-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, WLPhSHasPTHjTtyaHZbCGGPskKZUepZqy7oZZ0lsBnqS/KeXXJlZEBmCV7j7eF1T oNOQAKhnjNsvq3oUCxakOw== 0000938492-98-000168.txt : 19980505 0000938492-98-000168.hdr.sgml : 19980505 ACCESSION NUMBER: 0000938492-98-000168 CONFORMED SUBMISSION TYPE: SC 13D PUBLIC DOCUMENT COUNT: 4 FILED AS OF DATE: 19980504 SROS: NASD SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: ADVANCED RADIO TELECOM CORP CENTRAL INDEX KEY: 0001010286 STANDARD INDUSTRIAL CLASSIFICATION: CABLE & OTHER PAY TELEVISION SERVICES [4841] IRS NUMBER: 521869023 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D SEC ACT: SEC FILE NUMBER: 005-49879 FILM NUMBER: 98609391 BUSINESS ADDRESS: STREET 1: 500 108TH AVE NE STREET 2: SUITE 2600 CITY: BELLEVUE STATE: WA ZIP: 98004 BUSINESS PHONE: 2066888700 MAIL ADDRESS: STREET 1: 500 108TH AVENUE NE STREET 2: SUITE 2600 CITY: BELLEVUE STATE: WA ZIP: 98004 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: WINSTAR COMMUNICATIONS INC CENTRAL INDEX KEY: 0000868797 STANDARD INDUSTRIAL CLASSIFICATION: TELEPHONE COMMUNICATIONS (NO RADIO TELEPHONE) [4813] IRS NUMBER: 133585278 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 13D BUSINESS ADDRESS: STREET 1: 230 PARK AVE STE 2700 CITY: NEW YORK STATE: NY ZIP: 10169 BUSINESS PHONE: 2125844000 FORMER COMPANY: FORMER CONFORMED NAME: ROBERN INDUSTRIES INC DATE OF NAME CHANGE: 19930328 FORMER COMPANY: FORMER CONFORMED NAME: ROBERN APPAREL INC DATE OF NAME CHANGE: 19600201 SC 13D 1 SCHEDULE 13D SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 -------------------- SCHEDULE 13D (Rule 13d-101) INFORMATION TO BE INCLUDED IN STATEMENTS FILED PURSUANT TO RULE 13d-1(a) AND AMENDMENTS THERETO FILED PURSUANT TO RULE 13d-2(a) (Amendment No. __________)1 ADVANCED RADIO TELECOM CORP. - ------------------------------------------------------------------------------- (Name of Issuer) COMMON STOCK, PAR VALUE $.001 - ------------------------------------------------------------------------------- (Title Class of Securities) 00743 U 10 1 - ------------------------------------------------------------------------------- (CUSIP Number) Timothy R. Graham, Esq. Executive Vice President and General Counsel WinStar Communications, Inc. 230 Park Avenue, New York, NY 10169 212-584-4000 - ------------------------------------------------------------------------------- (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications) April 24, 1998 - ------------------------------------------------------------------------------- (Date of Event which Requires Filing of this Statement) If the filing person has previously filed a statement on Schedule 13G to report the acquisition which is the subject of this Schedule 13D, and is filing this schedule because of Rule 13d-1(e), 13d-1(f) or 13d-1(g), check the following box |_|. Note:Schedules filed in paper format shall include a signed original and five copies of the schedule, including all exhibits. See Rule 13d-7(b)for other parties to whom copies are to be sent. (Continued on following pages) Page 1 of 6 Pages - -------------------- 1 The remainder of this cover page shall be filled out for a reporting person's initial filing on this form with respect to the subject class of securities, and for any subsequent amendment containing information which would alter disclosures provided in a prior cover page. The information required on the remainder of this cover page shall not be deemed to be "filed" for the purpose of Section 18 of the Securities Exchange Act of 1934 ("Act") or otherwise subject to the liabilities of that section of the Act but shall be subject to all other provisions of the Act (however, see the Notes). SCHEDULE 13D CUSIP No. 00743U 10 1 Page 2 of 6 Pages ----------------------- ----- ----- - ------------------------------------------------------------------------------ 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON WinStar Communications, Inc. 13-3585278 - ------------------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)|X| (b)|_| - ------------------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------------------ 4 SOURCE OF FUNDS* 00-See Item 3 - ------------------------------------------------------------------------------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| N/A - ------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION Delaware - ------------------------------------------------------------------------------ 7 SOLE VOTING POWER NUMBER OF -------------------------------------------------- SHARES 8 SHARED VOTING POWER BENEFICIALLY 3,313,864 OWNED BY -------------------------------------------------- EACH 9 SOLE DISPOSITIVE POWER REPORTING PERSON -------------------------------------------------- WITH 10 SHARED DISPOSITIVE POWER 3,313,864 - ------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,313,864 - See Item 5 - ------------------------------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| - ------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.9% - ------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON* CO - ------------------------------------------------------------------------------ Page 2 of 6 Pages SCHEDULE 13D CUSIP No. 00743U 10 1 Page 3 of 6 Pages ----------------------- ----- ----- - ------------------------------------------------------------------------------ 1 NAME OF REPORTING PERSON S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON WINSTAR LHC1 LLC 13-3585278 - ------------------------------------------------------------------------------ 2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP* (a)|X| (b)|_| - ------------------------------------------------------------------------------ 3 SEC USE ONLY - ------------------------------------------------------------------------------ 4 SOURCE OF FUNDS* 00-See Item 3 - ------------------------------------------------------------------------------ 5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO ITEMS 2(d) OR 2(e) |_| N/A - ------------------------------------------------------------------------------ 6 CITIZENSHIP OR PLACE OF ORGANIZATION New York - ------------------------------------------------------------------------------ 7 SOLE VOTING POWER NUMBER OF ------------------------------------------------ SHARES 8 SHARED VOTING POWER BENEFICIALLY OWNED BY 3,313,864 EACH ------------------------------------------------ REPORTING 9 SOLE DISPOSITIVE POWER PERSON WITH ------------------------------------------------ 10 SHARED DISPOSITIVE POWER 3,313,864 - ------------------------------------------------------------------------------ 11 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON 3,313,864 - See Item 5 - ------------------------------------------------------------------------------ 12 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW (11) EXCLUDES CERTAIN SHARES* |_| - ------------------------------------------------------------------------------ 13 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW (11) 14.9% - ------------------------------------------------------------------------------ 14 TYPE OF REPORTING PERSON* OO - ------------------------------------------------------------------------------ Page 3 of 6 Pages Item 1. Security and Issuer. The class of equity securities to which this statement relates is the common stock, $.001 par value per share, of Advanced Radio Telecom Corp. (the "Issuer"), a Delaware corporation having principal executive offices at 500 108th Avenue N.E., Bellevue, Washington 98004. Item 2. Identity and Background. (a) Name. This Schedule is filed by WinStar Communications, Inc. ("WinStar") and WinStar LHC1 LLC (the "LLC"). (b) State of Formation and Citizenship. WinStar is a Delaware corporation. The LLC is a New York limited liability company. (c) Business Address. The business address of each of WinStar and the LLC is 230 Park Avenue, New York, New York 10169. (d) Principal Business. WinStar is primarily engaged in the business of providing facilities-based voice and data telecommunications services to businesses and other customers in major metropolitan areas throughout the United States. The LLC has been formed to acquire the shares of common stock of the Issuer which are reported in this statement. The LLC is a wholly owned subsidiary of WinStar. WinStar is the sole member of the LLC. (e) During the last five years, neither WinStar nor the LLC nor any of their executive officers or directors has been convicted in any criminal proceeding (excluding traffic violations or similar misdemeanors). (f) During the last five years, neither WinStar nor the LLC nor any of their executive officers or directors has been a party to any civil proceeding of a judicial or administrative body of competent jurisdiction resulting in any judgment, decree or final order enjoining any of such persons from engaging in future violations of, or prohibiting or mandating activities subject to, Federal or State securities laws or finding any violation with respect to such laws. Item 3. Source and Amount of Funds or other Consideration. The consideration to be used by the LLC to acquire the shares of common stock of the Issuer to which this statement relates will be shares of common stock, par value $.01 per share, of WinStar, which will be issued by WinStar in satisfaction of a capital contribution to the LLC. Item 4. Purpose of Transaction. The LLC will acquire the common stock of the Issuer with the present intention of making an investment in the Issuer and not with the present intention of acquiring or influencing control of the Issuer's business. After the acquisition of the common stock, the LLC intends from time to time to review its investment in the Issuer on the basis of various factors, including the Issuer's business, financial condition, results of operations and prospects, general economic and industry conditions, the securities markets in general and those for the Issuer's securities in particular, as well as other developments and other investment opportunities. Based upon such review, the LLC will take such actions in the future as it may deem appropriate in light of the circumstances existing from time to time. If the LLC, WinStar or other affiliates of WinStar believes that further investment in the Issuer is attractive, whether because of the market price of the Issuer's securities or otherwise, the LLC may dispose of such shares or the LLC, WinStar or other affiliates of WinStar may acquire additional shares or take other actions if market conditions or other business considerations, in the judgment of the LLC, WinStar or any such affiliate, warrant. Such additional acquisitions may be effected through open market purchases, privately Page 4 of 6 Pages negotiated transactions, tender offers to existing holders or through direct negotiation with the Issuer. Such further acquisitions, dispositions or other actions may or may not result in (i) an extraordinary business transaction, such as a merger, reorganization or liquidation, involving the Issuer or any of its subsidiaries, (ii) a sale or transfer of a material amount of assets of the Issuer or of any of its subsidiaries, (iii) a change in the present board of directors or management of the Issuer, (iv) a material change in the present capitalization or dividend policy of the Issuer, (v) any other material change in the Issuer's business or corporate structure, (vi) changes in the Issuer's charter or bylaws that may impede the acquisition of control of the Issuer by any person, (vii) a class of securities of the Issuer to be delisted from a national securities exchange or to cease to be authorized to be quoted in an inter-dealer quotation system of a registered national securities association, (viii) a class of equity securities of the Issuer becoming eligible for termination of registration pursuant to Section 12(g)(4) of the Securities Exchange Act of 1934 or (ix) any action similar to the foregoing. Item 5. Interest in Securities of the Issuer. As of the date of this Schedule, neither WinStar nor the LLC or any other subsidiary of WinStar owns any securities of the Issuer. On April 24, 1998, WinStar and the LLC, and in the case of the agreement referred to in paragraph (b) below, with WinStar LHC2 LLC, a New York limited liability company and wholly owned subsidiary of WinStar, entered into the following agreements to acquire an aggregate of up to 3,313,864 shares of common stock of the Issuer (14.9% of the outstanding shares of common stock of the Issuer on March 25, 1998, as reported by the Issuer in its Annual Report on Form 10-K for its fiscal year ended December 31, 1997): (a) Agreement with James J. Pinto with respect to 555,000 shares of common stock of the Issuer. (b) Agreement and Plan of Reorganization with Landover Holdings Corporation ("LHC") and Laurence S. Zimmerman, with respect to 2,758,864 shares of common stock of Issuer (and certain other assets of LHC which will be acquired by WinStar LHC2 LLC). The consummation of the transactions contemplated by each of such agreements is subject to the fulfillment or waiver of certain conditions usual to such transactions, including determination that such transactions will not cause a "Common Stock Event" under the Rights Agreement dated June 20, 1997 between the Issuer and Continental Stock Transfer & Trust Company and, in the case of the agreement described in paragraph (b) above, expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976. Based upon the last sale price the common stock of WinStar reported on the Nasdaq National Market on April 24, 1998, the price per share of common stock of the Issuer to be paid by the LLC will be $17.39. Such price is subject to adjustment in certain circumstances as set forth in each of the agreements described above. WinStar and the LLC will share power to vote and to dispose of or to direct the disposition of the shares of common stock of the Issuer to be acquired by the LLC. WinStar, as the sole member of the LLC, has the power to control the activities of the LLC. In such capacity, WinStar will also have the right to receive or the power to direct the receipt of dividends from, or the proceeds from the sale of, the shares of common stock of the Issuer to be acquired by the LLC. Item 6. Contracts, Arrangements, Understandings or Relationships With Respect to Securities of the Issuer. Please refer to Item 5 for a description of the agreements pursuant to which the LLC has agreed to purchase shares of common stock of the Issuer, which are filed as exhibits to this statement. Pursuant to such agreements, among other things, each of the selling parties has agreed, for a period from the date of such agreements until two years from either the date the transactions contemplated thereby are consummated or earlier termination of the agreement to which such selling party is a party, not to, directly or indirectly, either alone or in concert with others, acquire or make any proposal to acquire, for its own account, by purchase or otherwise, any voting securities, options, warrants or securities convertible into or exercisable or exchangeable for voting securities of the Issuer. Page 5 of 6 Pages Item 7. Materials to be Filed as Exhibits. 1. Stock Purchase Agreement dated April 24, 1998, among WinStar, the LLC and James J. Pinto. 2. Agreement and Plan of Reorganization dated April 24, 1998, among WinStar, the LLC, WinStar LHC2 LLC, LHC and Laurence S. Zimmerman. 3. Indemnity Agreement dated April 24, 1998, among WinStar, the LLC, WinStar LHC2 LLC, LHC and Laurence S. Zimmerman. SIGNATURES After reasonable inquiry and to the best of the knowledge and belief of the undersigned, the undersigned certify that the information set forth in this statement is true, complete and correct. Dated: May 4, 1998 WINSTAR COMMUNICATIONS, INC. /s/ Timothy R. Graham By:___________________________________ Timothy R. Graham Title: Executive Vice President WINSTAR LHC1 LLC By: WinStar Communications, Inc., Member /s/ Timothy R. Graham By:___________________________________ Timothy R. Graham Title: Executive Vice President Page 6 of 6 Pages EX-10.1 2 STOCK PURCHASE AGREEMENT STOCK PURCHASE AGREEMENT AGREEMENT dated April 24, 1998 among WINSTAR COMMUNICATIONS, INC., a Delaware corporation ("WinStar"), WINSTAR LHC1 LLC, a New York limited liability company of which WinStar is the sole member ("WinLLC1"), and JAMES J. PINTO, residing at 366 Round Hill Road, Greenwich, Connecticut 06830 ("Seller"). WHEREAS, Seller is the owner of 560,231 of the outstanding shares (the "Shares") of common stock, par value $.001 per share, of Advanced Radio Telecom Corp. ("ARTT"); and WHEREAS, Seller desires to sell certain of such shares to WinLLC1 and WinLLC1 desires to purchase such shares from Seller on the terms and conditions set forth herein; IT IS AGREED: 1. Sale of Shares; Consideration. (a) Subject to the terms and conditions of this Agreement, on the Closing Date (as hereinafter defined) Seller shall sell, transfer, assign and convey to WinLLC1 555,000 shares of the common stock of ARTT (the "Shares"), and WinLLC1 shall purchase the Shares from Seller. As used herein, the term "Shares" includes the associated preferred stock purchase rights issued pursuant to the Rights Agreement dated June 20, 1997 between ARTT and Continental Stock Transfer & Trust Company (the "ARTT Rights Plan"). (b) The consideration payable to Seller for the Shares shall be 252,272 shares of the common stock, par value $.01 per share, of WinStar (the "WinStar Shares"), plus the "Adjustment Shares" (as defined in Section 1(c)), if any, which may be issued pursuant to Section 1(c). The WinStar Shares and the Adjustment Shares shall be issued by WinStar to Seller. (c) If, within eighteen months after the Closing Date, WinStar, directly or indirectly, (i) acquires at least 80% of the outstanding shares of common stock of ARTT, or (ii) acquires all or substantially all of the assets of ARTT or enters into a merger or other business combination with ARTT the consequence of which is that WinStar, directly or indirectly, becomes the sole owner of all or substantially all of the assets of ARTT ( any event under clauses (i) and (ii) being an "ARTT Business Combination") for an "average price per share" paid for shares of common stock of ARTT other than the Shares greater than $20.00 per share (the "Benchmark Price"), then WinStar shall issue to Seller that number of shares of common stock of WinStar ("Adjustment Shares") equal to the difference between such "average price per share" and the Benchmark Price multiplied by 555,000 and divided by the "Adjustment Price" (as hereinafter defined), rounded to the nearest whole share. Such issuance shall be made on the date (the "Adjustment Closing Date") which is the fifth business day after the date on which WinStar consummates the ARTT Business Combination. As used herein, "Adjustment Price" shall mean the average of the last sale prices of the common stock of WinStar reported on the Nasdaq National Market ("NNM") for the five consecutive trading days ending on the date on which WinStar consummates the ARTT Business Combination. For purposes of this Section 1(c), in determining the "average price per share" of any shares of common stock of ARTT for which payment is made with shares of common stock of WinStar, such common stock of WinStar shall be valued at the average of the last sale prices of WinStar common stock reported on the NNM for the five consecutive trading days ending on the date of such purchase by WinStar. In the event of an ARTT Business Combination pursuant to the preceding clause (ii), the "average price per share" shall be the value of the aggregate consideration paid by WinStar to ARTT or its stockholders in such ARTT Business Combination divided by the number of outstanding shares of common stock of ARTT, with any portion of such consideration which is paid for with shares of common stock of WinStar being valued at the average of the last sale prices of WinStar common stock reported on the NNM for the five consecutive trading days ending on the date of the consummation of such ARTT Business Combination. If any portion of the consideration paid by WinStar to ARTT or its stockholders is paid other than in cash or with shares of common stock of WinStar, for purposes hereof such consideration shall be valued at its fair market value. Notwithstanding the foregoing or anything else in this Agreement, WinStar shall have no obligation to acquire any ARTT securities and has made no representation that it has any present or future intent to acquire any ARTT securities other than the Shares and the shares to be acquired by WinLLC1 pursuant to the Reorganization Agreement (as hereinafter defined). (d) Solely at WinLLC1's election pursuant to Section 5(i), if Seller has obtained the necessary consents therefor, Seller shall assign to WinLLC1, and WinLLC1 shall assume, the obligations of Seller pursuant to Second Restated and Amended Registration Rights Agreement dated July 3, 1996, among ARTT, Advanced Radio Technologies Corporation ("ARTC"), the stockholders and warrantholders of ARTT and the stockholders and warrantholders of ARTC (the "Registration Rights Agreement"). (e) All share and share-related amounts and figures described hereunder shall be appropriately adjusted from time to time to account for and give effect to any reclassifications, stock splits, stock dividends, share combinations and similar changes affecting the common stock of WinStar as a whole or the common stock of ARTT as a whole and all holders thereof. 2. Closing. (a) Subject to the terms and conditions of this Agreement, the consummation of the transactions contemplated by this Agreement shall take place at a closing (the "Closing") to be held at 10:00 a.m., New York City time, at a mutually agreeable location in New York City, on a date ("Closing Date") as soon as practicable following the satisfaction or waiver of the conditions to Closing set forth in Section 6 hereof. (b) At the Closing, Seller shall deliver to (i) WinLLC1, certificates rep resenting the Shares, duly executed in form for transfer by the record holders thereof or with duly executed stock powers therefor, not bearing restrictive legends of any nature other than legends referring to restrictions imposed by Federal and state securities laws and free and clear of any liens, claims, charges, restrictions, security interests or other encumbrances of any kind, including, without limitation, encumbrances created by option, voting rights, buy-sell, stockholder or other agreements of any kind whatsoever affecting the Shares (collectively, "Encumbrances") other than Encumbrances resulting from the actions or omissions of WinStar or WinLLC1 ("WinStar Encumbrances") and those imposed by Federal and state securities laws, and (ii) WinStar and WinLLC1, the certificates and other documents required to be delivered by Seller pursuant hereto. (c) At the Closing, WinStar and WinLLC1 (collectively, the "WinStar Parties") shall deliver to Seller (i) a certificate for 228,132 of the WinStar Shares, and (ii) the certificates and other documents required to be delivered by the WinStar Parties pursuant hereto and shall deliver to the escrow agent referred to in Section 7(c) a certificate for the balance of the WinStar Shares. The certificates for the WinStar Shares and any Adjustment Shares issued hereunder shall bear the legends (the "Legends") set forth in Schedule A annexed hereto. 3. Representations and Warranties of Seller. Seller represents and warrants to the WinStar Parties as follows and acknowledges that the WinStar Parties are relying upon such representa tions and warranties: (a) This Agreement constitutes the valid and binding obligation of Seller, enforceable in accordance with its terms, except as the enforceability thereof may be limited by any applicable bankruptcy, insolvency or other laws affecting creditors' rights generally or by general principles of equity, regardless of whether such enforceability is considered in equity or at law and except that enforceability of any indemnification provision may be limited under Federal and state securities laws. (b) The execution, delivery and performance of this Agreement by Seller does not and will not (i) violate or result in any default under or give rise to any right of termination, revocation or modification of any indenture, license or other agreement to which Seller is a party or to which the Shares are subject or (ii) violate or result in any default under any law, regulation, order, writ, judgment or decree applicable to Seller or the Shares or by which the ability of Seller to consummate the transactions to be consummated by them hereunder would be adversely affected as a consequence of such violation or default. (c) (i) Subject to the Registration Rights Agreement, Seller has the sole, entire and unfettered right to transfer the Shares to WinLLC1, free and clear of any Encumbrance whatsoever and subject to no restrictions with respect to the transferability thereof. Upon acquisition of the Shares by WinLLC1, WinLLC1 will be able to vote, transfer and otherwise dispose of the Shares without restriction other than those imposed by Federal and state securities laws and those under the Registration Rights Agreement, if assumed by WinLLC1. (ii) Seller is the "beneficial owner" (as defined in Rule 13d-3 promulgated under the Securities and Exchange Act of 1934, as amended (the "Exchange Act")) of the Shares, free and clear of all Encumbrances except as set forth in Schedule B annexed hereto, all of which Encumbrances shall terminate and be null, void and of no effect on and after the Closing other than those imposed by the Registration Rights Agreement (if assigned to and assumed by WinLLC1) and Federal and state securities laws. No person or entity has any option or other right to purchase the Shares or otherwise obtain any interest in the Shares from Seller. The sale and transfer of the Shares to WinLLC1 pursuant to this Agreement will not give any person or entity a legal right or cause of action against the Shares or any of the WinStar Parties except as may result from a breach by a WinStar Party of an obligation to which it is subject. Upon consummation of the transactions contemplated hereby, WinLLC1 will hold the Shares free and clear of any Encumbrance, including any rights of any other person or entity whatsoever, other than WinStar Encumbrances, those imposed by Federal and state securities laws and, if assigned to and assumed by WinLLC1, the Registration Rights Agreement. (iii)The Shares are validly issued, fully paid and non-assessable and were issued in compliance with all Federal and state securities laws. The Shares constitute the only shares of capital stock of ARTT of which Seller is the beneficial owner other than 5,231 shares of common stock of ARTT. For purposes of Rule 144 ("Rule 144") promulgated under the Securities Act of 1933, as amended (the "1933 Act"), Seller is not an "affiliate" (as defined in Rule 144) of ARTT and has not been such an affiliate within three months prior to the date hereof and Seller acquired the Shares no later than the dates set forth in Schedule C except for those thereof listed in Schedule C as being free from restriction under Rule 144. (d) Seller is not in violation of any mortgage, indenture, contract, agreement, instrument, judgment, decree, order, statute, rule or regulation or writ or decree of any court, governmental agency or instrumentality to which he is subject, a violation of which would have a material adverse effect on his ability to perform his obligations under this Agreement. (e) The execution and delivery of this Agreement by Seller do not, and the performance of this Agreement and the consummation of the transactions contemplated hereby by Seller will not, require any consent, approval, authorization or other action by, or filing with or notification to, any governmental or regulatory authority or other third party other than notice to ARTT pursuant to the Registration Rights Agreement and, if the Registration Rights Agreement is assigned to and assumed by WinLLC1, a counterpart of such agreement signed by WinLLC1 required to be given to ARTT pursuant to such agreement. (f) Seller knows of no facts or circumstances which could reasonably be expected to have a material adverse effect upon the business, condition (financial or otherwise) or prospects of ARTT which have not been publicly disclosed. (g) No representation or warranty by Seller contained in this Agreement or other instrument furnished or to be furnished to the WinStar Parties pursuant to this Agreement or in connection with the transactions contemplated hereby contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading. (h) The WinStar Shares and Adjustment Shares will be acquired for Seller's account and not with a view towards distribution thereof. Seller understands that he must bear the economic risk of an investment in the WinStar Shares and the Adjustment Shares, which cannot be sold by Seller unless they are registered under the 1933 Act or an exemption therefrom is available. Seller is an "Accredited Investor" as defined in Regulation D promulgated under the 1933 Act. Seller has had both the opportunity to ask questions and receive answers from the officers and directors of the WinStar Parties and all persons acting on their behalf concerning the business and operations of the WinStar Parties and to obtain any additional information, to the extent the WinStar Parties possess or may possess such information or can acquire it without unreasonable effort or expense, necessary to verify the accuracy of such information. Seller acknowledges receiving from WinStar and reviewing WinStar's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 ("10-K"), WinStar's Proxy Statement for its Annual Meeting of Stockholders held on June 26, 1997 ("Proxy Statement"), WinStar's Current Reports on Form 8-K filed with the Securities and Exchange Commission ("Commission") since January 1, 1998, which are listed on Schedule D annexed hereto (the "8-Ks" and, together with the l0-K and the Proxy Statement, the "WinStar SEC Filings") and WinStar's Confidential Offering Circulars dated March 13, 1998 and March 17, 1998. (i) Seller is not a member of a "group" (within the meaning of Rule 13d-5 under the Exchange Act) with respect to the securities of ARTT with any other person or entity. (j) The representations and warranties of Seller set forth in this Agreement shall survive until one year from the Closing Date except that the representations and warranties set forth in Section 3(c) shall survive without limitation as to time. 4. Representations and Warranties of the WinStar Parties. The WinStar Parties jointly and severally represent and warrant as follows to Seller and acknowledge that Seller is relying upon such representations and warranties: (a) (i) WinStar (A) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, (B) has all the requisite power to own, lease and operate its properties and to carry on its business as now being conducted and (C) has all necessary power and authority to enter into this Agreement and to perform its obligations as contemplated hereby. (ii) WinLLC1 (A) is a limited liability company duly organized, validly existing and in good standing under the laws of the State of New York, (B) has all the requisite power to own, lease and operate its properties and to carry on its business as now being conducted and (C) has all necessary power and authority to enter into this Agreement and to perform its obligations as contemplated hereby. (iii)All action necessary to be taken by the WinStar Parties to authorize the execution, delivery and performance of this Agreement and all other agreements and instruments delivered and to be delivered by the WinStar Parties in connection herewith has been duly and validly taken. This Agreement constitutes the valid and binding obligation of each of the WinStar Parties, enforceable in accordance with its terms, except as the enforceability thereof may be limited by any applicable bankruptcy, insolvency or other laws affecting creditors' rights generally or by general principles of equity, regardless of whether such enforceability is considered in equity or at law, and except that enforceability of any indemnification provision may be limited under Federal and state securities laws. (b) The execution, delivery and performance of this Agreement by the WinStar Parties do not and will not (i) violate or result in any default under any provision of their respective Articles of Organization, Operating Agreement, Certificate of Incorporation or By-Laws, (ii) violate or result in any default under or give rise to any right of termination, revocation or modification of any indenture, license or other agreement to which any of the WinStar Parties is a party or (iii) violate or result in any default under any law, regulation, order, writ, judgment or decree applicable to any of the WinStar Parties or by which the ability of any of the WinStar Parties to consummate the transactions to be consummated by them hereunder would be adversely affected as a consequence of such violation or default. (c) The execution and delivery of this Agreement by the WinStar Parties do not, and the performance of this Agreement and the consummation of the transactions contemplated hereby by the WinStar Parties will not, require any consent, approval, authorization or other action by, or filing with or notification to, any governmental or regulatory authority or other third party other. (d) None of the WinStar Parties is in violation of any term of its respective Articles of Organization, Operating Agreement, Certificate of Incorporation or By-Laws or the provisions of any mortgage, indenture, contract, agreement, instrument, judgment, decree, order, statute, rule or regulation or writ or decree of any court, governmental agency or instrumentality to which it is subject, a violation of which would have a material adverse effect on its ability to perform its obligations under this Agreement. (e) The Shares will be acquired by WinLLC1 for its own account and not with a view towards distribution thereof. (f) The WinStar Shares and the Adjustment Shares are duly authorized and, upon issuance to Seller in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable and, based solely upon the representations and warranties of Seller contained herein, issued in compliance with all Federal and state securities laws and free and clear of all Encumbrances other than those imposed as set forth in the Legends. (g) Each of the WinStar SEC Filings, including the financial statements contained therein, as of their filing dates, complied in all material respects with the requirements of the rules and regulations promulgated by the Commission with respect thereto 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 in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Since the date of filing of the most recently filed of the WinStar SEC Filings, there has been no material adverse change in the business or financial condition of WinStar which has not been publicly disclosed. (h) The representations and warranties of the WinStar Parties set forth in this Agreement shall survive until one year from the Closing Date except that the representations and warran ties set forth in Sections 4(f) shall survive without limitation as to time. 5. Additional Agreements. (a) From the date hereof until the earlier of the Closing Date or the termination of this Agreement in accordance with the provisions hereof, Seller shall not sell, assign, or otherwise dispose of or place or allow to be placed any Encumbrance upon any of the Shares, except to the LLCs pursuant to this Agreement. (b) Seller shall pay all documentary transfer, sales and other taxes arising out of the sale and transfer of the Shares to WinLLC1. (c) From the date hereof through the Closing Date or the earlier termination of this Agreement, Seller, on the one hand, and the WinStar Parties, on the other hand (each a "Representing Party"), shall give the other prompt written notice of any event or development that occurs that (i) had it existed or been known on the date hereof would have been required to be disclosed by the Representing Party under this Agreement, (ii) would cause any of the representations and warranties of the Representing Party contained herein to be inaccurate, incomplete or otherwise misleading in any material respect, (iii) would cause the Representing Party to conclude that any of the conditions to Closing set forth in Section 6 hereof cannot be satisfied, or (iv) is of a nature that would or could reasonably be considered to adversely affect the ability of the Representing Party to consummate the transactions contemplated by this Agreement. (d) Subject to the terms and conditions of this Agreement, each party shall cooperate with the other and shall use all reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate the transactions contemplated hereby, including the execution and delivery of any additional instruments necessary to consummate the transactions contemplated hereby. Each of the parties shall execute such documents and other papers and take such further actions as may be reasonably required or desirable to carry out the provisions hereof. Each of the parties shall use its best efforts to cause the conditions to Closing specified in Section 6 which are within its control to be fulfilled. (e) Within 60 days after the Closing Date, WinStar will file a registration statement to register all of the WinStar Shares under the 1933 Act to enable Seller to make a public sale of the WinStar Shares (including those WinStar Shares deposited in escrow pursuant to Section 7(c)). If Adjustment Shares are issued, within 60 days after the date of such issuance, WinStar shall use its best efforts to file a registration statement to register all of the Adjustment Shares under the 1933 Act to enable Seller to make a public sale of the Adjustment Shares. WinStar will use its reasonable best efforts to cause such registration statement(s) to become effective as promptly as reasonably practicable after filing and to remain effective until such time as the WinStar Shares and the Adjustment Shares, as the case may be, may be sold publicly without registration under the 1933 Act. It shall be a condition to any such registration that Seller provide to WinStar all information and documents with respect to his ownership of the WinStar Shares and Adjustment Shares, compliance with law, manner of proposed disposition and such other matters as WinStar shall reasonably request for disclosure in the registration statement. WinStar and Seller shall indemnify one another in the manner and to the extent that is customary in connection with such registrations. WinStar shall pay all expenses attendant to the preparation and filing of such registration statement other than the fees and expenses of counsel and accountants of Seller and brokerage discounts and commissions. (f) From the date hereof until two years from either the Closing Date or earlier termination of this Agreement pursuant to the provisions of Section 8 hereof, except pursuant to this Agreement, neither Seller nor any of his Affiliates (other than the Trustees under the Voting Trust Agreement acting in capacities other than as such Trustees) or any group (within the meanings of Rule 13d-5 under the Exchange Act and the Voting Trust Agreement) of which Seller is or becomes a member will, directly or indirectly, either alone or in concert with others in any manner acquire, agree to acquire or make any proposal to acquire, for his own account, by purchase or otherwise, any voting securities, options, warrants or securities convertible into or exercisable or exchangeable for voting securities of ARTT. (g) From the date hereof until two years from either the Closing Date or the earlier termination of this Agreement pursuant to the provisions of Section 8 hereof, Seller shall not participate in any manner, directly or indirectly, individually in concert with others, (i) make or in any way participate in any "solicitation" of "proxies" to vote (as such terms are used in the proxy rules of the Commission promulgated under the Exchange Act) or seek to advise or influence any person or entity with respect to the voting of any voting securities of WinStar, (ii) otherwise seek representation on the Board of Directors ("Board") or to control or influence the management, Board or policies of WinStar, (iii) disclose to any third party any intention, plan or arrangement inconsistent with the foregoing or (iv) advise, assist or encourage any other person in connection with the foregoing. (h) Each party shall be solely responsible for the payment of the fees of all brokers, finders, investment bankers and similar parties engaged by it in connection with the transactions contemplated by this Agreement. (i) Promptly after the execution of this Agreement, Seller shall use reasonable efforts to obtain the consents necessary to permit him to assign to WinLLC1, and if such consents are obtained, at WinLLC1's election, given to Seller at least two business days prior to the Closing Date, shall assign to WinLLC1, his rights and obligations under the Registration Rights Agreement and WinLLC1, pursuant to Section 15 of the Registration Rights Agreement, shall exercise a counterpart to the Registration Rights Agreement agreeing to be treated thereunder in the same manner as Seller. (j) Concurrently with the execution of this Agreement, counsel to Seller shall deliver to ARTT an opinion of counsel, addressed to ARTT, stating that in the opinion of such counsel the transfer of the Shares pursuant to this Agreement does not involve a transaction requiring registration or qualification of the Shares under the 1933 Act or the securities or "blue sky" laws of any state of the United States. Seller hereby represents that the requirement set forth in the first two sentences of Section 12(c) of the Registration Rights Agreement that ARTT be given prior written notice of a holder's intention to make a "Transfer" of "Restricted Shares" (as those terms are defined in the Registration Rights Agreement) shall be satisfied by the delivery of an opinion of counsel concurrently with the Transfer. (k) WinLLC1 will not sell or otherwise transfer or dispose of the Shares except pursuant to an effective registration statement pursuant to the 1933 Act or an exemption from the registration requirements thereof. 6. Conditions to Closing. (a) The respective obligations of Seller and the WinStar Parties to consummate the transfer and acquisition of the Shares shall be subject to the fulfillment at or prior to the Closing Date of the following conditions: (i) There shall not be in effect any order, decree or injunction (whether preliminary, final or appealable) of a United States Federal or state court of competent jurisdiction, no rule or regulation shall have been enacted or adopted by any governmental authority or agency, and no action or proceeding shall be pending or threatened by any person or entity other than a party hereto that prohibits consummation of the transfer and acquisition of the Shares, or any of them, to WinLLC1. (ii) All governmental approvals required for the consummation of the transfer and acquisition of the Shares shall have been granted. (b) The obligation of the WinStar Parties to consummate the acquisition of the Shares shall be subject to the satisfaction or waiver, on or before the Closing Date, of each of the following conditions: (i) The representations and warranties of Seller contained in this Agreement shall be true and correct on and as of the Closing Date, with the same force and effect as if made as of the Closing Date. (ii) All the covenants contained in this Agreement to be complied with by Seller on or before the Closing Date shall have been complied with. (iii)The WinStar Parties shall have received a certificate executed by Seller to the effect set forth in Sections 6(b)(i) and (ii). (iv) Seller shall have made the deliveries required by Section 2(b) hereof and shall have executed and delivered to the WinStar Parties the Escrow Agreement referred to in Section 7(c). (v) The transactions contemplated by the Agreement and Plan of Reorganization dated April 24, 1998, among WinStar, WinLLC1, WinStar LHC2 LLC, Landover Holdings Corporation and Laurence S. Zimmerman ("Reorganization Agreement") shall have been consummated prior to or concurrently with the Closing or the WinStar Parties shall be satisfied, in their sole judgment, that such transactions will be consummated. (vi) Neither Seller nor ARTT shall have commenced any case, proceeding or other action (A) relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its property, or shall have made a general assignment for the benefit of its creditors, and there shall not have been commenced against Seller or ARTT any case, proceeding or other action of a nature referred to in clause (A) above or seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its property, which case, proceeding or other action (x) results in the entry of an order for relief or (y) remains undismissed, undischarged or unbonded. (vii)The WinStar Parties shall be satisfied, in their sole discretion, that the consummation of the transactions contemplated hereby, together with the acquisition of the shares to be purchased by WinLLC1 pursuant to the Reorganization Agreement, will not constitute a "Common Stock Event" pursuant to the Rights Plan of ARTT. (c) The obligation of Seller to consummate the transfer of the Shares and Other Assets shall be subject to the satisfaction or waiver, on or before the Closing Date, of each of the following conditions: (i) The representations and warranties of the WinStar Parties contained in this Agreement shall be true and correct on and as of the Closing Date, with the same force and effect as if made as of the Closing Date. (ii) All the covenants contained in this Agreement to be complied with by the WinStar Parties on or before the Closing Date shall have been complied with. (iii)Seller shall have received a certificate of the WinStar Parties to the effect set forth in Sections 6(c)(i) and (ii) hereof. (iv) The WinStar Parties shall have made the deliveries required by Section 2(c) hereof and shall have executed and delivered to Seller the Escrow Agreement referred to in Section 7(c). (v) None of the WinStar Parties or any of WinStar's significant subsidiaries (as determined pursuant to Regulation S-X promulgated under the 1933 Act) shall have commenced any case, proceeding or other action (A) relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its property, or shall have made a general assignment for the benefit of its creditors, and there shall not have been commenced against any of the WinStar Parties or any of WinStar's significant subsidiaries any case, proceeding or other action of a nature referred to in clause (A) above or seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its property, which case, proceeding or other action (x) results in the entry of an order for relief or (y) remains undismissed, undischarged or unbonded. 7. Indemnification and Reimbursement. (a) Seller shall indemnify and hold harmless the WinStar Parties from and against, and shall reimburse the WinStar Parties for, any Damages (as hereinafter defined) which may be sustained, suffered or incurred by any of the WinStar Parties, whether as a result of third-party claims or otherwise, and which arise from or in connection with or are attributable to (i) the breach of any of representations, warranties or covenants of Seller contained in this Agreement and (ii) the ownership of the Shares on or before the Closing Date. This indemnity shall survive the Closing for a period of one year after the Closing Date except that with respect to claims arising as a result of a breach or alleged breach of the representations and warranties in Section 3(c) and the covenants contained in Sections 5(f) and 5(g), it shall survive without limitation as to time. Any claim for indemnity asserted within the relevant period shall survive until resolved. (b) The WinStar Parties, jointly and severally, shall indemnify and hold harmless Seller from and against, and shall reimburse Seller for, any Damages which may be sustained, suffered or incurred by Seller, whether as a result of third-party claims or otherwise, and which arise from or in connection with or are attributable to (i) the breach of any of the representations, warranties and covenants of the WinStar Parties contained in this Agreement, (ii) the ownership of the Shares after the Closing Date, and (iii) any of the following occurring within the eighteen month period after the Closing Date: (A) the acquisition by WinStar (separately or with one or more of its affiliates (as defined under Regulation D promulgated under the 1933 Act)) of any voting securities of ARTT or options, warrants or securities convertible into or exercisable or exchangeable for voting securities of ARTT (other than the Shares and the shares to be acquired by WinLLC1 pursuant to the Reorganization Agreement), (B) the making or participation in any manner by WinStar in any "solicitation" or "proxies" (as such terms are used in the proxy rules of the Commission promulgated under the Exchange Act) to vote securities or ARTT or the seeking by WinStar to advise or influence any person or entity with respect to the voting of any voting securities of ARTT, (C) WinStar otherwise seeking representation on the Board of Directors ("Board") of ARTT or to control or influence the management, Board or policies of ARTT, (D) an executive officer or director of WinStar disclosing to any third party any intention, plan or arrangement to effectuate any of the foregoing or (E) WinStar advising, assisting or encouraging any other person in connection with the foregoing, other than Damages sustained, suffered or