<PAGE> 1
================================================================================
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------------------
SCHEDULE 13D
UNDER THE SECURITIES EXCHANGE ACT OF 1934
TELIGENT, INC.
(Name of Issuer)
CLASS A COMMON STOCK, PAR VALUE $0.01 PER SHARE
(Title of Class of Securities)
87959Y 10 3
(CUSIP Number)
THOMAS O. HICKS
C/O HICKS, MUSE, TATE & FURST INCORPORATED
200 CRESCENT COURT
SUITE 1600
DALLAS, TEXAS 75201
(214) 740-7300
(Name, Address and Telephone Number of Person Authorized to Receive Notices and
Communications)
Copies to:
ERIC S. SHUBE
VINSON & ELKINS, L.L.P.
1325 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10019
(917) 206-8005
December 3, 1999
(Date of Event which Requires Filing of this Statement)
<PAGE> 2
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition that is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the
following box. [ ]
(Continued on following pages)
================================================================================
Page 2
<PAGE> 3
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
Mr. Thomas O. Hicks
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds N/A
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization United States
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 3,478,258
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 3,478,258
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 3,478,258
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 26.4%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person IN
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 3
<PAGE> 4
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM4 Teligent Qualified Fund, LLC
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds OO
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization Delaware
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 2,368,817
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 2,368,817
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 2,368,817
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 19.7%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person OO
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 4
<PAGE> 5
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMTF Equity Fund IV (1999), L.P.
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds OO
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization Texas
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 2,368,817
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 2,368,817
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 2,368,817
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 19.7%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person PN
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 5
<PAGE> 6
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM4 Teligent Private Fund, LLC
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds OO
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization Delaware
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 16,782
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 16,782
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 16,782
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.2%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person OO
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 6
<PAGE> 7
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMTF Private Equity Fund IV (1999), L.P.
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) |X|
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds OO
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization Texas
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 16,782
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 16,782
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 16,782
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.2%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person PN
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 7
<PAGE> 8
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM4/GP (1999) Partners, L.P.
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds OO
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization Texas
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 2,385,599
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 2,385,599
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 2,385,599
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 19.8%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person PN
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 8
<PAGE> 9
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM 4-EQ Teligent Coinvestors, LLC
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds OO
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization Delaware
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 38,713
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 38,713
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 38,713
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.4%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person OO
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 9
<PAGE> 10
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM 4-EQ (1999) Coinvestors, L.P.
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds OO
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization Texas
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 38,713
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 38,713
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 38,713
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.4%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person PN
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 10
<PAGE> 11
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM 4-SBS Teligent Coinvestors, LLC
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds OO
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization Delaware
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 58,260
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 58,260
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 58,260
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.6%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person OO
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 11
<PAGE> 12
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM 4-SBS (1999) Coinvestors, L.P.
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds OO
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization Texas
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 58,260
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 58,260
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 58,260
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 0.6%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person PN
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 12
<PAGE> 13
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
Hicks, Muse GP (1999) Partners IV, L.P.
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) |X|
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds OO
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization Texas
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 2,482,572
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 2,482,572
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 2,482,572
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 20.4%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person PN
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 13
<PAGE> 14
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
Hicks, Muse (1999) Fund IV, LLC
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds OO
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization Texas
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 2,482,572
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 2,482,572
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 2,482,572
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 20.4%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person OO
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 14
<PAGE> 15
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM PG-IV Teligent, LLC
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds OO
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization Delaware
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 126,121
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 126,121
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 126,121
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 1.3%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person OO
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 15
<PAGE> 16
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
Hicks, Muse PG-IV (1999), C.V.
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds OO
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization Netherlands
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 126,121
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 126,121
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 126,121
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 1.3%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person PN
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 16
<PAGE> 17
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM Equity Fund IV/GP Partners (1999), C.V.
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds OO
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization Netherlands
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 126,121
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 126,121
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 126,121
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 1.3%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person PN
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 17
<PAGE> 18
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM GP Partners IV Cayman, L.P.
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds OO
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization Cayman Islands
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 126,121
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 126,121
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 126,121
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 1.3%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person PN
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 18
<PAGE> 19
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HM Fund IV Cayman LLC
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds OO
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization Cayman Islands
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 126,121
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 126,121
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 126,121
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 1.3%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person OO
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 19
<PAGE> 20
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMTF Bridge Teligent, LLC
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds OO
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization Delaware
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 869,565
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 869,565
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 869,565
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 8.2%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person OO
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 20
<PAGE> 21
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMTF Bridge Partners, L.P.
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds OO
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization Delaware
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 869,565
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 869,565
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 869,565
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 8.2%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person PN
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 21
<PAGE> 22
CUSIP NO. 87959Y 10 3
<TABLE>
<S> <C>
- ------------------------------------------------------------------------------------------------------------------------
1 Name of Reporting Person
I.R.S. Identification No. of above person (entities only)
HMTF Bridge Partners, LLC
- ------------------------------------------------------------------------------------------------------------------------
2 Check the appropriate box if a member of a group* (a) [ ]
(b) [X]
- ------------------------------------------------------------------------------------------------------------------------
3 SEC use only
- ------------------------------------------------------------------------------------------------------------------------
4 Source of Funds OO
- ------------------------------------------------------------------------------------------------------------------------
5 Check if Disclosure of Legal Proceedings is Required Pursuant to Items 2(d) or 2(e) [ ]
- ------------------------------------------------------------------------------------------------------------------------
6 Citizenship or Place of Organization Texas
- ------------------------------------------------------------------------------------------------------------------------
7 Sole Voting Power 0
-----------------------------------------------------------------------------------
Number of Shares Beneficially 8 Shared Voting Power* 869,565
-----------------------------------------------------------------------------------
Owned by Each Reporting 9 Sole Dispositive Power 0
-----------------------------------------------------------------------------------
Person With 10 Shared Dispositive Power* 869,565
- ------------------------------------------------------------------------------------------------------------------------
11 Aggregate Amount Beneficially Owned by each Reporting Person** 869,565
- ------------------------------------------------------------------------------------------------------------------------
12 Check if the Aggregate Amount in Row (11) Excludes Certain Shares [ ]
- ------------------------------------------------------------------------------------------------------------------------
13 Percent of Class Represented by Amount in Row (11)** 8.2%
- ------------------------------------------------------------------------------------------------------------------------
14 Type of Reporting Person OO
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
* The Reporting Person expressly disclaims (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the
shares owned of record by such reporting person.
** Assuming conversion of all 7 3/4% Series A Convertible Preferred Stock
beneficially owned by such reporting person, but without giving effect
to the conversion into Class A Common Stock of (1) any 7 3/4% Series A
Convertible Preferred Stock held by others or (2) any capital stock
held by other holders. See Item 5.
Page 22
<PAGE> 23
ITEM 1. SECURITY AND ISSUER.
The class of equity securities to which this Schedule 13D (this
"Statement") relates is the Class A Common Stock, par value $0.01 per share (the
"Class A Common Stock"), of Teligent, Inc., a Delaware corporation (the
"Issuer"). The address of the Issuer's principal executive offices is 8065
Leesburg Pike, Suite 400, Vienna, Virginia 22182.
ITEM 2. IDENTITY AND BACKGROUND.
(a) Name of Person(s) Filing this Statement (the "Reporting
Persons"):
Mr. Thomas O. Hicks
HM4 Teligent Qualified Fund, LLC, a Delaware limited liability
company ("Qualified LLC")
HMTF Equity Fund IV (1999), L.P., a Texas limited partnership
("Equity L.P.")
HM4 Teligent Private Fund, LLC, a Delaware limited liability
company ("Private LLC")
HMTF Private Equity Fund IV (1999), L.P., a Texas limited
partnership ("Private L.P.")
HM4/GP (1999) Partners, L.P., a Texas limited partnership
("HM4/GP Partners")
HM 4-EQ Teligent Coinvestors, LLC, a Delaware limited
liability company ("4-EQ LLC")
HM 4-EQ (1999) Coinvestors, L.P., a Texas limited partnership
("4-EQ L.P.")
HM 4-SBS Teligent Coinvestors, LLC, a Delaware limited
liability company ("4-SBS LLC")
HM 4-SBS (1999) Coinvestors, L.P., a Texas limited partnership
("4-SBS L.P.")
Hicks, Muse GP (1999) Partners IV, L.P., a Texas limited
partnership ("Hicks GP Partners")
Hicks, Muse (1999) Fund IV, LLC, a Texas limited liability
company ("Fund IV LLC")
HM PG-IV Teligent, LLC, a Delaware limited liability company
("PG-IV LLC")
Hicks, Muse PG-IV (1999), C.V., a limited partnership
organized under the laws of the Netherlands ("PG-IV C.V.")
HM Equity Fund IV/GP Partners (1999), C.V., a limited
partnership organized under the laws of the Netherlands ("HM
Equity C.V.")
HM GP Partners IV Cayman, L.P., a Cayman Islands exempted
limited partnership ("GP Cayman L.P.")
HM Fund IV Cayman LLC, an exempted Cayman Islands limited
liability company ("Fund IV Cayman LLC")
HMTF Bridge Teligent, LLC, a Delaware limited liability
company ("Bridge LLC")
HMTF Bridge Partners, L.P., a Delaware limited partnership
("Bridge Partners L.P.")
HMTF Bridge Partners, LLC, a Texas limited liability company
("Bridge Partners LLC")
(b) - (c)
Mr. Thomas O. Hicks
Mr. Thomas O. Hicks is chief executive officer of Hicks, Muse,
Tate & Furst Incorporated ("Hicks, Muse"), a private investment firm primarily
engaged in leveraged acquisitions, recapitalizations and other investment
activities. Mr. Hicks is also the sole member and sole manager of Fund IV LLC,
which is the sole general partner of Hicks GP Partners, which is the sole
general partner of HM4/GP Partners, which is the sole general partner of each of
Equity L.P. and Private L.P. Equity L.P. is the sole member of Qualified LLC,
and Private L.P. is the sole member of Private LLC. Hicks GP Partners is also
the sole general partner of each of 4-SBS L.P. and 4-EQ L.P. 4-SBS L.P. is the
sole member of 4-SBS LLC, and 4-EQ L.P. is the sole member of 4-EQ LLC. Mr.
Hicks is also the sole member of Fund IV Cayman LLC, which is the sole general
partner of GP Cayman L.P., which is the sole general partner of HM Equity C.V.,
which is the sole general partner of PG-IV C.V. PG-IV C.V. is the sole member of
PG-IV LLC. Mr. Hicks is also the sole member of Bridge Partners LLC, which is
the sole general partner of Bridge Partners L.P., which is the sole member of
Bridge LLC. The business address of Mr. Hicks is 200 Crescent Court, Suite 1600,
Dallas, Texas 75201-6950.
Page 23
<PAGE> 24
Qualified LLC
Qualified LLC is a Delaware limited liability company formed
to invest in the 7-3/4% Series A Convertible Preferred Stock of the Issuer (the
"Preferred Stock"). The business address of Qualified LLC, which also serves as
its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to Instruction C to Schedule 13D of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), information with respect to Equity
L.P., the sole member of Qualified LLC, is set forth below.
Equity L.P.
Equity L.P. is a Texas limited partnership, the principal
business of which is to invest directly or indirectly in various companies. The
business address of Equity L.P., which also serves as its principal office, is
200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to
Instruction C to Schedule 13D of the Exchange Act, information with respect to
HM4/GP Partners, the sole general partner of Equity L.P., is set forth below.
Private LLC
Private LLC is a Delaware limited liability company formed to
invest in the Preferred Stock. The business address of Private LLC, which also
serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act,
information with respect to Private L.P., the sole member of Private LLC, is set
forth below.
Private L.P.
Private L.P. is a Texas limited partnership, the principal
business of which is to invest directly or indirectly in various companies. The
business address of Private L.P., which also serves as its principal office, is
200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to
Instruction C to Schedule 13D of the Exchange Act, information with respect to
HM4/GP Partners, the sole general partner of Private L.P., is set forth below.
HM4/GP Partners
HM4/GP Partners is a Texas limited partnership, the principal
business of which is serving as the sole general partner of various limited
partnerships whose principal business is to serve as partners in various
investment partnerships. The principal business address of HM4/GP Partners,
which also serves as its principal office, is 200 Crescent Court, Suite 1600,
Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the
Exchange Act, information with respect to Hicks GP Partners, the sole general
partner of HM4/GP Partners, is set forth below.
4-EQ LLC
4-EQ LLC is a Delaware limited liability company formed to
invest in the Preferred Stock. The business address of 4-EQ LLC, which also
serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act,
information with respect to 4-EQ L.P., the sole member of 4-EQ LLC, is set forth
below.
4-EQ L.P.
4-EQ L.P. is a Texas limited partnership, the principal
business of which is to invest directly or indirectly in various companies. The
business address of 4-EQ L.P., which also serves as its principal office, is 200
Page 24
<PAGE> 25
Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C
to Schedule 13D of the Exchange Act, information with respect to Hicks GP
Partners, the sole general partner of 4-EQ L.P., is set forth below.
4-SBS LLC
4-SBS LLC is a Delaware limited liability company formed to
invest in the Preferred Stock. The business address of 4-SBS LLC, which also
serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act,
information with respect to 4-SBS L.P., the sole member of 4-SBS LLC, is set
forth below.
4-SBS L.P.
4-SBS L.P. is a Texas limited partnership, the principal
business of which is to invest directly or indirectly in various companies. The
business address of 4-SBS L.P., which also serves as its principal office, is
200 Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to
Instruction C to Schedule 13D of the Exchange Act, information with respect to
Hicks GP Partners, the sole general partner of 4-SBS L.P., is set forth below.
Hicks GP Partners
Hicks GP Partners is a Texas limited partnership, the
principal business of which is serving as the sole general partner of various
limited partnerships whose principal business is to serve as partners in various
investment partnerships. The principal business address of Hicks GP Partners,
which also serves as its principal office, is 200 Crescent Court, Suite 1600,
Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the
Exchange Act, information with respect to Fund IV LLC, the sole general partner
of Hicks GP Partners, is set forth below.
Fund IV LLC
Fund IV LLC is a Texas limited liability company, the
principal business of which is serving as the sole general partner in various
limited partnerships whose principal business is to serve as partners in various
investment partnerships. The business address of Fund IV LLC, which also serves
as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act,
information with respect to Mr. Thomas O. Hicks, the sole member of Fund IV LLC,
is set forth above.
PG-IV LLC
PG-IV LLC is a Delaware limited liability company formed to
invest in the Preferred Stock. The business address of PG-IV LLC, which also
serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act,
information with respect to PG-IV C.V., the sole member of PG-IV LLC, is set
forth below.
PG-IV C.V.
PG-IV C.V. is a limited partnership organized under the laws
of the Netherlands, the principal business of which is to invest directly or
indirectly in various companies. The business address of PG-IV C.V., which also
serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act,
information with respect to HM Equity C.V., the sole general partner of PG-IV
C.V., is set forth below.
Page 25
<PAGE> 26
HM Equity C.V.
HM Equity C.V. is a limited partnership organized under the
laws of the Netherlands, the principal business of which is serving as the sole
general partner of various limited partnerships whose principal business is to
serve as partners in various investment partnerships. The principal business
address of HM Equity C.V., which also serves as its principal office, is 200
Crescent Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C
to Schedule 13D of the Exchange Act, information with respect to GP Cayman L.P.,
the sole general partner of HM Equity C.V., is set forth below.
GP Cayman L.P.
GP Cayman L.P. is a Cayman Islands exempted limited
partnership, the principal business of which is serving as the sole general
partner of various limited partnerships whose principal business is to serve as
partners in various investment partnerships. The business address of GP Cayman
L.P., which also serves as its principal office, is 200 Crescent Court, Suite
1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the
Exchange Act, information with respect to Fund IV Cayman LLC, the sole general
partner of GP Cayman L.P., is set forth below.
Fund IV Cayman LLC
Fund IV Cayman LLC is an exempted Cayman Islands limited
liability company, the principal business of which is serving as the sole
general partner in various limited partnerships whose principal business is to
serve as partners in various investment partnerships. The business address of
Fund IV Cayman LLC, which also serves as its principal office, is 200 Crescent
Court, Suite 1600, Dallas, Texas 75201-6950. Pursuant to Instruction C to
Schedule 13D of the Exchange Act, information with respect to Mr. Thomas O.
Hicks, the sole member of Fund IV Cayman LLC, is set forth above.
Bridge LLC
Bridge LLC is a Delaware limited liability company formed to
invest in the Preferred Stock. The business address of Bridge LLC, which also
serves as its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act,
information with respect to Bridge Partners L.P., the sole member of Bridge LLC,
is set forth below.
Bridge Partners L.P.
Bridge Partners L.P. is a Delaware limited partnership, the
principal business of which to invest directly or indirectly in various
companies. The business address of Bridge Partners L.P., which also serves as
its principal office, is 200 Crescent Court, Suite 1600, Dallas, Texas
75201-6950. Pursuant to Instruction C to Schedule 13D of the Exchange Act,
information with respect to Bridge Partners LLC, the general partner of Bridge
Partners L.P., is set forth below.
Bridge Partners LLC
Bridge Partners LLC is Texas limited liability company, the
principal business of which is serving as the sole general partner of various
limited partnerships whose principal business is to serve as partners in various
investment partnerships. The principal business address of Bridge Partners LLC,
which also serves as its principal office, is 200 Crescent Court, Suite 1600,
Dallas, Texas 75201-6950. Pursuant to Instruction C to Schedule 13D of the
Exchange Act, information with respect to Mr. Thomas O. Hicks, the sole member
of Bridge Partners LLC, is set forth above.
Page 26
<PAGE> 27
(d) None of the entities or persons identified in this Item 2 has,
during the last five years, been convicted in a criminal proceeding (excluding
traffic violations or similar misdemeanors).
(e) None of the entities or persons identified in this Item 2 has,
during the last five years, been a party to a civil proceeding of a judicial or
administrative body of competent jurisdiction and as a result of such proceeding
was or is subject to a judgment, decree or final order enjoining future
violations of, or prohibiting or mandating activities subject to, federal or
state securities laws or finding any violations with respect to such laws.
(f) Mr. Hicks is a United States citizen.
ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
As more fully described in Item 6 below, on December 3, 1999, Qualified
LLC, Private LLC, 4-EQ LLC, 4-SBS LLC, PG-IV LLC and Bridge LLC each purchased
from the Issuer the number of shares of Preferred Stock set forth opposite their
respective names below at the purchase price set forth opposite their respective
names below.
<TABLE>
<CAPTION>
NUMBER OF
NAME OF ENTITY SHARES PURCHASED PURCHASE PRICE
-------------- ---------------- --------------
<S> <C> <C>
Qualified LLC 136,207 $136,207,000
Private LLC 965 $965,000
4-EQ LLC 2,226 $2,226,000
4-SBS LLC 3,350 $3,350,000
PG-IV LLC 7,252 $7,252,000
Bridge LLC 50,000 $50,000,000
</TABLE>
Qualified LLC obtained funds for the purchase price of its shares of
Preferred Stock from capital contributions provided by Equity L.P.; Equity L.P.
obtained such funds from capital contributions provided by its limited partners
and HM4/GP Partners; HM4/GP Partners obtained such funds from capital
contributions provided by its limited partners and Hicks GP Partners; and Hicks
GP Partners obtained such funds from capital contributions provided by its
limited partners and Fund IV LLC. Fund IV LLC obtained such funds from capital
contributions provided by Mr. Thomas O. Hicks, who obtained such funds from
personal funds.
Private LLC obtained funds for the purchase price of its shares of
Preferred Stock from capital contributions provided by Private L.P.; Private
L.P. obtained such funds from capital contributions provided by its limited
partners and HM4/GP Partners; HM4/GP Partners obtained such funds from capital
contributions provided by its limited partners and Hicks GP Partners; and Hicks
GP Partners obtained such funds from capital contributions provided by its
limited partners and Fund IV LLC. Fund IV LLC obtained such funds from capital
contributions provided by Mr. Thomas O. Hicks, who obtained such funds from
personal funds.
4-EQ LLC obtained funds for the purchase price of its shares of
Preferred Stock from capital contributions provided by 4-EQ L.P.; 4-EQ L.P.
obtained such funds from capital contributions provided by its limited partners
and Hicks GP Partners, and Hicks GP Partners obtained such funds from capital
contributions provided by its
Page 27
<PAGE> 28
limited partners and Fund IV LLC. Fund IV LLC obtained such funds from capital
contributions provided by Mr. Thomas O. Hicks, who obtained such funds from
personal funds.
4-SBS LLC obtained funds for the purchase price of its shares of
Preferred Stock from capital contributions provided by 4-SBS L.P.; 4-SBS L.P.
obtained such funds from capital contributions provided by its limited partners
and Hicks GP Partners, and Hicks GP Partners obtained such funds from capital
contributions provided by its limited partners and Fund IV LLC. Fund IV LLC
obtained such funds from capital contributions provided by Mr. Thomas O. Hicks,
who obtained such funds from personal funds.
PG-IV LLC obtained funds for the purchase price of its shares of
Preferred Stock from capital contributions provided by PG-IV C.V.; PG-IV C.V.
obtained such funds from capital contributions provided by its limited partners
and HM Equity C.V.; HM Equity C.V. obtained such funds from capital
contributions provided by its limited partners and G.P. Cayman L.P.; and G.P.
Cayman L.P. obtained such funds from capital contributions provided by its
limited partners and Fund IV Cayman LLC. Fund IV Cayman LLC obtained such funds
from capital contributions provided by Mr. Thomas O. Hicks, who obtained such
funds from personal funds.
Bridge LLC obtained funds for the purchase price of its shares of
Preferred Stock from capital contributions provided by Bridge Partners L.P.;
Bridge Partners L.P. obtained $1,522,780 of such funds from capital
contributions provided by its general partner, Bridge Partners LLC, and its
limited partners, and it obtained the remainder of the funds, $49,577,220, from
a portion of a credit facility from a bank, as defined in Section 3(a)(6) of the
Securities Exchange Act of 1934, as amended. Such funds include amounts
allocated to fees and expenses. The credit facility expires on January 15, 2000
and Bridge Partners L.P. expects that at or prior to that point such credit
facility will be replaced by a new credit facility. Bridge Partners L.P. intends
to repay the new credit facility either with funds drawn under another new
credit facility or with funds contributed by affiliates of Hicks, Muse. The
terms of the credit facility are set forth in the Credit Agreement, a copy of
which is filed as Exhibit 10.4 hereto, and is incorporated by reference. Bridge
Partners LLC obtained the funds it contributed to Bridge Partners L.P. from
capital contributions provided by Mr. Thomas O. Hicks, who obtained such funds
from personal funds.
ITEM 4. PURPOSE OF THE TRANSACTION.
The Reporting Persons consummated the transactions described herein in
order to acquire an interest in the Issuer for investment purposes. The
Reporting Persons intend to review continuously their position in the Issuer.
Depending upon future evaluations of the business prospects of the Issuer and
upon other developments, including, but not limited to, general economic and
business conditions and stock market conditions, the Reporting Persons may
retain or from time to time increase their holdings or dispose of all or a
portion of their holdings, subject to any applicable legal and contractual
restrictions on their ability to do so. In addition, Bridge LLC currently
intends to offer to sell some or all of its shares of Preferred Stock to other
affiliates of Hicks, Muse.
In addition, the matters set forth in Item 6 below are incorporated in
this Item 4 by reference as if fully set forth herein.
Except as set forth in this Item 4 (including the matters described in
Item 6 below which are incorporated in this Item 4 by reference), the Reporting
Persons have no present plans or proposals that relate to or that would result
in any of the actions specified in clauses (a) through (j) of Item 4 of Schedule
13D of the Exchange Act.
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) (1) Qualified LLC is the record and beneficial owner of 136,207
shares of Preferred Stock. Assuming conversion of all such shares, Qualified LLC
is the beneficial owner of 2,368,817 shares of Class A Common Stock, which,
based on calculations made in accordance with Rule 13d-3 of the Exchange Act
and, as disclosed by the Issuer in its Quarterly Report on Form 10-Q for the
quarterly period ended September 30, 1999 (the "Most Recent 10-Q"), there being
9,685,232 shares of Class A Common Stock outstanding, represents approximately
19.7% of the outstanding shares of Class A Common Stock. As disclosed in the
Most Recent 10-Q,
Page 28
<PAGE> 29
there are 44,426,299 shares of Class B Common Stock outstanding (the "Class B
Common Stock"). The Class B Common Stock, par value $0.01 per share, which is
not traded on an exchange, is convertible at the option of the holder thereof at
any time on a share-for-share basis into Class A Common Stock. Assuming
conversion of all of the Class B Common Stock outstanding and all 136,207 shares
of Preferred Stock owned of record by Qualified LLC, Qualified LLC's 136,207
shares of Preferred Stock would represent approximately 4.2% of the outstanding
shares of Class A Common Stock.
(2) Assuming conversion of all 136,207 shares of Preferred
Stock owned of record by Qualified LLC, Equity L.P., in its capacity as sole
member of Qualified LLC, may, pursuant to Rule 13d-3 of the Exchange Act, be
deemed to be the beneficial owner of 2,368,817 shares of Class A Common Stock,
which, based on calculations made in accordance with Rule 13d-3 of the Exchange
Act and there being 9,685,232 shares of Class A Common Stock outstanding,
represents approximately 19.7% of the outstanding shares of Class A Common
Stock. Assuming conversion of all of the Class B Common Stock outstanding and
all 136,207 shares of Preferred Stock owned of record by Qualified LLC, Equity
L.P.'s beneficial ownership of 136,207 shares of Preferred Stock would represent
approximately 4.2% of the outstanding shares of Class A Common Stock.
(3) Private LLC is the record and beneficial owner of 965
shares of Preferred Stock. Assuming conversion of all such shares, Private LLC
is the beneficial owner of 16,782 shares of Class A Common Stock, which, based
on calculations made in accordance with Rule 13d-3 of the Exchange Act and there
being 9,685,232 shares of Class A Common Stock outstanding, represents
approximately 0.2% of the outstanding shares of Class A Common Stock. Assuming
conversion of all of the Class B Common Stock outstanding and all 965 shares of
Preferred Stock owned of record by Private LLC, Private LLC's 965 shares of
Preferred Stock would represent approximately 0.03% of the outstanding shares of
Class A Common Stock.
(4) Assuming conversion of all 965 shares of Preferred Stock
owned of record by Private LLC, Private L.P., in its capacity as sole member of
Private LLC, may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be
the beneficial owner of 16,782 shares of Class A Common Stock, which, based on
calculations made in accordance with Rule 13d-3 of the Exchange Act and there
being 9,685,232 shares of Common Stock outstanding, represents approximately
0.2% of the outstanding shares of Class A Common Stock. Assuming conversion of
all of the Class B Common Stock outstanding and all 965 shares of Preferred
Stock owned of record by Private LLC, Private L.P.'s beneficial ownership of 965
shares of Preferred Stock would represent approximately 0.03% of the outstanding
shares of Class A Common Stock.
(5) Assuming conversion of all 137,172 shares of Preferred
Stock owned of record by Qualified LLC and Private LLC, HM4/GP Partners, in its
capacity as the sole general partner of each of Equity L.P. and Private L.P.,
may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial
owner of 2,385,599 shares of Class A Common Stock, which, based on calculations
made in accordance with Rule 13d-3 of the Exchange Act and there being 9,685,232
shares of Class A Common Stock outstanding, represents approximately 19.8% of
the outstanding shares of Class A Common Stock. Assuming conversion of all of
the Class B Common Stock outstanding and all 137,172 shares of Preferred Stock
owned of record by Qualified LLC and Private LLC, HM4/GP Partners' beneficial
ownership of 137,172 shares of Preferred Stock would represent approximately
4.2% of the outstanding shares of Class A Common Stock.
(6) 4-EQ LLC is the record and beneficial owner of 2,226
shares of Preferred Stock. Assuming conversion of all such shares, 4-EQ LLC is
the beneficial owner of 38,713 shares of Class A Common Stock, which, based on
calculations made in accordance with Rule 13d-3 of the Exchange Act and there
being 9,685,232 shares of Class A Common Stock outstanding, represents
approximately 0.4% of the outstanding shares of Class A Common Stock. Assuming
conversion of all of the Class B Common Stock outstanding and all 2,226 shares
of Preferred Stock owned of record by 4-EQ LLC, 4-EQ LLC's 2,226 shares of
Preferred Stock would represent approximately 0.1% of the outstanding shares of
Class A Common Stock.
Page 29
<PAGE> 30
(7) Assuming conversion of all 2,226 shares of Preferred Stock
owned of record by 4-EQ LLC, 4-EQ L.P., in its capacity as sole member of 4-EQ
LLC, may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the
beneficial owner of 38,713 shares of Class A Common Stock, which, based on
calculations made in accordance with Rule 13d-3 of the Exchange Act and there
being 9,685,232 shares of Class A Common Stock outstanding, represents
approximately 0.4% of the outstanding shares of Class A Common Stock. Assuming
conversion of all of the Class B Common Stock outstanding and all 2,226 shares
of Preferred Stock owned of record by 4-EQ LLC, 4-EQ L.P.'s beneficial ownership
of 2,226 shares of Preferred Stock would represent approximately 0.1% of the
outstanding shares of Class A Common Stock.
(8) 4-SBS LLC is the record and beneficial owner of 3,350
shares of Preferred Stock. Assuming conversion of all such shares, 4-SBS LLC is
the beneficial owner of 58,260 shares of Class A Common Stock, which, based on
calculations made in accordance with Rule 13d-3 of the Exchange Act and there
being 9,685,232 shares of Class A Common Stock outstanding, represents
approximately 0.6% of the outstanding shares of Class A Common Stock. Assuming
conversion of all of the Class B Common Stock outstanding and all 3,350 shares
of Preferred Stock owned of record by 4-SBS LLC, 4-SBS LLC's 3,350 shares of
Preferred Stock would represent approximately 0.1% of the outstanding shares of
Class A Common Stock.
(9) Assuming conversion of all 3,350 shares of Preferred Stock
owned of record by 4-SBS LLC, 4-SBS L.P., in its capacity as sole member of
4-SBS LLC, may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the
beneficial owner of 58,260 shares of Class A Common Stock, which, based on
calculations made in accordance with Rule 13d-3 of the Exchange Act and there
being 9,685,232 shares of Class A Common Stock outstanding, represents
approximately 0.6% of the outstanding shares of Class A Common Stock. Assuming
conversion of all of the Class B Common Stock outstanding and all 3,350 shares
of Preferred Stock owned of record by 4-SBS LLC, 4-SBS L.P.'s beneficial
ownership of 3,350 shares of Preferred Stock would represent approximately 0.1%
of the outstanding shares of Class A Common Stock.
(10) Assuming conversion of all 142,748 shares of Preferred
Stock owned of record by Qualified LLC, Private LLC, 4-EQ LLC and 4-SBS LLC,
Hicks GP Partners, in its capacity as sole general partner of each of HM4/GP
Partners, 4-EQ L.P. and 4-SBS L.P., may, pursuant to Rule 13d-3 of the Exchange
Act, be deemed to be the beneficial owner of 2,482,572 shares of Class A Common
Stock, which, based on calculations made in accordance with Rule 13d-3 of the
Exchange Act and there being 9,685,232 shares of Class A Common Stock
outstanding, represents approximately 20.4% of the outstanding shares of Class A
Common Stock. Assuming conversion of all of the Class B Common Stock outstanding
and all 142,748 shares of Preferred Stock owned of record by Qualified LLC,
Private LLC, 4-EQ LLC and 4-SBS LLC, Hicks GP Partners' beneficial ownership of
142,748 shares of Preferred Stock would represent approximately 4.4% of the
outstanding shares of Class A Common Stock.
(11) Assuming conversion of all 142,748 shares of Preferred
Stock owned of record by Qualified LLC, Private LLC, 4-EQ LLC and 4-SBS LLC,
Fund IV LLC, in its capacity as the sole general partner of Hicks GP Partners,
may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be the beneficial
owner of 2,482,572 shares of Class A Common Stock, which, based on calculations
made in accordance with Rule 13d-3 of the Exchange Act and there being 9,685,232
shares of Class A Common Stock outstanding, represents approximately 20.4% of
the outstanding shares of Class A Common Stock. Assuming conversion of all of
the Class B Common Stock outstanding and all 142,748 shares of Preferred Stock
owned of record by Qualified LLC, Private LLC, 4-EQ LLC and 4-SBS LLC, Fund IV
LLC's beneficial ownership of 142,748 shares of Preferred Stock would represent
approximately 4.4% of the outstanding shares of Class A Common Stock.
(12) PG-IV LLC is the record and beneficial owner of 7,252
shares of Preferred Stock. Assuming conversion of all such shares, PG-IV LLC is
the beneficial owner of 126,121 shares of Class A Common Stock, which, based on
calculations made in accordance with Rule 13d-3 of the Exchange Act and there
being 9,685,232 shares of Class A Common Stock outstanding, represents
approximately 1.3% of the outstanding shares of Class A Common Stock. Assuming
conversion of all of the Class B Common Stock outstanding and all 7,252
Page 30
<PAGE> 31
shares of Preferred Stock owned of record by PG-IV LLC, PG-IV LLC's 7,252 shares
of Preferred Stock would represent approximately 0.2% of the outstanding shares
of Class A Common Stock.
(13) Assuming conversion of all 7,252 shares of Preferred
Stock owned of record by PG-IV LLC, PG-IV C.V., in its capacity as sole member
of PG-IV LLC, may, pursuant to Rule 13d-3 of the Exchange Act, be deemed to be
the beneficial owner of 126,121 shares of Class A Common Stock, which, based on
calculations made in accordance with Rule 13d-3 of the Exchange Act and there
being 9,685,232 shares of Class A Common Stock outstanding, represents
approximately 1.3% of the outstanding shares of Class A Common Stock. Assuming
conversion of all of the Class B Common Stock outstanding and all 7,252 shares
of Preferred Stock owned of record by PG-IV LLC, PG-IV L.P.'s beneficial
ownership of 7,252 shares of Preferred Stock would represent approximately 0.2%
of the outstanding shares of Class A Common Stock.
(14) Assuming conversion of all 7,252 shares of Preferred
Stock owned of record by PG-IV LLC, HM Equity C.V., in its capacity as sole
general partner of PG-IV C.V., may, pursuant to Rule 13d-3 of the Exchange Act,
be deemed to be the beneficial owner of 126,121 shares of Class A Common Stock,
which, based on calculations made in accordance with Rule 13d-3 of the Exchange
Act and there being 9,685,232 shares of Class A Common Stock outstanding,
represents approximately 1.3% of the outstanding shares of Class A Common Stock.
Assuming conversion of all of the Class B Common Stock outstanding and all 7,252
shares of Preferred Stock owned of record by PG-IV LLC, HM Equity C.V.'s
beneficial ownership of 7,252 shares of Preferred Stock would represent
approximately 0.2% of the outstanding shares of Class A Common Stock.
(15) Assuming conversion of all 7,252 shares of Preferred
Stock owned of record by PG-IV LLC, GP Cayman L.P., in its capacity as sole
general partner of HM Equity C.V., may, pursuant to Rule 13d-3 of the Exchange
Act, be deemed to be the beneficial owner of 126,121 shares of Class A Common
Stock, which, based on calculations made in accordance with Rule 13d-3 of the
Exchange Act and there being 9,685,232 shares of Class A Common Stock
outstanding, represents approximately 1.3% of the outstanding shares of Class A
Common Stock. Assuming conversion of all of the Class B Common Stock outstanding
and all 7,252 shares of Preferred Stock owned of record by PG-IV LLC, GP Cayman
L.P.'s beneficial ownership of 7,252 shares of Preferred Stock would represent
approximately 0.2% of the outstanding shares of Class A Common Stock.
(16) Assuming conversion of all 7,252 shares of Preferred
Stock owned of record by PG-IV LLC, Fund IV Cayman LLC, in its capacity as the
sole general partner of GP Cayman L.P. may, pursuant to Rule 13d-3 of the
Exchange Act, be deemed to be the beneficial owner of 126,121 shares of Class A
Common Stock, which, based on calculations made in accordance with Rule 13d-3 of
the Exchange Act and there being 9,685,232 shares of Class A Common Stock
outstanding, represents approximately 1.3% of the outstanding shares of Class A
Common Stock. Assuming conversion of all of the Class B Common Stock outstanding
and all 7,252 shares of Preferred Stock owned of record by PG-IV LLC, Fund IV
Cayman LLC's beneficial ownership of 7,252 shares of Preferred Stock would
represent approximately 0.2% of the outstanding shares of Class A Common Stock.
(17) Bridge LLC is the record and beneficial owner of 50,000
shares of Preferred Stock. Assuming conversion of all such shares, Bridge LLC is
the beneficial owner of 869,565 shares of Class A Common Stock, which, based on
calculations made in accordance with Rule 13d-3 of the Exchange Act and there
being 9,685,232 shares of Class A Common Stock outstanding, represents
approximately 8.2% of the outstanding shares of Class A Common Stock. Assuming
conversion of all of the Class B Common Stock outstanding and all 50,000 shares
of Preferred Stock owned of record by Bridge LLC, Bridge LLC's 50,000 shares of
Preferred Stock would represent approximately 1.6% of the outstanding shares of
Class A Common Stock.
(18) Assuming conversion of all 50,000 shares of Preferred
Stock owned of record by Bridge LLC, Bridge Partners L.P., in its capacity as
sole member of Bridge LLC, may, pursuant to Rule 13d-3 of the Exchange Act, be
deemed to be the beneficial owner of 869,565 shares of Class A Common Stock,
which, based on calculations made in accordance with Rule 13d-3 of the Exchange
Act and there being 9,685,232 shares of Class A Common Stock outstanding,
represents approximately 8.2% of the outstanding shares of Class A Common Stock.
Page 31
<PAGE> 32
Assuming conversion of all of the Class B Common Stock outstanding and all
50,000 shares of Preferred Stock owned of record by Bridge LLC, Bridge Partners
L.P.'s beneficial ownership of 50,000 shares of Preferred Stock would represent
approximately 1.6% of the outstanding shares of Class A Common Stock.
(19) Assuming conversion of all 50,000 shares of Preferred
Stock owned of record by Bridge LLC, Bridge Partners LLC, in its capacity as
general partner of Bridge Partners L.P., may, pursuant to Rule 13d-3 of the
Exchange Act, be deemed to be the beneficial owner of 869,565 shares of Class A
Common Stock, which, based on calculations made in accordance with Rule 13d-3 of
the Exchange Act and there being 9,685,232 shares of Class A Common Stock
outstanding, represents approximately 8.2% of the outstanding shares of Class A
Common Stock. Assuming conversion of all of the Class B Common Stock outstanding
and all 50,000 shares of Preferred Stock owned of record by Bridge LLC, Bridge
Partners LLC's beneficial ownership of 50,000 shares of Preferred Stock would
represent approximately 1.6% of the outstanding shares of Class A Common Stock.
