EXCHANGE OFFER
DEALER MANAGER AGREEMENT
April 10, 2000
Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Credit Suisse First Boston Corporation
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Ladies and Gentlemen:
Winstar Communications, Inc., a Delaware corporation (the "Company"), is
making an offer (the "Exchange Offer") to exchange (i) its 12-3/4% Senior Notes
Due 2010 (the "2010 Senior Notes") or its 14-3/4% Senior Discount Notes Due 2010
(the "Senior Discount Notes" and, together with the 2010 Senior Notes, the "New
Notes") to be issued pursuant to s (collectively, the "New Indentures")
between the Company and United States Trust Company of New York, as trustee (the
"Trustee") or any combination thereof, for any and all of its outstanding 10%
Senior Subordinated Notes Due 2008 (the "10% Notes") and (ii) a combination of
2010 Senior Notes and Senior Discount Notes to be determined by the Issuer for
any and all of its outstanding 15% Senior Subordinated Deferred Interest Notes
Due 2007 (the "15% Notes") and its 11% Senior Subordinated Deferred Interest
Notes Due 2008 (the "11% Notes" and, together with the 10% Notes and the 15%
Notes, the "Existing Subordinated Notes"), held by qualified institutional
buyers and institutional accredited investors under the Securities Act of 1933
(the "Securities Act") that can make the investment representations set forth in
the consent and letter of transmittal (the "Qualified Offerees Transmittal
Letter") circulated in connection with the Exchange Offer ("Qualified Offerees")
on the terms and subject to the conditions set forth in the Exchange Offer
Material (as defined below). In connection with the Exchange Offer, the Company
intends to amend (the "Proposed Amendments") certain provisions of (i) the
indenture governing the 10% Notes dated as of March 15, 1998 (the "10% Notes
Indenture") between the Company and the Trustee, (ii) the indenture governing
the 15% Notes dated as of October 1, 1997 (the "15% Notes Indenture") between
the Company and the Trustee and (iii) the indenture governing the 11% Notes
dated as of March 15, 1998 (the "11% Notes Indenture" and, together with the 10%
Notes Indenture and the 11% Notes Indenture, the "Existing Indentures") between
the Company and the Trustee. The Exchange Offer and all the transactions related
thereto shall be collectively referred to herein as the "Transactions". The
Proposed Amendments will be contained in supplements to each of the Existing
Indentures to be executed by the Company and the Trustee (the "Supplemental
Indentures"). The Proposed Amendments will be executed on or immediately
following the Consent Date (as defined in the Confidential Offering Circular and
Consent Solicitation Statement dated March 3, 2000 (as supplemented March 17,
2000, March 21, 2000, March 22, 2000, March 27, 2000 and March 28, 2000, the
"Exchange Offer Statement")), assuming receipt by the Company of the requisite
number of consents to the Proposed Amendments (the "Consents"). The Proposed
Amendments will become operative when the Existing Subordinated Notes are
accepted for purchase by the Company pursuant to the Exchange Offer (the first
date on which such event occurs being herein referred to as the "Settlement
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Date"). The Exchange Offer will be made on the terms and subject to the
conditions set forth in the Exchange Offer Statement.
Capitalized terms used but not defined herein shall have the meanings
assigned to them in the Exchange Offer Statement.
Concurrently with the Exchange Offer, the Company is (1) making the Tender
Offer to purchase the Existing Senior Notes, (2) conducting the Private
Placement of additional 2010 Senior Notes, 12-1/2% Senior Notes due 2008 (the
"2008 Senior Notes") to be issued pursuant to an indenture between the Company
and the Trustee (the "2008 Senior Notes Indenture") and 12-3/4% Senior Notes due
2010 denominated in euro (the "Euro Notes") to be issued pursuant to an
indenture between the Company and the Trustee (the "Euro Notes Indenture"), and
(3) seeking to enter into the Preferred Stock Transaction with the holders (the
"Specified Holders") of more than 75% of the outstanding shares of the Series C
14 1/4% Senior Cumulative Exchangeable Preferred Stock due 2007 of the Company
(the "Series C Preferred Stock"), including (A) an agreement by the Specified
Holders to waive any defaults under the certificate of designation governing the
Series C Preferred Stock resulting from the Refinancing (as defined) and certain
other events, (B) the Company's agreement to issue, on June 15, 2000, exchange
debentures (the "Exchange Debentures"), in exchange for all of the Series C
Preferred Stock, as provided by the terms of the Series C Preferred Stock
certificate of designation, (C) an agreement by the Specified Holders that
certain restrictive covenants and default provisions in the indenture that will
govern the Exchange Debentures will be eliminated and (D) the Company's
agreement to exchange all of the Exchange Debentures for 2010 Senior Notes and
Senior Discount Notes and the holders' agreement to participate in such
exchange.
As used herein, the term "Refinancing" means the Tender Offer, the Exchange
Offer, the Private Placement and the Preferred Stock Transaction, and the term
"Other Refinancing Agreements" means: (1) the Tender Offer Dealer Manager
Agreement, dated the date hereof, between the Company and the Dealer Managers
(as defined) (the "Tender Offer Dealer Manager Agreement"), (2) the supplemental
indentures to be entered into in connection with the Tender Offer, (3) the
Purchase Agreement (the "Dollar Notes Purchase Agreement") dated as of March 27,
2000, among the Company and the Dealer Managers, BNY Capital Markets, Inc. and
CIBC World Markets Corp., as representatives of the several Purchasers
identified therein, (4) the Purchase Agreement (the "Euro Notes Purchase
Agreement" and, together with the Dollar Notes Purchase Agreement, the "Purchase
Agreement") dated as of March 27, 2000, among the Company and Credit Suisse
First Boston (Europe) Limited, Salomon Brothers International Limited, Xxxxxxx
Xxxxx International, Xxxxxxx Xxxxx International, BNY Capital Markets, Inc. and
CIBC World Markets Corp., as representatives of the several Purchasers
identified therein, (5) the Registration Rights Agreement (the "Dollar Notes
Registration Rights Agreement"), among the Company and the Dealer Managers, BNY
Capital Markets, Inc. and CIBC World Markets Corp., as representatives of the
several Purchasers identified therein, (6) the Registration Rights Agreement
(the "Euro Notes Registration Rights Agreement" and, together with the Dollar
Notes Registration Rights Agreement, the "Registration Rights Agreement") among
the Company and Credit Suisse First Boston (Europe) Limited, Salomon Brothers
International Limited, Xxxxxxx Xxxxx International, Xxxxxxx Xxxxx International,
BNY Capital Markets, Inc. and CIBC World Markets Corp., as representatives of
the several Purchasers identified therein, and (7) the Stockholder Agreements
between the Company and the Specified Holders in respect of the Preferred Stock
Transaction, as amended as of the date hereof.
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The following sets forth the agreement among the Company, on the one hand,
and Xxxxxxx Xxxxx Barney Inc. and Credit Suisse First Boston Corporation, as
Joint Dealer Managers (the "Dealer Managers"), on the other hand.
1. Appointment as Dealer Managers. (a) The Company hereby appoints you as
Dealer Managers and authorizes you to act as such in connection with the
Transactions. As Dealer Managers, you agree, in accordance with your customary
practice, to perform those services in connection with the Transactions as are
customarily performed by investment banking firms in connection with exchange
offers of like nature, including, but not limited to, the solicitation of
tenders of Existing Subordinated Notes pursuant to the Exchange Offer. Your
respective obligations as Dealer Managers hereunder shall be several and not
joint and several. The performance of such services by you hereunder shall
commence upon the mailing of the Exchange Offer Statement and related documents
to each holder of Existing Subordinated Notes whom the Company believes to be a
Qualified Offeree (the date of commencement of such distribution being herein
referred to as the "Commencement Date").
(b) The Company expressly acknowledges that all opinions and advice
(written or oral) given by the Dealer Managers to the Company in connection with
the Dealer Managers' engagement are intended solely for the benefit and use of
the Company (including its management, directors and attorneys) in considering
the transactions to which they relate and the Company agrees that no such
opinion or advice shall be used for any other purpose or reproduced,
disseminated, quoted or referred to at any time, in any manner or for any
purpose, nor shall any public references to either of the Dealer Managers be
made by the Company (or such persons), without the prior consent of each of the
Dealer Managers, which consent shall not be unreasonably withheld, other than
pursuant to the order of any court or administrative agency or in any pending
legal or administrative proceeding, or otherwise as required by applicable law
or compulsory legal process (in which case the Company agrees to inform you
promptly thereof and, to the extent not expressly prohibited by such regulatory
process, prior to any such disclosure).
2. No Liability for Acts of Dealers, Banks and Trust Companies. Each of you
shall have no liability (in tort, contract or otherwise) to the Company, the
other Dealer Manager or any other person for any losses, claims, damages,
liabilities and expenses (each, a "Loss" and collectively, the "Losses") arising
from any act or omission on the part of any broker or dealer in securities
("Dealer") (other than yourself) or any bank or trust company or any other
person (other than yourself), and each of you shall not be liable for any Losses
arising from your own acts or omissions in performing your obligations as Dealer
Managers or as Dealers hereunder or otherwise in connection with the
Transactions, except for any such Losses which are finally judicially determined
by a court of competent jurisdiction to have resulted primarily from your gross
negligence or willful misconduct. In soliciting or obtaining tenders, neither
the Company, any Dealer, bank or trust company, nor the other Dealer Manager
shall be deemed to be acting as your agent or the agent of the Company, and you,
as Dealer Managers, shall not be deemed the agent of the Company, any Dealer,
bank or trust company, the other Dealer Manager or any other person. The Company
acknowledges and agrees that, in your capacity as Dealer Managers, each of you
shall act as an independent contractor, and any of your duties arising out of
your engagement pursuant to this Agreement shall be owed solely to the Company.
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3. The Exchange Offer Materials. The Company agrees to furnish you as soon
as practicable on or following the Commencement Date with as many copies as you
may reasonably request of the Exchange Offer Statement, the related Letter of
Transmittal and the Notice of Guaranteed Delivery, any other Exchange Document
and any other documents or materials filed or to be filed on behalf of the
Company in connection with the Transactions with any governmental or regulatory
authorities, agencies or instrumentalities, any amendments or supplements to any
of the foregoing, and all exhibits thereto, including, without limitation, any
materials incorporated by reference in the Exchange Offer Statement, and any
related materials to be used in connection with the Transactions (collectively,
as amended or supplemented from time to time, the "Exchange Offer Material").
You hereby agree, as Dealer Managers, that you will not disseminate any
written material for or in connection with the solicitation of tenders of
Existing Subordinated Notes pursuant to the Exchange Offer other than the
Exchange Offer Material, and you agree that you will not make any statements in
connection with such solicitation, other than the statements that are set forth
in the Exchange Offer Material or as otherwise authorized by the Company.
The Company agrees that, a reasonable time prior to publishing, using, or
filing with the U.S. Securities and Exchange Commission (the "Commission") or
with any other Federal, state, provincial, territorial or other governmental
agency, authority, or instrumentality of the United States, Canada or any other
jurisdiction ("Other Agency"), any Exchange Offer Material (whether preliminary
or otherwise) or any other materials which refer to either of you, it will
submit copies of such materials to you and will give reasonable consideration to
your and your counsel's comments, if any, thereon. In the event that the Company
uses or permits the use of, or files with the Commission or any Other Agency,
any Exchange Offer Material or any such other material (i) which has not been
submitted to you for your comments, or (ii) which has been so submitted and with
respect to which you have made comments, but which comments have not resulted in
a response reasonably satisfactory to you and your counsel to reflect your
comments, then you shall be entitled to withdraw as Dealer Managers in
connection with the Exchange Offer as set forth in Section 4.
Prior to and during the period of the Exchange Offer, the Company will
inform you promptly after it receives notice or becomes aware of the happening
of any event, or the discovery of any fact, which would require the making of
any change in any Exchange Offer Material or would affect in any material
respect the truth or completeness of any representation or warranty contained in
this Agreement if such representation or warranty were being made immediately
after the happening of such event or discovery of such fact. Any such change
shall be promptly made to such Exchange Offer Material, subject to the foregoing
paragraph.
The Company represents that the Exchange Offer Material has been or will be
prepared and approved by, and is the sole responsibility of, the Company (except
for information describing you that is provided by you in writing) and the
Company authorizes you to use the Exchange Offer Material in connection with the
Transactions.