incurred by Seller as a result of (x) in the case of the foregoing clause (A), a claim (other than by a WinStar Party or a stockholder of WinStar) that the consideration paid by the WinStar Parties for the Shares is excessive in relation to the consideration paid for such other shares and (y) in the case of any of the foregoing clauses (A) through (E), a breach or alleged breach by Seller (or any affiliate thereof) of any obligation to ARTT arising from activities or agreements of Seller (or any affiliate thereof) prior to the Closing Date. This indemnity shall survive the Closing for a period of one year after the Closing Date except that, with respect to claims arising (A) as a result of a breach or alleged breach of the representations and warranties in Sections 1(c), 4(f), 4(h) and 5(e), it shall survive without limitation as to time, and (B) under clause (iii) above, it shall survive for a period of 20 months after the Closing Date. Any claim for indemnity asserted within the relevant period shall survive until resolved. (c) As security for the payment of amounts which may be due to the WinStar Parties pursuant to the obligations of Seller in Section 7(a), on the Closing Date Seller shall deliver to Hahn & Hessen LLP, as escrow agent, 24,140 of the WinStar Shares, to be held and disposed of by such escrow agent pursuant to the terms of the Escrow Agreement, substantially in the form of Exhibit I annexed hereto, to be entered into by Seller, the WinStar Parties and such escrow agent on the Closing Date. (d) As used herein, the term "Damages" means the dollar amount of any loss, damage, expense or liability, including, without limitation, reasonable attorneys' fees and disbursements incurred by an indemnified party in any action or proceeding between the indemnified party and the indemnifying party or between the indemnified party and a third party, which is determined to have been sustained, suffered or incurred by a party and to have in arisen from or in connection with an event or state of facts which is subject to indemnification under this Agreement. The amount of Damages shall be the amount finally determined by a court of competent jurisdiction (after the exhausting of all appeals) or the amount agreed to upon settlement in accordance with the terms of this Agreement, if a third-party claim, or by the parties, if a direct claim of one party against another. Notwithstanding the foregoing, "Damages" shall include, with respect to any claim for indemnification arising under Section 7(b)(iii), only such loss, damage, expense and liability as, in the aggregate, exceeds the amount of any payment made pursuant to Section 1(c). (e) A party required to make an indemnification payment pursuant to this Agreement ("Indemnifying Party") shall have no liability to make such payment unless the party entitled to receive such indemnification payment ("Indemnified Party") gives notice to the Indemnifying Party specifying (i) the covenant, representation or warranty contained herein which it asserts has been breached, (ii) in reasonable detail, the nature and dollar amount of any claim the Indemnified Party may have against the Indemnifying Party by reason thereof under this Agreement, and (iii) whether the claim is a third-party claim or a direct claim of the Indemnified Party against the Indemnifying Party. (f) If an Indemnified Party becomes aware of a third-party claim for which an Indemnifying Party would be liable to an Indemnified Party hereunder, the Indemnified Party shall, with reasonable promptness, notify in writing the Indemnifying Party of such claim, identifying the basis for such claim and the amount or the estimated amount thereof to the extent then determinable which estimate shall not be conclusive of the final amount of such claim (the "Claim Notice"); provided, however, that any failure to give such Claim Notice will not be deemed a waiver of any rights of the Indemnified Party except to the extent the rights of the Indemnifying Party are actually prejudiced by such failure. The Indemnifying Party, upon request of the Indemnified Party, shall retain counsel (who shall be reasonably acceptable to the Indemnified Party) to represent the Indemnified Party and shall pay the reasonable fees and expenses of such counsel with regard thereto; provided, however, that any Indemnified Party is hereby authorized, prior to the date on which it receives written notice from the Indemnifying Party designation such counsel, to retain counsel, whose reasonable fees and expenses shall be at the expense of the Indemnifying Party, to file any motion, answer or other pleading and take such other action which it reasonably shall deem necessary to protect its interests or those of the Indemnifying Party until the date on which the Indemnified Party receives such notice from the Indemnified Party. After the Indemnifying Party shall retain such counsel, the Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) the named parties of any such proceeding (including any impleaded parties) included both the Indemnifying Party and the Indemnified Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. If requested by the Indemnifying Party, the Indemnified Party agrees to cooperate with the Indemnifying Party and its counsel in contesting any claim or demand which the Indemnifying Party defends. A claim or demand may not be settled by any party without the prior written consent of the other party (which consent will not be unreasonably withheld) unless, as part of such settlement, the Indemnified Party shall receive a full and unconditional release reasonably satisfactory to it. Notwithstanding the foregoing, the Indemnifying Party may settle any third-party claim without the prior written consent of the Indemnified Party if such claim is exclusively for monetary damages. (g) If any Indemnified Party shall have a direct claim against any Indemnifying Party hereunder, the Indemnified Party shall send a Claim Notice with respect to such claim to the Indemnifying Party. (h) No Indemnifying Party shall be required to indemnify an Indemnified Party pursuant to this Section 7 unless the aggregate of all amounts for which indemnity would otherwise be due against it exceeds $50,000 and then only to the extent such amounts exceed $50,000 and do not exceed $1,700,000. The provisions of this Section 7(h) shall not apply with respect to a claim for indemnification based on a breach or alleged breach of the covenants of Seller in Sections 5(f) and 5(g). 8. Termination. (a) This Agreement may be terminated at any time prior to the Closing as follows: (i) by mutual written consent of Seller and the WinStar Parties; (ii) by Seller, (A) if the WinStar Parties shall have failed to perform any of their covenants or agreements contained in this Agreement, which failure, if subject to cure, has not been cured within 10 business days after Seller has given notice to the WinStar Parties of his intention to terminate, (B) if the representations and warranties of the WinStar Parties contained in this Agreement shall not be true and correct in all respects at the time made and at the Closing Date or (C) if the conditions to the obligations of Seller to consummate the transactions contemplated by this Agreement shall not have occurred by August 31, 1998. (iii)by the WinStar Parties, (A) if Seller shall have failed to perform any of their covenants in this Agreement, which failure, if subject to cure, has not been cured within 10 business days after the WinStar Parties have given notice to Seller of their intention to terminate, (B) if the representations and warranties of Seller contained in this Agreement shall not be true and correct in all respects at the time made and on the Closing Date or (C) if the conditions to the obligations of the WinStar Parties to consummate the transactions contemplated by this Agreement shall not have occurred by August 31, 1998. (b) In the event of termination by Seller or the WinStar Parties, or both, pursuant hereto, written notice thereof shall forthwith be given to the other party and all further obligations of the parties under this Agreement shall terminate, no party shall have any right under this Agreement against any other party except as set forth in this Section 8, and each party shall bear its own costs and expenses. In such event: (i) If this Agreement is terminated by Seller pursuant to Section 8(a)(ii)(A) or (B) or by the WinStar Parties pursuant to Section 8(a)(iii)(A) or (B), the terminating party's right to pursue all legal and equitable remedies for breach of contract or otherwise, including, without limitation, Damages relating thereto, shall survive such termination unimpaired; and (ii) Nothing herein shall preclude any party, upon a breach hereof by another party, from pursuing all equitable remedies, including specific performance, it being acknowledged and agreed by the parties that the transactions contemplated hereby are of a special, unique and extraordinary character and that any breach will cause irreparable injury to the non- breaching party for which money damages will not provide a wholly adequate remedy. 9. Miscellaneous. (a) Except as otherwise provided herein, all costs and expenses, including, without limitation, fees and disbursements of representatives, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses. (b) All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made as of the date delivered if delivered personally or by nationally recognized overnight courier or by telecopy to the parties at the following addresses (or at such other address for a party as shall be specified by like notice, except that notices of changes of address shall be effective upon receipt): If to Seller: James Pinto 366 Round Hill Road Greenwich, Connecticut 06830 Telecopier No.: 212-935-3851 If to the WinStar Parties: 230 Park Avenue Suite 2700 New York, New York 10169 Attention: Timothy R. Graham, Esq. Telecopier No.: (212) 922-1637 with a copy to: Graubard Mollen & Miller 600 Third Avenue New York, New York 10016 Attention: David Alan Miller, Esq. Telecopier No.: (212) 818-8881 (c) Neither Seller nor the WinStar Parties shall make any public announce ments in respect of this Agreement or the transactions contemplated herein without the consent of the other, which consent shall not unreasonably withheld or delayed, except that any of the WinStar Parties may make any public announcement they deem necessary to comply with their legal obligations (including disclosure by means of filings with the Commission and other governmental authorities), and will use reasonable efforts to provide a copy of such public announcement to Seller prior to the public dissemination thereof. (d) The WinStar Parties may assign its rights under this Agreement, or any portion thereof, to any wholly-owned direct subsidiary (including a non-corporate subsidiary) of WinStar or any successor to WinStar, provided that such assignee shall assume in writing the rights and obligations so assigned and such assignment shall not relieve the WinStar Parties of their obligations hereunder to the extent not fulfilled by such assignee. Seller shall not assign any of his rights under this Agreement without the prior written consent of the WinStar Parties. (e) This Agreement may not be amended or modified except by an instrument in writing signed by Seller and the WinStar Parties, which instrument shall thereupon be binding upon all the parties. (f) Any party may (i) extend the time for the performance of any of the obligations or other acts of any other party, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party to be bound thereby. (g) If any provision of this Agreement is determined to be invalid, illegal or incapable of being enforced by a court or regulatory agency of competent jurisdiction, the other provisions of this Agreement shall not be affected and shall remain in full force and effect and the parties shall negotiate in good faith revisions to this Agreement so as to effect the original intent of the parties pursuant to the provision so affected. (h) This Agreement, together with the Schedules and Exhibits hereto (including the Escrow Agreement referred to in Section 7(c)), constitute the entire agreement, and supersede all prior agreements and undertakings, both written and oral, among the parties, with respect to the subject matter hereof and thereof and, except as otherwise expressly provided herein, are not intended to confer upon any other person any rights or remedies hereunder. (i) This Agreement shall inure to the benefit of and be binding upon the successors, distributees and assigns of the parties. (j) This Agreement shall be governed by, and construed in accordance with, the law of the State of New York, without regard to principles of conflicts of law. EACH PARTY HEREBY IRREVOCABLY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN THE STATE OF NEW YORK, COUNTY OF NEW YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY REGISTERED MAIL ADDRESSED TO SUCH PARTY AT ITS ADDRESS SPECIFIED IN SECTION 8(b). EACH PARTY FURTHER WAIVES ANY OBJECTION TO VENUE IN NEW YORK AND ANY OBJECTION TO AN ACTION OR PROCEEDING IN SUCH STATE AND COUNTY ON THE BASIS OF FORUM NON CONVENIENS. EACH PARTY ALSO WAIVES ANY RIGHT TO TRIAL BY JURY. (k) This Agreement may be executed in one or more counterparts, and by the different parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which when taken together shall constitute one and the same agreement. (l) No provision of this Agreement or any other instrument or other document delivered in connection with the transactions contemplated hereby will be interpreted in favor of, or against, any of the parties by reason of the extent to which such party or its counsel participated in the drafting hereof or by reason of the extent to which any such provision is inconsistent with any prior draft hereof or thereof. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above. WINSTAR COMMUNICATIONS, INC. /s/ T. R. Graham By________________________________________ Name: T.R. Graham Title: Executive Vice President WINSTAR LHC1 LLC By: WINSTAR COMMUNICATIONS, INC., Member /s/ T. R. Graham By:_______________________________________ Name: T.R. Graham Title: Executive Vice President /s/ James Pinto _______________________________________ JAMES PINTO EX-10.2 3 AGREEMENT AND PLAN OF REORGANIZATION AGREEMENT AND PLAN OF REORGANIZATION AGREEMENT AND PLAN OF REORGANIZATION ("Agreement") dated April 24, 1998 among WINSTAR COMMUNICATIONS, INC., a Delaware corporation ("WinStar"), WINSTAR LHC1 LLC, a New York limited liability company of which WinStar is the sole member ("WinLLC1"), WINSTAR LHC2 LLC, a New York limited liability company of which WinStar is the sole member ("WinLLC2" and, together with WinLLC1, the "LLCs"), LANDOVER HOLDINGS CORPORATION, a Delaware corporation ("LHC"), and LAURENCE S. ZIMMERMAN, residing at 210 El Vedado Road, Palm Beach, Florida 33480 ("Zimmerman" and, together with LHC, the "LHC Parties"). WHEREAS, Zimmerman is the owner of all of the outstanding shares of capital stock of LHC; and WHEREAS, LHC is principally engaged in the business of investing in stocks and other securities and managing its investments and has been so principally engaged since its organization in 1993 (the "Historic Business"); and WHEREAS, the LHC Parties wish to continue to invest in broad-band wireless telephone assets through WinStar; and WHEREAS, the LHC Parties, WinStar and the LLCs wish for LHC to transfer substantially all of its assets to the LLCs solely in exchange for shares of voting common stock of WinStar in a transaction intended to qualify as a "reorganization" within the meaning of Section 368(a)(1)(C) of the Internal Revenue Code of 1986, as amended ("IRC"), it being contemplated by the parties that LHC will thereafter, as an integral part of the transaction, distribute such shares of WinStar common stock to Zimmerman in complete liquidation of LHC and dissolve; and WHEREAS, WinStar has formed the LLCs to acquire substantially all of the assets of LHC on the terms and conditions set forth herein for valid business purposes; IT IS AGREED: 1. Transfer of Assets; Consideration. (a) Subject to the terms and conditions of this Agreement, LHC shall transfer, assign and convey to the LLCs, as directed by WinStar, and the LLCs shall acquire from LHC, on the Closing Date (as hereinafter defined), the following assets of LHC: (i) 2,758,864 shares of the common stock, par value $.001 per share, of Advanced Radio Telecom Corp. ("ARTT"), a Delaware corporation (the "Shares"), including the associated preferred stock purchase rights issued pursuant to the Rights Agreement dated June 20, 1997 between ARTT and Continental Stock Transfer & Trust Company (the "ARTT Rights Plan"), which shall be transferred, conveyed and assigned to WinLLC1; and (ii) subject to the provisions of Section 5(l), the other assets listed on Schedule A annexed hereto (the "Other Assets" and, collectively with the Shares, the "Historic Business Assets" of LHC), as the same exist on the Closing Date, which shall be transferred, conveyed and assigned to WinLLC2. (b) The consideration payable to LHC for the Historic Business Assets shall be 1,273,029 shares of the voting common stock, par value $.01 per share, of WinStar (the "WinStar Shares"), plus the "Adjustment Shares" (as defined in Section 1(c)), if any, which may be issued pursuant to Section 1(c). The WinStar Shares and the Adjustment Shares shall be issued by WinStar to LHC. (c) If, within eighteen months after the Closing Date, WinStar, directly or indirectly, (i) acquires at least 80% of the outstanding shares of common stock of ARTT, or (ii) acquires all or substantially all of the assets of ARTT or enters into a merger or other business combination with ARTT the consequence of which is that WinStar, directly or indirectly, becomes the sole owner of all or substantially all of the assets of ARTT ( any event under clauses (i) and (ii) being an "ARTT Business Combination") for an "average price per share" paid for shares of common stock of ARTT greater than $20.00 per share (the "Benchmark Price"), then WinStar shall issue to LHC (or to Zimmerman, as distributee of LHC in liquidation) that number of shares of common stock of WinStar ("Adjustment Shares") equal to the difference between such "average price per share" and the Benchmark Price multiplied by 2,758,864 and divided by the "Adjustment Price" (as hereinafter defined), rounded to the nearest whole share. Such issuance shall be made on the date (the "Adjustment Closing Date") which is the fifth business day after the date on which WinStar consummates the ARTT Business Combination. As used herein, "Adjustment Price" shall mean the average of the last sale prices of the common stock of WinStar reported on the Nasdaq National Market ("NNM") for the five consecutive trading days ending on the date on which WinStar consummates the ARTT Business Combination. For purposes of this Section 1(c), in determining the "average price per share" of any shares of common stock of ARTT for which payment is made with shares of common stock of WinStar, such common stock of WinStar shall be valued at the average of the last sale prices of WinStar common stock reported on the NNM for the five consecutive trading days ending on the date of such purchase by WinStar. In the event of an ARTT Business Combination pursuant to the preceding clause (ii), the "average price per share" shall be the value of the aggregate consideration paid by WinStar to ARTT or its stockholders in such ARTT Business Combination divided by the number of outstanding shares of common stock of ARTT, with any portion of such consideration which is paid for with shares of common stock of WinStar being valued at the average of the last sale prices of WinStar common stock reported on the NNM for the five consecutive trading days ending on the date of the consummation of such ARTT Business Combination. If any portion of the consideration paid by WinStar to ARTT or its stockholders is paid other than in cash or with shares of common stock of WinStar, for purposes hereof such consideration shall be valued at its fair market value. Notwithstanding the foregoing or anything else in this Agreement, WinStar shall have no obligation to acquire any ARTT securities and has made no representation that it has any present or future intent to acquire any ARTT securities other than the Shares and the Additional ARTT Shares (as hereinafter defined). (d) The LLCs shall acquire solely the Historic Business Assets and shall assume solely the following liabilities and obligations of the LHC Parties: (i) the obligations of LHC pursuant to the agreement with JPW Consulting, Inc. described in Schedule A (the "JPW Agreement"), (ii) margin debt in certain of the accounts listed in Schedule A as specified therein, not to exceed $1,000,000 in the aggregate on the Closing Date, and (iii) solely at WinLLC1's election pursuant to Section 5(o), the obligations of LHC pursuant to the Second Restated and Amended Registration Rights Agreement dated July 3, 1996, among ARTT, Advanced Radio Technologies Corporation ("ARTC"), the stockholders and warrantholders of ARTT and the stockholders and warrantholders of ARTC (the "Registration Rights Agreement") (collectively, the "Assumed Liabilities"). All of the Assumed Liabilities shall be assumed only by WinLLC2 other than the Registration Rights Agreement, which shall, at WinLLC1's election pursuant to Section 5(o), be assumed by WinLLC1 . (e) All share and share-related amounts and figures described hereunder shall be appropriately adjusted from time to time to account for and give effect to any reclassifications, stock splits, stock dividends, share combinations and similar changes affecting the common stock of WinStar as a whole or the common stock of ARTT as a whole and all holders thereof. 2. Closing. (a) Subject to the terms and conditions of this Agreement, the consummation of the transactions contemplated by this Agreement shall take place at a closing (the "Closing") to be held at 10:00 a.m., New York City time, at a mutually agreeable location in New York City, on a date ("Closing Date") as soon as practicable following the expiration or earlier termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended (the "HSR Act"), and the satisfaction or waiver of the other conditions to Closing set forth in Section 6 hereof. (b) At the Closing, LHC shall deliver to (i) WinLLC1, certificates representing the Shares, duly executed in form for transfer by the record holders thereof or with duly executed stock powers therefor, not bearing restrictive legends of any nature other than legends referring to restrictions imposed by Federal and state securities laws and free and clear of any liens, claims, charges, restrictions, security interests or other encumbrances of any kind, including, without limitation, encumbrances created by option, voting rights, buy-sell, stockholder or other agreements of any kind whatsoever affecting the Shares (collectively, "Encumbrances") other than Encumbrances resulting from the actions or omissions of WinStar or the LLCs ("WinStar Encumbrances") and those imposed by Federal and state securities laws and, if assigned to and assumed by WinLLC1, the Registration Rights Agreement (as hereafter defined), (ii) WinLLC2, bills of sale, assignments and other appropriate transfer documents in form reasonably satisfactory to WinLLC2 sufficient to convey to WinLLC2 good and marketable title to the Other Assets, free and clear of all Encumbrances other than WinStar Encumbrances and margin debt as specified in Schedule A, not to exceed $1,000,000 in the aggregate on the Closing Date, and (iii) the LLCs and WinStar, the certificates and other documents required to be delivered by the LHC Parties pursuant hereto. (c) At the Closing, WinStar and the LLCs (collectively, the "WinStar Parties") shall deliver to LHC (i) a certificate for 1,134,029 of the WinStar Shares, (ii) an assumption agreement or other appropriate assumption documents with respect to the Assumed Liabilities, in form reasonably satisfactory to LHC, executed by WinLLC2, and (iii) the certificates and other documents required to be delivered by the WinStar Parties pursuant hereto and shall deliver to the escrow agent referred to in the Escrow Agreement (as hereinafter defined) a certificate for the balance of the WinStar Shares. The certificates for the WinStar Shares and any Adjustment Shares issued hereunder shall bear the legends (the "Legends") set forth in Schedule B annexed hereto. 3. Representations and Warranties of the LHC Parties. The LHC Parties, jointly and severally, represent and warrant to the WinStar Parties as follows and acknowledge that the WinStar Parties are relying upon such representations and warranties: (a) LHC (i) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, (ii) has all requisite power to own, lease and operate its properties and to carry on its business as now being conducted and (iii) has all necessary power and authority to enter into this Agreement and to perform its obligations as contemplated hereby. All action necessary to be taken by LHC to authorize the execution, delivery and performance of this Agreement and all other agreements and instruments delivered and to be delivered by LHC in connection herewith has been duly and validly taken. This Agreement constitutes the valid and binding obligation of each of the LHC Parties, enforceable in accordance with its terms, except as the enforceability thereof may be limited by any applicable bankruptcy, insolvency or other laws affecting creditors' rights generally or by general principles of equity, regardless of whether such enforceability is considered in equity or at law and except that enforceability of any indemnification provision may be limited under Federal and state securities laws. (b) The execution, delivery and performance of this Agreement by the LHC Parties do not and will not (i) violate or result in any default under any provision of the Certificate of Incorporation or By-Laws of LHC, (ii) violate or result in any default under or give rise to any right of termination, revocation or modification of any indenture, license or other agreement to which any LHC Party is a party or to which the Shares or Other Assets are subject or (iii) violate or result in any default under any law, regulation, order, writ, judgment or decree applicable to such LHC Party or the Shares or the Other Assets or by which the ability of the LHC Parties to consummate the transactions to be consummated by them hereunder would be adversely affected as a consequence of such violation or default. (c) (i) Subject to the Registration Rights Agreement, the Voting Trust Agreement dated November 5, 1996 among LHC, Kimberly Zimmerman and Zachary Tyler Zimmerman Trust and Vernon L. Fotheringham, Andrew I. Fillat and Mark C. Demetree, Trustees (the "Voting Trust Agreement"), the Cooperation Agreement dated November 5, 1996 by and between LHC, Zimmerman and ARTT (the "Cooperation Agreement"), the instruction letters and customer agreements listed on Schedule C (collectively with the Registration Rights Agreement, the Voting Trust Agreement and the Cooperation Agreement, the "Operative Agreements"), LHC has the sole, entire and unfettered right to transfer the Shares to WinLLC1, free and clear of any Encumbrance whatsoever and subject to no restrictions with respect to the transferability thereof. Upon acquisition of the Shares by WinLLC1, WinLLC1 will be able to vote, transfer and otherwise dispose of the Shares without restriction under the Operative Agreements, except subject to the Registration Rights Agreement, if assumed by WinLLC1. (ii) The LHC Parties are the sole "beneficial owners" (as defined in Rule 13d-3 promulgated under the Securities and Exchange Act of 1934, as amended (the "Exchange Act")) of the Shares, free and clear of all Encumbrances except as set forth in Schedule C annexed hereto, all of which Encumbrances shall terminate and be null, void and of no effect on and after the Closing other than those imposed by the Registration Rights Agreement (if assigned to and assumed by WinLLC1) and Federal and state securities laws. No person or entity has any option or other right to purchase the Shares or otherwise obtain any interest in the Shares from any of the LHC Parties. The sale and transfer of the Shares to WinLLC1 pursuant to this Agreement will not give any person or entity a legal right or cause of action against the Shares or any of the WinStar Parties except as may result from a breach by a WinStar Party of an obligation to which it is subject. Upon consummation of the transactions contemplated hereby, WinLLC1 will hold the Shares free and clear of any Encumbrance, including any rights of any other person or entity whatsoever, other than WinStar Encumbrances, those imposed by Federal and state securities laws and, if assigned to and assumed by WinLLC1, the Registration Rights Agreement. (iii)The Shares are validly issued, fully paid and non-assessable and were issued in compliance with all Federal and state securities laws. (iv) The Shares constitute the only shares of capital stock of ARTT of which LHC or Zimmerman or any of their respective Affiliates (as defined in the ARTT Rights Plan) is the Beneficial Owner (as defined in the ARTT Rights Plan) other than an aggregate of 74,728 shares of common stock of ARTT (the "Excluded Shares"). For purposes of Rule 144 ("Rule 144") promulgated under the Securities Act of 1933, as amended (the "1933 Act"), none of the Shares was acquired by LHC later than October 28, 1996, and none of the LHC Parties is an "affiliate" (as defined in Rule 144) of ARTT or has been such an "affiliate" for at least three months prior to the date hereof. (d) LHC is not in violation of any term of its Certificate of Incorporation or By-Laws or any mortgage, indenture, contract, agreement, instrument, judgment, decree, order, statute, rule or regulation or writ or decree of any court, governmental agency or instrumentality to which it is subject, a violation of which would have a material adverse effect on its ability to perform its obligations under this Agreement. (e) The execution and delivery of this Agreement by the LHC Parties do not, and the performance of this Agreement and the consummation of the transactions contemplated hereby by the LHC Parties will not, require any consent, approval, authorization or other action by, or filing with or notification to, any governmental or regulatory authority or other third party other than (i) notice required to be given to the Trustees pursuant to the Voting Trust Agreement, (ii) notice to ARTT pursuant to the Registration Rights Agreement and, if the Registration Rights Agreement is assigned to and assumed by WinLLC1, a counterpart of such agreement signed by WinLLC1 required to be given to ARTT pursuant to such agreement, and (iii) notice to and actions by brokerage firms to transfer the Historic Business Assets and effectuate the assumption of the Assumed Liabilities. (f) None of the LHC Parties knows of any facts or circumstances which could reasonably be expected to have a material adverse effect upon the business, condition (financial or otherwise) or prospects of ARTT which have not been publicly disclosed. Zimmerman is not in possession of any "confidential information" which would subject him to the Insider Trading Policy and Procedure of ARTT adopted on May 31, 1996 and prohibit the transfer of the Shares to the LLCs by virtue of such policy. (g) No representation or warranty by the LHC Parties contained in this Agreement or other instrument furnished or to be furnished to the WinStar Parties pursuant to this Agreement or in connection with the transactions contemplated hereby contains any untrue statement of a material fact or omits to state a material fact necessary in order to make the statements contained herein or therein, in light of the circumstances under which they were made, not misleading. (h) Except as otherwise set forth in this Agreement, the WinStar Shares and Adjustment Shares will be acquired for LHC's account and not with a view towards distribution thereof. The LHC Parties understand that they must bear the economic risk of an investment in the WinStar Shares and the Adjustment Shares, which cannot be sold by a LHC Party unless they are registered under the 1933 Act or an exemption therefrom is available. Each of the LHC Parties is an "Accredited Investor" as defined in Regulation D promulgated under the 1933 Act. The LHC Parties have had both the opportunity to ask questions and receive answers from the officers and directors of the WinStar Parties and all persons acting on their behalf concerning the business and operations of the WinStar Parties and to obtain any additional information, to the extent the WinStar Parties possess or may possess such information or can acquire it without unreasonable effort or expense, necessary to verify the accuracy of such information. The LHC Parties acknowledge receiving from WinStar and reviewing Star's Annual Report on Form 10-K for the fiscal year ended December 31, 1997 ("10-K"), Star's Proxy Statement for its Annual Meeting of Stockholders held on June 26, 1997 ("Proxy Statement"), Star's Current Reports on Form 8-K filed with the Securities and Exchange Commission ("Commission") since January 1, 1998, which are listed on Schedule D annexed hereto (the "8-Ks" and, together with the l0-K and the Proxy Statement, the "WinStar SEC Filings") and Star's Confidential Offering Circulars dated March 13, 1998 and March 17, 1998. (i) No LHC Party is a member of a "group" (within the meaning of Rule 13d- 5 under the Exchange Act) with respect to the securities of ARTT with any other person or entity other than as set forth in a statement on Schedule 13-G dated May 22, 1997 filed by LHC and certain other persons. (j) LHC is the owner of, and has good and marketable title to, all of the Other Assets, free and clear of all Encumbrances except as set forth in Schedule A annexed hereto, all of which Encumbrances, other than liens to secure the payment of not more than $1,000,000 of margin debt, shall terminate and be null, void and of no effect on and after the Closing. (k) None of the WinStar Parties is an "LHC Affiliate" (as defined in the Voting Trust Agreement) or is "affiliated" (as defined in Section 2(b) of the Voting Trust Agreement) with an LHC Affiliate. (l) The LHC Parties have delivered to the WinStar Parties true and complete copies of each of the Operative Agreements and the JPW Agreement, which are the only agreements relating to the Historic Business Assets or the ownership thereof. (m) The representations and warranties of the LHC Parties set forth in this Agreement shall survive until one year from the Closing Date except that the representations and warranties set forth in Sections 3(c) and 3(j) shall survive without limitation as to time. 4. Representations and Warranties of the WinStar Parties. The WinStar Parties jointly and severally represent and warrant as follows to the LHC Parties and acknowledge that the LHC Parties are relying upon such representations and warranties: (a) (i) WinStar (A) is a corporation duly organized, validly existing and in good standing under the laws of the State of Delaware, (B) has all the requisite power to own, lease and operate its properties and to carry on its business as now being conducted and (C) has all necessary power and authority to enter into this Agreement and to perform its obligations as contemplated hereby. (ii) Each of the LLCs (A) is a limited liability company duly organized, validly existing and in good standing under the laws of the State of New York, (B) has all the requisite power to own, lease and operate its properties and to carry on its business as now being conducted, (C) has all necessary power and authority to enter into this Agreement and to perform its obligations as contemplated hereby and (D) shall be treated for Federal tax purposes as a "disregarded entity" within the meaning of Treasury Regulation ss.301.7701-3(b)(1)(i) as in effect on the date hereof. (iii)All action necessary to be taken by the WinStar Parties to authorize the execution, delivery and performance of this Agreement and all other agreements and instruments delivered and to be delivered by the WinStar Parties in connection herewith has been duly and validly taken. This Agreement constitutes the valid and binding obligation of each of the WinStar Parties, enforceable in accordance with its terms, except as the enforceability thereof may be limited by any applicable bankruptcy, insolvency or other laws affecting creditors' rights generally or by general principles of equity, regardless of whether such enforceability is considered in equity or at law, and except that enforceability of any indemnification provision may be limited under Federal and state securities laws. (b) The execution, delivery and performance of this Agreement by the WinStar Parties do not and will not (i) violate or result in any default under any provision of their respective Articles of Organization, Operating Agreements, Certificates of Incorporation or By-Laws, (ii) violate or result in any default under or give rise to any right of termination, revocation or modification of any indenture, license or other agreement to which any of the WinStar Parties is a party or (iii) violate or result in any default under any law, regulation, order, writ, judgment or decree applicable to any of the WinStar Parties or by which the ability of any of the WinStar Parties to consummate the transactions to be consummated by them hereunder would be adversely affected as a consequence of such violation or default. (c) The execution and delivery of this Agreement by the WinStar Parties do not, and the performance of this Agreement and the consummation of the transactions contemplated hereby by the WinStar Parties will not, require any consent, approval, authorization or other action by, or filing with or notification to, any governmental or regulatory authority or other third party other than the filing of a pre-merger notification ("Notification") pursuant to the HSR Act. (d) None of the WinStar Parties is in violation of any term of its respective Articles of Organization, Operating Agreement, Certificate of Incorporation or By-Laws or the provisions of any mortgage, indenture, contract, agreement, instrument, judgment, decree, order, statute, rule or regulation or writ or decree of any court, governmental agency or instrumentality to which it is subject, a violation of which would have a material adverse effect on its ability to perform its obligations under this Agreement. (e) The Shares will be acquired by WinLLC1 for its own account and not with a view towards distribution thereof. (f) The WinStar Shares and the Adjustment Shares are duly authorized and, upon issuance to LHC in accordance with the terms of this Agreement, will be validly issued, fully paid and non-assessable and, based solely upon the representations and warranties of the LHC Parties contained herein, issued in compliance with all Federal and state securities laws and free and clear of all Encumbrances other than those imposed as set forth in the Legends. (g) Each of the WinStar SEC Filings, including the financial statements contained therein, as of their filing dates, complied in all material respects with the requirements of the rules and regulations promulgated by the Commission with respect thereto 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 in order to make the statements therein, in light of the circumstances under which they were made, not misleading. Since the date of filing of the most recently filed of the WinStar SEC Filings, there has been no material adverse change in the business or financial condition of WinStar which has not been publicly disclosed. (h) (i) None of the WinStar Parties has any plan or intention to reacquire, directly or indirectly, any WinStar Shares or Adjustment Shares. (ii) None of the WinStar Parties has any plan or intention to sell or otherwise dispose of any significant portion of the Historic Business Assets except for dispositions made in the ordinary course of business or transfers described in IRC ss.368(a)(2)(C). (iii)Following the consummation of the transactions contemplated by this Agreement, the WinStar Parties plan and intend to use a significant portion of the Historic Business Assets in a business. (iv) None of the WinStar Parties is an investment company as defined in IRC ss.368(a)(2)(F)(iii) and (iv). (v) None of the WinStar Parties owns, nor have they owned in the five years preceding the date of this Agreement, directly or indirectly, any capital stock of LHC. (vi) WinStar has no plan or intention to sell or otherwise dispose of its membership interest in either of the LLCs (or any portions thereof). (i) None of the WinStar Parties is an "LHC Affiliate" (as defined in the Voting Trust Agreement) or is "affiliated" (as defined in Section 2(b) of the Voting Trust Agreement) with an LHC Affiliate. (j) The representations and warranties of the WinStar Parties set forth in this Agreement shall survive until one year from the Closing Date except that the representations and warran ties set forth in Sections 4(f) and 4(h) shall survive without limitation as to time. 5. Additional Agreements. (a) As soon as practicable after execution of this Agreement, WinStar shall file a Notification with the Federal Trade Commission ("FTC") and the U.S. Department of Justice ("DOJ") pursuant to and as required by the HSR Act and shall notify ARTT of such filing. WinStar shall use its reasonable best efforts to have the waiting period under the HSR Act terminated as early as practicable. Promptly upon receipt by any LHC Party or WinStar of any correspondence from the FTC or DOJ in connection therewith, such recipient shall give copies thereof to the other party. (b) From the date hereof until the earlier of the Closing Date or the termination of this Agreement in accordance with the provisions hereof, no LHC Party shall sell, assign, or otherwise dispose of or place or allow to be placed any Encumbrance upon any of the Shares or, except as provided in Section 5(l), the Other Assets or any interest therein, except to the LLCs pursuant to this Agreement. (c) The LHC Parties shall pay all documentary transfer, sales and other taxes arising out of the sale and transfer of the Shares and the Other Assets to the LLCs. (d) From the date hereof through the Closing Date or the earlier termination of this Agreement, the LHC Parties, on the one hand, and the WinStar Parties, on the other hand (each a "Representing Party"), shall give the other prompt written notice of any event or development that occurs that (i) had it existed or been known on the date hereof would have been required to be disclosed by the Representing Party under this Agreement, (ii) would cause any of the representations and warranties of the Representing Party contained herein to be inaccurate, incomplete or otherwise misleading in any material respect, (iii) would cause the Representing Party to conclude that any of the conditions to Closing set forth in Section 6 hereof cannot be satisfied, or (iv) is of a nature that would or could reasonably be considered to adversely affect the ability of the Representing Party to consummate the transactions contemplated by this Agreement. (e) Each party will use all reasonable efforts to obtain all authorizations, consents, orders and approvals of all Federal, state and other regulatory bodies and officials that may be or become necessary for the performance of its obligations pursuant to this Agreement and will cooperate fully with the other party in promptly seeking to obtain all such authorizations, consents, orders and approvals, including expiration or early termination of the waiting period under the HSR Act. (f) Subject to the terms and conditions of this Agreement, each party shall cooperate with the other and shall use all reasonable efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to consummate the transactions contemplated hereby, including the execution and delivery of any additional instruments necessary to consummate the transactions contemplated hereby. Each of the parties shall execute such documents and other papers and take such further actions as may be reasonably required or desirable to carry out the provisions hereof. Each of the parties shall use its best efforts to cause the conditions to Closing specified in Section 6 which are within its control to be fulfilled. (g) Within 60 days after the Closing Date, WinStar will file a registration statement to register all of the WinStar Shares under the 1933 Act to enable LHC and Zimmerman, as distributee of LHC in liquidation, to make a public sale of the WinStar Shares (including without limitation those WinStar Shares deposited in escrow pursuant to the Escrow Agreement). If Adjustment Shares are issued, within 60 days after the date of such issuance, WinStar shall use its best efforts to file a registration statement to register all of the Adjustment Shares under the 1933 Act to enable LHC and Zimmerman, as distributee of LHC in liquidation, to make a public sale of the Adjustment Shares. WinStar will use its reasonable best efforts to cause such registration statement(s) to become effective as promptly as reasonably practicable after filing and to remain effective until such time as the WinStar Shares and the Adjustment Shares, as the case may be, may be sold publicly without registration under the 1933 Act. It shall be a condition to any such registration that the LHC Parties provide to WinStar all information and documents with respect to their ownership of the WinStar Shares and Adjustment Shares, compliance with law, manner of proposed disposition and such other matters as WinStar shall reasonably request for disclosure in the registration statement. WinStar and the LHC Parties shall indemnify one another in the manner and to the extent that is customary in connection with such registrations. WinStar shall pay all expenses attendant to the preparation and filing of such registration statement other than the fees and expenses of counsel and accountants of the LHC Parties and brokerage discounts and commissions. (h) From the date hereof until two years from either the Closing Date or earlier termination of this Agreement pursuant to the provisions of Section 7 hereof, except pursuant to this Agreement, no LHC Party or any of their respective Affiliates (other than the Trustees under the Voting Trust Agreement acting in capacities other than as such Trustees) or any group (within the meanings of Rule 13d-5 under the Exchange Act and the Voting Trust Agreement) of which any LHC Party is or becomes a member will, directly or indirectly, either alone or in concert with others in any manner acquire, agree to acquire or make any proposal to acquire, for its own account, by purchase or otherwise, any voting securities, options, warrants or securities convertible into or exercisable or exchangeable for voting securities of ARTT. (i) From the date hereof until two years from either the Closing Date or the earlier termination of this Agreement pursuant to the provisions of Section 7 hereof, no LHC Party shall, in any manner, directly or indirectly, individually or in concert with others, (i) make or in any way participate in any "solicitation" of "proxies" to vote (as such terms are used in the proxy rules of the Commission promulgated under the Exchange Act) or seek to advise or influence any person or entity with respect to the voting of any voting securities of WinStar, (ii) otherwise seek representation on the Board of Directors ("Board") or to control or influence the management, Board or policies of WinStar, (iii) disclose to any third party any intention, plan or arrangement inconsistent with the foregoing or (iv) advise, assist or encourage any other person in connection with the foregoing. (j) Each party shall be solely responsible for the payment of the fees of all brokers, finders, investment bankers and similar parties engaged by it in connection with the transactions contemplated by this Agreement. (k) Promptly after the Closing, LHC will dissolve and liquidate and, subject to the provisions of the Escrow Agreement, distribute the WinStar Shares and any Adjustment Shares that may be issued after the Closing Date to Zimmerman as its sole stockholder. (l) During the period from the date hereof to the Closing Date, LHC may continue to invest in and trade securities through the accounts (the "Transferred Accounts") listed in paragraph I.B on Schedule A annexed hereto, subject to the following conditions that must be satisfied on the Closing Date: (i) The securities held in the Transferred Accounts must (A) have a readily ascertainable market value, (B) be issued by companies with a market capitalization of at least $3 billion, (C) be traded on the New York Stock Exchange or the American Stock Exchange or listed for quotation on the NNM and (D) be eligible as collateral for margin loans within the policies of the brokerage firms in which the Transferred Accounts are established. No more than 20% of the value of the securities in the Transferred Accounts on the Closing Date shall be in the securities of any single issuer. No securities in the Transferred Accounts on the Closing Date shall be securities of issuers engaged principally in telecommunications businesses (including the manufacture or distribution of equipment used for telecommunications services). (ii) The aggregate market value of the securities in the Transferred Accounts, measured as of the close of business on the business day prior to the Closing Date and based on the last sale price or closing price, as applicable, net of the aggregate margin debt secured by the securities in the Transferred