(20) Assuming conversion of all 200,000 shares of Preferred
Stock owned of record by Qualified LLC, Private LLC, 4-EQ LLC, 4-SBS LLC, PG-IV
LLC and Bridge LLC, Mr. Thomas O. Hicks, in his capacity as sole member of Fund
IV LLC, Fund IV Cayman LLC and Bridge Partners LLC, may, pursuant to Rule 13d-3
of the Exchange Act, be deemed to be the beneficial owner of 3,478,258 shares of
Class A Common Stock, which based on calculations made in accordance with Rule
13d-3 of the Exchange Act and there being 9,685,232 shares of Class A Common
Stock outstanding, represents approximately 26.4% of the outstanding shares of
Class A Common Stock. Assuming conversion of all of the Class B Common Stock
outstanding and all 200,000 shares of Preferred Stock owned of record by
Qualified LLC, Private LLC, 4-EQ LLC, 4-SBS LLC, PG-IV LLC and Bridge LLC, Mr.
Hicks' beneficial ownership of 200,000 shares of Preferred Stock would represent
approximately 6.0% of the outstanding shares of Class A Common Stock.
The Reporting Persons expressly disclaim (a) the existence of any group
and (b) beneficial ownership with respect to any shares other than the shares
owned of record by such Reporting Person.
(b) The information set forth in Items 7 through 11 of the cover pages
hereto is incorporated herein by reference.
(c) Except as set forth herein, none of the persons named in response
to paragraph (a) has effected any transactions in shares of Class A Common Stock
during the past 60 days.
(d) The right to receive dividends on, and proceeds from the sale of,
the shares of Class A Common Stock which may be beneficially owned by the
persons described in (a) and (b) above is governed by the limited liability
company agreements and limited partnership agreements of each such entity, and
such dividends or proceeds may be distributed with respect to numerous member
interests and general and limited partnership interests.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
The matters set forth in Item 2 are incorporated in this Item 6 by
reference as if fully set forth herein.
Stock Purchase Agreement
Pursuant to the Stock Purchase Agreement (the "Stock Purchase
Agreement"), dated as of November 4, 1999 between the Issuer, HMTF-IV
Acquisition Corp. ("HMTF-IV") and each of the other Purchasers (as defined in
the Stock Purchase Agreement) named on Schedule I thereto, the Issuer agreed to
sell to HMTF-IV, and HMTF- IV agreed to purchase from the Issuer, 200,000 shares
of Preferred Stock for a purchase price of $200,000,000.
Page 32
<PAGE> 33
Prior to the issuance of the shares of Preferred Stock at the Closing
(as defined below), pursuant to an Assignment of Rights Under Stock Purchase
Agreement dated November 9, 1999 (the "Initial Assignment Agreement"), HMTF-IV
assigned all of its rights, titles, interests and obligations in, to and under
the Stock Purchase Agreement to Qualified LLC, Private LLC, 4-EQ LLC, 4-SBS LLC
and PG-IV LLC (the "Assignees"). Following the execution and delivery of the
Initial Assignment Agreement, pursuant to an Assignment of Rights Under Stock
Purchase Agreement dated November 16, 1999 (the "Second Assignment Agreement"),
each Assignee assigned 25% of its rights, titles, interests and obligations in,
to and under the Stock Purchase Agreement to Bridge LLC.
On December 3, 1999, at the closing held pursuant to the Stock Purchase
Agreement (the "Closing"), the Issuer sold to each of the persons listed below
(the "HMTF Holders") the number of shares of Preferred Stock set forth opposite
each person's name below in exchange for the purchase price set forth opposite
such person's name below.
<TABLE>
<CAPTION>
NUMBER OF
NAME OF ENTITY SHARES PURCHASED PURCHASE PRICE
-------------- ---------------- --------------
<S> <C> <C>
Qualified LLC 136,207 $136,207,000
Private LLC 965 $965,000
4-EQ LLC 2,226 $2,226,000
4-SBS LLC 3,350 $3,350,000
PG-IV LLC 7,252 $7,252,000
Bridge LLC 50,000 $50,000,000
</TABLE>
The foregoing description of the Stock Purchase Agreement is not, and
does not purport to be, complete and is qualified in its entirety by reference
to the Stock Purchase Agreement, a copy of which is filed herewith as Exhibit
10.1 and is incorporated herein by reference.
Registration Rights
At Closing, the Issuer and the holders of Preferred Stock entered into
a Registration Rights Agreement (the "Registration Rights Agreement"), pursuant
to which the Issuer has agreed to effect three "demand" registrations at the
request of the holders of a majority of the Registrable Securities held by the
HMTF Holders and any direct or indirect transferee of any Registrable Securities
held by the HMTF Holders, provided that each such demand registration must be in
respect of Registrable Securities (as defined below) with a fair market value of
at least $50,000,000 and provided that certain other restrictions are met. In
addition, the Purchasers have certain piggyback registration rights in
connection with registrations of the Issuer's securities under the Securities
Act of 1933 (the "Securities Act").
"Registrable Securities" means (a) the Preferred Stock purchased
pursuant to the Stock Purchase Agreement, plus any additional shares of
Preferred Stock issued in respect thereof in connection with any stock split,
stock dividend or similar event with respect to the Preferred Stock, (b) the
Class A Common Stock issued upon conversion of such Preferred Stock, plus any
additional shares of Class A Common Stock issued in respect thereof in
connection with any stock split, stock dividend or similar event with respect to
the Class A Common
Page 33
<PAGE> 34
Stock and (c) any securities that the Issuer or any successor entity into which
such Class A Common Stock or such Preferred Stock may be converted or changed.
The foregoing description of the Registration Rights Agreement is not,
and does not purport to be, complete and is qualified in its entirety by
reference to the Registration Rights Agreement, a copy of which is filed
herewith as Exhibit 10.2 and is incorporated herein by reference.
Certificate of Designation
As contemplated by the Stock Purchase Agreement, the Board of Directors
of the Issuer approved and adopted the Certificate of Designation of the Powers,
Preferences and Relative, Participating, Optional and Other Special Rights of
7-3/4% Cumulative Convertible Preferred Stock and Qualifications, Limitations
and Restrictions Thereof (the "Certificate of Designation") to create the series
of Preferred Stock. Under the Certificate of Designation, the shares of
Preferred Stock will, with respect to dividend rights and rights on liquidation,
winding-up and dissolution, rank (i) senior to all shares of Class A Common
Stock and to each other class of capital stock or preferred stock of the Issuer,
the terms of which do not expressly provide that it ranks senior to or on a
parity with the shares of the Preferred Stock as to dividend rights and rights
on liquidation, winding-up and dissolution of the Issuer; (ii) on a parity with
additional shares of Preferred Stock issued by the Issuer and each other class
of capital stock or series of preferred stock of the Issuer issued by Issuer,
the terms of which expressly provide that such class or series will rank on a
parity with the shares of the Preferred Stock as to dividend rights and rights
on liquidation, winding-up and dissolution, if the Issuer, in issuing the
shares, complies with applicable provisions in the Certificate of Designation;
and (iii) junior to each class of capital stock or series of preferred stock of
the Issuer issued by the Issuer, the terms of which expressly provide that such
class or series will rank senior to the shares of Preferred Stock as to dividend
rights and rights upon liquidation, winding-up and dissolution, if the Issuer,
in issuing the shares, complies with applicable provisions in the Certificate of
Designation.
The holders of the shares of Preferred Stock will be entitled to
receive with respect to each share of Preferred Stock, out of funds legally
available for the payment of dividends, dividends at a rate per annum of 7-3/4%
of the then-effective Liquidation Preference (as defined below). Such dividends
shall be cumulative from the date of issuance of the Preferred Stock and shall
be payable quarterly in arrears. The Issuer shall make any dividend payments
with respect to any period (i) prior to November 30, 2004, by delivery of shares
of Preferred Stock, and (ii) after November 30, 2004, (a) in cash, (b) by
delivery of shares of Preferred Stock or (c) through any combination of the
foregoing.
The holders of shares of Preferred Stock will have the right,
generally, at any time, to convert any or all their shares of Preferred Stock
into a number of fully paid and nonassessable shares of Class A Common Stock
equal to the then effective Liquidation Preference thereof plus accrued and
unpaid dividends to the date of conversion divided by the Conversion Price in
effect at the time of conversion.
The shares of Preferred Stock may be redeemed at any time commencing on
or after November 30, 2004 (or earlier, if, under the Certificate of
Designation, certain conditions relating to a Change of Control (as defined in
the Certificate of Designation) shall have occurred), in whole or from time to
time in part, at the election of the Issuer, at a redemption price payable in
cash equal to 100% (or, under certain conditions described below relating to a
Change of Control, 101%) of the then effective Liquidation Preference plus
accrued and unpaid dividends from the last dividend payment date to the date
fixed for redemption. Shares of Preferred Stock (if not earlier redeemed or
converted) shall be mandatorily redeemed by the Issuer on November 30, 2014, at
a redemption price per share in cash equal to the then effective Liquidation
Preference, plus accrued and unpaid dividends thereon from the last dividend
payment date to the date of mandatory redemption.
Upon occurrence of a "Change of Control" (as defined in the Certificate
of Designation), the holders of Preferred Stock shall have the right to either
(a) continue to hold their shares of Preferred Stock or securities issued in
respect of Preferred Stock in connection with such Change of Control and in
compliance with the terms of the
Page 34
<PAGE> 35
Certificate of Designation, (b) convert their shares of Preferred Stock
(including shares received as a Special Payment (defined below)) and, if the
Change of Control occurs prior to November 30, 2004, receive the Special Payment
on such shares (the "Conversion Option") or (c) elect to have their shares of
Preferred Stock remarketed as described below (the "Remarketing Option").
If the Conversion Option is selected with respect to a share of
Preferred Stock, the holder of such share of Preferred Stock shall be deemed to
have elected to convert such share in accordance with provisions of the
Certificate of Designation and, if the Change of Control occurs prior to
November 30, 2004, the Issuer shall issue, and the holder shall be entitled to
receive, in respect of such share selected for the Conversion Option, a number
of shares of Preferred Stock determined pursuant to a formula set forth in the
Certificate of Designation (the "Special Payment"). Any shares of Preferred
Stock received as a Special Payment may then be converted by the holder thereof
as provided in the Certificate of Designation.
If the Remarketing Option is selected with respect to a share of
Preferred Stock, such holder shall be deemed to have elected to waive such
holder's right to receive the Special Payment with respect to such Change of
Control and the Issuer shall thereafter have the option to either (a) have such
share redeemed in accordance with the provisions for optional redemption
contained in the Certificate of Designation, except that the redemption price
shall be 101% of the Liquidation Preference of such share plus accrued and
unpaid dividends from the last dividend payment date to the redemption date, or
(b) remarket such share for the account of such holder and, if the net proceeds
to such holder of such remarketing are less than 101% of the Liquidation
Preference of such share plus accrued and unpaid dividends thereon from the last
dividend payment date to the date payment is received by such holder in respect
of such share, the Issuer shall issue to and sell for the account of such holder
a sufficient number of shares of Class A Common Stock to make up such shortfall.
If the Issuer does not, within 180 days after the date of the Issuer's giving
written notice of its election of (a) or (b) above, settle the claim with the
holder pursuant to (a) or (b) above, then the holder shall have the option, for
a period of 10 business days, of electing the Conversion Option.
The holders of the shares of Preferred Stock will be entitled to vote
on all matters that the holders of the Issuer's Class A Common Stock are
entitled to vote upon. In exercising these voting rights, each share of
Preferred Stock shall be entitled to vote on an as-converted basis with the
holders of the Issuer's Class A Common Stock. The approval of the holders of at
least a majority of the then-outstanding shares of Preferred Stock, voting as
one class, will be required for the Issuer to take certain actions. In addition,
for so long as members of the HMTF Group own (a) at least 100 shares of
Preferred Stock and (b) any combination of the shares of Preferred Stock issued
to the HMTF Holders as of the Closing date and shares of Class A Common Stock
issued upon conversion of such Preferred Stock, which, taken together, would
represent (if all such shares of Preferred Stock were converted) an amount of
Class A Common Stock issuable upon conversion of 50% or more of such Preferred
Stock, the holders of the HMTF Shares, voting as a class, may elect one director
to serve on the board of directors of the Issuer. Pursuant to this right, the
HMTF Holders have elected Thomas O. Hicks for election to the board of directors
of the Issuer. The Stock Purchase Agreement contains a parallel provision for
the election of a director, but subject only to the minimum ownership level set
forth in clause (b) of the second preceding sentence, that is inoperative for so
long as the above described provision is in effect.
"Liquidation Preference" means an amount equal to $1,000 per share of
Preferred Stock, subject to change in accordance with the provisions of the
Certificate of Designation.
The foregoing description is not, and does not purport to be, complete
and is qualified in its entirety by reference to the Certificate of Designation,
a copy of which is filed as Exhibit 10.3 and is incorporated by reference.
Page 35
<PAGE> 36
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit 10.1: Stock Purchase Agreement, dated as of November 4, 1999,
between the Issuer, HMTF-IV and each of the other Purchasers
(as defined in the Stock Purchase Agreement) named on Schedule
I thereto, relating to the purchase and sale of 7-3/4% Series
A Convertible Preferred Stock of Teligent, Inc.
Exhibit 10.2: Registration Rights Agreement, dated as of November 4,
1999, between the Issuer and each of the Initial Holders (as
defined in the Registration Rights Agreement).
Exhibit 10.3: Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights of
7-3/4% Cumulative Convertible Preferred Stock and
Qualifications, Limitations and Restrictions Thereof.
Exhibit 10.4: Credit Agreement, dated November 24, 1999, by and among
HMTF Bridge Partners, L.P., as Borrower, the Lenders named
therein and a bank (as defined in Section 3(a)(6) of the
Securities Exchange Act of 1934, as amended), as
Administrative Agent.
Exhibit 99.1: Joint Filing Agreement among the parties regarding filing of
Schedule 13D.
Page 36
<PAGE> 37
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 *
-----------------------------------------
Name: Thomas O. Hicks
* By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Attorney-in-Fact
S-1
<PAGE> 38
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 HM4 TELIGENT QUALIFIED FUND, LLC
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
S-2
<PAGE> 39
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 HMTF EQUITY FUND IV (1999), L.P.
By: HM4/GP (1999) Partners, L.P., its
General Partner
By: Hicks, Muse GP (1999) Partners IV,
L.P., its General
Partner
By: Hicks, Muse (1999) Fund IV, LLC, its
General Partner
By: /s/ David W. Knickel
-------------------------------------
Name: David W. Knickel
Title: Vice President
S-3
<PAGE> 40
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 HM4 TELIGENT PRIVATE FUND, LLC
By: /s/ David W. Knickel
--------------------------------
Name: David W. Knickel
Title: Vice President
S-4
<PAGE> 41
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 HMTF PRIVATE EQUITY FUND IV (1999), L.P.
By: HM4/GP (1999) Partners, L.P., its
General Partner
By: Hicks, Muse GP (1999) Partners IV,
L.P., its General Partner
By: Hicks, Muse (1999) Fund IV, LLC,
its General Partner
By: /s/ David W. Knickel
---------------------------------------
Name: David W. Knickel
Title: Vice President
S-5
<PAGE> 42
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 HM4/GP (1999) PARTNERS, L.P.
By: Hicks, Muse GP (1999) Partners IV,
L.P., its General Partner
By: Hicks, Muse (1999) Fund IV, LLC, its
General Partner
By: /s/ David W. Knickel
------------------------------------
Name: David W. Knickel
Title: Vice President
S-6
<PAGE> 43
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 HM 4-EQ TELIGENT COINVESTORS, LLC
By: /s/ David W. Knickel
--------------------------------
Name: David W. Knickel
Title: Vice President
S-7
<PAGE> 44
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 HM 4-EQ (1999) COINVESTORS, L.P.
By: Hicks, Muse GP (1999) Partners IV,
L.P., its General Partner
By: Hicks, Muse (1999) Fund IV, LLC,
its General Partner
By: /s/ David W. Knickel
------------------------------------
Name: David W. Knickel
Title: Vice President
S-8
<PAGE> 45
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 HM 4-SBS TELIGENT COINVESTORS, LLC
By: /s/ David W. Knickel
------------------------------------
Name: David W. Knickel
Title: Vice President
S-9
<PAGE> 46
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 HM 4-SBS (1999) COINVESTORS, L.P.
By: Hicks, Muse GP (1999) Partners IV,
L.P., its General Partner
By: Hicks, Muse (1999) Fund IV, LLC,
its General Partner
By: /s/ David W. Knickel
------------------------------------
Name: David W. Knickel
Title: Vice President
S-10
<PAGE> 47
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 HICKS, MUSE GP (1999) PARTNERS IV, L.P.
By: Hicks, Muse (1999) Fund IV, LLC,
its General Partner
By: /s/ David W. Knickel
------------------------------------
Name: David W. Knickel
Title: Vice President
S-11
<PAGE> 48
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 HICKS, MUSE (1999) FUND IV, LLC
By: /s/ David W. Knickel
------------------------------------
Name: David W. Knickel
Title: Vice President
S-12
<PAGE> 49
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 HM PG-IV TELIGENT, LLC
By: /s/ David W. Knickel
------------------------------------
Name: David W. Knickel
Title: Vice President
S-13
<PAGE> 50
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 HICKS, MUSE PG-IV (1999), C.V.
By: HM Equity Fund IV/GP Partners
(1999), C.V., its General Partner
By: HM GP Partners IV Cayman, L.P.,
its General Partner
By: HM Fund IV Cayman LLC, its General
Partner
By: /s/ David W. Knickel
------------------------------------
Name: David W. Knickel
Title: Vice President
S-14
<PAGE> 51
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 HM EQUITY FUND IV/GP PARTNERS (1999), C.V.
By: HM GP Partners IV Cayman, L.P.,
its General Partner
By: HM Fund IV Cayman LLC, its General
Partner
By: /s/ David W. Knickel
------------------------------------
Name: David W. Knickel
Title: Vice President
S-15
<PAGE> 52
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 HM GP PARTNERS IV CAYMAN, L.P.
By: HM Fund IV Cayman LLC, its General
Partner
By: /s/ David W. Knickel
------------------------------------
Name: David W. Knickel
Title: Vice President
S-16
<PAGE> 53
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 HM FUND IV CAYMAN LLC
By: /s/ David W. Knickel
------------------------------------
Name: David W. Knickel
Title: Vice President
S-17
<PAGE> 54
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 HMTF BRIDGE TELIGENT, LLC
By: /s/ David W. Knickel
------------------------------------
Name: David W. Knickel
Title: Vice President
S-18
<PAGE> 55
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 HMTF BRIDGE PARTNERS, L.P.
By: HMTF Bridge Partners, LLC, its
General Partner
By: /s/ David W. Knickel
------------------------------------
Name: David W. Knickel
Title: Vice President
S-19
<PAGE> 56
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
the undersigned certifies that the information set forth in this statement is
true, complete and correct.
December 10, 1999 HMTF BRIDGE PARTNERS, LLC
By: /s/ David W. Knickel
------------------------------------
Name: David W. Knickel
Title: Vice President
S-20
<PAGE> 57
EXHIBIT INDEX
Exhibit 10.1: Stock Purchase Agreement, dated as of November 4, 1999,
between the Issuer, HMTF-IV and each of the other Purchasers
(as defined in the Stock Purchase Agreement) named on Schedule
I thereto, relating to the purchase and sale of 7-3/4% Series
A Convertible Preferred Stock of Teligent, Inc.*
Exhibit 10.2: Registration Rights Agreement, dated as of November 4, 1999,
between the Issuer and each of the Initial Holders (as defined
in the Registration Rights Agreement).*
Exhibit 10.3: Certificate of Designation of the Powers, Preferences and
Relative, Participating, Optional and Other Special Rights of
7-3/4% Cumulative Convertible Preferred Stock and
Qualifications, Limitations and Restrictions Thereof.*
Exhibit 10.4: Credit Agreement, dated November 24, 1999, by and among
HMTF Bridge Partners, L.P., as Borrower, the Lenders named
therein and a bank (as defined in Section 3(a)(6) of the
Securities Exchange Act of 1934, as amended), as
Administrative Agent.*
Exhibit 99.1: Joint Filing Agreement among the parties regarding filing of
Schedule 13D.*
- ----------
* Filed herewith
E-1
<PAGE> 1
EXHIBIT 10.1
================================================================================
STOCK PURCHASE AGREEMENT
BY AND AMONG
TELIGENT, INC.
AND
THE PURCHASERS LISTED ON SCHEDULE I HERETO
------------------
Dated as of
November 4, 1999
------------------
================================================================================
<PAGE> 2
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.
<PAGE> 3
2
"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.
<PAGE> 4
3
"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, Tate & Furst 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 Hicks, 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 Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and applicable rules and regulations.
<PAGE> 5
4
"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
<PAGE> 6
5
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:
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
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)
</TABLE>
<PAGE> 7
6
<TABLE>
<CAPTION>
Term Section
---- -------
<S> <C>
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
</TABLE>
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
<PAGE> 8
7
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 & Moore, located at 825
Eighth Avenue, New York, New York 10019 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
<PAGE> 9
8
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.
<PAGE> 10
9
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 1 (the "Class B-Series 1 Common
Stock"), (B) 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
<PAGE> 11
10
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)
<PAGE> 12
11
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
<PAGE> 13
12
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,
<PAGE> 14
13
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.
<PAGE> 15
14
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
<PAGE> 16
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,
<PAGE> 17
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).
<PAGE> 18
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 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
<PAGE> 19
18
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
<PAGE> 20
19
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
<PAGE> 21
20
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.
<PAGE> 22
21
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.
<PAGE> 23
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.
<PAGE> 24
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
<PAGE> 25
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.
<PAGE> 26
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
<PAGE> 27
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
<PAGE> 28
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
<PAGE> 29
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.
8065 Leesburg Pike
Suite 400
Vienna, VA 22182
Attn: General Counsel
Telephone: (703) 762-5100
Fax: (703) 762-5227
<PAGE> 30
29
with a copy to:
Cravath, Swaine & Moore
Worldwide Plaza
825 Eighth Avenue
New York, New York 10019
Attn: Robert Rosenman
Telephone: (212) 474-1300
Fax: (212) 474-3700
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, Tate & Furst Incorporated
1325 Avenue of the Americas
25th Floor
New York, NY 10019
Attn: Michael Levitt
Telephone: (212) 424-1400
Fax: (212) 424-1450
with a copy to:
Vinson & Elkins, L.L.P.
1325 Avenue of the Americas, 17th Floor
New York, NY 10019
Attn: Eric S. Shube
Telephone: (917) 206-8005
Fax: (917) 206-8100
(as to matters relating to Microsoft Corporation)
One Microsoft Way
Building 8/ 2126
Redmond, WA 98052
Attn: Gregory B. Maffei, Senior Vice
President and Chief Financial Officer
Telephone: (425) 882-8080
Fax: (425) 936-2625
With copies to:
Microsoft Corporation
One Microsoft Way
Office 8S/2056
Redmond, WA 98052-6399
<PAGE> 31
30
Attn: Robert A. Eshelman, General Counsel,
Finance and Operations
Telephone:(425) 882-8080
Fax: (425) 936-7329
and
Preston, Gates & Ellis, LLP
701 5th Avenue Suite 5000
Seattle, WA 98104
Attn: Richard B. Dodd
Telephone:(206) 623-7580
Fax: (206) 623-7022
(as to matters relating to Chase Equity Associates, L.P.)
Chase Manhattan Bank
270 Park Avenue
40th Floor
New York, NY 10017
Attn: Catherine Crowley
Telephone:(212) 270-5015
Fax: (212) 270-7473
(as to matters relating to DB Capital Investing, L.P.)
White & Case LLP
1155 6th Avenue
New York, NY 10036
Attn: William F. Wynne, Jr.
Telephone:(212) 819-8316
Fax: (212) 354-8113
(as to matters relating to Olympus Growth Fund III, L.P. and Olympus
Executive Fund, L.P. )
Dewey Ballantine LLP
1301 Avenue of the Americas
New York, NY 10019
Attn: Richard A. Stenberg
Telephone:(212) 259-6280
Fax: (212) 259-6333
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.
<PAGE> 32
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
<PAGE> 33
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.
<PAGE> 34
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.
<PAGE> 35
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
<PAGE> 36
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.
<PAGE> 37
36
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first above written.
TELIGENT, INC.,
by /s/ Alex Mandl
------------------------
Name: Alex Mandl
Title: Chairman and Chief
Executive Officer
HMTF-IV ACQUISITION CORP.,
by /s/ Jack D. Furst
--------------------
Name: Jack D. Furst
Title: Executive Vice President
MICROSOFT CORPORATION,
by /s/ Gregory B. Maffei
------------------------
Name: Gregory B. Maffei
Title: Senior Vice President
and Chief Financial Officer
CHASE EQUITY ASSOCIATES, L.P.,
BY: CHASE CAPITAL PARTNERS,
its General Partner
by /s/ Michael R. Hannon
------------------------
Name: Michael R. Hannon
Title: General Partner
<PAGE> 38
37
DB CAPITAL INVESTORS, L.P.,
BY: DB CAPITAL PARTNERS, L.P.,
its General Partner
By: DB CAPITAL PARTNERS, INC.,
by /s/ Tyler Zachem
--------------------
Name: Tyler Zachem
Title: Managing Director
OLYMPUS GROWTH FUND III, L.P.,
BY:
By:
by /s/ Louis J. Mischianti
----------------------------
Name: Louis J. Mischianti
Title: Member
OLYMPUS EXECUTIVE FUND, L.P.,
BY:
By:
by /s/ Louis J. Mischianti
---------------------------
Name: Louis J. Mischianti
Title: Managing Member
<PAGE> 39
SCHEDULE I
<TABLE>
<CAPTION>
Purchaser Number of Shares
- --------- ----------------
<S> <C>
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
</TABLE>
<PAGE> 1
EXHIBIT 10.2
This REGISTRATION RIGHTS AGREEMENT (the "Agreement"), is made as of
December 3, 1999, by and among Teligent, Inc. a Delaware corporation, (the
"Company") and the security holders listed on Schedule I to this Agreement.
WHEREAS, the Company and the Initial Holders (as herein defined) (or
certain Affiliates of the Initial Holders) entered into a Stock Purchase
Agreement dated November 4, 1999 (the "Stock Purchase Agreement");
WHEREAS, it is a condition precedent to the closing of the transactions
contemplated in the Stock Purchase Agreement that the parties hereto execute and
deliver this Agreement;
NOW THEREFORE, in consideration of the premises, mutual promises and
covenants contained in this Agreement and intending to be legally bound, the
parties hereto hereby agree as follows:
ARTICLE I
Definitions
SECTION 1.01. Definitions. Terms defined in the Stock Purchase
Agreement are used herein as therein defined. In addition, the following terms,
as used herein, have the following meanings:
"Chase Holders" means the Initial Chase Holders and any direct or
indirect transferee of any Registrable Securities held by the Initial Chase
Holders.
"Commission" means the Securities and Exchange Commission.
"Demand Registration" means a registration under the Securities Act
requested in accordance with Section 2.01.
"DB Holders" means the Initial DB Holders and any direct or indirect
transferee of any Registrable Securities held by the Initial DB Holders.
"HMTF Holders" means the Initial HMTF Holders and any direct or
indirect transferee of any Registrable Securities held by the Initial HMTF
Holders.
<PAGE> 2
2
"Holders" means the collective reference to the HMTF Holders, the
Microsoft Holders, the Chase Holders, the DB Holders and the Olympus Holders.
"Initial Chase Holders" means Chase Capital Partners, a New York
General Partnership, or any of its Affiliates that it controls (including
without limitation Chase Equity Associates, L.P.)
"Initial DB Holders" means DB Capital Investors, L.P.
"Initial HMTF Holders" means HM4 Teligent Qualified Fund, LLC; HM4
Teligent Private Fund, LLC; HM PG-IV Teligent, LLC; HM 4-SBS Teligent
Coinvestors, LLC, HM 4-EQ Teligent Coinvestors, LLC and HMTF Bridge Teligent,
LLC.
"Initial Holders" means the collective reference to the Initial HMTF
Holders, the Initial Microsoft Holders, the Initial Chase Holders, the Initial
DB Holders and the Initial Olympus Holders.
"Initial Microsoft Holders" means Microsoft Corporation.
"Initial Olympus Holders" means Olympus Growth Fund III, L.P. and
Olympus Executive Fund, L.P.
"Initial Shelf Registration" has the meaning set forth in Section
2.03(a).
"Microsoft Holders" means the Initial Microsoft Holders and any direct
or indirect transferee of any Registrable Securities held by the Initial
Microsoft Holders.
"Olympus Holders" means the Initial Olympus Holders and any direct or
indirect transferee of any Registrable Securities held by the Initial Olympus
Holders.
"Piggyback Registration" has the meaning set forth in Section 2.02.
"Registrable Common Stock" means the shares of Common Stock issued upon
conversion of the Registrable Series A Preferred Stock, plus any additional
shares of Common Stock issued in respect thereof in connection with any stock
split, stock dividend or similar event with respect to the Common Stock.
<PAGE> 3
3
"Registrable Series A Preferred Stock" means the Series A Preferred
Stock purchased pursuant to the Stock Purchase Agreement, plus any additional
shares of Series A Preferred Stock issued in respect thereof in connection with
any stock split, stock dividend or similar event with respect to the Series A
Preferred Stock.
"Registrable Securities" means (a) the Registrable Series A Preferred
Stock, (b) the Registrable Common Stock and (c) any securities of the Company or
any successor entity into which Registrable Common Stock or Registrable Series A
Preferred Stock may hereafter be converted or changed. As to any particular
Registrable Securities, such securities shall cease to be Registrable Securities
when (i) a registration statement with respect to the sale of such securities
shall have become effective under the Securities Act and such securities shall
have been disposed of under such registration statement, (ii) such securities
shall have been transferred pursuant to Rule 144, (iii) such securities shall
have been otherwise transferred or disposed of, and new certificates therefor
not bearing a legend restricting further transfer shall have been delivered by
the Company, and subsequent transfer or disposition of them shall not require
their registration or qualification under the Securities Act or any similar
state law then in force, or (iv) such securities shall have ceased to be
outstanding.
"Requesting Holders" means the Holders requesting a Demand
Registration, and shall include parties deemed "Requesting Holders" pursuant to
Sections 2.01(a)(v)-(vii).
"Rule 144" means Rule 144 (or any successor rule of similar effect)
promulgated under the Securities Act.
"Second Shelf Registration" has the meaning set forth in Section
2.03(b).
"Selling Holder" means any Holder who is selling Registrable Securities
pursuant to a public offering registered hereunder.
"Underwriter" means a securities dealer who purchases any Registrable
Securities as principal and not as part of such dealer's market-making
activities.
SECTION 1.02. Internal References. Unless the context indicates
otherwise, references to Articles, Sections and paragraphs shall refer to the
corresponding articles, sections and paragraphs in this Agreement, and
references to the parties shall mean the parties to the Stock Purchase
Agreement.
<PAGE> 4
4
ARTICLE II
Registration Rights
SECTION 2.01. Demand Registration. (a)(i) Holders of a majority of the
Registrable Securities held by the HMTF Holders may make up to three written
requests for a Demand Registration of all or any part of the Registrable
Securities held by such HMTF Holders; provided, that (A) each such Demand
Registration by the HMTF Holders must be in respect of Registrable Securities
with a fair market value of at least $50,000,000, and (B) the HMTF Holders shall
not be entitled to a Demand Registration if, during the 120 days preceding such
request, either the HMTF Holders had requested a Demand Registration (unless
such Demand Registration was preempted pursuant to Section 2.01(e)), or the HMTF
Holders were given the opportunity to participate in a Piggyback Registration in
accordance with Section 2.02 and either (1) failed to notify the Company of a
desire to participate in such Piggyback Registration or (2) notified the Company
of a desire to participate in such Piggyback Registration and were able to sell
in such Piggyback Registration at least 80% of the Registrable Securities
requested by the HMTF Holders to be included in such Piggyback Registration.
(ii) Holders of a majority of the Registrable Securities held by the
Microsoft Holders may make up to three written requests for a Demand
Registration of all or any part of the Registrable Securities held by such
Microsoft Holders; provided, that (A) each such Demand Registration by the
Microsoft Holders must be in respect of Registrable Securities with a fair
market value of at least $50,000,000, and (B) the Microsoft Holders shall not be
entitled to a Demand Registration if, during the 120 days preceding such
request, either the Microsoft Holders had requested a Demand Registration
(unless such Demand Registration was preempted pursuant to Section 2.01(e)), or
the Microsoft Holders were given the opportunity to participate in a Piggyback
Registration in accordance with Section 2.02 and either (1) failed to notify the
Company of a desire to participate in such Piggyback Registration or (2)
notified the Company of a desire to participate in such Piggyback Registration
and were able to sell in such Piggyback Registration at least 80% of the
Registrable Securities requested by the Microsoft Holders to be included in such
Piggyback Registration.
(iii) Holders of a majority of the Registrable Securities held by the
Chase Holders, the DB Holders and the
<PAGE> 5
5
Olympus Holders may make one written request for a Demand Registration of all or
any part of the Registrable Securities held by such Chase Holders, DB Holders
and Olympus Holders. Any such Demand Registration pursuant to this Section
2.01(a)(iii) must be in respect of Registrable Securities with a fair market
value of at least $75,000,000; provided, that such Requesting Holders shall not
be entitled to exercise a Demand Registration if, during the 120 days preceding
such request, such Requesting Holders were given the opportunity to participate
in a Piggyback Registration in accordance with Section 2.02 and either (1)
holders of a majority of the Registrable Securities held by such Requesting
Holders failed to notify the Company of a desire to participate in such
Piggyback Registration or (2) such Requesting Holders notified the Company of a
desire to participate in such Piggyback Registration and were able to sell in
such Piggyback Registration at least 80% of the Registrable Securities requested
by the Chase Holders, the DB Holders and the Olympus Holders, respectively, to
be included in such Piggyback Registration.
(iv) Any request for a Demand Registration will specify the aggregate
number of shares of Registrable Securities proposed to be sold by the Requesting
Holders and will also specify the intended method of disposition thereof. A
registration will not count as a Demand Registration until it has become
effective. Should a Demand Registration not become effective due to the failure
of a Holder to perform its obligations under this Agreement or the inability of
the Requesting Holders to reach agreement with the Underwriters for the proposed
sale on price or other customary terms for such transaction, or in the event the
Requesting Holders withdraw or do not pursue the request for the Demand
Registration (in each of the foregoing cases, provided that at such time the
Company is in compliance in all material respects with its obligations under
this Agreement), then, subject to Section 2.01(b), such Demand Registration
shall be deemed to have been effected (provided that (i) if, the Demand
Registration does not become effective because a material adverse change has
occurred, or is reasonably likely to occur, in the condition (financial or
otherwise), business, assets or results of operations of the Company and its
subsidiaries taken as a whole subsequent to the date of the written request made
by the Requesting Holders or (ii) if, after the Demand Registration has become
effective, an offering of Registrable Securities pursuant to a registration is
interfered with by any stop order, injunction, or other order or requirement of
the Commission or other governmental agency or court then the Demand
Registration shall not be deemed to have been effected and will not count as a
Demand Registration).
<PAGE> 6
6
(v) Upon receipt of any request for a Demand Registration by holders of
a majority of the Registrable Securities held by the HMTF Holders, the Company
shall promptly (but in any event within ten (10) days) give written notice of
such proposed Demand Registration to all other HMTF Holders, and all such HMTF
Holders shall have the right, exercisable by written notice to the Company
within twenty (20) days of their receipt of the Company's notice, to elect to
include in such Demand Registration such portion of their Registrable Securities
as they may request. All such HMTF Holders requesting to have their Registrable
Securities included in a Demand Registration in accordance with the preceding
sentence shall be deemed to be "Requesting Holders" for purposes of this Section
2.01.
(vi) Upon receipt of any request for a Demand Registration by holders
of a majority of the Registrable Securities held by the Microsoft Holders, the
Company shall promptly (but in any event within ten (10) days) give written
notice of such proposed Demand Registration to all other Microsoft Holders, and
all such Microsoft Holders shall have the right, exercisable by written notice
to the Company within twenty (20) days of their receipt of the Company's notice,
to elect to include in such Demand Registration such portion of their
Registrable Securities as they may request. All such Microsoft Holders
requesting to have their Registrable Securities included in a Demand
Registration in accordance with the preceding sentence shall be deemed to be
"Requesting Holders" for purposes of this Section 2.01.
(vii) Upon receipt of any request for a Demand Registration by holders
of a majority of the Registrable Securities held by the Chase Holders, DB
Holders and Olympus Holders, the Company shall promptly (but in any event within
ten (10) days) give written notice of such proposed Demand Registration to all
other Chase Holders, DB Holders and Olympus Holders, and all such Holders shall
have the right, exercisable by written notice to the Company within twenty (20)
days of their receipt of the Company's notice, to elect to include in such
Demand Registration such portion of their Registrable Securities as they may
request. All such Holders requesting to have their Registrable Securities
included in a Demand Registration in accordance with the preceding sentence
shall be deemed to be "Requesting Holders" for purposes of this Section 2.01.
(b) In the event that the Requesting Holders withdraw or do not pursue
a request for a Demand Registration and, pursuant to Section 2.01(a) hereof,
such Demand Registration is deemed to have been effected, the
<PAGE> 7
7
HMTF Holders, the Microsoft Holders or the Chase Holders, the DB Holders and the
Olympus Holders, as the case may be, may reacquire such Demand Registration
(such that the withdrawal or failure to pursue a request will not count as a
Demand Registration hereunder) if the Selling Holders reimburse the Company for
any and all Registration Expenses incurred by the Company in connection with
such request for a Demand Registration.
(c) If the Requesting Holders so elect, the offering of such
Registrable Securities pursuant to such Demand Registration shall be in the form
of a "firm commitment" underwritten offering. A majority in interest of the
Requesting Holders shall have the right to select the managing Underwriters and
any additional investment bankers and managers to be used in connection with any
offering under this Section 2.01, subject to the Company's approval, which
approval shall not be unreasonably withheld.
(d) The Requesting Holders will inform the Company of the time and
manner of any disposition of Registrable Common Stock, and agree to reasonably
cooperate with the Company in effecting the disposition of the Registrable
Common Stock in a manner that does not unreasonably disrupt the public trading
market for the Common Stock; provided, however, that the Holders' only right to
a shelf registration statement shall be pursuant to Section 2.03.
