Document:

STOCKHOLDERS AGREEMENT

          STOCKHOLDERS AGREEMENT, dated as of January 13,
2000 (this "Stockholders Agreement"), by and among Alex J.
Mandl ("Mr. Mandl"), 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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                                                            2

          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 Mr. Mandl 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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                                                            3

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 Mr.
Mandl.

          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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                                                            4

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
Mr. Mandl 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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                                                            5

          (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 Alex J. Mandl, 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) Mr. Mandl 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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                                                            6

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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                                                            7

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 Mr. Mandl

          c/o Teligent, Inc.
          8065 Leesburg Pike
          Vienna, VA 22182
          Telecopier No.: (703) 762-5222;

          with a copy to

          Teligent, Inc.
          8065 Leesburg Pike
          Vienna, VA 22182
          Telecopier No.: (703) 762-5227
          Attention: General Counsel;

<PAGE>

                                                            8

          if to MSI or Liberty Media

          Liberty Media Corporation
          9197 South Peoria Street
          Englewood, CO 80112
          Telecopier No.: (720) 875-5382
          Attention: General Counsel;

          if to Telecom

          Telecom Ventures, L.L.C.
          211 North Union Street, Suite 300
          Alexandria, VA 22314
          Telecopier No.: (703) 706-3801
          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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                                                            9

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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                                                           10

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.

<PAGE>

                                                           11

          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:

                         ALEX J. MANDL,

                         by /s/ Alex J. Mandl
                            --------------------------------
                            Alex J. Mandl

                         TELCOM-DTS INVESTORS, L.L.C.,

                         by /s/ Rajuka Singh
                            --------------------------------
                            Name:  Rajuka Singh
                            Title: CEO and Chairman of the
                                   Board

                         LIBERTY MEDIA CORPORATION,
                         (for purposes of Section 2(b) only)

                         by /s/ Charles Y. Tanabe
                            --------------------------------
                            Name:  Charles Y. Tanabe
                            Title: Senior Vice President

                         As of the Effective Time: MICROWAVE
                         SERVICES, INC.,

                         by /s/ Charles Y. Tanabe
                            --------------------------------
                            Name:  Charles Y. Tanabe
                            Title: Senior Vice President============================================================

                   STOCK PURCHASE AGREEMENT

                         BY AND AMONG

                        TELIGENT, INC.

                             AND

          THE PURCHASERS LISTED ON SCHEDULE I HERETO

                      ------------------

                         Dated as of

                       November 4, 1999

                      ------------------

============================================================

<PAGE>

          This STOCK PURCHASE AGREEMENT is dated as of
November 4, 1999 (this "Agreement"), by and among Teligent,
Inc., a Delaware corporation (the "Company"), and each of the
purchasers listed on Schedule I hereto (individually, a
"Purchaser" and collectively, the "Purchasers").

          WHEREAS, the Company proposes, subject to the terms
and conditions set forth herein, to issue and sell to the
several Purchasers 500,000 Shares of its 7-3/4% Series A
Convertible Preferred Stock, liquidation preference $1,000
per share, par value $0.01 per share (the "Series A Preferred
Stock"); and

          WHEREAS, the Purchasers desire, subject to the
terms and conditions set forth herein, to purchase such
Series A Preferred Stock from the Company;

          NOW, THEREFORE, the parties hereto, intending to be
legally bound, hereby agree as follows.

                          ARTICLE I

                         DEFINITIONS

          (a) As used in this Agreement, the following terms
shall have the following meanings:

          "Affiliate" means, with respect to any Person, any
other Person directly or indirectly controlling, controlled
by, or under direct or indirect common control with, such
Person. For the purposes of this definition and the
definition of "HMTF Purchaser", "control" when used with
respect to any Person means the power to direct the
management and policies of such Person, directly or
indirectly, whether through the ownership of voting
securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to
the foregoing.

          "Applicable Law" means (a) any United States
federal, state, local or foreign law, statute, rule,
regulation, order, writ, injunction, judgment, decree or
permit of any Governmental Authority and (b) any rule or
listing requirement of any applicable national stock exchange
or listing requirement of any national stock exchange or
Commission recognized trading market on which securities
issued by the Company or any of the Subsidiaries are listed
or quoted.

<PAGE>

                                                            2

          "Business Day" means any day other than a Saturday,
a Sunday, the day after Thanksgiving or a day when banks in
The City of New York are authorized by Applicable Law to be
closed.

          "Capital Stock" means (i) with respect to any
Person that is a corporation, any and all shares, interests,
participations, rights or other equivalents (however
designated) of corporate stock and (ii) with respect to any
other Person, any and all partnership or other equity
interests of such Person.

          "Certificate of Designation" means the Certificate
of Designation of the Powers, Preferences and Relative,
Participating, Optional and Other Special Rights and
Qualifications, Limitations and Restrictions thereof relating
to the Series A Preferred Stock, in the form attached hereto
as Exhibit A.

          "Commission" means the United States Securities and
Exchange Commission.

          "Commission Filings" means all reports,
registration statements and other filings filed by the
Company with the Commission (and all notes, exhibits and
schedules thereto and documents incorporated by reference
therein).

          "Common Stock" means the Class A common stock, par
value $0.01 per share, of the Company.

          "Contract" means any contract, lease, loan
agreement, mortgage, security agreement, trust indenture,
note, bond, or other agreement (whether written or oral) or
instrument.

          "Conversion Shares" means the shares of Common
Stock issuable upon the conversion of the Series A Preferred
Stock in accordance with the terms of the Certificate of
Designation.

          "Equity Documents" means this Agreement, the
Registration Rights Agreement, the Certificate of Designation
and the Management Rights Agreement.

          "Exchange Act" means the Securities Exchange Act of
1934, and the rules and regulations of the Commission
promulgated thereunder.

          "GAAP" means United States generally accepted
accounting principles, consistently applied.

<PAGE>

                                                            3

          "Governmental Authority" means (i) any foreign,
Federal, state or local court or governmental or regulatory
agency or authority, (ii) any arbitration board, tribunal or
mediator and (iii) any national stock exchange or Commission
recognized trading market on which securities issued by the
Company or any of the Subsidiaries are listed or quoted.

          "HMTF" means Hicks, Muse, Tate & Furst
Incorporated, a Texas corporation.

          "HMTF Funds" means both HMTF Equity Fund IV, L.P.
and HMTF Private Equity Fund IV, L.P.

          "HMTF Group" means HMTF and its Affiliates and
their respective officers, directors, partners, members,
stockholders and employees (and members of their respective
families and trusts for the primary benefit of such family
members), and HMTF Purchaser and its Affiliates.

          "HMTF Purchaser" means any one or more of the
following: (i) HMTF-IV Acquisition Corp. (but only for so
long as it is controlled by a member of the HMTF Group), (ii)
HM4 Teligent Qualified Fund, LLC (but only for so long as it
is controlled by HMTF Equity Fund IV (1999), L.P. or another
member of the HMTF Group), (iii) HM4 Teligent Private Fund,
LLC (but only for so long as it is controlled by HMTF Private
Equity Fund IV (1999), L.P. or another member of the HMTF
Group), (iv) HM PG-IV Teligent, LLC ( but only for so long as
it is controlled by Hicks, Muse PG-IV (1999), C.V. or another
member of the HMTF Group), (v) HM 4- SBS Teligent
Coinvestors, LLC (but only for so long as it is controlled by
HM 4-SBS (1999) Coinvestors, L.P. or another member of the
HMTF Group), (vi) HM 4-EQ Teligent Coinvestors, LLC (but only
for so long as it is controlled by HM 4-EQ (1999)
Coinvestors, L.P. or another member of the HMTF Group), and
(vii) HM NE Teligent, LLC (but only for so long as it is
controlled by HM New Economy, L.P. or another member of the
HMTF Group).

          "HMTF Shares" means the HMTF Issued Series A
Preferred Shares held by members of the HMTF Group plus the
shares of Common Stock issued to and held by members of the
HMTF Group upon conversion of the HMTF Issued Series A
Preferred Shares.

          "HSR Act" means the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended, and applicable rules
and regulations.

<PAGE>

                                                            4

          "Lien" means any mortgage, pledge, lien, security
interest, claim, restriction, charge or encumbrance of any
kind.

          "Material Adverse Effect" means a material adverse
effect on the condition (financial or otherwise), business,
assets or results of operations of the Company and the
Subsidiaries, taken as a whole.

          "Microsoft" means Microsoft Corporation, a
Washington corporation.

          "Olympus Funds" means Olympus Growth Fund III, L.P.
and Olympus Executive Fund, L.P.

          "Permitted Transferee" means, with respect to any
Purchaser, or any Permitted Transferee of any Purchaser, (i)
any Purchaser Affiliate of such Purchaser that is not a
holder of common stock of the Company on the date hereof or
an affiliate of such holder; and (ii) any person that is a
member of the HMTF Group and any person investing, directly
or indirectly, in or in parallel with any member of the HMTF
Group; provided, however, that each Permitted Transferee must
agree in writing pursuant to a Permitted Transferee
Agreement, in accordance with the provisions of Section 6.5,
to be bound by the terms, and subject to the conditions, of
this Agreement to the same extent, and in the same manner, as
the transferring Purchaser prior to the transfer of any
Shares to such Permitted Transferee; and provided, further,
that the transfer of Shares from such Purchaser to such
Permitted Transferee is in compliance with all applicable
securities laws.

