STOCKHOLDERS AGREEMENT
STOCKHOLDERS AGREEMENT, dated as of January 13,
2000 (this "Stockholders Agreement"), by and among Xxxx X.
Xxxxx ("Xx. Xxxxx"), Liberty Media Corporation, a Delaware
corporation ("Liberty Media") (solely for purposes of Section
2(b)), Telcom-DTS Investors, L.L.C., a Delaware limited
liability company ("Telcom") and, as of the Effective Time,
as defined below, Microwave Services, Inc., a Delaware
corporation ("MSI").
WHEREAS, Teligent, Inc., a Delaware corporation
(the "Company"), Telcom, the members of Telcom, Digital
Services Corporation, a Virginia corporation ("DSC"), MSI,
and the Associated Group, Inc., a Delaware corporation
("AGI"), are parties to an agreement (the "Registration
Rights Agreement") dated as of September 29, 1997, providing
for certain rights and obligations of Telcom, DSC, MSI and
AGI relating to their ownership interests in the Company;
WHEREAS, on June 1, 1999, Liberty Media and AGI
announced that they had signed a definitive merger Agreement,
dated as of May 28, 1999 (the "Merger Agreement"), pursuant
to which, among other things, AGI will be acquired in a
stock-for-stock merger with a subsidiary of AT&T Corp. (the
"Merger") and MSI will become an indirect wholly owned
subsidiary of Liberty AGI, Inc. a Delaware corporation
("LAGI");
WHEREAS, LAGI is an affiliate of Liberty, and, as
of the Effective Time, MSI will be an Affiliate (as defined
below) of Liberty;
WHEREAS, as contemplated by the Merger Agreement,
immediately prior to the Effective Time, two of the current
five representatives of MSI on the Board of Directors (the
"Board") of the Company will resign and MSI, as the sole
holder of Class B-Series 1 Common Stock of the Company, will
fill the resulting vacancies with two persons selected by
Liberty Media (the "Liberty Nominees"); and
WHEREAS, the parties hereto desire to establish
certain arrangements regarding the governance of the Company
at and after the effective time (the "Effective Time") of the
Merger.
NOW, THEREFORE, in consideration of the foregoing
and the mutual covenants and agreements contained herein, and
intending to be legally bound hereby, the parties hereby
agree as follows:
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Section 1. Definitions. Capitalized terms used
herein and not otherwise defined shall have the meanings
ascribed to them in the Registration Rights Agreement.
(a) "Independent Person" means a person who, prior
to and as of the time of such person's initial nomination and
election or appointment as a director of the Company, and at
all times during such person's incumbency as a director, does
not have any substantial business or other financial
relationship (other than de minimis shareholdings in the
Company, Telcom and/or MSI and their respective Affiliates)
with any of the parties or their respective Affiliates. For
purposes of this definition, such nominee may be a board
member with Xx. Xxxxx on the boards of other companies, and
such relationship shall not, in and of itself, be considered
a "substantial business relationship."
(b) "Additional Designee" shall be a person elected
or appointed to fill a vacancy on the Board that results from
an event described in Section 3(g) below, which person at the
time of his or her initial nomination and election or
appointment meets the following requirements: such person is
an Independent Person who is acceptable to each of (i) the
Telcom Designees on the Board, (ii) the MSI Designees on the
Board and (iii) at least one other director. As provided
under Section 3(b) below, there may be more than one
Additional Designee on the Board at any time.
(c) "Liberty Designees" means three persons
designated from time to time by MSI.
(d) "Telcom Designees" means two persons designated
from time to time by Telcom. So long as Telcom, by virtue of
its beneficial ownership of Series B-2 common stock of the
Company, is entitled to designate one director, such Series
B-2 director shall be one of the two Telcom Designees.
(e) "Designees" means the Additional Designees, the
Liberty Designees and the Telcom Designees.
(f) "Affiliate" means, with respect to any
specified person, any other person that, directly or
indirectly through one or more intermediaries, controls, is
controlled by, or is under common control with, the person
specified. Notwithstanding the foregoing, the parties hereto
understand and agree that neither AT&T Corp. nor any
subsidiary of AT&T Corp. that is not a member of the Liberty
Media Group shall be deemed to be an Affiliate of any person
that is a member of the Liberty Media Group, except that,
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for purposes of the definition of Independent Person and for
purposes of Section 5(b), AT&T Corp. and its subsidiaries
shall be deemed to be Affiliates of MSI for so long as AT&T
Corp. directly or indirectly owns more than 50% of the voting
stock of MSI. For purposes of this definition, Liberty Media
Group shall include, without limitation, Liberty Media, LAGI
and, following the Effective Time, MSI.
(g) "Stockholder" means each of Telcom, MSI and Xx.
Xxxxx.
Section 2. Composition of the Board.
(a) The parties hereto agree that each of the
following events (the occurrence of each of which shall be
mutually conditioned upon the occurrence of the others) shall
occur or become effective immediately after the Effective
Time:
(i) two of the five representatives of MSI on the
Board (including the MSI representative appointed to the
Board in connection with the closing of the sale of the
Company's 7 3/4% convertible preferred stock (the "Company
Preferred Stock"), but excluding the Liberty Nominees), shall
resign;
(ii) the Board shall adopt resolutions reducing the
size of the Board to eight and filling the remaining vacancy
on the Board created by the resignations described in clause
(i) above with a Telcom Designee;
(iii) all of the Class B-Series 1 Common Stock of
the Company will convert into Class A Common Stock of the
Company;
(iv) MSI will become party to this Agreement; and
(v) Telcom, on behalf of itself and DSC, will waive
compliance with Section 2(c)(i) of the Registration Rights
Agreement.
(b) The parties hereto agree to take and cause
their respective Affiliates and designated representatives on
the Board to take all action within its or their collective
control and power necessary to ensure that, if the Effective
Time occurs, the events described in Section 2(a) above occur
immediately thereafter. Without limiting the generality of
the foregoing, Liberty Media covenants and agrees to cause
MSI to become a party hereto at the Effective Time by
executing and delivering a
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counterpart of this Stockholders Agreement to the other
parties.
(c) Telcom hereby acknowledges and agrees, on
behalf of itself and DSC, that the occurrence of the events
contemplated by Section 2(a) of this Stockholders Agreement
will satisfy the requirements of Section 2 of the
Registration Rights Agreement, as such requirements relate to
the transactions contemplated by the Merger Agreement.
Section 3. Covenants.
The Stockholders shall, and shall cause their
respective Affiliates and their designated representatives on
the Board to, from and after the Effective Time, take all
action within their collective control and power (including,
without limitation, (i) convening meetings of the Company's
Board of Directors, and (ii) if necessary, the voting shares
of Company common stock owned directly or indirectly by such
Stockholder or by an Affiliate thereof) necessary to ensure
that:
(a) the size of the Board shall be eight members;
(b) the Stockholders and their Affiliates comply
with the provisions of Section 8 of the November 1997
Agreement (as defined in Section 6 below), provided that, if
Xx. Xxxxx is no longer Chief Executive Officer of the
Company, the Stockholders shall, and shall cause their
respective Affiliates and their designated representatives on
the Board to, take all action within their collective control
and power necessary to ensure that the person selected as
Chief Executive Officer of the Company meets the requirements
for an Additional Designee;
(c) each of MSI and Telcom nominates their
respective Designees and the Stockholders vote, and cause
their respective Affiliates to vote, to elect the Designees
as, and to cause the Designees to be, Directors of the
Company in accordance herewith at all times following, the
Effective Time, and such Designees are not removed as
Directors unless the Stockholder who nominated any such
Designee ("Nominator") determines he/she should be removed
(in which case he/she shall be removed and replaced by a new
Designee by the Nominator);
(d) each of the Designees shall continue to be
nominated and elected as a director of the Company and to be
a director of the Company until the Termination Date;
