4,000,000 Shares
WINSTAR COMMUNICATIONS, INC.
Series D 7% Senior Cumulative Convertible Preferred Stock
Due 2010
(Liquidation Preference $50 per share)
REGISTRATION RIGHTS AGREEMENT
March 12, 1998
Credit Suisse First Boston Corporation
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
c/o Credit Suisse First Boston Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Ladies and Gentlemen:
Winstar Communications, Inc., a Delaware corporation (the
"Company"), together with its wholly owned subsidiary, WinStar Multichannel
Corp., a Delaware corporation, propose to issue and sell to Credit Suisse First
Boston Corporation, ▇▇▇▇▇ ▇▇▇▇▇▇ Inc., ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated and
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC (the "Initial Purchasers"), upon the terms
set forth in a purchase agreement of even date herewith (the "Purchase
Agreement"), 4,000,000 shares of the Company's Series D 7% Senior Cumulative
Convertible Preferred Stock Due 2010 (liquidation preference $50 per share) (the
"Convertible Preferred Stock"). The Convertible Preferred Stock will be
convertible into shares of Common Stock, par value $0.01 per share, of the
Company (the "Common Stock") at the conversion price set forth in the Offering
Circular dated March 12, 1998 (the "Offering Circular"), subject to adjustment
in accordance with the Certificate of Designation of the Convertible Preferred
Stock (the "Certificate of Designation"). Dividends on the Convertible Preferred
Stock may, at the option of the Company be paid in shares of Common Stock, as
described in the Offering Circular. The Convertible Preferred Stock and the
Common Stock issuable as dividends on the Convertible Preferred Stock or upon
conversion of the Convertible Preferred Stock are collectively herein referred
to as the "Securities" and each of them as held singularly is herein referred to
as a "Security". As an inducement to the Initial Purchasers to
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enter into the Purchase Agreement and in satisfaction of a condition to the
Initial Purchasers' obligations thereunder, the Company agrees with the Initial
Purchasers, (i) for the benefit of the Initial Purchasers and (ii) for the
benefit of the holders of the Securities from time to time (each of the
foregoing a "Holder" and together the "Holders"), as follows:
1. Shelf Registration. So long as any Transfer Restricted
Security (as defined in Section 5 hereof) exists, the Company shall take the
following actions:
(a) The Company shall, at its cost, prepare and, not later
than 45 days after (or if such 45th day is not a business day, the first
business day thereafter) the date of original issue of the Convertible Preferred
Stock, file with the Securities and Exchange Commission (the "Commission") and
thereafter shall use its best efforts to cause to be declared effective on or
prior to August 15, 1998 a registration statement on the appropriate form (the
"Shelf Registration Statement") covering the offer and sale of the Transfer
Restricted Securities by the Holders thereof from time to time in accordance
with the methods of distribution set forth in the Shelf Registration Statement
and Rule 415 under the Securities Act of 1933 (the "Securities Act")
(hereinafter, the "Shelf Registration").
(b) The Company shall use its best efforts to keep the Shelf
Registration Statement continuously effective, in order to permit the prospectus
included therein to be lawfully delivered by the Holders of the relevant
Securities, until such time as all the Securities covered by the Shelf
Registration Statement have been sold pursuant thereto or may be sold pursuant
to Rule 144(k) under the Securities Act (or any successor rule thereof),
assuming for this purpose that the Holders thereof are not affiliates of the
Company (in any such case, such period being called the "Shelf Registration
Period"). The Company shall be deemed not to have used its best efforts to keep
the Shelf Registration Statement effective during the requisite period if it
voluntarily takes any action that would result in Holders of Securities covered
thereby not being able to offer and sell such Securities during that period,
unless (i) such action is required by applicable law or (ii) upon the occurrence
of any event contemplated by paragraph 2(b)(iv) below, such action is taken by
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the Company in good faith and for valid business reasons and the Company
thereafter promptly complies with the requirements of paragraph 2(h) below if
the Company has determined in good faith that there are no material legal or
commercial impediments in so doing.
