<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
SCHEDULE 13D
(RULE 13d-101)
INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO 13d-1(a)
AND AMENDMENTS THERETO FILED PURSUANT TO 13d-2(a)
Teligent, Inc.
(Name of Issuer)
Class A Common Stock
par value $.01
(Title of Class of Securities)
87959Y 10 3
(CUSIP Number)
Randal D. Murdock, Esq.
Graham & James LLP
885 Third Avenue, 24th Floor
New York, New York 10022
(212) 848-1039
(Name, Address and Telephone Number of Person
Authorized to Receive Notices and Communications)
November 26, 1997
(Date of Event Which Requires Filing of This Statement)
If the filing person has previously filed a statement on Schedule 13G
to report the acquisition which is the subject of this Schedule 13D, and is
filing this schedule because of Rule 13d-1(b)(3) or (4), check the following box
[ ].
Note. Six copies of this statement, including
all exhibits, should be filed with the
Commission. See Rule 13d-1(a) for other parties to whom copies are to be sent.
(Continued on following pages)
(Page 1 of _ Pages)
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CUSIP No.87959Y 10 3 13D Page _____ of _____ Pages
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
NTTA&T Investment, Inc. IRS Identification No. 13-3970788
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO (See Item 3)
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH 5,783,400
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
5,783,400
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,783,400 Shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [X]
(See Item 5)
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
41.5%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 3
CUSIP No.87959Y 10 3 13D Page _____ of _____ Pages
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
NTT America, Inc. IRS Identification No. 13-3422202
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO (See Item 3)
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
New York
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH 5,783,400
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
5,783,400
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,783,400 Shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [X]
(See Item 5)
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
41.5%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
<PAGE> 4
CUSIP No.87959Y 10 3 13D Page _____ of _____ Pages
1 NAMES OF REPORTING PERSONS
I.R.S. IDENTIFICATION NOS. OF ABOVE PERSONS (ENTITIES ONLY)
Nippon Telegraph and Telephone Corporation
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a) [X]
(b) [ ]
3 SEC USE ONLY
4 SOURCE OF FUNDS
OO (See Item 3)
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT
TO ITEM 2(d) OR 2(e) [ ]
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Japan
NUMBER OF 7 SOLE VOTING POWER
SHARES 0
BENEFICIALLY
OWNED BY 8 SHARED VOTING POWER
EACH 5,783,400
REPORTING
PERSON WITH 9 SOLE DISPOSITIVE POWER
0
10 SHARED DISPOSITIVE POWER
5,783,400
11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
5,783,400 Shares
12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES
CERTAIN SHARES* [X]
(See Item 5)
13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11)
41.5%
14 TYPE OF REPORTING PERSON*
CO
*SEE INSTRUCTIONS BEFORE FILLING OUT!
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ITEM 1. SECURITY AND ISSUER.
The title of the class of equity securities to which this
Statement relates is the Class A Common Stock, par value $.01 per share (the
"Class A Common Stock") of Teligent, Inc., a Delaware Corporation (the
"Company"). Under the Company's Certificate of Incorporation (the "Certificate
of Incorporation"), shares of the Company's Class B Common Stock, par value $.01
per share (the "Class B Common Stock"; together with the Class A Common Stock,
the "Common Stock"), including the Class B Common Stock designated Series 3,
(the "Series B-3 Common Stock") beneficially owned by Nippon Telegraph and
Telephone Corporation ("NTT"), its wholly-owned subsidiary NTT America, Inc.
("NTTA"), and NTTA's wholly-owned subsidiary NTTA&T Investment, Inc. ("NTTA&T";
together with NTT and NTTA, the "Reporting Persons") are convertible at the
option of the holder at any time on a share-for-share basis into Class A Common
Stock and convert automatically upon a transfer to any person other than a
Permitted Transferee (as defined in the Certificate of Incorporation). The
principal executive offices of the Company are located at 8065 Leesburg Pike,
Vienna, VA 22182.
ITEM 2. IDENTITY AND BACKGROUND.
(a) - (c) and (f)
NTT, a corporation organized under the laws of Japan, has its
principal executive office at 19-2 Nishi-Shinjuku 3-chome, Shinjuku-ku, Tokyo
163-19, Japan. NTT's principal business is providing local, long-distance,
and other telecommunications services. NTTA is a New York corporation, the
principal executive office of which is located at 101 Park Avenue, 41st Floor,
New York, NY 10178. The principal business of NTTA is conducting
telecommunications research activities and serving as a liaison organization for
NTT. NTTA&T, a Delaware corporation, is a holding company involved in investing
in telecommunications enterprises. NTTA&T's principal executive office is also
located at 101 Park Avenue, 41st Floor, New York, NY 10178. The name, principal
occupation, business address, and citizenship of each of the directors and
executive officers of the Reporting Persons is set forth on Schedule A hereto.
(d) and (e)
The Reporting Persons, and, to the best knowledge of the
Reporting Persons, each of their respective directors and executive officers,
have neither, during the last five years, been (a) convicted in a criminal
proceeding (excluding traffic violations or similar misdemeanors) or (b) a party
to a civil proceeding of a judicial or administrative body of competent
jurisdiction and as a result of such proceeding was or is subject to a judgment,
decree, or final order enjoining future violations of, or prohibiting or
mandating activities subject to, federal or state securities laws or finding any
violation with respect to such laws.
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ITEM 3. SOURCE AND AMOUNT OF FUNDS OR OTHER CONSIDERATION.
NTTA&T acquired 5,783,400 shares of Series B-3 Common Stock
pursuant to the merger on November 26, 1997 of Teligent, L.L.C., a Delaware
limited liability company and, prior to such merger the owner of all of the
outstanding capital stock of the Company ("Teligent, L.L.C."), with and into the
Company (the "Reorganization Merger"), upon the terms of the Agreement and Plan
of Merger, dated as of October 6, 1997, by and between the Company and Teligent,
L.L.C.
As a result of the Reorganization Merger, all of Teligent,
L.L.C.'s member interests were converted into and became shares of Common Stock
of the Company, as follows: (i) the interest of Microwave Services, Inc., a
Delaware corporation ("MSI") and wholly-owned subsidiary of The Associated
Group, Inc. ("Associated"), was converted into 21,436,689 shares of Class B
Common Stock designated Series 1 ("Series B-1 Common Stock"); (ii) the interest
of Telcom-DTS Investors, L.L.C. a Delaware limited liability company (the
"Telcom Stockholder"), was converted into 17,206,210 shares of Class B Common
Stock designated Series 2 ("Series B-2 Common Stock"); (iii) the interest of
NTTA&T was converted into 5,783,400 shares of Series B-3 Common Stock, including
3,470,040 shares acquired by purchase from the Company immediately after the
Reorganization Merger; and (iv) the interest of Lynn Forester ("Forester") was
converted into 1,831,410 shares of Class A Common Stock.
ITEM 4. PURPOSE OF TRANSACTION.
Reference is made to the discussion in Item 3 hereof, which is
incorporated herein by reference, for a description of the Reorganization
Merger. The Reorganization Merger was effected in connection with and
immediately prior to the consummation on November 26, 1997 of the Company's
initial public offering of its Class A Common Stock (the "IPO").
The Reporting Persons have no current plans to dispose of
shares of Common Stock. However, subject to their obligations under the
agreements described under Item 6 below, they may in the future dispose of
shares of Common Stock in the market, in privately negotiated transactions or
otherwise.
