1
Exhibit A
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and entered
into as of November 13, 1997 by and among Teligent, L.L.C., a Delaware limited
liability company (the "Company") and NTTA&T Investment, Inc., a Delaware
corporation (such party and any party to which any rights under this Agreement
have been transferred, a "Holder").
This Agreement is made pursuant to that certain Securities Purchase
Agreement, dated as of September 30, 1997 (the "Securities Purchase Agreement"),
between, among other parties, the Company and the Nippon Telegraph and Telephone
Corporation. The execution and delivery of this Agreement by the Company is a
condition to the First Closing (as such term is defined under the Securities
Purchase Agreement).
The parties hereto agree as follows:
ARTICLE I
Section 1.1. Definitions. Certain defined terms used herein and not
otherwise defined shall have the meanings for such terms as used in the Limited
Liability Company Agreement (as hereinafter defined). In addition, as used in
this Agreement, the following capitalized terms have the following meanings:
Exchange Act shall mean the Securities Exchange Act of 1934, as amended.
Initial Public Offering shall mean an initial Public Offering which
results in net proceeds to the Company of not less than $75,000,000.
Limited Liability Company Agreement shall mean the Amended and Restated
Limited Liability Company Agreement of the Company dated as of the date hereof,
as from time to time amended.
Managing Underwriter shall have the meaning specified in Section 2.1(e).
Public Offering shall mean a public offering and sale of equity securities
of the Company or any successors thereto, pursuant to an effective registration
statement under the Securities Act.
Registrable Securities shall mean membership interests of the Company
purchased by the Holders pursuant to the Securities Purchase Agreement or the
securities into which such membership interests have been converted upon the
conversion of the Company from a limited liability company to a "C" corporation,
together with any securities issued or issuable by the Company in respect of any
of such securities by way of a distribution or split or in connection with a
combination or subdivision of such securities of the Company, reclassification,
recapitalization, merger, consolidation or other reorganization of the Company.
As to any particular Registrable Securities, such securities shall cease
to be Registrable
2
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.
Registration Expenses shall mean any and all out-of-pocket expenses
incident to the Company's performance of or compliance with this Agreement,
including, without limitation, all Securities and Exchange Commission
("Commission"), stock exchange or National Association of Securities Dealers,
Inc. ("NASD") registration and filing fees, all fees and expenses of complying
with securities and blue sky laws (including the reasonable fees and
disbursements of underwriters' counsel in connection with blue sky
qualifications and NASD filings), all fees and expenses of the transfer agent
and registrar for the Registrable Securities, all printing expenses, the fees
and disbursements of counsel for the Company and of its independent public
accountants, including the expenses of any special audits and/or "cold comfort"
letters required by or incident to such performance and compliance, but
excluding underwriting discounts and commissions, the fees and disbursements of
the Holder's counsel and applicable transfer and documentary stamp taxes, if
any, which shall be borne by the seller of the securities in all cases.
Securities Act shall mean the Securities Act of 1933, as amended, or any
similar federal statute then in effect, and in reference to a particular section
thereof shall include a reference to the comparable section, if any, of any such
similar federal statute and the rules and regulations thereunder.
Underwritten Offering shall mean a Public Offering for which an investment
banking firm will enter into an underwriting agreement.
ARTICLE II
Registration Rights
Section 2.1. Demand Registrations.
