AGREEMENT AND PLAN OF MERGER
This Agreement and Plan of Merger (this "Agreement"), dated as
of October 6, 1997, is by and between Teligent, Inc., a Delaware corporation
(the "Company"), and Teligent, L.L.C., a Delaware limited liability company (the
"LLC").
WITNESSETH
WHEREAS, the LLC has determined (i) to offer equity interests
to the public pursuant to a registration statement filed with the Securities and
Exchange Commission (the "IPO"); and (ii) in connection with the IPO, to
reorganize the LLC as a corporation; and
WHEREAS, the Board of Directors and the sole stockholder of
the Company, and the Board of Directors and the Members of the LLC holding a
majority of the interest therein, have approved and adopted this Agreement.
NOW, THEREFORE, for good and valuable consideration, the
receipt of which is hereby acknowledged, the parties to this Agreement covenant
and agree as follows:
ARTICLE I
THE MERGER
I.1 The Merger; Surviving Corporation. Subject to the terms
and conditions set forth in this Agreement, at the Effective Time (as defined in
Section 1.3 below), the LLC shall be merged with and into the Company, pursuant
to Section 264 of the Delaware General Corporation Law (the "DGCL") and Section
18-209 of the Delaware Limited Liability Company Act (the "DLLCA"), and the
separate existence of the LLC shall cease. The Company shall be the surviving
entity (the "Surviving Corporation") and shall continue to be governed by the
DGCL.
I.2 Condition to the Merger. The LLC and the Company shall not
consummate the Merger unless and until there shall have occurred, or be
occurring concurrently with the Merger, the closing of the purchase of capital
stock of the Company by the underwriter or underwriters
for the IPO in accordance with the terms of the applicable underwriting
agreement or agreements. The LLC and the Company agree that the foregoing
condition shall not be waived.
I.3 Effective Time. The Merger shall become effective (the
"Effective Time") upon filing of the Certificate of Merger (the "Certificate of
Merger") with the Secretary of State of the State of Delaware. The Certificate
of Merger shall be filed at such time as the Company and the LLC shall direct.
I.4 Cancellation of the Limited Liability Company. In
accordance with Section 18-209(e) of the DLLCA, the Certificate of Merger filed
pursuant to Section 1.3 hereof shall be deemed a certificate of cancellation of
the LLC.
ARTICLE II
THE SURVIVING CORPORATION
II.1 Name. The name of the Surviving Corporation shall
continue to be Teligent, Inc.
II.2 Certificate of Incorporation and Bylaws; Defined Terms.
The Certificate of Incorporation and Bylaws of the Surviving Corporation shall
be as set forth in Exhibits I and II to this Agreement, respectively, unless and
until amended in accordance with their terms and applicable law. Capitalized
terms used but not defined herein shall have the meanings given to such terms in
the Certificate of Incorporation set forth in Exhibit I to this Agreement.
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II.3 Directors and Officers. The directors of the Company
immediately prior to the Effective Time (who shall include at least all of the
individuals then serving as directors of the LLC) shall be the initial directors
of the Surviving Corporation, each to hold office in accordance with the
Certificate of Incorporation and Bylaws of the Surviving Corporation and until
his or her successor is duly elected and qualified or until his or her earlier
resignation or removal. The officers of the Company immediately prior to the
Effective Time shall be the initial officers of the Surviving Corporation, each
to hold office in accordance with the Certificate of Incorporation and Bylaws of
the Surviving Corporation and until his or her successor is duly appointed and
qualified or until his or her earlier resignation or removal.
ARTICLE III
CONVERSION OF SECURITIES
III.1 Conversion of LLC Interests. At the Effective Time, by
virtue of the Merger and without any action on the part of the Company, the LLC
or any holder of the following interests or securities:
(a) the interest of Microwave Services, Inc., a
Delaware corporation ("MSI"), in the LLC shall be converted into and become a
number of shares of Class B-Series 1 Common Stock of the Surviving Corporation
equal to the product of (x) MSI's percentage interest in the LLC immediately
prior to the Effective Time (expressed in decimal form to five decimal places)
and (y) the Pre-IPO Outstanding Amount (as hereinafter defined);
(b) the interest of Telcom-DTS, L.L.C., a Delaware
limited liability company ("Telcom"), in the LLC shall be converted into and
become a number of shares of Class B-Series 2 Common Stock of the Surviving
Corporation equal to the product of (x) Telcom's percentage interest in the LLC
immediately prior to the Effective Time (expressed in decimal form to five
decimal places) and (y) the Pre-IPO Outstanding Amount;
(c) the interest of Nippon Telegraph and
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Telephone Corporation and its affiliates (collectively, "NTT") in the LLC shall
be converted into and become a number of shares of Class B-Series 3 Common Stock
of the Surviving Corporation equal to the product of (x) NTT's percentage
interest in the LLC immediately prior to the Effective Time (expressed in
decimal form to five decimal places) and (y) the Pre-IPO Outstanding Amount;
(d) the interest of Xxxx Xxxxxxxx in the LLC shall be
converted into and become a number of shares of Class A Common Stock of the
Surviving Corporation equal to the product of (x) Xxxx Xxxxxxxx'x percentage
interest in the LLC immediately prior to the Effective Time (expressed in
decimal form to five decimal places) and (y) the Pre-IPO Outstanding Amount;
(e) the interest, if any, of any person or entity
(other than MSI, Telcom, NTT and Xxxx Xxxxxxxx) in the LLC shall be converted
into and become a number of shares of Class A Common Stock of the Surviving
Corporation equal to the product of (x) such person's or entity's percentage
interest in the LLC immediately prior to the Effective Time (expressed in
decimal form to five decimal places) and (y) the Pre-IPO Outstanding Amount; and
(f) all shares of capital stock of the Company, if
any, that are issued and outstanding immediately prior to the Effective Time
shall be cancelled and retired.
