$100,000,000
WINSTAR COMMUNICATIONS, INC.
$100,000,000 15% Senior Subordinated Deferred Interest Notes Due 2007
PURCHASE AGREEMENT
October 7, 1997
CREDIT SUISSE FIRST BOSTON CORPORATION
BT XXXX XXXXX INCORPORATED
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue
New York, N.Y. 10010
Ladies and Gentlemen:
1. Introductory. WinStar Communications, Inc., a Delaware corporation
(the "Issuer"), has agreed, subject to the terms and conditions stated herein,
to issue and sell to the several initial purchasers named in Schedule A hereto
(the "Purchasers") U.S.$100,000,000 principal amount of the Issuer's 15% Senior
Subordinated Deferred Interest Notes Due 2007 (the "Offered Securities"). The
Offered Securities are being issued under an indenture, dated as of October 1,
1997 (the "Indenture"), between the Issuer and United States Trust Company of
New York, as Trustee. The United States Securities Act of 1933 is herein
referred to as the "Securities Act."
As provided in Section 5(a) of this Agreement, the Issuer has agreed to
prepare and deliver to the Purchasers an offering circular relating to the
Offered Securities being purchased by the Purchasers for use by the Purchasers
in connection with the resale of the Offered Securities. Such offering circular
is herein referred to as the "Offering Document."
The Issuer hereby agrees with the several Purchasers as follows:
2. Representations and Warranties of the Issuer. The Issuer represents
and warrants to, and agrees with, the several Purchasers that:
(a) As of its date, the Offering Document will 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 Offering Document based upon written
information furnished to the Issuer by any Purchaser through Credit Suisse First
Boston Corporation ("CSFBC") specifically for use therein. The Issuer's Annual
Report on Form 10-K most recently filed with the Securities and Exchange
Commission (the "Commission") and all subsequent reports (collectively, the
"Exchange Act Reports") which have been filed by the Issuer with the
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Commission or sent to stockholders pursuant to the Securities Exchange Act of
1934 (the "Exchange Act"), when they were filed with the Commission, conformed
in all material respects to the requirements of the Exchange Act and the rules
and regulations of the Commission thereunder. Each of (i) the registration
statement on Form S-4 under the Securities Act (Registration No. 333-26367)
filed by the Issuer and WinStar Equipment Corp. on May 2, 1997, as amended
pursuant to Amendment No. 1 on July 22, 1997, and Amendment No. 2 on August 5,
1997 (as so amended, the "May S-4 Registration Statement"), (ii) the
registration statement on Form S-3 under the Securities Act (Registration No.
333-18465) filed by the Issuer on December 20, 1996, as amended pursuant to
Amendment No. 1 on June 10, 1997, and Amendment No. 2 on August 5, 1997 (as so
amended, the "S-3 Registration Statement") and (iii) the registration statement
on Form S-4 under the Securities Act (Registration No. 333-35961) filed by the
Issuer and WinStar Equipment II Corp. ("WEC-II") on September 19, 1997 (the
"September S-4 Registration Statement" and, together with the S-3 Registration
Statement, the May S-4 Registration Statement and the Exchange Act Reports, the
"SEC Filings"), as of the date hereof, conforms in all material respects to the
requirements of the Securities Act and the rules and regulations of the
Commission thereunder, and such registration statement (as amended) neither
includes any untrue statement of a material fact nor omits to state any material
fact required to be stated therein or necessary to make the statements therein
not misleading (except that (i) neither the May S-4 Registration Statement nor
the S-3 Registration Statement includes the Issuer's quarterly financial
information for the period ended June 30, 1997, (ii) neither the S-3
Registration Statement, the May S-4 Registration Statement nor the September S-4
Registration Statement includes a description of the Offered Securities, and
(iii) none of the SEC Filings includes a description of the Company's proposed
purchase of assets from US One Communications Corp. and its subsidiaries, or any
financing of the costs of such acquisition (the "US One Acquisition")).
