REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (this "Agreement") is made and
entered into as of [ ] ___, 199_ by and among Teligent, L.L.C., a Delaware
limited liability company (the "Company") and ___________________ (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 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 "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 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 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 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 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, 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.
(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 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
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
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 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 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
00 Xxxxx Xxxxxx Xxxxx, Xxxxx 000X, Xxxxxxxxx, Xxxxxxxx 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) Telcon 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 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.
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:
---------------------------
Name:
Title:
Holder:
NTTA&T INVESTMENT, INC.
By:
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Name:
Title:
