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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.
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"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.
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"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.
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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
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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).
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(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
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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
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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
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(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
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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
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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-
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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.
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(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
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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.
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(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.
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(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
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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
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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
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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
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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
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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).
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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.
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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.
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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/ Xxxx Xxxxx
------------------------
Name: Xxxx Xxxxx
Title: Chairman and Chief
Executive Officer
HM4 TELIGENT QUALIFIED FUND, LLC,
by /s/ Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
HM4 TELIGENT PRIVATE FUND, LLC,
by /s/ Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
HM PG-IV TELIGENT, LLC,
by /s/ Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
HM 4-SBS TELIGENT COINVESTORS, LLC,
by /s/ Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
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HM 4-EQ TELIGENT COINVESTORS, LLC,
by /s/ Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
HMTF BRIDGE TELIGENT, LLC,
by /s/ Xxxxx X. Xxxxxxx
------------------------
Name: Xxxxx X. Xxxxxxx
Title: Vice President
MICROSOFT CORPORATION,
by /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
and Chief Financial Officer
CHASE EQUITY ASSOCIATES, L.P.,
by CHASE CAPITAL PARTNERS,
its General Partner
by /s/ Xxxxxxx X. Xxxxxx
------------------------
Name: Xxxxxxx X. Xxxxxx
Title: General Partner
DB CAPITAL INVESTORS, L.P.,
by DB CAPITAL PARTNERS, L.P.,
its General Partner
by DB CAPITAL PARTNERS, INC.,
by /s/ Xxxxx Xxxxxx
------------------------
Name: Xxxxx Xxxxxx
Title: Managing Director
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OLYMPUS GROWTH FUND III, L.P.,
by OGP III, LLC
by /s/ Xxxxx X. Xxxxxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Member
OLYMPUS EXECUTIVE FUND, L.P.,
by OEF, L.P., its general partner
by LJM L.L.C., its general partner
by /s/ Xxxxx X. Xxxxxxxxxx
-----------------------
Name: Xxxxx X. Xxxxxxxxxx
Title: Managing Member
27
SCHEDULE I
Number of Purchase Price
--------- --------------
Purchasers Shares of the Shares
---------- ------ -------------
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
