$450,000,000
WINSTAR COMMUNICATIONS, INC.
$200,000,000 10% Senior Subordinated Notes Due 2008
$250,000,000 11% Senior Subordinated Deferred Interest Notes Due 2008
PURCHASE AGREEMENT
--------------------
March 17, 1998
CREDIT SUISSE FIRST BOSTON CORPORATION
SALOMON BROTHERS INC
XXXXXX XXXXXXX & CO. INCORPORATED
NATIONSBANC XXXXXXXXXX SECURITIES LLC
c/o Credit Suisse First Boston Corporation,
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, X.X. 10010
Ladies and Gentlemen:
1. Introductory. WinStar Communications, Inc., a Delaware corporation
(the "Issuer" or "WinStar"), has agreed, subject to the terms and conditions
stated herein, to issue and sell to the several initial purchasers named in
Schedule A hereto (the "Purchasers") U.S.$200,000,000 principal amount of the
Issuer's 10% Senior Subordinated Notes Due 2008 (the "Cash-Pay Notes") and
U.S.$250,000,000 principal amount of the Issuer's 11% Senior Subordinated
Deferred Interest Notes Due 2008 (the "Deferred Interest Notes" and, together
with the Cash-Pay Notes, the "Offered Securities"). Each of the Cash-Pay Notes
and the Deferred Interest Notes will be issued under a separate indenture, each
dated as of March 15, 1998 (each, an "Indenture" and together, the "Indentures")
between the Issuer and United States Trust Company of New York, as Trustee. The
United States Securities Act of 1933 is herein referred to as the "Securities
Act."
The Issuer hereby agrees with the several Purchasers as follows:
2. Representations and Warranties of the Issuer. The Issuer represents
and warrants to, and agrees with, the several Purchasers that:
(a) A preliminary offering circular and an offering circular relating
to the Offered Securities to be offered by the Purchasers have been prepared by
the Issuer. Such preliminary offering circular and offering circular, as both
are supplemented as of the date of this Agreement, together with any other
document approved by the Issuer for use in connection with the contemplated
resale of the Offered Securities are hereinafter collectively referred to as the
"Offering Document." On the date of this Agreement, the Offering Document does
not include any untrue statement of a material
2
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading. The preceding sentence does not apply to statements in or
omissions from the Offering Document based upon written information furnished to
the Issuer by any Purchaser through Credit Suisse First Boston Corporation
("CSFBC") specifically for use therein, it being understood and agreed that the
only such information is that described as such in Section 7(b). WinStar's
Annual Report on Form 10-K most recently filed with the Securities and Exchange
Commission (the "Commission") and all subsequent reports (collectively, the
"Exchange Act Reports") which have been filed by WinStar with the Commission or
sent to stockholders pursuant to the Securities Exchange Act of 1934 (the
"Exchange Act"), when they were filed with the Commission, conformed in all
material respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder.
(b) The Issuer has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Offering Document; and the Issuer is duly qualified to do
business as a foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its business requires
such qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the condition
(financial or other), business, properties or results of operations of the
Issuer and its subsidiaries, taken as a whole (a "Material Adverse Effect"). The
Issuer is qualified to do business as a foreign corporation in the State of New
York.
(c) Each subsidiary of the Issuer has been duly incorporated and is an
existing corporation in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own its properties and
conduct its business as described in the Offering Document; and each subsidiary
of the Issuer is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of property
or the conduct of its business requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not have a
Material Adverse Effect; all of the issued and outstanding capital stock of each
subsidiary of the Issuer has been duly authorized and validly issued and is
fully paid and nonassessable; and the capital stock of each subsidiary owned by
the Issuer, directly or through subsidiaries, is owned free from liens,
encumbrances and defects other than shares of the direct or indirect
subsidiaries of WinStar New Media, Inc.
(d) Each of the Indentures and the Registration Rights Agreement has
been duly authorized; the Offered Securities have been duly authorized; and when
the Offered Securities are delivered and paid for pursuant to this Agreement on
the Closing Date (as defined below), the Indentures and the Registration Rights
Agreement will have been duly executed and delivered, such Offered Securities
will have been duly executed, authenticated, issued and delivered and will
conform, in all material respects, to the description thereof contained in the
Offering Document and the Indentures, the Registration Rights Agreement and such
Offered Securities will constitute valid and legally binding obligations of the
Issuer, enforceable in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization, moratorium and
3
similar laws of general applicability relating to or affecting creditors' rights
and to general equity principles; and, with respect to the Registration Rights
Agreement, except that rights to indemnity and contribution may be limited by
federal and state securities laws and public policy considerations.
(e) Except as contemplated by this Agreement or as disclosed in the
Offering Document, there are no contracts, agreements or understandings between
the Issuer and any person that would give rise to a valid claim against the
Issuer or any Purchaser for a brokerage commission, finder's fee or other like
payment in connection with the transactions contemplated by this Agreement.
(f) No consent, approval, authorization, or order of, or filing with,
any govern mental agency or body or any court is required for the consummation
of the transactions contemplated by this Agreement in connection with the
issuance and sale of the Offered Securities by the Issuer, other than as may be
required under the Securities Act and the Rules and Regulations of the
Commission thereunder with respect to the Registration Rights Agreement among
the Issuer and the Purchasers dated the date hereof (the "Registration Rights
Agreement") and the transactions contemplated thereunder, and such as may be
required by securities or blue sky laws of any state of the United States or of
any foreign jurisdiction in connection with the offer and sale of the Offered
Securities.
(g) The execution, delivery and performance of the Indentures, the
Registration Rights Agreement and this Agreement, and the issuance and sale of
the Offered Securities and compliance with the terms and provisions thereof will
not result in a breach or violation of any of the terms and provisions of, or
constitute a default under, (i) any statute, rule, regulation or order of any
governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Issuer or any subsidiary of the Issuer or any of their
properties, (ii) any agreement or instrument to which the Issuer or any such
subsidiary is a party or by which the Issuer or any such subsidiary is bound or
to which any of the properties of the Issuer or any such subsidiary is subject,
or (iii) the charter or by-laws of the Issuer or any such subsidiary, except, in
the case of clause (i) or (ii), such breaches, violations or defaults that
individually or in the aggregate would not have a Material Adverse Effect; and
the Issuer has full corporate power and authority to authorize, issue and sell
the Offered Securities to be sold by the Issuer as contemplated by this
Agreement.
(h) This Agreement has been duly authorized, executed and delivered by
the Issuer.
(i) Except as disclosed in the Offering Document, and except for liens
on the shares of the direct or indirect subsidiaries of WinStar New Media, Inc.,
the Issuer and its subsidiaries have good and marketable title to all real
properties and all other properties and assets owned by them, in each case free
from liens, encumbrances and defects that would materially affect the value
thereof or materially interfere with the use made or to be made thereof by them;
and, except as disclosed in the Offering Document, the Issuer and its
subsidiaries hold any leased real or personal property under valid and
enforceable leases with no exceptions that would materially interfere with the
use made or to be made thereof by them.
(j) The Issuer and its subsidiaries possess adequate certificates,
authorities or permits issued by appropriate governmental agencies or bodies
necessary to conduct the
4
business now operated by them and have not received any notice of proceedings
relating to the revocation or modification of any such certificate, authority or
permit that, individually or in the aggregate, could reasonably be expected to
have a Material Adverse Effect.
(k) No labor dispute with the employees of the Issuer or any of its
subsidiaries exists or, to the knowledge of the Issuer, is imminent that could
reasonably be expected to have a Material Adverse Effect.
(l) The Issuer and its subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and other
intellectual property (collectively, "intellectual property rights") necessary
to conduct the business as now operated by them, or used in the conduct of the
business as now operated by them, except to the extent that the failure to own
or possess or the inability to acquire such intellectual property rights would
not individually or in the aggregate have a Material Adverse Effect; and the
Issuer has not received any notice of infringement of or conflict with asserted
rights of others with respect to any intellectual property rights that, if
determined adversely to the Issuer or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
(m) Except as disclosed in the Offering Document, neither the Issuer
nor any of its subsidiaries is in violation of any statute, rule, regulation,
decision or order of any governmental agency or body or any court, domestic or
foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment or
human exposure to hazardous or toxic substances (collectively, "environmental
laws"), owns or operates any real property contaminated with any substance that
is subject to any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any claim
relating to any environmental laws, which violation, contamination, liability or
claim would individually or in the aggregate have a Material Adverse Effect; and
the Issuer is not aware of any pending investigation which might lead to such a
claim.
(n) Except as disclosed in the Offering Document, there are no pending
actions, suits or proceedings against or affecting the Issuer, any of its
subsidiaries or any of their respective properties that, individually or in the
aggregate, could reasonably be expected to have a Material Adverse Effect, or to
materially and adversely affect the ability of the Issuer to perform its
obligations under any of the Indentures, the Registration Rights Agreement or
this Agreement, or which are otherwise material in the context of the sale of
the Offered Securities; and, to the Issuer's knowledge, no such actions, suits
or proceedings are threatened or contemplated.
(o) The financial statements included in the Offering Document present
fairly the financial position of the Issuer and its consolidated subsidiaries
and, subject to the last paragraph of the report of Xxxxx Xxxxxxxx LLP, of
MIDCOM Communications, Inc. ("Midcom") and its consolidated subsidiaries as of
the dates shown and their results of operations and cash flows for the periods
shown, and such financial statements, subject to the last paragraph of the
report of Xxxxx Xxxxxxxx LLP, have been prepared in conformity with generally
accepted accounting principles in the United States applied on a consistent
basis; and the assumptions used in preparing the pro forma financial statements
included in the Offering Document provide a reasonable basis for presenting the
significant effects
5
directly attributable to the transactions or events described therein, the
related pro forma adjustments give appropriate effect to those assumptions, and
the pro forma columns therein reflect the proper application of those
adjustments to the corresponding historical financial statement amounts.
(p) Except as disclosed in the Offering Document, since the date of the
latest audited financial statements included in the Offering Document, there has
been no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of the Issuer and its subsidiaries
taken as a whole (it being understood that the acquisition from Telesoft Corp.
of its Tier I Internet service provider, the acquisition of substantially all of
the assets of Midcom, a change in the price of the Common Stock or the
continuation of operating losses consistent with the Issuer's historical results
shall be deemed not to be, in and of themselves, such a material adverse
change), and, except as disclosed in or contemplated by the Offering Document,
there has been no dividend or distribution of any kind declared, paid or made by
the Issuer on any class of its capital stock.
(q) The Issuer is not an open-end investment company, unit investment
trust or face-amount certificate company that is or is required to be registered
under Section 8 of the United States Investment Company Act of 1940 (the
"Investment Company Act"), nor is it a closed-end investment company required to
be registered, but not registered, there under; and the Issuer is not and, after
giving effect to the offering and sale of the Offered Securities and the
application of the proceeds thereof as described in the Offering Document, will
not be an "investment company" as defined in the Investment Company Act.
(r) No securities of the same class (within the meaning of Rule
144A(d)(3) under the Securities Act) as the Offered Securities are listed on any
national securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. automated inter-dealer quotation system.
(s) Assuming the accuracy of the representations and warranties of the
Purchasers contained herein, the offer and sale of the Offered Securities in the
manner contemplated by this Agreement will be exempt from the registration
requirements of the Securities Act; and it is not necessary to qualify an
indenture in respect of the Offered Securities under the United States Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), other than in
connection with the Issuer's obligations under the Registration Rights
Agreement.