Under the Certificate of Incorporation, NTTA&T, as the record
holder of all outstanding shares of Series B-3 Common Stock, is currently
entitled to elect one member of the Company's Board of Directors (the "Series
B-3 Director"); provided, however, that if at any time (A) the number of issued
and outstanding shares of Series B-3 Common Stock (exclusive of any shares held
in the Company's treasury or by subsidiaries of the company) is less than (i) 3%
of the aggregate number of issued and outstanding shares of Common Stock
(exclusive of shares held in the Company's treasury or by subsidiaries of the
Company and shares issued pursuant to the exercise of any warrants, options or
other rights to purchase
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shares issued in connection with any debt issued by the Company substantially
concurrently with the consummation of the IPO or (ii) 50% of the aggregate
number of shares of Series B-3 Common Stock issued and outstanding (exclusive of
any shares held in the Company's treasury or by subsidiaries of the Company and
shares issued pursuant to the exercise of any warrants, options or other rights
to purchase shares issued in connection with any issued by the Company
substantially concurrently with the consummation of the IPO) immediately
following the Reorganization Merger or (B) NTT or any person or entity
controlled by it chooses at any time to engage in, or make a material investment
in any person or entity whose principal business is, the provision in the United
States of any terrestrial fixed wireless local telecommunications services
offered by the Company in the same market segments (i.e., business or
residential) then, without any further action of any party or the Company, all
of such issued and outstanding shares of Series B-3 Common Stock will
automatically and irrevocably be converted into an equal number of shares of
Class A Common Stock and NTTA&T will no longer be entitled to elect a Series B-3
Director. In the event of any stock split, reverse stock split, stock dividend
or similar transaction with respect to the Series B-3 Common Stock, the number
referred to in clause (ii) of this paragraph is required to be appropriately
adjusted.
Other than as described above, NTTA&T has no plans or
proposals which relate to, or may result in, any of the matters listed in Items
4(a)-(j) of Schedule 13D (although NTTA&T reserves the right to develop such
plans).
ITEM 5. INTEREST IN SECURITIES OF THE ISSUER.
(a) As of the close of business on December 8, 1997, by virtue
of their beneficial ownership of 5,783,400 shares of Series B-3 Common Stock,
the Reporting Persons beneficially owned 5,783,400 shares of Class A Common
Stock. Based on information set forth in the Company's Registration Statement on
Form S-1 with respect to the IPO which was declared effective on November 21,
1997 (the "Registration Statement"), such 5,783,400 shares of Series B-3 Common
Stock (assuming the conversion of all such 5,783,400 shares of Series B-3 Common
Stock into Class A Common Stock) represented approximately 41.5% of the total
number of shares of Class A Common Stock outstanding on November 26, 1997
immediately after consummation of the IPO (plus the 5,783,400 shares of Class A
Common Stock which would be outstanding and beneficially owned by the Reporting
Persons upon such conversion and assuming that no other shares of Class B Common
Stock have been converted to Class A Common Stock).
Pursuant to Rule 13(d)(5)(b)(1) of the General Rules and
Regulations of the Securities Exchange Act of 1934 (the "Exchange Act"), the
Reporting Persons may, by virtue of certain provisions of certain of the
agreements described under Item 6, be deemed to comprise a "group" with some of
all of the parties to such agreements. Based on information set forth in the
Registration
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Statement, on November 26, 1997, immediately after consummation of the IPO, the
group which, by virtue of certain provisions of the Stockholders Agreement (as
defined under Item 6 below), may be deemed to be comprised of the Reporting
Persons, the Telcom Stockholder, Associated, and MSI, is deemed, pursuant to
Rule 13(d)(5)(b)(1) under the Exchange Act, to beneficially own an aggregate of
44,426,299 shares of Class B Common Stock (and thus of the same number of shares
of Class A Common Stock into which such shares of Class B Common Stock are
convertible), representing approximately 84.5% of the total number of shares of
Class A Common Stock outstanding as of such time (plus the 44,426,299 shares of
Class A Common Stock which would be outstanding and deemed to be beneficially
owned by such group upon such conversion). Neither the filing of this Statement
nor any of its contents shall be deemed to constitute an admission that any of
the Reporting Persons is, for purposes of Section 13(d) of the Exchange Act or
any other purpose, the beneficial owner of shares of Common Stock beneficially
owned or deemed to be beneficially owned by any person or entity who or which
may be deemed to constitute a group with the Reporting Persons or by any such
group, and each of the Reporting Persons expressly disclaims such beneficial
ownership.
(b) The Reporting Persons share the power to vote or direct
the vote and to dispose and direct the disposition of the 5,783,400 shares of
Series B-3 Common Stock (and thus of the same number of shares of Class A Common
Stock into which such shares of Series B-3 Common Stock are convertible)
beneficially owned by them. However, by virtue of its ownership of all of the
outstanding capital stock of NTTA&T through its wholly-owned subsidiary NTTA,
NTT has the power to cause NTTA&T to vote, and to dispose or direct the
disposition of, such shares of Series B-3 Common Stock (and thus of the shares
of Class A Common Stock into which such shares of Series B-3 Common Stock are
convertible) at the times and in the manner determined by NTT.
(c) Except as described above under Item 3 and in this Item 5,
none of the Reporting Persons, nor, to the best knowledge of each Reporting
Person, any of its directors or executive officers, has effected any transaction
in shares of Common Stock during the past 60 days.
(d) None.
(e) Not applicable.
ITEM 6. CONTRACTS, ARRANGEMENTS, UNDERSTANDINGS OR RELATIONSHIPS WITH RESPECT
TO SECURITIES OF THE ISSUER.
REGISTRATION RIGHTS AGREEMENT
Teligent, L.L.C. and NTTA&T have entered into a Registration
Rights Agreement dated as of November 13, 1997 (the "Registration Rights
Agreement"). The Registration Rights Agreement provides that NTTA&T may demand
registration (each, a
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"Demand Registration") of the shares of Common Stock received by NTTA&T pursuant
to the Reorganization Merger ("NTT Registrable Securities") at any time after
the six month anniversary of the IPO (subject to a maximum of three Demand
Registrations in total), provided such demand is (i) made by holders of at least
20% of the outstanding NTT Registrable Securities or (ii) with respect to NTT
Registrable Securities the aggregate offering price of which, net of
underwriting discounts and commissions, is not less than $20 million. Upon such
request, the Company is required to use its reasonable best efforts to register
under the Securities Act of 1933, as amended (the "Securities Act"), subject to
certain holdback periods, NTT Registrable Securities held by the requesting
holders and any other holders who desire to sell Common Stock pursuant to such
Demand Registration. In addition, the Registration Rights Agreement provides
that, subject to certain limitations, holders of NTT Registrable Securities may
participate in any registration of Common Stock by the Company under the
Securities Act (other than on Form S-4 or S-8 under the Securities Act) (each, a
"Piggyback Registration"). Holders of NTT Registrable Securities also have the
right, subject to certain holdback periods and other limitations, after the six
month anniversary of the consummation of the IPO to demand that the Company
effect a registration on Form S-3 under the Securities Act, if available, (a
"Form S-3 Registration") of all or part of their NTT Registrable Securities, so
long as the anticipated aggregate offering price for such NTT Registrable
Securities is in excess of $10 million.
Under the Registration Rights Agreement, the Company is
required to pay all registration expenses (other than underwriting discounts and
commissions and fees and disbursements of counsel of the selling stockholders)
with respect to all required Demand Registrations and Form S-3 Registrations and
up to three Piggyback Registrations. Under the Registration Rights Agreement,
the Company is required to indemnify the selling stockholders, and the Company
may request as a condition to effecting any registration indemnification from
the selling stockholders, against certain liabilities in respect of any
registration statement covered by the agreement.