(c) Notwithstanding any other provisions of this Agreement to
the contrary, the Company shall cause (other than information required to be
supplied by the selling Holders pursuant to this Agreement) (i) the Shelf
Registration Statement and the related prospectus and any amendment or
supplement thereto to comply in all material respects with the applicable
requirements of the Securities Act and the rules and regulations of the
Commission thereunder, (ii) the Shelf Registration Statement and any amendment
thereto not to contain, when it becomes effective, an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any prospectus
forming a part of the Shelf Registration Statement, and any amendment or
supplement to such prospectus, not to contain, as of the date of such prospectus
or amendment or supplement, 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.
(d) The Company shall ensure that the Shelf Registration
Statement includes the shares of Common Stock issued in payment of dividends, if
any, as permitted in accordance with the terms of the Convertible Preferred
Stock.
2. Registration Procedures. In connection with the Shelf
Registration contemplated by Section 1 hereof the following provisions shall
apply so long as any Transfer Restricted Security exists:
(a) The Company shall (i) furnish, without charge, to the
Initial Purchasers, prior to the filing thereof with the Commission, a copy of
the Shelf Registration Statement and each amendment thereof and each amendment
or supplement, other than such amendments or supplements filed solely pursuant
to (iii) below, if any, to the prospectus included therein and, in the event
that an Initial Purchaser (with respect to any portion of an unsold allotment
from the original offering) is participating in the Shelf Registration
Statement, shall use its best efforts to reflect in each such document, when so
filed with the
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Commission, such comments as such Initial Purchaser reasonably and timely may
propose, (ii) include in each such document the names of the Holders who notify
the Company that they propose to sell Transfer Restricted Securities pursuant to
the Shelf Registration Statement as selling security holders and (iii) file
pursuant to Rule 424(b) under the Securities Act an amendment to the Shelf
Registration Statement or amend the prospectus to cover new Holders of
Securities upon written notice by such new Holders to such effect.
(b) The Company shall give written notice to the Initial
Purchasers and the Holders of Transfer Restricted Securities included within the
coverage of the Shelf Registration Statement (which notice pursuant to clauses
(ii)-(iv) hereof shall be accompanied by an instruction, if applicable, to
suspend the use of the prospectus until the requisite changes have been made):
(i) when the Shelf Registration Statement or any amendment
thereto has been filed with the Commission and when the Shelf
Registration Statement or any post-effective amendment thereto has
become effective;
(ii) of the issuance by the Commission of any stop order
suspending the effectiveness of the Shelf Registration Statement or the
initiation of any proceedings for that purpose;
(iii) of the receipt by the Company or its legal counsel of
any notification with respect to the suspension of the qualification of
the Securities for sale in any jurisdiction or the initiation or
threatening of any proceeding for such purpose; and
(iv) of the happening of any event that requires the Company
to make changes in the Shelf Registration Statement or the prospectus
in order that the Shelf Registration Statement and the prospectus do
not contain an untrue statement of a material fact and do not omit to
state a material fact required to be stated therein or necessary to
make the statements therein (in the case of the prospectus, in light of
the circumstances under which they were made) not misleading.
(c) The Company shall make every reasonable effort to obtain
the withdrawal at the earliest possible time, of any order suspending the
effectiveness of the Shelf Registration Statement.
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(d) The Company shall furnish to each Holder of Transfer
Restricted Securities included within the coverage of the Shelf Registration, if
the Holder so requests in writing, without charge, one copy of the Shelf
Registration Statement and any post-effective amendment thereto, including
financial statements and schedules, and, all exhibits thereto (including those,
if any, incorporated by reference).
(e) The Company shall, during the Shelf Registration Period,
deliver to each Holder of Transfer Restricted Securities included within the
coverage of the Shelf Registration Statement, without charge, as many copies of
the prospectus (including each preliminary prospectus) included in the Shelf
Registration Statement and any amendment or supplement thereto as such person
may reasonably request. The Company consents, subject to the provisions of this
Agreement, to the use of the then current prospectus or any amendment thereto,
together with any supplement thereto, by each of the selling Holders in
connection with the offering and sale of the Transfer Restricted Securities
covered by the prospectus, or any amendment or supplement thereto, included in
the Shelf Registration Statement.
(f) Prior to any public offering of the Securities pursuant to
the Shelf Registration Statement, the Company shall register or qualify or
cooperate with the Holders of the Transfer Restricted Securities included
therein and their respective counsel in connection with the registration or
qualification of such Securities for offer and sale under the securities or
"blue sky" laws of such states of the United States as any such Holder
reasonably requests in writing and do any and all other acts or things
reasonably necessary or advisable to enable the offer and sale in such
jurisdictions of the Securities covered by the Shelf Registration Statement;
provided, however, that the Company shall not be required to (i) qualify
generally to do business in any jurisdiction where it is not then otherwise
required to be so qualified or (ii) take any action which would subject it to
general service of process or to taxation in any jurisdiction where it is not
then so subject.
(g) The Company shall cooperate with the Holders of the
Transfer Restricted Securities to facilitate the timely preparation and delivery
of certificates representing the Securities sold pursuant to the Shelf
Registration Statement free of any restrictive legends and in such denominations
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and registered in such names as the Holders may request in connection with sales
of the Securities pursuant to the Shelf Registration Statement.
(h) Upon the occurrence of any event contemplated by
paragraphs (ii) through (iv) of Section 2(b) above during the period for which
the Company is required to maintain an effective Shelf Registration Statement,
the Company shall promptly prepare and file a post-effective amendment to the
Shelf Registration Statement or an amendment or supplement (by way of
incorporation by reference from an Exchange Act report or otherwise) to the
related prospectus and any other required document so that the prospectus will
not contain an untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary to make the statements therein,
in light of the circumstances under which they were made, not misleading. If the
Company notifies the Initial Purchasers or the Holders of Transfer Restricted
Securities included within the coverage of the Shelf Registration Statement, in
accordance with paragraphs (ii) through (iv) of Section 2(b) above, to suspend
the use of the prospectus until the requisite changes to the prospectus have
been made, then the Initial Purchasers and the Holders shall suspend use of such
prospectus.
(i) Not later than the effective date of the Shelf
Registration Statement, the Company will provide CUSIP numbers for the
Convertible Preferred Stock registered for resale under the Shelf Registration
Statement, and use reasonable commercial efforts to provide printed certificates
for such Convertible Preferred Stock, in form eligible for deposit with The
Depository Trust Company.
(j) The Company will comply with all rules and regulations of
the Commission to the extent and so long as they are applicable to the Shelf
Registration and will make generally available to its security holders (or
otherwise provide in accordance with Section 11(a) of the Securities Act) an
earnings statement satisfying the provisions of Section 11(a) of the Securities
Act, no later than 45 days after the end of a 12-month period (or 90 days, if
such period is a fiscal year) beginning with the first month of the Company's
first fiscal quarter commencing after the effective date of the Shelf
Registration Statement, which statement shall cover such 12-month period.
(k) The Company may require each Holder of Securities to be
sold pursuant to the Shelf Registration Statement to furnish to the Company such
information regarding the Holder, his or her ownership of Securities and the
distribution of the Securities by such Holder as the
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Company may from time to time reasonably require for inclusion in the Shelf
Registration Statement, and the Company may exclude from such registration the
Securities of any Holder that fails to furnish such information within a
reasonable time after receiving such request.
(l) The Company shall (i) make reasonably available for
inspection by the Holders of the Transfer Restricted Securities included within
the coverage of the Shelf Registration Statement and any attorney, accountant or
other agent retained by the Holders of the Securities all relevant financial and
other records, pertinent corporate documents and properties of the Company and
(ii) cause the Company's officers, directors, employees, accountants and
auditors to supply all relevant information reasonably requested by the Holders
of the Securities or any such attorney, accountant or agent in connection with
the Shelf Registration Statement, in each case, as shall be reasonably necessary
to enable such persons to conduct a reasonable investigation within the meaning
of Section 11 of the Securities Act; provided, however, that the foregoing
inspection and information gathering (i) shall be coordinated by you and, on
behalf of the other parties, by one counsel (the "Designated Counsel")
designated by the Holders of a majority of the shares of the Convertible
Preferred Stock covered by the Shelf Registration Statement (provided that
Holders of Common Stock issued upon the conversion of the Convertible Preferred
Stock shall be deemed to be Holders of the aggregate number of shares of
Convertible Preferred Stock from which such Common Stock was converted) and (ii)
shall not be available for any such Holder that is a competitor of the Company,
and provided further that any records, documents, properties or information that
are designated by the Company as confidential at the time of delivery of such
records, documents, properties or information shall be kept confidential by such
persons, unless (i) such records, documents, properties or information are in
the public domain or otherwise publicly available, (ii) disclosure of such
records, documents, properties or information is required by court or
administrative order or (iii) disclosure of such records, documents, properties
or information, in the written opinion of counsel to such person, is otherwise
required by law (including pursuant to the requirements of the Securities Act).
(m) The Company, if requested by the Designated Counsel, shall
cause (i) its counsel to deliver an opinion and updates thereof relating to the
Transfer Restricted Securities in customary form, with customary limitations,
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qualifications and exceptions, addressed to such Holders, and dated, in the case
of the initial opinion, the effective date of such Shelf Registration Statement
(it being agreed that the matters to be covered by such opinion shall include
the due incorporation and good standing of the Company and its subsidiaries; the
due authorization, execution and issuance, and the validity and
nonassessibility, of the applicable Securities; other than as disclosed, the
absence of governmental approvals required to be obtained in connection with the
Shelf Registration Statement, or the offering and sale of the applicable
Securities; the compliance as to form of such Shelf Registration Statement and
any documents incorporated by reference therein; and, as of the date of the
opinion and as of the effective date of the Shelf Registration Statement or most
recent post-effective amendment thereto, as the case may be, the absence from
such Shelf Registration Statement and the prospectus included therein, as then
amended or supplemented, and from any documents incorporated by reference
therein, of an untrue statement of a material fact or the omission to state
therein a material fact required to be stated therein or necessary to make the
statements therein not misleading (in the case of any such documents, in the
light of the circumstances existing at the time that such documents were filed
with the Commission under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"))), (ii) its officers to execute and deliver all customary
documents and certificates and updates thereof reasonably requested by the
Designated Counsel and (iii) its independent public accountants and the
independent public accountants with respect to any other entity for which
financial information is provided in the Shelf Registration Statement to provide
to the selling Holders of the applicable Securities a comfort letter in
customary form and covering matters of the type customarily covered in comfort
letters in connection with primary underwritten offerings, subject to receipt of
appropriate documentation as contemplated, and only if permitted, by Statement
of Auditing Standards No. 72.
(n) The Company will use its best efforts to cause the Common
Stock included in such Shelf Registration Statement to be, upon resale
thereunder, listed on each securities exchange, if any, on which any shares of
Common Stock are then listed.
(o) The Company shall use reasonable commercial efforts to
take all other steps necessary to effect the registration of the Transfer
Restricted Securities covered by the Shelf Registration Statement contemplated
hereby.
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(p) The Company shall use reasonable commercial efforts to
cooperate with Holders of Convertible Preferred Stock that are required to
receive physical certificates evidencing shares of Common Stock received as
dividends paid in respect of such Convertible Preferred Stock to assist such
Holders through the prompt delivery of such physical certificates to such
Holders.
3. Registration Expenses. The Company shall bear all fees and
expenses incurred in connection with the performance of its obligations under
Sections 1 through 2 hereof, whether or not the Shelf Registration Statement is
filed or becomes effective, and shall bear or reimburse the Holders of the
Securities covered by the Shelf Registration for the reasonable fees and
disbursements of the Designated Counsel.
4. Indemnification. (a) The Company agrees to indemnify and
hold harmless each Holder of Transfer Restricted Securities included within the
coverage of the Shelf Registration Statement and each person, if any, who
controls such Holder within the meaning of the Securities Act or the Exchange
Act (each Holder and such controlling persons are referred to collectively as
the "Indemnified Parties") from and against any losses, claims, damages or
liabilities, joint or several, or any actions in respect thereof (including any
losses, claims, damages, liabilities or actions relating to purchases and sales
of the Securities) to which each Indemnified Party becomes subject under the
Securities Act, the Exchange Act or otherwise, insofar as such losses, claims,
damages, liabilities or actions arise out of or are based upon, any untrue
statement or alleged untrue statement of a material fact contained in the Shelf
Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to the Shelf Registration, or arise
out of, or are based upon, the omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the statements
therein not misleading, and subject to subsection (c) below, shall reimburse, as
incurred, the Indemnified Parties for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action in respect thereof; provided, however, that
the Company shall not be liable in any such case to the extent that such loss,
claim, damage, liability, or action in respect thereof arises out of or is based
upon (x) the use of any prospectus in violation of the last sentence of Section
2(h), or (y) any untrue statement or alleged untrue statement or omission or
alleged omission made in the Shelf
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Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to the Shelf Registration in reliance
upon, and in conformity with, written information pertaining to such Holder and
furnished to the Company by or on behalf of such Holder specifically for
inclusion therein; provided further, however, that this indemnity agreement will
be separate from any liability which the Company may otherwise have to such
Indemnified Party; provided further, however, that with respect to any untrue
statement or alleged untrue statement in or omission or alleged omission from
any prospectus, the indemnity agreement contained in this subsection (a) shall
not enure to the benefit of any Holder that sold the Securities concerned to the
person asserting any such losses, claims, damages or liabilities, to the extent
that any such loss, claim, damage or liability of such Holder results from the
fact that there was not sent or given to such person, at or prior to the written
confirmation of the sale of such Securities to such person, a copy of the
prospectus if the Company had previously furnished copies thereof to such Holder
and such prospectus corrected such untrue statement or omission or alleged
untrue statement or omission.
(b) Each Holder of Transfer Restricted Securities included
within the coverage of the Shelf Registration Statement, severally and not
jointly, will indemnify and hold harmless the Company and each person, if any,
who controls the Company within the meaning of the Securities Act or the
Exchange Act from and against any losses, claims, damages or liabilities or any
actions in respect thereof, to which the Company or any such controlling person
becomes subject under the Securities Act, the Exchange Act or otherwise, insofar
as such losses, claims, damages, liabilities or actions arise out of or are
based upon any untrue statement or alleged untrue statement of a material fact
contained in a Shelf Registration Statement or prospectus or in any amendment or
supplement thereto or in any preliminary prospectus relating to a Shelf
Registration, or arise out of, or are based upon the omission or alleged
omission to state therein a material fact necessary to make the statements
therein not misleading, but in each case only to the extent that the untrue
statement or omission or alleged untrue statement or omission was made in
reliance upon and in conformity with written information pertaining to such
Holder and furnished to the Company by or on behalf of such Holder specifically
for inclusion therein; and, subject to the limitation set forth immediately
preceding this clause, and to subsection (c) below, shall reimburse, as
incurred, the Company for any legal or other expenses
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reasonably incurred by the Company or any such controlling person in connection
with investigating or defending any loss, claim, damage, liability or action in
respect thereof; provided, however, that such Holder shall not have any
liability under this clause (b) in excess of the aggregate purchase price paid
by such Holder for the shares of Convertible Preferred Stock purchased by such
Holder. This indemnity agreement will be separate from any liability which such
Holder may otherwise have to the Company or any of its controlling persons.