(t) Except for sales to or through the Purchasers or affiliates
thereof, neither the Issuer nor any of its affiliates, nor any person acting on
its or their behalf (i) has, within the six-month period prior to the date
hereof, offered or sold in the United States or to any U.S. person (as such
terms are defined in Regulation S under the Securities Act) the Offered
Securities or any security of the same class or series as the Offered Securities
or (ii) has offered or will offer or sell the Offered Securities (A) in the
United States by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act or (B)
with respect to any such securities sold in reliance on Rule 903 of Regulation S
("Regulation S") under the Securities Act, by means of any directed selling
efforts within the meaning of Rule 902(b) of Regulation S. The Issuer, its
affiliates and any person acting on their behalf have complied and will comply
6
with the offering restrictions requirement of Regulation S. The Issuer has not
entered and will not enter into any contractual arrangement with respect to the
distribution of the Offered Securities except for this Agreement and the
Registration Rights Agreement.
(u) The Issuer is subject to Section 13 or 15(d) of the Exchange Act.
(v) The Issuer and its subsidiaries are in compliance in all material
respects with the Communications Act of 1934 (as amended by the
Telecommunications Act of 1996, the "Communications Act") and with all
applicable rules, regulations and policies of the Federal Communications
Commission (the "FCC").
(w) The Issuer has provided to the Purchasers a complete and accurate
list of all licenses granted to the Issuer and its subsidiaries (other than
experimental licenses in the 38 GHz portions of the radio spectrum and licenses
granted to the Issuer or its subsidiaries or acquired from Local Area
Telecommunications, Inc. that are not in the 38 GHz portion of the radio
spectrum) by the FCC (the "Licenses"). All of the Licenses are currently valid
and in full force and effect. Neither the Issuer nor any of its subsidiaries has
any knowledge of any investigation, notice of apparent liability, violation,
forfeiture or other order or complaint issued by or before any court or
regulatory body, including the FCC, or of any other proceedings (other than
proceedings relating to the wireless communications industries generally) which
could in any manner materially threaten or adversely affect the validity or
continued effectiveness of any of the Licenses, except that, on March 9, 1998,
several parties filed petitions for reconsideration (the "Petitions") of the 38
GHz Order (as defined in the Offering Document) alleging, among other things,
that the February 10, 1998 License grants to the Issuer of additional channels
in each of Atlanta, Buffalo, Cincinnati, Dallas, Houston, Miami, New York, St.
Louis, Seattle, Spokane and Tampa were in violation of the rules of the FCC.
(x) No event has occurred which (i) results in, or after notice or
lapse of time or both would result in, revocation, suspension, adverse
modification, non-renewal, impairment, restriction or termination of, or order
of forfeiture with respect to, any License or (ii) materially and adversely
affects or could reasonably be expected in the future to materially adversely
affect any of the rights of the Issuer or any of its subsidiaries thereunder.
(y) The Issuer and its subsidiaries have duly filed in a timely manner
all material filings, reports, applications, documents, instruments and
information required to be filed by them under the Communications Act, and all
such filings are true, correct and complete in all material respects.
(z) Neither the Issuer nor any of its subsidiaries has any reason to
believe that any of the Licenses will not be renewed in the ordinary course.
3. Purchase, Sale and Delivery of Offered Securities; Payment of
Underwriting Discount. On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Issuer hereby agrees to sell to the Purchasers, and the Purchasers
hereby agree, severally and not jointly, to purchase from the Issuer, the
respective principal amounts of Offered Securities set forth opposite the names
of the Purchasers in Schedule A hereto, at an aggregate purchase price of
$437,062,500.
7
The Issuer hereby agrees to deliver against payment of the purchase
price the Offered Securities in the form of one or more permanent global
securities in definitive form (the "Global Securities") deposited with the
Trustee as custodian for The Depository Trust Company ("DTC") and registered in
the name of Cede & Co., as nominee for DTC. Interests in any permanent Global
Securities will be held only in book-entry form through DTC, except in limited
circumstances (which are described in the Offering Document). Payment for the
Offered Securities shall be made by the Purchasers in Federal (same day) funds
by wire transfer to an account previously designated to CSFBC by the Issuer at a
bank acceptable to CSFBC, at the office of Cravath, Swaine & Xxxxx, Worldwide
Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, X.X. 10019-7475 at 10:00 A.M. (New York
time), on March 20, 1998, or at such other time not later than seven full
business days thereafter as CSFBC and the Issuer determine, such time being
herein referred to as the "Closing Date", against delivery to the Trustee as
custodian for DTC of the Global Securities representing all of the Offered
Securities. The Global Securities will be made available for examination at the
offices of Cravath, Swaine & Xxxxx at least 24 hours prior to the Closing Date.
4. Representations and Agreements by Purchasers; Resale by Purchasers.
(a) Each Purchaser severally represents and warrants to the Issuer that
it is an "accredited investor" within the meaning of Regulation D under the
Securities Act.
(b) Each Purchaser severally acknowledges that the Offered Securities
have not been registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
except in accordance with Regulation S or pursuant to an exemption from the
registration requirements of the Securities Act. Each Purchaser severally
represents and agrees that it has offered and sold the Offered Securities, and
will offer and sell the Offered Securities only in accor dance with Rule 903 or
Rule 144A under the Securities Act ("Rule 144A"). Accordingly, neither such
Purchaser nor its affiliates, nor any persons acting on its or their behalf,
have engaged or will engage in any directed selling efforts with respect to the
Offered Securities, and such Purchaser, its affiliates and all persons acting on
its or their behalf have complied and will comply with the offering restrictions
requirement of Regulation S. Each Purchaser severally agrees that, at or prior
to confirmation of sale of the Offered Securities, other than a sale pursuant to
Rule 144A, such Purchaser will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remuneration that purchases the
Offered Securities from it during the restricted period a confirmation or notice
to substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered or
sold within the United States or to, or for the account or benefit of,
U.S. persons (i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the date of the commencement
of the offering and the closing date, except in either case in
accordance with Regulation S (or Rule 144A if available) under the
Securities Act."