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The Company recognizes and confirms that in connection with the
Transactions, you will be using and relying upon information (both written and
oral), documents (including the Exchange Offer Material), and data furnished by
the Company, and information available from public sources (collectively, the
"Information"). The Company further recognizes that you do not assume
responsibility for the accuracy or completeness of the Information and will not
undertake to independently verify its accuracy or completeness.
4. Withdrawal. If the Company (a) uses or permits the use of any Exchange
Offer Material (i) which has not been submitted to you for your comments or (ii)
which has been so submitted and with respect to which you have made comments but
as to which the Company has not complied with the provisions of Section 3 or (b)
shall have breached any of its representations, warranties, agreements or
covenants herein or in any of the Other Refinancing Agreements, then, in each
case, you shall be entitled to withdraw as Dealer Managers in connection with
the Transactions without any liability or penalty whatsoever for such withdrawal
and without loss of any right to indemnification or contribution provided in
Section 14 or right to the payment of all fees and expenses payable hereunder
which have accrued to the date of such withdrawal (it being agreed that in the
event of any such withdrawal, for the purposes of determining the fees payable
to you pursuant to Section 5, the principal amount of Existing Subordinated
Notes tendered (and not subsequently withdrawn) pursuant to the Exchange Offer
as of the close of business on the date of such withdrawal which are thereafter
acquired by the Company pursuant to the Exchange Offer shall be deemed to have
been acquired as of the date of such withdrawal). If you shall withdraw as
Dealer Managers for any of the reasons set forth in the preceding sentence, the
reimbursement for your expenses through the date of such withdrawal shall be
paid to you promptly after such date.
5. Compensation. The Company agrees to pay you as compensation for your
services as Dealer Managers a fee of $15.00 for each $1,000 in principal amount
at issuance (or, in the case of the Senior Discount Notes, at maturity) of New
Notes issued by the Company pursuant to the Exchange Offer. Such fee shall be
payable upon consummation of the Exchange Offer.
6. Reimbursement of Fees and Expenses. In addition to your compensation for
your services as Dealer Managers, the Company agrees to pay (i) all fees and
expenses relating to the preparation, filing, printing, mailing, and publishing
of all the Exchange Offer Material, (ii) all fees and expenses of the Exchange
Agent and the Information Agent (each as defined in Section 8 hereof), (iii) all
advertising charges in connection with the Transactions, (iv) all customary
mailing and handling fees and expenses of Dealers (including you), banks and
trust companies in forwarding the Exchange Offer Material to their customers and
(v) all other reasonable costs and expenses incurred by you in connection with
the Transactions (but excluding any such costs and expenses incurred in
connection with the Private Placement). The Company also agrees to promptly
reimburse you, upon request made from time to time, for all reasonable fees and
disbursements of your counsel and all your reasonable travel and other
out-of-pocket expenses incurred in connection with or arising out of the
Transactions (but excluding any such fees, costs and expenses incurred in
connection with the Private Placement). All payments to be made by the Company
pursuant to this Section 6 shall be made promptly against delivery to the
Company of statements thereof. The Company shall perform its obligations set
forth in this Section 6 regardless of whether or not the Exchange Offer is
commenced or the Company acquires any Existing Subordinated Notes pursuant to
the Exchange Offer or whether you withdraw pursuant to Section 4.
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7. Securityholder Lists. The Company shall provide you with copies of its
records showing the names and addresses of, and the principal amounts of
Existing Subordinated Notes held by, all Holders for purposes of the Exchange
Offer and will cause you to be advised from day to day during the period of the
Exchange Offer as to any transfers of Existing Subordinated Notes.
8. Other Agents. The Company will arrange for United States Trust Company
of New York to serve as exchange agent (the "Exchange Agent") and ChaseMellon
Financial Services, LLC to serve as Information Agent (the "Information Agent")
in connection with the Transactions and, as such, to advise you as to such
matters relating to the Transactions as frequently as you may request.
9. Sufficient Funds; Settlement. The Company represents and warrants to you
that, subject to consummation of the Private Placement, it will have sufficient
funds available, and has or will have sufficient authority to use such funds
under applicable law, to enable it to pay in accordance with the terms of and
subject to the conditions contained in the Exchange Offer and Sections 5 and 6
hereof, and the Company hereby agrees to pay on the Settlement Date any accrued
interest on the 10% Notes and any cash payments required in lieu of the issuance
of fractional New Notes incurred in connection with exchanging all Existing
Subordinated Notes tendered and accepted for exchange pursuant to the Exchange
Offer (as more fully described in the Exchange Offer Statement) and the fees and
expenses payable hereunder.
10. Representations, Warranties and Covenants of the Company. The Company
represents and warrants to you, and agrees with you, that:
(a) The Company 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 Exchange Offer Material; and the Company 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 Company and its subsidiaries,
taken as a whole (a "Material Adverse Effect"). The Company is qualified to
do business as a foreign corporation in the State of New York.
(b) Each Significant Subsidiary (as defined in Regulation S-X under
the Securities Exchange Act of 1934, as amended (the "Exchange Act")) of
the Company, WEC and WEC II 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 Exchange Offer Material; and each
subsidiary of the Company (including WEC and WEC II) 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 Company (including WEC and WEC II) has been duly
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authorized and validly issued and is fully paid and nonassessable; and the
capital stock of each subsidiary owned by the Company (including WEC and
WEC II), directly or through subsidiaries, is owned free from liens,
encumbrances and defects.
(c) This Agreement has been duly authorized, executed and delivered;
each of the Supplemental Indentures, the New Indentures, the New Notes and
the Dollar Notes Registration Rights Agreement has been duly authorized;
each of this Agreement and the Dollar Notes Registration Rights Agreement
constitutes and, when the Existing Senior Notes have been delivered to the
Company and paid for pursuant to this Agreement and the Tender Offer
Material on the Settlement Date, the Supplemental Indentures and the New
Indentures will have been duly executed and delivered, such New Notes will
have been duly executed, authenticated, issued and delivered and will
conform, in all material respects, to the description thereof contained in
the Exchange Offer Material, and this Agreement, the Dollar Notes
Registration Rights Agreement, the Supplemental Indentures, the New
Indentures and such New Notes will constitute valid and legally binding
obligations of the Company, 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 this Agreement and the Dollar Notes Registration Rights
Agreement, except that rights to indemnity and contribution may be limited
by Federal and state securities laws and public policy considerations.
(d) Except as contemplated by this Agreement or as disclosed in the
Exchange Offer Material, there are no contracts, agreements or
understandings between the Company and any person that would give rise to a
valid claim against the Company or either Dealer Manager for a brokerage
commission, finder's fee or other like payment in connection with the
transactions contemplated by this Agreement.
(e) 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 or the
other transactions contemplated as part of the Refinancing, other than
those which have been obtained and such as may be required by securities or
blue sky laws of any state of the United States or of any foreign
jurisdiction.
(f) The execution, delivery and performance of this Agreement, the
Supplemental Indentures, the New Indentures and the Dollar Notes
Registration Rights Agreement and the consummation of the Transactions and
the other transactions contemplated as part of the Refinancing and
compliance with the terms hereof and 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, regulation or order of any governmental
agency or body or any court, domestic or foreign, having jurisdiction over
the Company or any subsidiary of the Company or any of their properties,
(B) any agreement or instrument to which the Company or any such subsidiary
is a party or by which the Company or any such subsidiary is bound or to
which any of the properties of the Company or any such subsidiary is
subject, or (C) the charter or by-laws of either of the Company or any such
subsidiary, except, in the case of clause (A) or (B), such breaches,
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violations or defaults that individually or in the aggregate would not have
a Material Adverse Effect; and the Company has full corporate power and
authority to authorize, engage in and consummate the Transactions, as
contemplated by this Agreement and the other transactions contemplated as
part of the Refinancing.
(g) Except as disclosed in the Exchange Offer Material, and except for
liens granted under the Company's accounts receivable securitization
Facility, the Company 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
Exchange Offer Material, the Company 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.
(h) 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.
(i) No labor dispute with the employees of the Company or any of its
subsidiaries exists or, to the knowledge of the Company, is imminent that
could reasonably be expected to have a Material Adverse Effect.
(j) The Company 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 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.
(k) Except as disclosed in the Exchange Offer Material, 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
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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.
(l) Except as disclosed in the Exchange Offer Material, 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 obligations under this Agreement, the Dollar
Notes Registration Rights Agreement, the Supplemental Indentures or the New
Indentures, or which are otherwise material in the context of the
Transactions or the other transactions contemplated as part of the
Refinancing; and, to the Company's knowledge, no such actions, suits or
proceedings are threatened or contemplated.
(m) The financial statements included in the Exchange Offer Material
present fairly the financial position of the Company and its consolidated
subsidiaries as of the dates shown and their results of operations and cash
flows for the periods shown, such financial statements have been prepared
in conformity with the generally accepted accounting principles in the
United States applied on a consistent basis, the assumptions used in
preparing the pro forma financial statements included in the Exchange Offer
Material, 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.
(n) Except as disclosed in the Exchange Offer Material, since the date
of the latest audited financial statements included in the Exchange Offer
Material, 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 (it being understood that a
change in the price of the Company's common stock or the continuation of
operating losses consistent with the Company'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 Exchange Offer Material,
there has been no dividend or distribution of any kind declared, paid or
made by the Company on any class of its capital stock.
(o) None of the Company, WEC or WEC II is 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"); none of the
Company, WEC or WEC II is a closed-end investment company required to be
registered, but not registered, thereunder; and none of the Company, WEC or
WEC II is and, after giving effect to the Transactions and the other
transactions contemplated as part of the Refinancing and the application of
the proceeds thereof as described in the Exchange Offer Material, will be
an "investment company" as defined in the Investment Company Act.
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(p) The Company is subject to Section 13 or 15(d) of the Exchange Act.
(q) No securities of the same class (within the meaning of Rule
144A(d)(3) under the Securities Act) as the New Notes, the 2008 Senior
Notes or the Euro Notes 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.
(r) Based upon the accuracy of the representations and warranties of
the Qualified Offerees set forth in the Qualified Offerees Transmittal
Letters, of the Purchasers in the Purchase Agreements and of the Specified
Holders in the Preferred Stock Transaction Agreements, the offer and sale
of the New Notes, the 2008 Senior Notes and the Euro Notes in the manner
contemplated by this Agreement, the Preferred Stock Transaction and,
assuming the accuracy of the representations and warranties of the
Purchasers contained therein, the Purchase Agreements will be exempt from
the registration requirements of the Securities Act; and it is not
necessary to qualify either New Indenture, the 2008 Senior Notes Indenture
or the Euro Indenture in respect of the New Notes, the 2008 Senior Notes or
the Euro Notes, respectively, under the United States Trust Indenture Act
of 1939, as amended (the "Trust Indenture Act"), other than in connection
with the Company's obligations under the Registration Rights Agreements.
(s) Neither the Company nor any of its or 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 ("Regulation S") under the
Securities Act) the New Notes, the 2008 Senior Notes or the Euro Notes or
any security of the same class or series as the New Notes, the 2008 Senior
Notes or the Euro Notes or (ii) has offered or will offer or sell the New
Notes, the 2008 Senior Notes or the Euro Notes (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, by means of
any directed selling efforts within the meaning of Rule 902(b) of
Regulation S. The Company, its affiliates and any person acting on their
behalf have complied and will comply with the offering restrictions
requirement of Regulation S. The Company has not entered and will not enter
into any contractual arrangement with respect to the distribution of the
New Notes, the 2008 Senior Notes or the Euro Notes except for this
Agreement, the Purchase Agreements and the Registration Rights Agreements.
(t) The Company and its subsidiaries are in compliance in all material
respects with the Communications Act of 1934 (as amended by the Tele
communications Act of 1996, the "Communications Act") and with all
applicable rules, regulations and policies of the Federal Communications
Commission (the "FCC").
(u) The Company has provided to the Dealer Managers a complete and
accurate list of all licenses held as of March 1, 2000 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
11
not in the 38 GHz portion of the radio spectrum and proceedings
affecting the service rules and licensing of Spectrum in the 38 GHz band)
by the FCC (the "Licenses"). All of 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 that, on March 12, 1998, several parties filed petitions
for reconsideration of the February 10, 1998 additional channel grants to
the Company in each of Atlanta, Buffalo, Cincinnati, Dallas, Houston,
Miami, New York, St. Louis, Spokane and Tampa. On October 22, 1999, the FCC
denied some of the petitions for reconsideration and affirmed the grants.
One petition for reconsideration remains pending. In response to the FCC's
denial of the petitions for reconsideration, two parties filed a joint
application for review requesting that the FCC reconsider the grants. The
Company filed an opposition to this application which remains pending. In
addition, on March 9, 1998, several parties filed petitions for
reconsideration of the FCC's 38 GHz Order, alleging, among other things,
that the February 10, 1998, license grants to the Company were in violation
of the FCC's processing rules. The Company filed a consolidated opposition
to these petitions. The FCC denied these petitions on August 23, 1999.
However, several parties have filed petitions for review in the U.S. Court
of Appeals for the D.C. Circuit.
In addition, on December 29, 1999, the FCC granted in part five
Company applications requesting additional channels in the following areas:
Baltimore, New York, Philadelphia, and Washington, D.C. On January 24,
2000, several parties filed petitions for reconsideration of each of these
grants. The Company filed an opposition to these petitions which remains
pending.
In addition, on October 23, 1997, DCT Communications, Inc. filed a
petition for reconsideration seeking revocation of the Company's license in
Ft. Lauderdale, Florida. The Company opposed the petition. On January 21,
1999, the FCC released an order denying DCT's petition for reconsideration.
In response, DCT filed an application for review which the Company opposed.
The FCC denied the application for review on February 22, 2000; however,
DCT may seek review of the FCC's decision in the courts.
(v) Except as disclosed in the Exchange Offer Material, no event has
occurred which (i) 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 (ii) 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.
12
(w) 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.
(x) 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.
(y) All necessary corporate and stockholder action has been duly taken
by the Company to authorize the Transactions and the other transactions
contemplated as part of the Refinancing, the execution, delivery and
performance of this Agreement, the Dollar Notes Registration Rights
Agreement, the Supplemental Indentures, the New Indentures and the Other
Refinancing Agreements and all other actions contemplated by this
Agreement, the Dollar Notes Registration Rights Agreement, the Supplemental
Indentures, the New Indentures and the Other Refinancing Agreements and the
consummation of the Transactions and the other transactions contemplated as
part of the Refinancing and no other corporate or stockholder proceedings
are necessary to authorize any such actions.
(z) The Company has no knowledge of any material fact or information
concerning the Company or any of its subsidiaries or affiliates, or the
operations, assets, condition (financial or otherwise), earnings, business
affairs or business prospects of the Company, or any of its subsidiaries or
affiliates, which is required to be made generally available to the public
and which has not been, or is not being, or will not be, made generally
available to the public.
(aa) In connection with the Transactions, the Company has complied,
and will continue to comply, in all material respects with the Exchange Act
and the rules and regulations thereunder, including, without limitation,
Sections 10 and 14 of the Exchange Act and Rule 10b-5, Rule 14e-1 and Rule
14e-5 of the Exchange Act.
(bb) On the date of this Agreement, the Exchange Offer Material does
not include any 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. The
preceding sentence does not apply to statements in or omissions from the
Exchange Offer Material based upon written information furnished to the
Company by any Dealer Manager specifically for use therein. The Company's
Annual Report on Form 10-K most recently filed with the Commission and all
subsequent reports (collectively, the "Exchange Act Reports") which have
been filed by the Company with the Commission or sent to stockholders
pursuant to 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.
(cc) Each of the representations and warranties set forth in this
Agreement will be true and correct on and as of the date hereof and the
Settlement Date.
11. Conditions of the Obligations of the Dealer Managers. The obligations
of the Dealer Managers to act hereunder will be subject to the accuracy of the
representations and warranties on the part of the Company contained in this
13
Agreement, to the performance by the Company of its obligations contained in
this Agreement, to the accuracy of the certificates of officers of the Company
delivered pursuant to the provisions hereof, to the performance by the Company
of its obligations hereunder and to the following additional conditions
precedent:
(a) The Dealer Managers shall have received a letter, dated the date
of the Exchange Offer Statement, 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 and schedules
examined by them and included in the Exchange Offer Material 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 certain procedures undertaken by them,
nothing came to their attention that caused them to believe that:
(A) at a date no later than two business days prior to the
date of the Exchange Offer Statement, 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 Company and its subsidiaries, on a consolidated
basis, as compared with amounts shown on the December 31, 1999
audited consolidated balance sheet included in the Exchange Offer
Material;
(B) for the period from January 1, 2000, to a date no later
than two business days prior to the date of the Exchange Offer
Statement, 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; or
(C) the unaudited pro forma condensed consolidated financial
statements included in the Exchange Offer Material do not comply
as to form in all material respects with the applicable
accounting requirements of the Securities Act and the related
published Rules and Regulations thereunder or the pro forma
adjustments have not been properly applied to the historical
amounts in the compilation of those statements,
except in all cases set forth in clauses (A) and (B) above for
changes, increases or decreases 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 Exchange Offer Material (in each
14
case to the extent that such dollar amounts, percentages and
other financial information are derived from the general
accounting records of the Company and its subsidiaries subject to
the internal controls of the Company'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.
All financial statements and schedules included in material
incorporated by reference into the Exchange Offer Material shall
be deemed included in the Exchange Offer Material for purposes of
this subsection.
(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 reasonable judgment of the Dealer Managers, be
likely to prejudice materially the success of the Transactions or any of
the other transactions contemplated as part of the Refinancing, 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 Company or its subsidiaries which, in the judgment of the
Dealer Managers, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the Transactions or any of the
other transactions contemplated as part of the Refinancing (it being
understood that a change in the price of the Company's common stock or the
continuation of operating losses consistent with the Company'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
Company 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 possible upgrading, and no
implication of a possible downgrading, of such rating); (C) any material
suspension or material 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
Company 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 the
Dealer Managers, the effect of any such outbreak, escalation, declaration,
calamity or emergency makes it impractical or inadvisable to proceed with
completion of the Transactions or any of the other transactions
contemplated as part of the Refinancing.
(c) The Dealer Managers shall have received an opinion, dated the date
upon which the Exchange Offer is consummated, of Xxxxxxxx Mollen & Xxxxxx,
counsel for the Company, substantially to the effect set forth in
15
(i)-(viii) below, and of Xxxxxxx Xxxx & Xxxxxxxxx, regulatory counsel for
the Company, substantially to the effect set forth in (ix)-(xvi) below:
(i) The Company 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 Exchange Offer Material;
(ii) This Agreement has been duly authorized, executed and
delivered; each of the Supplemental Indentures, the New Indentures,
the New Notes and the Dollar Notes Registration Rights Agreement has
been duly authorized; each of this Agreement and the Dollar Notes
Registration Rights Agreement constitutes and, when the Existing
Subordinated Notes have been delivered to the Company and paid for
pursuant to this Agreement and the Exchange Offer Material on the
Settlement Date, the Supplemental Indentures and the New Indentures
will have been duly executed and delivered, such New Notes will have
been duly executed, authenticated, issued and delivered and will
conform, in all material respects, to the description thereof
contained in the Exchange Offer Material and the Supplemental
Indentures, the New Indentures, and such New Notes will constitute
valid and legally binding obligations of the Company, 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 this Agreement and
the Dollar Notes 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 Company is not and, after giving effect to the
Transactions and the other transactions contemplated as part of the
Refinancing and the application of the proceeds thereof as described
in the Exchange Offer Material will not be an "investment company" as
defined in the Investment Company Act;
(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 or the
consummation of the other transactions contemplated by the
Refinancing, 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 Agreements 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 Exchange Offer, the
Preferred Stock Transaction and the Private Placement;
(v) The execution, delivery and performance of this Agreement,
the Dollar Notes Registration Rights Agreement, the Supplemental
Indentures, and the New Indentures and the consummation of the
Transactions and the other transactions contemplated as part of the
16
Refinancing and compliance with the terms and provisions hereof and
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
Company or any subsidiary of the Company or any of its properties, (B)
any agreement or instrument listed as an exhibit to the Company'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 Company under the Exchange Act through the date of such opinion to
which the Company or any such subsidiary is a party or by which the
Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject, or (C)
the charter or by-laws of the Company 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 Company has full power and corporate authority
to engage in the Transactions as contemplated by this Agreement and
the other transactions contemplated as part of the Refinancing;
(vi) Such counsel have no reason to believe that the Exchange
Offer Material or any amendment or supplement thereto, as of the date
hereof or as of the date upon which the Exchange Offer is consummated,
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 Exchange Offer Material;
(vii) The descriptions in the Exchange Offer Material 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) Based upon the accuracy of the representations and
warranties of the Company set forth in Section 10 of this Agreement,
of the Qualified Offerees in the Qualified Offeree Transmittal Letters
and of the Specified Holders in the agreements governing the Preferred
Stock Transaction, it is not necessary in connection with the issuance
of New Notes in the Exchange Offer or in exchange for Series C
Preferred Stock (or Exchange Debentures) held by the Specified Holders
to register the New Notes under the Securities Act, and it is not
necessary to qualify the New Indentures under the Trust Indenture Act
of 1939, as amended, other than in connection with the Company's
obligations under the Dollar Notes Registration Rights Agreement;
(ix) 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;
17
(x) To the best of such counsel's knowledge, the Company and its
subsidiaries are in compliance in all material respects with all
material terms and conditions of each License;
(xi) 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 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;
(xii) Such counsel is not aware of any event or instance in which
the Company was not in compliance with all applicable and material
rules, regulations and policies of the FCC pertaining to the Licenses;
(xiii) 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, modification, nonrenewal,
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 (ii) 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 thereunder;
(xiv) To the best of such counsel's knowledge, 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 pertaining
to the Licenses;
(xv) Such counsel is not aware of any reason to believe that any
of the Licenses will not be renewed in the ordinary course; and
(xvi) The FCC has the authority, under certain circumstances, to
modify radio licenses that it has issued. On November 3, 1997, the FCC
released an Order concerning the 38 GHz band adopting licensing,
service and technical rules, and a plan to auction the remaining
unlicensed portions of the 38 GHz band for commercial use. On February
20, 1998, a party filed a petition for reconsideration of the FCC's 38
GHz Order seeking review of the FCC's channelization and assignment of
the 38 GHz band to ensure that spectrum remains available for
satellite services. On reconsideration, the FCC declined to reserve
spectrum in this band for satellite services.
On December 23, 1998, the FCC issued an Order primarily
designating the 38 GHz band for terrestrial wireless services. Several
parties filed petitions for reconsideration of that decision seeking
18
authority to use the 38 GHz band for satellite services. On December
1, 1999, the FCC affirmed its Order on reconsideration. However,
parties may seek review of the FCC's Order on reconsideration in the
courts.
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 Company 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 Dealer Managers shall have received from Cravath, Swaine &
Xxxxx, counsel for the Dealer Managers, such opinion or opinions, dated the
Settlement Date, as the Dealer Managers may reasonably require, and the
Company 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 Dealer Managers shall have received a certificate, dated the
date upon which the Exchange Offer is consummated, 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 date hereof or thereof, as the case may be, and that,
subsequent to the dates of the most recent financial statements in the
Exchange Offer Statement, 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 Exchange Offer Statement, or as
described in such certificate.
(f) The Dealer Managers shall have received a letter, dated the date
upon which the Exchange Offer is consummated, 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 date upon which the Exchange Offer is consummated
for the purposes of this subsection.
(g) No restraining order or denial of an application for approval
shall have been issued and no litigation shall have been commenced or
threatened with respect to this Agreement, the Transactions or the other
transactions contemplated as part of the Refinancing and no development in
any pending litigation with respect to this Agreement, the Transactions or
the other transactions contemplated as part of the Refinancing shall have
occurred by or before any agency, court or other governmental body of any
jurisdiction which you believe in good faith makes it inadvisable for you
to continue to act hereunder.
19
The Company will furnish the Dealer Managers with such conformed
copies of such opinions, certificates, letters and documents as the Dealer
Managers reasonably request.
12. Additional Covenants of the Company. (a) Prior to and during the term
of the Transactions and the Refinancing, the Company will advise you promptly of
(i) the occurrence of any event, or the discovery of any fact, which could cause
the Company to fail to commence or withdraw or terminate the Exchange Offer or
any of the other transactions contemplated as part of the Refinancing or would
permit the Company to exercise any right not to exchange the Existing
Subordinated Notes tendered pursuant to the Exchange Offer, not to purchase the
Existing Senior Notes tendered pursuant to the Tender Offer or not to exchange
the shares of Series C Preferred Stock (or Exchange Debentures) tendered
pursuant to the Preferred Stock Transaction, (ii) any proposal or requirement to
amend or supplement any Exchange Offer Material, (iii) any extension,
termination, completion or expiration of the Exchange Offer, the Tender Offer,
the Private Placement or the Preferred Stock Transaction, (iv) any communication
from the Commission or any Other Agency relating to the Transactions or any of
the Exchange Offer Material, including any order suspending or preventing the
use of any thereof, (v) any other material developments in connection with the
Transactions, (vi) any other material developments in connection with the
Refinancing and (vii) any other information relating to the Exchange Offer, the
Tender Offer, the Private Placement or the Preferred Stock Transaction, which
you may from time to time reasonably request.
(b) The Company will comply with the Securities Act, the Exchange Act, the
Trust Indenture Act, and the applicable rules and regulations promulgated
thereunder, as well as all applicable stock exchange regulations, in connection
with the Exchange Offer Material and the Transactions. If any event shall occur
or condition exist as a result of which it is necessary to amend or supplement
any Exchange Offer Material in order that such Exchange Offer Material 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, in the light of the
circumstances existing at the time they are delivered, not misleading or if it
shall be necessary at any such time to amend or supplement the Exchange Offer
Material in order to comply with the requirements of the Securities Act, the
Exchange Act or the Trust Indenture Act, the Company will promptly prepare such
amendment or supplement as may be necessary to correct such untrue statement or
omission or to make the Exchange Offer Material comply with such requirements.
The Company will disseminate, as required, any and all necessary amendments and
supplements to the Exchange Offer Material and the other documents to be
distributed to the holders in connection with the Transactions and will promptly
furnish to you a true and accurate copy of each such amendment or supplement
prior to the distribution thereof.
(c) The Company acknowledges that Xxxxxxx Xxxxx Barney Inc., Credit Suisse
First Boston Corporation and their respective affiliates may own for their own
account Existing Subordinated Notes, and agrees that Xxxxxxx Xxxxx Xxxxxx Inc.,
Credit Suisse First Boston Corporation and their respective affiliates may
tender such Existing Subordinated Notes pursuant to the Exchange Offer and
receive the full consideration therefor in accordance with the terms of the
Exchange Offer.
13. Qualification of New Notes. The Company shall promptly take such action
as you may reasonably request from time to time to qualify the New Notes for
offering and sale under the state securities or blue sky laws of such
jurisdictions as you may reasonably designate, and shall use their best efforts
20
to comply promptly with such laws so as to permit the continued qualification of
such securities in such jurisdictions, provided that in connection therewith the
Company shall not be obligated to qualify as a foreign corporation or to file a
general consent to service of process in any jurisdiction in which it is not
then qualified or subject to service, as the case may be.
14. Indemnification and Contribution. The Company agrees to indemnify and
hold harmless each of you, your respective directors, officers, employees and
agents and each person who controls either of you within the meaning of either
the Securities Act or the Exchange Act against any and all losses, claims,
damages or liabilities, joint or several, or other expenses reasonably incurred
in connection with investigating or defending any such loss, claim, damage,
liability or action, and each such indemnified party shall have no liability to
the Company or its parents, owners, creditors or security holders for any loss,
claim, damage or liability or other expense, (a) arising out of or based upon
(i) any untrue statement or alleged untrue statement of a material fact
contained in any Exchange Offer Material, or any omission or alleged omission to
state in any Exchange Offer Material a material fact necessary to make the
statements made therein, in the light of the circumstances under which they were
made, not misleading or (ii) any withdrawal, termination or cancelation by the
Company of, or failure by the Company to make or consummate, the Exchange Offer
according to its terms or (iii) any breach or alleged breach by the Company of
any representation or warranty or failure to comply with any of the agreements
contained herein or (iv) any other action or failure to act by the Company, its
employees or other agents or by you at the Company's request or with the
Company's consent or (b) otherwise arising out of, relating to or in connection
with or alleged to arise out of, relate to or be in connection with the proposed
exchange by the Company of New Notes for any Existing Subordinated Notes or your
role as Dealer Managers in connection with either thereof, whether the event
allegedly giving rise to such claim shall have occurred prior to the
commencement of, during the period of, or subsequent to the consummation of, the
Exchange Offer, and, in each case, agrees to reimburse each such indemnified
party, as incurred, for any legal or other expenses reasonably incurred by them
in connection with investigating or defending any such loss, claim, damage,
liability or action; provided, however, that the Company shall not be liable to
the extent that any such loss, claim, damage or liability arises out of or is
based upon (1) in the case of clause (a)(i), any such untrue statement or
alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by you specifically for inclusion therein or (2) in the case of clause
(b), that is finally judicially determined by a court of competent jurisdiction
not subject to further appeal to have resulted primarily from either of your
gross negligence or willful misconduct. This indemnity agreement will be in
addition to any liability which the Company may otherwise have.
Promptly after receipt by an indemnified party under this Section 14 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 this
Section 14, notify the indemnifying party in writing of the commencement
thereof; but the failure so to notify the indemnifying party (i) will not
relieve it from liability under the first paragraph of this Section 14 unless
and to the extent it did not otherwise learn of such action and such failure
results in the forfeiture by the indemnifying party of substantial rights and
defenses and (ii) will not, in any event, relieve the indemnifying party from
any obligations to any indemnified party other than the indemnification
obligation provided in the first paragraph of this Section 14. The indemnifying
21
party shall be entitled to appoint counsel of the indemnifying party's choice at
the indemnifying party's expense to represent the indemnified party in any
action for which indemnification is sought (in which case the indemnifying party
shall not thereafter be responsible for the fees and expenses of any separate
counsel retained by the indemnified party or parties except as set forth below);
provided, however, that such counsel shall be reasonably satisfactory to the
indemnified party. Notwithstanding the indemnifying party's election to appoint
counsel to represent the indemnified party in an action, the indemnified party
shall have the right to employ one firm or separate counsel (plus local
counsel), and the indemnifying party shall bear the reasonable fees, costs and
expenses of such separate counsel, if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it or other indemnified parties
which are different from or additional to those available to the indemnifying
party, (iii) the indemnifying party shall not have employed counsel satisfactory
to the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
If the indemnity provided for in the foregoing paragraphs of this Section
14 is for any reason unavailable to an indemnified party in respect of any
losses, claims, damages, liabilities or expenses referred to therein, then you
and the Company, in lieu of the Company's indemnifying such indemnified party,
agree that the Company shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages, liabilities or
expenses (i) in such proportion as is appropriate to reflect the relative
benefits received by the Company and by you from the Transactions or (ii) if the
allocation provided by the foregoing clause (i) is not permitted by applicable
law, in such proportion as is appropriate to reflect not only the relative
benefits referred to in the foregoing clause (i), but also the relative fault of
the Company and of you in connection with the statements, actions or omissions
which resulted in such losses, claims, damages, liabilities or expenses, as well
as any other relevant equitable considerations; provided, however, that in no
event shall your aggregate contribution to the amount paid or payable exceed the
aggregate amount of fees actually received by you pursuant to this Agreement.
The relative benefits received by the Company on the one hand and by you on the
other shall be deemed to be in the same proportion as (i) the maximum aggregate
value of the consideration proposed to be paid by the Company for the purchase
of Existing Subordinated Notes pursuant to the Exchange Offer bears to (ii) the
maximum aggregate fee proposed to be paid to you pursuant to Section 5. The
relative fault of the Company on the one hand and of you on the other (i) in the
case of an untrue or alleged untrue statement of a material fact or an omission
or alleged omission to state a material fact, shall be determined by reference
to, among other things, whether such statement or omission relates to
information supplied by the Company or by you and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
22
statement or omission and (ii) in the case of any other action or omission,
shall be determined by reference to, among other things, whether such action or
omission was taken or omitted to be taken by the Company or by you and the
parties' relative intent, knowledge, access to information and opportunity to
prevent such action or omission.
The Company and you agree that it would not be just and equitable if
contribution pursuant to this Section 14 were determined by pro rata allocation
or by any other method of allocation which does not take account of the
equitable considerations referred to in the immediately preceding paragraph. For
purposes of this Section 14, each person who controls either of you and each of
your respective directors, officers, employees and agents shall have the same
rights to contribution as you, subject in each case to the applicable terms and
conditions set forth above. The amount paid or payable by an indemnified party
as a result of the losses, claims, damages, liabilities or expenses referred to
in the immediately preceding paragraph shall be deemed to include, subject to
the limitations set forth above, any legal or other expenses reasonably incurred
by such indemnified party in connection with investigating or defending any such
action or claim.
The foregoing indemnity and contribution agreements shall be in addition to
any other rights that any indemnified party may otherwise have.
15. Termination; Full Force and Effect. This Agreement shall terminate upon
the earlier of (i) the Settlement Date, (ii) the date of termination or
withdrawal of the Exchange Offer and (iii) the termination or withdrawal of the
Tender Offer, the Private Placement or the Preferred Stock Transaction. The
indemnity and contribution agreements contained in Section 14 hereof, the fee
and expense reimbursement agreements contained in Sections 4, 5 and 6 hereof and
the representations, warranties, covenants and agreements of the Company set
forth in this Agreement shall remain operative and in full force and effect
regardless of (i) any failure to commence, or the withdrawal, termination or
consummation of, the Exchange Offer, the Tender Offer, the Private Placement or
the Preferred Stock Transaction or the termination or assignment of this
Agreement, (ii) any investigation made by or on behalf of any indemnified party,
(iii) any termination of your appointment hereunder pursuant to Section 4
hereof, this Section 15 or otherwise and (iv) the completion of your services
hereunder.
16. Severability. In the event any one or more of the provisions contained
in this Agreement should be held invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be affected or impaired thereby (it being
understood that the invalidity of a particular provision in a particular
jurisdiction shall not in and of itself affect the validity of such provision in
any other jurisdiction).
17. Counterparts. This Agreement may be executed in any number of separate
counterparts, and all the said counterparts taken together shall be deemed to
constitute one and the same instrument. Delivery of an executed counterpart by
facsimile transmission shall be effective as delivery of a manually signed
counterpart.
18. Binding Effect. This Agreement, including any right to indemnity or
contribution hereunder, shall inure to the benefit of and be binding upon the
Company, you and the other indemnified parties and each of the Company's, your
and their respective successors and assigns. Nothing in this Agreement is
intended, or shall be construed, to give to any other person or entity any right
or obligation hereunder or by virtue hereof.
23
19. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO
APPLICABLE PRINCIPLES OF CONFLICTS OF LAW.
20. Entire Agreement. This Agreement constitutes the entire agreement
between the parties hereto and supersedes all prior agreements, understandings
and arrangements, oral or written, between the parties hereto with respect to
the subject matter hereof.
21. Notices. All notices and other communications required or permitted to
be given under this Agreement shall be in writing and shall be deemed to have
been duly given if delivered personally or sent by registered or certified mail,
return receipt requested, postage prepaid, or by facsimile transmission,
subsequently confirmed in writing as aforesaid, to the parties hereto as
follows:
(a) If to you:
Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
Confirm: (000) 000-0000
and
Credit Suisse First Boston Corporation
Eleven Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Transaction Advisory Group
Fax: (000) 000-0000
Confirm: (000) 000-0000
with a copy to:
Cravath, Swaine & Xxxxx
Worldwide Plaza
000 Xxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxxx, Esq.
Fax: (000) 000-0000
Confirm: (000) 000-0000
24
(b) If to the Company:
Winstar Communications, Inc.
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: General Counsel
Fax: (000) 000-0000
Confirm: (000) 000-0000
with a copy to:
Xxxxxxxx Xxxxxx & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx Xxxxxx, Esq.
Fax: (000) 000-0000
Confirm: (000) 000-0000
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
Please indicate your willingness to act as Dealer Managers on the terms set
forth herein and your acceptance of the foregoing provisions by signing in the
space provided below for that purpose and returning to us a copy of this
Agreement, whereupon this Agreement and your acceptance shall constitute a
binding agreement among us.
Very truly yours,
WINSTAR COMMUNICATIONS, INC.
/s/ Xxxxxxx X. Xxxxxxxx
by ___________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
Accepted as of the
date first set forth above:
XXXXXXX XXXXX XXXXXX INC.
/s/ Xxxxxxx Xxxxxx
by ____________________________
Name: Xxxxxxx Xxxxxx
Title: Director
CREDIT SUISSE FIRST BOSTON CORPORATION
/s/ Xxxxxx X. Xxxxxx
by _____________________________
Name: Xxxxxx X. Xxxxxx
Title: Director
