PROMISSORY NOTE
$1,000,000 May 5, 2000
FOR VALUE RECEIVED, the undersigned, Hamid Akhavan (the "Borrower"), hereby
promises to pay to Teligent Services, Inc., a Delaware company (the "Company"),
the principal sum (the "Principal Sum") of One Million Six Hundred Thousand
Dollars ($1,600,000) in lawful money of the United States of America. The
Borrower also agrees to pay interest (computed on the basis of a 365 or 366 day
year, as the case may be) on any unpaid amount of the Principal Sum from and
after the date of this Promissory Note set forth above (the "Effective Date")
until the entire Principal Sum has been paid in full, at a rate equal to 7.45%
per annum; provided that in no event shall such interest be charged to the
extent it would violate any applicable usury law. Payment of the Principal Sum
and accrued interest thereon shall not be secured. Borrower shall be personally
liable for the Principal Sum and the accrued interest thereon, calculated in
accordance with this Promissory Note.
This Promissory Note is subject to the following further terms and conditions:
1. PAYMENT UPON MATURITY. The Principal Sum and all accrued interest
thereon will become due and payable on the second anniversary of the
Effective Date (the "Maturity Date").
2. PAYMENT AND PREPAYMENT. All payments and prepayments of the Principal
Sum of, and the accrued interest thereon, shall be made to the Company
or its order, in lawful money of the United States of America at the
principal offices of the Company (or at such other place as the Company
shall notify the Borrower in writing). The Borrower may, at his option,
prepay this Promissory Note in whole or in part at any time from time
to time without penalty or premium. Any prepayments of any portion of
the Principal Sum of this Promissory Note shall be accompanied by
payment of all interest accrued but unpaid hereunder. Upon full and
final payment, or forgiveness, of the Principal Sum of, and interest
accrued on, this Promissory Note, it shall be canceled by the Company
and surrendered by the Borrower. All payments hereunder shall be
applied first to the payment of any costs of collection then due
hereunder, second to the payment of accrued and unpaid interest then
due hereunder, and the remainder, if any, shall be applied to the
unpaid Principal Sum. The Borrower agrees that, if any payment made by
the Borrower is applied to this Promissory Note and is at any time
annulled, set aside, rescinded, invalidated, declared to be fraudulent
or preferential or otherwise required to be refunded or repaid, then,
to the extent of such payment, the Borrower's liability hereunder shall
be and remain in full force and effect as fully as if such payment had
never been made.
3. LOAN FORGIVENESS. Notwithstanding the foregoing, the Principal Sum, and
accrued and unpaid interest thereon, shall be automatically forgiven
upon the happening of either of the following events: (a) the second
anniversary of the Effective Date, if, and only if, the Borrower shall
be employed by the Company on such date, (b) if, prior to the second
anniversary of the Effective Date, Borrower's employment with the
Company is terminated by the Company for any reason other than for
Cause (as defined below) or (c) the occurrence of a Change of Control
(as defined below) prior to the second anniversary of the Effective
Date. For purposes hereof, a "Change of Control" means (i) any person
or entity, or group of affiliated persons or entities, other than the
Liberty Media Corporation, a Delaware corporation, and Telcom-DTS
Investors, L.L.C., a Delaware limited liability company (collectively,
the "Shareholders") and/or their respective affiliates acquires stock
of Teligent representing more than 50% of the voting power of all such
outstanding stock; or (ii) the majority of the Board of Directors of
Teligent consists of persons who are designees of any person or entity
or group of affiliated persons or entities which hold stock in
Teligent, other than the Shareholders and/or their respective
affiliates; or (iii) Teligent adopts a plan of liquidation providing
for the distribution of all or substantially all of its assets; or (iv)
all or substantially all of the business enterprise of Teligent is
disposed of pursuant to a sale of assets transaction or a merger,
consolidation or similar transaction in which Teligent is not the
surviving entity (unless (A) no person or entity, or group of
affiliated persons or entities, other than the Shareholders and/or
their respective affiliates, owns immediately after such transaction
stock or other equity interests of the entity which succeeds to the
business of Teligent as a result of such transaction representing more
than 50% of the voting power of all such outstanding stock, or (B) a
majority of the board of directors (or comparable governing body) of
the entity which succeeds to the business of Teligent as a result of
such transaction consists of persons (or persons designated by such
persons) who constituted a majority of the Board of Directors of
Teligent immediately prior to such transaction. For purposes of this
definition, "affiliate" (or derivations thereof) of any person or
entity means any other person or entity directly or indirectly
controlling or controlled by or under direct or indirect common control
with such person or entity; and for purposes of this definition,
"control" when used with respect to any person or entity means the
power to direct the management and policies of such person or entity,
directly or indirectly, whether through the ownership of voting
securities or other equity interests, by contract or otherwise, and the
terms "controlling" and "controlled" have meanings correlative to the
foregoing.
4. LOAN PRORATION; LOAN ACCELERATION. In the event of the Borrower's
voluntary termination of his employment with the Company prior to the
second anniversary of the Effective Date, the Borrower agrees to
reimburse the Company for the entire outstanding Principal Sum and all
accrued interest thereon immediately, prorated (i.e. multiplied) by the
following ratio: the number of days between the termination date and
the second anniversary of the Effective Date divided by 730. Upon (a)
any termination of the Borrower's employment with the Company for Cause
(as defined below), (b) the Borrower's death, (c) the inability of the
Borrower to continue employment with the Company due to a disability,
or (d) an Event of Default (as defined) the entire outstanding
Principal Sum and all accrued interest thereon shall become due and
payable by the Borrower to the Company immediately, without
presentment, demand, protest, notice of dishonor and all other demands
and notices of any kind, all of which are hereby expressly waived, For
purposes hereof, "Cause" means (i) the engaging by the Borrower in
willful misconduct or negligence that is materially injurious to the
Company; (ii) the embezzlement or misappropriation of funds or property
of the Company by the Borrower or the conviction of the Borrower of a
felony or the entrance of a plea of guilty or nolo contendre by the
Borrower to a felony; or (iii) the willful failure or refusal by the
Borrower to perform his duties or responsibilities that continues after
being brought to the attention of the Borrower. Determination of Cause
shall be made by Company in its discretion, and any such determination
shall be final and binding on the Borrower. The Borrower promises to
pay to the Company on demand by the Company all reasonable costs and
expenses incurred by the Company after an event giving rise to
acceleration in connection with the collection and enforcement of this
Promissory Note, including, without limitation, reasonable attorneys'
fees and expenses and all court costs.
5. EVENTS OF DEFAULT; DEFAULT INTEREST; DEFAULT ACCELERATION AND EXPENSES.
The occurrence of any one or more of the following events shall
constitute an event of default (individually, an "Event of Default" and
collectively, the "Events of Default") under the terms of this
Promissory Note: (a) the failure of the Borrower to pay to the Company
within fourteen (14) days of when due any and all amounts payable by
the Borrower to the Company under the terms of this Promissory Note;
(b) if a petition in bankruptcy is filed by Borrower under the U.S.
Bankruptcy Code, as amended, or under any other insolvency laws or laws
providing for the relief of debtors; (c) if the Borrower becomes
insolvent or executes a general assignment for the benefit of creditors
or if any appointment is made or a receiver or trustee for the property
of the Borrower; or (d) if a petition is filed against the Borrower
under the U.S. Bankruptcy Code, as amended, and is not dismissed within
sixty (60) days of filing.
6. NOTICE. For the purposes of this Promissory Note, notices, demands and
all other communications provided for herein shall be in writing and
shall be deemed to have been duly given when delivered in person or
five business days after being mailed by United States certified or
registered mail, return receipt requested, postage prepaid, addressed
as follows:
If to the Borrower: If to the Company:
Hamid Akhavan Teligent Services, Inc.
11620 Piney Spring Lane 8065 Leesburg Pike, Suite 400
Potomac, MD 20854 Vienna, VA 22182
Attn: Laurence E. Harris, General Counsel
Or such other address as any party may have furnished to others in
writing in accordance herewith.
7. MISCELLANEOUS.
A. No delay or failure by the Company or the legal holder of this
Promissory Note in the exercise of any right or remedy shall constitute
a waiver thereof, and no single or partial exercise by the legal holder
hereof of any right or remedy shall preclude other future exercise
thereof, or the exercise of any other right or remedy. This Promissory
Note may be assigned by the Company without the prior written consent
of the Borrower. This Promissory Note may be amended or modified, and
the terms and conditions hereof may be waived, only by a majority vote
of the Board of Directors of Teligent; provided, however, if any
amendment or modification to this Promissory Note materially and
adversely affects the rights of the Borrower hereunder, such
modification or amendment shall require the written consent of the
Borrower.
B. The headings contained in this Promissory Note are for reference
purposes only.
C. No provisions hereof shall confer upon the Borrower the right to
continue in the employment of the Company, any of its subsidiaries or
any of their perspective successors or affect any rights which the
Company or any of such subsidiaries or successor may have to terminate
the employment of the Borrower.
D. The Provisions of this Promissory Note shall be governed and construed
in accordance with the laws of the State of Delaware, without giving
effect to the choice of law principals thereof. The Company, but not
the Borrower, shall have the right to assign this Promissory Note.
IN WITNESS WHEREOF, this Promissory Note has been duly executed and
delivered to the Company by the Borrower on the date first above written.
/S/ HAMID AKHAVAN
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Hamid Akhavan