Unless otherwise defined herein, terms used in this subsection (b) have the
meanings given to them by Regulation S.
8
(c) Each Purchaser severally agrees that it and each of its affiliates
has not entered and will not enter into any contractual arrangement with respect
to the dis tribution of the Offered Securities except for any such arrangements
with the other Purchasers or affiliates of the other Purchasers or with the
prior written consent of the Issuer.
(d) Each Purchaser severally agrees that it and each of its affiliates
has not offered or sold, and will not offer or sell, the Offered Securities in
the United States by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act,
including, but not limited to (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio, or (ii) any seminar or meeting whose attendees have
been invited by any general solicitation or general advertising. Each Purchaser
severally agrees, with respect to resales made in reliance on Rule 144A of any
of the Offered Securities, to deliver either with the confirmation of such
resale or other wise prior to settlement of such resale a notice to the effect
that the resale of such Offered Securities has been made in reliance upon the
exemption from the registration requirements of the Securities Act provided by
Rule 144A.
(e) Each of the Purchasers severally represents and agrees that (i) it
has not offered or sold and prior to the date six months after the date of issue
of the Offered Securities will not offer or sell any Offered Securities to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Act 1986 with respect to
anything done by it in relation to the Offered Securities in, from or otherwise
involving the United Kingdom; and (iii) it has only issued or passed on and will
only issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Offered Securities to a person who is of a kind
described in Article 11(3) of the Financial Services Act 1986 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on.
(f) Each Purchaser agrees that promptly following the completion of its
initial resale of all the Offered Securities purchased by such Purchaser
pursuant to this Agreement, it will notify the Issuer in writing thereof.
5. Certain Agreements of the Issuer. The Issuer agrees with the several
Purchasers that:
(a) The Issuer will advise CSFBC promptly of any proposal to amend or
supplement the Offering Document and will not effect such amendment or
supplementation without CSFBC's consent (which consent shall not be unreasonably
withheld). If, at any time prior to the completion of the resale of the Offered
Securities by the Purchasers, any event occurs as a result of which the Offering
Document as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any such time to amend or
supplement the Offering Document to comply with any
9
applicable law, the Issuer promptly will notify CSFBC of such event and promptly
will prepare, at its own expense, an amendment or supplement which will correct
such statement or omission or effect such compliance. Neither CSFBC's consent
to, nor the Purchasers' delivery to offerees or investors of, any such amendment
or supplement shall constitute a waiver of any of the conditions set forth in
Section 6.
(b) The Issuer will furnish to CSFBC copies of the Offering Document
and all amendments and supplements to such document, in each case as soon as
available and in such quantities as CSFBC reasonably requests, and the Issuer
will furnish to CSFBC on the Closing Date three copies of the Offering Document
signed by a duly authorized officer of the Issuer, one of which will include the
independent accountants' reports therein manually signed by such independent
accountants. At any time when the Issuer is not subject to Section 13 or 15(d)
of the Exchange Act, the Issuer will promptly furnish or cause to be furnished
to CSFBC (and, upon request, to each of the other Purchasers) and, upon request
of holders and prospective purchasers of the Offered Securities, to such holders
and purchasers, copies of the information required to be delivered to holders
and prospective purchasers of the Offered Securities pursuant to Rule 144A(d)(4)
under the Securities Act (or any successor provision thereto) in order to permit
compliance with Rule 144A in connection with resales by such holders of the
Offered Securities. The Issuer will pay the expenses of printing and
distributing to the Purchasers all such documents.
(c) The Issuer will use its best efforts to arrange for the
qualification of the Offered Securities for sale and the determination of their
eligibility for investment under the laws of such jurisdictions in the United
States and Canada as CSFBC reasonably designates and will continue such
qualifications in effect so long as required for the resale of the Offered
Securities by the Purchasers; provided, however, that the Issuer will not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any such jurisdiction.
(d) During the period of five years after the Closing Date, the Issuer
will furnish to CSFBC and, upon request, to each of the other Purchasers, as
soon as practicable after the end of each fiscal year, a copy of the Issuer's
annual report to stockholders for such year; and the Issuer will furnish to
CSFBC and, upon request, to each of the other Purchasers (i) as soon as
available, a copy of each report and any definitive proxy statement of the
Issuer filed with the Commission under the Exchange Act or mailed to
stockholders and (ii) from time to time, such other publicly available
information concerning the Issuer as CSFBC may reasonably request.
(e) During the period of two years after the Closing Date, the Issuer
will, upon request, furnish to the Purchasers and any holder of Offered
Securities a copy of the restrictions on transfer applicable to the Offered
Securities.
(f) During the period of two years after the Closing Date, the Issuer
will not, and will not permit any of its affiliates (as defined in Rule 144
under the Securities Act) to, resell any of the Offered Securities that have
been reacquired by any of them.
(g) During the period of two years after the Closing Date, the Issuer
will not be or become, an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be registered under
Section 8 of the Investment Company Act, and the Issuer is not, or will not be
or become, a closed-end
10
investment company required to be registered, but not registered, under the
Investment Company Act.