The "Pre-IPO Outstanding Amount" shall be the aggregate number of shares of
Common Stock of the Company that will be issued and outstanding immediately
following the Merger (without giving effect to the issuance of any shares in the
IPO), as disclosed in the definitive prospectus for the IPO.
III.2 No Fractional Shares. No fractional shares of capital
stock of the Surviving Corporation shall be issued in the Merger. In lieu of any
fractional share that any holder would otherwise be entitled to receive, such
holder shall instead instead receive one whole share of the same class and
series.
ARTICLE IV
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TRANSFER AND CONVEYANCE OF ASSETS
AND ASSUMPTION OF LIABILITIES
IV.1 Transfer, Conveyance and Assumption. At the Effective
Time, the Company shall continue in existence as the Surviving Corporation and,
without further transfer, succeed to and possess all the rights, privileges and
powers of the LLC, and all the assets and property of whatever kind and
character of the LLC shall vest in the Surviving Corporation without further act
or deed. Thereafter, the Company, as the Surviving Corporation, shall be liable
for all of the liabilities and obligations of the LLC, and any claim or judgment
against the LLC may be enforced against the Company, as the Surviving
Corporation. As of the Effective Time, the Surviving Corporation shall assume
all of the Company's obligations under the Company Appreciation Rights granted
to Xxxx X. Xxxxx ("Xx. Xxxxx") pursuant to that certain Employment Agreement
entered into between the LLC and Xx. Xxxxx, dated as of September 1, 1996, and
the Appreciation Units granted to certain employees of the LLC pursuant to the
Associated Communications, L.L.C. Long-Term Incentive Plan. At or prior to the
Effective Time, the Company shall enter into a stockholders' agreement which
will implement as of the Effective Time (to the extent not implemented by the
Certificate of Incorporation or Bylaws of the Surviving Corporation) the
provisions of the Amended and Restated Limited Liability Company Agreement of
the Teligent, L.L.C. as then in effect (the "LLC Agreement") which, under the
LLC Agreement, are contemplated to be implemented.
IV.2 Taxation. It is intended that the Merger shall be treated
as a transfer of the property of the LLC to the Company under Section 351 of the
Internal Revenue Code.
IV.3 Further Assurances. If at any time the Company shall
consider or be advised that any further assignment, conveyance or assurance is
necessary or advisable to vest, perfect or confirm of record in the Surviving
Corporation the title to any property or right of the LLC, or otherwise, to
carry out the provisions hereof, the proper representatives of the LLC as of the
Effective Time shall execute and deliver any and all proper deeds, assignments
and assurances, and do all
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things necessary and proper to vest, perfect or convey title to such property or
right in the Surviving Corporation and otherwise to carry out the provisions
hereof.
ARTICLE V
TERMINATION
V.1 Termination. This Agreement shall automatically terminate
in the event that the condition to the Merger set forth in Section 1.2 of this
Agreement shall not have been satisfied on or before December 31, 1997.
V.2 Effect of Termination. If this Agreement is terminated
pursuant to Section 5.1, this Agreement shall become void and of no effect with
no liability on the part of any party hereto.
ARTICLE VI
MISCELLANEOUS
VI.1 Entire Agreement. This Agreement contains the parties'
entire understanding and agreement with respect to its subject matter, and any
and all conflicting or inconsistent discussions, agreements, promises,
representations and statements, if any, between the parties or their
representatives that are not incorporated in this Agreement shall be null and
void and are merged into this Agreement.
VI.2 Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall constitute an original, but all of which
together shall constitute a single agreement.
VI.3 Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without giving
effect to conflicts
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of law principles.
VI.4 Headings. The various section headings are inserted for
purposes of reference only and shall not affect the meaning or interpretation of
this Agreement or any provision hereof.
VI.5 Severability. The provisions of this Agreement shall be
severable, and any invalidity, unenforceability or illegality of any provision
or provisions of this Agreement shall not affect any other provision or
provisions of this Agreement, and each term and provision of this Agreement
shall be construed to be valid and enforceable to the full extent permitted by
law.
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IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed as of the date first above written.
Teligent, L.L.C.
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Chairman and CEO
Teligent, Inc.
By: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Chairman and CEO