(e) The Company will have the right to preempt any Demand Registration
with a primary registration by delivering written notice (within five business
days after the Company has received a request for such Demand Registration) of
such intention to the Selling Holder indicating that the Company has identified
a specific business need and use for the proceeds of the sale of such securities
and the Company shall use commercially reasonable efforts to effect a primary
registration within 60 days of such notice. In the ensuing primary registration,
the Holders will have such piggyback registration rights as are set forth in
Section 2.02 hereof. Upon the Company's preemption of a requested Demand
Registration, such requested registration will not count as the Holders' Demand
Registration; provided that a Demand Registration will not be deemed preempted
if the Holders are permitted to sell all requested securities in connection with
the ensuing primary offering by exercising their piggyback registration rights
as set forth in Section 2.02. The Company may exercise the right to preempt only
twice in any 360-day period; provided that during any 360-day period the Company
shall use its reasonable best efforts to permit a period of at least
<PAGE> 8
8
120 consecutive days during which the Selling Holders may effect a Demand
Registration.
(f) Priority on Demand Registrations. No securities to be sold for the
account of any Person (including the Company) other than a Requesting Holder
shall be included in a Demand Registration unless the managing Underwriter or
Underwriters shall advise the Company and the Requesting Holders in writing that
the inclusion of such securities will not materially and adversely affect the
price of the offering (a "Material Adverse Effect"). Furthermore, in the event
the managing Underwriter or Underwriters shall advise the Company or the
Requesting Holders that even after exclusion of all securities of other Persons
(including the Company) pursuant to the immediately preceding sentence, the
amount of Registrable Securities proposed to be included in such Demand
Registration by Requesting Holders is sufficiently large to cause a Material
Adverse Effect, the Registrable Securities of the Requesting Holders to be
included in such Demand Registration shall equal the number of shares which the
Company and the Requesting Holders are so advised can be sold in such offering
without a Material Adverse Effect and such shares shall be allocated pro rata
among the Requesting Holders on the basis of the number of Registrable
Securities requested to be included in such registration by each such Requesting
Holder; provided, however, that if any Registrable Securities requested to be
registered pursuant to a Demand Registration under Section 2.01 are excluded
from registration hereunder, then the Holder(s) having shares excluded
("Excluded Holders") shall have the right to withdraw all, or any part, of their
shares from such registration.
SECTION 2.02. Piggyback Registration. (a) If the Company proposes to
file a registration statement under the Securities Act with respect to an
offering of Common Stock for its own account or for the account of another
Person (other than a registration statement on Form S-4 or S-8, or, except as
provided for in Section 2.03, pursuant to Rule 415 (or any substitute form or
rule, respectively, that may be adopted by the Commission)), the Company shall
give written notice of such proposed filing to the Holders at the address set
forth in the share register of the Company as soon as reasonably practicable
(but in no event less than 15 days before the anticipated filing date),
undertaking to provide each Holder the opportunity to register on the same terms
and conditions such number of shares of Registrable Common Stock as such Holder
may request (a "Piggyback Registration"). Each Holder will have seven business
days after receipt of any such notice to notify the Company as to whether it
wishes to participate in a Piggyback Registration
<PAGE> 9
9
(which notice shall not be deemed to be a request for a Demand Registration);
provided that should a Holder fail to provide timely notice to the Company, such
Holder will forfeit any rights to participate in the Piggyback Registration
with respect to such proposed offering other than as described in Sections
2.01(a)(v)-(vii), as applicable. In the event that the registration statement is
filed on behalf of a Person other than the Company, the Company will use its
best efforts to have the shares of Registrable Common Stock that the Holders
wish to sell included in the registration statement. If the Company or the
Person for whose account such offering is being made shall determine in its sole
discretion not to register or to delay the proposed offering, the Company may,
at its election, provide written notice of such determination to the Holders and
(i) in the case of a determination not to effect the proposed offering, shall
thereupon be relieved of the obligation to register such Registrable Common
Stock in connection therewith, and (ii) in the case of a determination to delay
a proposed offering, shall thereupon be permitted to delay registering such
Registrable Common Stock for the same period as the delay in respect of the
proposed offering. As between the Company and the Selling Holders, the Company
shall be entitled to select the Underwriters in connection with any Piggyback
Registration.
(b) Priority on Piggyback Registrations. If the Registrable Securities
requested to be included in the Piggyback Registration by any Holder differ from
the type of securities proposed to be registered by the Company and the managing
Underwriter advises the Company that due to such differences the inclusion of
such Registrable Securities would cause a Material Adverse Effect, then (i) the
number of such Holders' Registrable Securities to be included in the Piggyback
Registration shall be reduced to an amount which, in the opinion of the managing
Underwriter, would eliminate such Material Adverse Effect or (ii) if no such
reduction would, in the opinion of the managing Underwriter, eliminate such
Material Adverse Effect, then the Company shall have the right to exclude all
such Registrable Securities from such Piggyback Registration, provided, that no
other securities of such type are included and offered for the account of any
other Person in such Piggyback Registration. Any partial reduction in number of
Registrable Securities of any Holder to be included in the Piggyback
Registration pursuant to clause (i) of the immediately preceding sentence shall
be effected pro rata based on the ratio which such Holder's requested shares
bears to the total number of shares requested to be included in such Piggyback
Registration by all Persons other than the Company who have the contractual
right to request that their
<PAGE> 10
10
shares be included in such registration statement and who have requested that
their shares be included. If the Registrable Securities requested to be included
in the registration statement are of the same type as the securities being
registered by the Company and the managing Underwriter advises the Company that
the inclusion of such Registrable Securities would cause a Material Adverse
Effect, the Company will be obligated to include in such registration statement,
as to each Holder only a portion of the shares such Holder has requested be
registered equal to the ratio which such Holder's requested shares bears to the
total number of shares requested to be included in such registration statement
by all Persons (other than the Person or Persons initiating such registration
request) who have the contractual right to request that their shares be included
in such registration statement and who have requested their shares be included.
If the Company initiated the registration, then the Company may include all of
its securities in such registration statement before any such Holder's requested
shares are included. If another security holder initiated the registration, then
the Company may not include any of its securities in such registration statement
unless all Registrable Securities requested to be included in the registration
statement by all Holders are included in such registration statement. If as a
result of the provisions of this Section 2.02(b) any Holder shall not be
entitled to include all Registrable Securities in a registration that such
Holder has requested to be so included, such Holder may withdraw such Holder's
request to include Registrable Securities in such registration statement prior
to its effectiveness.
Section 2.03 Shelf Registration. (a) Holders of a majority of the
Registrable Securities may, at any time after the first anniversary of the
Closing Date (the "First Anniversary"), make a written request that the Company
effect a shelf registration of a portion of the Registrable Securities held by
such Holders (the "Initial Shelf Registration") pursuant to Rule 415; provided,
that a Holder will be entitled to include in the Initial Shelf Registration no
more than 25% of the Registrable Securities held by such Holder. Upon receipt of
a request for the Initial Shelf Registration, the Company shall promptly (but in
any event within 10 days) give written notice of the proposed Initial Shelf
Registration to all other Holders, and each such other Holders shall have the
right to include in the Initial Shelf Registration up to 25% of the Registrable
Securities held by such Holder.
(b) From and after the fifth anniversary of the Closing Date (the
"Fifth Anniversary"), Holders of a
<PAGE> 11
11
majority of the Registrable Securities may make a written request that the
Company effect a shelf registration pursuant to Rule 415 of all or a portion of
the Registrable Securities held by such Holders (the "Second Shelf
Registration"). Upon receipt of a written request for the Second Shelf
Registration, the Company shall promptly (but in any event within ten (10) days)
give written notice of the proposed Second Shelf Registration to all other
Holders, and all such other Holders shall have the right to include in the
Second Shelf Registration all or a portion of the Registrable Securities held by
such Holder.
ARTICLE III
Registration Procedures
SECTION 3.01. Filings; Information. In connection with the
registration of Registrable Securities pursuant to Section 2.01, Section 2.02
and Section 2.03 hereof, the Company will use its reasonable best efforts to
effect the registration of such Registrable Securities as promptly as is
reasonably practicable, and in connection with any such request:
(a) The Company will expeditiously prepare and file with the Commission
a registration statement on any form for which the Company then qualifies and
which counsel for the Company shall deem appropriate and available for the sale
of the Registrable Securities to be registered thereunder in accordance with
the intended method of distribution thereof, and use its reasonable best efforts
to cause such filed registration statement to become and remain effective (i)
with respect to any Demand Registration or Piggyback Registration, for such
period, not to exceed 60 days, as may be reasonably necessary to effect the sale
of such securities, (ii) with respect to the Initial Shelf Registration, until
the earlier of the sale of all Registrable Securities thereunder and the Fifth
Anniversary and (iii) with respect to the Second Shelf Registration, until the
earlier of the sale of all Registrable Securities thereunder and the end of the
36th calendar month from the time the Second Shelf Registration becomes
effective; provided that if the Company shall furnish to the Selling Holder a
certificate signed by the Company's Chairman, President or any Vice-President
stating that the Company's Board of Directors has determined in good faith that
it would be detrimental or otherwise disadvantageous to the Company or its
shareholders for such a registration statement to be filed as expeditiously as
possible because the sale of Registrable Securities covered by such Registration
Statement or the disclosure of informa-
<PAGE> 12
12
tion in any related prospectus or prospectus supplement would materially
interfere with any acquisition, financing or other material event or transaction
which is then intended or the public disclosure of which at the time would be
materially prejudicial to the Company, the Company may postpone the filing or
effectiveness of a registration statement for a period of not more than 120
days; provided that during any 360-day period the Company shall use its
reasonable best efforts to permit a period of at least 120 consecutive days
during which the Company will make a registration statement available under this
Agreement; and provided further that if (i) the effective date of any
registration statement filed pursuant to a Demand Registration would otherwise
be at least 45 calendar days, but fewer than 90 calendar days, after the end of
the Company's fiscal year, and (ii) the Securities Act requires the Company to
include audited financials as of the end of such fiscal year, the Company may
delay the effectiveness of such registration statement for such period as is
reasonably necessary to include therein its audited financial statements for
such fiscal year.
(b) Anything in this Agreement to the contrary notwithstanding, it is
understood and agreed that the Company shall not be required to keep any shelf
registration effective or useable for offers and sales of the Registrable
Securities, file a post effective amendment to a shelf registration statement or
prospectus supplement or to supplement or amend any registration statement, if
the Company is then involved in discussions concerning, or otherwise engaged in,
any material financing or investment, acquisition or divestiture transaction or
other material business purpose if the Company determines in good faith that the
making of such a filing, supplement or amendment at such time would interfere
with such transaction or purpose. The Company shall promptly give the Holders of
Registrable Securities written notice of such postponement containing a general
statement of the reasons for such postponement and an approximation of the
anticipated delay. Upon receipt by a Holder of Registrable Securities of notice
of an event of the kind described in this Section 3.01(b), such Holder shall
forthwith discontinue such Holder's disposition of Registrable Securities until
such Holder's receipt of notice from the Company that such disposition may
continue and of any supplemented or amended prospectus indicated in such notice.
The Company shall use its reasonable best efforts to permit sales of Registrable
Securities on such shelf registration statement for at least 120 days during any
360-day period.
<PAGE> 13
13
(c) The Company will, if requested, prior to filing such registration
statement or any amendment or supplement thereto, furnish to the Selling
Holders, and each applicable managing Underwriter, if any, copies thereof, and
thereafter furnish to the Selling Holders and each such Underwriter, if any,
such number of copies of such registration statement, amendment and supplement
thereto (in each case including all exhibits thereto and documents incorporated
by reference therein) and the prospectus included in such registration statement
(including each preliminary prospectus) as the Selling Holders or each such
Underwriter may reasonably request in order to facilitate the sale of the
Registrable Securities by the Selling Holders.
(d) After the filing of the registration statement, the Company will
promptly notify the Selling Holders of any stop order issued or, to the
Company's knowledge, threatened to be issued by the Commission and take all
reasonable actions required to prevent the entry of such stop order or to remove
it if entered.
(e) The Company will use its commercially reasonable efforts to
qualify the Registrable Securities for offer and sale under such other
securities or blue sky laws of such jurisdictions in the United States as the
Selling Holders reasonably request; keep each such registration or qualification
(or exemption therefrom) effective during the period in which such registration
statement is required to be kept effective; and do any and all other acts and
things which may be reasonably necessary or advisable to enable each Selling
Holder to consummate the disposition of the Registrable Securities owned by such
Selling Holder in such jurisdictions; provided that the Company will not be
required to (i) qualify generally to do business in any jurisdiction where it
would not otherwise be required to qualify but for this paragraph 3.01(e), (ii)
subject itself to taxation in any such jurisdiction or (iii) consent to general
service of process in any such jurisdiction.
(f) The Company will as promptly as is practicable notify the Selling
Holders, at any time when a prospectus relating to the sale of the Registrable
Securities is required by law to be delivered in connection with sales by an
Underwriter or dealer, of the occurrence of any event requiring the preparation
of a supplement or amendment to such prospectus so that, as thereafter delivered
to the purchasers of such Registrable Securities, such prospectus will not
contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements
<PAGE> 14
14
therein, in the light of the circumstances under which they were made, not
misleading and promptly make available to the Selling Holders and to the
Underwriters any such supplement or amendment. Upon receipt of any notice of the
occurrence of any event of the kind described in the preceding sentence, Selling
Holders will forthwith discontinue the offer and sale of Registrable Securities
pursuant to the registration statement covering such Registrable Securities
until receipt by the Selling Holders and the Underwriters of the copies of such
supplemented or amended prospectus and, if so directed by the Company, the
Selling Holders will deliver to the Company all copies, other than permanent
file copies then in the possession of Selling Holders, of the most recent
prospectus covering such Registrable Securities at the time of receipt of such
notice. In the event the Company shall give such notice, the Company shall
extend the period during which such registration statement shall be maintained
effective as provided in Section 3.01(a) hereof by the number of days during the
period from and including the date of the giving of such notice to the date when
the Company shall make available to the Selling Holders such supplemented or
amended prospectus.
(g) The Company will enter into customary agreements (including an
underwriting agreement in customary form) and take such other actions as are
required in order to expedite or facilitate the sale of such Registrable
Securities.
(h) At the request of any Underwriter in connection with an
underwritten offering the Company will furnish (i) an opinion of counsel,
addressed to the Underwriters, covering such customary matters as the managing
Underwriter may reasonably request and (ii) a comfort letter or comfort letters
from the Company's independent public accountants covering such customary
matters as the managing Underwriter may reasonably request.
(i) If requested by the managing Underwriter or any Selling Holder, the
Company shall promptly incorporate in a prospectus supplement or post effective
amendment such information as the managing Underwriter or any Selling Holder
reasonably requests to be included therein, including without limitation, with
respect to the Registrable Securities being sold by such Selling Holder, the
purchase price being paid therefor by the Underwriters and with respect to any
other terms of the underwritten offering of the Registrable Securities to be
sold in such offering, and promptly make all required filings of such prospectus
supplement or post effective amendment.
<PAGE> 15
15
(j) The Company shall promptly make available for inspection by any
Selling Holder or Underwriter participating in any disposition pursuant to any
registration statement, and any attorney, accountant or other agent or
representative retained by any such Selling Holder or Underwriter (collectively,
the "Inspectors"), all financial and other records, pertinent corporate
documents and properties of the Company (collectively, the "Records"), as shall
be reasonably necessary to enable them to exercise their due diligence
responsibility, and cause the Company's officers, directors and employees to
supply all information requested by any such Inspector in connection with such
registration statement; provided, however, that unless the disclosure of such
Records is necessary to avoid or correct a misstatement or omission in the
registration statement or the release of such Records is ordered pursuant to a
subpoena or other order from a court of competent jurisdiction, the Company
shall not be required to provide any information under this subparagraph (j) if
(A) the Company believes, after consultation with counsel for the Company, that
to do so would cause the Company to forfeit an attorney-client privilege that
was applicable to such information or (B) if either (1) the Company has
requested and been granted from the Commission confidential treatment of such
information contained in any filing with the Commission or documents provided
supplementally or otherwise or (2) the Company reasonably determines in good
faith that such Records are confidential and so notifies the Inspectors in
writing unless prior to furnishing any such information with respect to (A) or
(B) such Holder of Registrable Securities requesting such information agrees to
enter into a confidentiality agreement in customary form and subject to
customary exceptions; provided further, however, that each Holder of Registrable
Securities agrees that it will, upon learning that disclosure of such Records is
sought in a court of competent jurisdiction, give notice to the Company and
allow the Company, at its expense, to undertake appropriate action and to
prevent disclosure of the Records deemed confidential.
(k) The Company shall cause the Registrable Securities included in any
registration statement to be (A) listed on each securities exchange, if any, on
which similar securities issued by the Company are then listed, or (B)
authorized to be quoted and/or listed (to the extent applicable) on the Nasdaq
National Market if the Registrable Securities so qualify.
(l) The Company shall provide a CUSIP number for the Registrable
Securities included in any registration statement not later than the effective
date of such registration statement.
<PAGE> 16
16
(m) The Company shall cooperate with each Selling Holder and each
Underwriter participating in the disposition of such Registrable Securities and
their respective counsel in connection with any filings required to be made with
the National Association of Securities Dealers, Inc.
(n) The Company shall during the period when the prospectus is required
to be delivered under the Securities Act, promptly file all documents required
to be filed with the Commission pursuant to Sections 13(a), 13(c), 14 or 15(d)
of the Exchange Act.
(o) The Company will make generally available to its security holders,
as soon as reasonably practicable, an earnings statement covering a period of 12
months, beginning within three months after the effective date of the
registration statement, which earnings statement shall satisfy the provisions of
Section 11(a) of the Securities Act and the rules and regulations of the
Commission thereunder.
(p) The Company will use its commercially reasonable efforts to cause
all such Registrable Common Stock and, in the event of a public offering of
Series A Preferred Stock, the Series A Preferred Stock (subject to applicable
listing requirements) to be listed on each securities exchange or quoted on each
inter-dealer quotation system on which the Common Stock is then listed or
quoted.
The Company may require Selling Holders promptly to furnish in writing
to the Company such information regarding such Selling Holders, the plan of
distribution of the Registrable Securities and other information as the Company
may from time to time reasonably request or as may be legally required in
connection with such registration.
SECTION 3.02. Registration Expenses. In connection with any
Registration effected hereunder, the Company shall pay the following expenses
incurred in connection with such registration (the "Registration Expenses"): (i)
registration and filing fees with the Commission and the National Association of
Securities Dealers, Inc., (ii) fees and expenses of compliance with securities
or blue sky laws (including reasonable fees and disbursements of counsel in
connection with blue sky qualifications of the Registrable Securities), (iii)
printing expenses, (iv) fees and expenses incurred in
<PAGE> 17
17
connection with the listing or quotation of the Registrable Securities, (v) fees
and expenses of counsel to the Company and the reasonable fees and expenses of
independent certified public accountants for the Company (including fees and
expenses associated with the special audits or the delivery of comfort letters),
(vi) the reasonable fees and expenses of any additional experts retained by the
Company in connection with such registration and (vii) all roadshow costs and
expenses not paid by the Underwriters.
ARTICLE IV
Indemnification and Contribution
SECTION 4.01. Indemnification by the Company. The Company agrees to
indemnify and hold harmless each Selling Holder and its Affiliates and their
respective officers, directors, partners, stockholders, members, employees,
agents and representatives and each Person (if any) which controls a Selling
Holder within the meaning of either Section 15 of the Securities Act or Section
20 of the Exchange Act, from and against any and all losses, claims, damages,
liabilities, costs and expenses (including reasonable attorneys' fees) caused
by, arising out of, resulting from or related to any untrue statement or alleged
untrue statement of a material fact contained in any registration statement or
prospectus relating to the Registrable Securities (as amended or supplemented if
the Company shall have furnished any amendments or supplements thereto) or any
preliminary prospectus, or caused by any omission or alleged omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading, except insofar as such losses, claims,
damages or liabilities are caused by or based upon any information furnished in
writing to the Company by or on behalf of such Selling Holder expressly for use
therein or by the Selling Holder's failure to deliver a copy of the registration
statement or prospectus or any amendments or supplements thereto after the
Company has furnished the Selling Holder with copies of the same; provided,
however, that the Company shall have no obligation to indemnify under this
sentence to the extent any such losses, claims, damages or liabilities have been
finally and non-appealably determined by a court to have resulted from such
Selling Holder's willful misconduct or gross negligence. The Company also agrees
to indemnify any Underwriters of the Registrable Securities, their officers and
directors and each person who controls such Underwriters on substantially the
same basis as that of the indemnification of the Selling Holders provided in
this Section 4.01, except insofar as
<PAGE> 18
18
such losses, claims, damages or liabilities are caused by or based upon any
information furnished in writing to the Company by or on behalf of such
Underwriter expressly for use therein or by the Underwriter's failure to deliver
a copy of the registration statement or prospectus or any amendments or
supplements thereto after the Company has furnished the Underwriter with copies
of the same; provided, however, that the Company shall have no obligation to
indemnify under this sentence to the extent any such losses, claims, damages or
liabilities have been finally and non-appealably determined by a court to have
resulted from any such Underwriter's willful misconduct or gross negligence.
SECTION 4.02. Indemnification by Selling Holders. Each Selling Holder
agrees to indemnify and hold harmless the Company, its officers and directors,
and each Person, if any, which controls the Company within the meaning of either
Section 15 of the Securities Act or Section 20 of the Exchange Act to the same
extent as the foregoing indemnity from the Company to each Selling Holder, but
only with reference to information furnished in writing by or on behalf of such
Selling Holder expressly for use in any registration statement or prospectus
relating to the Registrable Securities, or any amendment or supplement thereto,
or any preliminary prospectus. Each Selling Holder also agrees to indemnify and
hold harmless any Underwriters of the Registrable Securities, their officers and
directors and each person who controls such Underwriters on substantially the
same basis as that of the indemnification of the Company provided in this
Section 4.02, but only with reference to information furnished in writing by or
on behalf of such Selling Holder expressly for use in any registration statement
or prospectus relating to the Registrable Securities, or any amendment or
supplement thereto, or any preliminary prospectus. Each such Selling Holder's
liability under this Section 4.02 shall be limited to an amount equal to the net
proceeds (after deducting the underwriting discount and expenses) received by
such Selling Holder from the sale of such Registrable Securities by such Selling
Holder.
SECTION 4.03. Conduct of Indemnification Proceedings. In case any
proceeding (including any governmental investigation) shall be instituted
involving any Person in respect of which indemnity may be sought pursuant to
Section 4.01 or Section 4.02, such Person (the "Indemnified Party") shall
promptly notify the Person against whom such indemnity may be sought (the
"Indemnifying Party") in writing and the Indemnifying Party, upon the request of
the Indemnified Party, shall retain counsel reasonably satisfactory to such
Indemnified Party to
<PAGE> 19
19
represent such Indemnified Party and any others the Indemnifying Party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any Indemnified
Party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such Indemnified Party unless (i) the
Indemnifying Party and the Indemnified Party shall have mutually agreed to the
retention of such counsel or (ii) the named parties to any such proceeding
(including any impleaded parties) include both the Indemnified Party and the
Indemnifying Party and, in the written opinion of counsel for the Indemnified
Party, representation of both parties by the same counsel would be inappropriate
due to actual or potential differing interests between them. It is understood
that the Indemnifying Party shall not, in connection with any proceeding or
related proceedings in the same jurisdiction, be liable for the fees and
expenses of more than one separate firm of attorneys (in addition to any local
counsel) at any time for all such Indemnified Parties, and that all such fees
and expenses shall be reimbursed as they are incurred. In the case of any such
separate firm for the Indemnified Parties, such firm shall be designated in
writing by the Indemnified Parties. The Indemnifying Party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent (not to be unreasonably withheld), or if there be a
final judgment for the plaintiff, the Indemnifying Party shall indemnify and
hold harmless such Indemnified Parties from and against any loss or liability
(to the extent stated above) by reason of such settlement or judgment.
SECTION 4.04. Contribution. If the indemnification provided for in
this Article IV is unavailable to an Indemnified Party in respect of any losses,
claims, damages or liabilities in respect of which indemnity is to be provided
hereunder, then each such Indemnifying Party, in lieu of indemnifying such
Indemnified Party, shall to the fullest extent permitted by law contribute to
the amount paid or payable by such Indemnified Party as a result of such losses,
claims, damages or liabilities in such proportion as is appropriate to reflect
the relative fault of such party in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative fault of the Company, a
Selling Holder and the Underwriters shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
<PAGE> 20
20
information supplied by such party and the parties' relative intent, knowledge,
access to information and opportunity to correct or prevent such statement or
omission.
The Company and each Selling Holder agrees that it would not be just
and equitable if contribution pursuant to this Section 4.04 were determined by
pro rata allocation (even if the Underwriters were treated as one entity for
such purpose) or by any other method of allocation that does not take account of
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an Indemnified Party as a result of the losses,
claims, damages or liabilities referred to in the immediately preceding
paragraph shall be deemed to include, subject to the limitations set forth
above, any legal or other expenses reasonably incurred by such Indemnified Party
in connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Article IV, no Underwriter shall be
required to contribute any amount in excess of the amount by which the total
price at which the securities underwritten by it and distributed to the public
were offered to the public exceeds the amount of any damages which such
Underwriter has otherwise been required to pay by reason of such untrue or
alleged untrue statement or omission or alleged omission, and each Selling
Holder shall not be required to contribute any amount in excess of the amount by
which the net proceeds of the offering (before deducting expenses) received by
such Selling Holder exceeds the amount of any damages which such Selling Holder
has otherwise been required to pay by reason of such untrue or alleged untrue
statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any Person who was not guilty of such
fraudulent misrepresentation.
ARTICLE V
Miscellaneous
SECTION 5.01. Participation in Underwritten Registrations. No Person
may participate in any under written registered offering contemplated hereunder
unless such Person (a) agrees to sell its securities on the basis provided in
any underwriting arrangements approved by the Persons entitled hereunder to
approve such arrangements, (b) completes and executes all questionnaires, powers
of attorney, custody arrangements, indemnities, underwriting agreements and
other documents reasonably required under the
<PAGE> 21
21
terms of such underwriting arrangements and this Agreement and (c) furnishes in
writing to the Company such information regarding such Person, the plan of
distribution of the Registrable Securities and other information as the Company
may from time to time request or as may be legally required in connection with
such registration; provided, however, that no such Person shall be required to
make any representations or warranties in connection with any such registration
other than representations and warranties as to (i) such Person's ownership of
his or its Registrable Securities to be sold or transferred free and clear of
all liens, claims and encumbrances, (ii) such Person's power and authority to
effect such transfer and (iii) such matters pertaining to compliance with
securities laws as may be reasonably requested; provided further, however, that
the obligation of such Person to indemnify pursuant to any such underwriting
agreements shall be several, not joint and several, among such Persons selling
Registrable Securities, and the liability of each such Person will be in
proportion to, and provided further that such liability will be limited to, the
net amount received by such Person from the sale of such Person's Registrable
Securities pursuant to such registration.
SECTION 5.02. Rule 144. The Company covenants that it will file any
reports required to be filed by it under the Securities Act and the Exchange Act
and that it will take such further action as the Holders may reasonably request
to the extent required from time to time to enable the Holders to sell
Registrable Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rule 144 under the Securities Act, as
such Rule may be amended from time to time, or any similar rule or regulation
hereafter adopted by the Commission. Upon the request of any Holder, the Company
will deliver to such Holder a written statement as to whether it has complied
with such reporting requirements.
SECTION 5.03. Holdback Agreements. Each Holder agrees, in the event of
an underwritten offering for the Company (whether for the account of the Company
or otherwise) not to offer, sell, contract to sell or otherwise dispose of any
Registrable Securities, or any securities convertible into or exchangeable or
exercisable for such securities, including any sale pursuant to Rule 144 under
the Securities Act (except as part of such underwritten offering), during the 14
days prior to, and during the 120-day period (or such lesser period as the lead
or managing underwriters may require) beginning on, the effective date of the
registration statement for such underwritten offering (or, in the case of an
offering pursuant to an effective shelf registration statement pursuant to Rule
415, the pricing date for such underwritten offering).
<PAGE> 22
22
SECTION 5.04. Termination. The registration rights granted under this
Agreement will terminate on November 30, 2014, or such earlier time as there
shall no longer be any Registrable Securities; provided, however, that if all
shares of Series A Preferred Stock outstanding on such date shall not have been
redeemed in full in accordance with Section 10 of the Certificate of
Designations, this Agreement shall remain in full force and effect with respect
to such shares (and the shares of Common Stock issuable upon the conversion of
such shares) until such time as such shares have been so redeemed in full.
SECTION 5.05. Amendments, Waivers, Etc. This Agreement may not be
amended, waived or otherwise modified or terminated except by an instrument in
writing signed by the Company and (i) Holders of at least 50% of the Registrable
Securities then held by all HMTF Holders, if the amendment is to be effective
against the HMTF Holders, (ii) Holders of at least 50% of the Registrable
Securities then held by all Microsoft Holders, if the amendment is to be
effective against the Microsoft Holders, (iii) Holders of at least 50% of the
Registrable Securities then held by all Chase Holders, if the amendment is to be
effective against the Chase Holders, (iv) Holders of at least 50% of the
Registrable Securities then held by all DB Holders, if the amendment is to be
effective against the DB Holders, and (v) Holders of at least 50% of the
Registrable Securities then held by all Olympus Holders, if the amendment is to
be effective against the Olympus Holders.
SECTION 5.06. Counterparts. This Agreement may be executed in one or
more counterparts, all of which shall be considered one and the same agreement.
Each party need not sign the same counterpart.
SECTION 5.07. Entire Agreement. This Agreement (i) constitutes the
entire agreement and supersedes all prior agreements and understandings, both
written and oral, among the parties with respect to the subject matter hereof.
SECTION 5.08. Governing Law. This Agreement shall be governed by, 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.
<PAGE> 23
23
SECTION 5.09. Assignment of Registration Rights. Each Holder of the
Registrable Securities may assign all or any part of its rights under this
Agreement to any person to whom such Holder sells, transfers or assigns such
Registrable Securities. In the event that the Holder shall assign its rights
pursuant to this Agreement in connection with the transfer of less than all its
Registrable Securities, the Holder shall also retain his rights with respect to
its remaining Registrable Securities.
<PAGE> 24
24
IN WITNESS WHEREOF, the Company and each Initial Holder has caused this
Agreement to be signed on its behalf by its officer thereunto duly authorized as
of the date first written above.
TELIGENT, INC.,
by /s/ Alex Mandl
------------------------
Name: Alex Mandl
Title: Chairman and Chief
Executive Officer
HM4 TELIGENT QUALIFIED FUND, LLC,
by /s/ David W. Knickel
------------------------
Name: David W. Knickel
Title: Vice President
HM4 TELIGENT PRIVATE FUND, LLC,
by /s/ David W. Knickel
------------------------
Name: David W. Knickel
Title: Vice President
HM PG-IV TELIGENT, LLC,
by /s/ David W. Knickel
------------------------
Name: David W. Knickel
Title: Vice President
HM 4-SBS TELIGENT COINVESTORS, LLC,
by /s/ David W. Knickel
------------------------
Name: David W. Knickel
Title: Vice President
<PAGE> 25
25
HM 4-EQ TELIGENT COINVESTORS, LLC,
by /s/ David W. Knickel
------------------------
Name: David W. Knickel
Title: Vice President
HMTF BRIDGE TELIGENT, LLC,
by /s/ David W. Knickel
------------------------
Name: David W. Knickel
Title: Vice President
MICROSOFT CORPORATION,
by /s/ Gregory B. Maffei
------------------------
Name: Gregory B. Maffei
Title: Senior Vice President
and Chief Financial Officer
CHASE EQUITY ASSOCIATES, L.P.,
by CHASE CAPITAL PARTNERS,
its General Partner
by /s/ Michael R. Hannon
------------------------
Name: Michael R. Hannon
Title: General Partner
DB CAPITAL INVESTORS, L.P.,
by DB CAPITAL PARTNERS, L.P.,
its General Partner
by DB CAPITAL PARTNERS, INC.,
by /s/ Tyler Zachem
------------------------
Name: Tyler Zachem
Title: Managing Director
<PAGE> 26
26
OLYMPUS GROWTH FUND III, L.P.,
by OGP III, LLC
by /s/ Louis J. Mischianti
-----------------------
Name: Louis J. Mischianti
Title: Member
OLYMPUS EXECUTIVE FUND, L.P.,
by OEF, L.P., its general partner
by LJM L.L.C., its general partner
by /s/ Louis J. Mischianti
-----------------------
Name: Louis J. Mischianti
Title: Managing Member
<PAGE> 27
SCHEDULE I
<TABLE>
<CAPTION>
Number of Purchase Price
--------- --------------
Purchasers Shares of the Shares
- ---------- ------ -------------
<S> <C> <C>
HM4 Teligent Qualified Fund, LLC 136,207 $136,207,000
HM4 Teligent Private Fund, LLC 965 $ 965,000
HM 4-SBS Teligent Coinvestors,
LLC 3,350 $ 3,350,000
HM PG-IV Teligent, LLC 7,252 $ 7,252,000
HM 4-EQ Teligent Coinvestors, LLC 2,226 $ 2,226,000
HMTF Bridge Teligent, LLC 50,000 $ 50,000,000
Microsoft Corporation 200,000 $200,000,000
Chase Equity Associates, L.P. 50,000 $ 50,000,000
DB Capital Investors, L.P. 25,000 $ 25,000,000
Olympus Growth Fund III, L.P. 24,750 $ 24,750,000
Olympus Executive Fund, L.P. 250 $ 250,000
</TABLE>
<PAGE> 1
EXHIBIT 10.3
TELIGENT, INC.
CERTIFICATE OF DESIGNATION OF THE POWERS,
PREFERENCES AND RELATIVE, PARTICIPATING, OPTIONAL
AND OTHER SPECIAL RIGHTS OF 7-3/4% CUMULATIVE
CONVERTIBLE PREFERRED STOCK AND
QUALIFICATIONS, LIMITATIONS
AND RESTRICTIONS THEREOF
7-3/4% Series A Convertible
Preferred Stock due 2014
Teligent, Inc., a company organized and existing under the General
Corporation Law of the State of Delaware (the "Company"), certifies that
pursuant to the authority contained in its Certificate of Incorporation (the
"Certificate of Incorporation") and its By-laws (the "By-laws"), and in
accordance with Section 151 of the General Corporation Law of the State of
Delaware, the board of directors of the Company (the "Board of Directors") at a
meeting duly called and held on November 3, 1999, duly approved and adopted the
following resolution, which resolution remains in full force and effect on the
date hereof:
RESOLVED, that pursuant to the authority vested in the Board of
Directors by the Certificate of Incorporation and By-laws, the Board of
Directors does hereby create, authorize and provide for the issue of a series of
Preferred Stock having the following designation, voting powers, preferences and
relative, participating, optional and other special rights:
Certain capitalized terms used herein are defined in Section 16.
1. Number and Designation. The Company shall have a series of Preferred
Stock, which shall be designated as its 7-3/4% Series A Convertible Preferred
Stock due 2014 (the "Series A Preferred Stock"), par value $0.01 per share, with
500,000 shares initially authorized and, subject to the limitations set forth
herein, such number of additional shares as are authorized from time to time by
resolution of the Board of Directors for payment of dividends and other payments
(including Special Payments) on the Series A Preferred Stock in accordance with,
and subject to the limitations set forth in, Section 11 hereof. Unless otherwise
specified, references herein to any "Section" refer to the Section number
specified in this Certificate of Designation.
<PAGE> 2
2
2. Issuance. The Company may issue up to 500,000 shares of Series A
Preferred Stock in accordance with the Purchase Agreement, and may issue
additional shares of Series A Preferred Stock as dividends and other payments on
the Series A Preferred Stock as may be determined from time to time by the Board
of Directors (or any authorized committee thereof) in accordance with Section
11.
3. Registered Form; Liquidation Preference; Registrar. Certificates for
shares of Series A Preferred Stock shall be issuable only in registered form and
only with an initial liquidation preference of $1,000 per share. The Company
shall serve as initial Registrar and Transfer Agent (the "Registrar") for the
Series A Preferred Stock.
4. Registration; Transfer. Shares of the Series A Preferred Stock have
not been registered under the Securities Act of 1933 (the "Securities Act") and
may not be resold, pledged or otherwise transferred prior to the date when they
may be resold pursuant to Rule 144 under the Securities Act other than (i) to
the Company, (ii) pursuant to an exemption from registration under the
Securities Act or (iii) pursuant to an effective registration statement under
the Securities Act, in each case in accordance with any applicable securities
laws of any state of the United States. Until such time as it is no longer
required pursuant to the Securities Act, certificates evidencing the Series A
Preferred Stock shall contain a legend (the "Restrictive Legend") evidencing the
foregoing restrictions in substantially the form set forth on the form of Series
A Preferred Stock attached hereto as Exhibit A.
5. Paying Agent and Conversion Agent. (a) The Company shall maintain
(i) an office or agency where shares of Series A Preferred Stock may be
presented for payment (the "Paying Agent"), (ii) an office or agency where
shares of Series A Preferred Stock may be presented for conversion (the
"Conversion Agent"), and (iii) a Registrar, which shall be an office or an
agency where shares of Series A Preferred Stock may be presented for transfer.
The Company may appoint the Registrar, the Paying Agent and the Conversion Agent
and may appoint one or more additional paying agents and one or more additional
conversion agents in such other locations as it shall determine. The term
"Paying Agent" includes any additional paying agent, and the term "Conversion
Agent" includes any additional conversion agent. The Company may change any
Paying Agent or Conversion Agent without prior notice to any holder. The Company
shall notify the Registrar of the name and address of any Paying
<PAGE> 3
3
Agent or Conversion Agent appointed by the Company. If the Company fails to
appoint or maintain another entity as Paying Agent or Conversion Agent, the
Registrar shall act as such. Notwithstanding the foregoing, the Company or any
of its Affiliates may act as Paying Agent, Registrar, coregistrar or Conversion
Agent.
(b) Neither the Company nor the Registrar shall be required (A) to
issue, countersign or register the transfer of or exchange any share of Series A
Preferred Stock during a period beginning at the opening of business 15 days
before any Redemption Date (as defined under Section 10(d)) and ending at the
close of business on such Redemption Date or (B) to register the transfer of or
exchange any share of Series A Preferred Stock so selected for redemption.
(c) If shares of Series A Preferred Stock are issued upon the transfer,
exchange or replacement of shares of Series A Preferred Stock bearing the
Restricted Shares Legend, or if a request is made to remove such Restricted
Shares Legend on shares of Series A Preferred Stock, the shares of Series A
Preferred Stock so issued shall bear the Restricted Shares Legend, or the
Restricted Shares Legend shall not be removed, as the case may be, unless the
holders of such shares shall request such Legend be removed, and outside counsel
for such holders 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.
(d) Each holder of a share of Series A Preferred Stock agrees to
indemnify the Company and the Registrar against any liability that may result
from the transfer, exchange or assignment by such holder of such holder's share
of Series A Preferred Stock in violation of any provision of this Certificate of
Designation and/or applicable Federal or state securities law; provided,
however, that such indemnity shall not apply to acts of wilful misconduct or
gross negligence on the part of the Company or the Registrar, as the case may
be.
(e) Payments (whether in cash or in shares of Series A Preferred Stock)
due on the shares of Series A Preferred Stock shall be payable at the office or
agency of the Company maintained for such purpose in The City of New York and at
any other office or agency maintained by the Company for such purpose. If any
such payment is in cash, it shall be payable by United States dollar check drawn
on, or wire transfer (provided that appropriate wire
<PAGE> 4
4
instructions have been received by the Registrar at least 15 days prior to the
applicable date of payment) to a United States dollar account maintained by the
holder with, a bank located in New York City; provided that at the option of the
Company payment of dividends in cash may be made by check mailed to the address
of the person entitled thereto as such address shall appear in the Series A
Preferred Share Register.
6. Dividend Rights. The Company shall pay, and the holders of the
shares of Series A Preferred Stock shall be entitled to receive, cumulative
dividends from the date of initial issuance of such shares of Series A Preferred
Stock at a rate of 7-3/4% per annum on the amount of the then effective
Liquidation Preference of the shares of Series A Preferred Stock. Dividends will
be computed on the basis of a 360 day year of twelve 30 day months and, in
accordance with Section 11, will be payable by (A) cash, (B) delivery of shares
of Series A Preferred Stock, or (C) any combination of the foregoing. Dividends
will be payable quarterly in arrears on February 28, May 31, August 31 and
November 30 of each year (each a "Dividend Payment Date"), commencing February
28, 2000, for so long as any shares of Series A Preferred Stock are outstanding;
provided, however, that if such date is not a Business Day, then the Dividend
Payment Date shall be the next Business Day. The Company may elect not to
declare dividend payments on any Dividend Payment Date; provided, however, that
dividends on shares of the Series A Preferred Stock will accrue whether or not
the Company has earnings or profits, whether or not there are funds legally
available for the payment of such dividends and whether or not dividends are
declared. Dividends, whether declared or undeclared, will accumulate to the
extent they are not paid on the Dividend Payment Date for the period to which
they relate. The Company will take all actions required or permitted under the
General Corporation Law of the State of Delaware to permit the payment of
dividends on the shares of Series A Preferred Stock. Arrearages of unpaid
dividends, whether declared or undeclared ("Accumulated Dividends"), will not
themselves bear interest but will be added to the Liquidation Preference of the
Series A Preferred Stock in accordance with the following sentence, and
dividends will accrue thereafter on the full amount of the Liquidation
Preference as so increased. If any dividend payable on any Dividend Payment Date
is not declared and paid in full on such Dividend Payment Date, the amount so
payable, to the extent not paid, shall be added to the then effective
Liquidation Preference on such Dividend Payment Date.
<PAGE> 5
5
7. Payment of Dividend; Mechanics of Payment; Dividend Rights
Preserved. (a) Dividends on any share of Series A Preferred Stock that are
payable, and are punctually paid or duly provided for, on any Dividend Payment
Date shall be paid in arrears to the person in whose name such share of Series A
Preferred Stock (or one or more predecessor shares of Series A Preferred Stock)
is registered at the close of business on the next preceding February 15, May
15, August 15 and November 15 (each, together with any record date established
for the payment of Accumulated Dividends, a "Dividend Record Date").
(b) Unless full cumulative dividends on all outstanding shares of
Series A Preferred Stock for all past dividend periods shall have been declared
and paid, or declared and a sufficient sum for the payment thereof set apart,
then:
(i) no dividend (other than (A) with respect to Junior Shares or
Parity Shares, a dividend payable solely in any Junior Shares or Parity
Shares, respectively, or (B) with respect to Parity Shares, a partial
dividend paid pro rata on such Parity Shares and the shares of Series A
Preferred Stock) shall be declared or paid upon, or any sum set apart for
the payment of dividends upon, any Junior Shares or Parity Shares,
respectively;
(ii) no other distribution shall be declared or made upon, or any sum
set apart for the payment of any distribution upon, any Junior Shares or
Parity Shares, other than a distribution consisting solely of Junior Shares
or Parity Shares, respectively;
(iii) no Junior Shares or Parity Shares or any warrants, rights, calls
or options (other than any cashless exercises of options or buybacks of
options or restricted stock from present or former employees, directors or
consultants) exercisable for or convertible into any Parity Share or Junior
Share shall be purchased, redeemed or otherwise acquired (other than in
exchange for other Junior Shares or Parity Shares, respectively and other
than any conversion of Class B Common Stock of the Company into Class A
Common Stock of the Company) by the Company or any of its subsidiaries; and
(iv) no monies shall be paid into or set apart or made available for a
sinking or other like fund for the purchase, redemption or other
acquisition of any Junior
<PAGE> 6
6
Shares or Parity Shares or any warrants, rights, calls or options
exercisable for or convertible into any Parity Shares or Junior Shares by
the Company or any of its subsidiaries (other than any cashless exercises
of options or option buybacks).
Except as provided in Section 13, holders of Series A Preferred Stock
will not be entitled to any dividends, whether payable in cash, property or
stock, in excess of the full cumulative dividends as herein described.
(c) The Company will notify the Registrar and make a public
announcement no later than the close of business on the tenth Business Day prior
to the Record Date for each dividend as to whether it will pay such dividend
and, if so, the form of consideration it will use to make such payment.
(d) Any Accumulated Dividends on any share of Series A Preferred Stock
may be paid, subject to Section 11, by the Company in any lawful manner (which
shall include the establishment of a record date not more than 45 days prior to
the payment thereof) not inconsistent with the requirements of any national
stock exchange or Commission recognized trading market on which the shares of
Series A Preferred Stock may be listed or admitted to trading, and upon such
notice (which shall precede the record date by at least ten Business Days) as
may be required by such exchange or trading market, if, after notice given by
the Company to the Registrar of the proposed payment pursuant to this clause
(d), such manner of payment shall be deemed practicable by the Registrar. Each
payment of Accumulated Dividends made in compliance with Section 11 shall
automatically reduce the then-effective Liquidation Preference by an amount
equal to such payment; provided, however, that the Liquidation Preference shall
not be reduced below $1,000 per share.
(e) Subject to the foregoing provisions of this Section 7, each share
of Series A Preferred Stock delivered under this Certificate of Designation upon
registration of transfer of or in exchange for or in lieu of any other share of
Series A Preferred Stock shall carry the rights to dividends accumulated and
unpaid, and to accrue, that were carried by such other shares of Series A
Preferred Stock.
(f) The holder of record of a share of Series A Preferred Stock at the
close of business on a Dividend Record Date with respect to the payment of
dividends on the shares of Series A Preferred Stock will be entitled to
<PAGE> 7
7
receive such dividends with respect to such share of Series A Preferred Stock on
the corresponding Dividend Payment Date, notwithstanding the conversion of such
share after such Dividend Record Date and prior to such Dividend Payment Date.
8. Voting Rights. (a) The holders of record of shares of Series A
Preferred Stock shall not be entitled to any voting rights except as hereinafter
provided in this Section 8 or as otherwise provided by law.
(b) The holders of record of shares of Series A Preferred Stock shall
be entitled to vote on all matters that the holders of the Company's Common
Stock are entitled to vote upon.
(c) In addition to the voting rights set forth above, the approval of
the holders of at least a majority of the then Outstanding shares of Series A
Preferred Stock voting or consenting, as the case may be, as one class, will be
required for the Company to:
(i) amend the Certificate of Incorporation, this Certificate of
Designation or the By-Laws so as to (A) affect adversely the rights,
preferences (including, without limitation, liquidation preferences,
conversion price, dividend rate and Optional Redemption provisions),
privileges or voting rights of holders of the shares of Series A Preferred
Stock, or (B) increase or decrease the number of authorized shares of
Series A Preferred Stock;
(ii) in a single transaction or series of related transactions,
consolidate or merge with or into, or sell, assign, transfer, lease, convey
or otherwise dispose of all or substantially all of its assets to, any
person or adopt a plan of liquidation, except as expressly provided in
Section 14;
(iii) enter into, or permit any of its subsidiaries to enter into, any
agreement that would impose material restrictions on the Company's ability
to honor the exercise of any rights of the holders of the Series A
Preferred Stock;
(iv) authorize or create, modify the terms of or increase the
authorized amount of any Senior Shares;
(v) issue any shares of Series A Preferred Stock other than (a)
pursuant to the terms of the Purchase
<PAGE> 8
8
Agreement as in effect on the Closing Date, and (b) shares issued in
payment of dividends on the Series A Preferred Stock as contemplated in
Section 6, Section 7 or Section 13 hereof;
(vi) commence or effect any tender or exchange offer made by the
Company or any Subsidiary for all or any portion of the Common Stock; or
(vii) issue shares of Parity Stock in excess of $500,000,000
liquidation preference at the time of issuance;
provided, that so long as DB Capital Investors, L.P. ("DB") or any Affiliate
transferee of DB holds shares of Series A Preferred Stock, DB or such transferee
shall not vote any of such shares with respect to transactions described in
clauses (c)(ii), (c)(iii) and (c)(vi) above until such time as the Financial
Services Modernization Act of 1999 becomes effective or legal restrictions with
respect to the voting by a bank with respect to such transactions are otherwise
removed;
provided, further, that so long as Chase Equity Associates, L.P. ("Chase") or
any Affiliate transferee of Chase holds shares of Series A Preferred Stock, then
Chase or such transferee shall not vote any of such shares with respect to
transactions described in clauses (c)(ii), (c)(iii) and (c)(vi) above until such
time as the Financial Services Modernization Act of 1999 becomes effective or
legal restrictions with respect to the voting by a bank with respect to such
transactions are otherwise removed.
(d) For so long as members of the HMTF Group own (x) at least 100
shares of Series A Preferred Stock and (y) any combination of the shares of
Series A Preferred Stock issued to members of the HMTF Group on the Closing Date
under the Purchase Agreement (the "HMTF Issued Series A Preferred Shares") and
shares of 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, the HMTF
Holders, voting as a single class, shall be entitled to elect one director to
serve on the Board of Directors at any annual meeting of stockholders or special
meeting held in place thereof, or at a special meeting of the HMTF Holders
called as hereinafter provided. At any time after voting power to elect such
director shall have become vested and be continuing in the
<PAGE> 9
9
HMTF Holders pursuant to this paragraph, or if a vacancy shall exist in the
office of a director elected by the HMTF Holders at a time when the HMTF Holders
are entitled to elect a director pursuant to this paragraph, a proper officer of
the Company may, and upon the written request of the holders of record of at
least twenty-five percent (25%) of the HMTF Issued Series A Preferred Shares
held by the HMTF Holders then outstanding addressed to the Secretary of the
Company shall, call a special meeting of the HMTF Holders for the purpose of
electing the director that such holders are entitled to elect. If such meeting
shall not be called by a proper officer of the Company within twenty (20) days
after personal service of said written request upon the Secretary of the
Company, or within twenty (20) days after mailing the same within the United
States by certified mail, addressed to the Secretary of the Company at its
principal executive offices, then the holders of at least twenty-five percent
(25%) of the HMTF Issued Series A Preferred Shares held by the HMTF Holders may
designate in writing one of their number to call such meeting at the expense of
the Company, and such meeting may be called by the person so designated upon the
notice required for the annual meeting of stockholders of the Company and shall
be held at the place for holding the annual meetings of stockholders. As used
herein, (i) "HMTF Group" means Hicks, Muse, Tate & Furst Incorporated, a Texas
corporation, 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 HM4
Teligent Qualified Fund, LLC; HM4 Teligent Private Fund, LLC; HM PG-IV Teligent,
LLC; HM 4-SBS Teligent Coinvestors, LLC, HM 4-EQ Teligent Coinvestors, LLC and
HM NE Teligent, LLC and their respective Affiliates; provided, however, that (1)
HM4 Teligent Qualified Fund, LLC shall only constitute a member of the HMTF
Group for so long as it is controlled by HMTF Equity Fund IV (1999), L.P. or
another member of the HMTF Group, (2) HM4 Teligent Private Fund, LLC shall only
constitute a member of the HMTF Group for so long as it is controlled by HMTF
Private Equity Fund IV (1999), L.P. or another member of the HMTF Group, (3) HM
PG-IV Teligent, LLC shall only constitute a member of the HMTF Group for so long
as it is controlled by Hicks, Muse PG-IV (1999), C.V. or another member of the
HMTF Group, (4) HM 4-SBS Teligent Coinvestors, LLC shall only constitute a
member of the HMTF Group for so long as it is controlled by HM 4-SBS (1999)
Coinvestors, L.P. or another member of the HMTF Group, (5) HM 4-EQ Teligent
Coinvestors, LLC shall only constitute a member of the HMTF Group for so long as
it is controlled by HM 4-EQ (1999) Coinvestors, L.P. or another member of the
HMTF Group and (6) HM NE Teligent, LLC shall
<PAGE> 10
10
only constitute a member of the HMTF Group for so long as it is controlled by HM
New Economy, L.P. or another member of the HMTF Group and (ii) "HMTF Holders"
means members of the HMTF Group that are the holders of all or a portion of the
HMTF Issued Series A Preferred Shares or the Common Stock into which such HMTF
Issued Series A Preferred Shares are converted. Any action permitted or required
to be taken by the HMTF Holders pursuant to this Section 8(d) may be taken (1)
at any annual or special meeting of stockholders or at a special meeting of the
HMTF Holders, or (2) without a meeting, without prior notice, and without a vote
if a consent or consents in writing, setting forth the action so taken, shall be
signed by the HMTF Holders having not less than the minimum number of votes that
would be necessary to authorize or take such action at a meeting at which all
shares held by the HMTF Holders entitled to vote thereon were present and voted
and shall be delivered to the Company by delivery to its address listed in
Section 8.2 of the Purchase Agreement.
(e) In exercising the voting rights set forth in Section 8(b), each
share of Series A Preferred Stock shall be entitled to vote on an as-converted
basis with the holders of the Company's Common Stock. In exercising the voting
rights set forth in Section 8(d), each HMTF Issued Series A Preferred Share held
by a member of the HMTF Group shall be entitled to vote on an as-converted basis
with the other HMTF Issued Series A Preferred Shares and shares of Common Stock
held by members of the HMTF Group and into which HMTF Issued Series A Preferred
Shares have been converted, voting as a single class. In exercising the other
voting rights set forth in this Section 8, each share of Series A Preferred
Stock entitled to vote shall have one vote per share, except that when any other
series of preferred stock shall have the right to vote with the Series A
Preferred Stock as a single class on any matter, then the Series A Preferred
Stock and such other series of preferred stock shall have with respect to such
matters one vote per $1,000 of the aggregate liquidation preference of all
shares of Series A Preferred Stock and all shares of such other series of
preferred stock. Except as otherwise required by applicable law or as set forth
herein, the shares of Series A Preferred Stock shall not have any relative,
participating, optional or other special voting rights and powers and the
consent of the holders thereof shall not be required for the taking of any
corporate action.
9. Ranking. (a) The shares of Series A Preferred Stock will, with
respect to dividend rights and rights on liquidation, winding-up and
dissolution, rank
<PAGE> 11
11
(i) senior to all shares of Common Stock (whether issued in one or more classes)
and to each other class of capital stock or series of Preferred Stock of the
Company, the terms of which do not expressly provide that it ranks senior to or
on a parity with the shares of Series A Preferred Stock as to dividend rights
and rights on liquidation, winding-up and dissolution of the Company
(collectively referred to, together with all shares of Common Stock (whether
issued in one or more classes) of the Company, as "Junior Shares"); (ii) on a
parity with additional shares of Series A Preferred Stock issued by the Company
and each other class of capital stock or series of Preferred Stock of the
Company issued by the Company in compliance with Section 8, the terms of which
expressly provide that such class or series will rank on a parity with the
shares of Series A Preferred Stock as to dividend rights and rights on
liquidation, winding-up and dissolution of the Company (collectively referred to
as "Parity Shares"); and (iii) junior to each class of capital stock or series
of Preferred Stock of the Company issued by the Company in compliance with
Section 8, the terms of which expressly provide that such class or series will
rank senior to the shares of Series A Preferred Stock as to dividend rights and
rights upon liquidation, winding-up and dissolution of the Company (collectively
referred to as "Senior Shares").
(b) No dividend whatsoever shall be declared or paid upon, or any sum
set apart for the payment of dividends upon, any outstanding shares of Series A
Preferred Stock with respect to any dividend period unless all dividends for all
preceding dividend periods have been declared and paid, or declared and a
sufficient sum set apart for the payment of such dividends, upon all outstanding
Senior Shares.
(c) In the event of any liquidation, dissolution or winding-up of the
Company, whether voluntary or involuntary, the holders of the shares of Series A
Preferred Stock then Outstanding shall be entitled to receive, prior and in
preference to any distribution of any of the assets of the Company to the
holders of shares of Common Stock or Junior Shares by reason of their ownership
thereof, an amount equal to the then effective Liquidation Preference, plus an
amount equal to all dividends accrued and unpaid thereon from the last Dividend
Payment Date to the date fixed for liquidation, dissolution or winding-up. If
upon the occurrence of such event the assets of the Company shall be
insufficient to permit the payment to such holders of the full preferential
amount and all liquidating payments on all Parity Securities, the entire assets
of the Company legally available for distribution shall be distributed among the
<PAGE> 12
12
holders of the shares of Series A Preferred Stock and the holders of all Parity
Shares ratably in accordance with the respective amounts that would be payable
on such shares of Series A Preferred Stock and any such Parity Securities if all
amounts payable thereon were paid in full. After payment of the full
preferential amount (and, if applicable, an amount equal to a pro rata dividend
to the holders of Outstanding shares of Series A Preferred Stock), such holders
shall not be entitled to any further participation in any distribution of assets
of the Company.
10. Redemption. (a) The shares of Series A Preferred Stock may be
redeemed at any time commencing on or after November 30, 2004 (or earlier, in
accordance with the provisions of Section 13(e) if a Change of Control Date
shall have occurred, but only as to shares of Series A Preferred Stock with
respect to which the Remarketing Option has been elected), in whole or from time
to time in part, at the election of the Company (an "Optional Redemption"), at a
redemption price (the "Redemption Price") payable in cash equal to 100% (or, in
the case of shares of Series A Preferred Stock with respect to which the
Remarketing Option has been elected, if the Change of Control Date occurs prior
to November 30, 2004, 101%) of the then effective Liquidation Preference plus
accrued and unpaid dividends thereon from the last Dividend Payment Date to the
date of redemption (the "Optional Redemption Date").
(b) Shares of Series A Preferred Stock (if not earlier redeemed or
converted) shall be mandatorily redeemed by the Company on November 30, 2014
(the "Mandatory Redemption Date"; provided, however, that if such date is not a
Business Day, then the Mandatory Redemption Date shall be the next Business
Day), at a Redemption Price per share in cash equal to the then effective
Liquidation Preference, plus accrued and unpaid dividends thereon from the last
Dividend Payment Date to the Mandatory Redemption Date.
(c) In the event of a redemption of fewer than all the shares of Series
A Preferred Stock, the shares of Series A Preferred Stock will be chosen for
redemption by the Registrar from the Outstanding shares of Series A Preferred
Stock not previously called for redemption, pro rata or by lot or by such other
method as the Registrar shall deem fair and appropriate; provided, that the
Company may redeem (an "Odd-lot Redemption") all shares held by holders of fewer
than 100 shares of Series A Preferred Stock (or by holders that would hold fewer
than 100 shares of Series A Preferred Stock following such redemption) prior to
its redemption of other shares of Series A Preferred Stock;
<PAGE> 13
13
provided, further, that the Company may not redeem a portion of any share
without redeeming the entire share. If fewer than all the shares of Series A
Preferred Stock represented by any share certificate are so to be redeemed, (i)
the Company shall issue a new certificate for the shares not redeemed and (ii)
if any shares represented thereby are converted before termination of the
conversion right with respect to such shares, such converted shares shall be
deemed (so far as may be) to be the shares represented by such share certificate
that was selected for redemption. Shares of Series A Preferred Stock that have
been converted during a selection of shares of Series A Preferred Stock to be
redeemed shall be treated by the Registrar as outstanding for the purpose of
such selection but not for the purpose of the payment of the Redemption Price.
(d) In the event the Company elects to effect an Optional Redemption,
the Company shall (i) make a public announcement of the redemption and (ii) give
a redemption notice (the "Redemption Notice") to the holders not fewer than 30
days nor more than 60 days before the redemption date (the "Redemption Date").
Whenever a Redemption Notice is required to be delivered to the holders, such
notice shall provide the information set forth below and be given by first class
mail, postage prepaid to each holder of shares of Series A Preferred Stock to be
redeemed, at such holder's address appearing in the Series A Preferred Share
Register. All Redemption Notices shall identify the shares of Series A Preferred
Stock to be redeemed (including CUSIP number) and shall state:
(i) the Redemption Date;
(ii) the applicable Redemption Price;
(iii) if fewer than all the outstanding shares of Series A Preferred
Stock are to be redeemed, the identification (and, in the case of partial
redemption, the certificate number, the total number of shares represented
thereby and the number of such shares being redeemed on the Redemption
Date) of the particular shares of Series A Preferred Stock to be redeemed;
(iv) that on the Redemption Date the Redemption Price, together with
all accrued and unpaid dividends from the last Dividend Payment Date to the
Redemption Date, will become due and payable upon each such share of Series
A Preferred Stock to be redeemed and that dividends thereon will cease to
accrue on and after said date;
<PAGE> 14
14
(v) the conversion price (and, if applicable, the amount of cash
payable on conversion pursuant to Section 12(d)(xii)), the date on which
the right to convert shares of Series A Preferred Stock to be redeemed will
terminate and the place or places where such shares of Series A Preferred
Stock may be surrendered for conversion; and
(vi) the place or places where such shares of Series A Preferred Stock
are to be surrendered for payment of the Redemption Price and the other
amounts which are then payable.
The Redemption Notice shall be given by the Company or, at the
Company's request, by the Registrar in the name and at the expense of the
Company; provided that if the Company so requests, it shall provide the
Registrar adequate time, as reasonably determined by the Registrar, to deliver
such notices in a timely fashion.
(e) Prior to any Redemption Date, the Company shall deposit with the
Registrar or with a Paying Agent (or, if the Company is acting as its own Paying
Agent, segregate and hold in trust) an amount of consideration sufficient to pay
the Redemption Price of all the shares of Series A Preferred Stock that are to
be redeemed on that date plus all accrued and unpaid dividends thereon from the
last Dividend Payment Date to the Redemption Date. If any share of Series A
Preferred Stock called for redemption is converted, any consideration deposited
with the Registrar or with any Paying Agent or so segregated and held in trust
for the redemption of such share of Series A Preferred Stock shall be paid or
delivered to the Company upon Company Order or, if then held by the Company,
shall be discharged from such trust.
(f) Notice of redemption having been given as aforesaid, the shares of
Series A Preferred Stock so to be redeemed shall, on the Redemption Date, become
due and payable at the Redemption Price therein specified plus all accrued and
unpaid dividends thereon from the last Dividend Payment Date to the Redemption
Date, and from and after such date (unless the Company shall default in the
payment of the Redemption Price and accrued but unpaid dividends) dividends on
such shares of Series A Preferred Stock shall cease to accrue and such shares
shall cease to be convertible into shares of Common Stock. Upon surrender of any
such shares of Series A Preferred Stock for redemption in accordance with said
notice, such shares of Series A Preferred Stock shall be redeemed by the Company
at the applicable
<PAGE> 15
15
Redemption Price, together with all accrued and unpaid dividends thereon from
the last Dividend Payment Date to the Redemption Date. If any share of Series A
Preferred Stock called for redemption shall not be so paid upon surrender
thereof for redemption, the Redemption Price thereof, and all accrued and unpaid
dividends thereon from the last Dividend Payment Date to the Redemption Date,
shall, until paid, bear interest from the Redemption Date at the dividend rate
payable on the shares of Series A Preferred Stock.
(h) Any certificate that represents more than one share of Series A
Preferred Stock and is to be redeemed only in part shall be surrendered at any
office or agency of the Company designated for that purpose (with, if the
Company or the Registrar so requires, due endorsement by, or a written
instrument of transfer in form satisfactory to the Company and the Registrar
duly executed by, the holder thereof or his attorney duly authorized in
writing), and the Company shall execute, and the Registrar shall countersign and
deliver to the holder of such share of Series A Preferred Stock without service
charge, a new Series A Preferred Stock certificate or certificates, representing
any number of shares of Series A Preferred Stock as requested by such holder, in
aggregate amount equal to and in exchange for the number of shares not redeemed
and represented by the Series A Preferred Stock certificate so surrendered.
(i) If a share of Series A Preferred Stock is redeemed subsequent to a
Dividend Record Date with respect to any Dividend Payment Date and on or prior
to such Dividend Payment Date, then any Accumulated Dividends will be paid to
the person in whose name such share of Series A Preferred Stock is registered at
the close of business on such Dividend Record Date.
11. Method of Payments. (a) The Company shall make any dividend
payments with respect to any period (i) prior to November 30, 2004, by delivery
of shares of Series A Preferred Stock and (ii) after November 30, 2004, at the
election of the Company (x) in cash, (y) by delivery of shares of Series A
Preferred Stock or (z) through any combination of the foregoing.
(b) No fractional shares of Series A Preferred Stock will be delivered
to the holders, but the Company will instead pay a cash adjustment to each
holder that would otherwise be entitled to a fraction of a share of such Series
A Preferred Stock. The amount of such cash adjustment will be determined based
on the then effective Liquidation Preference.
<PAGE> 16
16
(c) Any portion of any payment on or in respect of the shares of Series
A Preferred Stock in satisfaction of the Accumulated Dividends will be paid in
additional shares of Series A Preferred Stock.
12. Conversion. (a) Subject to and upon compliance with the provisions
of this Certificate of Designation, at the option of the holder thereof, any
share of Series A Preferred Stock may be converted at any time into a number of
fully paid and nonassessable shares of Common Stock (calculated as to each
conversion to the nearest 1/100 of a share) equal to the then effective
Liquidation Preference thereof plus accrued and unpaid dividends to the date of
conversion divided by the Conversion Price in effect at the time of conversion.
Such conversion right shall expire at the close of business on the Business Day
next preceding the Mandatory Redemption Date. In case a share of Series A
Preferred Stock is called for redemption, such conversion right in respect of
the share so called shall expire at the close of business on the Business Day
next preceding the Redemption Date, unless the Company defaults in making the
payment due upon redemption.
The Conversion Price shall be initially $57.50 per share of Common
Stock. The Conversion Price shall be adjusted in certain instances as provided
in Section 12(d) and Section 12(e).
(b) In order to exercise the conversion privilege, the holder of any
share of Series A Preferred Stock to be converted shall surrender the
certificate for such share, duly endorsed or assigned to the Company or in
blank, at any office or agency of the Company maintained for that purpose,
accompanied by written notice to the Company at such office or agency that the
holder elects to convert such share or, if fewer than all the shares of Series A
Preferred Stock represented by a single share certificate are to be converted,
the number of shares represented thereby to be converted.
Shares of Series A Preferred Stock shall be deemed to have been
converted immediately prior to the close of business on the day of surrender of
such shares for conversion in accordance with the foregoing provisions, and at
such time the rights of the holders of such shares as holders shall cease, and
the person or persons entitled to receive the shares of Common Stock issuable
upon conversion shall be treated for all purposes as the record holder or
holders of such shares of Common Stock at such time. As promptly as practicable
on or after the conversion date, the
<PAGE> 17
17
Company shall issue and shall deliver at such office or agency a certificate or
certificates for the number of full shares of Common Stock issuable upon
conversion, together with payment in lieu of any fraction of a share, as
provided in Section 12(c).
In the case of any conversion of fewer than all the shares of Series A
Preferred Stock evidenced by a certificate, upon such conversion the Company
shall execute and the Registrar shall countersign and deliver to the holder
thereof, at the expense of the Company, a new certificate or certificates
representing the number of unconverted shares of Series A Preferred Stock.
(c) No fractional shares of Common Stock shall be issued upon the
conversion of a share of Series A Preferred Stock. If more than one share of
Series A Preferred Stock shall be surrendered for conversion at one time by the
same holder, the number of full shares of Common Stock which shall be issuable
upon conversion thereof shall be computed on the basis of the aggregate number
of shares of Series A Preferred Stock so surrendered. Instead of any fractional
shares of Common Stock which would otherwise be issuable upon conversion of any
share of Series A Preferred Stock, the Company shall pay a cash adjustment in
respect of such fraction in an amount equal to the same fraction of the closing
price (as defined in Section 12(d)(vii)) per Common Share at the close of
business on the Business Day prior to the day of conversion.
(d) The Conversion Price shall be adjusted from time to time by the
Company as follows:
(i) If the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding shares of Common Stock in
shares of Common Stock, the Conversion Price in effect at the opening of
business on the date following the date fixed for the determination of
shareholders entitled to receive such dividend or other distribution shall
be reduced by multiplying such Conversion Price by a fraction of that the
numerator shall be the number of shares of Common Stock outstanding at the
close of business on the Common Stock Record Date (as defined in Section
12(d)(vii)) fixed for such determination and the denominator shall be the
sum of such number of shares and the total number of shares constituting
such dividend or other distribution, such reduction to become effective
immediately after the opening of business on the day following the Common
Stock Record
<PAGE> 18
18
Date. If any dividend or distribution of the type described in this Section
12(d)(i) is declared but not so paid or made, the Conversion Price shall
again be adjusted to the Conversion Price which would then be in effect if
such dividend or distribution had not been declared.
(ii) If the Company shall offer or issue rights or warrants to all
holders of its outstanding shares of Common Stock entitling them to
subscribe for or purchase shares of Common Stock at a price per share less
than the Current Market Price (as defined in Section 12(d)(vii)) on the
Common Stock Record Date fixed for the determination of shareholders
entitled to receive such rights or warrants, the Conversion Price shall be
adjusted so that the same shall equal the price determined by multiplying
the Conversion Price in effect at the opening of business on the date after
such Common Stock Record Date by a fraction of which the numerator shall be
the number of shares of Common Stock outstanding at the close of business
on the Common Stock Record Date plus the number of shares of Common Stock
which the aggregate offering price of the total number of shares of Common
Stock subject to such rights or warrants would purchase at such Current
Market Price and of which the denominator shall be the number of shares of
Common Stock outstanding at the close of business on the Common Stock
Record Date plus the total number of additional shares of Common Stock
subject to such rights or warrants for subscription or purchase. Such
adjustment shall become effective immediately after the opening of business
on the day following the Common Stock Record Date fixed for determination
of shareholders entitled to purchase or receive such rights or warrants. To
the extent that shares of Common Stock are not delivered pursuant to such
rights or warrants, upon the expiration or termination of such rights or
warrants the Conversion Price shall again be adjusted to be the Conversion
Price which would then be in effect had the adjustments made upon the
issuance of such rights or warrants been made on the basis of delivery of
only the number of shares of Common Stock actually delivered. If such
rights or warrants are not so issued, the Conversion Price shall again be
adjusted to be the Conversion Price which would then be in effect if such
date fixed for the determination of shareholders entitled to receive such
rights or warrants had not been fixed. In determining whether any rights or
warrants entitle the holders to subscribe for or purchase shares of Common
<PAGE> 19
19
Stock at less than such Current Market Price, and in determining the
aggregate offering price of such shares of Common Stock, there shall be
taken into account (x) any consideration received for such rights or
warrants, with the value of such consideration and the amount of such
exercise or subscription price, if other than cash, to be determined by the
Board of Directors and (y) the amount of any exercise price or subscription
price required to be paid upon exercise of such warrants or rights.
(iii) If the outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the Conversion Price in
effect at the opening of business on the day following the day upon which
such subdivision becomes effective shall be proportionately reduced, and,
conversely, if the outstanding shares of Common Stock shall be combined
into a smaller number of shares of Common Stock, the Conversion Price in
effect at the opening of business on the day following the day upon which
such combination becomes effective shall be proportionately increased,
such reduction or increase, as the case may be, to become effective
immediately after the opening of business on the day following the day upon
which such subdivision or combination becomes effective.
(iv) If the Company shall, by dividend or other wise, distribute to
all holders of its shares of Common Stock any class of capital stock of the
Company (other than any dividends or distributions to which Section
12(d)(i) applies) or evidences of its indebtedness, cash or other assets
(including securities, but excluding any rights or warrants of a type
referred to in Section 12(d)(ii) and dividends and distributions paid
exclusively in cash and excluding any capital stock, evidences of
indebtedness, cash or assets distributed upon a merger or consolidation to
which Section 12(e) applies) (the foregoing hereinafter in this Section
12(d)(iv) called the "Distributed Securities"), then, in each such case,
the Conversion Price shall be reduced so that the same shall be equal to
the price determined by multiplying the Conversion Price in effect
immediately prior to the close of business on the Common Stock Record Date
(as defined in Section 12(d)(vii)) with respect to such distribution by a
fraction of which the numerator shall be the Current Market Price
(determined as provided in Section 12(d)(vii)) on such date less the fair
market value (as determined by the Board of Directors, whose
<PAGE> 20
20
good faith determination shall be conclusive and described in a resolution
of the Board of Directors) on such date of the portion of the Distributed
Securities so distributed applicable to one share of Common Stock and the
denominator shall be such Current Market Price, such reduction to become
effective immediately prior to the opening of business on the day following
the Common Stock Record Date; provided, however, that, in the event the
then fair market value (as so determined) of the portion of the Distributed
Securities so distributed applicable to one share of Common Stock is equal
to or greater than the Current Market Price on the Common Stock Record
Date, in lieu of the foregoing adjustment, adequate provision shall be made
so that each holder of shares of Series A Preferred Stock shall have the
right to receive upon conversion of a share of Series A Preferred Stock (or
any portion thereof) the amount of Distributed Securities such holder would
have received had such holder converted such share of Series A Preferred
Stock (or portion thereof) immediately prior to such Common Stock Record
Date. If such dividend or distribution is not so paid or made, the
Conversion Price shall again be adjusted to be the Conversion Price which
would then be in effect if such dividend or distribution had not been
declared. If the Board of Directors determines the fair market value of any
distribution for purposes of this Section 12(d)(iv) by reference to the
actual or when issued trading market for any securities constituting all or
part of such distribution, it must in doing so consider the prices in such
market over the same period used in computing the Current Market Price
pursuant to Section 12(d)(vii) to the extent possible.
Rights or warrants distributed by the Company to all holders of shares
of Common Stock entitling the holders thereof to subscribe for or purchase
shares of the Company's capital stock (either initially or under certain
circumstances), which rights or warrants, until the occurrence of a
specified event or events ("Dilution Trigger Event"): (A) are deemed to be
transferred with such shares of Common Stock; (B) are not exercisable; and
(C) are also issued in respect of future issuances of shares of Common
Stock, shall be deemed not to have been distributed for purposes of this
Section 12(d)(iv) (and no adjustment to the Conversion Price under this
Section 12(d)(iv) shall be required) until the occurrence of the earliest
Dilution Trigger Event, whereupon such rights and warrants shall be deemed
to have been distributed and an appropriate
<PAGE> 21
21
adjustment to the Conversion Price under this Section 12(d)(iv) shall be
made. If any such rights or warrants, including any such existing rights or
warrants distributed prior to the first issuance of shares of Series A
Preferred Stock, are subject to subsequent events, upon the occurrence of
each of which such rights or warrants shall become exercisable to purchase
different securities, evidences of indebtedness or other assets, then the
occurrence of each such event shall be deemed to be such date of issuance
and record date with respect to new rights or warrants (and a termination
or expiration of the existing rights or warrants, without exercise by the
holder thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Dilution Trigger Event with
respect thereto, that was counted for purposes of calculating a
distribution amount for which an adjustment to the Conversion Price under
this Section 12(d) was made, (1) in the case of any such rights or warrants
which shall all have been redeemed or repurchased without exercise by any
holders thereof, the Conversion Price shall be readjusted upon such final
redemption or repurchase to give effect to such distribution or Dilution
Trigger Event, as the case may be, as though it were a cash distribution,
equal to the per share redemption or repurchase price received by a holder
or holders of shares of Common Stock with respect to such rights or
warrants (assuming such holder had retained such rights or warrants), made
to all holders of shares of Common Stock as of the date of such redemption
or repurchase, and (2) in the case of such rights or warrants which shall
have expired or been terminated without exercise by any holders thereof,
the Conversion Price shall be readjusted as if such rights and warrants had
not been issued.
Notwithstanding any other provision of this Section 12(d)(iv) to the
contrary, rights, warrants, evidences of indebtedness, other securities,
cash or other assets (including, without limitation, any rights distributed
pursuant to any shareholder rights plan) shall be deemed not to have been
distributed for purposes of this Section 12(d)(iv) if the Company makes
proper provision so that each holder of shares of Series A Preferred Stock
who converts a share of Series A Preferred Stock (or any portion thereof)
after the date fixed for determination of shareholders entitled to receive
such distribution shall be entitled to receive upon such conversion, in
addition to the shares
<PAGE> 22
22
of Common Stock issuable upon such conversion, the amount and kind of such
distributions that such holder would have been entitled to receive if such
holder had, immediately prior to such determination date, converted such
share of Series A Preferred Stock into a share of Common Stock.
For purposes of this Section 12(d)(iv) and Sections 12(d)(i) and (ii),
any dividend or distribution to which this Section 12(d)(iv) is applicable
that also includes shares of Common Stock, or rights or warrants to
subscribe for or purchase shares of Common Stock to which Section 12(d)(ii)
applies (or both), shall be deemed instead to be (A) a dividend or
distribution of the evidences of indebtedness, assets, shares of capital
stock, rights or warrants other than such shares of Common Stock or rights
or warrants to which Section 12(d)(ii) applies (and any Conversion Price
reduction required by this Section 12(d)(iv) with respect to such dividend
or distribution shall then be made) immediately followed by (B) a dividend
or distribution of such shares of Common Stock or such rights or warrants
(and any further Conversion Price reduction required by Sections 12(d)(i)
or 12(d)(ii) with respect to such dividend or distribution shall then be
made), except that (1) the Common Stock Record Date of such dividend or
distribution shall be substituted as "the date fixed for the determination
of stockholders entitled to receive such dividend or other distribution",
"the Common Stock Record Date fixed for such determination" and "the Common
Stock Record Date" within the meaning of Section 12(d)(i) and as "the date
fixed for the determination of shareholders entitled to receive such rights
or warrants", "the Common Stock Record Date fixed for the determination of
the share holders entitled to receive such rights or warrants" and "such
Common Stock Record Date" for purposes of Section 12(d)(ii), and (2) any
shares of Common Stock included in such dividend or distribution shall not
be deemed "outstanding at the close of business on the date fixed for such
determination" for the purposes of Section 12(d)(i).