(h) The Issuer will pay all expenses incidental to the performance of
the Issuer's obligations under this Agreement and the Indentures, including (i)
the fees and expenses of the Trustee and its professional advisers; (ii) all
expenses in connection with the execution, issue, authentication, packaging and
initial delivery of the Offered Securities, the preparation and printing of this
Agreement, the Offered Securities, the Indenture, the Offering Document and
amendments and supplements thereto, and any other document relating to the
issuance, offer, sale and delivery of the Offered Securities; (iii) the cost of
qualifying the Offered Securities for trading in The Private Offerings, Resale
and Trading through Automated Linkages (PORTAL) market and any expenses
incidental thereto; (iv) the cost of any advertising approved by the Issuer in
connection with the issue of the Offered Securities; (v) any expenses (including
fees and disbursements of counsel) incurred in connection with qualification of
the Offered Securities for sale under the laws of such jurisdictions in the
United States and Canada as CSFBC designates and the printing of memoranda
relating thereto; (vi) any fees charged by investment rating agencies for the
rating of the Offered Securities; and (vii) all expenses incurred in
distributing the Offering Document (including any amendments and supplements
thereto) to the Purchasers. The Issuer will also pay or reimburse the Purchasers
(to the extent incurred by them) for all travel expenses of the Issuer's
officers and employees and any other expenses of the Issuer in connection with
attending or hosting meetings with prospective purchasers of the Offered
Securities from the Purchasers.
(i) In connection with the offering, until CSFBC shall have notified
the Issuer and the other Purchasers of the completion of the resale of the
Offered Securities, neither the Issuer nor any of its affiliates has or will
(unless required by the terms of the indenture governing such Offered
Securities), either alone or with one or more other persons, bid for or purchase
for any account in which it or any of its affiliates has a beneficial interest
any Offered Securities or attempt to induce any person to purchase any Offered
Securities; and neither they nor any of their affiliates will make bids or
purchases for the purpose of creating actual, or apparent, active trading in, or
of raising the price of, the Offered Securities.
(j) The Issuer will not at any time offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, any securities under
circumstances where such offer, sale, pledge, contract or disposition would
cause the exemption afforded by Section 4(2) of the Securities Act or the safe
harbor of Regulation S thereunder to cease to be applicable to the offer and
sale of the Offered Securities.
(k) The Issuer will cause each Offered Security to bear the legend set
forth in the form of Note attached as Exhibit 1 to the Rule 144A/ Regulation S
Appendix to the applicable Indenture until such legend shall no longer be
necessary or advisable because the Offered Securities are no longer subject to
the restrictions on transfer described therein.
6. Conditions of the Obligations of the Purchasers. The obligations
of the several Purchasers to purchase and pay for the Offered Securities will be
subject to the accuracy of the representations and warranties on the part of the
Issuer herein, to the
11
accuracy of the certificates of officers of the Issuer delivered pursuant to the
provisions hereof, to the performance by the Issuer of its obligations hereunder
and to the following additional conditions precedent:
(a) The Purchasers shall have received a letter, dated the date of this
Agreement, of Xxxxx Xxxxxxxx LLP, in agreed form, confirming that they are
independent public accountants within the meaning of the Securities Act and the
applicable published rules and regulations thereunder ("Rules and Regulations")
and stating to the effect that:
(i) in their opinion the financial statements examined by them
and included in the Offering Document comply as to form in all material
respects with the applicable accounting requirements of the Securities
Act and the related published Rules and Regulations;
(ii) on the basis of a reading of the latest available interim
financial statements of the Issuer, inquiries of certain officials of
the Issuer who have responsibility for financial and accounting matters
and other specified procedures, nothing came to their attention that
caused them to believe that:
(A) at March 13, 1998, there was any change in the
capital stock or paid-in capital, increase in long-term debt
or any decreases in consolidated net current assets or
stockholders' equity of the Issuer and its subsidiaries, on a
consolidated basis as compared with amounts shown on the
December 31, 1997 audited consolidated balance sheet included
in the Offering Document; or
(B) for the period from January 1, 1998 to March 13,
1998, there were any decreases, as compared with the
corresponding period in the preceding year, in consolidated
operating revenues or in the total or per-share amounts of net
loss;
except in all cases set forth in clauses (A) and (B) above for changes,
increases or decreases which the Offering Document discloses have
occurred or may occur or which are described in such letter; and
(iii) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Offering Document (in each case to the
extent that such dollar amounts, percentages and other financial
information are derived from the general accounting records of WinStar
and its subsidiaries subject to the internal controls of the Issuer's
accounting system or are derived directly from such records by analysis
or computation) with the results obtained from inquiries, a reading of
such general accounting records and other procedures specified in such
letter and have found such dollar amounts, percentages and other
financial information to be in agreement with such results, except as
otherwise specified in such letter.
(b) Subsequent to the execution and delivery of this Agreement, there
shall not have occurred (i) a change in U.S. or international financial,
political or economic conditions or currency exchange rates or exchange controls
as would, in the judgment of CSFBC, be likely to prejudice materially the
success of the proposed issue, sale or distribution of the Offered Securities,
whether in the primary market or in respect of
12
dealings in the secondary market, or (ii) (A) any change, or any development or
event involving a prospective change, in the condition (financial or other),
business, properties or results of operations of the Issuer or its subsidiaries
which, in the judgment of CSFBC, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the offering or the
sale of and payment for the Offered Securities (it being understood that a
change in the price of the Issuer's common stock or the continuation of
operating losses consistent with the Issuer's historical results shall be deemed
not to be, in and of itself, a material adverse change); (B) any downgrading in
the rating of any debt securities of the Issuer by any "nationally recognized
statistical rating organization" (as defined for purposes of Rule 436(g) under
the Securities Act), or any public announcement that any such organization has
under surveillance or review its rating of any debt securities of the Issuer
(other than an announcement with positive implications of a possible upgrading,
and no implication of a possible downgrading, of such rating); (C) any
suspension or limitation of trading in securities generally on the New York
Stock Exchange, or any setting of minimum prices for trading on such exchange,
or any suspension of trading of any securities of the Issuer on any exchange or
in the over-the-counter market; (D) any banking moratorium declared by U.S.
Federal or New York authorities; or (E) any outbreak or escalation of major
hostilities in which the United States is involved, any declaration of war by
Congress or any other substantial national or international calamity or
emergency if, in the judgment of CSFBC, the effect of any such outbreak,
escalation, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the offering or sale of and payment
for the Offered Securities.
(c) The Purchasers shall have received an opinion, dated the Closing
Date, of Graubard Xxxxxx & Xxxxxx, counsel for the Issuer, substantially to the
effect set forth in (i)-(ix) below, and of Xxxxxxx Xxxx & Xxxxxxxxx, regulatory
counsel for the Issuer, substantially to the effect set forth in (x)-(xvii)
below:
(i) Issuer has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with corporate power and authority to own its properties and conduct
its business as described in the Offering Document;
(ii) Each of the Indentures and the Registration Rights
Agreement has been duly authorized, executed and delivered; the Offered
Securities have been duly authorized, executed, authenticated, issued
and delivered and conform in all material respects to the description
thereof contained in the Offering Document; and the Indentures, the
Offered Securities and the Registration Rights Agreement constitute
valid and legally binding obligations of the Issuer enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and to
general equity principles; and, with respect to the Registration Rights
Agreement, except that rights to indemnity and contribution may be
limited by federal and state securities laws and public policy
considerations;
(iii) The Issuer is not and, after giving effect to the
offering and sale of the Offered Securities and the application of the
proceeds thereof as described in the Offering Document, will not be an
"investment company" as defined in the Investment Company Act;
13
(iv) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is required
for the consummation of the transactions contemplated by this Agreement
in connection with the issuance or sale of the Offered Securities by
the Issuer and the consummation of the transactions under the
Registration Rights Agreement, other than as may be required under the
Securities Act and the Rules and Regulations of the Commission
thereunder with respect to the Registration Rights Agreement and the
transactions contemplated thereunder and such as may be required by
securities or blue sky laws of the various states of the United States
and of foreign jurisdictions in connection with the offer and sale of
the Offered Securities;
(v) The execution, delivery and performance of the Indentures,
the Registration Rights Agreement and this Agreement, and the issuance
and sale of the Offered Securities and compliance with the terms and
provisions thereof will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, (A) any
statute, rule or regulation or any order known to such counsel of any
governmental agency or body or any court having jurisdiction over the
Issuer or any subsidiary of the Issuer or any of its properties, (B)
any agreement or instrument listed as an exhibit to the Issuer's Annual
Report on Form 10-K most recently filed with the Commission or listed
as an exhibit to or filed with any subsequent reports filed by the
Issuer under the Exchange Act through December 31, 1997, to which the
Issuer or any such subsidiary is a party or by which the Issuer or any
such subsidiary is bound or to which any of the properties of the
Issuer or any such subsidiary is subject, or (C) the charter or by-laws
of the Issuer or any such subsidiary, except, in the case of clause (A)
or (B), breaches, violations or defaults that individually or in the
aggregate would not have a Material Adverse Effect; and the Issuer has
full power and corporate authority to authorize, issue and sell the
Offered Securities to be sold by the Issuer as contemplated by this
Agreement;
(vi) Such counsel have no reason to believe that the Offering
Document, or any amendment or supplement thereto, as of the date hereof
and as of the Closing Date, contained any untrue statement of a
material fact or omitted 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; it being
understood that such counsel need express no opinion as to the
financial statements or other financial data contained in the Offering
Document;
(vii) The descriptions in the Offering Document of statutes,
legal and governmental proceedings and contracts and other documents
are accurate in all material respects and fairly present the
information purported to be described therein;
(viii) This Agreement has been duly authorized, executed and
delivered by the Issuer;
(ix) Based upon the accuracy of the representations and
warranties of the Issuer set forth in Section 2(t) of this Agreement
and of the Purchasers in Section 4 hereof, it is not necessary in
connection with (i) the offer, sale and delivery of the Offered
Securities by the Issuer to the several Purchasers pursuant
14
to this Agreement or (ii) the resales of the Offered Securities by the
several Purchasers in the manner contemplated by this Agreement, to
register the Offered Securities under the Securities Act other than in
connection with the Issuer's obligations under the Registration Rights
Agreement.
(x) No prior or subsequent consent, approval, authorization or
order of the FCC is required to be obtained, and no prior or subsequent
notice to or filing with the FCC is required to be made, in connection
with the offering of Offered Securities or the issuance of the
Underlying Shares.
(xi) To the best of such counsel's knowledge, the Issuer and
its subsidiaries are in compliance in all material respects with all
material terms and conditions of each License.
(xii) To the best of such counsel's knowledge, all of the
Licenses are currently valid and in full force and effect, and there is
no investigation, notice of apparent liability, violation, forfeiture
or other order of complaint issued by or before any court or regulatory
body, including the FCC, or of any other proceedings (other than
proceedings relating to the wireless communications industries
generally) which could in any manner materially threaten or adversely
affect the validity or continued effectiveness of any of the Licenses;
provided, however, on February 10, 1998, the FCC granted additional
channels for 38 GHz licenses in the following areas: Atlanta, Buffalo,
Cincinnati, Dallas, Houston, Miami, New York, St. Louis, Seattle,
Spokane and Tampa. On March 9, 1998, several parties filed petitions
for reconsideration of the 38 GHz Order, alleging, among other things,
that the February 10, 1998, license grants to the Issuer were in
violation of the Commission's processing rules, which Petitions for
Reconsideration were made available to the public on March 10, 1998. At
least one of those parties stated that it would be filing a separate
pleading on this issue.
(xii) Such counsel is not aware of any event or instance in
which the Issuer was not in compliance with all applicable and material
rules, regulations and policies of the FCC pertaining to the Licenses.
