REGISTRATION RIGHTS AGREEMENT
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REGISTRATION RIGHTS AGREEMENT dated as of March 6, 1998, by
and between Teligent, Inc., a Delaware corporation (the "Company"),
and Microwave Services, Inc., a Delaware corporation ("MSI").
MSI owns of record 17,206,210 shares of the Company's
Common Stock, par value $.01 per share, designated as Class B-Series 1
(such 17,206,210 shares being referred to as the "Series B-1 Shares"),
which Series B-1 Shares are convertible on a share-for-share basis
into shares of the Company's Common Stock, par value $.01 per share,
designated as Class A (the "Class A Common Stock").
MSI has requested that the Company grant to MSI, and the
Company has agreed to grant to MSI, the registration rights provided
for herein.
In consideration of the foregoing, and the agreements set
forth herein, and for other good and valuable consideration the
receipt and sufficiency of which are hereby acknowledged, the parties
hereto agree as follows:
1. Registration Rights. The Company agrees that MSI will have the
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registration rights set forth in this Section 1 with respect to shares
of Class A Common Stock into which the Series B-1 Shares have been
converted or are convertible ("Registrable Securities").
(a) "Piggyback" Registration Rights. (i) If the
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Company at any time proposes to register under the Securities Act of
1933, as amended (the "Securities Act") (other than a registration on
Form S-4 or S-8 or any successor or similar forms thereto and other
than a registration pursuant to paragraph 1(b) below), whether or not
for sale for its own account (including, without limitation, pursuant
to the exercise by any other person or entity of any registration
rights granted by the Company), on a form and in a manner that would
permit registration of Registrable Securities for sale to the public
under the Securities Act, it will give written notice to MSI 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
equity 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 such equity securities are reasonably expected to be sold to the
public). Upon the written request of MSI delivered to the Company
within 15 calendar days after the receipt of any such notice (which
request shall specify the Registrable Securities intended to be
disposed of by MSI and the intended method of disposition thereof),
the Company will use reasonable best efforts to effect the registra-
tion under the Securities Act of the Registrable Securities that the
Company has been so requested to register, subject to the further
provisions of this agreement;
(ii) If a registration pursuant to this Section 1
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 1(a) pro rata, based on
the respective numbers of Registrable Securities as to which registra-
tion has been so requested by each holder of Registrable Securities.
(iii) In connection with any underwritten offering
with respect to which holders of Registrable Securities shall have
requested registration pursuant to this Section 1, the Company shall
have the right to select the managing underwriter with respect to the
offering.
(b) Demand Registration Rights. (i) In addition to the
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registration rights afforded by Section 1(a) above, at any time
commencing six months after November 26, 1997 (the "Demand Date"), MSI
shall be entitled to demand in writing that the Company effect a
registration under the Securities Act and under such state securities
laws as MSI may reasonably request (provided that the Company shall
not be required to consent to general service of process in any
jurisdiction where it is not then so subject) in respect of all or
part of the Registrable Securities held by MSI, provided that (A) such
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demand registration right shall apply only if the amount of
Registrable Securities to be registered (1) constitutes at least 20%
of the amount of Registrable Securities owned by MSI or (2) has an
anticipated aggregate offering price (before underwriters' fees, com-
missions and discounts) of at least $20,000,000, (B) the Company shall
not be obligated to use its reasonable best efforts to cause to become
effective a registration statement pursuant to this Section 1(b) until
a period shall have elapsed from the effective date of the most recent
previous registration statement under the Securities Act with respect
to a public offering of equity securities of the Company (a "Prior
Public Offering") equal to the greater of (1) 120 days and (2) the
shortest period of any lockup of shareholders of the Company required
by the lead managing underwriter of such Prior Public Offering (the
"Holdback Period") and (C) if, while a registration request is pending
pursuant to this Section 1(b), 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 1(b) until such material information is dis-
closed to the public or ceases to be material; provided, further, however,
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that the foregoing delay shall in no event exceed 120 days.
Notwithstanding the foregoing provisions of Section 1(b), the Company
shall not be obligated to effect more than three registrations
pursuant to this Section 1(b)(i).
(ii) At any time after the Demand Date, MSI shall be
entitled to demand in writing that the Company effect a registration
under the Securities Act of all or part of its 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
MSI and the intended method of distribution thereof (such notice is
hereinafter referred to as an "S-3 Holder Request"); provided, that
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the Company shall be obligated to effect a registration of Registrable
Securities pursuant to this Section 1(b)(ii) 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
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obligated to file and use its reasonable best efforts to cause to
become effective a registration statement pursuant to this Section
1(b) until a period equal to the Holdback Period shall have elapsed
from the effective date of the Prior Public Offering. 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 Securities Exchange Act of 1934, the
Company will use its reasonable best efforts to make Short-Form
Registrations on Form S-3 available for the sale of Registrable
Securities.
(iii) If, in connection with any underwritten offering
pursuant to this Section 1(b), the managing underwriter thereof
advises the Company in writing that in its opinion the number of
securities (including, for purposes of this Section 1(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 all
holders seeking to participate in such offering, and securities shall
be excluded from such offering in the following order until such
limitation has been met: (A) securities requested to be included in
such offering by holders other than MSI, if any, shall be excluded
until all such other securities shall be so excluded, (B) securities
that the Company has elected to include in such offering, if any,
shall be excluded until all such securities have been excluded, and,
(C) thereafter, any Registrable Securities requested to be included in
such offering shall be excluded pro rata, based on the respective
number of Registrable Securities as to which registration has been so
requested by each holder thereof.
(iv) If a requested registration pursuant to this
Section 1(b) involves an underwritten offering, the holders of 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 for
such offering.