NTTA&T is permitted under the Registration Rights Agreement to
assign its rights thereunder to any person to which it transfers no less than
20% of the NTT Registrable Securities. The Registration Rights Agreement
terminates with respect to particular NTT 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 have been disposed
of under such registration statement, (ii) such securities have been transferred
pursuant to Rule 144, (iii) such securities 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 does not require registration or qualification
under the
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Securities Act or any similar state law then in force, or (iv) such securities
have ceased to be outstanding.
The Registration Rights Agreement is included as Exhibit A to
this Statement, and the foregoing description of the Registration Rights
Agreement is qualified in its entirety by reference to such Exhibit, which is
hereby incorporated herein by reference.
STOCKHOLDERS' AGREEMENT
Immediately prior to consummation of the IPO, MSI, the Telcom
Stockholder, NTTA&T (collectively, the "Stockholder Parties") and the Company
entered into a Stockholders' Agreement (the "Stockholders' Agreement"). Pursuant
to the Stockholders' Agreement, NTTA&T and the Telcom Stockholder have certain
rights and obligation with respect to their ownership interest in, and the
governance of, the Company, including, so long as the Telcom Stockholder and
NTTA&T, respectively, have the right to elect a member of the Company's Board,
the right of such respective directors to approve, among other matters, any
amendment to the Certificate of Incorporation which materially and adversely
affects the rights of NTTA&T or the Telcom Stockholder, respectively, in a
discriminatory manner vis-a-vis one or more of the other Stockholder Parties.
The Stockholders' Agreement also provides that so long as the Telcom Stockholder
and NTTA&T, respectively, have the right to elect a member of the Company's
Board of Directors, the Company will afford to representatives of the Telcom
Stockholder and NTTA&T, respectively, certain business consultation rights,
including with respect to any action (each a "Consultation Event") which (i)
materially changes the fundamental character of the Company's business, (ii)
replaces the Company's Chief Executive Officer or Chief Operating Officer, (iii)
involves the sale or pledge by the Company of a substantial portion of its
assets or any acquisition, divestiture or merger of the Company with another
entity or any joint venture outside the ordinary course of the Company's
business or (iv) involves the issuance by the Company of shares of Common Stock
or preferred stock to any telecommunications carrier. With respect to any
Consultation Event, the Company will be required to provide reasonable advance
notice to NTTA&T and the Telcom Stockholder and, in the case of the Consultation
Event referred to in clause (iv) of the immediately preceding sentence, to give
due consideration to their objections. In the Stockholders' Agreement each of
the parties thereto has agreed to vote, or act by written consent with respect
to, all of their respective shares of Common Stock in favor of the election of
the Company's Chief Executive Officer as a member of the Company's board of
Directors.
The Stockholders' Agreement also provides, in effect,that
until November 13, 1999, each Stockholder Party will hold at least one-half of
the shares of Common Stock held by such Stockholder Party as of November 26,
1997 (after giving effect to the Reorganization Merger as described under Item 3
above), except that
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such requirement will lapse and be without further effect automatically as to
NTTA&T and the Telcom Stockholder, respectively, if a Consultation Event occurs
even though NTTA&T or the Telcom Stockholder, respectively, has objected
thereto. Under the Stockholders' Agreement, if such requirement so lapses with
respect to the Telcom Stockholder and, at the time of such lapsing, MSI is not
entitled, pursuant to the Certificate of Incorporation, to elect a majority of
the members of the Company's Board, then such requirement shall also lapse and
be without further effect with respect to MSI. In addition, in the Stockholders'
Agreement, MSI and the Telcom Stockholder have each granted to NTTA&T co-sale
rights with respect to any sale or transfer by either of them (other than to an
affiliate or pursuant to a pledge arrangement, and excluding any public sale or
distribution whether pursuant to a registration statement, Rule 144 or
otherwise) of shares of Common Stock (other than Common Stock acquired in public
market transactions).
Under the Stockholders' Agreement, if the Company is required
by a change in law or other circumstance to reduce the level of foreign
ownership of the Company and the Company is unable to obtain a waiver of such
requirement, the Company will have the right, and will be required, at NTTA&T's
election, to refuse to sell stock in the Company to any Foreign Owner (as
defined in the Stockholders' Agreement) if such a transaction would adversely
impact NTTA&T's ability to hold its then existing share ownership in the
Company, and, in addition, the Company will have the right, and will be
required, at the election of any Stockholder Party, to repurchase for cash (to
the extent permitted by applicable Delaware corporation law) shares first from
all other Foreign Owners other than the Stockholder Parties, if applicable, and
thereafter from each of the Stockholder Parties, on a pro rata basis (based on
the percentage of foreign ownership attributable to each Stockholder Party) at
the fair market value thereof based on the Company's then public trading value.
The Stockholders' Agreement is included as Exhibit B to this
Statement, and the foregoing description of the Stockholders Agreement is
qualified in its entirety by reference to such Exhibit, which is hereby
incorporated herein by reference.
LOCK-UP AGREEMENT
In connection with the IPO, NTT executed a letter agreement
(the "Lock-Up Agreement") whereby NTT agreed not to, without the prior written
consent of the representative of the underwriters of the IPO (the
"Underwriters"), register for sale, sell, or otherwise transfer (except in
private transactions with affiliates who agree to be bound by the Lock-Up
Agreement) any equity securities of the Company or Teligent, L.L.C. before the
earlier of (a) the date requested by the Underwriters and (b) 180 days after the
date of the IPO. For purposes of the Lock-Up Agreement, any sale of securities
convertible or exchangeable into equity securities of the Company or Teligent,
L.L.C. or any swap or
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other arrangement that transfers the economic consequences of ownership of
equity securities of the Company or Teligent L.L.C. constitutes a sale of such
equity securities. The Lock-Up Agreement is included as Exhibit C to this
Statement, and the foregoing description of the Lock-Up Agreement is qualified
in its entirety by reference to such Exhibit, which is hereby incorporated
herein by reference.
Except as described in this Statement, neither of the
Reporting Persons nor, to the best knowledge of each Reporting Person, any of
its directors or executive officers has any contracts, arrangements,
understandings or relationships with respect to any securities of the Company.
ITEM 7. MATERIAL TO BE FILED AS EXHIBITS.
Exhibit A - Registration Rights Agreement
Exhibit B - Stockholders' Agreement
Exhibit C - Lock-Up Agreement
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SIGNATURE
After reasonable inquiry and to the best of my knowledge and
belief, I certify that the information set forth in this statement is true,
complete and correct.
Dated: December 8, 1997
NIPPON TELEGRAPH AND TELEPHONE CORPORATION
By: /s/ Osamu Inoue
------------------------------------------------
Name: Osamu Inoue
Title: Vice President, Overseas
Carrier Business
Global Business Headquarters NTT
NTT AMERICA, INC.
By: /s/ Keisuke Nakasaki
------------------------------------------------
Name: Keisuke Nakasaki
Title: President and CEO
NTTA&T INVESTMENT, INC.
By: /s/ Keisuke Nakasaki
------------------------------------------------
Name: Keisuke Nakasaki
Title: President and CEO
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SCHEDULE A
Directors and Executive Officers of
Nippon Telegraph and Telephone Corporation
The name, present principal occupation or employment, and
business address of each of the directors and executive officers (or their
Japanese equivalents) of Nippon Telegraph and Telephone Corporation ("NTT") is
set forth below. Unless otherwise indicated below an individual's name, each
individual listed below has a business address of 19-2 Nishi-Shinjuku 3-chome,
Shinjuku-ku, Tokyo 163-19, Japan. Each individual listed below is a citizen of
Japan.