(xiv) Such counsel is not aware of the occurrence of any event
which (i) results in, or after notice or lapse of time or both would
result in, revocation, suspension, adverse modification, nonrenewal,
impairment, restriction or termination of, or order of forfeiture with
respect to, any License or (ii) materially and adversely affects or
could reasonably be expected in the future to materially adversely
affect any of the rights of the Issuer or any of its subsidiaries
thereunder.
(xv) To the best of such counsel's knowledge, the Issuer and
its subsidiaries have duly filed in a timely manner all material
filings, reports, applications, documents, instruments and information
required to be filed by them under the Communications Act pertaining to
the Licenses.
(xvi) Such counsel is not aware of any reason to believe that
any of the Licenses will not be renewed in the ordinary course.
15
(xvii) The FCC has the authority, under certain circumstances,
to modify radio licenses that it has issued. On November 3, 1997, the
FCC adopted rules to auction unlicensed portions of the 38.6 - 40.0 GHz
band for commercial use. On March 24, 1997, the FCC proposed rules to
segment the 38.6 - 40.0 GHz band for terrestrial wireless services. In
either event, the FCC may adopt changes to the existing and proposed
regulations governing 38 GHz licensees, which could have an impact on
the scope of the Licenses and the operations of the Issuer and its
subsidiaries. As of the date of such letter, and except as otherwise
discussed in such letter, such counsel is not aware of any official FCC
action that may permit or is likely to lead to the revocation,
nonrenewal, modification, impairment, restriction, or suspension of any
License or any right or authority thereunder in whole or in part.
(d) The Purchasers shall have received from Cravath, Swaine & Xxxxx,
counsel for the Purchasers, such opinion or opinions, dated the Closing Date,
with respect to the incorporation of the Issuer, the validity of the Offered
Securities, the Offering Document, the exemption from registration for the offer
and sale of the Offered Securities by the Issuer to the several Purchasers and
the resales by the several Purchasers as contemplated hereby and other related
matters as CSFBC may reasonably require, and the Issuer shall have furnished to
such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(e) The Purchasers shall have received a certificate, dated the Closing
Date, of the Chief Executive Officer or any Vice President and a principal
financial or accounting officer of the Issuer in which such officers, to the
best of their knowledge after reasonable investigation, shall state that the
representations and warranties of the Issuer in this Agreement are true and
correct, that the Issuer has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date, and that, subsequent to the dates of the most recent financial
statements in the Offering Document there has been no material adverse change,
nor any development or event involving a prospective material adverse change, in
the condition (financial or other), business, properties or results of
operations of the Issuer and its subsidiaries taken as a whole except as set
forth in or contemplated by the Offering Document or as described in such
certificate (it being understood that the acquisition from Telesoft Corp. of its
Tier I Internet service provider, the acquisition of substantially all of the
assets of Midcom, a change in the price of the Common Stock or the continuation
of operating losses consistent with the Issuer's historical results shall be
deemed not to be, in and of themselves, such a material adverse change), and,
except as disclosed in or contemplated by the Offering Document, there has been
no dividend or distribution of any kind declared, paid or made by the Issuer on
any class of its capital stock.
(f) The Purchasers shall have received a letter, dated the Closing
Date, of Xxxxx Xxxxxxxx LLP which meets the requirements of subsection (a) of
this Section, except that the specified date referred to in such subsection will
be a date not more than five days prior to the Closing Date for the purposes of
this subsection.
The Issuer will furnish the Purchasers with such conformed copies of
such opinions, certificates, letters and documents as the Purchasers reasonably
request. CSFBC may in its sole discretion waive on behalf of the Purchasers
compliance with any conditions to the obligations of the Purchasers hereunder,
whether in respect of the Closing Date or otherwise.
16
7. Indemnification and Contribution. (a) The Issuer will indemnify and
hold harmless each Purchaser against any losses, claims, damages or liabilities,
joint or several, to which such Purchaser may become subject, under the
Securities Act or the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any breach of any of the representations and warranties of the Issuer
contained herein or any untrue statement or alleged untrue statement of any
material fact contained in the Offering Document, or any amendment or supplement
thereto, or any related preliminary offering circular, or arise out of or are
based upon the omission or alleged omission to state therein a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and will reimburse
each Purchaser for any legal or other expenses reasonably incurred by each
Purchaser in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred; provided, however,
that the Issuer will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon an untrue
statement or alleged untrue statement in or omission or alleged omission from
any of such documents in reliance upon and in conformity with written
information furnished to the Issuer by such Purchaser through CSFBC specifically
for use therein, it being understood and agreed that the only such information
consists of the information described as such in subsection (b) below; provided
further, however, that with respect to any untrue statement or alleged untrue
statement in or omission or alleged omission from any preliminary offering
circular, the indemnity agreement contained in this subsection (a) shall not
inure to the benefit of any Purchaser that sold the Offered Securities concerned
to the person asserting any such losses, claims, damages or liabilities, to the
extent that such sale was an initial resale by such Purchaser and any such loss,
claim, damage or liability of such Purchaser 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 Offered Securities to such person, a copy of the Offering
Document if the Issuer had previously furnished copies thereof to such Purchaser
and such Offering Document corrected such untrue statement or omission or
alleged untrue statement or omission.
(b) Each Purchaser will severally and not jointly indemnify and hold
harmless the Issuer against any losses, claims, damages or liabilities to which
the Issuer may become subject, under the Securities Act or the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Offering Document, or any
amendment or supplement thereto, or any related preliminary offering circular,
or arise out of or are based upon the omission or the alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Issuer by such
Purchaser through CSFBC specifically for use therein, and will reimburse any
legal or other expenses reasonably incurred by the Issuer in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred, it being understood and agreed that the only such
information furnished by any Purchaser consists of the following information in
the Offering Document furnished on behalf of the Purchasers: the last paragraph
at the bottom of the cover page concerning the terms of the offering by the
Purchasers, the legends concerning over-allotments and stabilizing on the inside
front cover page and, under the caption "Plan of Distribution," (i) the third
sentence of the second paragraph
17
thereunder, (ii) the fourth paragraph thereunder and (iii) the third sentence in
the sixth paragraph thereunder.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (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 (which consent shall not be unreasonably withheld), 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 for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party (which consent shall not be unreasonably
withheld), 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 is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then 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 referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Issuer on the
one hand and the Purchasers on the other from the offering of the Offered
Securities or (ii) if the allocation provided by clause (i) above 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 Issuer on the one hand and the Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Issuer on the one hand and
the Purchasers on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses but after
deducting the Purchasers' discounts and commissions) received by the Issuer bear
to the total discounts and commissions received by the Purchasers from the
Issuer under this Agreement. The relative fault 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 Issuer or the Purchasers and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue 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
18
or defending any action or claim which is the subject of this subsection (d).
Notwithstanding the provisions of this subsection (d), no Purchaser shall be
required to contribute any amount in excess of the amount by which the total
price at which the Offered Securities purchased by it were resold exceeds the
amount of any damages which such Purchaser has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. The Purchasers' obligations in this subsection (d) to contribute are
several in proportion to their respective purchase obligations and not joint.
(e) The obligations of the Issuer under this Section shall be in
addition to any liability which the Issuer may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Purchaser within the meaning of the Securities Act or the Exchange Act; and the
obligations of the Purchasers under this Section shall be in addition to any
liability which the respective Purchasers may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Issuer within the meaning of the Securities Act or the Exchange Act.
8. Default of Purchasers. If any Purchaser or Purchasers default in
their obligations to purchase Offered Securities hereunder and the aggregate
number of shares of Offered Securities that such defaulting Purchaser or
Purchasers agreed but failed to purchase does not exceed 10% of the total number
of shares of Offered Securities, CSFBC may make arrangements satisfactory to the
Issuer for the purchase of such Offered Securities by other persons, including
any of the Purchasers, but if no such arrangements are made by the Closing Date,
the non-defaulting Purchasers shall be obligated severally, in proportion to
their respective commitments hereunder, to purchase the Offered Securities that
such defaulting Purchasers agreed but failed to purchase. If any Purchaser or
Purchasers so default and the aggregate number of shares of Offered Securities
with respect to which such default or defaults occur exceeds 10% of the number
of shares of Offered Securities and arrangements satisfactory to CSFBC and the
Issuer for the purchase of such Offered Securities by other persons are not made
within 36 hours after such default, this Agreement will terminate without
liability on the part of any non-defaulting Purchaser or the Issuer, except as
provided in Section 9. As used in this Agreement, the term "Purchaser" includes
any person substituted for a Purchaser under this Section. Nothing herein will
relieve a defaulting Purchaser from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Issuer or its officers and of the several Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Purchaser, the Issuer or any of its representatives, officers or
directors or any controlling person, and will survive delivery of and payment
for the Offered Securities. If for any reason the purchase of the Offered
Securities by the Purchaser is not consummated, the Issuer shall remain
responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5 (other than with respect to a defaulting Purchaser) and the respective
obligations of the Issuer and the Purchasers pursuant to Section 7 shall remain
in effect. If the purchase of the Offered Securities by the Purchasers is not
consummated for any reason other than solely because of the termination of this
Agreement pursuant to Section 8 or solely because of the occurrence of any event
specified in clause (C), (D) or (E) of Section 6(b)(ii), the Issuer
19
will reimburse the Purchasers for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Purchasers will be mailed, delivered or telecopied and confirmed to
the Purchasers, c/o Credit Suisse First Boston Corporation, Xxxxxx Xxxxxxx
Xxxxxx, Xxx Xxxx, XX 00000 or, if sent to the Issuer, will be mailed, delivered
or electronically transmitted and confirmed to it at 000 Xxxx Xxxxxx, Xxx Xxxx,
XX 00000, Attention: Xxxxxxx Xxxxxx; provided, however, that any notice to a
Purchaser pursuant to Section 7 will be mailed, delivered or telecopied and
confirmed to such Purchaser.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 7, and no other person will have any
right or obligation hereunder, except that holders of Offered Securities shall
be entitled to enforce the agreements for their benefit contained in the second
and third sentences of Section 5(b) hereof against the Issuer as if such holders
were parties thereto.
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. Applicable 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.
Each of the parties hereby submits to the non-exclusive jurisdiction of
the Federal and state courts in the Borough of Manhattan in The City of New York
in any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
20
If the foregoing is in accordance with the Purchasers' understanding of
our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement among the Issuer and the several
Purchasers in accordance with its terms.
Very truly yours,
WinStar Communications, Inc.
By....................................
Name:
Title:
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
Credit Suisse First Boston Corporation
Salomon Brothers Inc
Xxxxxx Xxxxxxx & Co. Incorporated
NationsBanc Xxxxxxxxxx Securities LLC
By Credit Suisse First Boston Corporation
By..........................................
Name:
Title:
SCHEDULE A
Principal Amount Principal Amount
of Cash-Pay of Deferred
Initial Purchasers Notes Interest Notes
------------------ --------------------- -----------------
Credit Suisse First Boston Corporation............... $ 110,000,000 $ 137,500,000
Salomon Brothers Inc................................. 60,000,000 75,000,000
Xxxxxx Xxxxxxx & Co. Incorporated.................... 20,000,000 25,000,000
NationsBanc Xxxxxxxxxx Securities LLC................ 10,000,000 12,500,000
---------- ----------
Total................................................ $ 200,000,000 250,000,000
=========== ===========
A-1