          "Person" means any individual, partnership,
corporation, limited liability company, joint venture,
association, joint-stock company, trust, unincorporated
organization, government or agency or political subdivision
thereof, or other entity.

          "Purchaser Affiliate" means (a) any direct or
indirect holder of any equity interests or securities in any
Purchaser (whether limited or general partners, members,
stockholders or otherwise), (b) any Affiliate of any
Purchaser or (c) any director, officer, employee,
representative or agent of (i) such Purchaser, (ii) any
Affiliate of such Purchaser or (iii) any holder of equity
interests or securities referred to in clause (a) above.

          "Registration Rights Agreement" means the
Registration Rights Agreement, to be dated as of the Closing

<PAGE>

                                                            5

Date, to be entered into by and among the Company and the
Purchasers, in the form attached hereto as Exhibit B.

          "Securities Act" means the Securities Act of 1933,
and the rules and regulations of the Commission promulgated
thereunder.

          "Series A Preferred Stock" has the meaning set
forth in the first recital to this Agreement. The Series A
Preferred Stock has the designation, powers, preferences and
rights, and qualifications, limitations and restrictions
thereof set forth in the Certificate of Designation.

          "Shares" means the shares of Series A Preferred
Stock to be issued and sold by the Company to the Purchasers
pursuant to Section 2.1 hereof.

          "subsidiary" means, with respect to any Person (i)
a corporation a majority of whose capital stock with voting
power, under ordinary circumstances, to elect directors is at
the time, directly or indirectly, owned by such Person, by a
subsidiary of such Person, or by such Person and one or more
subsidiaries of such Person, (ii) a partnership in which such
Person or a subsidiary of such Person is, at the date of
determination, a general partner of such partnership and has
the power to direct the policies and management of such
partnership or (iii) any other Person (other than a
corporation) in which such Person, a subsidiary of such
Person or such Person and one or more subsidiaries of such
Person, directly or indirectly, at the date of determination
thereof, has (A) at least a majority ownership interest or
(B) the power to elect or direct the election of the
directors or other governing body of such Person.

          "Subsidiary" means a subsidiary of the Company.

          "Transactions" means the transactions contemplated
by this Agreement.

          (b) As used in this Agreement, the following
terms shall have the meanings given thereto in the Sections
set forth opposite such terms:

         Term                                  Section

    Agreement                                  Preamble
    Class B Common Stock                       3.2(a)
    Class B-Series 1 Common Stock              3.2(a)
    Class B-Series 2 Common Stock              3.2(a)
    Class B-Series 3 Common Stock              3.2(a)

<PAGE>

                                                            6

         Term                                  Section

    Closing                                    2.2
    Closing Date                               2.2
    Company                                    Preamble
    DGCL                                       3.2(d)
    HMTF Director                              5.2
    HMTF Issued Series A Preferred Shares      5.2
    Indemnified Party                          8.1(c)
    indemnified person                         8.1(b)
    Indemnifying Party                         8.1(c)
    Information                                3.7
    Issuance                                   2.1
    Losses                                     8.1(b)
    Management Rights Agreement                2.2(d)
    Notices                                    8.2
    Permitted Transferee Agreement             6.5
    Projections                                3.7
    Purchaser; Purchasers                      Preamble
    Purchase Price                             2.1
    Share Transfer                             6.5
    Supplying Purchasers                       8.18

                          ARTICLE II

                      SALE AND PURCHASE

          SECTION 2.1. Agreement to Sell and to Purchase;
Purchase Price. On the Closing Date, and upon the terms and
subject to the conditions set forth in this Agreement, the
Company shall issue and sell to each Purchaser, and each
Purchaser, severally and not jointly, shall purchase and
accept from the Company, such number of Shares as is set
forth opposite such Purchaser's name on Schedule I hereto
(the "Issuance"), for a purchase price, payable by wire
transfer of immediately available funds to a bank account or
bank accounts designated by the Company described in Section
2.2(a)(i), equal to $1,000 per Share (the "Purchase Price").

          SECTION 2.2. Closing. The closing of the Issuance
to each Purchaser (the "Closing") shall take place on a date
to be specified by the Company and such Purchaser, which
shall be no later than the later of (A) the 2nd Business Day
after the date as of which all of the conditions set forth in
Article VII hereof shall have been satisfied as to the
purchase by the HMTF Purchaser and the purchase by the
Olympus Funds (or, to the extent permitted, waived by the
party or parties entitled to the benefit

<PAGE>

                                                            7

thereof) and (B) 15 Business Days after the date hereof or at
such other time and date as the parties hereto shall agree in
writing (such date and time, the "Closing Date"), at the
offices of Cravath, Swaine & Moore, located at 825 Eighth
Avenue, New York, New York 10019 or at such other place as
the parties hereto shall agree in writing. At such time as a
Purchaser and the Company shall have satisfied all the
conditions set forth in Article VII, if the Company elects,
such Purchaser and the Company shall close separately on such
date (it being understood that the timing of the closing with
respect to the HMTF Purchaser shall be governed solely by the
preceding sentence, without giving effect to the matters
therein relating to the Olympus Funds).

          At the Closing with respect to each Purchaser:

          (a) Such Purchaser shall deliver:

          (i) against delivery of a certificate or
     certificates representing the Shares being purchased by
     such Purchaser pursuant to Section 2.1, an amount equal
     to the aggregate Purchase Price of such Shares via wire
     transfer of immediately available funds to such bank
     account as the Company shall designate not later than
     two Business Days prior to the Closing Date; and

          (ii) a copy of the Registration Rights Agreement
     executed by such Purchaser.

          (b) The Company shall deliver to such Purchaser:

          (i) against payment of the Purchase Price therefor,
     a certificate or certificates representing the Shares
     being purchased by such Purchaser pursuant to Section
     2.1, which shall be in definitive form and registered in
     the name of such Purchaser or its nominee or designee
     and in a single certificate or in such other
     denominations as such Purchaser shall request not later
     than two Business Days prior to the Closing Date;

          (ii) an opinion of counsel to the Company, dated
     the Closing Date, covering such matters as are
     customarily covered by such opinions, in form and
     substance reasonably acceptable to the Purchasers;

          (iii) an officer's certificate of the Company as
     contemplated by Section 7.2(g);

          (iv) a certificate of the secretary of the Company
     covering such matters as are customarily covered by

<PAGE>

                                                            8

     such certificates, in form and substance reasonably
     acceptable to the Purchasers;

          (v) a long-form good standing certificate of the
     Company issued by the Secretary of State of the State of
     Delaware; and

          (vi) a copy of the Registration Rights Agreement
     executed by the Company.

          (c) The Company shall deliver to each Purchaser (or
its designee) a transaction fee equal to 2% of the Purchase
Price of the Shares purchased by such Purchaser, in
immediately available funds by wire transfer to an account
designated by such Purchaser at least two Business Days prior
to the Closing Date.

          (d) The Company shall deliver to each of the HMTF
Funds and the Olympus Funds a letter in the form of Exhibit
C-1 and C-2, respectively, executed by the Company (the
"Management Rights Agreement").

                         ARTICLE III

                REPRESENTATIONS AND WARRANTIES
                        OF THE COMPANY

          The Company hereby represents and warrants to each
Purchaser on the date hereof and on and as of the Closing
Date as follows:

          SECTION 3.1. Organization and Standing. Each of the
Company and the material domestic Subsidiaries is duly
incorporated, validly existing and in good standing under the
laws of its state of incorporation and has all requisite
corporate power and authority to own its properties and
assets and to carry on its business as it is now being
conducted and as proposed to be conducted. Each of the
Company and the material domestic Subsidiaries is duly
qualified to transact business as a foreign corporation and
is in good standing in each jurisdiction in which the
character of the properties owned or leased by it or the
nature of its business makes such qualification necessary,
except for any such failures to so qualify or be in good
standing that would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect. The
Company has delivered to Purchaser true and complete copies
of the Company's Certificate of Incorporation, as amended to
date, and By-laws, as in effect on the date hereof.

<PAGE>

                                                            9

          SECTION 3.2. Capital Stock. (a) As of the date of
this Agreement, the authorized Capital Stock of the Company
consists solely of (i) 200,000,000 shares of Common Stock, of
which 9,685,232 shares are issued and outstanding, (ii)
65,000,000 shares of Class B common stock, par value $0.01
per share (the "Class B Common Stock"), consisting of three
Series: (A) 30,000,000 shares of Class B Common Stock
designated as Series 1 (the "Class B-Series 1 Common Stock"),
(B) 25,000,000 shares of Class B Common Stock designated as
Series 2 (the "Class B-Series 2 Common Stock") and (C)
10,000,000 shares of Class B Common Stock designated as
Series 3 (the "Class B-Series 3 Common Stock"), of which
21,436,689 shares of Class B-Series 1 Common Stock,
17,206,210 shares of Class B-Series 2 Common Stock and
5,783,400 shares of Class B-Series 3 Common Stock are issued
and outstanding, and (iii) 10,000,000 shares of preferred
stock, par value $0.01 per share, of which, prior to the
issuance of the Shares on the Closing Date as contemplated by
this Agreement, no shares have been designated and no shares
are issued or outstanding. Each share of Capital Stock of the
Company that will be issued and outstanding immediately
following the Closing, including without limitation the
Shares, will be duly authorized and validly issued and fully
paid and nonassessable, and the issuance thereof will not
have been subject to any preemptive rights or made in
violation of any Applicable Law.

          (b) Except as set forth on Schedule 3.2, as of the
date of this Agreement, there are (i) no outstanding options,
warrants, agreements, conversion rights, exchange rights,
preemptive rights or other rights (whether contingent or not)
to subscribe for, purchase or acquire any issued or unissued
shares of Capital Stock of the Company or any Subsidiary, and
(ii) no restrictions upon, or Contracts or understandings of
the Company or any Subsidiary, or, to the knowledge of the
Company, Contracts or understandings of any other Person,
with respect to, the voting or transfer of any shares of
Capital Stock of the Company or any Subsidiary.

          (c) The Conversion Shares have been duly authorized
and adequately reserved in contemplation of the conversion of
the Series A Preferred Stock and, when issued and delivered
in accordance with the terms of the Certificate of
Designation, will have been validly issued and will be fully
paid and nonassessable, and the issuance thereof will not
have been subject to any preemptive rights or made in
violation of any Applicable Law.

          (d) The holders of the Series A Preferred Stock
will, upon issuance thereof, have the rights set forth in

<PAGE>

                                                           10

the Certificate of Designation (subject to the limitations
and qualifications set forth therein and under the General
Corporation Law of the State of Delaware (the "DGCL")).

          SECTION 3.3. Authorization; Enforceability. The
Company has the power and authority to execute, deliver and
perform its obligations under each of the Equity Documents,
and has taken all action necessary to authorize the
execution, delivery and performance by it of each of such
Equity Documents and to consummate the Issuance. No other
corporate or stockholder proceeding on the part of the
Company is necessary for such authorization, execution,
delivery and consummation. The Company has duly executed and
delivered this Agreement and, at the Closing, the Company
will have duly executed and delivered each of the other
Equity Documents to be executed and delivered at or prior to
Closing. This Agreement constitutes, and each of the other
Equity Documents, when executed and delivered by the Company,
will constitute, a legal, valid and binding obligation of the
Company.

          SECTION 3.4. No Violation; Consents. (a) The
execution, delivery and performance by the Company of each of
the Equity Documents and the consummation by the Company of
the Issuance do not and will not contravene any Applicable
Law, except for any such contravention that would not,
individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect. Except as set forth on
Schedule 3.4(a), the execution, delivery and performance by
the Company of each of the Equity Documents and the
consummation of the Issuance (i) will not (A) violate, result
in a breach of or constitute (with or without due notice or
lapse of time or both) a default (or give rise to any right
of termination, cancelation or acceleration) under any
Contract to which the Company is a party or by which the
Company is bound or to which any of its assets is subject, or
(B) result in the creation or imposition of any Lien upon any
of the assets of the Company, except for any such violations,
breaches, defaults or Liens that would not, individually or
in the aggregate, reasonably be expected to have a Material
Adverse Effect and (ii) will not conflict with or violate any
provision of the certificate of incorporation or bylaws or
other governing documents of the Company.

          (b) Except for (i) the filings by the Company, if
any, required by the HSR Act, (ii) applicable filings, if
any, required by applicable federal and state securities laws
and (iii) filing of the Certificate of Designation with the
Secretary of State of the State of Delaware, in each case,
which shall be made (or are not required to be made)

<PAGE>

                                                           11

on or prior to the Closing Date, no consent, authorization or
order of, or filing or registration with, any Governmental
Authority or other Person is required to be obtained or made
by the Company for the execution, delivery and performance of
this Agreement or the consummation by the Company of the
Issuance, or for the execution, delivery and performance by
the Company of the Registration Rights Agreement, except
where the failure to obtain such consents, authorizations or
orders, or make such filings or registrations, would not,
individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect or a material adverse effect
on the ability of the Company to consummate the transactions
contemplated hereby.

          SECTION 3.5. Commission Filings; Financial State
ments. (a) The Company has filed all reports, registration
statements and other filings, together with any amendments or
supplements required to be made with respect thereto, that it
has been required to file with the Commission under the
Securities Act and the Exchange Act. As of the respective
dates of their filing with the Commission, the Commission
Filings complied in all material respects with the applicable
provisions of the Securities Act and the Exchange Act and did
not contain any untrue statement of a material fact or omit
to state a material fact required to be stated therein or
necessary to make the statements made therein, in the light
of the circumstances under which they were made, not
misleading.

          (b) Each of the historical consolidated financial
statements of the Company (including any related notes or
schedules) included in the Commission Filings was prepared in
accordance with GAAP (except as may be disclosed therein),
and complied in all material respects with the rules and
regulations of the Commission. Such financial statements
fairly present the consolidated financial position of the
Company and the Subsidiaries as of the dates thereof and the
consolidated results of operations, cash flows and changes in
stockholders' equity for the periods then ended (subject, in
the case of the unaudited interim financial statements, to
normal, recurring year-end audit adjustments). Except as set
forth or reflected in the Commission Filings filed prior to
the date hereof, the Company does not have any liabilities or
obligations of any nature (whether accrued, absolute,
contingent, unasserted or otherwise) that individually or in
the aggregate would be expected to have a Material Adverse
Effect.

          SECTION 3.6. Private Offering. Based, in part, on
the Purchasers' representations in Section 4.2, the offer and
sale of the Shares is exempt from the registration and

<PAGE>

                                                           12

prospectus delivery requirements of the Securities Act.
Neither the Company, nor anyone acting on behalf of it, has
offered or sold or will offer or sell any securities, or has
taken or will take any other action (including, without
limitation, any offering of any securities of the Company
under circumstances that would require, under the Securities
Act, the integration of such offering with the offering and
sale of the Shares), which would subject the Issuance to the
registration provisions of the Securities Act.

          SECTION 3.7. Provided Information. To the
knowledge of the Company, all written information (excluding
information of a general economic nature and financial
projections) concerning the Company and the Transactions (the
"Information") that has been or will be prepared by or on
behalf of the Company or any of the Company's authorized
representatives and that has been made or will be made
available to the Purchasers or any of their authorized
representatives in connection with the Issuance, when taken
as a whole, was or will be, at the time made available,
correct in all material respects and did not or will not, at
the time made available, contain any untrue statement of a
material fact or omit to state a material fact necessary in
order to make the statements contained therein not misleading
in light of the circumstances under which such statements are
made. All financial projections concerning the Company and
the Issuance (the "Projections") that have been prepared by
or on behalf of the Company or any of the Company's
authorized representatives and that have been or will be made
available to the Purchasers or any of their authorized
representatives in connection with the Issuance have been,
and at the time made available will be, reasonably prepared
on a basis reflecting the best currently available estimates
and judgments of the Company's management as to the future
financial performance of the Company and the individual
business segments thereof.

       SECTION 3.8. Material Adverse Change. Except as
disclosed in the Commission Filings, since June 30, 1999,
there has not been any event, occurrence or development of a
state of circumstances or facts that has had, or could have
reasonably been expected to have, (i) a Material Adverse
Effect or (ii) a material adverse effect on the ability of
the Company to perform its obligations under this Agreement.

          SECTION 3.9. Litigation. There are not any
(a) outstanding judgments against or affecting the Company or
any of the Subsidiaries, (b) proceedings pending or, to the
knowledge of the Company, threatened against or affecting the
Company or any of the Subsidiaries or (c) investigations by
any Governmental Authority that are,

<PAGE>

                                                           13

to the knowledge of the Company, pending or threatened
against or affecting the Company or any of the Subsidiaries
that (i) in any manner challenge or seek to prevent, enjoin,
alter or materially delay the Issuance or (ii) if resolved
adversely to the Company or any Subsidiary, would have,
individually or in the aggregate, a Material Adverse Effect.

          SECTION 3.10. Permits and Licenses. The Company and
the Subsidiaries have obtained all governmental permits,
licenses, franchises and authorizations required for the
Company and the Subsidiaries to conduct their respective
businesses as currently conducted, except for those of which
the failure to obtain would not have a Material Adverse
Effect.