(c) Promptly after receipt by an indemnified party under this
Section 4 of notice of the commencement of any action or proceeding (including a
governmental investigation), such indemnified party will, if a claim in respect
thereof is to be made against the indemnifying party under this Section 4,
notify the indemnifying party of the commencement thereof; but the omission so
to notify the indemnifying party will not, in any event, relieve the
indemnifying party from any obligations to any indemnified party other than the
indemnification obligation provided in subsections (a) or (b) above. In case any
such action is brought against any indemnified party, and it notifies the
indemnifying party of the commencement thereof, the indemnifying party will be
entitled to participate therein and, to the extent that it may wish, jointly
with any other indemnifying party similarly notified, to assume the defense
thereof, with counsel reasonably satisfactory to such indemnified party (who
shall not, except with the consent of the indemnified party, be counsel to the
indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof the
indemnifying party will not be liable to such indemnified party under this
Section 4 for any legal or other expenses, other than reasonable costs of
investigation, subsequently incurred by such indemnified party in connection
with the defense thereof. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement of any pending or
threatened action in respect of which any indemnified party is or could have
been a party and indemnity could have been sought hereunder by such indemnified
party unless such settlement includes an unconditional release of such
indemnified party from all liability on any claims that are the subject matter
of such action.
(d) If the indemnification provided for in this Section 4 is
unavailable or insufficient to hold harmless an indemnified party under
subsections (a) or (b) above, then
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each indemnifying party shall contribute to the amount paid or payable by such
indemnified party as a result of the losses, claims, damages or liabilities (or
actions in respect thereof) referred to in subsections (a) or (b) above (i) in
such proportion as is appropriate to reflect the relative benefits received by
the indemnifying party or parties on the one hand and the indemnified party on
the other from the registration of the Securities, pursuant to the Shelf
Registration, or (ii) if the allocation provided by the foregoing clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the indemnifying party or parties on the one hand and the
indemnified party on the other, in connection with the statements or omissions
that resulted in such losses, claims, damages or liabilities (or actions in
respect thereof), as well as any other relevant equitable considerations. The
relative fault of the parties shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company on the one hand or such Holder or such other indemnified
party, as the case may be, on the other, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission. The amount paid by an indemnified party as a result of
the losses, claims, damages or liabilities referred to in the first sentence of
this subsection (d) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any action or claim which is the subject of this subsection (d).
Notwithstanding any other provision of this subsection (d), the Holders shall
not be required to contribute any amount in excess of the amount by which the
net proceeds received by such Holders from the sale of the Securities pursuant
to the Shelf Registration Statement exceeds the amount of damages which such
Holders have otherwise been required to pay by reason of such untrue or alleged
untrue statement or omission or alleged omission. No person guilty of fraudulent
misrepresentation (within the meaning of Section 11(f) of the Securities Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this paragraph (d), each person,
if any, who controls such indemnified party within the meaning of the Securities
Act or the Exchange Act shall have the same rights to contribution as such
indemnified party and each person, if any, who controls the Company within the
meaning of the
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Securities Act or the Exchange Act shall have the same rights to contribution as
the Company.
(e) The agreements contained in this Section 4 shall survive
the sale of the Securities pursuant to the Shelf Registration Statement and
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of any
indemnified party.
5. Additional Dividends Under Certain Circumstances. (a)
Additional dividends (the "Additional Dividends") with respect to the
Convertible Preferred Stock shall accrue as follows if any of the following
events occur (each such event in clauses (i) and (ii) below being herein called
a "Registration Default"):
(i) if by August 15, 1998, the Shelf Registration Statement has
not been declared effective by the Commission; or
(ii) if after the Shelf Registration Statement is declared
effective (A) the Shelf Registration Statement thereafter ceases to be
effective; or (B) the Shelf Registration Statement or the related
prospectus ceases to be usable (in each case except as permitted in
paragraph (b) below) in connection with resales of Transfer Restricted
Securities in accordance with and during the periods specified herein
because either (1) any event occurs as a result of which the related
prospectus forming part of such Shelf Registration Statement would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein in the light of
the circumstances under which they were made not misleading, or (2) it
shall be necessary to amend such Shelf Registration Statement or
supplement the related prospectus, to comply with the Securities Act or
the Exchange Act or the respective rules thereunder.
Additional Dividends shall accrue on the shares of Convertible
Preferred Stock from and including the date on which any such Registration
Default shall occur, to but excluding the date on which all such Registration
Defaults have been cured, at a rate of 2% per annum in addition to the dividends
otherwise accruing on the Convertible Preferred Stock).
(b) A Registration Default referred to in Section 5(a)(ii) shall
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be deemed not to have occurred and be continuing in relation to the Shelf
Registration Statement or the related prospectus if (i) such Registration
Default has occurred solely as a result of (x) the filing of a post-effective
amendment to the Shelf Registration Statement to incorporate annual audited
financial information with respect to the Company where such post-effective
amendment is not yet effective and needs to be declared effective to permit
Holders to use the related prospectus or (y) other material events, with respect
to the Company that would need to be described in the Shelf Registration
Statement or the related prospectus and (ii) in the case of clause (y), the
Company proceeds promptly and in good faith to amend or supplement (including by
way of filing documents under the Exchange Act which are incorporated by
reference into the Registration Statement) the Shelf Registration Statement and
related prospectus to describe such events; provided, however, that in any case
if such Registration Default occurs for a continuous period in excess of 45
days, Additional Dividends shall be payable in accordance with the above
paragraph from the 46th day after such Registration Default initially occurs
until such Registration Default is cured.
(c) Any amounts of Additional Dividends due pursuant to clause
(a)(i) or (a)(ii) of this Section 5 or pursuant to the proviso contained in
Section 5(b) will be payable on the regular dividend payment dates with respect
to the Convertible Preferred Stock on the same terms and conditions and subject
to the same limitations as pertain at such time for the payment of regular
dividends. The amount of Additional Dividends will be determined by multiplying
the applicable Additional Dividends rate by the aggregate liquidation preference
of the outstanding shares of Convertible Preferred Stock, multiplied by a
fraction, the numerator of which is the number of days such Additional Dividend
rate was applicable during such period (determined on the basis of a 360-day
year comprised of twelve 30-day months), and the denominator of which is 360.
(d) "Transfer Restricted Securities" means each Security until
(i) the date on which such Security has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf Registration
Statement or (ii) the date on which such Security is distributed to the public
pursuant to Rule 144 under the Securities Act or is saleable pursuant to Rule
144(k) under the Securities Act (or any successor rule thereof) or would be
saleable pursuant to Rule 144(k) under the Securities Act had it not been held
by, or had never been held by, an affiliate of the Company.
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6. Rules 144 and 144A. So long as any Transfer Restricted
Security exists, the Company shall use its best efforts to file the reports
required to be filed by it under the Securities Act and the Exchange Act in a
timely manner and, if at any time the Company is not required to file such
reports, it will, upon the reasonable request of any Holder of Transfer
Restricted Securities, make publicly available other information so long as
necessary to permit sales of its securities pursuant to Rules 144 and 144A. The
Company covenants that, in the event the Company is no longer subject to
Sections 13 or 15(d) of the Exchange Act, it will take such further action as
any Holder of Transfer Restricted Securities may reasonably request, all to the
extent required from time to time to enable such Holder to sell Transfer
Restricted Securities without registration under the Securities Act within the
limitation of the exemptions provided by Rules 144 and 144A (including the
requirements of Rule 144A(d)(4)). The Company will provide a copy of this
Agreement to prospective purchasers of Securities identified to the Company by
the Initial Purchasers upon request. Notwithstanding the foregoing, nothing in
this Section 6 shall be deemed to require the Company to register any of its
securities pursuant to the Exchange Act.
7. Miscellaneous. (a) Amendments and Waivers. The provisions
of this Agreement may not be amended, modified or supplemented, and waivers or
consents to departures from the provisions hereof may not be given, except by
the Company and the written consent of the Holders of a majority of the shares
of Transfer Restricted Securities (provided that Holders of Common Stock issued
upon conversion of Convertible Preferred Stock shall be deemed to be Holders of
the aggregate number of Convertible Preferred Stock from which such Common Stock
was converted) affected by such amendment, modification, supplement, waiver or
consents.
(b) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand delivery, first-class
mail, facsimile transmission, or air courier which guarantees overnight
delivery:
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(1) if to the Holders, at the most current address shown for
the Holders in the records of the Transfer Agent, with a copy in like
manner to you as follows:
c/o Credit Suisse First Boston Corporation
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: Transactions Advisory Group
with a copy to:
▇▇▇▇▇▇▇, Swaine & ▇▇▇▇▇
Worldwide Plaza
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇, Esq.
(2) if to the Company, at its address as follows:
WinStar Communications, Inc.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
with a copy to:
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇ & ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Fax No.: (▇▇▇) ▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; three
business days after being deposited in the mail, postage prepaid, if mailed;
when receipt is acknowledged by recipient's facsimile machine operator, if sent
by facsimile transmission; and on the day delivered, if sent by overnight air
courier guaranteeing next day delivery.
(c) No Inconsistent Agreements; Damages. The Company has not,
as of the date hereof, entered into, nor shall it, on or after the date hereof,
enter into, any agreement with respect to its securities that is inconsistent
with the rights granted to the Holders herein or otherwise conflicts with the
provisions hereof.
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Notwithstanding anything to the contrary contained in this Agreement, it is
hereby acknowledged and agreed that the Company shall have no liability for
monetary damages to the Initial Purchasers or any Holder for any breaches,
failures to comply or violations by it of Section 1 or 2 of this Agreement
except as expressly provided in Section 4 or 5 hereof; provided, however, in the
event that the Company breaches, fails to comply or violates the provisions of
Section 1 or 2 hereof, the Holders shall be entitled to, and the Company shall
not oppose the granting of, equitable relief, including injunction and specific
performance.
(d) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors and assigns of each of the
parties, including, without the need for an express assignment or any consent by
the Company thereto, subsequent Holders of Transfer Restricted Securities. The
Company hereby agrees to extend the benefits of this Agreement to any Holder of
Transfer Restricted Securities and any such Holder may specifically enforce the
provisions of this Agreement as if an original party hereto.
(e) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(g) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAWS.
By the execution and delivery of this Agreement, the Company
submits to the nonexclusive jurisdiction of any federal or state court in the
State of New York.
(h) Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is held
invalid, illegal or unenforceable, the validity, legality and enforceability of
any such provision in every other respect and of the remaining provisions
contained herein shall not be affected or impaired thereby.
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(i) Securities Held by the Company. Whenever the consent or
approval of Holders of a specified number of Transfer Restricted Securities is
required hereunder, Securities held by the Company or its affiliates (other than
subsequent Holders of Transfer Restricted Securities if such subsequent Holders
are deemed to be affiliates solely by reason of their holdings of such
Securities) shall not be counted in determining whether such consent or approval
was given by the Holders of such required percentage.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to the Company a counterpart hereof,
whereupon this instrument, along
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with all counterparts, will become a binding agreement among the several Initial
Purchasers and the Company in accordance with its terms.
Very truly yours,
WINSTAR COMMUNICATIONS, INC.
By: _______________________________
Name:
Title:
The foregoing Registration Rights
Agreement is hereby confirmed and accepted as
of the date first above written.
Credit Suisse First Boston Corporation
▇▇▇▇▇ ▇▇▇▇▇▇ Inc.
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated
NationsBanc ▇▇▇▇▇▇▇▇▇▇ Securities LLC
By: Credit Suisse First Boston Corporation
By: ______________________________________
Name:
Title:
