SECOND RESTATED AND AMENDED MERGER AGREEMENT AND PLAN
OF REORGANIZATION, dated October __, 1996, among
ADVANCED RADIO TELECOM CORP. (formerly known as
ADVANCED RADIO TECHNOLOGY, LTD.), a Delaware
corporation ("TELECOM"), ADVANCED RADIO TECHNOLOGIES
CORPORATION, a Delaware corporation ("ART") and ART
MERGER CORPORATION, a Delaware corporation ("Merger
Sub").
TELECOM and ART entered into a Restated and Amended Merger Agreement and
Plan of Reorganization, dated June 26, 1996 (the "Old Merger Agreement") and
have determined to further amend and restate the Old Merger Agreement and revise
the merger and plan of reorganization contemplated therein. ART has formed a
wholly owned subsidiary, Merger Sub, which has and will not carry out any
business and which has and will not take any action other than entering into
this Agreement. The parties agree that the Old Merger Agreement is amended and
restated in its entirety by this Agreement.
Simultaneously with the Merger, ART intends to effect a one for 2.75
reverse stock split of the ART Common Stock.
The respective Boards of Directors of TELECOM, ART and Merger Sub deem it
advisable and in the best interests of such corporations and their respective
stockholders that Merger Sub be merged with and into TELECOM on the terms and
conditions set forth in this Agreement.
Accordingly, the parties further agree as follows:
DEFINITIONS. As used in this Agreement and in any amendments thereto, the
following terms shall have the following meanings respectively:
(a) (i) "Existing ART Common Stock" shall refer to the Common Stock,
$0.001 par value per share, of ART [outstanding immediately prior to the
Effective Time.
(ii) "ART Common Stock" shall refer to the Common Stock, $0.001
par value per share, of ART outstanding or issuable on and after the Effective
Time.
(b) (i) "ART Series A Preferred Stock" shall refer to the Series A
Preferred Stock, $0.001 par value per share, of ART;
(ii) "ART Series B Preferred Stock" shall refer to the Series B
Preferred Stock, $0.001 par value per share, of ART;
(iii) "ART Series C Preferred Stock" shall refer to the Series C
Preferred Stock, $0.001 par value per share, of ART;
(iv) "ART Series D Preferred Stock" shall refer to the Series D
Preferred Stock, $0.001 par value per share, of ART;
(v) "ART Series E Preferred Stock" shall refer to the Series E
Preferred Stock, $0.001 par value per share, of ART; and
(vi) "ART Series F Preferred Stock" shall refer to the Series F
Preferred Stock, $0.001 par value per share, of ART.
(c) "ART Series A Redeemable Preferred Stock" shall refer to the
Series A Redeemable Preferred Stock, $.001 par value per share, of ART.
(d) "Closing" shall refer to the closing under this Agreement as
described in Section 6.
(e) "Effective Time" shall mean the date and time when the Merger
becomes effective pursuant to the General Corporation Law of the State of
Delaware ("GCL").
(f) "Merger" shall refer to the merger of Merger Sub into and with
TELECOM as provided in Section 1.
(g) "TELECOM Common Stock" shall refer to the Common Stock, $0.001
par value per share, of TELECOM.
(h) (i) "TELECOM Series A Preferred Stock" shall refer to the Series
A Preferred Stock, $0.001 par value per share, of TELECOM;
(ii) "TELECOM Series B Preferred Stock" shall refer to the
Series B Preferred Stock, $0.001 par value per share, of TELECOM;
(iii) "TELECOM Series C Preferred Stock" shall refer to the
Series C Preferred Stock, $0.001 par value per share, of TELECOM;
(iv) "TELECOM Series D Preferred Stock" shall refer to the
Series D Preferred Stock, $0.001 par value per share, of TELECOM;
(v) "TELECOM Series E Preferred Stock" shall refer to the Series
E Preferred Stock, $0.001 par value per share, of TELECOM; and
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(vi) "TELECOM Series F Preferred Stock" shall refer to the
Series F Preferred Stock, $0.001 par value per share, of TELECOM.
1. THE MERGER. Merger Sub shall be merged into and with TELECOM upon the
terms set forth in this Agreement in a transaction intended to qualify as a
reorganization described in Section 36B(a)(1)(B) of the Internal Revenue Code.
2. CERTIFICATE OF MERGER. After satisfaction or waiver of all conditions
established herein to the obligations of the parties, TELECOM shall file with
the Secretary of State of the State of Delaware a duly executed Certificate of
Merger in the form of ANNEX I (the "Certificate of Merger"). The parties shall
use their best efforts to cause such conditions to be fulfilled as soon as
possible.
3. EFFECT OF MERGER. The effect of the Merger shall be as provided in
this Agreement, the Certificate of Merger and the GCL. At the Effective Time:
(a) TELECOM shall be the surviving corporation in the Merger (in such
capacity, the "Surviving Corporation");
(b) the certificate of incorporation of the Surviving Corporation
shall be as set forth on EXHIBIT A to ANNEX I hereto, so that as amended,
in its entirety it shall be substantially identical to the Certificate of
Incorporation of Merger Sub as restated and amended immediately prior to
the Effective Time;
(c) the Bylaws of the Surviving Corporation shall be as set forth on
ANNEX II hereto, so that, as amended, in their entirety they shall be
substantially identical to the Bylaws of Merger Sub, as amended immediately
prior to the Effective Time;
(d) the initial directors of the Surviving Corporation shall be those
persons who immediately prior to the Effective Time were serving as the
directors of Merger Sub to hold office in accordance with the Certificate
of Incorporation and Bylaws of the Surviving Corporation until their
successors are duly elected or appointed;
(e) the initial officers of the Surviving Corporation shall be those
persons who immediately prior to the Effective Time were serving as the
officers of Merger Sub until their successors are duly elected or
appointed;
(f) the corporate existence, franchises and rights of TELECOM, with
its purposes, powers and
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objects, shall continue unaffected and unimpaired by the Merger, and
TELECOM shall succeed to and be fully vested insofar as permitted by law,
with the corporate existence, identity and all rights, franchises, assets,
liabilities and obligations of Merger Sub, all as set forth in and subject
to Section 259 of the GCL;
(g) the name of the Surviving Corporation shall be changed to "ART
Licensing Corp."; and
(h) the separate existence and corporate organization of Merger Sub
shall cease.
4. TREATMENT OF SHARES. At the Effective Time, by virtue of the Merger
and without any action on the part of any stockholder of ART, TELECOM, Merger
Sub or their stockholders:
(a) each share of Common Stock, $.01 par value per share, of Merger
Sub outstanding immediately prior to the Effective Time shall be converted
into one share of TELECOM Common Stock;
(b) (i) each 2.75 issued shares of Existing ART Common Stock
outstanding immediately prior to the Effective Time shall be converted into
the right to receive one share of ART Common Stock;
(ii) no fractional shares of ART Common Stock will be issued as
a result of the Merger; and in lieu of the issuance of fractional shares
(A) each holder of TELECOM Common Stock or Existing ART Common Stock who
otherwise would be entitled to receive a fractional share of ART Common
Stock equal to or greater than 0.5 of a share of ART Common Stock shall
receive one full share of ART Common Stock, and (B) each such holder who
otherwise would be entitled to receive a fractional share of ART Common
Stock representing less than 0.5 of a share of ART Common Stock shall be
entitled to receive cash in lieu thereof computed based on a price per
share of $16.50 and shall not be entitled to receive any share of ART
Common Stock in respect thereto;
(c) each 2.75 issued shares of TELECOM Common Stock (excluding any
shares to be cancelled pursuant to section 4(f)) outstanding immediately
prior to the Effective Time shall be converted into the right to receive
one share of ART Common Stock;
(d) (i) each issued share of TELECOM Series A Preferred Stock
outstanding immediately prior to the Effective Time shall be converted into
the right to receive one share of ART Series A Preferred Stock;
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(ii) each issued share of TELECOM Series B Preferred Stock
outstanding immediately prior to the Effective Time shall be converted into
the right to receive one share of ART Series B Preferred Stock;
(iii) each issued share of TELECOM Series C Preferred Stock
outstanding immediately prior to the Effective Time shall be converted into
the right to receive one share of ART Series C Preferred Stock;
(iv) each issued share of TELECOM Series D Preferred Stock
outstanding immediately prior to the Effective Time shall be converted into
the right to receive one share of ART Series D Preferred Stock;
(v) each issued share of TELECOM Series E Preferred Stock
outstanding immediately prior to the Effective Time shall be converted into
the right to receive one share of ART Series E Preferred Stock; and
(vi) each issued share of TELECOM Series F Preferred Stock
outstanding immediately prior to the Effective Time shall be converted into
the right to receive one share of ART Series F Preferred Stock.
(e) the sole outstanding share of ART Series A Redeemable Preferred
Stock, held by TELECOM, shall be cancelled;
(f) each outstanding option to purchase TELECOM Common Stock issued
pursuant to TELECOM's Restated Equity Incentive Plan, shall be replaced by
an option of similar tenor under ART's Equity Incentive Plan in accordance
with the terms thereof;
(g) no fractional shares of ART Common Stock will be issued as a
result of the Merger, either at the Closing or at the time of issuance of
certificates in the names of the TELECOM stockholders. In lieu of the
issuance of fractional shares (A) each holder of TELECOM Common Stock who
otherwise would be entitled to receive a fractional share of ART Common
Stock equal to or greater than 0.5 of a share of ART Common Stock shall
receive one full share of ART Common Stock, and (B) each such holder who
otherwise would be entitled to receive a fractional share of ART Common
Stock representing less than 0.5 of a share of ART Common Stock shall be
entitled to receive cash in lieu thereof computed based on a price per
share of $16.50 and shall not be entitled to receive any share of ART
Common Stock in respect thereto; and
(h) Each outstanding share of TELECOM Common Stock held in treasury
of TELECOM or owned by ART
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immediately prior to Effective Time, shall by virtue of the Merger and
without any action on the part of the holder thereof, cease to be
outstanding, be canceled and retired without payment of any consideration
therefor and cease to exist.
5. FURTHER ASSURANCES. If at any time after the Effective Time, TELECOM
shall consider or be advised that any further assignments or assurances in law
or any other things are necessary or desirable to vest, perfect or confirm, of
record or otherwise, in TELECOM the title to any property or right of TELECOM
acquired or to be acquired by reason of or as a result of the Merger, the
officers of Merger Sub in office immediately prior to the Effective Time shall
in the name and on behalf of Merger Sub have and may exercise power and
authority to execute and deliver all such proper deeds, assignments and
assurances in law and do all things necessary and proper to vest, perfect or
confirm title to such property or rights in TELECOM and otherwise to carry out
the purposes of this Agreement, and the proper officers and directors of TELECOM
are hereby additionally authorized in the name of Merger Sub or otherwise to
take any and all such action.
6. CLOSING AND EXCHANGE OF STOCK CERTIFICATES.
(a) The Closing (provided that the Effective Time shall already have
arrived) will take place at 10:00 A.M. New York time on the date of the
Effective Time, or at such other time as the parties to this Agreement, acting
through their Boards of Directors or the Executive Committees thereof, may
mutually agree. The place of Closing will be at the offices of ▇▇▇▇ & Hessen
LLP, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ or at such other place as may be
mutually agreed upon by the parties.
(b) As soon as practicable after the Effective Time, each holder of
shares of TELECOM Common Stock and TELECOM Series A, B, C, D, E and F Preferred
Stock outstanding immediately prior to the Effective Time (excluding shares to
be cancelled pursuant to 4(g)) shall surrender the certificate or certificates
representing such shares to ART and shall receive in exchange therefor a
certificate or certificates representing the number of whole shares of ART
Common Stock or ART Series A, B, C, D, E or F Preferred Stock, as the case may
be, which such holders shall be entitled to receive as provided in Section 4.
The certificate or certificates so surrendered shall be duly endorsed as ART may
require. Subject to the following provisions of this Section 6(b), after the
Effective Time each certificate which represented outstanding shares of TELECOM
Common Stock or TELECOM Series A, B, C, D, E or F Preferred Stock prior to the
Effective Time shall be deemed for all corporate purposes to evidence the
ownership of the shares of ART Common Stock or ART Series A, B, C, D, E or F
Preferred Stock provided in Section 4. No dividend or other distribution
payable with respect to the ART Common Stock or ART Series A, B, C, D, E or F
Preferred Stock shall be
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paid to any holder of any certificate representing shares of TELECOM Common
Stock or TELECOM Series A, B, C, D, E or F Preferred Stock issued and
outstanding immediately prior to the Effective Time until such holder surrenders
such certificate for exchange as provided in this Section 6(b).
(c) All shares of ART Common Stock for and into which shares of
TELECOM Common Stock shall have been exchanged and converted pursuant to this
Agreement shall be deemed to have been issued in full satisfaction of all rights
pertaining to such exchanged and converted shares. Except for such rights and
except as provided in Section 6(b), the holder of certificate(s) representing
shares of TELECOM Common Stock issued and outstanding immediately prior to the
Effective Time shall have no rights with respect to such shares other than to
surrender such certificate or certificates pursuant to Section 6(b).
(d) All shares of ART Series A, B, C, D, E or F Preferred Stock for
and into which shares of TELECOM Series A, B, C, D, E or F Preferred Stock shall
have been exchanged and converted pursuant to this Agreement shall be deemed to
have been issued in full satisfaction of all rights pertaining to such exchanged
and converted shares. Except for such rights and except as provided in Section
6(b), the holder of certificate(s) representing shares of TELECOM Series A, B,
C, D, E or F Preferred Stock issued and outstanding immediately prior to the
Effective Time shall have no rights with respect to such shares other than to
surrender such certificate or certificates pursuant to Section 6(b).
7. REPRESENTATIONS, WARRANTIES AND COVENANTS OF ART. ART represents,
warrants and agrees as follows:
(a) ART is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Delaware with corporate power and
authority to carry on the business in which it is engaged, to own, lease, and
operate its properties, to execute and deliver this Agreement and to perform its
obligations under this Agreement;
(b) The authorized capital stock of ART consists of 100,000,000
shares of Existing ART Common Stock, $.001 par value per share, of which
10,013,055 shares are issued and outstanding on the date of this Agreement, and
10,000,000 shares of serial preferred stock, $.001 par value per share, of which
1 share of Series A Redeemable Preferred Stock is issued and outstanding on the
date of this Agreement. ART does not hold any shares of its authorized capital
stock in its treasury. All of the issued and outstanding shares of such capital
stock are duly and validly issued and outstanding and are fully paid and
nonassessable.
(c) Except with the prior written approval of TELECOM, between the
date of this Agreement and the Effective
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Time, there will be no change in the Certificate of Incorporation or By-Laws or
in the authorized or issued capital stock of ART.
(d) Except with the prior written approval of TELECOM, between the
date of this Agreement and the Effective Time, ART will not (i) issue any
additional capital stock or other security, (ii) declare, set aside or pay any
dividend or make any other distribution in respect to its capital, (iii)
directly or indirectly redeem, purchase or otherwise acquire any shares of its
capital stock, or (iv) issue to any person options, warrants or other rights to
acquire any securities of ART.
(e) From the date of this Agreement up to and including the Effective
Time, except with the prior written approval of TELECOM, the business of ART
will be conducted in the usual, regular and ordinary manner, and ART will not
make any material change in its methods of management, distribution, marketing,
accounting or operations.
(f) In the event the Merger is not effective for any reason by May
13, 1997, in addition to its obligations under Section 12 hereof, ART agrees to
surrender all of the shares of TELECOM Common Stock held by ART to TELECOM
without any additional consideration.
8. REPRESENTATIONS, WARRANTIES AND COVENANT OF ART, MERGER SUB AND
TELECOM. Each of ART, Merger Sub and TELECOM will use its respective best
efforts to cause all of the conditions set forth in Sections 9 through 13 that
are within its control to be satisfied as soon as practicable after the date
hereof.
9. REPRESENTATIONS, WARRANTIES AND COVENANTS OF MERGER SUB.
(a) Merger Sub is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware with power and
authority to carry on its business, to own its properties, and to execute and
deliver this Agreement and perform its obligations hereunder.
(b) Between the date of this Agreement and the Effective Time, there
will be no change in the Certificate of Incorporation or By-Laws or in the
authorized or issued capital stock of Merger Sub.
(c) Except as otherwise provided herein, between the date of this
Agreement and the Effective Time, Merger Sub will not (i) issue any additional
capital stock or other security, (ii) declare, set aside or pay any dividend or
make any other distribution in respect to its capital, (iii) directly or
indirectly redeem, purchase or otherwise acquire any shares of its capital
stock, or (iv) issue to any person options, warrants or other rights to acquire
any securities of Merger Sub.
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(d) From the date of this Agreement up to and including the Effective
Time, except with the prior written approval of TELECOM, Merger Sub will not
engage in any business or incur any indebtedness.
10. REPRESENTATIONS, WARRANTIES AND COVENANTS OF TELECOM. TELECOM
represents, warrants and agrees as follows:
(a) TELECOM is a corporation duly organized, validly existing and in
good standing under the laws of the State of Delaware with power and authority
to carry on its business, to own its properties, and to execute and deliver this
Agreement and perform its obligations hereunder.
(b) TELECOM shall not sell or transfer any ART Series A Redeemable
Preferred Stock held by TELECOM.
(c) TELECOM waives any rights to dividends on the ART Series A
Redeemable Preferred Stock held by TELECOM.
11. CONDITIONS PRECEDENT TO THE OBLIGATION OF TELECOM. The obligations
of TELECOM under this Agreement and the Certificate of Merger are subject to the
fulfillment prior to or on the Effective Time of the following conditions:
(a) This Agreement and the Merger shall have been approved by the
affirmative vote of the holders of all of the shares of ART Common Stock
entitled to vote thereon;
(b) The Merger shall have been approved by the Federal Communication
Commission;
(c) ART shall adopt, file and make effective its Second Amended and
Restated Certificate of Incorporation (the "Restated ART Certificate of
Incorporation") in the form attached hereto as Annex III; and
(d) TELECOM shall have received an opinion of its counsel to the
effect that the Merger will be a reorganization described in Section
368(a)(1)(B) of the Internal Revenue Code.
12. CONDITIONS PRECEDENT TO OBLIGATIONS OF ART. The obligations of ART
under this Agreement are subject to the fulfillment prior to or on the Effective
Time of the following conditions:
(a) The Restated ART Certificate of Incorporation, this Agreement and
the Merger shall have been approved by the affirmative vote of the holders
of TELECOM capital stock entitled to vote thereon;
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(b) The Merger shall have been approved by the Federal Communication
Commission; and
(c) ART shall have received an opinion of its counsel to the effect
that the Merger will be a reorganization described in Section 368(a)(1)(B)
of the Internal Revenue Code.
13. CONDITIONS PRECEDENT TO OBLIGATIONS OF MERGER SUB. The obligations of
Merger Sub under this Agreement are subject to the fulfillment prior to or on
the Effective Time of the following conditions:
(a) This Agreement and the Merger shall have been approved by the
affirmative vote of the holders of TELECOM capital stock entitled to vote
thereon; and
(b) The Merger shall have been approved by the Federal Communication
Commission.
14. EFFECT OF FAILURE TO CONSUMMATE MERGER. In the event the Merger is
not effective for any reason by May 13, 1997, ART shall surrender all of its
shares of TELECOM Common Stock to TELECOM, and TELECOM and ART shall revise the
terms of that certain Services Agreement, dated May 8, 1995, to provide that (i)
the term thereof will be extended to 40 years, (ii) ART will receive, in the
event of any dividends paid by TELECOM to its stockholders, an amount equal to
the percentage share (the "Percentage Share") that the ART stockholders would
have owned of the combined corporations after giving effect to the Merger
(without taking into account any issuances of stock by ART or TELECOM after the
date hereof) of such aggregate dividends, (iii) ART will have a right of co-
sale, subject to FCC approval, in accordance with its Percentage Share of the
aggregate consideration payable to TELECOM and ART in such transaction in the
event of any merger or sale of substantial assets by TELECOM and (iv), in the
event ART agrees to merge into another entity or to sell substantially all its
assets to another entity, TELECOM shall, upon the request of ART, use its best
efforts, subject to FCC approval, to merge into such entity or sell
substantially all its assets to such entity for aggregate consideration equal to
the Percentage Share of the aggregate consideration to be paid for ART and
TELECOM in such transaction.
15. MODIFICATION AND TERMINATION. To the fullest extent permitted under
the GCL, TELECOM, Merger Sub and ART, by mutual consent of their respective
Boards of Directors, may amend, modify and supplement this Agreement in such
manner as may be agreed upon by them in writing at any time before the Closing.
TELECOM, Merger Sub and ART may at any time, by mutual consent of their Boards
of Directors, terminate this Agreement.
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16. MISCELLANEOUS.
(a) PARTIES IN INTEREST. This Agreement shall only bind and inure to
the benefit of the parties and their respective successors and assigns.
(b) ENTIRE AGREEMENT. This Agreement contains the entire
understanding of the parties with respect to the subject matter hereof and
supersedes all prior agreements and understandings between the parties with
respect to such subject matter.
(c) COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and each such counterpart shall be deemed to be an original
instrument, but all such counterparts together shall constitute only one
agreement.
(d) HEADINGS. The section headings contained in this Agreement are
for reference purposes only and shall not affect in any way the meaning or
interpretation of this Agreement.
(e) GOVERNING LAW. This Agreement shall be governed by and construed
in accordance with the laws of the State of Delaware, without giving effect to
principles of conflicts of law.
IN WITNESS WHEREOF, the Board of Directors of each of the parties hereto
first having duly adopted and approved the same, this Second Restated and
Amended Merger Agreement and Plan of Reorganization has been executed and
delivered on the date first above written.
Attest: ADVANCED RADIO TELECOM CORP.
(formerly Advanced Radio
Technology, Ltd.)
----------------------
Name:
Title: By:
------------------------
Name:
Title:
Attest: ADVANCED RADIO TECHNOLOGIES
CORPORATION
----------------------
Name: By:
Title: -----------------------
Name:
Title:
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Attest: ART MERGER CORPORATION
By:
---------------------- -----------------------
Name: Name:
Title: Title:
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ANNEX I
TO SECOND RESTATED AND AMENDED MERGER
AGREEMENT AND PLAN OF REORGANIZATION
CERTIFICATE OF MERGER
OF
ART MERGER CORPORATION
WITH AND INTO
ADVANCED RADIO TELECOM CORP.
The undersigned corporation, organized and existing under the General
Corporation Law of the State of Delaware (the "General Corporation Law"), DOES
HEREBY CERTIFY:
FIRST: The name and state of incorporation of each of the constituent
corporations in the merger are as follows:
Name State of Incorporation
---- ----------------------
ADVANCED RADIO TELECOM CORP.
(formerly known as Advanced
Radio Technology, Ltd.) Delaware
ART MERGER CORPORATION Delaware
SECOND: A Second Restated and Amended Merger Agreement and Plan of
Reorganization dated October __, 1996 (the "Merger Agreement") has been
approved, adopted, certified, executed, and acknowledged by each constituent
corporation in accordance with Section 251 of the General Corporation Law of the
State of Delaware.
THIRD: The name of the surviving corporation shall be ART LICENSING CORP.
FOURTH: Such amendments or changes to the certificate of incorporation of
the surviving corporation as are desired to be effected by the merger are set
forth on Exhibit A attached hereto and incorporated herein by reference, which
sets forth such certificate of incorporation, as so amended, in its entirety.
FIFTH: The executed Merger Agreement is on file at the principal place of
business of the surviving corporation at ▇▇▇ - ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇, ▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇.
SIXTH: A copy of the Merger Agreement will be furnished by the surviving
corporation, on request and without cost, to any stockholder of any constituent
corporation.
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IN WITNESS WHEREOF, this Certificate of Merger has been executed and
acknowledged this __ day of October, 1996.
ADVANCED RADIO TELECOM CORP.
By:
-------------------------------------
Name:
Title:
ACKNOWLEDGED:
------------------------------
Name:
Title:
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