(a) At any time after the sixth month anniversary of the
effectuation of an Initial Public Offering (the "Demand Date"), the Holders
shall be entitled to demand in writing that the Company effect a registration
under the Securities Act of all or part of their Registrable Securities,
specifying in the request the number and type of Registrable Securities to be
registered by the Holders and the intended method of disposition thereof (such
notice is hereinafter referred to as a "Holder Request"). Upon receipt of such
Holder Request, the Company will give prompt written notice to all other Holders
and all other holders of the same or a substantially similar class of securities
as those held by the Holders with applicable registration rights (such
securityholders referred to herein as the "Other Holders" and such securities as
the "Other Holders Securities" and, together with the Registrable Securities,
the
2
3
"Securities") of such registration request and other relevant facts involved in
such proposed registration and will, as expeditiously as possible, use its
reasonable best efforts to effect the registration under the Securities Act of:
(i) all Registrable Securities which the Company has been so
requested to register by the Holders; and
(ii) all other Securities which the Company has been requested
to register by any other Holder thereof and by all Other Holders, if
applicable, by written request given to the Company within 30 calendar
days after the giving of such written notice by the Company (which request
shall specify the intended method of disposition of such Securities), all
to the extent necessary to permit the disposition (in accordance with the
intended methods thereof as aforesaid) of the Securities so to be
registered;
provided, however, that the Company shall not be obligated to file a
registration statement relating to any Holder Request under this Section 2.1(a)
unless (A) the Company shall have received requests for such registration with
respect to at least 20% of the Registrable Securities purchased pursuant to the
Securities Purchase Agreement (the "NCC Shares") or (B) it is reasonably
anticipated that, with respect to the Registrable Securities requested to be
registered, the aggregate offering price, net of underwriters' discounts and
commissions, will be not less than $20,000,000;
provided, further, however, that the Company shall not be obligated to file and
use its reasonable best efforts to cause to become effective a registration
statement pursuant to this Section 2.1 until a period shall have elapsed from
the effective date of the most recent such previous registration statement of
the Company (the "Prior Public Offering") equal to the greater of (i) 120 days
and (ii) the shortest period of any lockup of shareholders of the Company
required by the underwriting firm which was the lead manager of the Prior Public
Offering (the "Holdback Period"); and provided, further, that if, while a
registration request is pending pursuant to this Section 2.1, the Board of
Directors of the Company makes a good faith determination that the filing or
effectiveness of a registration statement would require the public disclosure of
material information, the disclosure of which would adversely affect the
Company, the Company shall not be required to effect a registration pursuant to
this Section 2.1 until such material information is disclosed to the public or
ceases to be material; provided, however, that the foregoing delay shall in no
event exceed 120 days, and provided, further, that in such event, if requested
by the Holders of Registrable Securities representing at least 50% of the
Registrable Securities which are or were included in such registration, the
Holders will be entitled to withdraw such request, and if such request is
withdrawn, such registration will not count as one of the required registrations
under this Section 2.1. In any event, the Company will pay all Registration
Expenses in connection with any registration initiated under this Section 2.1.
(b) Notwithstanding the foregoing provisions of Section 2.1(a), the
Company shall not be obligated to effect more than three registrations pursuant
to this Section 2.1.
(c) A registration requested pursuant to Section 2.1(a) will not be
deemed to have been effected for purposes of this Agreement unless it has become
effective; provided, that if after such registration has become effective, the
offering of Registrable Securities pursuant
3
4
thereto is interfered with by any stop order, injunction or other order or
requirement of the Commission or other governmental agency or court (other than
any such order, injunction or other order or requirement as would not affect any
of the date of the closing with respect to the sale of such securities, the
number of such securities to be sold or the price to be paid for such
securities), such registration will be deemed not to have been effected.
(d) The Company will pay all Registration Expenses in connection
with each of the registrations of Registrable Securities effected by it pursuant
to this Section 2.1.
(e) If a registration pursuant to this Section 2.1 involves an
Underwritten Offering, the Holders of a majority of the Registrable Securities
to be included in such registration shall have the right, with the approval of
the Company (which approval shall not be unreasonably withheld), to select the
investment banker (or investment bankers) that shall manage the Underwritten
Offering (collectively, the "Managing Underwriter").
(f) If in connection with any Underwritten Offering pursuant to this
Section 2.1, the Managing Underwriter shall advise the Company that, in its
judgment, the number of Securities (including, for purposes of this Section 2.1,
securities of the Company which the Company has proposed to include in such
offering) proposed to be included in such offering should be limited due to
market conditions, then the Company will promptly so advise the Holders and the
Other Holders, as applicable, and Securities shall be excluded from such
offering in the following order until such limitation has been met: (i) Other
Securities requested to be registered pursuant to Section 2.1(a), if any, shall
be excluded until all of the Other Securities shall have been so excluded, (ii)
Securities which the Company has elected to include in such offering, if any,
shall be excluded until all of such Securities have been excluded, and, (iii)
thereafter, any Registrable Securities requested to be included in such offering
pursuant to Section 2.1(a) shall be excluded pro rata, based on the respective
number of Registrable Securities as to which registration has been so requested
by each Holder.
(g) If more than 50% of the Registrable Securities requested to be
included in a registration pursuant to Section 2.1(a) are not so included, such
registration shall not count as one of the permitted registrations under this
Section 2.1.
Section 2.2. Registration.