          SECTION 3.11. Intellectual Property, etc. Schedule
3.11 sets forth a true and complete list of all patents,
patent applications, trademarks, trade names, service marks
and registered copyrights and make work rights and
applications therefor, if any, owned by or licensed to the
Company. All patents, patent applications, trademarks, mask
works, service marks and copyrights of the Company have been
duly applied for or registered and filed with or issued by
each appropriate governmental entity in the jurisdictions
indicated on Schedule 3.11, all necessary affidavits of
continuing use have been filed and all necessary maintenance
fees have been paid to continue all such rights in effect.
The Company owns or is licensed or otherwise has the right to
use, without payment to any other person except for fees set
forth in Schedule 3.11, all intellectual property used in or
necessary for the Company's business, as presently conducted
and as proposed to be conducted. The Company's ownership
and/or use of intellectual property in its business, as
presently conducted and as proposed to be conducted does not
conflict with, or result in any violation of, or default
(with or without notice or lapse of time, or both) under, or
give rise to a right of termination, cancelation or
acceleration of any obligation or result in any loss of a
material benefit under or the creation of any Lien in or upon
any of the properties or assets of the Company under, any
contract between the Company and any person or any other
intellectual property rights of any other person, except for
any such conflict, violation, default, right of termination,
cancelation, acceleration, loss of material benefit or
creation of any Lien which would not have a Material Adverse
Effect.

<PAGE>

                                                           14

                          ARTICLE IV

                REPRESENTATIONS AND WARRANTIES
                      OF THE PURCHASERS

          Each Purchaser severally as to itself only, and not
jointly, hereby represents and warrants to the Company as of
the date hereof and as of the Closing Date as follows:

          SECTION 4.1. Organization; Authorization;
Enforceability. Such Purchaser is duly organized, validly
existing and in good standing under the laws of the
jurisdiction of its organization and has all requisite power
and authority to own its properties and assets and to carry
on its business as it is now being conducted and as currently
proposed to be conducted. Such Purchaser has the power to
execute, deliver and perform its obligations under each of
the Equity Documents to which it is a party and has taken all
action necessary to authorize the execution, delivery and
performance by it of such Equity Documents and to consummate
the transactions contemplated hereby and thereby. No other
proceedings on the part of such Purchaser are necessary for
such authorization, execution, delivery and consummation.
Such Purchaser has duly executed and delivered this Agreement
and, at the Closing, such Purchaser will have duly executed
and delivered each of the other Equity Documents to be
executed and delivered at or prior to Closing. This Agreement
constitutes, and each of the other Equity Documents to which
such Purchaser is a party, when executed and delivered by
such Purchaser, will constitute, a legal, valid and binding
obligation of such Purchaser.

          SECTION 4.2. Private Placement. (a) Such Purchaser
understands that (i) the offering and sale of the Shares in
the Issuance by the Company is intended to be exempt from
registration under the Securities Act pursuant to Section
4(2) thereof and (ii) there is no existing public or other
market for the Shares.

          (b) Such Purchaser (either alone or together with
its advisors) has sufficient knowledge and experience in
financial and business matters so as to be capable of
evaluating the merits and risks of its investment in the
Shares and is capable of bearing the economic risks of such
investment.

          (c) Such Purchaser is acquiring the Shares to be
acquired hereunder (and will acquire the Conversion Shares)
for its own account (or for accounts over which it exercises
investment authority), for investment and not with a view to

<PAGE>

                                                           15

the public resale or distribution thereof, in violation of
any securities law.

          (d) Such Purchaser understands that the Shares will
be issued in a transaction exempt from the registration or
qualification requirements of the Securities Act and
applicable state securities laws, and that such securities
must be held indefinitely unless a subsequent disposition
thereof is registered or qualified under the Securities Act
and such laws or is exempt from such registration or
qualification.

          (e) Such Purchaser (A) has been furnished with or
has had full access to all of the information that it
considers necessary or appropriate to make an informed
investment decision with respect to the Shares and that it
has requested from the Company, (B) has had an opportunity to
discuss with management of the Company the intended business
and financial affairs of the Company and to obtain
information (to the extent the Company possessed such
information or could acquire it without unreasonable effort
or expense) necessary to verify any information furnished to
it or to which it had access and (C) can bear the economic
risk of (x) an investment in the Shares indefinitely and (y)
a total loss in respect of such investment, has such
knowledge and experience in business and financial matters so
as to enable it to understand and evaluate the risks of and
form an investment decision with respect to its investment in
the Shares and to protect its own interest in connection with
such investment.

          SECTION 4.3. No Violation; Consents. (a) The
execution, delivery and performance by such Purchaser of each
of the Equity Documents to which it is a party and the
consummation of the Transactions do not and will not
contravene any Applicable Law, except for such contraventions
as would not, individually or in the aggregate, reasonably be
expected to have a material adverse effect on the ability of
such Purchaser to timely perform its obligations under this
Agreement. The execution, delivery and performance by such
Purchaser of each of the Equity Documents to which it is a
party and the consummation of the Transactions contemplated
therein (i) will not (A) violate, result in a breach of or
constitute (with or without due notice or lapse of time or
both) a default (or give rise to any right of termination,
cancelation or acceleration) under any Contract to which such
Purchaser is party or by which such Purchaser is bound or to
which any of its assets is subject, or (B) result in the
creation or imposition of any Lien upon any of the assets of
such Purchaser, except for any such violations, breaches,

<PAGE>

                                                           16

defaults or Liens that would not, individually or in the
aggregate, reasonably be expected to have a material adverse
effect on the ability of such Purchaser to timely perform its
obligations under this Agreement, and (ii) will not conflict
with or violate any provision of the certificate of
incorporation or bylaws or other governing documents of such
Purchaser.

          (b) Except for (i) the filings by the Purchaser, if
any, required by the HSR Act, and (ii) applicable filings, if
any, with the Commission pursuant to the Exchange Act, in
each case, which shall be made (or are not required to be
made) on or prior to the Closing Date, no consent,
authorization or order of, or filing or registration with,
any Governmental Authority or other Person is required to be
obtained or made by such Purchaser for the execution,
delivery and performance of any of the Equity Documents to
which it is a party or the consummation of any of the
transactions contemplated therein, except where the failure
to obtain such consents, authorizations or orders, or make
such filings or registrations, would not, individually or in
the aggregate, reasonably be expected to have a material
adverse effect on the ability of such Purchaser to timely
perform its obligations under this Agreement.

          SECTION 4.4. No Litigation. There are not any (a)
outstanding judgments against or affecting the Purchaser or
any of its subsidiaries, (b) proceedings pending or, to the
knowledge of the Purchaser, threatened against or affecting
the Purchaser or any of its subsidiaries or (c)
investigations by any Governmental Authority that are, to the
knowledge of the Purchaser, pending or threatened against or
affecting the Purchaser or any of its subsidiaries that, in
any case, individually or in the aggregate, would reasonably
be expected to have a material adverse effect on the ability
of such Purchaser to timely perform its obligations under
this Agreement.

          SECTION 4.5. HMTF Purchaser. Each HMTF Purchaser is
controlled by a member of the HMTF Group (excluding the HMTF
Purchasers for purposes of this sentence from the definition
of HMTF Group).

<PAGE>

                                                           17

                          ARTICLE V

                   COVENANTS OF THE COMPANY

          SECTION 5.1. Operation of Business. From the date
hereof until the Closing Date, the Company shall, and shall
cause each of the Subsidiaries to:

          (i) operate its business in all material respects
     in the ordinary course and in compliance with Applicable
     Laws;

          (ii) not adopt any amendment to its charter or
     bylaws or comparable organizational documents;

          (iii) not split, combine or reclassify any shares
     of the Company's Capital Stock;

          (iv) not declare or pay any dividend or
     distribution (whether in cash, stock or property) in
     respect of its Capital Stock or increase the number of
     shares subject to the Company's stock incentive and
     option plan;

          (v) not take any action, or knowingly omit to take
     any action, that would, or that would reasonably be
     expected to, result in (A) any of the representations
     and warranties of the Company set forth in Article III
     becoming untrue or (B) any of the conditions to the
     obligations of Purchaser set forth in Section 7.2 not
     being satisfied or (C) the triggering of any of the
     anti-dilution adjustments contained in the Certificate
     of Designation for the Series A Preferred Stock (had
     such Certificate been in effect); or

          (vi) enter into any agreement or commitment to do
     any of the foregoing.

          SECTION 5.2. HMTF Director. The Company shall cause
to be elected to the Company's Board of Directors one person
designated by the holders of a majority of the then
outstanding HMTF Shares (the "HMTF Director"), for so long as
members of the HMTF Group own any combination of the shares
of Series A Preferred Shares issued to members of the HMTF
Group on the Closing Date (the "HMTF Issued Series A
Preferred Shares") and Common Stock issued upon conversion of
HMTF Issued Series A Preferred Shares which, taken together,
would represent, if all HMTF Issued Series A Preferred Shares
were converted, an amount of Common Stock issuable upon
conversion of 50% or more of the HMTF Issued Series A
Preferred Shares; provided, however, that the right

<PAGE>

                                                           18

to designate the HMTF Director under this Section 5.2 shall
be suspended at any time that members of the HMTF Group own
at least 100 shares of Series A Preferred Stock and have the
right to elect a person to the Board of Directors under the
terms of the Series A Preferred Stock set forth in the
Certificate of Designation. In the event the holders of a
majority of the then outstanding HMTF Shares are entitled
under this Section 5.2 to designate the HMTF Director for
election to the Company's Board of Directors and elect to
have the Board of Directors appoint the HMTF Director, they
shall so notify the Company in writing and the Company shall
(a) increase the size of the Board of Directors by one and
fill the vacancy created thereby by electing the HMTF
Director and (b) in connection with the meeting of
stockholders of the Company next following such election,
nominate such HMTF Director for election as director by the
stockholders and use its commercially reasonable efforts to
cause the HMTF Director to be so elected. If the holders of a
majority of the then outstanding HMTF Shares are entitled
under this Section 5.2 to designate the HMTF Director for
election to the Company's Board of Directors and a vacancy
shall exist in the office of a HMTF Director, the holders of
a majority of the then outstanding HMTF Shares shall be
entitled to designate a successor and the Board of Directors
shall elect such successor and, in connection with the
meeting of stockholders of the Company next following such
election, nominate such successor for election as director by
the stockholders and use its commercially reasonable efforts
to cause the successor to be elected.

          SECTION 5.3. Access to Books and Records. (a) The
Company shall afford to each of the Purchasers and the
Purchasers' accountants, counsel and representatives full
access during normal business hours throughout the period
prior to the Closing Date (or the earlier termination of this
Agreement pursuant to Section 8.4) to all its properties,
books, Contracts, commitments and records (including, but not
limited to, tax returns) and, during such period, shall, upon
request, furnish promptly to each of the Purchasers (i) a
copy of each report, schedule and other document filed or
received by any of them pursuant to the requirements of
Federal or state securities laws and (ii) all other
information concerning its business, properties and personnel
as the Purchasers may reasonably request, provided that no
investigation or receipt of information pursuant to this
Section 5.3 shall affect any representation or warranty of
the Company or the conditions to the obligations of the
Purchasers.

          (b) The Company shall supplement the Information
and the Projections from time to time until the Closing Date

<PAGE>

                                                           19

so that the representations and warranties in Section 3.7
shall remain correct, but no such supplement shall be given
effect for purposes of determining whether the Company has
breached any representations or warranties for purposes of
Section 7.2 and Section 8.1.

          SECTION 5.4. Agreement to Take Necessary and
Desirable Actions. The Company shall (a) subject to the
satisfaction of the conditions set forth in Section 7.1,
execute and deliver the Equity Documents and such other
documents, certificates, agreements and other writings and
(b) take such other actions, in each case, as may be
necessary or reasonably requested by any of the Purchasers in
order to consummate or implement the Issuance in accordance
with the terms of this Agreement.

          SECTION 5.5. Compliance with Conditions;
Commercially Reasonable Efforts. The Company shall use all
commercially reasonable efforts to cause all conditions
precedent to the obligations of the Company and the
Purchasers to be satisfied. Upon the terms and subject to the
conditions of this Agreement, the Company will use all
commercially reasonable efforts to take, or cause to be
taken, all action, and to do, or cause to be done, all things
necessary, proper or advisable consistent with Applicable Law
to consummate and make effective in the most expeditious
manner practicable the Issuance in accordance with the terms
of this Agreement.

          SECTION 5.6. HSR Act Notification. To the extent
required by the HSR Act, the Company shall, to the extent it
has not already done so, (a) use all commercially reasonable
efforts to file or cause to be filed, as promptly as
practicable after the execution and delivery of this
Agreement, with the United States Federal Trade Commission
and the Antitrust Division of the United States Department of
Justice, all reports and other documents required to be filed
by it under the HSR Act concerning the transactions
contemplated hereby and (b) use all commercially reasonable
efforts to promptly comply with or cause to be complied with
any requests by the United States Federal Trade Commission or
the Antitrust Division of the United States Department of
Justice for additional information concerning such
transactions, in each case so that the waiting period
applicable to this Agreement and the transactions
contemplated hereby under the HSR Act shall expire as soon as
practicable after the execution and delivery of this
Agreement. The Company agrees to request, and to cooperate
with the Purchasers in requesting, early termination of any
applicable waiting period under the HSR Act.

<PAGE>

                                                           20

          SECTION 5.7. Consents and Approvals. The Company
(a) shall use all commercially reasonable efforts to obtain
all necessary consents, waivers, authorizations and approvals
of all Governmental Authorities and of all other Persons
required in connection with the execution, delivery and
performance of the Equity Documents or the consummation of
the Issuance and (b) shall diligently assist and cooperate
with the Purchasers in preparing and filing all documents
required to be submitted by the Purchasers to any
Governmental Authority in connection with the Issuance (which
assistance and cooperation shall include, without limitation,
timely furnishing to the Purchasers all information
concerning the Company and the Subsidiaries that counsel to
the Purchasers reasonably determines is required to be
included in such documents or would be helpful in obtaining
any such required consent, waiver, authorization or
approval).

          SECTION 5.8. Reservation of Shares. The Company
shall:

          (i) cause to be authorized and reserve and keep
     available at all times during which any of the Shares
     remain outstanding, free from preemptive rights, out of
     its treasury stock or authorized but unissued shares of
     Capital Stock, or both, solely for the purpose of
     effecting the conversion of the Shares pursuant to the
     terms of the Certificate of Designation, sufficient
     shares of Common Stock to provide for the issuance of
     the maximum number of shares issuable upon conversion of
     outstanding Shares;

          (ii) issue and cause the transfer agent to deliver
     such shares of Common Stock as required upon conversion
     of the Shares, and take all actions necessary to ensure
     that all such shares will, when issued and paid for
     pursuant to the conversion of the Shares, be duly and
     validly issued, fully paid and nonassessable; and

          (iii) if any shares of Common Stock reserved for
     the purpose of issuance upon conversion of the Shares
     require registration with or approval of any
     Governmental Authority under any Applicable Law before
     such shares may be validly issued or delivered, secure
     such registration or approval, as the case may be, and
     maintain such registration or approval in effect so long
     as so required.

          SECTION 5.9. Use of Proceeds. The Company shall use
the proceeds from the Issuance for payment of expenses

<PAGE>

                                                           21

incurred in connection with the Transactions and for general
corporate purposes.

          SECTION 5.10. Filing of Certificate of Designation.
Prior to the Issuance, the Company shall file the Certificate
of Designation with the Secretary of State of the State of
Delaware pursuant to Section 151(g) of the DGCL.

          SECTION 5.11. Listing of Shares. The Company shall
use all commercially reasonable efforts to cause the shares
of Common Stock issuable upon conversion of the Shares to be
listed or otherwise eligible for trading on the NASDAQ
National Market System or other national securities exchange.

          SECTION 5.12. Periodic Information. For so long as
the Shares or any Conversion Shares are outstanding the
Company shall file all reports required to be filed by the
Company under Section 13 or 15(d) of the Exchange Act and
shall provide the holders of the Shares and the Conversion
Shares and prospective purchasers of such shares with the
information specified in Rule 144A(d) under the Securities
Act.

          SECTION 5.13. Legends. So long as applicable, each
certificate representing any portion of the Shares or shares
of Common Stock issuable upon conversion of the Shares shall
be stamped or otherwise imprinted with a legend in the
following form (in addition to any legend required under
applicable state securities laws):

     "THE SHARES REPRESENTED BY THIS CERTIFICATE HAVE NOT
     BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS
     AMENDED (THE "SECURITIES ACT") OR THE SECURITIES LAWS OF
     ANY STATE OF THE UNITED STATES. SUCH SHARES MAY NOT BE
     OFFERED, SOLD, TRANSFERRED, PLEDGED, HYPOTHECATED OR
     OTHERWISE DISPOSED OF IN THE ABSENCE OF SUCH
     REGISTRATION OTHER THAN PURSUANT TO AN EXEMPTION FROM
     SUCH REGISTRATION REQUIREMENTS.

After the above requirement for a legend is no longer
applicable because the Shares are freely transferable under
the Securities Act, the Company shall remove such legend upon
request from a holder of such Shares, if outside counsel for
such holder reasonably determines that the transfer of such
Shares is no longer restricted by the Securities Act and
outside counsel for the Company reasonably concurs in such
determination.

<PAGE>

                                                           22

                          ARTICLE VI

                 COVENANTS OF THE PURCHASERS

          SECTION 6.1. Agreement to Take Necessary and
Desirable Actions. Each Purchaser shall (a) subject to the
satisfaction of the conditions set forth in Section 7.2,
execute and deliver each of the Equity Documents to which it
is a party and such other documents, certificates, agreements
and other writings and (b) take such other actions as may be
reasonably necessary, desirable or requested by the Company
in order to consummate or implement the Issuance to such
Purchaser in accordance with the terms of this Agreement.

          SECTION 6.2. Compliance with Conditions;
Commercially Reasonable Efforts. Each Purchaser will use all
commercially reasonable efforts to cause all of the
obligations imposed upon it in this Agreement to be duly
complied with, and to cause all conditions precedent to the
obligations of the Company and the Purchasers to be
satisfied. Upon the terms and subject to the conditions of
this Agreement, each Purchaser will use all commercially
reasonable efforts to take, or cause to be taken, all action,
and to do, or cause to be done, all things necessary, proper
or advisable consistent with applicable law to consummate and
make effective in the most expeditious manner practicable the
Issuance to such Purchaser in accordance with the terms of
this Agreement.

          SECTION 6.3. HSR Act Notification. To the extent
required by the HSR Act, each Purchaser shall, if it has not
already done so, (a) use all commercially reasonable efforts
to file or cause to be filed, as promptly as practicable
after the execution and delivery of this Agreement, with the
United States Federal Trade Commission and the Antitrust
Division of the United States Department of Justice, all
reports and other documents required to be filed by it under
the HSR Act concerning the transactions contemplated hereby
and (b) use all commercially reasonable efforts to promptly
comply with or cause to be complied with any requests by the
United States Federal Trade Commission or the Antitrust
Division of the United States Department of Justice for
additional information concerning such transactions in each
case so that the waiting period applicable to this Agreement
and the transactions contemplated hereby under the HSR Act
shall expire as soon as practicable after the execution and
delivery of this Agreement. Purchaser agrees to request, and
to cooperate with the Company in requesting, early
termination of any applicable waiting period under the HSR
Act.

<PAGE>

                                                           23

          SECTION 6.4. Consents and Approvals. Each Purchaser
(a) shall use all commercially reasonable efforts to obtain
all necessary consents, waivers, authorizations and approvals
of all Governmental Authorities other than as expressly set
forth in Section 6.3 regarding the HSR Act, and of all other
Persons required in connection with the execution, delivery
and performance of this Agreement or the consummation of the
Issuance to such Purchaser and (b) shall diligently assist
and cooperate with the Company in preparing and filing all
documents required to be submitted by the Company to any
Governmental Authority in connection with such Transactions
(which assistance and cooperation shall include, without
limitation, timely furnishing to the Company all information
concerning such Purchaser that counsel to the Company
reasonably determines is required to be included in such
documents or would be helpful in obtaining any such required
consent, waiver, authorization or approval).

          SECTION 6.5. Restrictions on Transfer. No Purchaser
shall sell, assign, transfer, pledge, hypothecate, deposit in
a voting trust or otherwise dispose of any portion of the
Shares (any such disposition, a "Share Transfer"), other than
(a) to a Permitted Transferee of such Purchaser that has
agreed in writing (each, a "Permitted Transferee Agreement")
to be bound by the terms and provisions of this Section 6.5
to the same extent that the transferring Purchaser would be
bound if it beneficially owned the Shares transferred to such
Permitted Transferee or (b)(i) in any transaction in
compliance with Rule 144 under the Securities Act or any
successor rule or regulation, (ii) in a transaction exempt
from the registration requirements of the Securities Act or
(iii) pursuant to a registration statement. Each Purchaser
shall promptly notify the Company of any Share Transfer to a
Permitted Transferee of such Purchaser, which notification
shall include a Permitted Transferee Agreement executed by
each Permitted Transferee of such Purchaser to whom any
Shares have been transferred.

                         ARTICLE VII

               CONDITIONS PRECEDENT TO CLOSING

          SECTION 7.1. Conditions to the Company's
Obligations. The obligations of the Company with respect to a
Purchaser hereunder required to be performed on the

<PAGE>

                                                           24

Closing Date shall be subject to the satisfaction or waiver,
at or prior to the Closing, of the following conditions:

          (a) The representations and warranties of such
Purchaser contained in this Agreement shall have been true
and correct when made and, in addition, shall be repeated and
true and correct in all material respects on and as of the
Closing Date with the same force and effect as though made on
and as of the Closing Date.

          (b) Such Purchaser shall have performed in all
material respects all obligations and agreements, and
complied in all material respects with all covenants
contained in this Agreement to be performed and complied with
by such Purchaser at or prior to the Closing Date.

          (c) Any applicable waiting period under the HSR Act
with respect to the purchase by such Purchaser shall have
expired or been terminated.

          SECTION 7.2. Conditions to Each Purchaser's
Obligations. The obligations of a Purchaser hereunder
required to be performed on the Closing Date shall be subject
to the satisfaction or waiver, at or prior to the Closing, of
the following conditions:

          (a) The representations and warranties of the
Company contained in this Agreement (i) shall have been true
and correct when made and (ii) shall be (A) in the case of
representations and warranties that are qualified as to
materiality or Material Adverse Effect, true and correct and
(B) in all other cases, true and correct in all material
respects, in the case of clauses (A) and (B), as of the
Closing Date with the same force and effect as though made on
and as of the Closing Date.

          (b) The Company shall have performed in all
material respects all of its obligations, agreements and
covenants contained in this Agreement to be performed and
complied with at or prior to the Closing Date.

          (c) The Company shall have entered into the
Registration Rights Agreement.

          (d) The Company shall have filed the Certificate of
Designation with the Secretary of State of the State of
Delaware.

          (e) Any applicable waiting period under the HSR Act
with respect to the purchase by such Purchaser shall have
expired or been terminated.

<PAGE>

                                                           25

          (f) With respect to the Closing of the purchase by
Microsoft, the earlier of (x) December 15, 1999, or (y) the
expiration or other termination of the waiting period under
the HSR Act with respect to the filing under the HSR Act by
the HMTF Purchaser, shall have occurred prior to or
simultaneously with such Closing; and with respect to the
Closing of the purchase by DB, the purchase by the HMTF
Purchaser shall have occurred prior to or simultaneously with
such Closing.

          (g) The Company shall have delivered to such
Purchaser a certificate executed by it or on its behalf by a
duly authorized representative, dated the Closing Date, to
the effect that each of the conditions specified in paragraph
(a) through (e) of this Section 7.2 has been satisfied.

          (h) No provision of any Applicable Law, injunction,
order or decree of any Governmental Entity shall be in effect
which has the effect of making the Transactions illegal or
shall otherwise restrain or prohibit the consummation of the
Transactions.

          (i) Such Purchaser shall have received an opinion
of counsel to the Company, dated the Closing Date, and
addressed to such Purchaser, in form and substance reasonably
acceptable to the Purchaser.

          (j) Such Purchaser shall have received certificates
representing the Shares purchased by such Purchaser
concurrently with the Company's receipt of the Purchase Price
for such Shares.

          (k) with respect to the HMTF Purchaser and the
Olympus Funds only, the Company shall have delivered to the
HMTF Purchaser and the Olympus Funds a Management Rights
Agreement executed by the Company and addressed to the HMTF
Funds and the Olympus Growth Fund III, L.P., respectively.

          (l) there shall not have occurred (i) any event,
circumstance, condition, fact, effect or other matter which
has had or could reasonably be expected to have a material
adverse effect (x) on the business, assets, financial
condition, prospects, or results of operations of the Company
and the Subsidiaries taken as a whole or (y) on the ability
of the Company and the Subsidiaries to perform on a timely
basis any material obligation under this Agreement or to
consummate the Issuance contemplated hereby; or (ii) any
material disruption of or material adverse change in
financial, banking or capital market conditions that would

<PAGE>

                                                           26

reasonably be expected to materially impair the Company's
ability to obtain financing on reasonable terms.

                         ARTICLE VIII

                        MISCELLANEOUS

          SECTION 8.1. Indemnification. (a) All
representations, warranties, covenants and agreements
contained in this Agreement shall survive the Closing for 18
months (except (i) covenants and agreements that are required
to be performed after the Closing Date and (ii) the last
sentence of Section 3.2(a), which shall survive
indefinitely). Notwithstanding the foregoing, with respect to
claims asserted pursuant to this Section 8.1 before the
expiration of the applicable representation, warranty,
covenant or agreement, such claims shall survive until the
date they are finally adjudicated or otherwise resolved.

          (b) The Company agrees to indemnify and hold
harmless each Purchaser and each Purchaser Affiliate (each an
"indemnified person"), from and against (and to reimburse
each indemnified person as the same are incurred) any and all
losses (including, but not limited to, impairment of the
value of the Shares as of the date such loss first becomes
known, but excluding consequential damages), claims, damages,
liabilities, costs and expenses (collectively, "Losses") to
which any indemnified person may become subject or which any
indemnified person may incur based upon, arising out of, or
in connection with (i) a breach of any representation,
warranty or covenant of this Agreement by the Company or (ii)
any claim, litigation, investigation or proceeding brought by
or on behalf of any Person other than the Company relating to
the Issuance, and to reimburse each indemnified person upon
demand for any reasonable legal or other reasonable out of
pocket expenses incurred in connection with investigating or
defending any of the foregoing, provided the maximum amount
indemnifiable to each Purchaser (and its successors or
assigns) under clause (i) shall not exceed the purchase price
of the Shares purchased by such Purchaser.

          (c) If a Person entitled to indemnity hereunder (an
"Indemnified Party") asserts that the Company (the
"Indemnifying Party") has become obligated to the Indemnified
Party pursuant to Section 8.1(b), or if any suit, action,
investigation, claim or proceeding is begun, made or
instituted as a result of which the Indemnifying Party may
become obligated to the Indemnified Party hereunder, the
Indemnified Party shall notify the

<PAGE>

                                                           27

Indemnifying Party promptly and shall cooperate with the
Indemnifying Party, at the Indemnifying Party's expense, to
the extent reasonably necessary for the resolution of such
claim or in the defense of such suit, action or proceedings,
including making available any information, documents and
things in the possession of the Indemnified Party.
Notwithstanding the foregoing notice requirement, the right
to indemnification hereunder shall not be affected by any
failure to give, or delay in giving, notice unless, and only
to the extent that, the rights and remedies of the
Indemnifying Party shall have been materially prejudiced as a
result of such failure or delay.

          (d) In fulfilling its obligations under this
Section 8.1, after the Indemnifying Party has provided each
Indemnified Party with a written notice of its acceptance of
liability under this Section 8.1, as between such Indemnified
Party and the Indemnifying Party, the Indemnifying Party
shall have the right to investigate, defend, settle or
otherwise handle, with the aforesaid cooperation, any claim,
suit, action or proceeding brought by a third party in such
manner as the Indemnifying Party may in its sole discretion
reasonably deem appropriate; provided, that (i) counsel
retained by the Indemnifying Party is reasonably satisfactory
to the Indemnified Party and (ii) the Indemnifying Party will
not consent to any settlement or entry of judgment imposing
any obligations on any other party hereto other than
financial obligations for which such party will be
indemnified hereunder, unless such party has consented in
writing to such settlement or judgment (which consent may be
given or withheld in its sole discretion) and (iii) the
Indemnifying Party will not consent to any settlement or
entry of judgment unless, in connection therewith, the
Indemnifying Party obtains a full and unconditional release
of the Indemnified Party from all liability with respect to
such suit, action, investigation claim or proceeding.
Notwithstanding the Indemnifying Party's election to assume
the defense or investigation of such claim, action or
proceeding, the Indemnified Party shall have the right to
employ separate counsel and to participate in the defense or
investigation of such claim, action or proceeding, which
participation shall be at the expense of the Indemnifying
Party, if (i) on the advice of counsel to the Indemnified
Party use of counsel of the Indemnifying Party's choice could
reasonably be expected to give rise to a material conflict of
interest, (ii) the Indemnifying Party shall not have employed
counsel reasonably satisfactory to the Indemnified Party to
represent the Indemnified Party within a reasonable time
after notice of the assertion of any such claim or
institution of any such action or proceeding, (iii) if the

<PAGE>

                                                           28

Indemnifying Party shall authorize the Indemnified Party to
employ separate counsel at the Indemnifying Party's expense
or (iv) such action shall seek relief other than monetary
damages against the Indemnified Party.

          (e) The Company and the Purchasers agree that any
payment of Losses made hereunder will be treated by the
parties on their tax returns as an adjustment to the Purchase
Price. If, notwithstanding such treatment by the parties, a
final determination (which shall include the form 870-AD or
successor form) with respect to the Indemnified Party or any
of its affiliates causes any such payment not to be treated
as an adjustment to Purchase Price, then the Indemnifying
Party shall indemnify the Indemnified Party for any taxes
payable by the Indemnified Party or any subsidiary by reason
of the receipt of such payment (including any payments under
this 8.1(e)), determined at an assumed marginal tax rate
equal to the highest marginal tax rate then in effect for
corporate taxpayers in the relevant jurisdiction.

          SECTION 8.2. Notices. All notices, demands,
requests, consents, approvals or other communications
(collectively, "Notices") required or permitted to be given
hereunder or which are given with respect to this Agreement
shall be in writing and shall be personally served, delivered
by reputable air courier service with charges prepaid, or
transmitted by hand delivery, telegram, telex or facsimile,
addressed as set forth below, or to such other address as
such party shall have specified most recently by written
notice. Notice shall be deemed given on the date of service
or transmission if personally served or transmitted by
telegram, telex or facsimile. Notice otherwise sent as
provided herein shall be deemed given on the next business
day following delivery of such notice to a reputable air
courier service.

          To the Company:

               Teligent, Inc.
               8065 Leesburg Pike
               Suite 400
               Vienna, VA 22182
               Attn:  General Counsel
               Telephone:  (703) 762-5100
               Fax:  (703) 762-5227

<PAGE>

                                                           29

          with a copy to:

               Cravath, Swaine & Moore
               Worldwide Plaza
               825 Eighth Avenue
               New York, New York 10019
               Attn:  Robert Rosenman
               Telephone:  (212) 474-1300
               Fax:  (212) 474-3700

          To the Purchasers:

          To the address specified below for each Purchaser.

          (as to matters relating to the HMTF Group)

          To the appropriate member of the HMTF Group

               c/o Hicks, Muse, Tate & Furst Incorporated
               1325 Avenue of the Americas
               25th Floor
               New York, NY 10019
               Attn:  Michael Levitt
               Telephone:  (212) 424-1400
               Fax:  (212) 424-1450

          with a copy to:

               Vinson & Elkins, L.L.P.
               1325 Avenue of the Americas, 17th Floor
               New York, NY 10019
               Attn:  Eric S. Shube
               Telephone:  (917) 206-8005
               Fax:  (917) 206-8100

          (as to matters relating to Microsoft Corporation)

               One Microsoft Way
               Building 8/ 2126
               Redmond, WA 98052
               Attn:  Gregory B. Maffei, Senior Vice
               President and Chief Financial Officer
               Telephone:  (425) 882-8080
               Fax:  (425) 936-2625

          With copies to:

               Microsoft Corporation
               One Microsoft Way
               Office 8S/2056
               Redmond, WA 98052-6399

<PAGE>

                                                           30

               Attn:  Robert A. Eshelman, General Counsel,
               Finance and Operations
               Telephone: (425) 882-8080
               Fax:  (425) 936-7329

               and

               Preston, Gates & Ellis,
               LLP 701 5th Avenue Suite
               5000 Seattle, WA 98104
               Attn: Richard B. Dodd
               Telephone: (206) 623-7580
               Fax: (206) 623-7022

          (as to matters relating to Chase Equity
Associates, L.P.)

               Chase Manhattan Bank
               270 Park Avenue
               40th Floor
               New York, NY 10017
               Attn:  Catherine Crowley
               Telephone:  (212) 270-5015
               Fax:  (212) 270-7473

          (as to matters relating to DB Capital
Investing, L.P.)

               White & Case LLP
               1155 6th Avenue
               New York, NY 10036
               Attn:  William F. Wynne, Jr.
               Telephone:  (212) 819-8316
               Fax:  (212) 354-8113

          (as to matters relating to Olympus Growth Fund III,
L.P. and Olympus Executive Fund, L.P. )

               Dewey Ballantine LLP
               1301 Avenue of the Americas
               New York, NY  10019
               Attn:  Richard A. Stenberg
               Telephone:  (212) 259-6280
               Fax: (212) 259-6333

          SECTION 8.3. Governing Law. This Agreement shall be
governed by, interpreted under, and construed in accordance
with the laws of the State of New York, regardless of the
laws that might otherwise govern under applicable principles
of conflicts of law thereof.

<PAGE>

                                                           31

          SECTION 8.4. Termination. (a) This Agreement may be
terminated as between the Company and any Purchaser (i) at
any time prior to the Closing Date by mutual written
agreement of the Company and such Purchaser, (ii) if the
Closing shall not have occurred on or prior to December 30,
1999, by either the Company or such Purchaser, at any time
after December 30, 1999, provided that the right to terminate
this Agreement under this Section 8.4(a)(ii) shall not be
available to any party whose failure to fulfill any
obligation under this Agreement was the cause of or resulted
in the failure of the Closing to occur on or before such
date, (iii) if any Governmental Authority shall have issued a
nonappealable final order, decree or ruling or taken any
other action having the effect of permanently restraining,
enjoining or otherwise prohibiting the transactions
contemplated by this Agreement, by either the Company or such
Purchaser, (iv) if either the Company or such Purchaser shall
have breached any of its material obligations under this
Agreement, by the non-breaching party, or (v) if an event
described in Section 7.2(l) shall have occurred, by such
Purchaser. Any party desiring to terminate this Agreement
pursuant to clauses 8.4(a)(ii), (iii), (iv) or (v) shall
promptly give notice of such termination to the other party.

          (b) If this Agreement is terminated as between the
Company and a Purchaser, as permitted by Section 8.4(a), such
termination shall be without liability of any party (or any
stockholder, director, officer, partner, employee, agent,
consultant or representative of such party) to any other
party to this Agreement; provided that if such termination
shall result from the willful (a) failure of any party to
fulfill a condition to the performance of the obligations of
the other party, (b) failure to perform a covenant of this
Agreement or (c) breach by any party hereto of any
representation or warranty contained herein, such failing or
breaching party shall be fully liable for any and all losses
(excluding consequential damages) incurred or suffered by the
other party as a result of such failure or breach. The
provisions of Sections 8.2, 8.3, this Section 8.4, Sections
8.5, 8.8, 8.10, 8.11, 8.12, 8.13, 8.14, 8.16, 8.17, 8.18 and
8.20 shall survive any termination hereof pursuant to Section
8.4(a).

          SECTION 8.5. Entire Agreement. As between the
Company and each Purchaser this Agreement and the Equity
Documents (including all agreements entered into pursuant
hereto and thereto and all certificates and instruments
delivered pursuant hereto and thereto) constitute the entire
agreement of the parties with respect to the subject matter
hereof and supersede all prior and contemporaneous

<PAGE>

                                                           32

agreements, representations, understandings, negotiations and
discussions between the parties, whether oral or written,
with respect to the subject matter hereof.

          SECTION 8.6. Modifications and Amendments. No
amendment, modification or termination of this Agreement as
between the Company and a Purchaser shall be binding unless
executed in writing by the Company and such Purchaser
intending to be bound thereby.

          SECTION 8.7. Waivers and Extensions. Any party to
this Agreement may waive any condition, right, breach or
default that such party has the right to waive, provided that
such waiver will not be effective against the waiving party
unless it is in writing, is signed by such party, and
specifically refers to this Agreement. Waivers may be made in
advance or after the right waived has arisen or the breach or
default waived has occurred. Any waiver may be conditional.
No waiver of any breach of any agreement or provision herein
contained shall be deemed a waiver of any preceding or
succeeding breach thereof nor of any other agreement or
provision herein contained. No waiver or extension of time
for performance of any obligations or acts shall be deemed a
waiver or extension of the time for performance of any other
obligations or acts.

          SECTION 8.8. Titles and Headings. Titles and
headings of sections of this Agreement are for convenience
only and shall not affect the construction of any provision
of this Agreement.

          SECTION 8.9. Exhibits and Schedules. Each of the
exhibits and schedules referred to herein and attached hereto
is an integral part of this Agreement and is incorporated
herein by reference.

          SECTION 8.10. Expenses. All costs and expenses
incurred in connection with this Agreement shall be paid by
the party incurring such cost or expense; provided, however,
that (a) the Company shall pay the filing fee payable in
respect of any HSR filing, and (b) if this Agreement is
terminated with respect to any Purchaser for any reason other
than a breach by such Purchaser and other than a failure of
the condition set forth in Section 7.2(l)(ii) to be
satisfied, then (without limiting any party's right to
recover damages pursuant to Section 8.4(b)) the Company shall
reimburse such Purchaser for such Purchaser's reasonable
out-of-pocket costs and expenses incurred in connection with
this Agreement.

<PAGE>

                                                           33

          SECTION 8.11. Press Releases and Public
Announcements. All public announcements or disclosures
relating to the Issuance or this Agreement shall be made only
if mutually agreed upon by the Company and the Purchasers,
except to the extent such disclosure is, in the opinion of
counsel, required by law or by regulation of any applicable
national stock exchange or Commission recognized trading
market; provided that (a) any such required disclosure shall
only be made, to the extent consistent with law and
regulation of any applicable national stock exchange or
Commission recognized trading market, after consultation with
each Purchaser and (b) no such announcement or disclosure
(except as required by law or by regulation of any applicable
national stock exchange or Commission recognized trading
market) shall identify any Purchaser without such Purchaser's
prior consent.

          SECTION 8.12. Assignment; No Third Party
Beneficiaries. This Agreement and the rights, duties and
obligations hereunder may not be assigned or delegated by the
Company without the prior written consent of the Purchasers,
and may not assigned or delegated by any Purchaser without
the Company's prior written consent except that each
Purchaser may assign any or all of its rights and obligations
under this Agreement to any one or more of its Affiliates.
Any assignment or delegation of rights, duties or obligations
hereunder made by the Company without the prior written
consent of the Purchasers, shall be void and of no effect.
This Agreement and the provisions hereof shall be binding
upon and shall inure to the benefit of each of the parties
and their respective successors and permitted assigns. This
Agreement is not intended to confer any rights or benefits on
any Persons other than the parties hereto, except as
expressly set forth in Section 5.2, Section 8.1, this Section
8.12 or Section 8.20.

          SECTION 8.13. Severability. This Agreement shall be
deemed severable, and the invalidity or unenforceability of
any term or provision hereof shall not affect the validity or
enforceability of this Agreement or of any other term or
provision hereof. Furthermore, in lieu of any such invalid or
unenforceable term or provision, the parties hereto intend
that there shall be added as a part of this Agreement a
provision as similar in terms to such invalid or
unenforceable provision as may be possible and be valid and
enforceable.

          SECTION 8.14. Counterparts. This Agreement may be
executed in counterparts, each of which shall be deemed an
original, but all of which taken together shall constitute
one and the same instrument.

<PAGE>

                                                           34

          SECTION 8.15. Further Assurances. As between the
Company and a Purchaser, each party hereto, upon the request
of any other party hereto, shall do all such further acts and
execute, acknowledge and deliver all such further instruments
and documents as may be necessary or desirable to carry out
the transactions contemplated by this Agreement, including,
in the case of the Company, such acts, instruments and
documents as may be necessary or desirable to convey and
transfer to each Purchaser the Shares to be purchased by it
hereunder.

          SECTION 8.16. Remedies Cumulative. The remedies
provided herein shall be cumulative and shall not preclude
the assertion by any party hereto of any other rights or the
seeking of any remedies against the other party hereto.

          SECTION 8.17. Several Liability of the Purchasers.
Nothing in this Agreement (including, without limitation,
Article VI) shall be construed to impose on any Purchaser any
liability for any action or failure to act of any other
Purchaser, including any breach of this Agreement by any such
other Purchaser.

          SECTION 8.18. No Duty to Other Purchasers. Each
Purchaser confirms with each other Purchaser that such
Purchaser has conducted its own due diligence in connection
with its investment in the Shares and the other Purchasers
may therefore have information different from, or additional
to, the information possessed by such Purchaser. In addition,
although certain of such other Purchasers (the "Supplying
Purchasers") may have shared information received by them
(including information contained in third party reports
prepared for such other Purchasers) with such Purchaser, no
representation or warranty is being made with respect to such
information by any Supplying Purchaser or any such third
party. Nothing in this Section 8.18 is meant to limit any
duty, obligation or liability the Company may have to any
Purchaser under this Agreement or otherwise.

          SECTION 8.19. Specific Performance. The parties
hereto agree that the remedy at law for any breach of this
Agreement may be inadequate, and that as between the Company
and a Purchaser any party by whom this Agreement is
enforceable shall be entitled to specific performance in
addition to any other appropriate relief or remedy. Such
party may, in its sole discretion, apply to a court of
competent jurisdiction for specific performance or injunctive
or such other relief as such court may deem just and proper
in order to enforce this Agreement as between the Company and
a Purchaser, or prevent any violation hereof, and, to the
extent permitted by applicable as between the

<PAGE>

                                                           35

Company and a Purchaser law, each party waives any objection
to the imposition of such relief.

          SECTION 8.20. No Purchaser Affiliate Liability. No
Purchaser Affiliate shall have any liability or obligation of
any nature whatsoever in connection with or under this
Agreement or the transactions contemplated hereby, and the
Company hereby waives and releases all claims of any such
liability and obligation, it being understood that no such
Person or entity (other than Purchaser) shall be liable for
or in respect of this Agreement with the transactions
contemplated hereby.

<PAGE>

                                                           36

          IN WITNESS WHEREOF, the parties hereto have
executed this Agreement as of the date first above written.

                              TELIGENT, INC.,

                              by /s/ Alex Mandl
                                 -------------------------------
                                 Name:  Alex Mandl
                                 Title: Chairman and Chief
                                        Executive Officer

HMTF-IV ACQUISITION CORP.,

by /s/ Jack D. Furst
   -------------------------------
   Name:  Jack D. Furst
   Title: Authorized Representative

MICROSOFT CORPORATION,

by /s/ Gregory B. Maffei
   -------------------------------
   Name:  Gregory B. Maffei
   Title: Senior Vice President
          and Chief Financial Officer

CHASE EQUITY ASSOCIATES, L.P.,

  BY:  CHASE CAPITAL PARTNERS,
       its General Partner

by /s/ Michael R. Hannon
   -------------------------------
   Name:  Michael R. Hannon
   Title: General Partner

<PAGE>

                                                           37

DB CAPITAL INVESTORS, L.P.,

  BY:  DB CAPITAL PARTNERS, L.P.,
              its General Partner

  By:  DB CAPITAL PARTNERS, INC.,

by /s/ Frank Schiff
   -------------------------------
   Name:  Frank Schiff
   Title: Managing Director

OLYMPUS GROWTH FUND III, L.P.,

  BY: OGP III, LLC

by /s/ Louis J. Mischianti
   -------------------------------
   Name:  Louis J. Mischianti
   Title: Member

OLYMPUS EXECUTIVE FUND, L.P.,

  BY: OEF, L.P., its general partner

  By: LJM L.L.C., its general partner

by /s/ Louis J. Mischianti
   -------------------------------
   Name:  Louis J. Mischianti
   Title: Managing Member

<PAGE>

                          SCHEDULE I

Purchaser                                         Number of Shares

HMTF-IV Acquisition Corp.                         200,000

Microsoft Corporation                             200,000

Chase Equity Associates, L.P.                      50,000

DB Capital Investors, L.P.                         25,000

Olympus Growth Fund III, L.P.                      24,750

Olympus Executive Fund, L.P.                          250

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