Name Principal Occupation
Shigeo Sawada Chairman and Representative Director of NTT
Jun-ichiro Miyazu President and Representative Director of NTT
Hidekazu Inoue Senior Executive Vice President and
Representative Director of NTT
Toshiharu Aoki Senior Executive Vice President and
Representative Director of NTT
Kazuo Asada Senior Executive Vice President and
3-15 Baba-cho Representative Director of NTT
Chuo-ku
Osaka-shi, 540-8511
Japan
Toshio Hayata Executive Vice President and Managing
Director of NTT
Shigeru Ikeda Executive Vice President and Managing
Director of NTT
Shuichi Kizuka Executive Vice President and Managing
Director of NTT
Masanobu Suzuki Executive Vice President and Managing
Director of NTT
Yuji Matsuo Executive Vice President and Managing
3-1 Sakura-machi Director of NTT
Kumamoto-shi
Kumamoto 360-8519
Japan
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Hiroshi Ishihara Executive Vice President and Managing
3-1 Otemachi Director of NTT
2-chome
Chiyoda-ku
Tokyo 100-0004
Japan
Toshiyuki Mineshima Executive Vice President and Managing
Director of NTT
Norio Wada Executive Vice President and Managing
Director of NTT
Hitoshi Tajima Executive Vice President and Managing
Director of NTT
Hiroshi Ishikawa Executive Vice President and Managing
Director of NTT
Shoichi Makino Senior Vice President and
Director of NTT
Hirofumi Shimada Senior Vice President and Director of NTT
1137-5, Nitta-cho
Nagano-shi
Nagano 380-8519
Japan
Masahiro Shibao Senior Vice President and Director of NTT
9-60, Osu 4-chome
Naka-ku
Nagoya-shi
Aichi 460-8319
Japan
Ryuji Nunotani Senior Vice President and Director of NTT
Tadayuki Arai Senior Vice President and Director of NTT
Kiyoshi Mita Senior Vice President and Director of NTT
Tatsuo Izawa Senior Vice President and Director of NTT
Yoshinori Uda Senior Vice President and Director of NTT
9-1, Konan 1-chome
Minato-ku
Tokyo 108-8019
Japan
Seiji Takashima Senior Vice President and Director of NTT
2-1, Gohashi
3-chome
Wakabayashi-ku
Sendai-miyagi 984-8519
Japan
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Satoshi Miura Senior Vice President and Director of NTT
Michio Takeuchi Senior Vice President and Director of NTT
Michitomo Ueno Senior Vice President and Director of NTT
Toshiaki Fukui Senior Vice President and Director of NTT
6-77, Motoi-machi
Naka-ku
Hiroshima-shi
Hiroshima 730-0011
Japan
Katsuya Okimi Senior Vice President and Director of NTT
Kunihiro Kato Senior Vice President and Director of NTT
Shinichi Aizawa Senior Vice President and Director of NTT
Masaaki Kasahara Senior Vice President and Director of NTT
Kanji Koide Senior Vice President and Director of NTT
Yoshiyuki Sukemune Senior Vice President and Director of NTT
Ryuzo Sejima Counselor to the President of NTT
Masashi Kojima Chief Executive Counselor of NTT
16
<PAGE> 17
Directors and Executive Officers of NTT America, Inc.
The name and present principal occupation or employment of each of the
directors and executive officers of NTT America, Inc. ("NTTA") is set forth
below. Unless otherwise indicated, each individual listed below has a business
address of 101 Park Avenue, 41st Floor, New York, NY 10178 and is a citizen of
Japan.
Directors Principal Occupation
Keisuke Nakasaki President and CEO of NTTA
Akihiko Okada Vice President and Secretary of NTTA
Kazuo Imai Vice President of NTTA
Mitsuo Murakami Vice President of NTTA
Tatsuo Kawasaki Vice President, Global Communications
19-2 Nishi-Shinjuku Business Project of NTT
3-chome
Shinjuku-ku
Tokyo 163-19
Japan
Executive Officers (who are not Directors)
Fred Schweizer Vice President and General Manager of
U.S. citizen Business Communications Group
Directors and Executive Officers of NTTA&T Investment, Inc.
The name and present principal occupation or employment of each of the
directors and executive officers of NTTA&T Investment, Inc. is set forth below.
Each individual listed below has a business address of 101 Park Avenue, 41st
Floor, New York, NY 10178 and is a citizen of Japan.
Directors/Officers Principal Occupation
Keisuke Nakasaki See above
Director, President, and CEO
Mitsuo Murakami See above
Director and Secretary
Hajime Kii Director, Corporate Affairs
Director and Treasurer of NTTA
17
<PAGE> 18
EXHIBIT INDEX
Exhibit A - Registration Rights Agreement
Exhibit B - Stockholders' Agreement
Exhibit C - Lock-Up Agreement
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
<PAGE> 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
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<PAGE> 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,
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<PAGE> 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.
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<PAGE> 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
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<PAGE> 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
<PAGE> 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
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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
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<PAGE> 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
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<PAGE> 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 8065 Leesburg
Pike, Vienna, VA 22182, Attn.: Laurence E Harris; with a copy to (i) The
Associated Group, Inc., 3 Bala Plaza East, Suite 502, Bala Cynwyd, PA 19004,
Attn.: Scott G. Bruce; (ii) Telcom Ventures, LLC, 211 North Union Street, Suite
300, Alexandria, VA 22314, Attn.: Hal B. Perkins; and (iii) Kent A. Coit, Esq.,
Skadden Arps, Slate, Meagher & Flom, One Beacon Street, Boston, MA 02108; 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
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<PAGE> 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.
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<PAGE> 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/ Alex J. Mandl
----------------------------------
Name: Alex J. Mandl
Title: Chairman and CEO
Holder:
NTTA&T INVESTMENT, INC.
By: /s/ Keisuke Nakasaki
----------------------------------
Name: Keisuke Nakasaki
Title: President and CEO
16
<PAGE> 1
Exhibit B
STOCKHOLDERS' AGREEMENT
STOCKHOLDERS' AGREEMENT, dated as of November 26, 1997 (this
"Agreement"), by and among Teligent, Inc., a Delaware corporation (the
"Company"), Microwave Services, Inc., a Delaware corporation ("MSI"), Telcom-DTS
Investors, L.L.C., a Delaware limited liability company ("Telcom"), and NTTA&T
Investment Inc. ("New Member" and, together with MSI and Telcom, the
"Stockholders"), an indirect wholly owned subsidiary of Nippon Telegraph and
Telephone Corporation, a Japanese corporation ("NTT").
WHEREAS, the Stockholders are parties to the Amended and
Restated Limited Liability Company Agreement, dated as of November 13, 1997 (the
"LLC Agreement"), of Teligent, L.L.C., a Delaware limited liability company (the
"LLC"), entered into pursuant to the Securities Purchase Agreement dated as of
September 30, 1997 by and among the LLC, MSI, Digital Services Corporation, a
Virginia corporation and an affiliate of Telcom, and NTT (the "Purchase
Agreement");
WHEREAS, upon the terms and subject to the conditions of the
Agreement and Plan of Merger, dated as of October 6, 1997 (the "Merger
Agreement"), by and between the Company and the LLC, immediately prior to the
Company's initial public offering of Class A Common Stock (the "IPO") the LLC
will be merged (the "Merger") with and into the Company;
WHEREAS, the Merger Agreement provides that as a result of the
Merger the Stockholders will receive shares of Common Stock of the Company, as
the entity surviving the Merger; and
WHEREAS, the LLC Agreement contemplates, and the parties
hereto have agreed, that following a Conversion Transaction (as defined in the
LLC Agreement), in connection with an IPO, certain rights, privileges and
obligations set forth in the LLC Agreement with respect to the ownership and
governance of the LLC will, to the extent and upon the terms and subject to the
conditions set forth herein, continue to apply with respect to the ownership and
governance of the Company.