(v) If the Company shall, by dividend or other wise, distribute to all
holders of its shares of Common Stock cash (excluding any cash that is
distributed upon a merger or consolidation to which Section 12(e) applies
or as part of a distribution referred to in Section 12(d)(iv)) in an
aggregate amount that, combined together with (A) the aggregate amount of
any
<PAGE> 23
23
other such distributions to all holders of its shares of Common Stock made
exclusively in cash within the 12 months preceding the date of payment of
such distribution, and in respect of which no adjustment pursuant to this
Section 12(d)(v) has been made, and (B) the aggregate of any cash plus the
fair market value (as determined by the Board of Directors, whose good
faith determination shall be conclusive and described in a resolution of
the Board of Directors) of consideration payable in respect of any tender
offer by the Company for all or any portion of the shares of Common Stock
concluded within the 12 months preceding the date of payment of such
distribution, and in respect of which no adjustment pursuant to Section
12(d)(vi) has been made, exceeds 5% of the net income of the Company
reported for the 12 month period ending with the fiscal quarter next
preceding such payment (the "12 Month Net Income"), then, and in each such
case, immediately after the close of business on such date, the Conversion
Price shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the close
of business on such Common Stock Record Date by a fraction (1) the
numerator of which shall be equal to the Current Market Price on the Common
Stock Record Date less an amount equal to the quotient of (x) the excess of
such combined amount over such 5% of the 12 Month Net Income and (y) the
number of shares of Common Stock outstanding on the Common Stock Record
Date and (2) the denominator of which shall be equal to the Current Market
Price on such Common Stock Record Date; provided, however, that, if the
portion of the cash so distributed applicable to one share of Common Stock
is equal to or greater than the Current Market Price of the shares of
Common Stock on the Common Stock Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each holder of shares
of Series A Preferred Stock shall have the right to receive upon conversion
of a shares of Series A Preferred Stock (or any portion thereof) the amount
of cash such holder would have received had such holder converted such
share of Series A Preferred Stock (or portion thereof) immediately prior to
such Common Stock Record Date. If such dividend or distribution is not so
paid or made, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such dividend or
distribution had not been declared. Any cash distribution to holders of
shares of Common Stock as to which the Company makes the election permitted
by Section 12(d)(xii) and as to
<PAGE> 24
24
which the Company has complied with the requirements of such Section
12(d)(xii) shall be treated as not having been made for all purposes of
this Section 12(d)(v).
(vi) If a tender offer made by the Company or any of its subsidiaries
for all or any portion of the Common Stock expires and such tender offer
(as amended upon the expiration thereof) requires the payment to
shareholders (based on the acceptance (up to any maximum specified in the
terms of the tender offer) of Purchased Shares) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose good faith determination shall be conclusive and described
in a resolution of the Board of Directors) that, combined together with (A)
the aggregate of the cash plus the fair market value (as determined by the
Board of Directors, whose good faith determination shall be conclusive and
described in a resolution of the Board of Directors), as of the expiration
of such tender offer, of consideration payable in respect of any other
tender offers, by the Company or any of its subsidiaries for all or any
portion of the shares of Common Stock expiring within the 12 months
preceding the expiration of such tender offer and in respect of which no
adjustment pursuant to this Section 12(d)(vi) has been made and (B) the
aggregate amount of any distributions to all holders of the Common Stock
made exclusively in cash within 12 months preceding the expiration of such
tender offer and in respect of which no adjustment pursuant to Section
12(d)(v) has been made, exceeds 5% of the 12 Month Net Income (determined
as of the last time (the "Expiration Time") tenders could have been made
pursuant to such tender offer (as it may be amended)) times the number of
shares of Common Stock outstanding (including any tendered shares) at the
Expiration Time, then, and in each such case, immediately prior to the
opening of business on the day after the date of the Expiration Time, the
Conversion Price shall be adjusted so that the same shall equal the price
determined by multiplying the Conversion Price in effect immediately prior
to the close of business on the date of the Expiration Time by a fraction
of which the numerator shall be the number of shares of Common Stock
outstanding (including any tendered shares) at the Expiration Time
multiplied by the Current Market Price of the shares of Common Stock on the
trading day next succeeding the Expiration Time and the denominator shall
be the sum of (x) the fair market value (determined as aforesaid) of the
aggregate
<PAGE> 25
25
consideration payable to shareholders based on the acceptance (up to any
maximum specified in the terms of the tender offer) of all shares validly
tendered and not withdrawn as of the Expiration Time (the shares deemed so
accepted, up to any such maximum, being referred to as the "Purchased
Shares") and (y) the product of the number of shares of Common Stock
outstanding (less any Purchased Shares) at the Expiration Time and the
Current Market Price of the shares of Common Stock on the trading day next
succeeding the Expiration Time, such reduction (if any) to become effective
immediately prior to the opening of business on the day following the
Expiration Time. If the Company is obligated to purchase shares pursuant to
any such tender offer, but the Company is permanently prevented by
applicable law from effecting any such purchases or all such purchases are
rescinded, the Conversion Price shall again be adjusted to be the
Conversion Price which would then be in effect if such tender offer had not
been made. If the application of this Section 12(d)(vi) to any tender offer
would result in an increase in the Conversion Price, no adjustment shall be
made for such tender offer under this Section 12(d)(vi).
(vii) For purposes of this Section 12(d), the following terms shall
have the meaning indicated:
"closing price" with respect to any securities on any day means
the closing price as of 4:00 p.m. Eastern Time on such day or any earlier
final closing on such day or, if no such sale takes place on such day, the
average of the reported high and low prices on such day, in each case on
the Nasdaq National Market, or the New York Stock Exchange, as applicable,
or, if such security is not listed or admitted to trading on such national
market or exchange, on the national stock exchange or Commission recognized
trading market in the United States on which such security is quoted or
listed or admitted to trading, or, if not quoted or listed or admitted to
trading on any national stock exchange or Commission recognized trading
market in the United States, the average of the high and low prices of such
security on the over-the-counter market on the day in question as reported
by the National Quotation Bureau Incorporated or a similar generally
accepted reporting service in the United States, or, if not so available,
in such manner as furnished by any New York Stock Exchange member firm
selected from time to time by the Board of Directors for that purpose, or a
price
<PAGE> 26
26
determined in good faith by the Board of Directors, whose determination
shall be conclusive and described in a resolution of the Board of
Directors.
"Common Stock Record Date" means, with respect to any dividend,
distribution or other transaction or event in which the holders of Common
Stock have the right to receive any cash, securities or other property or
in which the Common Stock (or other applicable security) is exchanged for
or converted into any combination of cash, securities or other property,
the date fixed for determination of shareholders entitled to receive such
cash, securities or other property (whether such date is fixed by the Board
of Directors or by statute, contract or otherwise).
"Current Market Price" means the average of the daily closing prices
per share of Common Stock for the 10 consecutive trading days immediately
prior to the date in question; provided, however, that (A) if the "ex" date
(as hereinafter defined) for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment to the
Conversion Price pursuant to Section 12(d)(i), (ii), (iii), (iv), (v) or
(vi) occurs during such 10 consecutive trading days, the closing price for
each trading day prior to the "ex" date for such other event shall be
adjusted by multiplying such closing price by the same fraction by which
the Conversion Price is so required to be adjusted as a result of such
other event, (B) if the "ex" date for any event (other than the issuance or
distribution requiring such computation) that requires an adjustment to
the Conversion Price pursuant to Section 12(d)(i), (ii), (iii), (iv), (v)
or (vi) occurs on or after the "ex" date for the issuance or distribution
requiring such computation and prior to the day in question, the closing
price for each trading day on and after the "ex" date for such other event
shall be adjusted by multiplying such closing price by the reciprocal of
the fraction by which the Conversion Price is so required to be adjusted as
a result of such other event and (C) if the "ex" date for the issuance or
distribution requiring such computation is prior to the day in question,
after taking into account any adjustment required pursuant to clause (A) or
(B) of this proviso, the closing price for each trading day on or after
such "ex" date shall be adjusted by adding thereto the amount of any cash
and the fair market value (as determined by the Board of Directors in a
manner consistent with any good faith
<PAGE> 27
27
determination of such value for purposes of Section 12(d)(iv) or (v), whose
good faith determination shall be conclusive and described in a resolution
of the Board of Directors) of the evidences of indebtedness, shares of
capital stock or assets being distributed applicable to one share of Common
Stock as of the close of business on the day before such "ex" date. For
purposes of any computation under Section 12(d)(vi), the Current Market
Price on any date shall be deemed to be the average of the daily closing
prices per share of Common Stock for such day and the next two succeeding
trading days; provided, however, that, if the "ex" date for any event
(other than the tender offer requiring such computation) that requires an
adjustment to the Conversion Price pursuant to Section 12(d)(i), (ii),
(iii), (iv), (v) or (vi) occurs on or after the Expiration Time for the
tender or exchange offer requiring such computation and prior to the day in
question, the closing price for each trading day on and after the "ex" date
for such other event shall be adjusted by multiplying such closing price by
the reciprocal of the fraction by which the Conversion Price is so required
to be adjusted as a result of such other event. For purposes of this
paragraph, the term "ex" date (1) when used with respect to any issuance or
distribution, means the first date on which the shares of Common Stock
trade regular way on the relevant exchange or in the relevant market from
which the closing price was obtained without the right to receive such
issuance or distribution, (2) when used with respect to any subdivision or
combination of shares of Common Stock, means the first date on which the
shares of Common Stock trade regular way on such exchange or in such market
after the time at which such subdivision or combination becomes effective
and (3) when used with respect to any tender or exchange offer means the
first date on which the shares of Common Stock trade regular way on such
exchange or in such market after the Expiration Time of such offer.
Notwithstanding the foregoing, whenever successive adjustments to the
Conversion Price are called for pursuant to this Section 12(d), such
adjustments shall be made to the Current Market Price as may be necessary
or appropriate to effectuate the intent of this Section 12(d) and to avoid
unjust or inequitable results, as determined in good faith by the Board of
Directors.
"fair market value" means the amount which a willing buyer would pay a
willing seller in an arm's-length transaction.
<PAGE> 28
28
(viii) No adjustment in the Conversion Price shall be required unless
such adjustment would require an increase or decrease of at least 1% in
such price; provided, however, that any adjustments which by reason of this
Section 12(d)(viii) are not required to be made shall be carried forward
and taken into account in any subsequent adjustment. All calculations under
this Section 12 shall be made by the Company and shall be made to the
nearest cent. No adjustment need be made for a change in the par value or
no par value of the Common Stock.
(ix) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Registrar an Officers' Certificate
setting forth the Conversion Price after such adjustment and setting forth
a brief statement of the facts requiring such adjustment. Promptly after
delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Price setting forth the adjusted Conversion
Price and the date on which each adjustment becomes effective and shall
mail such notice of such adjustment of the Conversion Price to each holder
of shares of Series A Preferred Stock at such holder's last address
appearing on the register of holders maintained for that purpose within 20
days of the effective date of such adjustment. Failure to deliver such
notice shall not affect the legality or validity of any such adjustment.
(x) In any case in which this Section 12(d) provides that an
adjustment shall become effective immediately after a Common Stock Record
Date for an event, the Company may defer until the occurrence of such event
issuing to the holder of any share of Series A Preferred Stock converted
after such Common Stock Record Date and before the occurrence of such event
the additional shares of Common Stock issuable upon such conversion by
reason of the adjustment required by such event over and above the shares
of Common Stock issuable upon such conversion before giving effect to such
adjustment.
(xi) For purposes of this Section 12(d), the number of shares of
Common Stock at any time outstanding shall not include shares held in the
treasury of the Company. The Company shall not pay any dividend or make any
distribution on shares of Common Stock held in the treasury of the Company.
<PAGE> 29
29
(xii) In lieu of making any adjustment to the Conversion Price
pursuant to Section 12(d)(v), the Company may elect to reserve an amount of
cash for distribution to the holders of shares of Series A Preferred Stock
upon the conversion of the shares of Series A Preferred Stock so that any
such holder converting shares of Series A Preferred Stock will receive upon
such conversion, in addition to the shares of Common Stock and other items
to which such holder is entitled, the full amount of cash which such holder
would have received if such holder had, immediately prior to the Common
Stock Record Date for such distribution of cash, converted its shares of
Series A Preferred Stock into shares of Common Stock, together with any
interest accrued with respect to such amount, in accordance with this
Section 12(d)(xii). The Company may make such election by providing an
Officers' Certificate to the Registrar to such effect on or prior to the
payment date for any such distribution and depositing with the Registrar on
or prior to such date an amount of cash equal to the aggregate amount that
the holders of shares of Series A Preferred Stock would have received if
such holders had, immediately prior to the Common Stock Record Date for
such distribution, converted all the shares of Series A Preferred Stock
into shares of Common Stock. Any such funds so deposited by the Company
with the Registrar shall be invested by the Registrar in unconditional U.S.
Government obligations with a maturity not more than three months from the
date of issuance. Upon conversion of shares of Series A Preferred Stock by
a holder thereof, such holder shall be entitled to receive, in addition to
the shares of Common Stock issuable upon conversion, an amount of cash
equal to the amount such holder would have received if such holder had,
immediately prior to the Common Stock Record Date for such distribution,
converted its shares of Series A Preferred Stock into shares of Common
Stock, along with such holder's pro rata share of any accrued interest
earned as a consequence of the investment of such funds. Promptly after
making an election pursuant to this Section 12(d)(xii), the Company shall
give or shall cause to be given notice to all holders of shares of Series A
Preferred Stock of such election, which notice shall state the amount of
cash per share of Series A Preferred Stock such holders shall be entitled
to receive (without giving effect to any interest that may become payable)
upon conversion of the shares of Series
<PAGE> 30
30
A Preferred Stock as a consequence of the Company having made such
election.
(e) Subject to Section 13, in case of any consolidation of the Company
with, or merger of the Company into, any other corporation, or in case of any
merger of another corporation into the Company (other than a merger that does
not result in any reclassification, conversion, exchange or cancelation of
outstanding shares of Common Stock of the Company), or in case of any sale,
conveyance or transfer of all or substantially all the assets of the Company,
the holder of each share of Series A Preferred Stock shall have the right
thereafter, during the period such share of Series A Preferred Stock shall be
convertible as specified in Section 12(a), to convert such share of Series A
Preferred Stock into the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, conveyance or transfer by a holder
of the number of shares of shares of Common Stock of the Company into which such
share of Series A Preferred Stock might have been converted immediately prior to
such consolidation, merger, conveyance or transfer, assuming such holder of
shares of Common Stock of the Company failed to exercise his rights of election,
if any, as to the kind or amount of securities, cash and other property
receivable upon such consolidation, merger, conveyance or transfer (provided
that, if the kind or amount of securities, cash and other property receivable
upon such consolidation, merger, conveyance or transfer is not the same for each
Common Share of the Company in respect of which such rights of election shall
not have been exercised ("nonelecting share"), then for the purpose of this
Section 12 the kind and amount of securities, cash and other property receivable
upon such consolidation, merger, conveyance or transfer by each nonelecting
share shall be deemed to be the kind and amount so receivable per share by a
plurality of the nonelecting shares). Such securities shall provide for
adjustments which, for events subsequent to the effective date of the triggering
event, shall be as nearly equivalent as may be practicable to the adjustments
provided for in this Section 12. The above provisions of this Section 12 shall
similarly apply to successive consolidations, mergers, conveyances or transfers.
(f) In case:
(i) the Company shall declare a dividend (or any other distribution)
on its Common Stock payable otherwise than in cash out of its earned
surplus; or
<PAGE> 31
31
(ii) the Company shall authorize the granting to all holders of its
shares of Common Stock of rights or warrants to subscribe for or purchase
any shares of capital stock of any class or of any other rights; or
(iii) of any reclassification of the Common Stock (other than a
subdivision or combination of the Company's outstanding shares of Common
Stock), or of any consolidation or merger to which the Company is a party
and for which approval of any shareholders of the Company is required, or
the sale, conveyance or transfer of all or substantially all the assets of
the Company; or
(iv) of the voluntary or involuntary dissolution, liquidation or
winding-up of the Company;
then the Company shall cause to be filed with the Registrar and at each office
or agency maintained for the purpose of conversion of shares of Series A
Preferred Stock, and shall cause to be mailed to all holders at their last
addresses as they shall appear in the shares of Series A Preferred Stock
Register, at least 20 Business Days (or 10 Business Days in any case specified
in clause (i) or (ii) above) prior to the applicable date hereinafter specified,
a notice stating (x) the date on which a record is to be taken for the purpose
of such dividend, distribution, rights or warrants, or, if a record is not to be
taken, the date as of which the holders of shares of Common Stock of record to
be entitled to such dividend, distribution, rights or warrants are to be
determined or (y) the date on which such reclassification, consolidation,
merger, sale, transfer, dissolution, liquidation or winding-up is expected to
become effective, and the date as of which it is expected that holders of shares
of Common Stock of record shall be entitled to exchange their shares of Common
Stock for securities, cash or other property deliverable upon such
reclassification, consolidation, merger, sale, transfer, dissolution,
liquidation or winding-up. Failure to give the notice required by this Section
12(f) or any defect therein shall not affect the legality or validity of any
dividend, distribution, right, warrant, reclassification, consolidation, merger,
sale, transfer, dissolution, liquidation or winding-up, or the vote upon any
such action.
(g) The Company shall at all times reserve and keep available, free
from preemptive rights, out of its authorized but unissued shares of Common
Stock, for the purpose of effecting the conversion of shares of Series A
Preferred Stock, the full number of shares of Common Stock
<PAGE> 32
32
then issuable upon the conversion of all outstanding shares of Series A
Preferred Stock.
(h) The Company will pay any and all taxes that may be payable in
respect of the issue or delivery of shares of Common Stock on conversion of
shares of Series A Preferred Stock pursuant hereto. The Company shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of shares of Common Stock in a name
other than that of the holder of the share of Series A Preferred Stock or shares
of Series A Preferred Stock to be converted, and no such issue or delivery shall
be made unless and until the Person requesting such issue has paid to the
Company the amount of any such tax, or has established to the satisfaction of
the Company that such tax has been paid or is not payable.
13. Change of Control. (a) If a Change of Control shall have occurred
(the time and date of such occurrence being a "Change of Control Date"), the
Company shall cause to be filed with the Registrar and at each office or agency
maintained for the purpose of conversion of shares of Series A Preferred Stock,
and shall cause to be mailed to all holders at their last addresses as they
shall appear in the Series A Preferred Stock Register, in any case within 10
days after the Change of Control Date, a notice stating (1) the Change of
Control Date, (2) the fact that holders shall have the right to either (a)
continue to hold their shares of Series A Preferred Stock (or the shares of
preferred stock issued in respect thereof pursuant to Section 14) (the "Hold
Option"), (b) convert their shares of Series A Preferred Stock (including shares
received as a Special Payment (as defined below)) in accordance with Section 12
and, if the Change of Control Date occurs prior to November 30, 2004, receive
the Special Payment on such shares (the "Conversion Option") or (c) elect the
Remarketing Option (as defined below), (3) the relevant circumstances and facts
regarding such Change of Control and (4) the instructions that such holder must
follow in order to exercise the rights identified above.
(b) Within 30 days after delivery by the Company of the notice
described in Section 13(a), each holder of shares of Series A Preferred Stock
(or the shares of preferred stock issued in respect thereof pursuant to Section
14) who wishes to exercise the Hold Option, the Conversion Option or the
Remarketing Option must submit written notice (a "COC Response Notice") to the
Company setting forth the option such holder wishes to elect (and if
<PAGE> 33
33
no option is selected within such 30 day period such holder shall be deemed to
have selected the Hold Option).
(c) If the Hold Option is selected with respect to a share of Series A
Preferred Stock, or if no notice from a holder is received by the date referred
to in the preceding paragraph, such holder shall be deemed to have elected to
waive such holder's right to receive the Special Payment with respect to such
Change of Control and such share of Series A Preferred Stock (or the shares of
preferred stock issued in respect thereof pursuant to Section 14) shall remain
outstanding in accordance with its current terms.
(d) If the Conversion Option is selected with respect to a share of
Series A Preferred Stock, the holder of such share of Series A Preferred Stock
shall be deemed to have elected to convert such share in accordance with Section
12 and, if the Change of Control Date occurs prior to November 30, 2004, the
Company shall pay, and such holder shall be entitled to receive, in respect of
such share of Series A Preferred Stock as to which the Conversion Option has
been selected, shares of Series A Preferred Stock with a Liquidation Preference
equal to the product of (x) the Share Factor with respect to such share of
Series A Preferred Stock and (y) the Aggregate Special Payment Amount (the
"Special Payment"). Such Special Payment shall accrue as of the Change of
Control Date (if the Change of Control Date is prior to November 30, 2004)
whether or not the Company has earnings or profits, whether or not there are
funds legally available for the payment of such dividend and whether or not such
dividend is declared and shall be in all respects identical to any other
dividend declared or accrued on the Series A Preferred Stock (except as set
forth above) and all provisions of this Certificate of Designation applicable to
dividends shall apply to such Special Payment (except as set forth above).
(e) If the Remarketing Option is selected with respect to a share of
Series A Preferred Stock, such holder shall be deemed to have elected to waive
such holder's right to receive the Special Payment with respect to such Change
of Control (except under the circumstances set forth in Section 13(f) below) and
the Company shall thereafter have the option (the "Remarketing Option") to
either (a) have such share redeemed in accordance with the optional redemption
procedures set forth in Section 10 (except that (i), if the Change of Control
Date occurs prior to November 30, 2004, the Redemption Price shall be 101% of
the Liquidation Preference of such share plus accrued and unpaid dividends
<PAGE> 34
34
from the last Dividend Payment Date to the Redemption Date and (ii) such
procedures shall apply only to the holders so electing the Remarketing Option)
or (b) remarket such share for the account of such holder and, if the net
proceeds to such holder of such remarketing are less than an amount in cash
equal to 101% of the Liquidation Preference of such share plus accrued and
unpaid dividends thereon from the last Dividend Payment Date to the date payment
in full is received by such holder in respect of such share (the "Remarketing
Price"), the Company shall issue to and sell for the account of such holder a
sufficient number of shares of Common Stock to make up such shortfall; i.e.,
such that the holder receives a net amount in cash in respect of such share of
Series A Preferred Stock as to which the Remarketing Option has been selected
which, when taken together with the net proceeds received by such holder in such
remarketing is equal to the Remarketing Price. Written notice of the election by
the Company to either redeem or remarket such share shall be provided to such
holder within 75 days after receipt of a COC Response Notice specifying the
Remarketing Option.
(f) In order to accomplish the remarketing, the Company shall take all
actions that may be necessary, including without limitation, preparing and
filing a registration statement under the Securities Act of 1933, and shall pay
all expenses (including without limitation, underwriting discounts) associated
with the remarketing and issuance and shall provide customary indemnification
for the benefit of the holder against securities law liabilities in connection
therewith. If the Remarketing Option has been selected and the Company has not
elected to redeem such share, payment of the full Remarketing Price in respect
of the remarketed share shall be made at a single settlement against surrender
of the share. Such settlement shall take place as soon as reasonably
practicable. If such settlement does not take place within 180 days after the
date of the Company's written notice pursuant to paragraph (e) above, the
Company shall give written notice to the Holders that have elected the
Remarketing Option that such 180 day period has elapsed and such Holders shall
have the option, for a period of 10 business days following the giving of such
notice, of electing (i) the Conversion Option and, if the Change of Control Date
occurs prior to November 30, 2004, receiving the Special Payment calculated as
if such Holder had originally elected the Conversion Option (instead of the
Remarketing Option) or (ii) the Hold Option.
(g) The Company shall have the right to institute reasonable procedures
in order to implement this Section 13
<PAGE> 35
35
and, to the extent reasonably practicable, will make proper provision prior to
the Change of Control Date to ensure that the holders of shares of Series A
Preferred Stock will be entitled to receive the benefits intended to be afforded
by this Section 13. Nothing in this Section 13 shall affect the rights of the
holders of Series A Preferred Stock set forth in Section 14 hereof.
14. Consolidation, Merger, Conveyance or Transfer. Without the vote or
consent of the holders of a majority of the then Outstanding shares of Series A
Preferred Stock, the Company may not consolidate or merge with or into, or sell,
assign, transfer, lease, convey or otherwise dispose of all or substantially all
of its assets to, any person unless (i) if the Company is the surviving or
continuing person, the Series A Preferred Stock shall remain outstanding without
any amendment that would adversely affect the preferences, rights or powers of
the Series A Preferred Stock, (ii) if the Company is not the surviving or
continuing person, (a) the entity formed by such consolidation or merger or to
which such sale, assignment, transfer, lease, conveyance or other disposition
shall have been made (in any such case, the "resulting entity") is a corporation
organized and existing under the laws of Bermuda, the United States or any State
thereof or the District of Columbia; and (b) the shares of Series A Preferred
Stock are converted into or exchanged for and become shares of such resulting
entity, having in respect of such resulting entity the same (or more favorable)
powers, preferences and relative, participating, optional or other special
rights that the shares of Series A Preferred Stock had immediately prior to such
transaction; and (iii) the Company shall have delivered to the Registrar an
Officers' Certificate and an opinion of counsel, reasonably satisfactory in form
and content, each stating that such consolidation, merger, conveyance or
transfer complies with this Section 14 and that all conditions precedent herein
provided for relating to such transaction have been complied with.
15. SEC Reports; Reports by Company. So long as any shares of Series A
Preferred Stock are outstanding, the Company shall file with the SEC and, within
15 days after it files them with the SEC, with the Registrar and, if requested,
furnish to each holder of shares of Series A Preferred Stock all annual and
quarterly reports and the information, documents, and other reports that the
Company is required to file with the SEC pursuant to Section 13(a) or 15(d) of
the Exchange Act ("SEC Reports"). In the event the Company is not required or
shall cease to be required to
<PAGE> 36
36
file SEC Reports, pursuant to the Exchange Act, the Company will nevertheless
file such reports with the SEC (unless the SEC will not accept such a filing).
Whether or not required by the Exchange Act to file SEC Reports with the SEC, so
long as any shares of Series A Preferred Stock are Outstanding, the Company will
furnish or cause to be furnished copies of the SEC Reports to the holders of
shares of Series A Preferred Stock at the time the Company is required to make
such information available to the Registrar and to prospective investors who
request it in writing.
16. Definitions. For purposes of this Certificate of Designation, the
following terms shall have the meaning set forth below:
"Accumulated Dividends" has the meaning set forth in Section 6.
"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 Group", "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.
"Aggregate Change of Control Date Accreted Value" means the product
obtained by multiplying (x) the Change of Control Date Accreted Value by (y) the
number of shares of Series A Preferred Stock Outstanding as of the Change of
Control Date without giving effect to the conversion of shares of Series A
Preferred Stock pursuant to the Conversion Option.
"Aggregate Five Year Accreted Value" means the product obtained by
multiplying (x) the Five Year Accreted Value by (y) the number of shares of
Series A Preferred Stock Outstanding as of the Change of Control Date without
giving effect to the conversion of shares of Series A Preferred Stock pursuant
to the Conversion Option.
"Aggregate Special Payment Amount" means the difference between (x) the
Aggregate Five Year Accreted Value and (y) the Aggregate Change of Control Date
Accreted Value.
<PAGE> 37
37
"Associated Group" means The Associated Group, Inc., a Delaware
corporation.
"Average Market Value" of the Common Stock means the arithmetic average
of the Current Market Value of the shares of Common Stock for the ten trading
days ending on the fifth Business Day prior to (i) in the case of the payment of
any dividend, the Record Date for such dividend and (ii) in the case of any
other payment, the date of such payment.
"Board of Directors" has the meaning set forth in the Recitals.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The City of New York
are authorized or obligated by law or executive order to be closed.
"By-laws" has the meaning set forth in the Recitals.
"COC Response Notice" has the meaning set forth in Section 13(b).
"Capital Stock" means, with respect to any person, any and all shares,
interests, participations, rights in, or other equivalents (however designated
and whether voting and/or non-voting) of such person's capital stock, whether
outstanding on the Closing Date or issued after the Closing Date, and any and
all rights (other than any evidence of indebtedness), warrants or options
exchangeable for or convertible into such capital stock.
"Certificate of Incorporation" has the meaning set forth in the
recitals.
"Change of Control" means the occurrence of any of the following
events: (a) any "person" or "group" (as such terms are used in Sections 13(d)
and 14(d) of the Exchange Act) (other than (x) any such group if each member of
such group, together with its Affiliates, owns less than 50% of the total Voting
Capital Stock of the Company and (y) until the earlier of the termination of the
Liberty Merger Agreement and consummation of the Liberty Merger, Associated
Group)) is or becomes the "beneficial owner" (as defined in Rule 13d-3 and 13d-5
under the Exchange Act, except that a person shall be deemed to have "beneficial
ownership" of all securities that such person has the right to acquire, whether
such right is exercisable immediately or only after
<PAGE> 38
38
the passage of time), directly or indirectly, of more than 50% of the total
Voting Capital Stock of the Company or (b) the Company consolidates with, or
merges with or into, another person or sells, assigns, conveys, transfers,
leases or otherwise disposes of all or substantially all of its assets to any
person, or any person consolidates with, or merges with or into the Company, in
any such event pursuant to a transaction in which the holders of the outstanding
Voting Capital Stock of the Company immediately prior to such transaction hold
less than 50% of the outstanding Voting Capital Stock of the surviving or
transferee company or its parent company immediately after such transaction or
immediately after such transaction any "person" or "group" (as such terms are
used in Sections 13(d) and 14(d) of the Exchange Act), (other than (x) any such
group if each member of such group, together with its Affiliates, owns less than
50% of the total Voting Capital Stock of the Company and (y) until the earlier
of the termination of the Liberty Merger Agreement and consummation of the
Liberty Merger, Associated Group) is the "beneficial owner" (as defined in Rules
13d-3 and 13d-5 under the Exchange Act, except that a person shall be deemed to
have "beneficial ownership" of all securities that such person has the right to
acquire, whether such right is exercisable immediately or only after the passage
of time), directly or indirectly, of more than 50% of the total Voting Capital
Stock of the surviving or transferee company or its parent company or (c) during
any consecutive two-year period, individuals who at the beginning of such period
constituted the Board of Directors (together with any new directors whose
election by the Board of Directors or whose nomination for election by the
stockholders of the Company was approved by a vote of a majority of the
directors then still in office who were either directors at the beginning of
such period or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the Board of
Directors then in office or (d) any transaction subject to Rule 13e-3 under the
Exchange Act if following such Rule 13e-3 transaction a person or group (as such
terms are used in Section 13(d) and 14(d) of the Exchange Act) owns more than
50% of the total Voting Capital Stock of the Company.
"Change of Control Date" has the meaning set forth in Section 13(a).
"Change of Control Date Accreted Value" means with respect to each
$1,000 of original Liquidation Preference, the value that $1,000 would accrete
to between the Closing
<PAGE> 39
39
Date and the Change of Control Date, compounded quarterly at an annual rate of
7-3/4%.
"Change of Control Obligation" has the meaning set forth in Section
13(a).
"Closing Date" means any Closing Date under the Purchase Agreement.
"closing price" has the meaning set forth in Section 12(d)(vii).
"Common Stock Record Date" has the meaning set forth in Section
12(d)(vii).
"Common Stock" means the Class A common stock of the Company, par value
$.01 per share.
"Company" has the meaning set forth in the Recitals.
"Company Order" means a written request or order signed in the name of
the Company by its Chairman of the Board, its President or a Vice President and
by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary.
"Conversion Agent" has the meaning set forth in Section 5(a).
"Conversion Option" has the meaning set forth in Section 13(a).
"Conversion Price" means the price at which shares of Common Stock
shall be delivered upon conversion.
"Current Market Value" of the Common Stock means the average of the
high and low sale prices of the shares of Common Stock as reported on the Nasdaq
National Market or any national stock exchange or Commission recognized trading
market in the United States upon which the shares of Common Stock are then
listed or admitted to trading, for the trading day in question.
"Current Market Price" has the meaning set forth in Section 12(d)(vii).
"DB" has the meaning set forth in Section 8(c).
<PAGE> 40
40
"Dilution Trigger Event" has the meaning set forth in Section
12(d)(iv).
"Distributed Securities" has the meaning set forth in Section
12(d)(iv).
"Dividend Payment Date" has the meaning set forth in Section 6.
"Dividend Record Date" has the meaning set forth in Section 7(a).
"Expiration Time" has the meaning set forth in Section 12(d)(vi).
"fair market value" has the meaning set forth in Section 12(d)(vii).
"Five Year Accreted Value" means with respect to each $1,000 of
original Liquidation Preference, $1,467.843.
"HMTF Group" has the meaning set forth in Section 8(d).
"HMTF Holders" has the meaning set forth in Section 8(d).
"HMTF Issued Series A Preferred Shares" has the meaning set forth in
Section 8(d).
"Hold Option" has the meaning set forth in Section 13(a).
"Junior Shares" has the meaning set forth in Section 9(a).
"Liberty Merger" means the consummation of the merger as contemplated
by the Liberty Merger Agreement, as it may be amended from time to time.
"Liberty Merger Agreement" means the Amended and Restated Agreement and
Plan of Merger, dated as of October 28, 1999, among AT&T Corp., A-Group Merger
Corp., Liberty Media Corporation and the Associated Group, Inc. as it may be
amended from time to time.
"Liquidation Preference" means an amount equal to $1,000 per share of
Series A Preferred Stock, subject to change in accordance with Section 6 and
Section 7 hereof, including, without limitation, Accumulated Dividends.
<PAGE> 41
41
"Mandatory Redemption Date" has the meaning set forth in Section 10(b);
provided, however, that if such date shall not be a Business Day, then such date
shall be the next Business Day.
"nonelecting share" has the meaning set forth in Section 12(e).
"Odd-lot Redemption" has the meaning set forth in Section 10(c).
"Officers' Certificate" means a certificate of the Company signed in
the name of the Company by its Chairman of the Board, its President or a Vice
President and by its Treasurer, an Assistant Treasurer, its Secretary or an
Assistant Secretary.
"Optional Redemption" has the meaning set forth in Section 10(a).
"Optional Redemption Date" has the meaning set forth in Section 10(a).
"Outstanding" means when used with respect to shares of Series A
Preferred Stock, as of the date of determination, all shares of Series A
Preferred Stock theretofore authenticated and delivered under this Certificate
of Designation, except (a) shares of Series A Preferred Stock theretofore
converted into shares of Common Stock in accordance with Section 12 and shares
of Series A Preferred Stock theretofore canceled by the Registrar or delivered
to the Registrar for cancelation; (b) shares of Series A Preferred Stock for
whose payment or redemption money in the necessary amount has been theretofore
deposited with the Registrar or any Paying Agent (other than the Company) in
trust or set aside and segregated in trust by the Company (if the Company shall
act as its own Paying Agent) for the holders of such shares of Series A
Preferred Stock; provided that, if such shares of Series A Preferred Stock are
to be redeemed, notice of such redemption has been duly given pursuant to this
Certificate of Designation or provision therefor satisfactory to the Registrar
has been made; and (c) shares of Series A Preferred Stock (x) that are
mutilated, destroyed, lost or stolen which the Company has decided to pay or (y)
in exchange for or in lieu of which other shares of Series A Preferred Stock
have been authenticated and delivered pursuant to this Certificate of
Designation; provided, however, that, in determining whether the holders of the
shares of Series A Preferred Stock have given any request, demand,
authorization, direction, notice,
<PAGE> 42
42
consent or waiver or taken any other action hereunder, shares of Series A
Preferred Stock owned by the Company or any other obligor upon the shares of
Series A Preferred Stock or any Affiliate of the Company or of such other
obligor shall be disregarded and deemed not to be Outstanding, except that, in
determining whether the Registrar shall be protected in relying upon any such
request, demand, authorization, direction, notice, consent, waiver or other
action, only shares of Series A Preferred Stock which the Registrar has actual
knowledge of being so owned shall be so disregarded. Shares of Series A
Preferred Stock so owned which have been pledged in good faith may be regarded
as Outstanding if the pledgee establishes to the satisfaction of the Registrar
the pledgee's right so to act with respect to such shares of Series A Preferred
Stock and that the pledgee is not the Company or any other obligor upon the
shares of Series A Preferred Stock or any Affiliate of the Company or of such
other obligor.
"Parity Shares" has the meaning set forth in Section 9(a).
"Paying Agent" has the meaning set forth in Section 5(a).
"Person" means an individual, partnership, corporation, limited
liability company, business trust, joint stock company, trust, unincorporated
association, joint venture, governmental authority or other entity of whatever
nature.
"Preferred Stock" means, with respect to any person, any and all
shares, interests, participations or other equivalents (however designated,
whether voting or non-voting) of such person's preferred or preference stock,
whether now outstanding or issued after the date hereof, including all series
and classes of such preferred or preference stock.
"Purchase Agreement" means the Stock Purchase Agreement dated as of
November 4, 1999, among the Company and the Purchasers named therein, as it may
be amended from time to time.
"Purchased Shares" has the meaning set forth in Section 12(d)(vi).
"Redemption Date" has the meaning set forth in Section 10(f).
<PAGE> 43
43
"Redemption Notice" has the meaning set forth in Section 10(f).
"Redemption Price" has the meaning set forth in Section 10(e).
"Registrar" has the meaning set forth in Section 3.
"Registration Rights Agreement" means the Registration Rights Agreement
dated as of December 3, 1999, among the Company and the Purchasers.
"Remarketing Option" has the meaning set forth in Section 13(e).
"Restricted Shares Legend" has the meaning set forth in Section 4(a).
"resulting entity" has the meaning set forth in Section 14.
"SEC" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after the adoption of this Certificate of Designation such commission
is not existing and performing the duties now assigned to it, then the body
performing such duties at such time.
"SEC Reports" has the meaning set forth in Section 15.
"Securities Act" has the meaning set forth in Section 4(a).
"Senior Shares" has the meaning set forth in Section 9(a).
"Series A Preferred Stock" has the meaning set forth in Section 1.
"Share Factor" means with respect to each share of Series A Preferred
Stock, a fraction, the numerator of which is the Liquidation Preference of such
share as of the Change of Control Date, without giving effect to the Special
Payment, and the denominator of which is the aggregate Liquidation Preference of
all outstanding shares of Series A Preferred Stock as of the Change of Control
Date, without giving effect to the Special Payment.
<PAGE> 44
44
"Special Payment" has the meaning set forth in Section 13.
"Voting Capital Stock" means with respect to any Person, securities of
any class or classes of Capital Stock in such Person ordinarily entitling the
holders thereof (whether at all times or at the times that such class of Capital
Stock has voting power by reason of the happening of any contingency) to vote in
the election of members of the board of directors or comparable governing body
of such Person.
<PAGE> 45
45
IN WITNESS WHEREOF, the Company has caused this Certificate of
Designation to be duly executed by Laurence E. Harris, Senior Vice President and
General Counsel of the Company, this 3rd day of December, 1999.