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(e) any vacancy in the seat on the Board held by a
Designee, which vacancy occurs subsequent to the Effective
Time, shall be filled by the respective Nominator with
another Designee immediately;
(f) as soon as practicable after the Effective
Time, the Company's Certificate of Incorporation shall be
amended to add the following proviso to the end of the last
sentence of Article Sixth thereof:
"; provided further, that stockholders shall be
entitled to act by written consent in accordance with
Section 228 of the DGCL without regard to any of the
foregoing restrictions in order to implement or enforce
the provisions of the Stockholders Agreement dated as of
January , 2000, by and among Xxxx X. Xxxxx, Liberty
Media Corporation, Microwave Services, Inc. and
Telcom-DTS Investors, L.L.C.";
(g) in the event that any of the following events
occur: (i) the beneficial owner of the Class B-Series 3
Common Stock is no longer entitled to designate a Series B-3
director; (ii) the investors in the Company Preferred Stock
who are entitled to designate a director (the "HMTF
Director") are no longer entitled to designate the HMTF
Director; (iii) Xx. Xxxxx is no longer a member of the Board;
or (iv) an Additional Designee resigns or is removed, then,
in each such case, the resulting director vacancy shall be
filled with a person that meets the requirements for an
Additional Designee within 30 days of the Stockholders'
obtaining knowledge of such vacancy; and
(h) no action is taken which would have the effect
of eliminating, limiting, restricting, avoiding or otherwise
modifying the effect of any provision contained herein.
Section 4. No Inconsistent Agreements. Each
Stockholder hereby covenants and agrees that neither it nor
any of its Affiliates shall enter into any voting agreement
or grant a proxy or power of attorney with respect to the
shares of voting stock of the Company it beneficially owns
which is inconsistent with this Stockholders Agreement. Each
party hereby represents and warrants that this Stockholders
Agreement:
(a) has been duly authorized, executed and
delivered by such party; and
(b) is a binding obligation of such party,
enforceable against such party in accordance with its terms
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and does not require the consent of any person not a party
hereto to be effective to bind such party and the shares of
the Company common stock held by such party or any Affiliate
hereof.
Section 5. Transfer of Shares. (a) Except as set
forth in (b) below and subject to the provisions of Section
10 below, each Stockholder and its Affiliates shall be free
to sell and otherwise transfer any and all of their shares of
Company stock free and clear of any obligations set forth
herein; provided, however, that in the case of a transfer of
all of the remaining shares of Company stock owned by a
Stockholder and its Affiliates, such Stockholder shall no
longer be a party hereunder.
(b) Notwithstanding the foregoing sentence, (i)
Telcom agrees that this Stockholders Agreement and the rights
and obligations hereunder shall attach to each of the shares
of voting stock of the Company it beneficially owns and shall
be binding upon any Affiliates of Telcom to which legal or
beneficial ownership shall pass whether by sale, transfer or
operation of law and (ii) MSI (upon its becoming a signatory
hereto) agrees that this Stockholders Agreement and the
rights and obligations hereunder shall attach to each of the
shares of voting stock of the Company it beneficially owns
and shall be binding upon any Affiliate of MSI to which legal
or beneficial ownership shall pass whether by sale, transfer
or operation of law (provided that beneficial ownership of
such shares shall not be deemed to pass as a result of a
change in ownership of MSI if after such change MSI continues
to be the record owner of such shares and is a member of the
Liberty Media Group).
Section 6. Information and Consultation Rights. The
parties hereby agree that for the term of this Agreement, so
long as MSI (upon its becoming a signatory hereto) and
Telcom, respectively, remain a party hereto and are in
compliance with the provisions hereof, the Company will (a)
use reasonable efforts to provide regular information to,
consult with and obtain the advice of each of their
Designees, respectively, in connection with ordinary
decisions of the Board of Directors and (b) have Consultation
(as such term is defined in the Stockholders' Agreement dated
November 26, 1997 among the Company, MSI, Telcom, NTTA&T
Investment Inc. and NTT ("November 1997 Agreement") with each
of MSI and Telcom for any Consultation Event (as such term is
defined in the November 1997 Agreement).
Section 7. Effectiveness; Termination. Except as
otherwise expressly provided herein and except for
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Sections 2(b) and 2(c) and this Section 7, which shall become
effective upon execution and delivery hereof, this
Stockholders Agreement shall become effective as of the
Effective Time. This Stockholders Agreement shall terminate
at the close of business on the earliest of (i) the
consummation of a merger transaction in which all of the
outstanding shares of Common Stock of the Company are
acquired by any party, (ii) September 30, 2001, (iii)
September 30, 2000 (in the case of a written agreement
between MSI and Telcom prior to such date, providing that
this Stockholders Agreement shall be terminated as of
September 30, 2000) and (iv) the date on which the Merger
Agreement is terminated if the Merger is not consummated,
provided that if this Stockholders Agreement is terminated
pursuant to this clause (iv), this Stockholders Agreement
shall become effective again if Liberty Media or any of its
Affiliates and AGI or any of its Affiliates thereafter and
prior to the occurrence of an event specified in (i), (ii) or
(iii) above, enter into any Agreement similar to the Merger
Agreement (the earliest of (i), (ii), (iii) or (iv), the
"Termination Date").
Section 8. Notices. All notices, requests, claims,
demands and other communications under this Stockholders
Agreement shall be in writing and shall be given or made (and
shall be deemed to have been duly given or made upon receipt)
by delivery in person, by facsimile (transmission confirmed),
by courier service or by registered or certified mail
(postage prepaid, return receipt requested) to the respective
parties at the following addresses (or at such other address
for a party as shall be specified in a notice given in
accordance with this Section 8):
if to Xx. Xxxxx
c/o Teligent, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000;
with a copy to
Teligent, Inc.
0000 Xxxxxxxx Xxxx
Xxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: General Counsel;
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if to MSI or Liberty Media
Liberty Media Corporation
0000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: General Counsel;
if to Telecom
Telecom Ventures, L.L.C.
000 Xxxxx Xxxxx Xxxxxx, Xxxxx 000
Xxxxxxxxxx, XX 00000
Telecopier No.: (000) 000-0000
Attention: President and General Counsel.
Section 9. Severability. If any term or other
provision of this Stockholders Agreement is invalid, illegal
or incapable of being enforced by any rule of law, or public
policy, all other conditions and provisions of this
Stockholders Agreement shall nevertheless remain in full
force and effect so long as the economic or legal substance
of this Stockholders Agreement is not affected in any manner
materially adverse to any party. Upon such determination that
any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good
faith to modify this Stockholders Agreement so as to effect
the original intent of the parties as closely as possible in
a mutually acceptable manner in order that the transactions
contemplated by this Stockholders Agreement be consummated as
originally contemplated to the fullest extent possible.
Section 10. Entire Agreement; Assignment. This
Stockholders Agreement constitutes the entire agreement among
the parties with respect to the subject matter hereof and
supersedes all prior agreements and undertakings, both
written and oral, among the parties, or any of them, with
respect to the subject matter hereof; provided, however, the
parties expressly agree that the terms and conditions of the
November 1997 Agreement are in no manner amended, modified or
waived by this Stockholders Agreement. Expect as expressly
set forth herein, the provisions of the Registration Rights
Agreement shall not be amended, modified or waived by this
Stockholders Agreement. This Stockholders Agreement and all
of the rights, interests and obligations under this
Stockholders Agreement may only be assigned by MSI or Telcom,
respectively, in connection with a transfer by MSI or Telcom,
respectively, of all, but not less than all, of the shares of
voting stock of the Company held by the transferor at the
time of such transfer to the
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transferee; provided, that in connection with any such
transfer, MSI or Telcom, as applicable, shall require such
transferee to unconditionally agree in writing to become a
"party" and a "Stockholder" for purposes of this Stockholders
Agreement and to be bound by the terms and conditions hereof;
provided, further, that such shares of voting stock of the
Company being transferred must represent in the aggregate no
less than 25% of the voting stock of the Company beneficially
owned by MSI or Telcom, as applicable, as of the Effective
Time (as adjusted for stock splits, stock dividends, reverse
stock splits and similar events). Notwithstanding the
foregoing or any other provisions of this Stockholders
Agreement, in no event shall any transferee acquiring shares
from a Stockholder in connection with a bona fide public
offering or a Rule 144 sale become or be required to become a
party hereto or bound hereby. Any purported assignment in
violation of this Section 10 shall be void.