<PAGE> 2
NOW, THEREFORE, in consideration of the premises, and for
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties to this Agreement covenant and agree as
follows:
Section 1. Effectiveness of Agreement. Defined Terms. This
Agreement shall not become effective unless and until the Merger is consummated.
If the Merger Agreement is terminated in accordance with its terms, this
Agreement shall automatically terminate. Capitalized terms used but not defined
herein shall have the respective meanings assigned to such terms in the form of
Certificate of Incorporation of the Company attached as Exhibit I to the Merger
Agreement, which will be effective upon the effectiveness of the Merger (the
"Certificate of Incorporation").
Section 2. Information Made Available. The Company covenants
and agrees with each of MSI, Telcom and New Member that, with respect to MSI, so
long as any shares of Class B-Series 1 Common Stock are outstanding, with
respect to Telcom, so long as any shares of Class B-Series 2 Common Stock are
outstanding, and with respect to New Member, so long as any shares of Class
B-Series 3 Common Stock are outstanding, the Company will use all reasonable
efforts to provide regular information to (and updates thereof), consult with,
and obtain the advice of, representatives of MSI designated by MSI's designees
(the "MSI Directors") to the board of directors of the Company (the "Board of
Directors"), representatives of Telcom designated by Telcom's designee (the
"Telcom Director") to the Board of Directors, and representatives of New Member
designated by New Member's designee (the "New Member Director") to the Board of
Directors, respectively, in connection with ordinary decisions of the Board of
Directors or any committee thereof. This Section 2 shall terminate as to New
Member, and New Member shall have no further rights under such Section, upon New
Member's delivery of, or failure to deliver, the notice required by Section 15.
Section 3. Consultation. The Company covenants and agrees with
New Member and Telcom that, with respect to New Member, so long as any shares of
Class B-Series 3 Common Stock are outstanding, and with respect to Telcom, so
long as any shares of Class B-Series 2
2
<PAGE> 3
Common Stock are outstanding, Consultation (as defined below) with New Member or
a representative (the "New Member Representative") designated from time to time
by New Member for such purpose (who need not be the representative described in
Section 12 hereof), and/or with Telcom or a representative (the "Telcom
Representative") designated from time to time by Telcom for such purpose (who
need not be the representative described in Section 12 hereof), respectively,
will be required for any action (each, a "Consultation Event") which (A)
materially changes the fundamental character of the Company's business; (B)
replaces the Company's Chief Executive Officer or Chief Operating Officer; (C)
involves the sale or pledge by the Company of a substantial portion of its
assets or any acquisition, divestiture or merger of the Company with another
entity or any joint venture outside the ordinary course of the Company's
business; or (D) involves the issuance by the Company of shares of Common Stock
or Preferred Stock to any telecommunications carrier (a "Strategic Partner").
"Consultation" shall mean and include reasonable advance notice and advance
disclosure of all material facts regarding the Consultation Event by the Company
to the New Member Representative and/or the Telcom Representative, respectively,
and, in the case of the issuance by the Company of shares of Common Stock or
Preferred Stock to a Strategic Partner, due consideration of any objections of
New Member and/or the Telcom Representative, respectively. New Member and Telcom
shall notify the Company as to who the New Member Representative and the Telcom
Representative, respectively, shall be, and shall provide the Company with the
address, business telephone and facsimile number for such respective persons.
Such persons shall be the New Member Representative and the Telcom
Representative, respectively, until such time as the Company receives written
notice from New Member or Telcom, respectively, stating the name, address,
business telephone and facsimile number of the new New Member Representative or
the new Telcom Representative, respectively. This Section 3 shall terminate as
to New Member, and New Member shall have no further rights under such Section,
upon New Member's delivery of, or failure to deliver, the notice required by
Section 15.
Section 4. Confidential Treatment of Proprietary Information.
Except as provided in Section 14 hereof, in the event any Covered Person (as
hereinafter
3
<PAGE> 4
defined) (the "Receiving Party") obtains from any other Covered Person or the
Company (the "Disclosing Party") information relating to the Company in whatever
form which is confidential or proprietary ("Proprietary Information"), the
Receiving Party (i) shall treat all such Proprietary Information as
confidential; (ii) shall use such Proprietary Information only for the purposes
contemplated in this Agreement; (iii) shall protect such Proprietary
Information, whether in storage or in use, with the same degree of care as the
Receiving Party uses to protect its own proprietary information against public
disclosure, but in no case with less than reasonable care; and (iv) shall not
disclose such Proprietary Information to any third party except to such
employees and agents of the Receiving Party who need to know such Proprietary
Information for the purpose of effectuating this Agreement and who have been
informed of the confidential nature of such Proprietary Information. "Covered
Person" shall mean any Stockholder, or any person (other than the Company) that
directly or indirectly, through one or more intermediaries, controls, is
controlled by, or is under common control with, the Company or any Stockholder;
any officers, directors, shareholders, controlling persons, partners, employees,
representatives or agents of any Stockholder or its Affiliates (other than the
Company); any director, officer, employee or agent of the Company or its
Affiliates; or any person who was, at the time of the act or omission in
question, such a person. As used in this Agreement, "Affiliate" means, with
respect to any specified person, a person that directly or indirectly, through
one or more intermediaries, controls, is controlled by, or is under common
control with, the person specified.
Section 5. Exceptions. The provisions of Section 4 of this
Agreement shall not apply to any Proprietary Information which: (i) was in the
public domain on the date hereof or comes into the public domain other than
through the fault or negligence of the Receiving Party; (ii) was lawfully
obtained by the Receiving Party from a third party without breach of this
Agreement and otherwise not in violation of the Disclosing Party's rights; (iii)
was known to the Receiving Party at the time of disclosure of such Proprietary
Information to the Receiving Party by the Disclosing Party and the Receiving
Party was not, at such time, subject to any confidentiality obligation with
respect thereto; (iv) was independ-
4
<PAGE> 5
ently developed by the Receiving Party without making use of any Proprietary
Information of the Disclosing Party; or (v) is required to be disclosed pursuant
to law.
Section 6. Return of Proprietary Information. Subject to
Section 14(d) of this Agreement, upon the dissolution of the Company, and in any
event upon the Disclosing Party's request at any time, the Receiving Party
shall: (i) return to the Disclosing Party all documents (including, any copies
thereof) embodying the Disclosing Party's Proprietary Information and (ii)
certify in writing to the Disclosing Party, within ten (l0) days following the
Disclosing Party's request, that all such Proprietary Information has been
returned.
Section 7. Equitable Remedies. Each Stockholder acknowledges
that the extent of damages in the event of the breach of any provision of
Section 4 or 6 hereof would be difficult or impossible to ascertain, and that
there will be available no adequate remedy at law in the event of any such
breach. Each Stockholder therefore agrees that in the event it or any Covered
Person employed by or affiliated with it breaches any provision of Section 4 or
6 hereof, the aggrieved party (including, without limitation, the Company) will
be entitled to injunctive or other equitable relief, in addition to any other
relief to which it may be entitled.
Section 8 CEO as Director. The Stockholders agree to vote, or
act by written consent with respect to, all of their respective shares of Common
Stock in favor of the election of the Chief Executive Officer of the Company as
a member of the Board of Directors.