(c) [Intentionally Omitted]
(d) Registration Procedures.
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(i) 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 Section
1(a) or 1(b), the Company will, as expeditiously as possible:
(A) Prepare and promptly file with the Securities
and Exchange Commission (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;
(B) 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 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.
(C) 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.
(D) 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 thereof 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 1(d)(i)(D)), 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.
(E) 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.
(F) Immediately notify each holder of Registrable
Securities covered by such registration statement, at any time when a
prospectus thereto is required to be delivered under the Securities
Act within the appropriate period mentioned in Section 1(d)(i)(B), if
the Company becomes aware that the prospectus included in such
registration statement, as ten 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 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.
(G) 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.
(H) Use its reasonable best efforts in connection
with the underwriters of list such Registrable Securities on each
securities exchange as they may reasonably designate.
(I) 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.
(J) Execute and deliver all instruments and
documents (including in an underwritten offering an underwriting
agreement in customary form) and taken such other actions and obtain
such certificates and opinions as are customary in an underwritten
public offering.
(ii) 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 1(d)(i)(F), 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 1(d)(i)(F).
(iii) If a registration pursuant hereto involves an
underwritten offering, the Company agrees, if so required by the
managing underwriter of such offering, 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 effec-
tive 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.
(iv) If a registration pursuant hereto 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 request by the managing
underwriter in such offering, 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 Securi-
ties sold n such offering), of any of the Company's excluding those
Registrable Securities sold in such offering), of any of the Company's
equity securities owned by such holder or securities, without the
consent of such 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 such managing
underwriter shall reasonably determine is required to effect a
successful offering; provided such agreement is substantially
identical in form and substance to other "lock-up" agreements of the
Company's other stockholders who execute such agreements in connection
with such offering.
(e) Indemnification.
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(i) In the event of any registration of any securities
of the Company under the Securities Act pursuant hereto, the Company
will, and it hereby agreed 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:
(A) 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 o ut 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;
(B) 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
(C) 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 (A) or (B)
above;
provided, however, that this indemnity does not apply to any
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loss, liability, claim, damage or expense to the extent arising out of
an untrue statement or alleged untrue statement or 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 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 under-
writer with the meaning of the 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.
(ii) The Company may require, as a condition to
including any Registrable Securities in any registration statement
filed in accordance herewith 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 1(e)(i) 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 such director, officer or con-
trolling 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 1(e) are to be several and not joint;
provided, however, that with respect to each claim pursuant to this
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Section 1(e)(ii), each such holder's liability under this Section
1(e)(ii) 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.
(iii) 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 1(e), 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
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the failure of any indemnified party to give notice as provided
herein shall not relieve the indemnifying party of its obligations
under this Section 1(e), 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 and for which an indemnifying party
may have indemnification liability hereunder with the consent of such
indemnifying party.
(iv) The Company and each seller of Registrable
Securities shall provid e 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.
(f) Contribution. In order to provide for just and
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equitable contribution in circumstances under which the indemnity
contemplated by Section 1(e) 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 Compa-
ny, 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 of omission and any other equitable
considerations appropriate under the circumstances. The Company and
each Seller of Registrable 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 1(e)(ii)
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 1(f), 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.
(g) Expenses. The Company shall bear all registration
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expenses (exclusive of underwriting fees, discounts and commissions)
in connection with the registrations effected by it pursuant to
Section 1(b) and such registration expenses incurred in connection
with up to three fully completed registrations of Registrable
Securities pursuant to Section 1(a).
(h) Transfer of Registration Rights. MSI may assign its
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rights under this Section 1 to any person or entity to whom or which
MSI sells, transfers or assigns not less than 20% of the Registrable
Securities; provided that such person or entity agrees in writing with
the Company to be bound by this Agreement to the same extent as MSI
was bound at the time of such sale, transfer or assignment.
(i) Cessation of Registrable Security Status. As to any
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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 under the Securities Act, (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 such securities 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.
2. Miscellaneous.
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(a) Effectiveness. This Agreement shall be effective
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immediately upon the execution and delivery hereof.
(b) Definition of "Person". As used herein, the term
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"Person" means any individual, corporation, association, partnership
(general or limited), joint venture, trust, joint-stock company,
estate, limited liability company, unincorporated organization or
other legal entity or organization.
(c) Successors and Assigns. Except as otherwise
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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.
(d) Amendment, Waiver. This Agreement may be amended
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only by a written instrument duly executed by the parties hereto. 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.
(e) Notices. Any notice, request, claim, demand,
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document or 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 by reputable overnight courier or other similar means of
communication, as follows:
i) If to the Company, addressed to the Company at
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, to the attention
of the Company's General Counsel (Facsimile No.
703-762-5227);
ii) If to MSI, addressed to it at ▇ ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, to the
attention of MSI's General Counsel;
or, in each case, to such other address or telex or
telecopy number as such party may designate in writing to
the other by written notice given in the manner specified
in this Section 2(e).
(f) Entire Agreement. This Agreement contains the
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entire agreement between the parties hereto with respect to the
subject matter hereof, and supersedes all prior oral and written
agreements and memoranda and undertakings between the parties hereto
with regard to such subject matter.
(g) Governing Law. This Agreement shall be governed
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by and construed in accordance with the laws of the State of New York,
without giving effect to its conflicts of laws principles.
(h) Counterparts. This Agreement may be executed in
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counterparts, each of which shall be deemed an original, but which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, this Agreement has been executed and
delivered by the parties as of the day and year first written above.
TELIGENT, INC.
By:/s/ ▇▇▇▇ ▇. ▇▇▇▇▇
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Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman and Chief
Executive Officer
MICROWAVE SERVICES, INC.
By:/s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
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Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Executive Vice President
