EXHIBIT 4.2
WINSTAR COMMUNICATIONS, INC.
$2,000,000,000 Aggregate Principal Amount of
Senior Notes Due 2010
CONVERSION AGREEMENT
--------------------
May 9, 2000
Lucent Technologies Inc.
000 Xxxxxxxx Xxxxxx
Xxxxxx Xxxx, Xxx Xxxxxx 00000
Ladies and Gentlemen:
Reference is made to the Credit Agreement, dated as of May 4,
2000 (as amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") by and among WVF-I LLC, a Delaware limited liability
company, any Replacement Borrower (as defined in the Credit Agreement) from time
to time party thereto, Winstar Communications, Inc., a Delaware corporation (the
"Company"), the lenders party thereto, The Bank of New York, as collateral
agent, and Lucent Technologies Inc. ("Lucent"), as administrative agent
thereunder. Capitalized terms used herein and not otherwise defined herein have
the meanings specified in the Credit Agreement or, if not defined therein, in
the Conversion Indenture referred to in the Credit Agreement.
The Credit Agreement provides that, during any Refinancing
Period, Lucent may elect in its sole discretion to convert outstanding Lucent
Loans, at any time in whole or from time to time in part, into Conversion Notes
issued by the Company under the Conversion Indenture. The Credit Agreement also
requires that, on and after the earlier of (A) the date on which the aggregate
principal amount (on a cumulative basis) of Loans borrowed under the Credit
Agreement equals or exceeds $250,000,000 and (B) September 30, 2000, the Company
will maintain in effect one or more registration statements under the Securities
Act registering the offer and sale of Conversion Notes, such that at all times
the aggregate principal amount of Conversion Notes covered by such effective
registration statement or registration statements equals or exceeds the
aggregate principal amount of outstanding Lucent Loans. The Company and Lucent
are entering into this Agreement in order to set forth certain agreements of the
Company with respect to the registration of Conversion Notes under the
Securities Act and the issuance, offering and sale thereof.
1. Registration of the Conversion Notes.
(i) The Company covenants and agrees with Lucent
that, on and after the earlier of (A) the date on which the aggregate
principal amount (on a cumulative basis) of Loans borrowed under the
Credit Agreement equals or
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exceeds $250,000,000 and (B) September 30, 2000, the Company will
maintain in effect one or more registration statements under the
Securities Act registering the offer and sale of all of the Conversion
Notes that may be issued pursuant to the Conversion Indenture, such
that at all times the aggregate principal amount of Conversion Notes
covered by such effective registration statement or registration
statements equals or exceeds the aggregate principal amount of
outstanding Lucent Loans.
(ii) The Company covenants and agrees with Lucent
that the Company will promptly (A) advise Lucent of the status of the
filing of the registration statements referred to in subparagraph (i)
of this Section 1, with the Securities and Exchange Commission
("Commission"), and respond to requests by Lucent for information
regarding the status of such filing, (B) provide Lucent with drafts of
such registration statements in such number as Lucent may reasonably
request and provide Lucent a reasonable opportunity to comment on such
drafts, (C) notify Lucent when such registration statements have been
filed with the Commission and provide Lucent with copies of such
registration statements as filed with the Commission in such number as
Lucent may reasonably request, (D) provide Lucent with copies of all
correspondence with the Commission with respect to such registration
statements, (E) notify Lucent when the Commission has declared such
registration statements effective and (F) deliver to Lucent copies of
such effective registration statements in such number as Lucent may
reasonably request.
2. Representations and Warranties of the Company.
The Company represents and warrants to, and agrees with,
Lucent as of the date hereof and as of each Conversion Date as follows (provided
that the representations and warranties set forth in subparagraphs (i), (iii),
(vi), (vii), (x)(A), (xi), (xii), (xiii), (xiv), (xv), (xvi), (xviii), (xix),
(xx), (xxi), (xxii) and (xxiii) of this Section 2 shall be given only as of each
Conversion Date and not as of the date hereof):
(i) A registration statement, including a prospectus, relating
to the Conversion Notes has been filed with the Commission and has
become effective. Such registration statement, and each other
registration statement relating to the Conversion Notes that is filed
with the Commission, is hereinafter referred to as a "Registration
Statement", and the prospectus included in any such Registration
Statement, as first filed with the Commission pursuant to and in
accordance with Rule 424(b) ("Rule 424(b)") under the Securities Act,
including all material incorporated by reference therein, is
hereinafter referred to as a "Prospectus". No document has been or will
be prepared or distributed in reliance on Rule 434 under the Securities
Act.