Section 9. Special Board Votes; Other Board Matters. (a) The
Company and the Stockholders agree that, notwithstanding any provision in the
Company's By-Laws to the contrary, the following actions shall require the
affirmative vote of a majority of the Board of Directors, which, so long as any
shares of Class B-Series 2 Common Stock are issued and outstanding, shall
include the affirmative vote of the Telcom Director and, so long as any shares
of Class B-Series 3 Common Stock are issued and outstanding, shall include the
affirmative vote of the New Member Director:
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<PAGE> 6
(i) any amendment to the Certificate of Incorporation or
By-laws of the Company which materially and adversely affects the rights of
Telcom or New Member in a manner which discriminates against Telcom or New
Member, either individually or with one or more other Stockholders, vis-a-vis
any of the other Stockholders, provided that the affirmative vote of a majority
of the Board of Directors, including only the Telcom Director (and not the New
Member Director), shall be necessary to approve such an amendment which so
affects Telcom (and not New Member), and the affirmative vote of a majority of
the Board of Directors, including only the New Member Director (and not the
Telcom Director), shall be necessary to approve such an amendment which so
affects New Member (and not Telcom);
(ii) any transaction between the Company and any Stockholder
or Affiliate thereof involving an amount in excess of $150,000, except for such
transactions contemplated by this Agreement, the Securities Purchase Agreement
between the Company and Nippon Telegraph and Telephone Corporation dated as of
September 30, 1997 (the "Purchase Agreement") and the Technical Services
Agreement dated as of October 22, 1997 between the Company and NTT America, Inc.
(iii) the appointment of any independent accountants or firm
of independent accountants, other than a nationally recognized accounting firm,
to serve as the Company's auditors; and
(iv) any action by the Company seeking protection under any
bankruptcy or insolvency law
(b) So long as, pursuant to the Certificate of Incorporation, MSI
is entitled to elect a majority of the members of the Board of Directors and to
remove or fill vacancies with respect to such directorships, MSI will use all
reasonable efforts to promptly fill any vacancies in such directorships, however
occurring, and to remove and replace any such director elected by MSI who is or
becomes unwilling or unable to serve as such director.
(c) Without limitation of and subject to Section 4 of Article III
of the Company's By-Laws, the
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<PAGE> 7
Company covenants and agrees with New Member to use all reasonable efforts under
the circumstances to provide the New Member Director with at least 72 hours
prior notice of any special meeting of the Board of Directors. If the New Member
Director is temporarily unavailable, New Member may appoint an alternate to act
in his stead, with full powers of substitution.
Section 10. Committees. (a) The Company and the Stockholders
agree that, so long as any shares of Class B-Series 3 Common Stock are issued
and outstanding, (i) the New Member Director and the New Member Representative
shall have visitation rights at meetings of all significant internal operating
committees of the Board of Directors, if any, and (ii) the New Member Director
shall be a member of any technical, compensation or audit committee, if any, of
the Board of Directors or any other committee designated by the Board of
Directors with the power to negotiate any Consultation Event. In the event no
audit committee of the Board of Directors has been established, the New Member
Director shall have the right to attend, so long as any shares of Class B-Series
3 Common Stock of the Company are issued and outstanding, all meetings involving
the auditor's review of the Company's financial condition and shall have the
right to review and discuss such auditor's reports with such auditor. The New
Member Director and the New Member Representative shall also, so long as any
shares of Class B-Series 3 Common Stock of the Company are issued and
outstanding, have visitation rights with respect to each committee of the Board
of Directors which is established of which the New Member Director is not a
member and shall receive no less than 48 hours prior written notice of each
meeting of any such committee. If, during the course of the meeting of any such
committee, the New Member Director shall determine that the matter being
considered should be considered by the full Board of Directors, such committee
shall thereupon cease its consideration of such matter and such matter shall
thereupon be referred back to the full Board of Directors. This Section l0(a)
shall terminate, and New Member shall have no further rights under such Section,
upon New Member's delivery of, or failure to deliver, the notice required by
Section 15.
(b) The Company and the Stockholders agree that, so long as
any shares of Class B-Series 2 Common
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<PAGE> 8
Stock are issued and outstanding, (i) the Telcom Director and the Telcom
Representative shall have visitation rights at meetings of all significant
internal operating committees of the Board of Directors, if any, and (ii) the
Telcom Director shall be a member of any technical, compensation or audit
committee, if any, of the Board of Directors or any other committee designated
by the Board of Directors with the power to negotiate any Consultation Event. In
the event no audit committee of the Board of Directors has been established, the
Telcom Director shall have the right to attend, so long as any shares of Class
B-Series 2 Common Stock of the Company are issued and outstanding, all meetings
involving the auditor's review of the Company's financial condition and shall
have the right to review and discuss such auditor's reports with such auditor.
The Telcom Director and the Telcom Representative shall also, so long as any
shares of Class B-Series 2 Common Stock of the Company are issued and
outstanding, have visitation rights with respect to each committee of the Board
of Directors which is established of which the Telcom Director is not a member
and shall receive no less than 48 hours prior written notice of each meeting of
any such committee. If, during the course of the meeting of any such committee,
the Telcom Director shall determine that the matter being considered should be
considered by the full Board of Directors, such committee shall thereupon cease
its consideration of such matter and such matter shall thereupon be referred
back to the full Board of Directors.
Section 11. Annual Business Plans and Budgets. The parties
hereto agree that an annual business plan and budget for the Company shall be
prepared by the officers of the Company and submitted to the Board of Directors
for its approval. Each such annual business plan and budget shall contain: (i) a
comprehensive and detailed budget for the upcoming year (including, without
limitation, projected capital expenditures and projected income, expense and
cash flow levels); (ii) such other financial, marketing and other plans and
projections for the upcoming year as the Board of Directors shall deem
appropriate; and (iii) such financial, marketing and other plans and projections
for the upcoming five-year period as the Board of Directors shall deem
appropriate. New Member shall have no further rights under this Section 11 upon
New Member's delivery of, or failure to deliver, the notice required by Section
15.
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<PAGE> 9
Section 12. New Member and Telcom Consultants. The parties
hereto agree that at any meeting of the Board of Directors at which the New
Member Director and/or the Telcom Director, respectively, is present, the New
Member Director and/or the Telcom Director, respectively, may each invite a
representative designated by New Member (and who is employed by New Member or an
Affiliate of New Member) or Telcom (and who is employed by Telcom or an
Affiliate of Telcom), respectively, to attend and consult and advise the New
Member Director or the Telcom Director, respectively, on any matter; provided,
that such respective representatives agree with the Company in writing to be
bound by Sections 4, 5, 6 and 7 hereof as if such representatives were Covered
Persons for purposes of such Sections.
Section 13. Agreement to Hold. Each Stock holder agrees that,
for the two-year period immediately following the date of the LLC Agreement,
each will continue to hold no less than 50% of its interest in the Company which
it owns immediately following the Merger; provided, that the foregoing agreement
and all other restrictions imposed on the ability of New Member or Telcom,
respectively, to transfer their respective interests in the Company, except
those imposed by law, shall lapse and be null, void and without further effect,
if a Consultation Event occurs even though New Member or Telcom, respectively,
have objected thereto; and provided, further, that if at the time the agreement
contained in this Section 13 shall have lapsed and become null and void and
without further effect with respect to Telcom pursuant to the immediately
preceding proviso, MSI is not entitled, pursuant to the Certificate of
Incorporation, to elect a majority of the members of the Board of Directors,
then the agreement contained in this Section 13 shall automatically lapse and
become null and void and without further effect with respect to MSI.
Section 14. New Member Information Right.