TELIGENT, INC.,
by /s/ Laurence E. Harris
----------------------
Name: Laurence E. Harris
Title: Senior Vice
President and
General Counsel
<PAGE> 46
EXHIBIT A
FACE OF SECURITY
Restricted Legend "THESE SECURITIES HAVE NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933 OR THE SECURITIES LAWS OF ANY STATE OR OTHER
JURISDICTION, AND, UNLESS SO REGISTERED, THEY MAY NOT BE SOLD, OFFERED FOR SALE,
TRANSFERRED, ASSIGNED, PLEDGED OR HYPOTHECATED EXCEPT PURSUANT TO AN EXEMPTION
FROM, OR IN A TRANSACTION NOT SUBJECT TO, THE REGISTRATION REQUIREMENTS OF THE
ACT AND APPLICABLE SECURITIES LAWS OF ANY STATE OR OTHER JURISDICTION."
<PAGE> 47
2
Number of Shares
Number: ____ ____ Shares
CUSIP NO.: [ ]
7-3/4% SERIES A CONVERTIBLE PREFERRED STOck
DUE 2014
OF
TELIGENT, INC.
TELIGENT, INC., a company organized under the laws of Delaware (the
"Company"), hereby certifies that [HOLDER] (the "Holder") is the registered
owner of fully paid and non-assessable preference securities of the Company
designated the 7-3/4% Series A Convertible Preferred Stock due 2014, par value
U.S.$0.01 and initial liquidation preference U.S.$1,000 per share (the
"Preferred Stock"). The shares of Preferred Stock are transferable on the books
and records of the Registrar, in person or by a duly authorized attorney, upon
surrender of this certificate duly endorsed and in proper form for transfer. The
designation, rights, privileges, restrictions, preferences and other terms and
provisions of the Preferred Stock represented hereby are issued and shall in all
respects be subject to the provisions of the Certificate of Designation of the
Company dated November [ ], 1999, as the same may be amended from time to time
in accordance with its terms (the "Preferred Stock Certificate of Designation").
Capitalized terms used herein but not defined shall have the meaning given them
in the Preferred Stock Certificate of Designation. The Company will provide a
copy of the Preferred Stock Certificate of Designation to a Holder without
charge upon written request to the Company at its principal place of business.
Reference is hereby made to select provisions of the Preferred Stock
set forth on the reverse hereof, and to the Preferred Stock Certificate of
Designation, which select provisions and the Preferred Stock Certificate of
Designation shall for all purposes have the same effect as if set forth at this
place.
<PAGE> 48
3
Upon receipt of this certificate, the Holder is bound by the Preferred
Stock Certificate of Designation and is entitled to the benefits thereunder.
Unless the Transfer Agent's valid counter-signature appears hereon, the
shares of Preferred Stock evidenced hereby shall not be entitled to any benefit
under the Preferred Stock Certificate of Designation or be valid or obligatory
for any purpose.
IN WITNESS WHEREOF, the Company has executed this certificate as of the
date set forth below.
TELIGENT, INC.,
by
---------------------------
Name:
Title:
[Seal]
by
---------------------------
Name:
Title:
Dated:
COUNTERSIGNED AND REGISTERED
[ ]
as Transfer Agent,
by
------------------------------
Authorized Signatory
Dated:
<PAGE> 49
REVERSE OF SECURITY
TELIGENT, INC.
Series A 7-3/4% Convertible Preferred Stock
due 2014
Dividends on each share of Preferred Stock shall be payable at a rate
per annum set forth on the face hereof or as provided in the Preferred Stock
Certificate of Designation. Subject to the limitations set forth in Section 11
of the Preferred Stock Certificate of Designation, dividends may be paid, at the
option of the Company, in cash or in shares of Preferred Stock of the Company or
a combination of cash and shares of Preferred Stock of the Company.
The shares of Preferred Stock shall be redeemable as provided in the
Preferred Stock Certificate of Designation. The shares of Preferred Stock shall
be convertible into the Company's Common Stock in the manner and according to
the terms set forth in the Preferred Stock Certification of Designation.
The Company shall furnish to any Holder upon request and without
charge, a copy of the voting rights preferences, limitations and special rights
of the shares of each class or series authorized to be issued by the Company so
far as they have been fixed and determined and the authority of the Board of
Directors to fix and determine the designations, voting rights, preferences,
limitations and special rights of the class and series of shares of the Company.
<PAGE> 50
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned assigns and transfers the shares of
Preferred Stock evidenced hereby to:
(Insert assignee's social security or tax identification number)
(Insert address and zip code of assignee)
and irrevocably appoints:
agent to transfer the shares of Preferred Stock evidenced hereby on the books of
the Transfer Agent and Registrar. The agent may substitute another to act for
him or her.
Date:
---------------------
Signature:
----------------------------
(Sign exactly as your name appears on the other side of this Convertible
Preferred Stock Certificate)
Signature Guarantee: *****
------------------------------
- --------
* Signature must be guaranteed by an "eligible guarantor institution" (i.e.,
a bank, stockbroker, savings and loan association or credit union) meeting the
requirements of the Registrar, which requirements include membership or
participation in the Securities Transfer Agents Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934.
<PAGE> 51
NOTICE OF CONVERSION
(To be Executed by the Registered Holder
in order to Convert the Preferred Stock)
The undersigned hereby irrevocably elects to convert (the "Conversion")
_________ shares of 7-3/4% Series A Convertible Preferred Stock due 2014 (the
"Preferred Stock"), represented by stock certificate No(s). ______________ (the
"Preferred Stock Certificates") into shares of common stock, par value U.S. $.01
per share ("Common Stock"), of Teligent, Inc. (the "Company") according to the
conditions of the Certificate of Designation establishing the terms of the
Preferred Stock (the "Preferred Stock Certificate of Designation"), as of the
date written below. If shares are to be issued in the name of a person other
than the undersigned, the undersigned will pay all transfer taxes payable with
respect thereto and is delivering herewith such certificates. No fee will be
charged to the holder for any conversion, except for transfer taxes, if any. A
copy of each Preferred Stock Certificate is attached hereto (or evidence of
loss, theft or destruction thereof).*
The undersigned represents and warrants that all offers and sales by the
undersigned of the shares of Common Stock issuable to the undersigned upon
conversion of the Preferred Stock shall be made pursuant to registration of the
Common Stock under the Securities Act of 1933 (the "Act"), or pursuant to an
exemption from registration under the Act.
Capitalized terms used but not defined herein shall have the meanings ascribed
thereto in or pursuant to the Preferred Stock Certificate of Designation.
Date of Conversion:
Applicable Conversion Price:
Number of shares of Preferred Stock to be Converted:
Number of shares of Common Stock to be Issued:
Signature:
Name:
Address:
Fax No.:
<PAGE> 52
2
* The Company is not required to issue shares of Common Stock until the
original Preferred Stock Certificate(s) (or evidence of loss, theft or
destruction thereof) to be converted are received by the Company or its Transfer
Agent. The Company shall issue and deliver shares of Common Stock to an
overnight courier not later than three business days following receipt of the
original Preferred Stock Certificate(s) to be converted.
** Address where shares of Common Stock and any other payments or certificates
shall be sent by the Company.
<PAGE> 1
EXHIBIT 10.4
CREDIT AGREEMENT
dated as of
November 24, 1999
among
HMTF Bridge Partners, L.P.,
The Lenders Parties Hereto,
and
[A bank, as defined in Section 3(a)(6)
of the Securities Exchange Act
of 1934, as amended]
as Administrative Agent
$110,000,000.00
TERM LOAN FACILITY
<PAGE> 2
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE 1
Definitions..............................................................................................1
SECTION 1.1 Defined Terms..........................................................................1
SECTION 1.2 Terms Generally........................................................................9
SECTION 1.3 Accounting Terms; GAAP.................................................................9
ARTICLE 2
Term Loans..............................................................................................10
SECTION 2.1 Term Loans..........................................................................10
SECTION 2.2 Procedure for Term Loan Borrowing...................................................10
SECTION 2.3 Repayment of Loans; Evidence of Debt; etc...........................................10
SECTION 2.4 Termination and Reduction of Commitments............................................11
SECTION 2.5 Prepayments.........................................................................11
SECTION 2.6 Conversion and Continuation Options.................................................12
SECTION 2.7 Minimum Amounts and Maximum Number of Tranches......................................13
SECTION 2.8 Interest............................................................................13
SECTION 2.9 Fees................................................................................13
SECTION 2.10 Inability to Determine Interest Rate................................................14
SECTION 2.11 Pro Rata Treatment and Payments.....................................................14
SECTION 2.12 Requirements of Law.................................................................15
SECTION 2.13 Taxes...............................................................................16
SECTION 2.14 Indemnity...........................................................................17
SECTION 2.15 Change of Lending Office............................................................18
SECTION 2.16 Replacement of Lenders..............................................................18
ARTICLE 3
Representations and Warranties..........................................................................18
SECTION 3.1 Organization; Powers................................................................18
SECTION 3.2 Authorization; Enforceability.......................................................19
SECTION 3.3 Governmental Approvals; No Conflicts................................................19
SECTION 3.4 Compliance with Laws and Agreements.................................................19
SECTION 3.5 Investment and Holding Company Status...............................................19
SECTION 3.6 Material Adverse Effect.............................................................19
SECTION 3.7 No Material Litigation..............................................................19
SECTION 3.8 Disclosure..........................................................................19
SECTION 3.9 Investments.........................................................................20
ARTICLE 4
Conditions Precedent....................................................................................20
SECTION 4.1 ............................................................................................20
(a) Loan Documents............................................................................20
(b) Closing Certificate.......................................................................20
(c) Legal Opinion.............................................................................20
(d) Approvals.................................................................................20
</TABLE>
<PAGE> 3
<TABLE>
<S> <C>
(e) Fees......................................................................................21
(f) Filings...................................................................................21
SECTION 4.2 Additional Conditions for Each Credit Event.........................................21
(a) Pledge Agreement..........................................................................21
(b) Representations and Warranties............................................................21
(c) No Default................................................................................21
(d) Certificate...............................................................................21
(e) Co-Investment.............................................................................21
(f) Legal Opinion.............................................................................22
(g) Management and Advisory Agreements........................................................22
(h) Investment................................................................................22
ARTICLE 5
Covenants...............................................................................................22
SECTION 5.1 Notices of Material Events..........................................................22
SECTION 5.2 Existence; Conduct of Business......................................................22
SECTION 5.3 Payment of Obligations..............................................................22
SECTION 5.4 Compliance with Laws................................................................23
SECTION 5.5 Use of Proceeds.....................................................................23
SECTION 5.6 Additional Collateral...............................................................23
SECTION 5.7 Financial Reporting.................................................................23
SECTION 5.8 Additional Guarantors...............................................................23
ARTICLE 6
Negative Covenants......................................................................................24
SECTION 6.1 Indebtedness........................................................................24
SECTION 6.2 Liens...............................................................................24
SECTION 6.3 Fundamental Changes.................................................................24
SECTION 6.4 Restricted Payments.................................................................24
SECTION 6.5 Sale of Assets......................................................................24
ARTICLE 7
Events of Default.......................................................................................25
ARTICLE 8
The Administrative Agent................................................................................27
ARTICLE 9
Miscellaneous...........................................................................................28
SECTION 9.1 Notices.............................................................................28
SECTION 9.2 Waivers; Amendments.................................................................29
SECTION 9.3 Expenses; Indemnity; Damage Waiver..................................................29
SECTION 9.4 Successors and Assigns..............................................................30
SECTION 9.5 Survival............................................................................32
SECTION 9.6 Counterparts; Integration; Effectiveness............................................32
SECTION 9.7 Severability........................................................................32
</TABLE>
<PAGE> 4
<TABLE>
<S> <C>
SECTION 9.8 Right of Setoff.....................................................................32
SECTION 9.9 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE
OF PROCESS .........................................................................32
SECTION 9.10 WAIVER OF JURY TRIAL................................................................33
SECTION 9.11 Headings............................................................................33
SECTION 9.12 Confidentiality.....................................................................33
SECTION 9.13 Syndication.........................................................................34
</TABLE>
SCHEDULE:
Schedule 2.1 -- Commitments
EXHIBITS:
Exhibit A -- Form of Assignment and Acceptance
Exhibit B -- Form of Opinion of Counsel
Exhibit C -- Form of Closing Certificate
Exhibit D -- Form of Affiliate Guarantee
Exhibit E -- Form of Note
Exhibit F -- Form of Pledge Agreement
Exhibit G -- Form of Hicks Muse Letter Agreement
Exhibit H -- Form of Principal Agreement
<PAGE> 5
1
CREDIT AGREEMENT, dated as of November 24, 1999, among HMTF Bridge
Partners, L.P., the Lenders parties hereto from time to time and [a bank, as
defined in Section 3(a)(6) of the Securities Exchange Act of 1934, as amended
(the "Bank")], as Administrative Agent.
The parties hereto agree as follows:
ARTICLE 1
Definitions
SECTION 1.1 Defined Terms. As used in this Agreement, the following terms
have the meanings specified below:
"ABR Loans" means Term Loans the rate of interest applicable to which is
based upon the Alternate Base Rate.
"Additional Lenders" has the meaning set forth in Section 9.13.
"Administrative Agent" means [Bank], in its capacity as administrative
agent for the Lenders hereunder.
"Affiliate" means, with respect to a specified Person, another Person that
directly, or indirectly through one or more intermediaries, Controls or is
Controlled by or is under common Control with the Person specified.
"Affiliate Guarantees" means the collective reference to each guarantee
agreement executed and delivered by a Guarantor, substantially in the form of
Exhibit D, as the same may be amended, supplemented or otherwise modified from
time to time.
"Agreement" means this Credit Agreement, as amended, supplemented or
otherwise modified from time to time.
"Alternate Base Rate" means, for any day, a rate per annum equal to the
greatest of (a) the Prime Rate in effect on such day, (b) the Base CD Rate in
effect on such day plus 1% and (c) the Federal Funds Effective Rate in effect on
such day plus 1/2 of 1%. Any change in the Alternate Base Rate due to a change
in the Prime Rate, the Base CD Rate or the Federal Funds Effective Rate shall be
effective from and including the effective date of such change in the Prime
Rate, the Base CD Rate or the Federal Funds Effective Rate, respectively.
"Applicable Margin" means a per annum rate equal to (a) 2.50% in the case
of Eurodollar Loans and (b) 1.50% in the case of ABR Loans.
"Assessment Rate" means, for any day, the annual assessment rate in effect
on such day that is payable by a member of the Bank Insurance Fund classified as
"well-capitalized" and within supervisory subgroup "B" (or a comparable
successor risk classification) within the meaning of 12 C.F.R. Part 327 (or any
successor provision) to the Federal Deposit Insurance Corporation for insurance
by such Corporation of time deposits made in dollars at the offices of such
member in the United States; provided that if, as a result of any change in any
law, rule or regulation, it is no longer possible to determine the Assessment
Rate as aforesaid, then the Assessment Rate shall be such annual rate as shall
be determined in good faith by the Administrative Agent to be representative of
the cost of such insurance to the Lenders.
<PAGE> 6
2
"Assignee" has the meaning set forth in Section 9.4(b).
"Assignment and Acceptance" means an assignment and acceptance entered into
by a Lender and an assignee (with the consent of any party whose consent is
required by Section 9.4), and accepted by the Administrative Agent, in the form
of Exhibit A or any other form approved by the Administrative Agent.
"Available Commitment" means, as to any Lender at any time, an amount equal
to the excess, if any, of (a) such Lender's Commitment over (b) such Lender's
Credit Exposure.
"Available Excess Investment Commitment Amount" means, as to any Lender at
any time, an amount equal to the excess, if any of (a) such Lender's Investment
Commitment Amount over (b) such Lender's Credit Exposure.
"Base CD Rate" means the sum of (a) the Three Month Secondary CD Rate
multiplied by the Statutory Reserve Rate plus (b) the Assessment Rate.
"Board" means the Board of Governors of the Federal Reserve System of the
United States.
"Borrower" means HMTF Bridge Partners, L.P., a Delaware limited
partnership.
"Business Day" means any day that is not a Saturday, Sunday or other day on
which commercial banks in New York City or Dallas, Texas are authorized or
required by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term Business Day shall also exclude any day on which banks
are not open for dealings in dollar deposits in the London interbank market.
"Capital Lease Obligations" of any Person means the obligations of such
Person to pay rent or other amounts under any lease of (or other arrangement
conveying the right to use) real or personal property, or a combination thereof,
which obligations are required to be classified and accounted for as capital
leases on a balance sheet of such Person under GAAP, and the amount of such
obligations shall be the capitalized amount thereof determined in accordance
with GAAP.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation),
including any limited liability company interests in a limited liability
company, any limited or general partnership interests in a partnership, and any
and all warrants, rights or options to purchase any of the foregoing.
"Change in Control" means any of the following events: (a) Hicks Muse, its
principals or Affiliates cease to own of record and beneficially a majority of
the economic interests in the Borrower and the power, directly or indirectly, to
vote or direct the voting of Capital Stock having a majority of the power to
direct the management and policies of the Borrower, or (b) Hicks Muse, its
principals or Affiliates cease to Control each Guarantor.
["Bank"] means [Bank].
"Closing Date" means November 24, 1999.
"Code" means the Internal Revenue Code of 1986, as amended from time to
time.
<PAGE> 7
3
"Co-Investor" means the principals of Hicks Muse, their families and
employees of Hicks Muse who make an investment in the Borrower with respect to
the Borrower's investment in a New Portfolio Company.
"Co-Investment" means an investment by a Co-Investor in the Borrower in
connection with the Borrower's Investment in a New Portfolio Company in an
amount not less than 2.98% of the Borrower's total Investment in such New
Portfolio Company.
"Commitment" means, as to any Lender, the commitment of such Lender to make
Term Loans hereunder, in an amount so that such Lender's Credit Exposure does
not exceed such Lender's commitment hereunder, as such commitment may be (a)
reduced from time to time pursuant to Section 2.4 and (b) reduced or increased
from time to time as the result of an Assignment and Acceptance. The initial
amount of each Lender's Commitment is set forth on Schedule 2.1, or in the
Assignment and Acceptance pursuant to which such Lender shall have assumed its
Commitment, as applicable.
"Control" means the possession of the power, directly or indirectly, to
vote more than 50% of the Capital Stock having ordinary voting power for the
election of directors (or persons performing similar functions) of a Person.
"Controlling" and "Controlled" have meanings correlative thereto.
"Credit Exposure" means, with respect to any Lender at any time, the sum of
the outstanding principal amount of such Lender's Term Loans at such time.
"Default" means any event or condition which constitutes an Event of
Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Directly Owned Investment Party" means any Person in which the Borrower
directly makes an Investment which Person directly or indirectly makes the same
Investment (which shall be a Permitted Investment) in a New Portfolio Company.
"dollars" or "$" refers to lawful money of the United States.
"Eurodollar Base Rate" means with respect to each day during each Interest
Period pertaining to a Eurodollar Loan, the rate per annum equal to the rate at
which [Bank] is offered dollar deposits at or about 10:00 A.M., New York, New
York time, two Business Days prior to the beginning of such Interest Period in
the interbank eurodollar market where the eurodollar and foreign currency and
exchange operations in respect of its Eurodollar Loans are then being conducted
for delivery on the first day of such Interest Period for the number of days
comprised therein and in an amount comparable to the amount of its Eurodollar
Loan to be outstanding during such Interest Period.
"Eurodollar Loans" means Term Loans the rate of interest applicable to
which is based upon the Eurodollar Rate.
"Eurodollar Rate" with respect to each day during each Interest Period
pertaining to a Eurodollar Loan, a rate per annum determined for such day
(rounded upward to the nearest 1/100th of 1%) equal to (a) the Eurodollar Base
Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate.
<PAGE> 8
4
"Eurodollar Tranche" the collective reference to Eurodollar Loans the then
current Interest Periods with respect to all of which begin on the same date and
end on the same later date (whether or not such Eurodollar Loans shall
originally have been made on the same day).
"Event of Default" has the meaning assigned to such term in Article 7.
"Federal Funds Effective Rate" means, for any day, the weighted average
(rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Administrative Agent from three Federal funds
brokers of recognized standing selected by it.
"Fees" means the fees payable pursuant to Section 2.9.
"Fund I" means Hicks, Muse, Tate & Furst Equity Fund, L.P.
"Fund II" means Hicks, Muse, Tate & Furst Equity Fund II, L.P.
"Fund III" means Hicks, Muse, Tate & Furst Equity Fund III, L.P.
"Fund IV" means Hicks, Muse, Tate & Furst Equity Fund IV, L.P and Hicks,
Muse, Tate & Furst Private Fund IV, L.P.
"Funding Fee" has the meaning set forth in Section 2.9(a).
"GAAP" means generally accepted accounting principles in the United States
from time to time.
"Globix Investment" means an Investment in the Series A Convertible
Preferred Stock of Globix Corporation.
"Governmental Authority" means the government of the United States, any
other nation or any political subdivision thereof, whether state or local, and
any agency, authority, instrumentality, regulatory body, court, central bank or
other entity exercising executive, legislative, judicial, taxing, regulatory or
administrative powers or functions of or pertaining to government.
"Guarantee" of or by any Person (the "guarantor") means any obligation,
contingent or otherwise, of the guarantor guaranteeing or having the economic
effect of guaranteeing any Indebtedness or other obligation of any other Person
(the "primary obligor") in any manner, whether directly or indirectly, and
including any obligation of the guarantor, direct or indirect, (a) to purchase
or pay (or advance or supply funds for the purchase or payment of) such
Indebtedness or other obligation or to purchase (or to advance or supply funds
for the purchase of) any security for the payment thereof, (b) to purchase or
lease property, securities or services for the purpose of assuring the owner of
such Indebtedness or other obligation of the payment thereof, (c) to maintain
working capital, equity capital or any other financial statement condition or
liquidity of the primary obligor so as to enable the primary obligor to pay such
Indebtedness or other obligation or (d) as an account party in respect of any
letter of credit or letter of guaranty issued to support such Indebtedness or
obligation; provided that the term Guarantee shall not include endorsements for
collection or deposit in the ordinary course of business.
<PAGE> 9
5
"Guarantors" means the collective reference to (a) each Affiliate of Hicks
Muse that holds carried interests in any New Portfolio Company (except to the
extent that a carried interest is attributable to an investment by any Specified
Fund in such New Portfolio Company) and (b) HM & Co. and each other Affiliate of
Hicks Muse that receives fee income (whether in the form of management fees,
transaction fees, investment banking fees, advisory fees or otherwise) from or
in respect of any New Fund, any New Portfolio Company or any Investment Party
(except to the extent that such fee income is attributable to an investment by
any Specified Fund in such New Portfolio Company, with any allocation of such
fee income attributable to Specified Fund(s) and New Fund(s) being made in a
manner equitable to the Lenders hereunder), in each case whether now existing or
subsequently formed.
"Hicks Muse" means HMTF Operating, L.P., a Texas limited partnership.
"HM & Co." means Hicks, Muse & Co. Partners, L.P., a Texas limited
partnership.
"Hicks Muse Letter Agreement" means the Letter Agreement dated as of the
date hereof between Hicks Muse and the Administrative Agent on behalf of the
Lenders, substantially in the form of Exhibit G, as the same may be amended,
supplemented or otherwise modified from time to time.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
under conditional sale or other title retention agreements relating to property
acquired by such Person, (d) all obligations of such Person in respect of the
deferred purchase price of property or services (excluding current accounts
payable incurred in the ordinary course of business), (e) all Indebtedness of
others secured by (or for which the holder of such Indebtedness has an existing
right, contingent or otherwise, to be secured by) any Lien on property owned or
acquired by such Person, whether or not the Indebtedness secured thereby has
been assumed, (f) all Guarantees by such Person of Indebtedness of others, (g)
all Capital Lease Obligations of such Person, (h) all obligations, contingent or
otherwise, of such Person as an account party in respect of letters of credit
and letters of guaranty and (i) all obligations, contingent or otherwise, of
such Person in respect of bankers' acceptances. The Indebtedness of any Person
shall include the Indebtedness of any other entity (including any partnership in
which such Person is a general partner) to the extent such Person is liable
therefor as a result of such Person's ownership interest in or other
relationship with such entity, except to the extent the terms of such
Indebtedness provide that such Person is not liable therefor.
"Interest Payment Date" means (a) as to any ABR Loan, the date which is the
Maturity Date, (b) as to any Eurodollar Loan, the last day of the Interest
Period applicable thereto and (c) as to any Term Loan, the date of any repayment
or prepayment made in respect thereof.
"Interest Period" means, as to any Eurodollar Loan, (a) initially, the
period commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or four weeks
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or four weeks
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the last day of
the then current Interest Period with respect thereto; provided that if any
Interest Period would end on a day other than a Business Day, such Interest
Period shall be extended to the next succeeding Business Day unless such next
succeeding Business Day would fall in the next calendar month, in which case
such Interest Period shall end on the next preceding Business Day.
<PAGE> 10
6
"Investment" means the collective reference to any direct or indirect
investment in a New Portfolio Company by Borrower consistent with investments
made by, or permitted under, any Specified Fund.
"Investment Commitment Amount" means the amount on the date giving rise to
this calculation, as calculated by the Borrower and the Administrative Agent,
rounded upward to the nearest $500,000.00, that represents (i) the Term Loans
and (ii) all interest and fees previously accrued or which will be payable
pursuant to Sections 2.8 and 2.9 through the Maturity Date assuming no
prepayments pursuant to Section 2.5 prior to the Maturity Date (using for future
periods not covered by existing Interest Periods, the Eurodollar Rate available
on the date of any determination for a one week Interest Period plus the
Applicable Margin). The Investment Commitment Amount of any Lender at any time
shall be its Loan Percentage of the total Investment Commitment Amount.
"Investment Party" means any Person in which the Borrower directly or
indirectly makes an Investment which Person directly or indirectly makes the
same Investment (which shall be a Permitted Investment) in a New Portfolio
Company.
"Investment Term Loan" has the meaning set forth in Section 2.9(a).
"Lenders" means the Persons listed on Schedule 2.1 and any other Person
that shall have become a party hereto pursuant to an Assignment and Acceptance,
other than any such Person that ceases to be a party hereto pursuant to an
Assignment and Acceptance.
"Library Services Investment" means an Investment in the common stock of
Dynix Corporation.
"Lien" means, with respect to any asset, (a) any mortgage, deed of trust,
lien, pledge, hypothecation, encumbrance, charge or security interest in, on or
of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset and (c) in the case of securities, any purchase option,
call or similar right of a third party with respect to such securities.
"Loan Documents" means the collective reference to this Agreement, the
Affiliate Guarantees, the Pledge Agreement, the Hicks Muse Letter Agreement, the
Principal Agreements and the Notes.
"Loan Parties" means the collective reference to the Borrower, the
Guarantors, Hicks Muse and any other Person party to a Loan Document.
"Loan Percentage" means, with respect to any Lender, the percentage of the
total Commitments represented by such Lender's Commitment, and, if the
Commitments have terminated, the aggregate outstanding principal amount of the
Term Loans represented by such Lender's Term Loans.
"Material Adverse Effect" means a material adverse effect on (a) the
ability of any Loan Party to perform any of its obligations under any Loan
Document or (b) the rights of or benefits available to the Lenders under any
Loan Document.
"Maturity Date" means the earlier of (a) January 15, 2000 and (b) the first
date after the Closing Date on which Hicks Muse or any of its Affiliates shall
have entered into a credit facility (a
<PAGE> 11
7
"Replacement Credit Facility") for the purpose of providing interim financing
for investments to be made by one or more funds organized by Hicks Muse or any
of its Affiliates.
"New Fund" means (a) any investment funds formed after the date hereof and
(other than the Olympus Real Estate Fund III, L.P., any private fund raised in
connection with the Olympus Real Estate Private Fund III, L.P., Hicks, Muse,
Tate & Furst Latin America Fund II, L.P., Hicks, Muse, Tate & Furst Latin
America Private Fund II, L.P. or any other fund agreed to by the Administrative
Agent) sponsored, advised or managed by Hicks Muse or any of its Affiliates or
(b) any other Person which may acquire an Investment in an Investment Party or a
New Portfolio Company or any part thereof.
"New Portfolio Company" means any Person, having as some or all of its
shareholders, partners or members, as the case may be, directly or indirectly,
the Borrower, Affiliates of the Borrower, and, if applicable, one or more
Co-Investors.
"Non-Consenting Lender" has the meaning set forth in Section 2.16.
"Non-Excluded Taxes" has the meaning set forth in Section 2.13(a).
"Non-Funding Lender" has the meaning set forth in Section 2.11.
"Non-U.S. Lender" has the meaning set forth in Section 2.13(b).
"Note" has the meaning set forth in Section 2.3(e).
"Obligations" means the collective reference to the unpaid principal of and
interest on the Term Loans and all other obligations and liabilities of the
Borrower to the Administrative Agent and the Lenders (including, without
limitation, interest accruing at the then applicable rate provided in this
Agreement after the maturity of the Term Loans and interest accruing at the then
applicable rate provided in this Agreement after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding), whether direct or
indirect, absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with, this
Agreement or any other document made, delivered or given in connection
therewith, in each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including, without
limitation, all fees and disbursements of counsel to the Administrative Agent or
to the Lenders that are required to be paid by the Borrower pursuant to the
terms of this Agreement).
"Participant" has the meaning set forth in Section 9.4(e).
"Permitted Investments" means the collective reference to the Globix
Investment, the Library Services Investment, the Teligent Investment and other
Investments of the type as described in Section 4.2(h).
"Person" means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, Governmental Authority
or other entity.
"Pledge Agreement" means the Pledge Agreement executed and delivered by the
Borrower, substantially in the form of Exhibit F, as the same may be amended,
supplemented or otherwise modified from time to time.
<PAGE> 12
8
"Prime Rate" means the rate of interest per annum publicly announced from
time to time by [Bank] as its prime rate in effect at its principal office in
New York, New York; each change in the Prime Rate shall be effective from and
including the date such change is publicly announced as being effective. The
Prime Rate is a reference rate and does not necessarily represent the lowest or
best rate actually charged to a customer.
"Principal Agreement" means the Principal Agreement executed and delivered
by each principal of Hicks Muse, substantially in the form of Exhibit H, as the
same may be amended, supplemented or otherwise modified from time to time.
"Register" has the meaning set forth in Section 9.4(c).
"Related Parties" means, with respect to any specified Person, such
Person's Affiliates and the respective directors, officers, employees, agents,
partners and advisors of such Person and such Person's Affiliates.
"Replacement Credit Facility" has the meaning set forth in the definition
of "Maturity Date".
"Required Lenders" at any time, Lenders of more than 50% of (a) the
Commitments or (b) if the Commitments have been terminated, the aggregate unpaid
principal amount of the Term Loans.
"Requirement of Law" as to any Person, the Certificate of Incorporation and
By-Laws or other organizational or governing documents of such Person, and any
law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such
Person or any of its property or to which such Person or any of its property is
subject.
"Responsible Officer" means the Chief Executive Officer, the President, any
Vice President, the Chief Financial Officer, the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary or any officer holding a
position with similar obligations.
"Restricted Payment" means any dividend or other distribution (whether in
cash, securities or other property) with respect to any shares of any class of
Capital Stock of any Person, or any payment (whether in cash, securities or
other property), including any sinking fund or similar deposit, on account of
the purchase, redemption, retirement, acquisition, cancellation or termination
of any such shares of Capital Stock of such Person or any option, warrant or
other right to acquire any such shares of Capital Stock of such Person.
"Specified Fund" means Fund I, Fund II, Fund III, Fund IV, Olympus Real
Estate Fund I, L.P., Olympus Real Estate Fund II, L.P., Hicks, Muse, Tate &
Furst Latin America Fund, L.P., Hicks, Muse, Tate & Furst Latin America Private
Fund, L.P., Hicks, Muse, Tate & Furst Europe Fund, L.P. and Hicks, Muse, Tate &
Furst Europe Private Fund, L.P.
"Statutory Reserve Rate" means a fraction (expressed as a decimal), the
numerator of which is the number one and the denominator of which is the number
one minus the aggregate of the maximum reserve percentages (including any
marginal, special, emergency or supplemental reserves) expressed as a decimal
established by the Board to which the Administrative Agent is subject (a) with
respect to the Base CD Rate, for new negotiable nonpersonal time deposits in
dollars of over $100,000 with maturities approximately equal to three months and
(b) with respect to the Eurodollar Rate, for eurocurrency funding (currently
referred to as "Eurocurrency Liabilities" in Regulation D of the Board). Such
reserve percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans
<PAGE> 13
9
shall be deemed to constitute eurocurrency funding and to be subject to such
reserve requirements without benefit of or credit for proration, exemptions or
offsets that may be available from time to time to any Lender under such
Regulation D or any comparable regulation. The Statutory Reserve Rate shall be
adjusted automatically on and as of the effective date of any change in any
reserve percentage.
"Teligent Investment" shall mean an Investment in the convertible preferred
stock of Teligent, Inc.
"Term Loans" has the meaning set forth in Section 2.1.
"Three Month Secondary CD Rate" means, for any day, the secondary market
rate for three month certificates of deposit reported as being in effect on such
day (or, if such day is not a Business Day, the next preceding Business Day) by
the Board through the public information telephone line of the Federal Reserve
Bank of New York (which rate will, under the current practices of the Board, be
published in Federal Reserve Statistical Release H.15(519) during the week
following such day) or, if such rate is not so reported on such day or such next
preceding Business Day, the average of the secondary market quotations for three
month certificates of deposit of major money center banks in New York City
received at approximately 12:00 noon, New York City time, on such day (or, if
such day is not a Business Day, on the next preceding Business Day) by the
Administrative Agent from three negotiable certificate of deposit dealers of
recognized standing selected by it.
"Ticking Fee" has the meaning set forth in Section 2.9(b).
"Transactions" means the execution, delivery and performance by the Loan
Parties of the Loan Documents, the borrowing of Term Loans and the use of the
proceeds thereof, the grant of the Liens under the Loan Documents and the making
of each Investment.
"Type" as to any Term Loans, its nature as an ABR Loan or a Eurodollar
Loan.
"United States" means the United States of America.
SECTION 1.2 Terms Generally. The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding masculine,
feminine and neuter forms. The words "include", "includes" and "including" shall
be deemed to be followed by the phrase "without limitation". The word "will"
shall be construed to have the same meaning and effect as the word "shall".
Unless the context requires otherwise (a) any definition of or reference to any
agreement, instrument or other document herein shall be construed as referring
to such agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.3 Accounting Terms; GAAP. Except as otherwise expressly provided
herein, all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time.
<PAGE> 14
10
ARTICLE 2
Term Loans
SECTION 2.1 Term Loans. Subject to the terms and conditions hereof, each
Lender severally agrees to make one or more term loans (each, a "Term Loan") to
the Borrower on the Closing Date and on any Business Day thereafter prior to the
Maturity Date in an aggregate principal amount not to exceed such Lender's
Available Commitment. The initial amount of each Lender's Commitment is set
forth on Schedule 2.1, or in the Assignment and Acceptance pursuant to which
such Lender shall have assumed its Commitment, as applicable. The Term Loans may
from time to time be (a) Eurodollar Loans or (b) ABR Loans, as determined by the
Borrower and notified to the Administrative Agent in accordance with Sections
2.2 and 2.6. Each Term Loan shall be made as part of a borrowing consisting of
Term Loans made by the Lenders ratably in accordance with their respective
Commitments. Amounts repaid or prepaid on account of the Term Loans may not be
reborrowed. The Term Loans shall be made only if the total Investment Commitment
Amounts shall not exceed the total Commitments.
SECTION 2.2 Procedure for Term Loan Borrowing. The Borrower shall give the
Administrative Agent irrevocable notice (including telephonic notice confirmed
in writing) (which notice must be received by the Administrative Agent (a) in
the case of Eurodollar Loans, not later than 11:00 a.m., New York, New York
time, three Business Days before the date of the anticipated borrowing and (b)
in the case of ABR Loans, not later than 12:00 noon, New York, New York time,
one Business Day prior to the date of the anticipated borrowing) requesting that
the Lenders make the Term Loans on such borrowing date and specifying the amount
to be borrowed. The Term Loans made on the Closing Date shall initially be ABR
Loans. Upon receipt of such notice the Administrative Agent shall promptly
notify each Lender thereof. Not later than 11:00 a.m., New York, New York time,
on the relevant borrowing date each Lender shall make available to the
Administrative Agent at its office specified in Section 9.1 an amount in
immediately available funds equal to the Term Loan to be made by such Lender.
The Administrative Agent shall credit the account of the Borrower on the books
of such office of the Administrative Agent with the aggregate of the amounts
made available to the Administrative Agent by the Lenders in immediately
available funds.
SECTION 2.3 Repayment of Loans; Evidence of Debt; etc. (a) The Borrower
hereby unconditionally promises to pay to the Administrative Agent for the
account of each Lender the then unpaid principal amount of the Term Loans of
such Lender on the Maturity Date (or such earlier date on which the Term Loans
shall become due and payable pursuant to Article 7).
(b) Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from the Term Loans of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.
(c) The Administrative Agent shall maintain the Register pursuant to
Section 9.4(c), and a subaccount therein for each Lender, in which shall be
recorded (i) the amount of each Term Loans made hereunder, including each Term
Loan evidenced by a Note, the Type thereof and each Interest Period applicable
thereto, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrower to each Lender hereunder and (iii) both
the amount of any sum received by the Administrative Agent hereunder from the
Borrower and each Lender's share thereof.
(d) The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.3(b) shall, to the extent permitted by
applicable law, be prima facie evidence of the existence and amounts of the
obligations of the Borrower therein recorded, absent manifest error;
<PAGE> 15
11
provided, however, that the failure of any Lender or the Administrative Agent to
maintain the Register or any such account, or any error therein, shall not in
any manner affect the obligation of the Borrower to repay (with applicable
interest) the Term Loans made to the Borrower by such Lender in accordance with
the terms of this Agreement.
(e) The Borrower agrees that, upon the request to the Administrative Agent
by any Lender, the Borrower will execute and deliver to such Lender a promissory
note of the Borrower evidencing the Term Loans of such Lender, substantially in
the form of Exhibit E, with appropriate insertions as to date and principal
amount (a "Note").
SECTION 2.4 Termination and Reduction of Commitments. (a) Unless previously
terminated by the Borrower in accordance with this Agreement, the Commitments
shall terminate on the Maturity Date.
(b) The Borrower may at any time terminate, or from time to time reduce,
the Commitments; provided that (i) each reduction of the Commitments shall be in
an amount that is an integral multiple of $1,000,000 and not less than
$1,000,000 and (ii) the Borrower shall not terminate or reduce the Commitments
if, after giving effect to any concurrent prepayment of the Loans in accordance
with Section 2.5, the sum of the Credit Exposures would exceed the total
Commitments.