(a) At any time after the Demand Date, the Holders shall be entitled
to demand in writing that the Company effect a registration under the Securities
Act of all or part of their Registrable Securities on Form S-3 or any similar
short-form ("Short-Form") registration statement ("Short-Form Registrations"),
if available, specifying in the request the number of Registrable Securities to
be registered by the Holders and the intended method of distribution thereof
(such notice is hereinafter referred to as an "S-3 Holder Request"); provided,
that the Company shall be obligated to effect a registration of Registrable
Securities pursuant to this Section 2.2 only if the anticipated aggregated
offering price for such Registrable Securities is in excess of $10,000,000,
provided, further, that the Company shall not be obligated to file and use its
reasonable best efforts to cause to become effective a registration statement
pursuant to this Section 2.2 until a period equal to the Holdback Period shall
have elapsed from the effective date of the Prior Public Offering; and provided,
further, that if, while a registration
4
5
request is pending pursuant to this Section 2.2, the Board of Directors of the
Company makes a good faith determination that the filing or effectiveness of a
registration statement would require the public disclosure of material
information, the disclosure of which would adversely affect the Company, the
Company shall not be required to effect a registration pursuant to this Section
2.2 until such material information is disclosed to the public or ceases to be
material; provided, however, that the foregoing delay shall in no event exceed
120 days. The Holders of Registrable Securities will be entitled to request an
unlimited number of Short-Form Registrations. After the Company has become
subject to the reporting requirements of the Exchange Act, the Company will use
its reasonable best efforts to make Short-Form Registrations on Form S-3
available for the sale of Registrable Securities.
(b) If, in connection with any Underwritten Offering pursuant to
Section 2.2(a), the Managing Underwriter thereof advises the Company in writing
that in its opinion the number of Securities (including, for purposes of this
Section 2.2(b), securities of the Company which the Company has proposed to
include in such offering) proposed to be included in such offering should be
limited due to market conditions, the Company will promptly so advise the
Holders and Other Holders, as applicable, and Securities shall be excluded from
such offering in the following order until such limitation has been met: (i)
Other Securities requested to be included in such offering pursuant to Section
2.2(c), if any, shall be excluded until all of the Other Securities shall be so
excluded, (ii) Securities that the Company has elected to include in such
offering, if any, shall be excluded until all such Securities have been
excluded, and, (iii) thereafter, any Registrable Securities requested to be
included in such offering pursuant to Sections 2.2(a) and (c) shall be excluded
pro rata, based on the respective number of Registrable Securities as to which
registration has been so requested by each Holder.
(c) Upon receipt of any S-3 Holder Request subject to Section
2.2(a), the Company will give prompt written notice to all other Holders and all
Other Holders and will, as expeditiously as possible, use its reasonable best
efforts to effect the registration under the Securities Act of:
(i) all Registrable Securities which the Company has been so
requested to register by the Holders; and
(ii) all other Registrable Securities which the Company has
been requested to register by any other Holder thereof and all Other
Securities, if applicable, by written request given to the Company within
30 calendar days after the giving of such written notice by the Company
(which request shall specify the intended method of disposition of such
Securities), all to the extent necessary to permit the disposition (in
accordance with the intended methods thereof as aforesaid) of the
Securities so to be registered.
(d) If a requested registration pursuant to this Section 2.2
involves an Underwritten Offering, the Holders representing a majority of
Registrable Securities included in such registration shall have the right, with
the approval of the Company (which approval shall not be unreasonably withheld),
to select the Managing Underwriter.
(e) The Company will pay all Registration Expenses in connection
with
5
6
registrations of Registrable Securities effected by it pursuant to this Section
2.2.
Section 2.3. Piggyback Registrations
(a) After the Initial Public Offering, if the Company at any time
proposes to register any of its equity securities of the same class as the
Registrable Securities under the Securities Act (other than a registration on
Form S-4 or S-8 or any successor or similar forms thereto and other than
pursuant to a registration under Section 2.1 or 2.2), whether or not for sale
for its own account (including, without limitation, pursuant to the exercise by
any other Person of any registration rights granted by the Company), on a form
and in a manner that would permit registration of Registrable Securities held by
a Holder for sale to the public under the Securities Act, it will give written
notice to all the Holders promptly of its intention to do so, describing such
securities and specifying the form and manner and the other relevant facts
involved in such proposed registration (including, without limitation, (x)
whether or not such registration will be in connection with an Underwritten
Offering of Registrable Securities and, if so, the identity of the Managing
Underwriter and whether such offering will be pursuant to a "best efforts" or
"firm commitment" underwriting and (y) the anticipated price range at which the
Registrable Securities are reasonably expected to be sold to the public). Upon
the written request of any such Holder delivered to the Company within 45
calendar days after the receipt of any such notice (which request shall specify
the Registrable Securities intended to be disposed of by such Holder and the
intended method of disposition thereof), the Company will use reasonable best
efforts to effect the registration under the Securities Act of all of the
Registrable Securities that the Company has been so requested to register;
provided, however, that:
(i) If, at any time after giving such written notice of its
intention to register any securities and prior to the effective date of
the registration statement filed in connection with such registration, the
Company shall determine for any reason not to register such securities,
the Company may, at its election, give written notice of such
determination to each Holder who made a request as hereinabove provided
and thereupon the Company shall be relieved of its obligation to register
any Registrable Securities in connection with such registration (but not
from its obligation to pay the Registration Expenses in connection
therewith, subject to Section 2.3(b)), without prejudice, however, to the
rights, of any Holder to request that such registration be effected as a
registration under Sections 2.1 or 2.2, upon the terms and subject to the
conditions set forth therein.
(ii) If such registration involves an Underwritten Offering,
all Holders of Registrable Securities requesting to be included in the
Company's registration must sell their Registrable Securities to the
underwriters selected by the Company on the same terms and conditions as
apply to the Company.
No registration effected under this Section 2.3 shall relieve
the Company of its obligation to effect registrations upon request under
Sections 2.1 or 2.2, upon the terms and conditions set forth therein.
(b) The Registration Expenses incurred in connection with up to
three fully completed registrations of Registrable Securities requested pursuant
to this Section 2.3 (and for each such registration discontinued or terminated
pursuant to the provisions of Section 2.3(a) or
6
7
for which more than 50% of the Registrable Securities for which registration has
been requested are not registered pursuant to the provisions of Section 2.3(c))
shall be paid by the Company.
(c) If a registration pursuant to this Section 2.3 involves an
Underwritten Offering and the Managing Underwriter advises the Company that, in
its opinion, the number of Registrable Securities proposed to be included in
such registration should be limited due to market conditions, then the Company
may exclude Registrable Securities requested to be included pursuant to Section
2.3(a) pro rata, based on the respective numbers of Registrable Securities as to
which registration has been so requested by each Holder.
(d) In connection with any Underwritten Offering with respect to
which holders of Registrable Securities shall have requested registration
pursuant to this Section 2.3, the Company shall have the right to select the
Managing Underwriter with respect to the offering.
Section 2.4. Registration Procedures.
(a) If and whenever the Company is required to use its reasonable
best efforts to effect or cause the registration of any Registrable Securities
under the Securities Act as provided in Sections 2.1, 2.2 or 2.3, the Company
will, as expeditiously as possible:
(i) Prepare and promptly file with the Commission a
registration statement with respect to such Registrable Securities and use
its reasonable best efforts to cause such registration statement to become
and remain effective; provided, that in the case of a registration
provided for in Sections 2.1, 2.2 or 2.3, before filing a registration
statement or prospectus or any amendments or supplements thereof, the
Company will furnish to one counsel selected by the Holders desiring to
register their Registrable Securities for sale copies of all such
documents proposed to be filed, which documents will be subject to the
right of such counsel to approve all information contained therein with
respect to the Holders (which approval shall not be unreasonably withheld)
and the reasonable opportunity of such counsel to otherwise comment
thereon; and, provided, further, that the Company may discontinue any
registration of its securities that is being effected pursuant to Section
2.3 at any time prior to the effective date of the registration statement
relating thereto.
(ii) Prepare and file with the Commission such amendments
(including post-effective amendments) and supplements to such registration
statement and the prospectus used in connection therewith as may be
necessary to keep such registration statement effective for a period as
may be requested by the Holders desiring to register their Registrable
Securities for sale not exceeding 90 days and to comply with the
provisions of the Securities Act with respect to the disposition of all
Registrable Securities covered by such registration statement during such
period in accordance with the intended methods of disposition by the
Holder or Holders thereof set forth in such registration statement.
(iii) Furnish to each Holder of Registrable Securities covered
by the registration statement and to each underwriter, if any, of such
Registrable Securities,
7
8
such number of copies of a prospectus and preliminary prospectus for
delivery in conformity with the requirements of the Securities Act, and
such other documents, as such Person may reasonably request, in order to
facilitate the public sale or other disposition of the Registrable
Securities.
(iv) Use its reasonable best efforts to register or qualify
such Registrable Securities covered by such registration statement under
such other securities or blue sky laws of such jurisdictions as each
Holder shall reasonably request, and do any and all other acts and things
which may be reasonably necessary or advisable to enable such Holder to
consummate the disposition of the Registrable Securities owned by such
Holder in such jurisdictions, except that the Company shall not for any
such purpose be required (A) to qualify to do business as a foreign
corporation in any jurisdiction where, but for the requirements of this
Section 2.4(a)(iv), it is not then so qualified, or (B) to subject itself
to taxation in any such jurisdiction, or (C) to take any action which
would subject it to general or unlimited service of process in any such
jurisdiction where it is not then so subject.
(v) Use its reasonable best efforts to cause such Registrable
Securities covered by such registration statement to be registered with or
approved by such other governmental agencies or authorities as may be
necessary to enable the Holder or Holders thereof to consummate the
disposition of such Registrable Securities.
(vi) Immediately notify each Holder of Registrable Securities
covered by such registration statement, at any time when a prospectus
relating thereto is required to be delivered under the Securities Act
within the appropriate period mentioned in Section 2.4(a)(ii), if the
Company becomes aware that the prospectus included in such registration
statement, as then in effect, includes an untrue statement of a material
fact or omits to state any material fact required to be stated therein or
necessary to make the statements therein not misleading in the light of
the circumstances then existing, and, at the request of any such Holder,
deliver a reasonable number of copies of an amended or supplemental
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such Registrable Securities, such prospectus shall not
include an untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances then existing.
(vii) Otherwise use its reasonable best efforts to comply with
all applicable rules and regulations of the Commission and make generally
available to its securityholders, in each case as soon as practicable, but
not later than 45 calendar days after the close of the period covered
thereby (90 calendar days in case the period covered corresponds to a
fiscal year of the Company), an earnings statement of the Company which
will satisfy the provisions of Section 11(a) of the Securities Act.
(viii) Use its reasonable best efforts in cooperation with the
underwriters to list such Registrable Securities on each securities
exchange as they may reasonably designate.
8
9
(ix) In the event the offering is an Underwritten Offering,
use its reasonable best efforts to obtain a "cold comfort" letter from the
independent public accountants for the Company in customary form and
covering such matters of the type customarily covered by such letters.
(x) Execute and deliver all instruments and documents
(including in an Underwritten Offering an underwriting agreement in
customary form) and take such other actions and obtain such certificates
and opinions as are customary in an underwritten public offering.
(b) Each Holder of Registrable Securities will, upon receipt of any
notice from the Company of the happening of any event of the kind described in
Section 2.4(a)(vi), forthwith discontinue disposition of the Registrable
Securities pursuant to the registration statement covering such Registrable
Securities until such Holder's receipt of the copies of the supplemented or
amended prospectus contemplated by Section 2.4(a)(vi).
(c) If a registration pursuant to Sections 2.1, 2.2 or 2.3 involves
an Underwritten Offering, the Company agrees, if so required by the Managing
Underwriter, not to effect any public sale or distribution of any of its equity
securities or securities convertible into or exchangeable or exercisable for any
of such equity securities during a period of up to 180 calendar days after the
effective date of such registration, except for securities sold in such
Underwritten Offering or except in connection with an option plan, purchase
plan, savings or similar plan, or an acquisition, merger or exchange offer.
(d) If a registration pursuant to Sections 2.1, 2.2 or 2.3 involves
an Underwritten Offering, each Holder of Registrable Securities, whether or not
such Holder's Registrable Securities are included in such registration, will, if
and to the extent requested by the Managing Underwriter, enter into an agreement
not to effect any public sale or distribution, including any sale pursuant to
Rule 144 under the Securities Act (but excluding those Registrable Securities
sold in such offering), of any of the Company's equity securities owned by such
Holder or securities convertible into or exchangeable or exercisable for any
such equity securities, without the consent of the Managing Underwriter, during
a period commencing on the effective date of such registration and ending a
number of calendar days thereafter not exceeding 180 days as the Managing
Underwriter shall reasonably determine is required to effect a successful
offering.
(e) If a registration pursuant to Sections 2.1, 2.2 or 2.3 involves
an Underwritten Offering, any Holder requesting that Registrable Securities be
included in such registration may elect by notice, in writing, given a
reasonable period prior to the effective date of the registration statement
filed in connection with such registration, not to register such securities in
connection with such registration, unless such Holder has agreed with the
Company or the Managing Underwriter to limit its rights under this Section 2.4.
(f) It is understood that in any Underwritten Offering, in addition
to any Registrable Securities (the "initial units") the underwriters have
committed to purchase, the underwriting agreement may grant the underwriters an
option to purchase up to a number of additional authorized but unissued
Registrable Securities (the "option units") equal to 15% of
9
10
the initial units (or such other maximum amount as the NASD may then permit),
solely to cover over-allotments. Registrable Securities proposed to be sold by
the Company and the Holders shall be allocated between initial units and option
units as agreed or, in the absence of agreement, pursuant to Sections 2.1(g),
2.2(b) or 2.3(c), as the case may be. The number of initial units and option
units to be sold by requesting Holders shall be allocated pro rata among all
such Holders on the basis of the relative number of Registrable Securities each
such Holder has included in such registration.
Section 2.5. Indemnification.
(a) In the event of any registration of any securities of the
Company under the Securities Act pursuant to Sections 2.1, 2.2 or 2.3, the
Company will, and it hereby agrees to, indemnify and hold harmless, to the
extent permitted by law, each Holder of any Registrable Securities covered by
such registration statement, its directors and officers or general and limited
partners, each other Person who participates as an underwriter in the offering
or sale of such securities and each other Person, if any, who controls such
Holder or any such underwriter within the meaning of the Securities Act, as
follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever arising out of or based upon an untrue statement or
alleged untrue statement of a material fact contained in any registration
statement (or any amendment or supplement thereto), including all
documents incorporated therein by reference, or the omission or alleged
omission therefrom of a material fact required to be stated therein or
necessary to make the statements therein not misleading, or arising out of
an untrue statement or alleged untrue statement of a material fact
contained in any preliminary prospectus or prospectus (or any amendment or
supplement thereto) or the omission or alleged omission therefrom of a
material fact necessary in order to make the statements therein not
misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever to the extent of the aggregate amount paid in
settlement of any litigation, or investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, if such settlement is effected with
the written consent of the Company; and
(iii) against any and all expense reasonably incurred by them
in connection with investigating, preparing or defending against any
litigation, or investigation or proceeding by any governmental agency or
body, commenced or threatened, or any claim whatsoever based upon any such
untrue statement or omission, to the extent that any such expense is not
paid under subparagraph (i) or (ii) above;
provided, however, that this indemnity does not apply to any loss,
liability, claim, damage or expense to the extent arising out of an untrue
statement or alleged untrue statement or omission or alleged omission made in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of such Holder, underwriter or control person expressly
for use in the preparation of any registration statement (or any amendment
10
11
thereto) or any preliminary prospectus or prospectus (or any amendment or
supplement thereto) and provided, further, that the Company shall not be liable
to any Person who participates as an underwriter in the offering or sale of
Registrable Securities or to any other Person, if any, who controls such
underwriter with the meaning of the Securities Act, in any such case to the
extent that such loss, liability, claim, damage or expense arises out of such
Person's failure to send or give a copy of the final prospectus, as the same may
be then supplemented or amended, to the Person asserting an untrue statement or
alleged untrue statement or omission or alleged omission at or prior to the
written confirmation of the sale of Registrable Securities to such Person if
such statement or omission was corrected in the final prospectus.
(b) The Company may require, as a condition to including any
Registrable Securities in any registration statement filed in accordance with
Sections 2.1, 2.2 or 2.3, that the Company shall have received an undertaking
reasonably satisfactory to it from the prospective seller of such Registrable
Securities to indemnify and hold harmless (in the same manner and to the same
extent as set forth in Section 2.5(a)) the Company, each director of the
Company, each officer of the Company and each other Person, if any, who controls
the Company within the meaning of the Securities Act, with respect to any
statement or alleged statement in or omission or alleged omission from such
registration statement, any preliminary, final or summary prospectus contained
therein, or any amendment or supplement, if such statement or alleged statement
or omission or alleged omission was made in reliance upon and in conformity with
written information furnished to the Company by or on behalf of such Holder
specifically stating that it is for use in the preparation of such registration
statement, preliminary, final or summary prospectus or amendment or supplement.
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of the Company or any such director, officer
or controlling Person and shall survive the transfer of such securities by such
Holder. In that event, the obligations of the Company and such Holders pursuant
to this Section 2.5 are to be several and not joint; provided, however, that
with respect to each claim pursuant to this Section 2.5(b), each such Holder's
liability under this Section 2.5(b) shall be limited to an amount equal to the
net proceeds (after deducting the underwriting discount and expenses) received
by such Holder from the sale of such Registrable Securities by such Holder.
(c) Promptly after receipt by an indemnified party hereunder of
written notice of the commencement of any action or proceeding involving a claim
referred to in this Section 2.5, such indemnified party will, if a claim in
respect thereof is to be made against an indemnifying party, give written notice
to such indemnifying party of the commencement of such action; provided,
however, that the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations under this
Section 2.5, except to the extent (not including any such notice of an
underwriter) that the indemnifying party is actually prejudiced by such failure
to give notice. In case any such action is brought against an indemnified party,
unless in such indemnified party's reasonable judgment a conflict of interest
between such indemnified and indemnifying parties may exist in respect of such
claim (in which case the indemnifying party shall not be liable for the fees and
expenses of more than one firm of counsel for a majority of the sellers of
Registrable Securities or more than one firm of counsel for the underwriters in
connection with any one action or separate but similar or related actions), the
indemnifying party will be entitled to participate in and to assume the defense
thereof, jointly with any other indemnifying party similarly notified, to the
extent that it may
11
12
wish with counsel reasonably satisfactory to such indemnified party, and after
notice from the indemnifying party to such indemnified party of its election so
to assume the defense thereof, the indemnifying party will not be liable to such
indemnified party for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof. No indemnified party
shall consent to the entry of any judgment or enter into any settlement of any
such action, the defense of which has been assumed by an indemnifying party or
for which an indemnifying party may have indemnification liability hereunder
without the consent of such indemnifying party.
(d) The Company and each seller of Registrable Securities shall
provide for the foregoing indemnity (with appropriate modifications) in any
underwriting agreement with respect to any required registration or other
qualification of securities under any federal or state law or regulation of any
governmental authority.
Section 2.6. Contribution. In order to provide for just and equitable
contribution in circumstances under which the indemnity contemplated by Section
2.5 is for any reason not available, the parties required to indemnify by the
terms thereof shall contribute to the aggregate losses, liabilities, claims,
damages and expenses of the nature contemplated by such indemnity agreement
incurred by the Company, any seller of Registrable Securities and one or more of
the underwriters, except to the extent that contribution is not permitted under
Section 11(f) of the Securities Act. In determining the amounts which the
respective parties shall contribute, there shall be considered the relative
benefits received by each party from the offering of the Registrable Securities
(taking into account the portion of the proceeds of the offering realized by
each), the parties' relative knowledge and access to information concerning the
matter with respect to which the claim was asserted, the opportunity to correct
and prevent any statement or omission and any other equitable considerations
appropriate under the circumstances. The Company and each Holder selling
securities agree with each other that no seller of Registrable Securities shall
be required to contribute any amount in excess of the amount such seller would
have been required to pay to an indemnified party if the indemnity under Section
2.5(b) were available. The Company and each such seller agree with each other
and the underwriters of the Registrable Securities, if requested by such
underwriters, that it would not be equitable if the amount of such contribution
were determined by pro rata or per capita allocation (even if the underwriters
were treated as one entity for such purpose) or for the underwriters' portion of
such contribution to exceed the percentage that the underwriting discount bears
to the initial public offering price of the Registrable Securities. For purposes
of this Section 2.6, each Person, if any, who controls an underwriter within the
meaning of Section 15 of the Securities Act shall have the same rights to
contribution as such underwriter, and each director and officer of the Company
who signed the registration statement, and each Person, if any, who controls the
Company or a seller of Registrable Securities within the meaning of Section 15
of the Securities Act shall have the same rights to contribution as the Company
or a seller of Registrable Securities, as the case may be.
Section 2.7. Rule 144. If the Company shall have filed a registration
statement pursuant to the requirements of Section 12 of the Exchange Act or a
registration statement pursuant to the requirements of the Securities Act, the
Company covenants that it will file the reports required to be filed by it under
the Securities Act and the Exchange Act and the rules
12
13
and regulations adopted by the Commission thereunder (or, if the Company is not
required to file such reports, it will, upon the request of any Holder of
Registrable Securities, make publicly available other information), and it will
take such further action as any Holder of Registrable Securities may reasonably
request, all to the extent required from time to time to enable such Holder to
sell Registrable Securities without registration under the Securities Act within
the limitation of the exemptions provided by (i) Rule 144 under the Securities
Act, as such Rule may be amended from time to time, or (ii) any similar rule or
regulation hereafter adopted by the Commission. Upon the request of any Holder
of Registrable Securities, the Company will deliver to such Holder a written
statement as to whether it has complied with such requirements.
Section 2.8. Transfer of Registration Rights.
Each Holder may assign its rights under this Agreement to any Person
to whom or which they sell, transfer or assign not less than 20% of the NCC
Shares (other than sales pursuant to Rule 144); provided, that such Person
agrees in writing with the Company to be bound by this Agreement to the same
extent as the transferring Holder.
ARTICLE III
Termination
Section 3.1. Termination. This Agreement shall terminate with respect to
any Holder when such Holder no longer owns any Registrable Securities.
ARTICLE IV
Miscellaneous
Section 4.1. Successors and Assigns. Except as otherwise provided herein,
all of the terms and provisions of this Agreement shall be binding upon, shall
inure to the benefit of and shall be enforceable by and against the respective
successors and assigns of the parties hereto.
Section 4.2. Amendment and Modification; Waiver of Compliance; Conflicts.
(a) This Agreement may be amended only by a written instrument duly
executed by the parties hereto.
(b) Except as otherwise provided in this Agreement, any failure of
any of the parties to comply with any obligation, covenant, agreement or
condition herein may be waived by the party entitled to the benefits thereof
only by a written instrument signed by the party granting such waiver, but such
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure.
Section 4.3. Notices. Any notice, request, claim, demand, document and
other communication hereunder to any party shall be effective upon receipt (or
refusal of receipt) and shall be in writing and delivered personally or sent by
telex or telecopy (with such telex or
13
14
telecopy confirmed promptly in writing sent by first class mail), or first class
mail, or other similar means of communication, as follows:
(a) If to the Company, addressed to the Company at 0000 Xxxxxxxx
Xxxx, Xxxxxx, XX 00000, Attn.: Xxxxxxxx X Xxxxxx; with a copy to (i) The
Associated Group, Inc., 0 Xxxx Xxxxx Xxxx, Xxxxx 000, Xxxx Xxxxxx, XX 00000,
Attn.: Xxxxx X. Xxxxx; (ii) Telcom Ventures, LLC, 000 Xxxxx Xxxxx Xxxxxx, Xxxxx
000, Xxxxxxxxxx, XX 00000, Attn.: Xxx X. Xxxxxxx; and (iii) Xxxx X. Xxxx, Esq.,
Xxxxxxx Xxxx, Slate, Xxxxxxx & Xxxx, Xxx Xxxxxx Xxxxxx, Xxxxxx, XX 00000; or
(b) If to a Holder, to the address of such Holder set forth in the
records of the Company;
or, in each case, to such other address or telex or telecopy number
as such party may designate in writing to each Holder and the Company by written
notice given in the manner specified herein.
All such communications shall be deemed to have been given,
delivered or made when so delivered by hand or sent by telex (answer back
received) or telecopy, or five business days after being so mailed.
Section 4.4. Entire Agreement. This Agreement, the Securities Purchase
Agreement and the other agreements referred to herein or therein or delivered
pursuant hereto or thereto which form a part hereof or thereof contain the
entire agreement among the parties hereto with respect to the subject
transactions contemplated hereby and supersede all prior oral and written
agreements and memoranda and undertakings among the parties hereto with regard
to this subject matter. The Company represents to the Holders that the rights
granted to the holders hereunder do not in any way conflict with and are not
inconsistent with the rights granted or obligations accepted under any other
agreement (including the Limited Liability Company Agreement) to which the
Company is a party. Neither the Company nor any Affiliate of the Company will
hereafter enter into any agreement with respect to its equity or debt securities
which is inconsistent with the rights granted to the Holders of Registrable
Securities under this Agreement without obtaining the prior written consent of
the Holders of a majority of the Registrable Securities whose rights would be
thereby affected.
Section 4.5. [Intentionally Omitted]
Section 4.6. Headings. The section and paragraph headings contained in
this Agreement are for reference purposes only and shall not affect in any way
the meaning or interpretation of this Agreement.
Section 4.7. Governing Law; Specific Performance. This Agreement and the
parties' respective obligations hereunder shall be governed by and construed in
accordance with the laws of New York (without regard to the conflicts of laws
principles thereunder). Each party expressly acknowledges each of the other
parties' right, in the event of such party's breach of its obligations
hereunder, to require the specific performance of such party's obligations
hereunder, and hereby waives any defenses or objections to any claim or action
seeking specific
14
15
performance by such party of its obligations hereunder based on the ground that
there exists an adequate remedy at law.
Section 4.8. Disputes Generally. In the event of a dispute between any of
the parties in connection with this Agreement, such dispute shall be subject to
the dispute resolution procedures set forth in Section 7.10 of the Securities
Purchase Agreement.
Section 4.9. Counterparts. This Agreement may be executed in two
counterparts, each of which shall be deemed an original, but both of which
together shall constitute one and the same instrument.
15
16
IN WITNESS WHEREOF, the parties hereto have caused this instrument to be duly
executed as of the date first above written.
The Company:
TELIGENT, L.L.C.
By: /s/ Xxxx X. Xxxxx
----------------------------------
Name: Xxxx X. Xxxxx
Title: Chairman and CEO
Holder:
NTTA&T INVESTMENT, INC.
By: /s/ Xxxxxxx Xxxxxxxx
----------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: President and CEO
16