(a) Secunded Employees. So long as any shares of Class
B-Series 3 Common Stock of the Company are issued and outstanding, New Member
and its Affiliates shall have the right, at their expense, to secund to the
Company employees of New Member or its Affiliates (not exceeding a total of five
such employees in any three
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month period) to observe the Company's operations, including its technical and
marketing activities (such secunded employees being referred to as the "Secunded
Employees"). This Section 14(a) shall automatically terminate and be of no
further force or effect upon New Member's delivery of, or failure to deliver,
the notice required by Section 15.
(b) Status of Secunded Employees; Expenses. The Secunded
Employees shall be and remain employees of New Member (or its Affiliates) for
all purposes, and New Member (or such Affiliates) shall be solely responsible
for, and shall indemnify and hold the Company harmless from and against any
claims for, the payment of any and all salary, bonuses, living expenses, travel
expenses and other compensation, and the provision of all retirement, health
care, insurance and other benefits to such Secunded Employees. New Member (or
its Affiliate) shall be solely responsible for, and shall indemnify and hold the
Company harmless from and against any claims for, the payment of any taxes or
governmental charges of any kind, including, without limitation, withholding
taxes, payroll taxes or unemployment or worker's compensation insurance, with
respect to any such Secunded Employees. The Secunded Employees shall, at the
Company's expense, be provided, with reasonable office space and standard
office equipment at the Company's facilities to the extent reasonably necessary
for them to carry out their intended purposes as described in Subsection 14(c)
below.
(c) Purpose of Secunded Employees. The Company and New Member
acknowledge that the Secunded Employees will be secunded to the Company so that
they may gain knowledge of the operation of fixed wireless communications
services as conducted by the Company, with a view to enabling New Member and its
Affiliates to provide such services to their customers outside the United
States.
(d) Information Rights. To enable New Member and its
Affiliates to benefit from seconding the Secunded Employees as contemplated by
this Section 14, New Member and its Affiliates shall have the non-exclusive,
perpetual, irrevocable royalty free right and license to use, solely in the
business of New Member and its Affiliates outside the United States, such
product, service, marketing, operational and technical information of the
Company as shall be learned or obtained by the Secunded Employ-
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ees; provided that such right and license shall not include any right or license
with respect to any patent (or patent application), utility model, design
patent, copyright, trademark or tradename (or other similar property rights
arising under United States or other laws) relating to specific inventions,
technical devices, software, publications or other works of the Company; and
provided further that if and to the extent such information constitutes
confidential or proprietary information of the Company, New Member will, and
will cause its Affiliates to, use the same efforts as it uses with respect to
its own confidential or proprietary information to keep such information of the
Company confidential. New Member and its Affiliates shall not be entitled to
sublicense, assign or otherwise transfer to any third party any of the rights
granted, or any of the information relating to the Company learned or obtained
by them, pursuant to this Section 14. In addition, the grant of rights by the
Company pursuant to this Section 15 shall be subject to the Company's need to
comply with its other agreements with third parties in existence on the date
hereof relating to any of the Company information referred to in this Section
14, it being understood and agreed that the Company will use all reasonable
efforts to afford New Member and its Affiliates the full benefit of the rights
granted pursuant to this Section 14 in a manner consistent with such other
agreements.
Section 15. New Member Notice of Competition. New Member will
provide the Company with at least 90 days prior written notice of any action
which, pursuant to clause (B) of the proviso to Article FOURTH, Section A(l)(d)
of the Certificate of Incorporation, would result in the automatic conversion of
shares of Class B-Series 3 Common Stock into Class A Common Stock.
Section 16. Foreign Ownership Limitation.
(a) The Company shall have the right to limit New Member's
ownership of the Company to ensure that it does not violate the foreign
ownership limitations imposed by the Communications Act of 1934, as amended, and
by the regulations and decisions of the Federal Communications Commission
(collectively, the "Communications Act").
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(b) If at any time after the date hereof the Company is
required by a change in the law or other circumstance to reduce the level of
foreign ownership of the Company, and absent the Company's ability to obtain a
waiver (which the Company will use all reasonable efforts to obtain), the
Company shall have the right, and shall be required (i) at New Member's
election, to refuse to sell equity interests in the Company or any equity
interests in the License Companies (as such term is defined in the Purchase
Agreement) to any Foreign Owner (as defined below) if any such transaction
would, under the Communications Act or other applicable law, adversely impact
New Member's ability to hold its then existing equity interest in the Company,
and (ii) at the election of any Stockholder, to repurchase such equity interests
in the Company, to the extent necessary to comply with applicable foreign
ownership restrictions, first, from all persons, other than the Stockholders,
who hold Foreign Ownership Interests (as defined below), and thereafter from
each of the Stockholders who hold Foreign Ownership Interests, on a pro rata
basis (based on the percentage of foreign ownership attributable to each
Stockholder), in each case, for an amount in cash (to the extent permitted by
the Delaware corporation law) equal to the "fair market value" of the equity
interests repurchased. If the class of equity interests to be repurchased (or
conversion equivalent) is publicly traded, "fair market value" shall be the
closing price per share or unit of such equity interest (or conversion
equivalent) on the trading day immediately preceding the date of such repurchase
and, if the class of equity interests to be repurchased (or conversion
equivalent) is not publicly traded, "fair market value" shall be determined by
the Board of Directors. In the event that (i) all or any portion of a
Stockholder's equity interest in the Company is to be repurchased pursuant to
this Section 16, (ii) such class of equity interests (or conversion equivalent)
is not publicly traded and (iii) such Stockholder disputes, by notice to the
Company within forty-five (45) days after receipt of notice from the Board of
Directors of the Board of Director's fair market value determination (a
"Valuation Dispute Notice"), then "fair market value" shall be determined by
two appraisers selected by the Company and such Stockholder, respectively,
within forty-five (45) days after delivery of the Valuation Dispute Notice. If
the appraisers chosen by the Company and such Stockholder cannot reach an
agreement within 30 days of
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their appointment, "fair market value" shall be determined by a third appraiser
to be selected by the original appraisers chosen by such Stockholder and the
Company within 10 days thereafter. "Foreign Owner" shall mean: (a) any person
who is a citizen of a country other than the United States, (b) any corporation
or other legal entity organized under the laws of any government other than the
government of the United States or of any state, territory or possession of the
United States, (c) any government other than the government of the United States
or of any state, territory or possession of the United States, or (d) any
representative of any of the foregoing, or any entity owned, or whose capital
was contributed, in whole or in part, by any of the foregoing; and "Foreign
Ownership Interests" shall mean any equity interests in the Company or equity
interests in the License Companies held by a Foreign Owner.
Section 17. New Member Co-Sale Rights. MSI and Telcom agree
that New Member will have co-sale rights with respect to any sale or transfer by
MSI or Telcom, respectively, or their respective Affiliates, to a single buyer
or group, of all of the shares of Common Stock held by MSI or Telcom or such
Affiliates, respectively, which co-sale rights shall be exercisable in
accordance with the same procedures as set forth in Section 10.3(b) of the LLC
Agreement (as if such Section were in effect and references in such Section to
an "Interest" being deemed for this purpose to refer to Common Stock).
Notwithstanding the foregoing, it is acknowledged and agreed that (i) pursuant
to Section 5.8 of the LLC Agreement, upon consummation of the Merger, the
Company, New Member and any person or entity who or which was a member of the
LLC but is not a party hereto will cease to have any rights pursuant to such
Sections 10.3(a) and 10.3(b) of the LLC Agreement, except as provided above in
this Section 17 with respect to New Member, and (ii) the co-sale rights provided
for in this Section 17 will in any event not apply with respect to (A) any sale
or transfer of Common Stock which was acquired pursuant to a public market
transaction, (B) any public sale or distribution of Common Stock, whether
pursuant to a registration statement under the Securities Act, Rule l44
thereunder or otherwise, (C) any sale or transfer of Common Stock to an
Affiliate (as such term is defined in the LLC Agreement) of the selling or
transferring party, provided such Affiliate executes and delivers to the parties
hereto an
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instrument agreeing to be bound hereby or (D) any pledge of, or grant of a
security interest in, Common Stock, provided such pledge or grant meets the
requirements set forth in Section 10.2(a)(ii), (a) (iii) and (a) (iv) of the LLC
Agreement (as if such Section were still in effect).
Section 18. Miscellaneous
(a) This Agreement may be modified or amended at any time by
Stockholders holding shares of Common Stock representing at least 50.01% of the
aggregate number of shares of Common Stock held by all Stockholders; provided,
that without the consent of any Stock holder, the Company may (i) enter into
agreements with permitted assignees pursuant to the terms of this Agreement,
providing in substance that such permitted assignees will be bound by this
Agreement and (ii) amend this Agreement (A) to satisfy any requirements,
conditions, guidelines or opinions contained in any opinion, directive, order,
ruling or regulation of the Securities and Exchange Commission, the Internal
Revenue Service or any other United States federal or state agency, or in any
United States federal or state statute, compliance with which the Board of
Directors deems to be in the best interests of the Company, (B) to change the
name of the Company, and (C) to cure any ambiguity or correct or supplement any
provision of this Agreement that may be incomplete or inconsistent with any
other provision contained herein, so long as any amendment under this clause
(ii) does not adversely affect the investment in the Company of any Stockholder;
provided, further, that, notwithstanding the foregoing provisions of this
Section 18(a), no amendment of this Agreement shall (y) deprive a Stockholder of
any of such Stockholder's rights hereunder without the prior written consent of
such Stockholder, or (z) change the provisions of this Section 18(a) without the
prior written consent of each Stockholder.
(b) Any party to this Agreement may extend the time for the
performance of any of the obligations or other acts of any other party hereto,
or waive compliance with any of the agreements of any other party, in each case
only to the extent that such obligations, agreements and conditions are intended
for its benefit.
(c) This Agreement contains the parties' entire understanding
and agreement with respect to its
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subject matter, and any and all conflicting or inconsistent discussions,
agreements, promises, representations and statements, if any, between the
parties or their representatives that are not incorporated in this Agreement
shall be null and void and are merged into this Agreement.
(d) This Agreement may be executed in two or more
counterparts, each of which shall constitute an original, but all of which
together shall constitute a single agreement.
(e) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without giving effect to its
conflicts of law principles.
(f) The various section headings are inserted for purposes of
reference only and shall not affect the meaning or interpretation of this
Agreement or any provision hereof.
(g) The provisions of this Agreement shall be severable, and
any invalidity, unenforceability or illegality of any provision or provisions of
this Agreement shall not affect any other provision or provisions of this
Agreement, and each term and provision of this Agreement shall be construed to
be valid and enforceable to the full extent permitted by law.
(h) This Agreement may not be assigned by any party without
the prior written consent of the other parties, provided, that in connection
with any Stock holder's transfer of shares of Class B Common Stock to a
Permitted Transferee of such Stockholder, such Stockholder shall require such
Permitted Transferee to agree in writing to become a "Stockholder" for purposes
of this Agreement and to be bound by the terms hereof.
(i) This Agreement shall inure to the benefit of, and be
binding upon, the parties to it and their respective successors and permitted
assigns. Nothing contained in this Agreement, express or implied, is intended to
confer upon any person other than the parties to it and their respective
successors and permitted assigns, any rights or remedies under or by reason of
this Agreement.
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(j) All notices, requests, demands and other communications
which are required or may be given pursuant to the terms of this Agreement shall
be in writing and shall be deemed given when delivered by hand, fax (provided,
that a confirming copy is sent by a reputable overnight courier service), or
reputable overnight courier service, to the parties at their respective
addresses set forth in Schedule I hereto or to such other address as any party
shall have designated by notice in writing to the other parties.
(k) The Company, MSI and Telcom covenant and agree with New
Member that any and all disputes hereunder involving any of them and New Member
shall be submitted to the same dispute resolution procedures as are set forth in
Section 7.10 of the Purchase Agreement.
(1) Nothing contained herein shall require any Stockholder to
make any further investment in or otherwise contribute capital to the Company.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
TELIGENT, INC.
By: /s/ Alex J. Mandl
-------------------------------------
Name: Alex J. Mandl
Title: Chairman & CEO
MICROWAVE SERVICES, INC.
By:/s/ David J. Berkman
-------------------------------------
Name: David J. Berkman
Title: Executive Vice President
TELCOM-DTS INVESTORS, L.L.C.
By:/s/ Rajendra Singh
-------------------------------------
Name: Rajendra Singh
Title: President
NTTA&T INVESTMENT INC.
By: /s/ Keisuke Nakasaki
-------------------------------------
Name: Keisuke Nakasaki
Title: President
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SCHEDULE I
Addresses for Notices
Teligent, Inc.
8065 Leesburg Pike
Vienna, Virginia 22182
Phone: 703-762-5100
Fax: 703-762-5227
Attention: General Counsel
Microwave Services, Inc.
650 Madison Avenue, 25th Floor
New York, New York 10022
Phone: 212-301-2800
Fax: 212-301-2811
Attention: President and General Counsel
Telcom-DTS Investors, L.L.C.
211 N. Union Street
Suite 300
Alexandria, Virginia 22314
Phone: 703-706-3800
Fax: 701-706-3801
Attention: President and General Counsel
NTTA&T Investment Inc.
c/o Nippon Telegraph and Telephone Corporation
Tokyo Opera City Tower
20-2 Nishi-Shinjuku 3-chome
Shinjuku, Tokyo 163-14
JAPAN
Phone: 011-81-3-5353-5111
Fax: 011-81-3-5353-5503
Attention: Mr. Osamue Inoue
and
c/o NTT America, Inc.
101 Park Avenue, 41st Floor
New York, New York 10178
Attention: Mr. Mitsuo Murakami
Fax: 212-661-1078
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Exhibit C
September 30, 1997
Teligent, L.L.C.
ll Canal Center Plaza, Suite 300
Alexandria, VA 22314
Attn.: Mr. Laurence E. Harris
Gentlemen:
This letter is being delivered in connection with that
certain Securities Purchase Agreement dated the date hereof between you, the
undersigned and the other parties thereto (the "Agreement"). The undersigned
agrees that, in connection with your initial Public Offering (as such term is
defined in the Agreement), subject to all of your current equity holders
entering into agreements similar to that of the undersigned, in consideration of
the underwriters (the "Underwriters") of the Public Offering agreeing to enter
into and perform their obligations pursuant to the underwriting agreement with
respect to the Public Offering, without the prior written consent of the
representative of the Underwriters, the undersigned will not register for sale
or sell or otherwise transfer, except in private transactions with affiliates
who agree to be bound by this agreement, any of your equity securities for a
period commencing on the date of the commencement of the Public Offering and
ending on the date which is the earlier to occur of (a) the date requested by
the Underwriters of the undersigned and (b) 180 days after the date of the
commencement of the Public Offering; provided that selling securities
convertible or exchangeable into your equity securities, or entering into a swap
or other arrangement that transfers the economic consequences of ownership of
your equity securities, shall constitute a sale of your equity securities; and
provided that this agreement shall apply to equity securities of Teligent, Inc..
Very truly yours,
NIPPON TELEGRAPH AND
TELEPHONE CORPORATION
By: /s/ Jun-ichiro Miyazu
------------------------------------------