Section 11. Parties in Interest; Certain Events.
Expect as specifically set forth in Section 4 and 10 this
Stockholders Agreement shall be binding upon and inure solely
to the benefit of each party hereto, and nothing in this
Stockholders Agreement, express or implied, is intended to or
shall confer upon any other person any right, benefit or
remedy of any nature whatsoever under or by a reason of this
Stockholders Agreement.
Section 12. Specific Performance. The parties
hereto agree that irreparable damage would occur in the event
any provision of this Stockholders Agreement were not
performed in accordance with the terms hereof and that the
parties shall be entitled to specific performance of the
terms hereof, in addition to any other remedy at law or
equity.
Section 13. Governing Law. This Stockholders
Agreement shall be governed by and construed in accordance
with the laws of the State of Delaware, without regard to any
principles of conflicts of laws of such State.
Section 14. Consent to Jurisdiction. (a) Subject to
Section 18 hereof, each party hereby irrevocably submits to
the exclusive jurisdiction of the courts of the State of
Delaware and to the jurisdiction of the United States
District Court for the State of Delaware, for the purpose of
any action or proceeding arising out of or relating to this
Stockholders Agreement, and each party hereby irrevocably
agrees that all claims in respect of such action or
proceeding shall be heard and determined exclusively in any
Delaware state or federal court. Each party agrees that a
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final judgment in any action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit
on the judgment or in any other manner provided by law.
(b) Each party irrevocably consents to the service
of the summons and complaint and any other process in any
other action or proceeding relating to the transactions
contemplated by this Stockholders Agreement, on behalf of
itself or its property, by personal delivery of copies of
such process to such party. Nothing in this Section 14 shall
affect the right of any party to serve legal process in any
other manner permitted by law.
Section 15. Headings. The descriptive headings
contained in this Stockholders Agreement are included for
convenience of reference only and shall not affect in any way
the meaning or interpretation of this Stockholders Agreement.
Section 16. Amendments. This Stockholders Agreement
may be amended or modified, and the terms and conditions
hereof may be waived, only by a written instrument signed by
the parties hereto or, in the case of a waiver, by each party
waiving compliance.
Section 17. Counterparts. This Stockholders
Agreement may be executed and delivered (including by
facsimile transmission) in one or more counterparts, and by
the different parties hereto in separate counterparts, each
of which when executed and delivered shall be deemed to be an
original but all of which taken together shall constitute one
and the same agreement.
Section 18. WAIVER OF JURY TRIAL. EACH PARTY HEREBY
IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS STOCKHOLDERS
AGREEMENT OR THE ACTIONS OF THE PARTIES IN THE NEGOTIATION,
ADMINISTRATION, PERFORMANCE AND ENFORCEMENT THEREOF.
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IN WITNESS WHEREOF, each of the parties hereto has
executed or caused this Stockholders Agreement to be
executed as of the date first written above by its
respective officers thereunto duly authorized:
XXXX X. XXXXX,
by /s/ Xxxx X. Xxxxx
--------------------------------
Xxxx X. Xxxxx
TELCOM-DTS INVESTORS, L.L.C.,
by /s/ Xxxxxx Xxxxx
--------------------------------
Name: Xxxxxx Xxxxx
Title: CEO and Chairman of the
Board
LIBERTY MEDIA CORPORATION,
(for purposes of Section 2(b) only)
by /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
As of the Effective Time: MICROWAVE
SERVICES, INC.,
by /s/ Xxxxxxx X. Xxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxx
Title: Senior Vice President