(ii) On the effective date of each Registration Statement,
such Registration Statement and the Prospectus forming part thereof,
including all amendments and supplements thereto, complied in all
respects with the requirements of the Securities Act and the rules and
regulations of the Commission (the "Rules and Regulations") and did not
include any 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, and on each Delivery Date (as defined in Section
3(b)), each
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Registration Statement and Prospectus (and any amendment or supplement
thereto) relating to the Conversion Notes then being delivered (each
such Registration Statement, a "Relevant Registration Statement" and
each such Prospectus, a "Relevant Prospectus") will, in the case of
each such Relevant Registration Statement, be effective and, in the
case of each such Relevant Registration Statement and Relevant
Prospectus, will comply in all respects with the requirements of the
Securities Act and the Rules and Regulations, and none of such
documents will include any 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; provided that this representation
and warranty does not apply to statements or omissions made in reliance
upon and in conformity with information concerning Lucent or any other
Person that has acquired Conversion Notes for distribution (an "Other
Person") furnished in writing by or on behalf of Lucent or any Other
Person to the Company expressly for use in each Relevant Registration
Statement and each Relevant Prospectus (or any amendment or supplement
thereto).
(iii) The Company is not now, nor immediately after the
issuance of any Conversion Notes will be, an "investment company" or a
company "controlled by" an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
(iv) Each subsidiary of the Company has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the jurisdiction of its incorporation, has corporate power and
authority to own, lease and operate its properties and to conduct its
business as described in each Relevant Prospectus and is duly qualified
as a foreign corporation to transact business and is in good standing
in each jurisdiction in which such qualification is required, whether
by reason of the ownership or leasing of property or the conduct of
business, except where the failure to be in good standing or to so
qualify would not have, singly or in the aggregate, a Material Adverse
Effect (as hereinafter defined).
(v) All of the issued and outstanding capital stock of the
Company has been duly authorized and validly issued and is fully paid
and nonassessable, and conforms in all material respects to the
description therein in each Relevant Prospectus.
(vi) Except as disclosed in each Relevant Prospectus, (A)
since the date of the latest audited financial statements included in
each Relevant Prospectus, there has been no material adverse change in
the condition, financial or otherwise, or in the results of operations
or business of the Company, and its subsidiaries considered as one
enterprise, whether or not arising in the ordinary course of business
(a "Material Adverse Change"), (B) there have been no transactions
entered into by the Company or any of its subsidiaries, other than
those in the ordinary course of business, which are material with
respect to the condition, financial or otherwise, or to the results of
operations or business of the Company and its subsidiaries considered
as one enterprise, and (C) there has been no dividend or distribution
of any kind declared, paid or made by the Company on any class of its
capital stock, except for regular quarterly dividends.
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(vii) The Company has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the state
of its incorporation with corporate power and authority to own, lease
and operate its properties and to conduct its business as described in
each Relevant Prospectus and to enter into and perform its obligations
under this Agreement and the Conversion Indenture; and the Company is
duly qualified as a foreign corporation to transact business and is in
good standing in each jurisdiction in which such qualification is
required, whether by reason of the ownership or leasing of property or
the conduct of business, except where the failure to be in good
standing or to so qualify would not have a material adverse effect on
the condition, financial or otherwise, or on the results of operations
or business of the Company and its subsidiaries considered as one
enterprise (a "Material Adverse Effect").
(viii) The Company has the corporate power and authority to
enter into and perform its obligations under this Agreement, the
Conversion Indenture and the Conversion Notes and to issue the
Conversion Notes. This Agreement has been duly authorized, executed and
delivered by the Company.
(ix) The Conversion Notes and the Conversion Indenture have
been duly authorized by the Company. The Conversion Indenture (assuming
due execution by the Trustee) constitutes a legal, valid and binding
obligation of the Company, and the Conversion Notes will, when
authenticated, issued and delivered in the manner provided for in the
Conversion Indenture, constitute legal, valid and binding obligations
of the Company entitled to the benefits of the Conversion Indenture and
enforceable, in each case, against the Company in accordance with their
terms, subject to applicable bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws affecting
creditors' rights and remedies generally and subject, as to
enforceability, to general principles of equity, including principles
of commercial reasonableness, good faith and fair dealing (regardless
of whether enforcement is sought in a proceeding in equity or at law),
and except that rights to indemnity and contribution may be limited by
federal and state securities laws and by public policy considerations.
The Conversion Notes and the Conversion Indenture conform in all
material respects to the description thereof contained in each Relevant
Prospectus.
(x)(A) Except as described in each Relevant Prospectus,
neither the Company nor any of its subsidiaries is in violation of its
charter or by-laws or in default in the performance or observance of
any obligation, agreement, covenant or condition contained in any
contract, indenture, mortgage, loan agreement, note, lease or other
agreement or instrument to which the Company or any of its subsidiaries
is a party or by which it or any of them may be bound, or to which any
of the property or assets of the Company or any of its subsidiaries is
subject, the effect of which violation or default in performance or
observance, singly or in the aggregate, would have a Material Adverse
Effect;
(B) The execution, delivery and performance of this Agreement,
the Conversion Indenture and the Conversion Notes, the issuance of the
Conversion Notes and the consummation of the transactions contemplated
herein and therein have been duly authorized by all necessary corporate
action on the part of the Company and its subsidiaries and will not
conflict with or constitute a breach of, or default under, or result in
the creation or imposition of any lien, charge or
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encumbrance upon any property or assets of the Company or any of its
subsidiaries pursuant to, any contract, indenture, mortgage, loan
agreement, note, lease or other agreement or instrument to which the
Company or any of its subsidiaries is a party or by which it or any of
them may be bound, or to which any of the property or assets of the
Company or any of its subsidiaries is subject, or violate any
applicable law, administrative regulation or administrative or court
decree, in each case, the effect of which conflict, breach, default,
lien, charge, encumbrance or violation, singly or in the aggregate,
would have a Material Adverse Effect, nor will such action result in
any violation of the provisions of the charter or by-laws of the
Company or any of its subsidiaries.
(xi) Except as described in each Relevant Prospectus, there
are no pending actions, suits or proceedings against or affecting the
Company, 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 Company to perform its obliga tions under the
Conversion Indenture or this Agreement, or which are otherwise material
in the context of the sale of the Conversion Notes; and, to the
Company's knowledge, no such actions, suits or proceedings are
threatened or contemplated.
(xii) Except as described in each Relevant Prospectus, the
Company and its subsidiaries possess adequate certificates, authorities
or permits issued by appropriate governmental agencies or bodies
necessary to conduct the 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.
(xiii) No authorization, approval or consent of, or filing
with, any court or governmental authority or agency is necessary or
required in connection with the issuance by the Company of the
Conversion Notes, except (A) those already obtained or made under the
Securities Act and the Trust Indenture Act of 1939 ("Trust Indenture
Act"), and (B) such as may be required under state securities or Blue
Sky laws and the securities laws of foreign jurisdictions.
(xiv) Except as described in each Relevant Prospectus, the
Company and its subsidiaries own, possess or can acquire on reasonable
terms, adequate trade marks, 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 Company 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 Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
(xv) The accountants who certified the financial statements
and supporting schedules included in each Relevant Registration
Statement and each Relevant
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Prospectus are independent public accountants as required by the
Securities Act and the Rules and Regulations.
(xvi) The financial statements, including the notes thereto,
included in each Relevant Registration Statement and each Relevant
Prospectus present fairly in all material respects the consolidated
financial position of the Company and its subsidiaries and of the
Company's predecessors as of the dates indicated and the results of
their operations and cash flows for the periods specified; except as
otherwise specifically stated in each Relevant Prospectus, said
financial statements have been prepared in conformity with generally
accepted accounting principles in the United States applied on a
consistent basis; any schedules included in any Relevant Registration
Statement present fairly the information required to be stated therein;
and if pro forma financial statements are included in any Relevant
Registration Statement or any Relevant Prospectus: the assumptions used
in preparing the pro forma financial statements included in such
Relevant Registration Statement or Relevant Prospectus provide a
reasonable basis for presenting the significant effects 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.
(xvii) The Conversion Indenture conforms in all material
respects with the requirements of the Trust Indenture Act applicable to
indentures to be qualified thereunder.
(xviii) Except as described in each Relevant Prospectus,
neither the Company 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 Company is not
aware of any pending investigation which might lead to such a claim.
(xix) Except as described in each Relevant Prospectus, the
Company 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").
(xx) All FCC licenses held (as of the most recent date for
which any financial information is included or incorporated by
reference in any Relevant Prospectus), by the Company and its
subsidiaries (other than experimental licenses in the 38 GHz portions
of the radio spectrum and licenses granted to the Company or its
subsidiaries or acquired from Local Area Telecommunications, Inc. that
are not in the 38 GHz portion of the radio spectrum and proceedings
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affecting the service rules and licensing of Spectrum in the 38 GHz
band) (the "Licenses") are currently valid and in full force and
effect. Neither the Company 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 and proceedings affecting the
service rules and licensing of spectrum in the 38 GHz band) which could
in any manner materially threaten or adversely affect the validity or
continued effectiveness of any of the Licenses, except as disclosed in
each Relevant Prospectus.
(xxi) Except as described in each Relevant Prospectus, no
event has occurred which (A) results in, or after notice or lapse of
time or both would result in, revocation, suspension, modification,
non-renewal, impairment, restriction or termination of, or order of
forfeiture with respect to, any License the loss of which could
reasonably be expected to have a Material Adverse Effect or (B)
materially and adversely affects or could reasonably be expected in the
future to materially adversely affect any of the rights of the Company
or any of its subsidiaries there under.
(xxii) The Company 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.
(xxiii) Neither the Company nor any of its subsidiaries has
any reason to believe that any of the Licenses will not be renewed in
the ordinary course.
3. Issuance of the Conversion Notes; Delivery.
(a) The Company agrees, subject to the terms and conditions of
the Credit Agreement, to issue the Conversion Notes.
(b) Delivery of each issuance of the Conversion Notes shall be
made at the offices and on such dates and times as Lucent shall specify in the
Conversion Certificates (each such date and time of delivery of the Conversion
Notes, a "Delivery Date"). Certificates for the Conversion Notes shall be
registered in such names and in such denominations as Lucent shall specify in
the Conversion Certificates. Lucent shall specify in the relevant Conversion
Certificate whether the issuance of the Conversion Notes will be in the form of
(i) definitive, fully registered certificates or (ii) one or more Global
Securities (as defined and described in the Conversion Indenture).
4. Covenants of the Company. With respect to each
issuance of Conversion Notes, the Company covenants and agrees with Lucent as
follows:
(i) The Company will advise Lucent and each Other Person
(provided that the Company has been notified of such Other Person),
when any Registration Statement and any amendment thereto has been
filed with the Commission and when any Registration Statement or any
post-effective amendment thereto has become effective.
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(ii) The Company will file each Relevant Prospectus with the
Commission pursuant to and in accordance with Rule 424(b)(2), not later
than the first business day following the delivery of the relevant
Conversion Certificate.
(iii) The Company will furnish to Lucent and each Other Person
such number of copies of each Relevant Registration Statement and
Relevant Prospectus, including all exhibits, and any amendments or
supplements thereto as Lucent and each Other Person may reasonably
request.
(iv) The Company will not at any time make any amendment or
supplement to any Relevant Registration Statement or any Relevant
Prospectus of which Lucent and each Other Person (provided that the
Company has been notified of such Other Person) shall not have
previously been advised and furnished a copy and have had reasonable
opportunity to comment on such proposed amendment or supplement, or to
which Lucent or any Other Person or their respective counsel shall
reasonably object, except as required by applicable law.
(v) The Company will advise Lucent and each Other Person
(provided that the Company has been notified of such Other Person), of
the institution by the Commission of any stop order proceedings in
respect of any Relevant Registration Statement or of any part thereof
and will use every reasonable effort to prevent the issuance of any
such stop order and to obtain as soon as possible its lifting, if
issued.
(vi) The Company will advise Lucent and each Other Person
(provided that the Company has been notified of such Other Person), of
any request by the Commission for amendments or supplements to any
Relevant Registration Statement or any Relevant Prospectus or for
additional information. Upon receipt of such notice from the Company
use of each Relevant Prospectus shall be suspended until the Company
has amended or supplemented each Relevant Prospectus to correct such
misstatement or omission or to effect such compliance. The Company will
forthwith prepare such amendment or supplement as may be necessary so
that each Relevant Prospectus, as so amended or supplemented, does not
include an untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein not
misleading and furnish to Lucent or such Other Person, as applicable,
such number of copies as Lucent or such Other Person, as applicable,
may reasonably request.
(vii) If at any time prior to completion of the distribution
of the Conversion Notes by Lucent or such Other Person to purchasers
who are not its affiliates (as determined by Lucent, or such Other
Person, as applicable) any event shall occur or condition shall exist
as a result of which it is necessary, in the view of the Company or in
the reasonable view of Lucent or such Other Person, as applicable, to
amend or supplement each Relevant Prospectus in order that each
Relevant Prospectus will not include an untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein not misleading, or if such amendment or supplement
is necessary to comply with applicable law, the Company will (in a form
and in substance that shall be reasonably satisfactory to Lucent, or
such Other Person, as applicable), forthwith prepare such amendment or
supplement as may be necessary so that each Relevant Prospectus, as so
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amended or supplemented, does not include such untrue statement of a
material fact or omit to state a material fact necessary in order to
make the statements therein not misleading and furnish to Lucent or
such Other Person, as applicable, such number of copies as Lucent or
such Other Person, as applicable, may reasonably request. The Company
agrees to notify Lucent and each Other Person (provided that the
Company has been notified of such Other Person) to suspend use of each
Relevant Prospectus as promptly as practicable after the occurrence of
an event specified in the first sentence of this paragraph (without
giving effect to the reasonable view of Lucent or such Other Person, as
applicable), and upon receipt of such notice from the Company use of
each Relevant Prospectus shall be suspended until the Company has
amended or supplemented each Relevant Prospectus to correct such
misstatement or omission or to effect such compliance.
(viii) The Company will furnish to Lucent and each Other
Person (provided that the Company has been notified of such Other
Person) copies of any annual reports, quarterly reports and current
reports filed by the Company with the Commission on Forms 10-K, 10-Q
and 8-K, or such other similar forms as may be designated by the
Commission, and such other documents, reports and information as shall
be furnished by the Company to the Trustee or to the holders of the
Conversion Notes pursuant to the Conversion Indenture but only so long
as the Company is obligated to furnish the foregoing documents pursuant
to the Conversion Indenture.
(ix) The Company will use its commercially reasonable efforts
in cooperation with Lucent and each Other Person to (A) permit the
Conversion Notes to be eligible for clearance and settlement through
the Depository, (B) provide a CUSIP number for the Conversion Notes not
later than the effective date of each Relevant Registration Statement,
and (C) provide the Trustee with printed certificates for the
Conversion Notes in a form eligible for deposit with the Depository.
(x) The Company will endeavor, in cooperation with Lucent,
each Other Person and their respective counsel, to qualify the
Conversion Notes for offering and sale under the applicable securities
laws of such states and other jurisdictions of the United States as
Lucent may reasonably designate; provided, that the Company shall not
be obligated to qualify as a foreign corporation in any jurisdiction in
which it is not so qualified or to take any action that would subject
the Company to general service of process in any jurisdiction where it
would not be so subject at the date of this Agreement. In each
jurisdiction in which the Conversion Notes have been so qualified, the
Company will file such statements and reports as may be required by the
laws of such jurisdiction to continue such qualification in effect for
a period of not less than one year from the date of each Relevant
Prospectus. The Company shall promptly advise Lucent and each Other
Person (provided that the Company has been notified of such Other
Person) of the receipt by the Company of any notification with respect
to (x) the suspension of the qualification or exemption from
qualification of the Conversion Notes for offering or sale in any
jurisdiction or (y) the institution, threatening or contemplation of
any proceeding for such purpose.
(xi) Prior to the termination of the Commitments and the
repayment of all outstanding Lucent Loans, the Company will not,
without the prior written
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consent of Lucent, (A) amend or modify the Conversion Indenture or (B)
amend or modify, or redeem or defease, the Issue Date Senior Notes, or
amend or modify the indenture under which the Issue Date Senior Notes
were issued.
(xii) On the date hereof and on each Conversion Date, Lucent
and each Other Person will receive an opinion, dated as of the date
hereof or the relevant Conversion Date, as the case may be, of counsel
for the Company, in customary form and substance and otherwise
reasonably satisfactory to Lucent and each Other Person.
(xiii) On each Conversion Date, Lucent and each Other Person
shall receive a certificate, dated such Conversion Date, of the Chief
Executive Officer or any Vice President and a principal financial or
accounting officer of the Company in which such officers, to the best
of their knowledge after reasonable investigation, shall state that the
representations and warranties of the Company in this Agreement are
true and correct, that the Company has complied with all agreements and
satisfied all conditions on its part to be performed or satisfied
hereunder at or prior to the Conversion Date, and that, subsequent to
the dates of the most recent financial statements in the Relevant
Prospectus 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 Company and its subsidiaries taken as a whole
except as set forth in or contemplated by the Relevant Prospectus or as
described in such certificate.
(xiv) On each Conversion Date, the Company, if requested with
reasonable advanced notice by Lucent or any Other Person, will cause
its independent public accountants to provide to Lucent and any Other
Person 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.
(xv) On each Conversion Date, counsel for Lucent and each
Other Person will be furnished with such documents and opinions as they
may reasonably require for the purpose of enabling them to pass upon
the issuance of the Conversion Notes as contemplated herein and related
proceedings, or in order to evidence the accuracy of any of the
representations or warranties, or the fulfillment of any of the
conditions, herein contained; and all proceedings taken by the Company
in connection with the issuance of the Conversion Notes and as herein
contemplated shall be reasonably satisfactory in form and substance to
Lucent, each Other Person and their respective counsel.
(xvi) The Company will comply with all rules and regulations
of the Commission to the extent and so long as they are applicable to
the resale of the Conversion Notes or the Relevant Registration
Statement 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
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effective date of the Relevant Registration Statement, which statement
shall cover such 12-month period.
(xvii) The Company will enter into such customary agreements
(including, if requested, an underwriting agreement in customary form)
and take all such other action, if any, as Lucent and any Other Person
shall reasonably request in order to facilitate any disposition of the
Conversion Notes pursuant to any Relevant Registration Statement.
(xviii) The Company will (A) make reasonably available for
inspection by a representative of, and special counsel acting for,
Lucent or any Other Person, all relevant financial and other records,
pertinent corporate documents and properties of the Company and its
subsidiaries and (B) cause the Company's officers, directors,
employees, accountants and counsel to supply all relevant information
reasonably requested by such representative and special counsel in
connection with the Relevant Registration Statement.
5. Payment of Expenses. The Company will pay all expenses
incident to the performance of its obligations under this Agreement, including
(i) the filing fees with the Commission and printing of each Relevant
Registration Statement and each Relevant Prospectus and of each amendment or
supplement thereto and the delivery to Lucent, each Other Person and their
respective designees of printed copies thereof, (ii) the copying of this
Agreement and the Conversion Indenture, (iii) the preparation, issuance and
delivery of the Conversion Notes, including capital duties, stamp duties and
transfer taxes, if any, payable upon issuance of any of the Conversion Notes and
the fees and expenses of the Trustee, (iv) the fees and disbursements of the
Company's counsel and accountants, (v) the qualification of the Conversion Notes
under state securities laws in accordance with the provisions of Section 4(xi),
including filing fees and the reasonable fees and disbursements of counsel for
Lucent and each Other Person in connection therewith, (vi) the fee of any filing
for review of any offering with the National Association of Securities Dealers,
Inc., (vii) all expenses and application fees incurred in connection with the
application for the inclusion of the Conversion Notes for book-entry transfer by
the Depository and (viii) any out-of-pocket expenses incurred by the Company on
any "road show" or similar presentation to prospective purchasers of Conversion
Notes.
6. Indemnification and Contribution.
(i) The Company will indemnify and hold harmless Lucent and
each Other Person, their respective affiliates, directors and officers
and each person, if any, who controls such person within the meaning of
Section 15 of the Securities Act, against any losses, claims, damages
or liabilities, joint or several, to which such person may become
subject, under the Securities Act or the Securities Exchange Act of
1934 (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 Company contained herein or any untrue statement or
alleged untrue statement of any material fact contained in any
Registration Statement, or any Prospectus, or any amendment or
supplement thereto, 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
12
were made, not misleading, and will reimburse Lucent and each Other
Person for any legal or other expenses reasonably incurred by Lucent
and each Other Person in connection with investigating or defending any
such loss, claim, damage, liability or action as such expenses are
incurred; provided, however, that the Company 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 Company by Lucent or any Other Person specifically for use
therein, it being understood and agreed that the only such information
consists of the information described as such in subsection (ii) below;
provided further, however, that with respect to any untrue statement or
alleged untrue statement in or omission or alleged omission from any
Relevant Registration Statement or any Relevant Prospectus, the
indemnity agreement contained in this subsection (i) shall not inure to
the benefit of Lucent or any Other Person that sold the Conversion
Notes concerned to the person asserting any such losses, claims,
damages or liabilities, to the extent that such sale was an initial
resale by Lucent or such Other Person and any such loss, claim, damage
or liability of Lucent or such Other Person 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 Conversion Notes to such person, a
copy of the Relevant Prospectus if the Company had previously furnished
copies thereof to Lucent or such Other Person and such Relevant
Prospectus corrected such untrue statement or omission or alleged
untrue statement or omission.
(ii) Lucent and each Other Person will severally and not
jointly indemnify and hold harmless the Company, its affiliates,
directors and officers and each person, if any, who controls the
Company within the meaning of Section 15 of the Securities Act, against
any losses, claims, damages or liabilities to which the Company 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 Relevant Prospectus, or any amendment or supplement thereto, 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 Company by Lucent or such Other
Person (as the case may be) specifically for use therein, and will
reimburse any legal or other expenses reasonably incurred by the
Company 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
Lucent and each Other Person consists of information in the Relevant
Prospectus under the caption "Plan of Distribution".
(iii) 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 (i) or (ii) above,
notify the indemnifying party of the commencement
13
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 (i) or (ii) 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 and does not include a statement
as to or an admission of fault, culpability or failure to act by or on
behalf of any indemnified party.
(iv) If the indemnification provided for in this Section is
unavailable or insufficient to hold harmless an indemnified party under
subsection (i) or (ii) 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 (i) or (ii) above (A) in such proportion as is appropriate
to reflect the relative benefits received by the Company on the one
hand and Lucent and each Other Person on the other from the offering of
the Conversion Notes or (B) if the allocation provided by clause (A)
above is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred to in
clause (A) above but also the relative fault of the Company on the one
hand and Lucent and each Other Person 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 Company on the
one hand and Lucent and each Other Person on the other shall be deemed
to be in the same proportion as the aggregate principal amount of the
Conversion Notes issued by the Company bear to the aggregate principal
amount of the Conversion Notes issued to Lucent and each Other Person
by the Company 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 Company or Lucent or each Other Person 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 (iv)
shall be deemed to include any legal or other expenses reasonably
incurred by such indemnified party in connection with investigating or
defending
14
any action or claim which is the subject of this subsection (iv).
Notwithstanding the provisions of this subsection (iv), neither Lucent
nor any Other Person shall be required to contribute any amount in
excess of the amount by which the aggregate principal amount of the
Conversion Notes issued to it exceeds the amount of any damages which
Lucent or such Other Person has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or
alleged omission. Lucent's and each Other Person's obligations in this
subsection (iv) to contribute are several in proportion to their
respective purchase obligations and not joint.
(v) The obligations of the Company under this Section shall be
in addition to any liability which the Company may otherwise have and
shall extend, upon the same terms and conditions, to each person, if
any, who controls Lucent or any Other Person within the meaning of the
Securities Act or the Exchange Act; and the obligations of Lucent and
each Other Person under this Section shall be in addition to any
liability which such persons may otherwise have and shall extend, upon
the same terms and conditions, to each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act.
7. Representations, Warranties and Agreements to Survive
Delivery. All representations, warranties, and agreements contained in this
Agreement or in certificates of officers of the Company submitted pursuant
hereto, shall remain operative and in full force and effect, regardless of any
investigation made by or on behalf of Lucent, any Other Person or any
controlling person, or by or on behalf of the Company, and shall survive
delivery of and payment for the Conversion Notes.
8. Notices. All notices and other communications hereunder
shall be in writing and shall be deemed to have been duly given if mailed or
transmitted by any standard form of telecommunication. Notices to Lucent shall
be directed to it at Lucent Technologies Inc., 000 Xxxxxxxx Xxxxxx, Xxxxxx Xxxx,
Xxx Xxxxxx 00000, Attention: Assistant Treasurer-Project Finance, fax: (908)
000-0000, with a copy to Cravath, Swaine & Xxxxx, 000 Xxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx, 00000, Attention: Xxxxx X. Xxxxxxx, III, fax: (000) 000-0000; notices
to the Company shall be directed to the Company at 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxxx, fax: (000) 000-0000, with a copy
to Xxxxxxxx Mollen & Xxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000,
Attention: Xxxxx Xxxx Xxxxxx, fax: (212) 000- 0000.
9. Parties. This Agreement shall inure to the benefit of and
be binding upon Lucent and the Company and their respective successors, heirs
and legal representatives. Nothing expressed or mentioned in this Agreement is
intended or shall be construed to give any person, firm or corporation, other
than Lucent, the Company and their respective successors, heirs and legal
representatives, and the affiliates, controlling persons, officers and directors
referred to in Section 6 and their heirs and legal representatives, any legal or
equitable rights, remedy or claim under or in respect of this Agreement or any
provision herein. This Agreement and all conditions and provisions hereof are
intended for the sole and exclusive benefit of Lucent, the Company and their
respective successors, heirs and legal representatives, and said affiliates,
controlling persons, officers and directors and their heirs and legal
representatives, and for the benefit of no other person, firm or corporation.
Notwithstanding the foregoing, each Other Person and its successors, heirs and
legal representatives, and the affiliates, controlling
15
persons, officers and directors referred to in Section 6 and their heirs and
legal representatives, shall be entitled to enforce the agreements for their
benefit contained in Sections 4, 5, 6 and 7 hereof against the Company as if
such Other Person was a party hereto. No purchaser of Conversion Notes from
Lucent or any Other Person shall be deemed to be a successor by reason merely of
such purchase, unless such Person has acquired Conversion Notes for
distribution.
10. Governing Law and Time. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York applicable
to agreements made and to be performed in said State. Each party hereto
irrevocably submits to the jurisdiction of any State or Federal court in the
State of New York and irrevocably waives any objection it may now or hereafter
have to the laying of venue of any action in any such court. Each party hereto
expressly waives its rights to trial by jury. Specified times of day refer to
New York City time.
16
CONVERSION AGREEMENT
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 with all counterparts, will become a binding
agreement between Lucent and the Company in accordance with its terms.
Very truly yours,
WINSTAR COMMUNICATIONS, INC.
By: /s/Xxxxxxxx X. Xxxxx
-------------------------
Name: Xxxxxxxx X. Xxxxx
Title: Senior Vice
President,
Treasurer
Confirmed and accepted as of the date first above written:
LUCENT TECHNOLOGIES INC.
By: /s/Xxxxx X. Xxxxxxxx
--------------------------
Name: Xxxxx X. Xxxxxxxx
Title: Director, Credit