(c) The Borrower shall notify the Administrative Agent of any election to
terminate or reduce the Commitments under Section 2.4(b) at least three Business
Days prior to the effective date of such termination or reduction, specifying
such election and the effective date thereof. Promptly following receipt of any
notice, the Administrative Agent shall advise the Lenders of the contents
thereof. Each notice delivered by the Borrower pursuant to this Section 2.4(c)
shall be irrevocable; provided that a notice of termination of the Commitments
delivered by the Borrower may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower (by notice to the Administrative Agent on or prior to
the specified effective date) if such condition is not satisfied. Any
termination or reduction of the Commitments shall be permanent. Each reduction
of the Commitments shall be made ratably among the Lenders in accordance with
their respective Commitments.
SECTION 2.5 Prepayments. (a) The Borrower may at any time and from time to
time prepay the Term Loans, in whole or in part, without premium or penalty,
upon irrevocable notice (including telephonic notice confirmed in writing)
delivered to the Administrative Agent at least three Business Days prior thereto
in the case of Eurodollar Loans and at least one Business Day prior thereto in
the case of ABR Loans, which notice shall specify the date and amount of
prepayment and whether the prepayment is of Eurodollar Loans, ABR Loans or a
combination thereof, and, if of a combination thereof, the amount allocable to
each; provided that, if a Eurodollar Loan is prepaid on any day other than the
last day of the Interest Period applicable thereto, the Borrower shall also pay
any amounts owing pursuant to Section 2.14. Upon receipt of any such notice, the
Administrative Agent shall promptly notify each Lender thereof. If any such
notice is given, the amount specified in such notice, together with accrued
interest thereon, shall be due and payable on the date specified therein;
provided that, if a notice of prepayment is given in connection with a
conditional notice of termination of the Commitments as contemplated by Section
2.4, then such notice of prepayment may be revoked if such notice is revoked in
accordance with Section 2.4.
(b) If any Capital Stock shall be issued by, or any capital contribution
shall be made to, the Borrower or any Investment Party (other than a New
Portfolio Company and other than with respect to any Co-Investment) or if the
Borrower or any Investment Party (other than a New Portfolio Company and other
than ratably with respect to any Co-Investment) receives any Restricted Payment,
100% of the
<PAGE> 16
12
net cash proceeds thereof or of such Restricted Payment, in each case received
by the Borrower, shall be applied toward the prepayment in full of the Term
Loans, together with accrued interest thereon. All prepayments made by Borrower
in accordance with this Section 2.5(b) shall result in a pro rata reduction of
the Commitments.
(c) Upon any sale, assignment, conveyance, transfer or other disposition
(in whole or in part) of any interest in the Borrower (other than any sale,
assignment, conveyance, transfer or other disposition to any Co-Investor) or any
interest of the Borrower in any Investment Party or a New Portfolio Company,
100% of the net cash proceeds (taking into account any necessary escrows)
thereof received by the Borrower (less the ratable interest of any Co-Investors)
shall be applied on the date thereof toward the prepayment in full of the Term
Loans, together with accrued interest thereon. All prepayments made by Borrower
in accordance with this Section 2.5(c) shall result in a pro rata reduction of
the Commitments.
(d) The application of any prepayment pursuant to paragraphs (b) or (c) of
this Section 2.5 shall be made first to ABR Loans and second to Eurodollar
Loans. Amounts prepaid on account of the Term Loans may not be reborrowed.
(e) Notwithstanding anything to the contrary contained herein, in the event
that the Borrower would incur costs pursuant to Section 2.14 as a result of any
payment due as a result of any prepayment to be made pursuant to this Section
2.5, the Borrower, at its option, may deposit the amount of such payment with
the Administrative Agent, for the benefit of the Lenders who would have received
such payment, in a cash collateral account until the end of the applicable
Interest Period at which time such payment shall be made. The Borrower hereby
grants to the Administrative Agent, for the benefit of such Lenders, a security
interest in all amounts in which the Borrower has any right, title or interest
which are from time to time on deposit in such cash collateral account and
expressly waives all rights (which rights the Borrower hereby acknowledges and
agrees are vested exclusively in the Administrative Agent) to exercise dominion
or control over any such amounts.
SECTION 2.6 Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to ABR Loans by giving the
Administrative Agent at least one Business Day's prior irrevocable notice of
such election, provided that if such conversion of Eurodollar Loans is made
other than on the last day of an Interest Period with respect thereto, then the
Borrower shall pay the Lenders any amounts due pursuant to Section 2.14. The
Borrower may elect from time to time to convert ABR Loans to Eurodollar Loans by
giving the Administrative Agent at least three Business Days' prior irrevocable
notice of such election (which notice shall specify the length of the initial
Interest Period therefor), provided that no ABR Loan may be converted into a
Eurodollar Loan when (i) any Event of Default has occurred and is continuing and
(ii) the Administrative Agent or the Required Lenders have determined in its or
their reasonable discretion not to permit such conversions. Upon receipt of any
such notice the Administrative Agent shall promptly notify each Lender thereof.
(b) Any Eurodollar Loan may be continued as such upon the expiration of the
then current Interest Period with respect thereto by the Borrower giving
irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term "Interest Period" set forth in Section 1.1, of
the length of the next Interest Period to be applicable to such Loans, provided
that no Eurodollar Loan may be continued as such when any Event of Default has
occurred and is continuing and the Administrative Agent has or the Required
Lenders have determined in its or their reasonable discretion not to permit such
continuations, and provided, further, that if the Borrower shall fail to give
any required notice as described above in this paragraph or if such continuation
is not permitted pursuant to the preceding proviso such Loans shall be
automatically converted to ABR Loans on the last day of
<PAGE> 17
13
such then expiring Interest Period. Upon receipt of any such notice the
Administrative Agent shall promptly notify each Lender thereof.
SECTION 2.7 Minimum Amounts and Maximum Number of Tranches. Notwithstanding
anything to the contrary in this Agreement, all borrowings, conversions,
continuations and optional prepayments of Eurodollar Loans hereunder and all
selections of Interest Periods hereunder shall be in minimum amounts of
$1,000,000 and incremental amounts of $100,000 in excess thereof and shall be
made pursuant to such elections so that, after giving effect thereto no more
than five Eurodollar Tranches shall be outstanding at any one time.
SECTION 2.8 Interest. (a) Each Eurodollar Loan shall bear interest for each
day during each Interest Period with respect thereto at a rate per annum equal
to the Eurodollar Rate determined for such day plus the Applicable Margin.
(b) Each ABR Loan shall bear interest at a rate per annum equal to the
Alternate Base Rate plus the Applicable Margin.
(c) If all or a portion of (i) any principal of any Term Loan, (ii) any
interest payable thereon or (iii) any Fees or any other amount payable hereunder
shall not be paid when due (whether at the stated maturity, by acceleration or
otherwise), the principal of the Term Loans and any such overdue interest, Fees
or other amount shall bear interest at a rate per annum which is (x) in the case
of principal, the rate that would otherwise be applicable thereto pursuant to
the foregoing provisions of this Section 2.8 plus 2% or (y) in the case of any
such overdue interest, Fees or other amount, the rate in effect at such time
pursuant to paragraph (b) of this Section 2.8 plus 2%, in each case from the
date of such non-payment until such overdue principal, interest, Fees or other
amount is paid in full (before as well as after receipt of a judgment).
(d) Interest shall be payable in arrears on each Interest Payment Date and
the Maturity Date, provided that interest accruing pursuant to paragraph (c) of
this Section 2.8 shall be payable from time to time on demand.
(e) Whenever it is calculated on the basis of the Prime Rate, interest
shall be calculated on the basis of a 365- (or 366-, as the case may be) day
year for the actual days elapsed; and, otherwise, interest shall be calculated
on the basis of a 360-day year for the actual days elapsed. The Administrative
Agent shall as soon as practicable notify the Borrower and the Lenders of each
determination of a Eurodollar Rate. Any change in the interest rate on a Term
Loan resulting from a change in the Alternate Base Rate shall become effective
as of the opening of business on the day on which such change becomes effective.
The Administrative Agent shall as soon as practicable notify the Borrower and
the Lenders of the effective date and the amount of each such change in interest
rate.
(f) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be conclusive and binding on
the Borrower and the Lenders in the absence of manifest error. The
Administrative Agent shall, at the request of the Borrower, deliver to the
Borrower a statement showing the quotations used by the Administrative Agent in
determining any interest rate in respect of any Eurodollar Loan.
SECTION 2.9 Fees. (a) The Borrower agrees to pay to the Administrative
Agent, for the account of each Lender, a funding fee (the "Funding Fee") equal
to 1.0% of each Term Loan made to fund an Investment (and not for the payment of
interest and fees) (each borrowing of such a Term Loan, an "Investment Term
Loan"), payable on the date of the funding of each such Investment Term Loan.
<PAGE> 18
14
(b) The Borrower agrees to pay to the Administrative Agent, for the account
of each Lender, a ticking fee (the "Ticking Fee") in the amount of 0.5% per
annum on the average daily amount of the Available Excess Investment Commitment
Amount, which shall be paid by Borrower to the Administrative Agent on the
Maturity Date (or if this Agreement is terminated prior to the Maturity Date,
the date this Agreement is terminated).
SECTION 2.10 Inability to Determine Interest Rate. If prior to the first
day of any Interest Period:
(a) the Administrative Agent shall have determined (which determination, in
the absence of manifest error, shall be conclusive and binding upon the
Borrower) that, by reason of circumstances affecting the relevant market,
adequate and reasonable means do not exist for ascertaining the Eurodollar Rate
for such Interest Period, or
(b) the Administrative Agent shall have received notice from the Required
Lenders that the Eurodollar Rate determined or to be determined for such
Interest Period will not adequately and fairly reflect the cost to such Lenders
(as conclusively certified by such Lenders) of making or maintaining their Term
Loans during such Interest Period, the Administrative Agent shall give telecopy
or telephonic notice thereof to the Borrower and the Lenders as soon as
practicable thereafter. If such notice is given (i) any Eurodollar Loans
requested to be made on the first day of such Interest Period shall be made as
ABR Loans, (ii) any Term Loans that were to have been converted on the first day
of such Interest Period to Eurodollar Loans shall be continued as ABR Loans and
(iii) any outstanding Eurodollar Loans shall be converted to ABR Loans on the
last day of the Interest Period applicable thereto. Until such notice has been
withdrawn by the Administrative Agent (which the Administrative Agent agrees to
do when the circumstances that prompted the delivery of such notice no longer
exist), no further Eurodollar Loans shall be made or continued as such, nor
shall the Borrower have the right to convert ABR Loans to Eurodollar Loans.
SECTION 2.11 Pro Rata Treatment and Payments. (a) Each payment (including
each prepayment) by the Borrower on account of principal of and interest on, and
fees with respect to, the Term Loans shall be made pro rata according to the
respective outstanding principal amounts of the Term Loans then held by the
Lenders.
(b) All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest or otherwise, shall be made
without setoff or counterclaim and shall be made prior to 12:00 Noon, New York,
New York time, on the due date thereof to the Administrative Agent, for the
account of the Lenders, at the Administrative Agent's office specified in
Section 9.1, in dollars and in immediately available funds. The Administrative
Agent shall distribute such payments to the Lenders promptly upon receipt in
like funds as received. If any payment hereunder becomes due and payable on a
day other than a Business Day, such payment shall be extended to the next
succeeding Business Day (except, in the case of Eurodollar Loans, as otherwise
provided in clause (i) of the definition of "Interest Period"). In the case of
any extension of any payment of principal pursuant to the preceding sentence,
interest thereon shall be payable at the then applicable rate during such
extension.
(c) Notwithstanding that a Lender (a "Non-Funding Lender") has (x) failed
to make a Term Loan required to be made by it hereunder, and the Administrative
Agent has determined that such Lender is not likely to make such Term Loan or
(y) given notice to the Borrower or the Administrative Agent that it will not
make, or that it has disaffirmed or repudiated any obligation to make, any Term
Loans, in each case, by reason of the provisions of the Financial Institutions
Reform, Recovery and Enforcement Act of 1989 or otherwise, any payment made on
account of the principal of the Term Loans outstanding shall be made pro rata
according to the respective outstanding principal amounts of such
<PAGE> 19
15
Term Loans; and any payment made on account of interest on the Term Loans shall
be made pro rata according to the respective amounts of accrued and unpaid
interest and/or fees due and payable on such Term Loans with respect to which
such payment is being made. The Borrower agrees to give the Administrative Agent
such assistance in making any determination pursuant to this paragraph as the
Administrative Agent may reasonably request. Any such determination by the
Administrative Agent shall be conclusive and binding on the Lenders.
SECTION 2.12 Requirements of Law. (a) If the adoption of or any change in
any Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority made
subsequent to the date hereof:
(i) shall subject any Lender to any tax of any kind whatsoever with respect
to this Agreement or any Eurodollar Loan made by it, or change the basis of
taxation of payments to such Lender in respect thereof (except Non-Excluded
Taxes covered by Section 2.13, the establishment of a tax based on the net
income of such Lender and changes in the rate of tax on the net income of such
Lender);
(ii) shall impose, modify or hold applicable any reserve, special deposit,
compulsory loan or similar requirement against assets held by, deposits or other
liabilities in or for the account of, advances, loans or other extensions of
credit by, or any other acquisition of funds by, any office of such Lender which
is not otherwise included in the determination of the Eurodollar Rate hereunder;
or
(iii) shall impose on such Lender any other condition; and the result of
any of the foregoing is to increase the cost to such Lender, by an amount which
such Lender deems to be material, of making, converting into, continuing or
maintaining Eurodollar Loans, or to reduce any amount receivable hereunder in
respect thereof, then, in any such case, the Borrower shall promptly pay such
Lender, upon its demand, any additional amounts necessary to compensate such
Lender for such increased cost or reduced amount receivable. If the Borrower
notifies the Administrative Agent within five Business Days after any Lender
notifies the Borrower of any increased cost pursuant to the foregoing provisions
of this Section 2.12(a), the Borrower may covert all Eurodollar Loans of such
Lender then outstanding into ABR Loans in accordance with Section 2.6 and shall,
additionally, reimburse such Lender for any cost in accordance with Section
2.14.
(b) If any Lender shall have determined that the adoption of or any change
in any Requirement of Law regarding capital adequacy or in the interpretation or
application thereof or compliance by such Lender or any corporation controlling
such Lender with any request or directive regarding capital adequacy (whether or
not having the force of law) from any Governmental Authority made subsequent to
the date hereof shall have the effect of reducing the rate of return on such
Lender's or such corporation's capital as a consequence of its obligations
hereunder to a level below that which such Lender or such corporation could have
achieved but for such adoption, change or compliance (taking into consideration
such Lender's or such corporation's policies with respect to capital adequacy)
by an amount deemed by such Lender to be material, then from time to time, after
submission by such Lender to the Borrower through the Administrative Agent of a
written request therefor, the Borrower shall pay to such Lender such additional
amount or amounts as will compensate such Lender for such reduction.
(c) A certificate as to any additional amounts payable pursuant to this
Section 2.12 showing in reasonable detail the calculation thereof and certifying
that it is generally charging such costs to other similarly situated borrowers
under similar credit facilities submitted by any Lender to the Borrower through
the Administrative Agent shall be conclusive in the absence of manifest error,
provided that the determination of such amounts shall be made in good faith in a
manner generally consistent with
<PAGE> 20
16
such Lender's standard practices. The obligations of the Borrower pursuant to
this Section 2.12 shall survive the termination of this Agreement and the
payment of the Term Loans and all other amounts payable hereunder for a period
of nine months thereafter. If any Lender becomes entitled to claim any
additional amounts pursuant to this Section 2.12, it shall promptly (and in any
event no later than 90 days after such Lender becomes entitled to make such
claim) notify the Borrower through the Administrative Agent of the event by
reason of which it has become so entitled.
SECTION 2.13 Taxes. (a) All payments made by the Borrower under this
Agreement, except as provided in this Section 2.13, shall be made free and clear
of, and without deduction or withholding for or on account of, any present or
future income, stamp or other taxes, levies, imposts, duties, charges, fees,
deductions or withholdings, now or hereafter imposed, levied, collected,
withheld or assessed by any Governmental Authority, excluding net income taxes
and franchise taxes (imposed in lieu of net income taxes) imposed on the
Administrative Agent or any Lender as a result of a present or former connection
between the Administrative Agent or such Lender and the jurisdiction of the
Governmental Authority imposing such tax or any political subdivision or taxing
authority thereof or therein (other than any such connection arising solely from
the Administrative Agent or such Lender having executed, delivered or performed
its obligations or received a payment under, or enforced, this Agreement or any
other Loan Document). If any such non-excluded taxes, levies, imposts, duties,
charges, fees, deductions or withholdings ("Non-Excluded Taxes") are required to
be withheld from any amounts payable to the Administrative Agent or any Lender
hereunder, the amounts so payable to the Administrative Agent or such Lender
shall be increased to the extent necessary to yield to the Administrative Agent
or such Lender (after payment of all Non-Excluded Taxes) interest or any such
other amounts payable hereunder at the rates or in the amounts specified in this
Agreement, provided, however, that the Borrower shall not be required to
increase any such amounts payable to any Lender with respect to any Non-Excluded
Taxes (i) that are attributable to such Lender's failure to comply with the
requirements of this Section, (ii) that are United States withholding taxes
imposed on amounts payable to such Lender at the time the Lender becomes a party
to this Agreement, except to the extent that such Lender's assignor (if any) was
entitled, at the time of assignment, to receive additional amounts from the
Borrower with respect to such Non-Excluded Taxes pursuant to Section 2.13(a) or
(iii) that are imposed as a result of an event occurring after the date the
Lender becomes a Lender other than a change in law or regulation or the
introduction of any law or regulation or a change in interpretation or
administration of any law. Whenever any Non-Excluded Taxes are payable by the
Borrower, as promptly as possible thereafter the Borrower shall send to the
Administrative Agent for its own account or for the account of such Lender, as
the case may be, a certified copy of an original official receipt received by
the Borrower showing payment thereof. If the Borrower fails to pay any
Non-Excluded Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent the required receipts or other required
documentary evidence, the Borrower shall indemnify the Administrative Agent and
the Lenders for any incremental taxes, interest or penalties that may become
payable by the Administrative Agent or any Lender as a result of any such
failure. The agreements in this Section 2.13 shall survive the termination of
this Agreement and the payment of the Loans and all other amounts payable
hereunder for a period of nine months thereafter.
(b) Each Lender (or Transferee) that is not a person within the meaning of
Section 7701(a)(30) of the Code (a "Non-U.S. Lender") shall deliver to the
Borrower and the Administrative Agent (or, in the case of a Participant, to the
Lender from which the related participation shall have been purchased) two
copies of either U.S. Internal Revenue Service Form W-8BEN or Form W-8ECI, or,
in the case of a Non-U.S. Lender claiming exemption from U.S. federal
withholding tax under Section 871(h) or 881(c) of the Code with respect to
payments of "portfolio interest", a Form W-8BEN, or any subsequent versions
thereof or successors thereto (and, if such Non-U.S. Lender delivers a Form
W-8BEN, an annual certificate representing, under penalty of perjury, that such
Non-U.S. Lender is not a "bank" for purposes of Section 881(c) of the Code, is
not a 10 percent shareholder (within the meaning of Section 871(h)(3)(B) of the
Code) of the Borrower and is not a controlled foreign corporation related to
<PAGE> 21
17
the Borrower (within the meaning of Section 864(d)(4) of the Code)), properly
completed and duly executed by such Non-U.S. Lender claiming complete exemption
from, or a reduced rate of, U.S. federal withholding tax on all payments by the
Borrower under this Agreement and the other Loan Documents. Such forms shall be
delivered by each Non-U.S. Lender on or before the date it becomes a party to
this Agreement (or, in the case of any Participant, on or before the date such
Participant purchases the related participation). In addition, each Non-U.S.
Lender shall deliver such forms on or before the expiration or obsolescence and
promptly upon the invalidity of any form previously delivered by such Non-U.S.
Lender and after the occurrence of any event requiring a change in the most
recently provided form and, if necessary, obtain any extensions of time
reasonably requested by the Borrower or the Administrative Agent for filing and
completing such forms. Each Non-U.S. Lender agrees, to the extent legally
entitled to do so, upon reasonable request by the Borrower, to provide to the
Borrower (for the benefit of the Borrower and the Administrative Agent) such
other forms as may be reasonably required in order to establish the legal
entitlement of such Lender to an exemption from withholding with respect to
payments of interest under this Agreement or the other Loan Documents, provided
that in determining the reasonableness of such a request, such Lender shall be
entitled to consider the cost of complying with such request (to the extent
unreimbursed by the Borrower) that would be imposed on such Lender. Each
Non-U.S. Lender shall promptly notify the Borrower at any time it determines
that it is no longer in a position to provide any previously delivered
certificate to the Borrower (or any other form of certification adopted by the
U.S. taxing authorities for such purpose). Notwithstanding any other provision
of this Section 2.13(b), a Non-U.S. Lender shall not be required to deliver any
form pursuant to this Section 2.13(b) that such Non-U.S. Lender is not legally
able to deliver.
(c) If the Administrative Agent or any Lender receives a refund in respect
of Non-Excluded Taxes paid by the Borrower, which in the good faith judgment of
such Lender is allocable to such payment, it shall promptly pay such refund,
together with any other amounts paid by the Borrower in connection with such
refunded Non-Excluded Taxes, to the Borrower, net of all out-of-pocket expenses
of such Lender incurred in obtaining such refund, provided, however, that the
Borrower agrees to promptly return such refund to the Administrative Agent or
the applicable Lender, as the case may be, if it receives notice from the
Administrative Agent or applicable Lender that such Administrative Agent or
Lender is required to repay such refund.
SECTION 2.14 Indemnity. The Borrower agrees to indemnify each Lender and to
hold each Lender harmless from any loss (excluding loss of profit) or expense
which such Lender may sustain or incur as a consequence of (a) default by the
Borrower in making a borrowing of, conversion into or continuation of Eurodollar
Loans after the Borrower has given a notice requesting the same in accordance
with the provisions of this Agreement, (b) default by the Borrower in making any
prepayment after the Borrower has given a notice thereof in accordance with the
provisions of this Agreement or (c) the making of a prepayment of Eurodollar
Loans on a day which is not the last day of an Interest Period with respect
thereto. Such indemnification may include an amount equal to the excess, if any,
of (i) the amount of interest which would have accrued on the amount so prepaid,
or not so borrowed, converted or continued, for the period from the date of such
prepayment or of such failure to borrow, convert or continue to the last day of
such Interest Period (or, in the case of a failure to borrow, convert or
continue, the Interest Period that would have commenced on the date of such
failure) in each case at the applicable rate of interest for such Loans provided
for herein (excluding, however, any margin included therein, if any) over (ii)
the amount of interest (as reasonably determined by such Lender) which would
have accrued to such Lender on such amount by placing such amount on deposit for
a comparable period with leading banks in the interbank eurodollar market. A
certificate as to any amounts payable pursuant to this Section 2.14, showing in
reasonable detail the calculation thereof, submitted to the Borrower by any
Lender shall be conclusive in the absence of manifest error. This covenant shall
survive the termination of this Agreement and the payment of the Loans and all
other amounts payable hereunder for a period of nine months thereafter.
<PAGE> 22
18
SECTION 2.15 Change of Lending Office. Each Lender agrees that if it makes
any demand for payment under Section 2.13(a), or if any adoption or change of
the type described in Section 2.12 shall occur with respect to it, it will use
reasonable efforts (consistent with its internal policy and legal and regulatory
restrictions and so long as such efforts would not be disadvantageous to it, as
determined in its reasonable discretion) to designate a different lending office
if the making of such a designation would reduce or obviate the need for the
Borrower to make payments under Section 2.13(a), or would eliminate or reduce
the effect of any adoption or change described in Section 2.12.
SECTION 2.16 Replacement of Lenders. If, at any time (a) the Borrower
becomes obligated to pay additional amounts described in Sections 2.12 or 2.13
as a result of any conditions described in such Sections, (b) any Lender becomes
insolvent and its assets become subject to a receiver, liquidator, trustee,
custodian or other Person having similar powers, (c) any Lender becomes a "Non-
consenting Lender" (as defined below in this Section 2.16) or (d) any Lender
becomes a Non-Funding Lender, then the Borrower may, on ten Business Days prior
written notice to the Administrative Agent and such Lender, replace such Lender
by causing such Lender to (and such Lender shall) assign pursuant to Section
9.4(b) all of its rights and obligations under this Agreement to a Lender or
other entity selected by the Borrower and reasonably acceptable to the
Administrative Agent for a purchase price equal to the outstanding principal
amount of such Lender's Loans and all accrued interest and fees and other
amounts payable hereunder; provided that (i) the Borrower shall have no right to
replace the Administrative Agent, (ii) neither the Administrative Agent nor any
Lender shall have any obligation to the Borrower to find a replacement Lender or
other such entity, (iii) in the event of replacement of a Non-consenting Lender
or a Lender to which the Borrower becomes obligated to pay additional amounts
pursuant to clause (a) of this Section, in order for the Borrower to be entitled
to replace such a Lender, such replacement must take place no later than 180
days after (A) the date the Non-consenting Lender shall have notified the
Borrower and the Administrative Agent of its failure to agree to any requested
consent, waiver or amendment or (B) the Lender shall have demanded payment of
additional amounts under one of the Sections described in clause (a) of this
Section, as the case may be and (iv) in no event shall the Lender hereby
replaced be required to pay or surrender to such replacement Lender or other
entity any of the fees received by such Lender hereby replaced pursuant to this
Agreement. In the case of a replacement of a Lender to which the Borrower
becomes obligated to pay additional amounts pursuant to clause (a) of this
Section, the Borrower shall pay such additional amounts to such Lender prior to
such Lender being replaced and the payment of such additional amounts shall be a
condition to the replacement of such Lender. In the event that (x) the Borrower
or the Administrative Agent has requested the Lenders to consent to a departure
or waiver of any provisions of the Loan Documents or to agree to any amendment
thereto, (y) the consent, waiver or amendment in question requires the consent
of all Lenders and (z) the Required Lenders have agreed to such consent, waiver
or amendment, then any such Lender who does not agree to such consent, waiver or
amendment shall be deemed a "Non- consenting Lender". The Borrower's right to
replace a Non-Funding Lender pursuant to this Section 2.16 is, and shall be, in
addition to, and not in lieu of, all other rights and remedies available to the
Borrower against such Non-Funding Lender under this Agreement, at law, in
equity, or by statute.
ARTICLE 3
Representations and Warranties
The Borrower represents and warrants to the Lenders, on the Closing Date
and on the date of each borrowing hereunder, that:
SECTION 3.1 Organization; Powers. The Borrower is duly formed, validly
existing and in good standing under the laws of the jurisdiction of its
organization or formation, has all requisite power
<PAGE> 23
19
and authority to carry on its business as now conducted and, except where the
failure to do so, individually or in the aggregate, could not reasonably be
expected to result in a Material Adverse Effect, is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is
required.
SECTION 3.2 Authorization; Enforceability. The Transactions are within the
Borrower's powers and have been duly authorized by all necessary partnership
actions. The Loan Documents have been duly executed and delivered on behalf of
each Loan Party thereto and constitute a legal, valid and binding obligation of
each such party, enforceable in accordance with their terms, subject to
applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors' rights generally and subject to general principles of
equity, regardless of whether considered in a proceeding in equity or at law.
SECTION 3.3 Governmental Approvals; No Conflicts. The Transactions (a) do
not require any consent or approval of, registration or filing with, or any
other action by, any Governmental Authority, except such as have been obtained
or made and are in full force and effect, (b) will not violate any applicable
law or regulation or the organizational or formation documents of any Loan Party
or any order of any Governmental Authority, (c) will not violate or result in a
default under any indenture, material agreement or other material instrument
binding upon any Loan Party or its assets, or give rise to a right thereunder to
require any payment to be made by any Loan Party, and (d) will not result in the
creation or imposition of any Lien on any asset of any Loan Party, other than
pursuant to the Loan Documents.
SECTION 3.4 Compliance with Laws and Agreements. Each Loan Party is in
compliance with all laws, regulations and orders of any Governmental Authority
applicable to it or its property and all agreements and other instruments
binding upon it or its property, except where the failure to do so, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect. No Default or Event of Default has occurred and is continuing.
SECTION 3.5 Investment and Holding Company Status. The Borrower is not (a)
an "investment company" as defined in, or subject to regulation under, the
Investment Company Act of 1940 or (b) a "holding company" as defined in, or
subject to regulation under, the Public Utility Holding Company Act of 1935.
SECTION 3.6 Material Adverse Effect. There has been no development or event
which has had or could reasonably be expected to have a Material Adverse Effect.
SECTION 3.7 No Material Litigation. No litigation, investigation or
proceeding of or before any arbitrator or Governmental Authority is pending or,
to the knowledge of any Loan Party, threatened by or against any Loan Party or
any Investment Party or against any of their respective properties or revenues
(a) with respect to any of the Loan Documents, any Investment Party or any of
the transactions contemplated hereby or thereby, or (b) which, if adversely
determined, could reasonably be expected to have a Material Adverse Effect.
SECTION 3.8 Disclosure. No information, financial statement, report,
certificate or other document prepared or furnished by or on behalf of any Loan
Party to the Administrative Agent or any Lender in connection with this
Agreement or any other Loan Document (but excluding all projections and pro
forma financial statements which shall have been prepared in good faith and
based upon reasonable assumptions) contains any untrue statement of a material
fact or omits to state any material fact necessary to make the statements herein
or therein not misleading.
<PAGE> 24
20
SECTION 3.9 Investments. (a) On and after the date of the making of each
Investment, each applicable Investment Party and each New Portfolio Company in
which such Investment is made will be duly organized or formed, validly existing
and in good standing under the laws of the jurisdiction of its organization or
formation, will have all requisite power and authority to carry out its business
as then conducted and proposed to be conducted and, except where the failure to
do so, individually or in the aggregate, could not reasonably be expected to
result in a Material Adverse Effect, will be qualified to do business in, and in
good standing in, every jurisdiction where such qualification is required. The
making of each Investment (i) will be within the power of Borrower and each
Investment Party and will be duly authorized by all necessary appropriate action
by Borrower and each applicable Investment Party, (ii) will not require any
consent or approval of, registration or filing with, or any other action by, any
Governmental Authority, except such as will have been obtained or made and be in
full force and effect, (iii) will not violate any applicable law or regulation
or any organizational document of the Borrower, any applicable Investment Party
and applicable New Portfolio Company or any order of any Governmental Authority,
(iv) will not violate or result in a default under any indenture, material
agreement or material other instrument binding upon the Borrower, the applicable
Investment Party and applicable New Portfolio Company or its assets, or give
rise to a right thereunder to require any payment to be made by the Borrower,
the applicable Investment Party or the applicable New Portfolio Company (other
than payments made simultaneously with such Investment), and (v) will not result
in the creation or imposition of any Lien on any asset of the Borrower, the
applicable Investment Party or New Portfolio Company except Liens under the
Pledge Agreement and Liens on the acquired assets to secure Indebtedness owed to
third party lenders incurred in connection with the making of an Investment in
the assets acquired thereby.
ARTICLE 4
Conditions Precedent
SECTION 4.1 The obligations of the Lenders to make the Term Loans hereunder
shall not become effective until the date on which each of the following
conditions is satisfied (or waived in accordance with Section 9.2):
(a) Loan Documents. The Administrative Agent (or its counsel) shall have
received (i) this Agreement, duly executed and delivered by the Borrower, (ii)
an Affiliate Guarantee, duly executed and delivered by each Guarantor in
existence on the Closing Date, (iii) the Pledge Agreement, duly executed and
delivered by the Borrower, together with all documents required to be delivered
thereunder, all certificates representing the Pledge Interests listed on
Schedule I thereto and stock powers endorsed in blank, (iv) the Hicks Muse
Letter Agreement, duly executed and delivered by each party thereto, and (v)
each of the Principal Agreements, duly executed and delivered by each party
thereto.
(b) Closing Certificate. The Administrative Agent shall have received, with
a counterpart for each Lender, a certificate of each Loan Party, dated the
Closing Date, substantially in the form of Exhibit C, with appropriate
insertions and attachments.
(c) Legal Opinion. The Administrative Agent shall have received the
executed legal opinion of Weil, Gotshal & Manges LLP, counsel to the Loan
Parties, substantially in the form of Exhibit B.
(d) Approvals. All governmental and third party approvals necessary or, in
the discretion of the Administrative Agent, advisable in connection with the
Transactions shall have been obtained and be in full force and effect, and all
applicable waiting periods shall have expired without any action being taken or
threatened by any competent authority which would restrain, prevent or otherwise
<PAGE> 25
21
impose adverse conditions on the Borrower's ability to perform its obligations
under the Loan Documents.
(e) Fees. The Administrative Agent shall have received all fees and other
amounts due and payable on or prior to the date hereof.
(f) Filings. Any documents (including, without limitation, financing
statements) required to be filed, registered or recorded in order to create, for
the benefit of the Administrative Agent and the Lenders, a perfected, first
priority security interest shall have been properly prepared for filing,
registration or recording in each office in each jurisdiction in which such
filings, registrations and recordations are required to perfect such first
priority security interests created by the Pledge Agreement, and the
Administrative Agent shall be satisfied that such recordings and filings will be
completed promptly after the date hereof.
SECTION 4.2 Additional Conditions for Each Credit Event. The obligation of
each Lender to make Term Loans on the occasion of any borrowing (other than Term
Loans made for the payment of interest and Fees) is subject to the satisfaction
of the following conditions:
(a) Pledge Agreement. The Administrative Agent shall have received from the
Borrower a Pledge Supplement (as defined in the Pledge Agreement) to the Pledge
Agreement signed on behalf of the Borrower together with (i)(x) the stock
certificates, notes or other evidence of ownership representing the Investment
in any New Portfolio Company or Directly Owned Investment Party owned by the
Borrower or to be acquired concurrently with such borrowing or such issuance and
(y) undated stock or transfer powers, executed in blank, for any certificates
representing such Investment, executed and delivered by a Responsible Officer of
the Borrower or (ii) any necessary UCC filings signed on behalf of the Borrower.
(b) Representations and Warranties. The representations and warranties of
the Loan Parties set forth in this Agreement and the Loan Documents shall be
true and correct in all material respects on and as of the date of such
borrowing, except to the extent they relate to an earlier date, in which case
they shall be true and correct in all material respects as of such earlier date.
(c) No Default. At the time of and immediately after giving effect to such
borrowing, no Default or Event of Default shall have occurred and be continuing.
(d) Certificate. With respect to each Term Loan the proceeds of which will
be used to fund an Investment, the Administrative Agent (which shall forward the
same to the Lenders) shall have received a certificate of the Borrower setting
forth in reasonable detail, and to the Borrower's knowledge, information with
respect to the following items: (i) a description of such Investment; (ii) the
total cost of such Investment; (iii) the amount, maturity, source and collateral
security for all debt, equity and other financing for such Investment; and (iv)
the name, form of organization and jurisdiction of organization of the
applicable New Portfolio Company and any Investment Party and the respective
direct ownership interests of the Borrower, each Investment Party and the New
Portfolio Company and their respective subsidiaries. In addition, the
Administrative Agent (which shall forward the same to the Lenders) shall receive
from the Borrower: (i) a copy of all purchase documents relating to the
applicable Investment and (ii) such other information reasonably requested by
the Lenders regarding the applicable Investment, the applicable New Portfolio
Company and the Investment Parties (if any).
(e) Co-Investment. The amount of the borrowing shall not equal more than
97.02% of the Borrower's Investment in a Directly Owned Investment Party or New
Portfolio Company as the case may be, and the Co-Investors shall have made the
Co-Investment.
<PAGE> 26
22
(f) Legal Opinion. The Administrative Agent shall have received an executed
legal opinion from the Loan Parties' outside counsel, as to all matters
reasonably requested by Administrative Agent including, without limitation, (a)
Regulation U and (b) perfection of the Administrative Agent's security interest
in the Investment pledged by the Borrower of either the applicable New Portfolio
Company or the applicable Directly Owned Investment Party, as the case may be.
(g) Management and Advisory Agreements. The Administrative Agent shall have
been provided a copy of each management and advisory agreement in respect of the
New Fund or an Investment in a New Portfolio Company on the date of such
borrowing.
(h) Investment. Each Investment shall be reasonably expected by the Loan
Parties to be suitable for purchase by New Fund (the determination of which will
include a determination that the Investment would have been suitable for
purchase by any Specified Fund and is consistent with past investments by the
Specified Funds).
Each borrowing shall be deemed to constitute a representation and warranty
by the Borrower on the date thereof as to the matters specified in paragraphs
(b) and (c) of this Section.
ARTICLE 5
Covenants
Until the principal of and interest on each Term Loan and all other amounts
payable hereunder shall have been paid in full and the Commitments are
terminated, the Borrower covenants and agrees with the Lenders that:
SECTION 5.1 Notices of Material Events. The Borrower will furnish to the
Administrative Agent and each Lender prompt written notice of the following:
(a) the occurrence of any Default or Event of Default;
(b) the filing or commencement of any action, suit or proceeding by or
before any arbitrator or Governmental Authority against or affecting any Loan
Party or any Affiliate thereof that, if adversely determined, could reasonably
be expected to result in a Material Adverse Effect; and
(c) any other development that results in, or could reasonably be expected
to result in, a Material Adverse Effect.
Each notice delivered under this Section shall be accompanied by a
statement of the Borrower setting forth the details of the event or development
requiring such notice and any action taken or proposed to be taken with respect
thereto.
SECTION 5.2 Existence; Conduct of Business. The Borrower will do or cause
to be done all things necessary to preserve, renew and keep in full force and
effect (a) its legal existence and (b) the rights, licenses, permits, privileges
and franchises material to the conduct of its business.
SECTION 5.3 Payment of Obligations. The Borrower will pay its material
obligations, including material tax liabilities, before the same shall become
delinquent or in default, except where (a) the validity or amount thereof is
being contested in good faith by appropriate proceedings, (b) the Borrower has
set aside on its books adequate reserves with respect thereto in accordance with
GAAP and
<PAGE> 27
23
(c) the failure to make payment pending such contest could not reasonably be
expected to result in a Material Adverse Effect.
SECTION 5.4 Compliance with Laws. The Borrower will comply with all laws,
rules, regulations and orders of any Governmental Authority applicable to it or
its property, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
SECTION 5.5 Use of Proceeds. The proceeds of the Term Loans will be used
only to finance Permitted Investments in New Portfolio Companies, Investments in
Directly Owned Investment Parties (for the purpose of enabling the relevant
Directly Owned Investment Party to make a Permitted Investment) and the payment
of interest, fees and expenses due hereunder; provided that (a) Term Loans may
not be borrowed for the purpose of making any such Investment if the aggregate
Investment Commitment Amount (after giving effect to such Term Loan) would
exceed the aggregate Commitments and (b) the aggregate principal amount of Term
Loans borrowed in connection with such Investments shall be limited as follows:
(i) approximately $21,000,000 in the case of the Globix Investment, (ii)
approximately $25,000,000 in the case of the Library Services Investment, (iii)
approximately $52,000,000 in the case of the Teligent Investment and (iv)
approximately $12,000,000 in the case of any other Investments. No part of the
proceeds of any Term Loan will be used, whether directly or indirectly, for any
purpose that entails a violation of any of the Regulations of the Board,
including Regulations G, U and X.
SECTION 5.6 Additional Collateral. With respect to any Investment in a New
Portfolio Company or a Directly Owned Investment Party made by the Borrower
after the Closing Date, the Borrower will promptly (i) execute and deliver to
the Administrative Agent, for the benefit of the Lenders, such Pledge
Supplements to the Pledge Agreement or such other documents as the
Administrative Agent shall deem necessary or advisable to grant to the
Administrative Agent, for the benefit of the Lenders, a Lien on the Capital
Stock of such New Portfolio Company or such Directly Owned Investment Party
which is owned by the Borrower, (ii) deliver to the Administrative Agent the
stock certificates, notes or other evidence of ownership representing the
Investment in such New Portfolio Company or such Directly Owned Investment Party
owned by the Borrower, together with undated stock or transfer powers, executed
and delivered in blank, for any stock certificates or notes representing such
Investment, by a Responsible Officer of the Borrower, (iii) take all actions
necessary or advisable to cause such Lien to be duly perfected in accordance
with all applicable Requirements of Law, including, without limitation, the
filing of financing statements in such jurisdictions as may be required by the
Pledge Agreement or by law or as may be requested by the Administrative Agent
and (iv) if reasonably requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described in clauses
(i), (ii) and (iii) immediately preceding, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to the Administrative
Agent.
SECTION 5.7 Financial Reporting. The Borrower will provide to the
Administrative Agent, for distribution to the Lenders, each of the financial
statements and related certificates and other business and financial information
distributed to the Borrower or its Affiliates by any New Portfolio Company, as
well as such additional information as the Lenders may reasonably request
hereunder.
SECTION 5.8 Additional Guarantors. Within ten (10) Business Days after the
formation of any Guarantor or the date such entity becomes a Guarantor within
the definition of Guarantor set forth in Section 1.1 hereof, the Borrower shall
cause such Guarantor to execute and deliver to the Administrative Agent an
Affiliate Guarantee substantially in the form of Exhibit D attached hereto.
<PAGE> 28
24
ARTICLE 6
Negative Covenants
Until the principal of and interest on each Term Loan and all other amounts
payable hereunder shall have been paid in full and the Commitments are
terminated, the Borrower covenants and agrees with the Lenders that:
SECTION 6.1 Indebtedness. The Borrower will not, and will not permit any
Investment Party to, create, incur, assume or permit to exist any Indebtedness,
except (a) Indebtedness created hereunder and under the other Loan Documents,
(b) nonconsensual obligations imposed by operation of law, (c) indemnification
obligations arising under the Borrower's constituent documents, and (d)
administrative expenses and taxes.
SECTION 6.2 Liens. The Borrower will not, and will not permit any
Investment Party to, create, incur, assume or permit to exist any Lien (other
than Liens created pursuant to the Pledge Agreement) on any property or asset
now owned or hereafter acquired by it, or assign or sell any income or revenues
(including accounts receivable) or rights in respect of any thereof other than
(a) Liens for taxes not yet due or which are being contested in good faith by
appropriate proceedings, provided that adequate reserves with respect thereto
are maintained on the books of the Borrower in accordance with GAAP, (b) Liens
in favor of banking institutions arising as a matter of law and encumbering the
deposits (including the right of setoff) held by such banking institutions in
the ordinary course of business and which are within the general parameters
customary in the banking industry, and (c) attachment and judgement Liens not
constituting an Event of Default.
SECTION 6.3 Fundamental Changes. (a) The Borrower will not, and will not
permit any Investment Party to, merge into or consolidate with any other Person,
or permit any other Person to merge into or consolidate with it, or liquidate or
dissolve.
(b) The Borrower will not engage in any business other than a business
consistent with its current operations and activities on the date of execution
of this Agreement.
SECTION 6.4 Restricted Payments. The Borrower will not, and will not permit
any Investment Party to, make any Restricted Payments (except that the
Investment Parties may make Restricted Payments to the Borrower to repay Term
Loans and other amounts due hereunder and the Borrower may make Restricted
Payments to a Co-Investor in respect of any Co-Investment amount with proceeds
funded by a Co-Investor).
SECTION 6.5 Sale of Assets. The Borrower shall not and will not permit any
Investment Party to sell, transfer or otherwise dispose of any of its property
other than for cash (yielding net proceeds) representing at least Borrower's or
such Investment Party's cost of such property (including, without limitation,
any interest and fees relating thereto), the net proceeds (less the ratable
interest of any Co-Investors and any necessary escrows) of which (to the extent
attributable to the Investment) are distributed to the Borrower to repay the
Term Loans.
<PAGE> 29
25
ARTICLE 7
Events of Default
If any of the following events ("Events of Default") shall occur:
(a) the Borrower shall fail to pay any principal of any Term Loan when and
as the same shall become due and payable, whether at the due date thereof or at
a date fixed for prepayment thereof or otherwise;
(b) the Borrower shall fail to pay any interest on any Term Loan or to pay
any Fee or any other amount (other than an amount referred to in clause (a) of
this Article) payable under or in connection with this Agreement, when and as
the same shall become due and payable, and such failure shall continue
unremedied for a period of five days;
(c) any representation or warranty made or deemed made by or on behalf of
any Loan Party in or in connection with any Loan Document or any amendment or
modification thereof, or in any report, certificate, financial statement or
other document furnished pursuant to or in connection with any Loan Document or
any amendment or modification thereof, shall prove to have been incorrect in any
material respect when made or deemed made;
(d) the Borrower shall fail to observe or perform any covenant, condition
or agreement contained in Section 5.2(a) or Article 6 or any Guarantor shall
fail to observe or perform any covenant, condition or agreement contained in
Section 10(a)(i) or (d) of its Affiliate Guarantee;
(e) any Loan Party shall fail to observe or perform any covenant, condition
or agreement contained in any Loan Document (other than those specified in
clause (a), (b), (c), (d) or (g) of this Article), and such failure shall
continue unremedied for a period of 30 days;
(f) any Loan Party, Investment Party, or any New Portfolio Company shall
(i) default in making any payment of any principal of or interest on any
Indebtedness (including any Guarantee, but excluding the Term Loans and
Guarantees pursuant to the Affiliate Guarantees) beyond the period of grace, if
any, provided in the instrument or agreement under which such Indebtedness was
created; or (ii) default in the observance or performance of any other agreement
or condition relating to any such Indebtedness or contained in any instrument or
agreement evidencing, securing or relating thereto, or any other event shall
occur or condition exist, the effect of which default or other event or
condition is to cause, or to permit the holder or beneficiary of such
Indebtedness (or a trustee or agent on behalf of such holder or beneficiary) to
cause, with the giving of notice if required, such Indebtedness to become due
prior to its stated maturity or (in the case of any such Indebtedness
constituting a Guarantee) to become payable; provided that a default, event or
condition described in clause (i) or (ii) of this paragraph (f) shall not at any
time constitute an Event of Default under this Agreement unless, at such time,
one or more defaults, events or conditions (without duplication as to the same
item of Indebtedness) of the type described in clauses (i) and (ii) of this
paragraph (f) shall have occurred and be continuing with respect to Indebtedness
the outstanding principal amount of which exceeds in the aggregate $500,000 in
the case of the Borrower or $10,000,000 in the case of any New Portfolio
Company, Investment Party or any other Loan Party; or
(g) (i) any Loan Party, Investment Party, or any New Portfolio Company
shall commence any case, proceeding or other action (A) under any existing or
future law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of debtors, seeking to have an order for
relief entered with respect to it, or seeking to adjudicate it a bankrupt or
insolvent, or
<PAGE> 30
26
seeking reorganization, windingup, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets, or any Loan Party, Investment
Party or any New Portfolio Company shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against any Loan
Party, Investment Party or any New Portfolio Company, any case, proceeding or
other action of a nature referred to in clause (i) above which (A) results in
the entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against any Loan Party, Investment Party or any New
Portfolio Company any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all or
any substantial part of its assets which results in the entry of an order for
any such relief which shall not have been vacated, discharged, or stayed or
bonded pending appeal within 60 days from the entry thereof; or (iv) any Loan
Party shall take any action in furtherance of, or indicating its consent to,
approval of, or acquiescence in, any of the acts set forth in clause (i), (ii),
or (iii) above; or (v) any Loan Party, Investment Party or any New Portfolio
Company shall generally not, or shall be unable to, or shall admit in writing
its inability to, pay its debts as they become due; or
(h) one or more judgments or decrees shall be entered against any Loan
Party, Investment Party or New Portfolio Company involving in the aggregate a
liability (not paid or fully covered by insurance as to which the relevant
insurance company has not denied coverage) of $500,000 or more in the case of
the Borrower and $10,000,000 or more in the case of any New Portfolio Company,
Investment Party or any other Loan Party, and all such judgments or decrees
shall not have been vacated, discharged, stayed or bonded pending appeal within
60 days from the entry thereof; or
(i) any Loan Document shall, at any time, cease to be in full force and
effect (unless released by the Administrative Agent at the direction of the
Required Lenders or as otherwise permitted under this Agreement or the other
Loan Documents) or shall be declared null and void, or the validity or
enforceability thereof shall be contested by any Loan Party; or
(j) any Person constituting a "Guarantor" shall not be a party to an
Affiliate Guarantee within ten Business Days after such Person has been
organized or formed;
(k) a Change in Control shall occur; or
(l) any Investment Party shall fail to distribute any payment made to it on
account of any Investment (net of reasonable expenses and reasonably required
escrows);
then, and in every such event (other than an event with respect to the Borrower
described in clause (g) of this Article), and at any time thereafter during the
continuance of such event, the Administrative Agent may, and at the request of
the Required Lenders shall, by notice to the Borrower, declare the Term Loans
then outstanding to be due and payable in whole (or in part, in which case any
principal not so declared to be due and payable may thereafter be declared to be
due and payable) and the Commitments to be terminated, and thereupon the
principal of the Term Loans so declared to be due and payable, together with
accrued interest thereon and all other obligations of the Borrower accrued
hereunder, shall become due and payable immediately, without presentment,
demand, protest or other notice of any kind, all of which are hereby waived by
the Borrower; and in case of any event with respect to the Borrower described in
clause (g) of this Article, the principal of the Term Loans then outstanding,
together with accrued interest thereon and all other obligations of the Borrower
accrued hereunder, shall automatically become due and payable and the
Commitments shall be automatically terminated, without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower; and at any
<PAGE> 31
27
time thereafter during the continuance of such event, the Administrative Agent
may exercise all of its rights and remedies under the Pledge Agreement in
accordance with all applicable laws.
ARTICLE 8
The Administrative Agent
Each of the Lenders hereby irrevocably appoints the Administrative Agent as
its agent and authorizes the Administrative Agent to take such actions on its
behalf and to exercise such powers as are delegated to the Administrative Agent
by the terms hereof, together with such actions and powers as are reasonably
incidental thereto.
The bank serving as the Administrative Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise the same as though it were not the Administrative Agent, and such bank
and its Affiliates may accept deposits from, lend money to and generally engage
in any kind of business with any Loan Party or any Affiliate thereof as if it
were not the Administrative Agent hereunder.
The Administrative Agent shall not have any duties or obligations except
those expressly set forth herein. Without limiting the generality of the
foregoing, (a) the Administrative Agent shall not be subject to any fiduciary or
other implied duties, regardless of whether a Default has occurred and is
continuing, (b) the Administrative Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Administrative Agent is
required to exercise in writing by the Required Lenders, and (c) except as
expressly set forth herein, the Administrative Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to any Loan Party or any of its Affiliates that is communicated to or
obtained by the bank serving as Administrative Agent or any of its Affiliates in
any capacity. The Administrative Agent shall not be liable for any action taken
or not taken by it with the consent or at the request of the Required Lenders or
in the absence of its own gross negligence or willful misconduct. The
Administrative Agent shall be deemed not to have knowledge of any Default unless
and until written notice thereof is given to the Administrative Agent by the
Borrower or a Lender, and the Administrative Agent shall not be responsible for
or have any duty to ascertain or inquire into (i) any statement, warranty or
representation made in or in connection with this Agreement, (ii) the contents
of any certificate, report or other document delivered hereunder or in
connection herewith, (iii) the performance or observance of any of the
covenants, agreements or other terms or conditions set forth herein, (iv) the
validity, enforceability, effectiveness or genuineness of this Agreement or any
other agreement, instrument or document, or (v) the satisfaction of any
condition set forth in Article 4 or elsewhere herein, other than to confirm
receipt of items expressly required to be delivered to the Administrative Agent.
The Administrative Agent shall be entitled to rely upon, and shall not
incur any liability for relying upon, any notice, request, certificate, consent,
statement, instrument, document or other writing believed by it to be genuine
and to have been signed or sent by the proper Person. The Administrative Agent
also may rely upon any statement made to it orally or by telephone and believed
by it to be made by the proper Person, and shall not incur any liability for
relying thereon. The Administrative Agent may consult with legal counsel (who
may be counsel for the Borrower), independent accountants and other experts
selected by it, and shall not be liable for any action taken or not taken by it
in accordance with the advice of any such counsel, accountants or experts.
The Administrative Agent may perform any and all its duties and exercise
its rights and powers by or through any one or more sub-agents appointed by the
Administrative Agent. The
<PAGE> 32
28
Administrative Agent and any such sub-agent may perform any and all its duties
and exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of the preceding paragraphs shall apply to any such
sub-agent and to the Related Parties of the Administrative Agent and any such
sub-agent, and shall apply to their respective activities in connection with the
syndication of the credit facilities provided for herein as well as activities
as Administrative Agent.
Subject to the appointment and acceptance of a successor Administrative
Agent as provided in this paragraph, the Administrative Agent may resign at any
time by notifying the Lenders and the Borrower. Upon any such resignation, the
Required Lenders shall have the right, in consultation with the Borrower, to
appoint a successor, which successor shall be approved by the Borrower (which
approval shall not be unreasonably withheld or delayed). If no successor shall
have been so appointed by the Required Lenders and shall have accepted such
appointment within 30 days after the retiring Administrative Agent gives notice
of its resignation, then the retiring Administrative Agent may, on behalf of the
Lenders, appoint a successor Administrative Agent which shall be a bank
reasonably acceptable to the Borrower. Upon the acceptance of its appointment as
Administrative Agent hereunder by a successor, such successor shall succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent, and the retiring Administrative Agent shall be
discharged from its duties and obligations hereunder. Any fees payable by the
Borrower to a successor Administrative Agent shall be the same as those payable
to its predecessor unless otherwise agreed between the Borrower and such
successor. After the Administrative Agent's resignation hereunder, the
provisions of this Article and Section 9.3 shall continue in effect for its
benefit in respect of any actions taken or omitted to be taken by it while it
was acting as Administrative Agent.
Each Lender acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on such documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement. Each Lender also acknowledges that it
will, independently and without reliance upon the Administrative Agent or any
other Lender and based on such documents and information as it shall from time
to time deem appropriate, continue to make its own decisions in taking or not
taking action under or based upon this Agreement, any related agreement or any
document furnished hereunder or thereunder.
ARTICLE 9
Miscellaneous
SECTION 9.1 Notices. Except in the case of notices and other communications
expressly permitted to be given by telephone, all notices and other
communications provided for herein shall be in writing (including by facsimile
transmission) and, unless otherwise expressly provided herein, shall be deemed
to have been duly given or made (a) in the case of delivery by hand, when
delivered, (b) in the case of delivery by mail, three days after being deposited
in the mails, postage prepaid, or (c) in the case of delivery by facsimile
transmission, when sent and receipt has been confirmed, addressed as follows:
(a) if to the Borrower, to it c/o HMTF Operating, Inc., 200 Crescent Court,
Suite 1600, Dallas, Texas 75201, Attention: Lawrence D. Stuart, Jr. (Telecopy
No. 214-740-7313);
(b) if to the Administrative Agent, to [Bank]; and
<PAGE> 33
29
(c) if to any Lender, to it at its address (or telecopy number) set forth
in an administrative questionnaire delivered to the Administrative Agent and as
otherwise notified in writing to the Borrower.
Any party hereto may change its address or telecopy number for notices and
other communications hereunder by notice to the other parties hereto. All
notices and other communications given to any party hereto in accordance with
the provisions of this Agreement shall be deemed to have been given on the date
of receipt.
SECTION 9.2 Waivers; Amendments. (a) No failure or delay by the
Administrative Agent or any Lender in exercising any right or power hereunder
shall operate as a waiver thereof, nor shall any single or partial exercise of
any such right or power, or any abandonment or discontinuance of steps to
enforce such a right or power, preclude any other or further exercise thereof or
the exercise of any other right or power. The rights and remedies of the
Administrative Agent and the Lenders hereunder are cumulative and are not
exclusive of any rights or remedies that they would otherwise have. No waiver of
any provision of this Agreement or consent to any departure by the Borrower
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Term Loan
shall not be construed as a waiver of any Default, regardless of whether the
Administrative Agent or any Lender may have had notice or knowledge of such
Default at the time.
(b) Neither any Loan Document nor any provision thereof may be waived,
amended or modified except pursuant to an agreement or agreements in writing
entered into by the Required Lenders and each affected Loan Party; provided that
no such agreement shall (i) increase the Commitment of any Lender without the
written consent of such Lender, (ii) reduce the amount of, or extend any
scheduled date for payment of, any principal or interest in respect of the Term
Loans, without the written consent of each Lender directly affected thereby,
(iii) change any of the provisions of this Section or the definition of
"Required Lenders" without the written consent of each Lender, (iv) release any
Loan Party from its obligations under the Loan Documents without the written
consent of each Lender (except upon payment in full in cash of the Obligations)
or (v) release all or substantially all of the collateral (except as expressly
provided in the Loan Documents) under the Affiliate Guarantees and the Pledge
Agreement (provided that a partial release of collateral thereunder shall
require the consent of the Required Lenders); provided, further, that no such
agreement shall amend, modify or otherwise affect the rights or duties of the
Administrative Agent hereunder without the prior written consent of the
Administrative Agent.
SECTION 9.3 Expenses; Indemnity; Damage Waiver. (a) The Borrower shall pay
or cause to be paid (i) all reasonable out-of-pocket expenses incurred by the
Administrative Agent, including the reasonable fees, charges and disbursements
of counsel for the Administrative Agent, in connection with the administration
of this Agreement or any amendments, modifications or waivers of the provisions
hereof and (ii) all reasonable out-of-pocket expenses incurred by the
Administrative Agent or any Lender, including the reasonable fees, charges and
disbursements of any counsel for the Administrative Agent or any Lender, in
connection with the enforcement or protection of its rights in connection with
the Loan Documents, including in connection with any workout, restructuring or
negotiations in respect thereof, the reasonable fees and disbursements of
counsel to the Administrative Agent and after the occurrence and during the
continuance of an Event of Default a single counsel to the Lenders collectively.
(b) The Borrower shall indemnify the Administrative Agent and each Lender,
and each Related Party of any of the foregoing Persons (each such Person being
called an "Indemnitee") against, and hold each Indemnitee harmless from, any and
all losses, claims, damages, liabilities and related expenses, including
reasonable the fees, charges and disbursements of any counsel for any
Indemnitee, incurred by or asserted against any Indemnitee arising out of, in
connection with, or as a result of (i) the
<PAGE> 34
30
execution or delivery of the Loan Documents or any agreement or instrument
contemplated thereby, the performance by the parties thereto of their respective
obligations under the Loan Documents or the consummation of the Transactions or
any other transactions contemplated by the Loan Documents, (ii) any Term Loan or
the use of the proceeds therefrom, or (iii) any actual or prospective claim,
litigation, investigation or proceeding relating to any of the foregoing,
whether based on contract, tort or any other theory and regardless of whether
any Indemnitee is a party thereto; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims, damages,
liabilities or related expenses are determined by a court of competent
jurisdiction by final and nonappealable judgment to have resulted from the gross
negligence or willful misconduct of such Indemnitee or, in the case of any
indemnified liabilities arising out of this Agreement or the other Loan
Documents, from the material breach by any such Indemnitee of this Agreement or
the other Loan Documents, as the case may be; provided that, for purpose of
clarity, no provision of this paragraph (b) shall be deemed to negate Section
9.3(a)(ii) to the extent that it provides that after the occurrence and during
the continuance of an Event of Default, the Lenders shall be reimbursed for a
single counsel.
(c) To the extent that the Borrower fails to pay any amount required to be
paid by it to the Administrative Agent, each Lender severally agrees to pay to
the Administrative Agent such Lender's Loan Percentage (determined as of the
time that the applicable unreimbursed expense or indemnity payment is sought) of
such unpaid amount; provided that the unreimbursed expense or indemnified loss,
claim, damage, liability or related expense, as the case may be, was incurred by
or asserted against the Administrative Agent in its capacity as such.
(d) To the extent permitted by applicable law, the Borrower shall not
assert, and hereby waives, any claim against any Indemnitee, on any theory of
liability, for special, indirect, consequential or punitive damages (as opposed
to direct or actual damages) arising out of, in connection with, or as a result
of, this Agreement or any agreement or instrument contemplated hereby, the
Transactions, any Term Loan or the use of the proceeds thereof.
(e) The agreements in this Section 9.3 shall survive repayment of the Loans
and all other amounts payable hereunder.
SECTION 9.4 Successors and Assigns. (a) The provisions of this Agreement
shall be binding upon and inure to the benefit of the parties hereto and their
respective successors and assigns permitted hereby, except that the Borrower may
not assign or otherwise transfer any of its rights or obligations hereunder
without the prior written consent of each Lender (and any attempted assignment
or transfer by the Borrower without such consent shall be null and void).
Nothing in this Agreement, expressed or implied, shall be construed to confer
upon any Person (other than the parties hereto, their respective successors and
assigns permitted hereby and, to the extent expressly contemplated hereby, the
Related Parties of each of the Administrative Agent and the Lenders) any legal
or equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees a portion of its rights
and obligations under this Agreement (an "Assignee"); provided that (i) except
in the case of an assignment to a Lender or an Affiliate of a Lender, each of
the Borrower (such consent not to be unreasonably withheld) and the
Administrative Agent (the consent of the Administrative Agent may be withheld in
its sole discretion) must give their prior written consent to such assignment,
(ii) except in the case of an assignment to a Lender or an Affiliate of a Lender
or an assignment of the entire remaining amount of the assigning Lender's
Commitment and Term Loans, the amount of the Term Loans of the assigning Lender
subject to each such assignment (determined as of the date the Assignment and
Acceptance with respect to such assignment is delivered to the Administrative
Agent) shall not be less than $5,000,000 unless each of the Borrower and the
Administrative Agent otherwise consent, (iii) the parties to each assignment
shall
<PAGE> 35
31
execute and deliver to the Administrative Agent an Assignment and Acceptance,
together with a processing and recordation fee of $4,000 (provided, however, if
the Borrower requests the replacement of any Lender pursuant to Section 2.16
hereof, the Borrower shall pay such processing and recordation fee, which shall
be funded with the proceeds of the Term Loans), and (iv) the assignee, if it
shall not be a Lender, shall deliver to the Administrative Agent an
administrative questionnaire; provided further that any consent of the Borrower
otherwise required under this paragraph shall not be required if an Event of
Default under clause (g) of Article 7 has occurred and is continuing. Upon
acceptance and recording pursuant to paragraph (d) of this Section, from and
after the effective date specified in each Assignment and Acceptance, the
assignee thereunder shall be a party hereto and, to the extent of the interest
assigned by such Assignment and Acceptance, have the rights and obligations of a
Lender under this Agreement, and the assigning Lender thereunder shall, to the
extent of the interest assigned by such Assignment and Acceptance, be released
from its obligations under this Agreement (and, in the case of an Assignment and
Acceptance covering all of the assigning Lender's rights and obligations under
this Agreement, such Lender shall cease to be a party hereto but shall continue
to be entitled to the benefits of Sections 2.12, 2.13, 2.14 and 9.3). Any
assignment or transfer by a Lender of rights or obligations under this Agreement
that does not comply with this paragraph shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with paragraph (e) of this Section.
(c) The Administrative Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in New York, New York a copy of
each Assignment and Acceptance delivered to it and a register for the
recordation of the names and addresses of the Lenders, and the Commitment of,
and principal amount of the Term Loans whether or not evidenced by a Note owing
to, each Lender pursuant to the terms hereof from time to time (the "Register").
The entries in the Register shall be conclusive, and the Borrower, the
Administrative Agent and the Lenders may treat each Person whose name is
recorded in the Register pursuant to the terms hereof as a Lender hereunder for
all purposes of this Agreement, notwithstanding notice to the contrary. Any
assignment of any Loan whether or not evidenced by a Note shall be effective
only upon appropriate entries with respect thereto being made in the Register
(and each Note shall expressly so provide). Any assignment or transfer of all or
part of a Loan evidenced by a Note shall be registered on the Register only upon
surrender for registration of assignment or transfer of the Note evidencing such
Loan, accompanied by a duly executed Assignment and Acceptance, and thereupon
one or more new Notes in the same aggregate principal amount shall be issued to
the designated Assignee and the old Notes shall be returned by the
Administrative Agent to the Borrower marked "cancelled".
(d) Upon its receipt of a duly completed Assignment and Acceptance executed
by an assigning Lender and an assignee, the assignee's completed administrative
questionnaire (unless the assignee shall already be a Lender hereunder), the
processing and recordation fee referred to in paragraph (b) of this Section and
any written consent to such assignment required by paragraph (b) of this
Section, the Administrative Agent shall accept such Assignment and Acceptance
and record the information contained therein in the Register. No assignment
shall be effective for purposes of this Agreement unless it has been recorded in
the Register as provided in this paragraph.
(e) Any Lender may, without the consent of the Borrower but with the
consent of the Administrative Agent (the consent of the Administrative Agent may
be withheld in its sole discretion) sell participations to one or more banks or
other entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Term Loans owing to it); provided that (i) such Lender's obligations
under this Agreement shall remain unchanged, (ii) such Lender shall remain
solely responsible to the other parties hereto for the performance of such
obligations and (iii) the Borrower, the Administrative Agent and the Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall
<PAGE> 36
32
provide that such Lender shall retain the sole right to enforce this Agreement
and to approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.2(b) that
affects such Participant. Subject to paragraph (f) of this Section, the Borrower
agrees that each Participant shall be entitled to the benefits of Sections 2.12,
2.13 and 2.14 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to paragraph (b) of this Section; provided that,
in the case of Section 2.13, such Participant shall have complied with the
requirements of said Section and provided, further, that no Participant shall be
entitled to receive any greater amount pursuant to any such Section than the
transferor Lender would have been entitled to receive in respect of the amount
of the participation transferred by such transferor Lender to such Participant
had no such transfer occurred.
(f) Any Lender may at any time pledge or assign a security interest in all
or any portion of its rights under this Agreement to secure obligations of such
Lender, including any such pledge or assignment to a Federal Reserve Bank, and
this Section shall not apply to any such pledge or assignment of a security
interest; provided that no such pledge or assignment of a security interest
shall release a Lender from any of its obligations hereunder or substitute any
such assignee for such Lender as a party hereto.
SECTION 9.5 Survival. All covenants, agreements, representations and
warranties made by the Borrower herein and in the certificates or other
instruments delivered in connection with or pursuant to this Agreement shall be
considered to have been relied upon by the other parties hereto and shall
survive the execution and delivery of this Agreement and the making of any Term
Loans, regardless of any investigation made by any such other party or on its
behalf.
SECTION 9.6 Counterparts; Integration; Effectiveness. This Agreement may be
executed in counterparts and by facsimile (and by different parties hereto on
different counterparts), each of which shall constitute an original, but all of
which when taken together shall constitute a single contract. This Agreement and
any separate agreements with respect to Fees constitute the entire contract
among the parties relating to the subject matter hereof and supersede any and
all previous agreements and understandings, oral or written, relating to the
subject matter hereof.
SECTION 9.7 Severability. Any provision of this Agreement held to be
invalid, illegal or unenforceable in any jurisdiction shall, as to such
jurisdiction, be ineffective to the extent of such invalidity, illegality or
unenforceability without affecting the validity, legality and enforceability of
the remaining provisions hereof; and the invalidity of a particular provision in
a particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.8 Right of Setoff. If an Event of Default shall have occurred and
be continuing, each Lender is hereby authorized at any time and from time to
time, to the fullest extent permitted by law, to set off and apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Lender to or for the
credit or the account of the Borrower against any of and all the obligations of
the Borrower now or hereafter existing under this Agreement held by such Lender,
irrespective of whether or not such Lender shall have made any demand under this
Agreement and although such obligations may be unmatured. The rights of each
Lender under this Section are in addition to other rights and remedies
(including other rights of setoff) which such Lender may have.
SECTION 9.9 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF PROCESS. (a)
THIS AGREEMENT SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAW OF
THE STATE OF NEW YORK.
<PAGE> 37
33
(b) The Borrower hereby irrevocably and unconditionally submits, for itself
and its property, to the nonexclusive jurisdiction of the Supreme Court of the
State of New York sitting in New York County and of the United States District
Court of the Southern District of New York, and any appellate court from any
thereof, in any action or proceeding arising out of or relating to this
Agreement, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such New
York State or, to the extent permitted by law, in such Federal court. Each of
the parties hereto agrees that a final judgment in any such action or proceeding
shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall
affect any right that the Administrative Agent or any Lender may otherwise have
to bring any action or proceeding relating to this Agreement against the
Borrower or its properties in the courts of any jurisdiction.
(c) The Borrower hereby irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection which it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Agreement in any court referred to in
paragraph (b) of this Section. Each of the parties hereto hereby irrevocably
waives, to the fullest extent permitted by law, the defense of an inconvenient
forum to the maintenance of such action or proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service of process
in the manner provided for notices in Section 9.1. Nothing in this Agreement
will affect the right of any party to this Agreement to serve process in any
other manner permitted by law.
SECTION 9.10 WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE
FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LEGAL PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING
TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY (WHETHER BASED ON
CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY
OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK
TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER
PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER
THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 9.11 Headings. Article and Section headings and the Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12 Confidentiality. Each Lender agrees to keep information
obtained by it pursuant hereto and the other Loan Documents identified as
confidential in writing at the time of delivery confidential in accordance with
such Lender's customary practices and agrees that it will only use such
information in connection with the transactions contemplated by this Agreement
and not disclose any of such information other than (a) to such Lender's
employees, representatives, directors, attorneys, auditors, agents or affiliates
who are advised of the confidential nature of such information, (b) to the
extent such information presently is or hereafter becomes available to such
Lender on a non-confidential basis from any source or such information that is
in the public domain at the time of disclosure, (c) to the extent disclosure is
required by law (including applicable securities laws), regulation, subpoena or
judicial order
<PAGE> 38
34
or process (provided that notice of such requirement or order shall be promptly
furnished to the Borrower unless such notice is legally prohibited) or requested
or required by bank, securities or investment company regulations or auditors or
any administrative body or commission to whose jurisdiction such Lender may be
subject, (d) to actual or prospective assignees or Participants who agree to be
bound by the provisions of this Section 9.12, (e) to the extent required in
connection with any litigation between any Loan Party and any Lender with
respect to the Term Loans or this Agreement and the other Loan Documents or (f)
with the Borrower's prior written consent. The agreements in this Section 9.12
shall survive repayment of the Term Loans and all other amounts payable
hereunder. Each of the parties hereto (each, a "Document Party") agrees to keep
confidential this Agreement and the other Loan Documents and the transactions
contemplated hereby and thereby; provided that nothing herein shall prevent any
Document Party from disclosing such information (a) to any other Document Party
or any Affiliate of any Document Party, or any officer, director, employee,
agent, or advisor of any Document Party or Affiliate of any Document Party, (b)
to any other Person if reasonably incidental to the administration of the credit
facility provided herein, (c) as required by any law, rule, or regulation, (d)
upon the order of any court or administrative agency, (e) upon the request or
demand of any regulatory agency or authority, (f) to any New Portfolio Company
(or prospective New Portfolio Company) or any officer, director, employee,
agent, or advisor of any Document Party or Affiliate of such New Portfolio
Company in connection with a proposed Investment by the Borrower in such New
Portfolio Company, (g) in connection with any litigation to which such Document
Party or any of its Affiliates may be a party, or (h) to the extent necessary in
connection with the exercise of any remedy under this Agreement or any other
Loan Document.
SECTION 9.13 Syndication. The Borrower agrees that the Administrative Agent
has the right to syndicate the Commitments and the Term Loans at any time or
from time to time to a group of financial institutions (the "Additional
Lenders") identified by the Administrative Agent in consultation with the
Borrower, if the Administrative Agent and its affiliates determine to syndicate
the Commitments and the Term Loans. The Borrower agrees to actively assist the
Administrative Agent and its affiliates in completing a syndication satisfactory
to the Administrative Agent and the Borrower, including (a) using commercially
reasonable efforts to ensure that the syndication efforts benefit materially
from the Borrower's lending and equity relationships, (b) direct contact between
the Borrower and any Additional Lenders, (c) furnishing, or, as the
Administrative Agent may request, assisting in the preparation of, information,
projections and marketing materials to be used in connection with the
syndication and (d) the hosting, with the Administrative Agent and its
affiliates, of one or more meetings of any Additional Lenders. The
Administrative Agent and its affiliates would manage all aspects of the
syndication, in consultation with the Borrower, including decisions as to the
selection of institutions to be approached and when they will be approached,
when their commitments will be accepted, which institutions will participate,
the allocations of the commitments among any Additional Lenders and the amount
and distribution of fees among any Additional Lenders. The Borrower acknowledges
that the information the Borrower may be asked to furnish to the Administrative
Agent and its affiliates and to any Additional Lenders may include sensitive
competitive information, and the Administrative Agent and its affiliates agree
to take appropriate and customary confidentiality precautions with respect
thereto.
<PAGE> 39
35
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their respective authorized officers as of the day and year
first above written.
HMTF BRIDGE PARTNERS, L.P., a Delaware limited
partnership
By: HMTF BRIDGE PARTNERS, LLC, a
Texas limited liability company
/s/ Darron K. Ash
-----------------------------------------
Darron K. Ash
Chief Financial Officer
Address for Notices:
200 Crescent Court, Suite 1600
Dallas, Texas 75201
Attn: Lawrence D. Stuart, Jr.
Telecopy: (214) 740-7313
<PAGE> 40
36
[Bank],
as Administrative Agent and as a Lender
By: /s/ [Bank]
-------------------------------------
Name: [Bank]
Title: Vice President
<PAGE> 41
SCHEDULE 2.1
<TABLE>
<CAPTION>
==================================================================
LENDER COMMITMENT
- ------------------------------------------------------------------
<S> <C>
[Bank] $110,000,000.00
- ------------------------------------------------------------------
TOTAL COMMITMENTS $110,000,000.00
==================================================================
</TABLE>
<PAGE> 1
EXHIBIT 99.1
JOINT FILING STATEMENT
Each of the undersigned agrees that (i) the statement on Schedule 13D
relating to the Class A Common Stock, par value $.01 per share, of Teligent,
Inc. has been adopted and filed on behalf of each of them, (ii) all future
amendments to such statement on Schedule 13D will, unless written notice to the
contrary is delivered as described below, be jointly filed on behalf of each of
them, and (iii) the provisions of Rule 13d-1(k)(1) under the Securities Exchange
Act of 1934 apply to each of them. This agreement may be terminated with respect
to the obligations to jointly file future amendments to such statement on
Schedule 13D as to any of the undersigned upon such person giving written notice
thereof to each of the other persons signatory hereto, at the principal office
thereof.
December 10, 1999 *
--------------------------------------
Name: Thomas O. Hicks
* By: /s/ David W. Knickel
---------------------------------
Name: David W. Knickel
Attorney-in-Fact
HM4 TELIGENT QUALIFIED FUND, LLC
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
HMTF EQUITY FUND IV (1999), L.P.
By: HM4/GP (1999) Partners, L.P., its
General Partner
By: Hicks, Muse GP (1999) Partners
IV, L.P., its General Partner
By: Hicks, Muse (1999) Fund IV, LLC,
its General Partner
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
HM4 TELIGENT PRIVATE FUND, LLC
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
1
<PAGE> 2
HMTF PRIVATE EQUITY FUND IV (1999),
L.P.
By: HM4/GP (1999) Partners, L.P., its
General Partner
By: Hicks, Muse GP (1999) Partners
IV, L.P., its General Partner
By: Hicks, Muse (1999) Fund IV, LLC,
its General Partner
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
HM4/GP (1999) PARTNERS, L.P.
By: Hicks, Muse GP (1999) Partners
IV, L.P., its General Partner
By: Hicks, Muse (1999) Fund IV, LLC,
its General Partner
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
HM 4-EQ TELIGENT COINVESTORS, LLC
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
HM 4-EQ (1999) COINVESTORS, L.P.
By: Hicks, Muse GP (1999) Partners
IV, L.P., its General Partner
By: Hicks, Muse (1999) Fund IV, LLC,
its General Partner
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
2
<PAGE> 3
HM 4-SBS TELIGENT COINVESTORS, LLC
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
HM 4-SBS (1999) COINVESTORS, L.P.
By: Hicks, Muse GP (1999) Partners
IV, L.P., its General Partner
By: Hicks, Muse (1999) Fund IV, LLC,
its General Partner
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
HICKS, MUSE GP (1999) PARTNERS IV,
L.P.
By: Hicks, Muse (1999) Fund IV, LLC,
its General Partner
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
HICKS, MUSE (1999) FUND IV, LLC
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
HM PG-IV TELIGENT, LLC
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
3
<PAGE> 4
HICKS, MUSE PG-IV (1999), C.V.
By: HM Equity Fund IV/GP Partners
(1999), C.V., its General Partner
By: HM GP Partners IV Cayman, L.P.,
its General Partner
By: HM Fund IV Cayman LLC, its
General Partner
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
HM EQUITY FUND IV/GP PARTNERS (1999),
C.V.
By: HM GP Partners IV Cayman, L.P.,
its General Partner
By: HM Fund IV Cayman LLC, its
General Partner
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
HM GP PARTNERS IV CAYMAN, L.P.
By: HM Fund IV Cayman LLC, its
General Partner
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
HM FUND IV CAYMAN LLC
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
4
<PAGE> 5
HMTF BRIDGE TELIGENT, LLC
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
HMTF BRIDGE PARTNERS, L.P.
By: HMTF Bridge Partners, LLC, its
General Partner
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
HMTF BRIDGE PARTNERS, LLC
By: /s/ David W. Knickel
-----------------------------------
Name: David W. Knickel
Title: Vice President
5