Accounts, shall be not less than $1,000,000 and such aggregate margin debt shall be not greater than $1,000,000. (iii)No securities of WinStar or any derivative securities based on WinStar securities may be held in a Transferred Account on the Closing Date. (m) WinStar shall report the acquisition of the Historic Business and the Historic Business Assets on its Federal corporation income tax return as a reorganization under IRC ss.368(a)(1)(C) and, if a similar report of the LHC Parties is timely furnished to WinStar, in a manner consistent therewith, in accordance with Treasury Regulation ss.l.368-3(a) as in effect on the date hereof and shall provide Zimmerman, within thirty (30) days of the filing of WinStar's Federal corporation income tax return on which such information is disclosed to the Internal Revenue Service, a copy of the statement attached to such return. (n) WinLLC2 shall take no action which would impair the existence of the Transferred Accounts. For purposes hereof, any action not taken by or at the direction of a WinStar Party shall not be deemed taken by a WinStar Party. (o) At WinLLC1's election, given to LHC at least two business days prior to the Closing Date, LHC shall assign its rights and obligations under the Registration Rights Agreement to WinLLC1 and WinLLC1, pursuant to Section 15 of the Registration Rights Agreement, shall exercise a counterpart to the Registration Rights Agreement agreeing to be treated thereunder in the same manner as LHC. (p) Concurrently with the execution of this Agreement, counsel to LHC shall deliver to ARTT an opinion of counsel, addressed to ARTT, stating that in the opinion of such counsel the transfer of the Shares pursuant to this Agreement does not involve a transaction requiring registration or qualification of the Shares under the 1933 Act. LHC hereby represents that the requirement set forth in the first two sentences of Section 12(c) of the Registration Rights Agreement that ARTT be given prior written notice of a holder's intention to make a "Transfer" of "Restricted Shares" (as those terms are defined in the Registration Rights Agreement) shall be satisfied by the delivery of an opinion of counsel concurrently with the Transfer. (q) During the period between the date of this Agreement and the Closing Date, neither WinStar nor any of its Affiliates (as defined in the ARTT Rights Plan) shall acquire or agree to acquire securities of ARTT in an amount such that any such acquisition would constitute a "Common Stock Event" under the ARTT Rights Plan. For purposes of this covenant, (i) no action contemplated by this Agreement shall be deemed to constitute a "Common Stock Event" and (ii) WinStar and such Affiliates may rely upon the assumptions that, as of the date of this Agreement, there are outstanding not less than 22,877,503 shares of common stock of ARTT, including warrants which, for purposes of the ARTT Rights Plan, are considered to be outstanding shares of common stock of ARTT. (r) WinLLC1 will not sell or otherwise transfer or dispose of the Shares except pursuant to an effective registration statement pursuant to the 1933 Act or an exemption from the registration requirements thereof. 6. Conditions to Closing. (a) The respective obligations of the LHC Parties and the WinStar Parties to consummate the transfer and acquisition of the Shares and the Other Assets shall be subject to the fulfillment at or prior to the Closing Date of the following conditions: (i) There shall not be in effect any order, decree or injunction (whether preliminary, final or appealable) of a United States Federal or state court of competent jurisdiction, no rule or regulation shall have been enacted or adopted by any governmental authority or agency, and no action or proceeding shall be pending or threatened by any person or entity other than a party hereto that prohibits consummation of the transfer and acquisition of the Shares and the Other Assets, or any of them, to the LLCs. (ii) All governmental approvals required for the consummation of the transfer and acquisition of the Shares and the Other Assets, including but not limited to termination or expiration of the waiting period under the HSR Act, shall have been granted. (b) The obligation of the WinStar Parties to consummate the acquisition of the Shares and the Other Assets shall be subject to the satisfaction or waiver, on or before the Closing Date, of each of the following conditions: (i) The representations and warranties of the LHC Parties contained in this Agreement shall be true and correct on and as of the Closing Date, with the same force and effect as if made as of the Closing Date. (ii) All the covenants contained in this Agreement to be complied with by LHC Parties on or before the Closing Date shall have been complied with. (iii)The WinStar Parties shall have received a certificate executed by the President of LHC and Zimmerman to the effect set forth in Sections 6(b)(i) and (ii). (iv) The WinStar Parties shall have received the opinion of Hahn & Hessen LLP, counsel to the LHC Parties, substantially in the form annexed hereto as Exhibit I. (v) The LHC Parties shall have made the deliveries required by Section 2(b) hereof and shall have executed and delivered to the WinStar Parties an Escrow Agreement substantially in the form of Exhibit II annexed hereto (the "Escrow Agreement"). (vi) Neither any LHC Party nor ARTT shall have commenced any case, proceeding or other action (A) relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its property, or shall have made a general assignment for the benefit of its creditors, and there shall not have been commenced against any LHC Party or ARTT any case, proceeding or other action of a nature referred to in clause (A) above or seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its property, which case, proceeding or other action (x) results in the entry of an order for relief or (y) remains undismissed, undischarged or unbonded. (vii)The WinStar Parties shall be satisfied, in their sole discretion, that the consummation of the transactions contemplated hereby, together with the acquisition of not more than 555,000 other shares of common stock of ARTT (the "Additional ARTT Shares") will not constitute a "Common Stock Event" pursuant to the Rights Plan of ARTT. (viii) The Excluded Shares shall have been sold to a person who is not "affiliated" (as defined in the Voting Trust Agreement) with LHC. (c) The obligation of the LHC Parties to consummate the transfer of the Shares and Other Assets shall be subject to the satisfaction or waiver, on or before the Closing Date, of each of the following conditions: (i) The representations and warranties of the WinStar Parties contained in this Agreement shall be true and correct on and as of the Closing Date, with the same force and effect as if made as of the Closing Date. (ii) All the covenants contained in this Agreement to be complied with by the WinStar Parties on or before the Closing Date shall have been complied with. (iii)The LHC Parties shall have received a certificate of the WinStar Parties to the effect set forth in Sections 6(c)(i) and (ii) hereof. (iv) The WinStar Parties shall have made the deliveries required by Section 2(c) hereof and shall have executed and delivered the Escrow Agreement to the LHC Parties. (v) The LHC Parties shall have received the opinion of Graubard Mollen & Miller, counsel to the WinStar Parties, to the effect set forth in Sections 4(a), (b)(i), (b)(ii) (to the best of their knowledge), (b)(iii) (to the best of their knowledge), (c) (to the best of their knowledge with respect to third parties), (d) (to the best of their knowledge except as to Articles of Organization, Operating Agreement, Certificate of Incorporation and By-Laws) and (f). (vi) None of the WinStar Parties or any of Star's significant subsidiaries (as determined pursuant to Regulation S-X promulgated under the 1933 Act) shall have commenced any case, proceeding or other action (A) relating to bankruptcy, insolvency, reorganization or relief of debtors, seeking to have an order for relief entered with respect to it, or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization, arrangement, adjustment, liquidation, dissolution, composition or other relief with respect to it or its debts, or (B) seeking appointment of a receiver, trustee, custodian or other similar official for it or for all or any substantial part of its property, or shall have made a general assignment for the benefit of its creditors, and there shall not have been commenced against any of the WinStar Parties or any of Star's significant subsidiaries any case, proceeding or other action of a nature referred to in clause (A) above or seeking issuance of a warrant of attachment, execution, distraint or similar process against all or any substantial part of its property, which case, proceeding or other action (x) results in the entry of an order for relief or (y) remains undismissed, undischarged or unbonded. 7. Termination. (a) This Agreement may be terminated at any time prior to the Closing as follows: (i) by mutual written consent of the LHC Parties and the WinStar Parties; (ii) by the LHC Parties, (A) if the WinStar Parties shall have failed to perform any of their covenants or agreements contained in this Agreement, which failure, if subject to cure, has not been cured within 10 business days after LHC has given notice to the WinStar Parties of its intention to terminate, (B) if the representations and warranties of the WinStar Parties contained in this Agreement shall not be true and correct in all respects at the time made and at the Closing Date or (C) if the conditions to the obligations of the LHC Parties to consummate the transactions contemplated by this Agreement shall not have occurred by June 30, 1998, except that if by June 30, 1998, all of such conditions have occurred other than approval of such transactions by the FTC and the DOJ, such approval has not been obtained by August 31, 1998. (iii)by the WinStar Parties, (A) if the LHC Parties shall have failed to perform any of their covenants in this Agreement, which failure, if subject to cure, has not been cured within 10 business days after the WinStar Parties have given notice to LHC of their intention to terminate, (B) if the representations and warranties of the LHC Parties contained in this Agreement shall not be true and correct in all respects at the time made and on the Closing Date or (C) if the conditions to the obligations of the WinStar Parties to consummate the transactions contemplated by this Agreement shall not have occurred by June 30, 1998, except that if by June 30, 1998, all of such conditions have occurred other than approval of such transactions by the FTC and the DOJ, such approval has not been obtained by August 31, 1998. (b) In the event of termination by the LHC Parties or the WinStar Parties, or both, pursuant hereto, written notice thereof shall forthwith be given to the other party and all further obligations of the parties under this Agreement shall terminate, no party shall have any right under this Agreement against any other party except as set forth in this Section 7, and each party shall bear its own costs and expenses. In such event: (i) If this Agreement is terminated by the LHC Parties pursuant to Section 7(a)(ii)(A) or (B) or by the WinStar Parties pursuant to Section 7(a)(iii)(A) or (B), the terminating party's right to pursue all legal and equitable remedies for breach of contract or otherwise, including, without limitation, Damages relating thereto, shall survive such termination unimpaired; and (ii) Nothing herein shall preclude any party, upon a breach hereof by another party, from pursuing all equitable remedies, including specific performance, it being acknowledged and agreed by the parties that the transactions contemplated hereby are of a special, unique and extraordinary character and that any breach will cause irreparable injury to the non- breaching party for which money damages will not provide a wholly adequate remedy. 8. Miscellaneous. (a) Except as otherwise provided herein, all costs and expenses, including, without limitation, fees and disbursements of representatives, incurred in connection with this Agreement and the transactions contemplated hereby shall be paid by the party incurring such costs and expenses. (b) All notices and other communications given or made pursuant hereto shall be in writing and shall be deemed to have been duly given or made as of the date delivered if delivered personally or by nationally recognized overnight courier or by telecopy to the parties at the following addresses (or at such other address for a party as shall be specified by like notice, except that notices of changes of address shall be effective upon receipt): If to the LHC Parties: Landover Holdings Corporation 156 West 56th Street New York, New York 10019 Attention: Laurence S. Zimmerman Telecopier No.: (212) 582-1022 - and - Laurence S. Zimmerman 210 El Vedado Road Palm Beach, Florida 33480 Telecopier No.: (561) 838-8884 with a copy to: Hahn & Hessen LLP 350 Fifth Avenue New York, New York 10118 Attention: James Kardon, Esq. Telecopier No.: (212) 594-7167 If to the WinStar Parties: 230 Park Avenue Suite 2700 New York, New York 10169 Attention: Timothy R. Graham, Esq. Telecopier No.: (212) 922-1637 with a copy to: Graubard Mollen & Miller 600 Third Avenue New York, New York 10016 Attention: David Alan Miller, Esq. Telecopier No.: (212) 818-8881 (c) Neither the LHC Parties nor the WinStar Parties shall make any public announcements in respect of this Agreement or the transactions contemplated herein without the consent of the other, which consent shall not unreasonably withheld or delayed, except that any of the WinStar Parties may make any public announcement they deem necessary to comply with their legal obligations (including disclosure by means of filings with the Commission and other governmental authorities), and will use reasonable efforts to provide a copy of such public announcement to LHC prior to the public dissemination thereof. (d) The WinStar Parties may assign its rights and obligations under this Agreement, or any portion thereof, to any wholly-owned direct subsidiary (including a non-corporate subsidiary) of WinStar or any successor to WinStar, provided that such assignee shall assume in writing the rights and obligations so assigned and such assignment shall not relieve the WinStar Parties of their obligations hereunder to the extent not fulfilled by such assignee. The LHC Parties shall not assign any of its rights under this Agreement without the prior written consent of the WinStar Parties. (e) This Agreement may not be amended or modified except by an instrument in writing signed by the LHC Parties and the WinStar Parties, which instrument shall thereupon be binding upon all the parties. (f) Any party may (i) extend the time for the performance of any of the obligations or other acts of any other party, (ii) waive any inaccuracies in the representations and warranties contained herein or in any document delivered pursuant hereto and (iii) waive compliance with any of the agreements or conditions contained herein. Any such extension or waiver shall be valid only if set forth in an instrument in writing signed by the party to be bound thereby. (g) If any provision of this Agreement is determined to be invalid, illegal or incapable of being enforced by a court or regulatory agency of competent jurisdiction, the other provisions of this Agreement shall not be affected and shall remain in full force and effect and the parties shall negotiate in good faith revisions to this Agreement so as to effect the original intent of the parties pursuant to the provision so affected. (h) This Agreement and the Indemnity Agreement among the parties executed concurrently with the execution of this Agreement, together with the Schedules and Exhibits hereto (including the Escrow Agreement), constitute the entire agreement, and supersede all prior agreements and undertakings, both written and oral, among the parties, with respect to the subject matter hereof and thereof and, except as otherwise expressly provided herein, are not intended to confer upon any other person any rights or remedies hereunder. (i) This Agreement shall inure to the benefit of and be binding upon the successors, distributees and assigns of the parties. (j) This Agreement shall be governed by, and construed in accordance with, the law of the State of New York, without regard to principles of conflicts of law. EACH PARTY HEREBY IRREVOCABLY CONSENTS AND SUBMITS TO THE JURISDICTION OF ANY NEW YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN THE STATE OF NEW YORK, COUNTY OF NEW YORK OVER ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT AND IRREVOCABLY CONSENTS TO THE SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY REGISTERED MAIL ADDRESSED TO SUCH PARTY AT ITS ADDRESS SPECIFIED IN SECTION 8(b). EACH PARTY FURTHER WAIVES ANY OBJECTION TO VENUE IN NEW YORK AND ANY OBJECTION TO AN ACTION OR PROCEEDING IN SUCH STATE AND COUNTY ON THE BASIS OF FORUM NON CONVENIENS. EACH PARTY ALSO WAIVES ANY RIGHT TO TRIAL BY JURY. (k) This Agreement may be executed in one or more counterparts, and by the different parties in separate counterparts, each of which when executed shall be deemed to be an original but all of which when taken together shall constitute one and the same agreement. (l) No provision of this Agreement or any other instrument or other document delivered in connection with the transactions contemplated hereby will be interpreted in favor of, or against, any of the parties by reason of the extent to which such party or its counsel participated in the drafting hereof or by reason of the extent to which any such provision is inconsistent with any prior draft hereof or thereof. THE FOLLOWING PAGE IS THE SIGNATURE PAGE IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above. WINSTAR COMMUNICATIONS, INC. /s/ T. R. Graham By:_________________________________ Name: T. R. Graham Title: Executive Vice President WINSTAR LHC1 LLC By: WINSTAR COMMUNICATIONS, INC., Member /s/ T. R. Graham By:_________________________________ Name: T. R. Graham Title: Executive Vice President WINSTAR LHC2 LLC By: WINSTAR COMMUNICATIONS, INC., Member /s/ T. R. Graham By:_________________________________ Name: T. R. Graham Title: Executive Vice President LANDOVER HOLDINGS CORPORATION /s/ Laurence S. Zimmerman By:_________________________________ Name: Laurence S. Zimmerman Title: President /s/ Laurence S. Zimmerman ___________________________________ LAURENCE S. ZIMMERMAN EX-10.3 4 INDEMNITY AGREEMENT INDEMNITY AGREEMENT AGREEMENT dated April 24, 1998 among WINSTAR COMMUNICATIONS, INC., a Delaware corporation ("WinStar"), WINSTAR LHC1 LLC, a New York limited liability company of which WinStar is the sole member ("WinLLC1"), WINSTAR LHC2 LLC, a New York limited liability company of which WinStar is the sole member ("WinLLC2" and, together with WinLLC1, the "LLCs"), LANDOVER HOLDINGS CORPORATION, a Delaware corporation ("LHC"), and LAURENCE S. ZIMMERMAN, residing at 210 El Vedado Road, Palm Beach, Florida 33480 ("Zimmerman" and, together with LHC, the "LHC Parties"). RECITALS: A. The parties hereto, concurrently with the execution of this Agreement, have entered into an Agreement and Plan of Reorganization ("Reorganization Agreement") relating to the acquisition by the LLCs of the Historic Business and Historic Business Assets of LHC. B. Capitalized terms used herein and not otherwise defined have the meanings ascribed to them in the Reorganization Agreement. IT IS AGREED: (a) The LHC Parties, jointly and severally, shall indemnify and hold harmless the WinStar Parties from and against, and shall reimburse the WinStar Parties for, any Damages (as hereinafter defined) which may be sustained, suffered or incurred by any of the WinStar Parties, whether as a result of third-party claims or otherwise, and which arise from or in connection with or are attributable to (i) the breach of any of representations, warranties or covenants of the LHC Parties contained in the Reorganization Agreement, (ii) any liabilities or obligations of LHC, whether arising before, on or after the Closing Date, other than the Assumed Liabilities and (iii) the ownership of the Shares and Other Assets on or before the Closing Date. This indemnity shall survive the Closing for a period of one year after the Closing Date except that with respect to claims arising as a result of a breach or alleged breach of the representations and warranties in Sections 3(c) and 3(j) of the Reorganization Agreement and the covenants contained in Sections 5(h) and 5(i) of the Reorganization Agreement, it shall survive without limitation as to time. Any claim for indemnity asserted within the relevant period shall survive until resolved. (b) The WinStar Parties, jointly and severally, shall indemnify and hold harmless the LHC Parties from and against, and shall reimburse the LHC Parties for, any Damages which may be sustained, suffered or incurred by any LHC Party, whether as a result of third-party claims or otherwise, and which arise from or in connection with or are attributable to (i) the breach of any of the representations, warranties and covenants of the WinStar Parties contained in the Reorganization Agreement, (ii) the ownership of the Shares after the Closing Date, and (iii) any of the following occurring within the eighteen month period after the Closing Date: (A) the acquisition by WinStar (separately or with one or more of its affiliates (as defined under Regulation D promulgated under the 1933 Act)) of any voting securities of ARTT or options, warrants or securities convertible into or exercisable or exchangeable for voting securities of ARTT (other than the Shares and the Additional ARTT Shares), (B) the making or participation in any manner by WinStar in any "solicitation" of "proxies" (as such terms are used in the proxy rules of the Commission promulgated under the Exchange Act) to vote securities of ARTT or the seeking by WinStar to advise or influence any person or entity with respect to the voting of any voting securities of ARTT, (C) WinStar otherwise seeking representation on the Board of Directors ("Board") of ARTT or to control or influence the management, Board or policies of ARTT, (D) an executive officer or director of WinStar disclosing to any third party any intention, plan or arrangement to effectuate any of the foregoing or (E) WinStar advising, assisting or encouraging any other person in connection with the foregoing, other than Damages sustained, suffered or incurred by a LHC Party as a result of (x) in the case of the foregoing clause (A), a claim (other than by a WinStar Party or a stockholder of WinStar) that the consideration paid by the WinStar Parties for the Shares is excessive in relation to the consideration paid for such other shares and (y) in the case of any of the foregoing clauses (A) through (E), a breach or alleged breach by any LHC Party (or any affiliate thereof) of any obligation to ARTT arising from activities or agreements of a LHC Party (or any affiliate thereof) prior to the Closing Date; provided that the WinStar Parties shall have no obligation to indemnify the LHC Parties hereunder, or any other liability to the LHC Parties, with respect to a breach of the representations, warranties and covenants in Sections 4(h) or 5(m) of the Reorganization Agreement unless there is also a breach of the covenant in Section 5(n) of the Reorganization Agreement occurring on or before the later of one year from the Closing Date or June 30, 1999 as a result of actions or omissions attributable to the WinStar Parties (for which purpose actions or omissions of the consultant under the JPW Agreement not done at the direction of a WinStar Party will not be attributable to the WinStar Parties). Subject to the proviso of the immediately preceding sentence, this indemnity shall survive the Closing for a period of one year after the Closing Date except that with respect to claims arising (A) as a result of a breach or alleged breach of the representations, warranties or covenants in Sections 1(c), 4(f), 4(h), 5(g), 5(m) and 5(n) of the Reorganization Agreement, it shall survive without limitation as to time, and (B) under clause (iii) above, it shall survive for a period of 20 months after the Closing Date. Any claim for indemnity asserted within the relevant period shall survive until resolved. (c) If, on the date ("Determination Date") which is the later of one year from the Closing Date or June 30, 1999, the net asset value of the Transferred Accounts (after deducting therefrom all expenses of the WinStar Parties under the JPW Agreement) (the "1999 Asset Value") is less than $900,000, other than as a result of actions or omissions attributable to the WinStar Parties (for which purpose actions or omissions of the consultant under the JPW Agreement not done at the direction of a WinStar Party will not be attributable to the WinStar Parties), the LHC Parties shall reimburse WinLLC2, in cash, in an amount equal to the difference between $900,000 and the 1999 Net Asset Value. Such reimbursement shall be treated as a reduction in the value of the consideration paid by the WinStar Parties for the Shares and the Other Assets. Any claim for payment by the WinStar Parties pursuant to this Paragraph (c) shall be made no later than 30 days after the Determination Date or, if such date is not a business day, the next succeeding business day. (d) As security for the payment of amounts which may be due to the WinStar Parties pursuant to the obligations of LHC in Paragraphs (a) and (c) of this Agreement, on the Closing Date LHC shall deliver to Hahn & Hessen LLP, as escrow agent, 139,000 of the WinStar Shares, to be held and disposed of by such escrow agent pursuant to the terms of the Escrow Agreement. (e) As used herein, the term "Damages" means the dollar amount of any loss, damage, expense or liability, including, without limitation, reasonable attorneys' fees and disbursements incurred by an indemnified party in any action or proceeding between the indemnified party and the indemnifying party or between the indemnified party and a third party, which is determined to have been sustained, suffered or incurred by a party and to have in arisen from or in connection with an event or state of facts which is subject to indemnification under this Agreement. The amount of Damages shall be the amount finally determined by a court of competent jurisdiction (after the exhausting of all appeals) or the amount agreed to upon settlement in accordance with the terms of this Agreement, if a third-party claim, or by the parties, if a direct claim of one party against another. (f) A party required to make an indemnification payment pursuant to this Agreement ("Indemnifying Party") shall have no liability to make such payment unless the party entitled to receive such indemnification payment ("Indemnified Party") gives notice to the Indemnifying Party specifying (i) the covenant, representation or warranty contained in the Reorganization Agreement which it asserts has been breached, (ii) in reasonable detail, the nature and dollar amount of any claim the Indemnified Party may have against the Indemnifying Party by reason thereof under this Agreement, and (iii) whether the claim is a third-party claim or a direct claim of the Indemnified Party against the Indemnifying Party. (g) If an Indemnified Party becomes aware of a third-party claim for which an Indemnifying Party would be liable to an Indemnified Party hereunder, the Indemnified Party shall, with reasonable promptness, notify in writing the Indemnifying Party of such claim, identifying the basis for such claim and the amount or the estimated amount thereof to the extent then determinable which estimate shall not be conclusive of the final amount of such claim (the "Claim Notice"); provided, however, that any failure to give such Claim Notice will not be deemed a waiver of any rights of the Indemnified Party except to the extent the rights of the Indemnifying Party are actually prejudiced by such failure. The Indemnifying Party, upon request of the Indemnified Party, shall retain counsel (who shall be reasonably acceptable to the Indemnified Party) to represent the Indemnified Party and shall pay the reasonable fees and expenses of such counsel with regard thereto; provided, however, that any Indemnified Party is hereby authorized, prior to the date on which it receives written notice from the Indemnifying Party designation such counsel, to retain counsel, whose reasonable fees and expenses shall be at the expense of the Indemnifying Party, to file any motion, answer or other pleading and take such other action which it reasonably shall deem necessary to protect its interests or those of the Indemnifying Party until the date on which the Indemnified Party receives such notice from the Indemnified Party. After the Indemnifying Party shall retain such counsel, the Indemnified Party shall have the right to retain its own counsel, but the fees and expenses of such counsel shall be at the expense of such Indemnified party unless (i) the Indemnifying Party and the Indemnified Party shall have mutually agreed to the retention of such counsel or (ii) the named parties of any such proceeding (including any impleaded parties) included both the Indemnifying Party and the Indemnified Party and representation of both parties by the same counsel would be inappropriate due to actual or potential differing interests between them. If requested by the Indemnifying Party, the Indemnified Party agrees to cooperate with the Indemnifying Party and its counsel in contesting any claim or demand which the Indemnifying Party defends. A claim or demand may not be settled by any party without the prior written consent of the other party (which consent will not be unreasonably withheld) unless, as part of such settlement, the Indemnified Party shall receive a full and unconditional release reasonably satisfactory to it. Notwithstanding the foregoing, the Indemnifying Party may settle any third-party claim without the prior written consent of the Indemnified Party if such claim is exclusively for monetary damages. (h) If any Indemnified Party shall have a direct claim against any Indemnifying Party hereunder, the Indemnified Party shall send a Claim Notice with respect to such claim to the Indemnifying Party. (i) No Indemnifying Party shall be required to indemnify an Indemnified Party pursuant to this Agreement unless the aggregate of all amounts for which indemnity would otherwise be due against it exceeds $50,000 and then only to the extent such amounts exceed $50,000 and do not exceed (i) $3,000,000 in the case of a breach of the representations, warranties and covenants of the WinStar Parties in Sections 4(h), 5(m) and 5(n) of the Reorganization Agreement, and (ii) $8,500,000 in any other case. For purposes of this Paragraph (i), "Indemnified Party" means the LHC Parties collectively or the WinStar Parties collectively, as the case may be. The provisions of this Paragraph (i) shall not apply with respect to a claim for indemnification based on a breach or alleged breach of the covenants of the LHC Parties in Sections 5(h) and 5(i) of the Reorganization Agreement. (j) The LHC Parties shall promptly notify WinStar if the Internal Revenue Service examines LHC's or Zimmerman's respective Federal income tax returns in which the transactions contemplated by the Reorganization Agreement are reported as qualifying as a "reorganization" within the meaning of IRC ss.368(a)(1)(C) and shall keep WinStar reasonably and currently informed of the status of any such examination, in each case solely to the extent that it relates to LHC's or Zimmerman's reporting of such transactions as so qualifying. (k) The provisions of this Agreement shall be the sole recourse of the parties for Damages with respect to breaches of the representations, warranties and covenants of the parties under the Reorganization Agreement, except in the case of fraud and provided that the parties shall not be precluded from seeking equitable remedies, including without limitation specific performance. If the Reorganization Agreement is terminated prior to the Closing, this Agreement shall also terminate. (l) The provisions of Section 8 of the Reorganization Agreement shall apply to this Agreement as if fully set forth herein. IN WITNESS WHEREOF, the parties have caused this Agreement to be executed as of the date first written above. WINSTAR COMMUNICATIONS, INC. /s/ T. R. Graham By:_________________________________ Name: T. R. Graham Title: Executive Vice President WINSTAR LHC1 LLC By: WINSTAR COMMUNICATIONS, INC., Member /s/ T. R. Graham By:_________________________________ Name: T. R. Graham Title: Executive Vice President WINSTAR LHC2 LLC By: WINSTAR COMMUNICATIONS, INC., Member /s/ T. R. Graham By:_________________________________ Name: T. R. Graham Title: Executive Vice President LANDOVER HOLDINGS CORPORATION /s/ Laurence S. Zimmerman By:_________________________________ Name: Laurence S. Zimmerman Title: President /s/ Laurence S. Zimmerman ___________________________________ LAURENCE S. ZIMMERMAN -----END PRIVACY-ENHANCED MESSAGE-----