(b) The Issuer has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the August Offering Document (as defined in Section 5(a)) or the
SEC Filings; and the Issuer is duly qualified to do business as a foreign
corporation in good standing in all other juris dictions in which its ownership
or lease of property or the conduct of its business requires such qualification,
except to the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the condition (financial or other),
business, properties or results of operations of the Issuer and its
subsidiaries, taken as a whole (a "Material Adverse Effect"). The Issuer is
qualified to do business as a foreign corporation in the State of New York.
(c) Each subsidiary of the Issuer has been duly incorporated and is an
existing corporation in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own its properties and
conduct its business as described in the August Offering Document or the SEC
Filings; and each subsidiary of the Issuer is duly qualified to do business as a
foreign corporation in good standing in all other jurisdictions in which its
ownership or lease of property or the conduct of its business requires such
qualification, except to the extent that the failure to be so qualified or be in
good standing would not have a Material Adverse Effect; all of the issued and
outstanding capital stock of each subsidiary of the Issuer has been duly
authorized and validly issued and is fully paid and nonassessable; and the
capital stock
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of each subsidiary owned by the Issuer, directly or through subsidiaries, is
owned free from liens, encumbrances and defects.
(d) Each of the Indenture and the Registration Rights Agreement (as
defined herein) has been duly authorized, executed and delivered; the Offered
Securities have been duly authorized; and when the Offered Securities are
delivered and paid for pursuant to this Agreement on the Closing Date (as
defined below), such Offered Securities will have been duly executed,
authenticated, issued and delivered; and the Indenture and the Registration
Rights Agreement constitute, and such Offered Securities will constitute, valid
and legally binding obligations of the Issuer, enforce able 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; except that,
with respect to the Registration Rights Agreement, rights to indemnity and
contribution may be limited by federal and state securities laws and public
policy considerations.
(e) Except as contemplated by this Agreement or as disclosed in the
August Offering Document or the SEC Filings, there are no contracts, agreements
or under standings between the Issuer and any person that would give rise to a
valid claim against the Issuer or any Purchaser for a brokerage commission,
finder's fee or other like payment in connection with the transactions
contemplated by this Agreement.
(f) No consent, approval, authorization, or order of, or filing with,
any govern mental agency or body or any court is required for the consummation
of the transac tions contemplated by this Agreement in connection with the
issuance and sale of the Offered Securities by the Issuer, other than as may be
required under the Securities Act and the Rules and Regulations of the
Commission thereunder with respect to the Registration Rights Agreement among
the Issuer and the Purchasers dated the date hereof (the "Registration Rights
Agreement") and the transactions contemplated there under, and such as may be
required by securities or blue sky laws of any state of the United States or of
any foreign jurisdiction in connection with the offer and sale of the Offered
Securities.
(g) The execution, delivery and performance of the Indenture, the
Registration Rights Agreement and this Agreement, and the issuance and sale of
the Offered Securities and compliance with the terms and provisions thereof will
not result in a breach or violation of any of the terms and provisions of, or
constitute a default under, (i) any statute, rule, regulation or order of any
governmental agency or body or any court, domestic or foreign, having
jurisdiction over the Issuer or any subsidiary of the Issuer or any of their
properties, (ii) any agreement or instrument to which the Issuer or any such
subsidiary is a party or by which the Issuer or any such subsidiary is bound or
to which any of the properties of the Issuer or any such subsidiary is subject,
or (iii) the charter or by-laws of the Issuer or any such subsidiary, except, in
the case of clause (i) or (ii), such breaches, violations or defaults that
individually or in the aggregate would not have a Material Adverse Effect; and
the Issuer has full corporate power and authority to authorize, issue and sell
the Offered Securities to be sold by the Issuer as contemplated by this
Agreement.
(h) This Agreement has been duly authorized, executed and delivered by
the Issuer.
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(i) Except as disclosed in the August Offering Document or the SEC
Filings, the Issuer and its subsidiaries have good and marketable title to all
real properties and all other properties and assets owned by them, in each case
free from liens, encumbrances and defects that would materially affect the value
thereof or materially interfere with the use made or to be made thereof by them;
and, except as disclosed in the August Offering Document or the SEC Filings, the
Issuer and its subsidiaries hold any leased real or personal property under
valid and enforceable leases with no exceptions that would materially interfere
with the use made or to be made thereof by them.
(j) The Issuer and its subsidiaries possess adequate certificates,
authorities or permits issued by appropriate governmental agencies or bodies
necessary to conduct the business now operated by them and have not received any
notice of proceedings relating to the revocation or modification of any such
certificate, authority or permit that, individually or in the aggregate, could
reasonably be expected to have a Material Adverse Effect.
(k) No labor dispute with the employees of the Issuer or any of its
subsidiaries exists or, to the knowledge of the Issuer, is imminent that could
reasonably be expected to have a Material Adverse Effect.
(l) The Issuer and its subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and other
intellectual property (collectively, "intellectual property rights") necessary
to conduct the business as now operated by them, or used in the conduct of the
business as now operated by them, except to the extent that the failure to own
or possess or the inability to acquire such intellectual property rights would
not individually or in the aggregate have a Material Adverse Effect; and the
Issuer has not received any notice of infringement of or conflict with asserted
rights of others with respect to any intellectual property rights that, if
determined adversely to the Issuer or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
(m) Except as disclosed in the August Offering Document or the SEC
Filings, neither the Issuer nor any of its subsidiaries is in violation of any
statute, rule, regulation, decision or order of any governmental agency or body
or any court, domestic or foreign, relating to the use, disposal or release of
hazardous or toxic substances or relating to the protection or restoration of
the environment or human exposure to hazardous or toxic substances
(collectively, "environmental laws"), owns or operates any real property
contaminated with any substance that is subject to any environmental laws, is
liable for any off-site disposal or contamination pursuant to any environmental
laws, or is subject to any claim relating to any environmental laws, which
violation, contamination, liability or claim would individually or in the
aggregate have a Material Adverse Effect; and the Issuer is not aware of any
pending investiga tion which might lead to such a claim.
(n) Except as disclosed in the August Offering Document or the SEC
Filings, there are no pending actions, suits or proceedings against or affecting
the Issuer, any of its subsidiaries or any of their respective properties that,
individually or in the aggregate, could reasonably be expected to have a
Material Adverse Effect, or to materially and adversely affect the ability of
the Issuer to perform its obligations under
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the Indenture, the Registration Rights Agreement or this Agreement, or which are
otherwise material in the context of the sale of the Offered Securities; and, to
the Issuer's knowledge, no such actions, suits or proceedings are threatened or
contemplated.
(o) The financial statements included or incorporated by reference in
the September S-4 Registration Statement present fairly the financial position
of the Issuer and its consolidated subsidiaries as of the dates shown and their
results of operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with generally accepted accounting
principles in the United States applied on a consistent basis; and the
assumptions used in preparing the pro forma financial statements included or
incorporated by reference in the September S-4 Registration Statement 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.
(p) Except as disclosed in the August Offering Document or the SEC
Filings, since the date of the latest audited financial statements included in
the September S-4 Registration 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 either of the Issuer and its subsidiaries taken as a whole (it
being understood that the US One Acquisition, a change in the Issuer's stock
price or the continuation of operating losses consistent with the Issuer's
historical results shall be deemed not to be, in and of themselves, such a
material adverse change), and, except as disclosed in or contemplated by the
August Offering Document or the SEC Filings, there has been no dividend or
distribution of any kind declared, paid or made by the Issuer on any class of
its capital stock.
(q) The Issuer is not an open-end investment company, unit investment
trust or face-amount certificate company that is or is required to be registered
under Section 8 of the United States Investment Company Act of 1940 (the
"Investment Company Act"), nor is it a closed-end investment company required to
be registered, but not registered, thereunder; and the Issuer is not and, after
giving effect to the offering and sale of the Offered Securities and the
application of the proceeds thereof, will not be an "investment company" as
defined in the Investment Company Act.
(r) No securities of the same class (within the meaning of Rule
144A(d)(3) under the Securities Act) as the Offered Securities are listed on any
national securities exchange registered under Section 6 of the Exchange Act or
quoted in a U.S. auto mated inter-dealer quotation system.
(s) Assuming the accuracy of the representations and warranties of the
Purchasers contained herein, the offer and sale of the Offered Securities in the
manner contemplated by this Agreement will be exempt from the registration
requirements of the Securities Act; and it is not necessary to qualify an
indenture in respect of the Offered Securities under the United States Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), other than in
connection with the Issuer's obligations under the Registration Rights
Agreement.
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(t) Except for sales to or through the Purchasers, neither the Issuer
nor any of its affiliates, nor any person acting on its or their behalf (i) has,
within the six-month period prior to the date hereof, offered or sold in the
United States or to any U.S. person (as such terms are defined in Regulation S
under the Securities Act) the Offered Securities or any security of the same
class or series as the Offered Securities or (ii) has offered or will offer or
sell the Offered Securities (A) in the United States by means of any form of
general solicitation or general advertising within the meaning of Rule 502(c)
under the Securities Act or (B) with respect to any such securities sold in
reliance on Rule 903 of Regulation S ("Regulation S") under the Securities Act,
by means of any directed selling efforts within the meaning of Rule 902(b) of
Regulation S. The Issuer, its affiliates and any person acting on their behalf
have complied and will comply with the offering restrictions requirement of
Regulation S. The Issuer has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered Securities except
for this Agreement and the Registration Rights Agreement.
(u) The Issuer is subject to Section 13 or 15(d) of the Exchange Act.
(v) The Issuer and its subsidiaries are in compliance in all material
respects with the Communications Act of 1934 (as amended by the
Telecommunications Act of 1996, the "Communications Act") and with all
applicable rules, regulations and policies of the Federal Communications
Commission (the "FCC").
(w) The Issuer has provided to the Purchasers a complete and accurate
list of all licenses granted to the Issuer and its subsidiaries (other than
experimental licenses in the 31 GHz and 38 GHz portions of the radio spectrum
and licenses acquired from Local Area Telecommunications, Inc. that are not in
the 38 GHz portion of the radio spectrum) by the FCC (the "Licenses"). All of
the Licenses are currently valid and in full force and effect. Neither the
Issuer nor any of its subsidiaries have any knowledge of any investigation,
notice of apparent liability, violation, forfeiture or other order or complaint
issued by or before any court or regulatory body, including the FCC, or of any
other proceedings (other than proceedings relating to the wireless
communications industries generally) which could in any manner materially
threaten or adversely affect the validity or continued effectiveness of any of
the Licenses.
(x) No event has occurred which (i) results in, or after notice or
lapse of time or both would result in, revocation, suspension, adverse
modification, non-renewal, impairment, restriction or termination of, or order
of forfeiture with respect to, any License or (ii) materially and adversely
affects or could reasonably be expected in the future to materially adversely
affect any of the rights of the Issuer or any of its subsidiaries thereunder.
(y) The Issuer and its subsidiaries have duly filed in a timely manner
all material filings, reports, applications, documents, instruments and
information required to be filed by them under the Communications Act, and all
such filings are true, correct and complete in all material respects.
(z) Neither the Issuer nor any of its subsidiaries have any reason to
believe that any of the Licenses will not be renewed in the ordinary course.
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3. Purchase, Sale and Delivery of Offered Securities; Payment of
Underwriting Discount. On the basis of the representations, warranties and
agreements herein contained, but subject to the terms and conditions herein set
forth, the Issuer hereby agrees to sell to the Purchasers, and the Purchasers
hereby agree, severally and not jointly, to purchase from the Issuer, the
respective principal amounts of Offered Securities set forth opposite the names
of the Purchasers in Schedule A hereto, at an aggregate purchase price of $93,
914,797.81.
The Issuer hereby agrees to deliver against payment of the purchase
price the Offered Securities in the form of one or more permanent global
securities in definitive form (the "Global Securities") deposited with the
Trustee as custodian for The Depository Trust Company ("DTC") and registered in
the name of Cede & Co., as nominee for DTC. Interests in any permanent Global
Securities will be held only in book-entry form through DTC, except in limited
circumstances (which are described in the August Offering Document). Payment for
the Offered Securities shall be made by the Purchasers in Federal (same day)
funds by wire transfer to an account previously designated to CSFBC by the
Issuer at a bank acceptable to CSFBC, at the office of Cravath, Swaine & Xxxxx,
Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, X.X. 00000-0000 at 10:00 A.M. (New
York time), on the date hereof (the "Closing Date"), against delivery to the
Trustee as custodian for DTC of the Global Securities representing all of the
Offered Securities.
4. Representations and Agreements by Purchasers; Resale by Purchasers.
(a) Each Purchaser severally represents and warrants to the Issuer that
it is an "accredited investor" within the meaning of Regulation D under the
Securities Act.
(b) Each Purchaser severally acknowledges that the Offered Securities
have not been registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
except in accordance with Regulation S or pursuant to an exemption from the
registration requirements of the Securities Act. Each Purchaser severally
represents and agrees that it has offered and sold the Offered Securities, and
will offer and sell the Offered Securities (i) as part of its distribution at
any time and (ii) otherwise until 40 days after the later of the com mencement
of the offering and the Closing Date, only in accordance with Rule 903 or Rule
144A under the Securities Act ("Rule 144A"). Accordingly, neither such Purchaser
nor its affiliates, nor any persons acting on its or their behalf, have engaged
or will engage in any directed selling efforts with respect to the Offered
Securities, and such Purchaser, its affiliates and all persons acting on its or
their behalf have complied and will comply with the offering restrictions
requirement of Regulation S. Each Purchaser severally agrees that, at or prior
to confirmation of sale of the Offered Securities, other than a sale pursuant to
Rule 144A, such Purchaser will have sent to each distributor, dealer or person
receiving a selling concession, fee or other remunera tion that purchases the
Offered Securities from it during the restricted period a confirmation or notice
to substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered or
sold within the United States or to, or for the account or benefit of,
U.S. persons (i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the date of the commencement
of the offering and the closing date,
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except in either case in accordance with Regulation S (or Rule 144A if
available) under the Securities Act."
Unless otherwise defined herein, terms used in this subsection (b) have the
meanings given to them by Regulation S.
(c) Each Purchaser severally agrees that it and each of its affiliates
has not entered and will not enter into any contractual arrangement with respect
to the dis tribution of the Offered Securities except for any such arrangements
with the other Purchaser or affiliates of the other Purchaser or with the prior
written consent of the Issuer.
(d) Each Purchaser severally agrees that it and each of its affiliates
has not offered or sold, and will not offer or sell, the Offered Securities in
the United States by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act,
including, but not limited to (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio, or (ii) any seminar or meeting whose attendees have
been invited by any general solicitation or general advertising. Each Purchaser
severally agrees, with respect to resales made in reliance on Rule 144A of any
of the Offered Securities, to deliver either with the confirmation of such
resale or otherwise prior to settlement of such resale a notice to the effect
that the resale of such Offered Securities has been made in reliance upon the
exemption from the registration requirements of the Securities Act provided by
Rule 144A.
(e) Each of the Purchasers severally represents and agrees that (i) it
has not offered or sold and prior to the date six months after the date of issue
of the Offered Securities will not offer or sell any Offered Securities to
persons in the United Kingdom except to persons whose ordinary activities
involve them in acquiring, hold ing, managing or disposing of investments (as
principal or agent) for the purposes of their businesses or otherwise in
circumstances which have not resulted and will not result in an offer to the
public in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995; (ii) it has complied and will comply with all
applicable provisions of the Financial Services Xxx 0000 with respect to
anything done by it in relation to the Offered Securities in, from or otherwise
involving the United Kingdom; and (iii) it has only issued or passed on and will
only issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Offered Securities to a person who is of a kind
described in Article 11(3) of the Financial Services Xxx 0000 (Investment
Advertisements) (Exemptions) Order 1996 or is a person to whom such document may
otherwise lawfully be issued or passed on.
(f) Each Purchaser agrees that promptly following the completion of its
initial resale of all the Offered Securities purchased by such Purchaser
pursuant to this Agreement, it will notify the Issuer in writing thereof.
5. Certain Agreements of the Issuer. The Issuer agrees with the
several Purchasers that:
(a) The Issuer will prepare and deliver to the Purchasers, as soon as
reasonably practicable after the date hereof, the Offering Document, which shall
be in a form substantially similar to the Confidential Offering Circular dated
August 8, 1997 of the
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Issuer and WEC-II (the "August Offering Document"), with such changes as are
necessary so that such document does not include material misstatements or
omissions. The Issuer will advise CSFBC promptly of any proposal to amend or
supplement the Offering Document and will not effect such amendment or
supplementation without CSFBC's consent (which consent shall not be unreasonably
withheld). If, at any time prior to the completion of the resale of the Offered
Securities by the Purchasers, any event occurs as a result of which the Offering
Document as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any such time to amend or
supplement the Offering Document to comply with any applicable law, the Issuer
promptly will notify CSFBC of such event and promptly will prepare, at its own
expense, an amendment or supplement which will correct such statement or
omission or effect such compliance. Neither CSFBC's consent to, nor the
Purchasers' delivery to offerees or investors of, any such amendment or
supplement shall constitute a waiver of any of the conditions set forth in
Section 6.
(b) The Issuer will furnish to CSFBC copies of the Offering Document
and all amendments and supplements to such document, in each case as soon as
available and in such quantities as CSFBC reasonably requests, and the Issuer
will furnish to CSFBC as soon as available three copies of the Offering Document
signed by a duly authorized officer of the Issuer, one of which will include the
independent accountants' reports therein manually signed by such independent
accountants. At any time when the Issuer is not subject to Section 13 or 15(d)
of the Exchange Act, such Issuer will promptly furnish or cause to be furnished
to CSFBC (and, upon request, to each of the other Purchasers) and, upon request
of holders and prospective purchasers of the Offered Securities, to such holders
and purchasers, copies of the information required to be delivered to holders
and prospective purchasers of the Offered Securities pursuant to Rule 144A(d)(4)
under the Securities Act (or any successor provision thereto) in order to permit
compliance with Rule 144A in connection with resales by such holders of the
Offered Securities. The Issuer will pay the expenses of printing and
distributing to the Purchasers all such documents.
(c) The Issuer will use its best efforts to arrange for the
qualification of the Offered Securities for sale and the determination of their
eligibility for investment under the laws of such jurisdictions in the United
States and Canada as CSFBC reason ably designates and will continue such
qualifications in effect so long as required for the resale of the Offered
Securities by the Purchasers; provided, however, that the Issuer will not be
required to qualify as a foreign corporation or to file a general consent to
service of process in any such state.
(d) During the period of five years after the Closing Date, the Issuer
will furnish to CSFBC and, upon request, to each of the other Purchasers, as
soon as practicable after the end of each fiscal year, a copy of the Issuer's
annual report to stockholders for such year; and the Issuer will furnish to
CSFBC and, upon request, to each of the other Purchasers (i) as soon as
available, a copy of each report and any definitive proxy statement of the
Issuer filed with the Commission under the Exchange Act or mailed to
stockholders and (ii) from time to time, such other publicly available
information concerning the Issuer as CSFBC may reasonably request.
10
(e) During the period of two years after the Closing Date, the Issuer
will, upon request, furnish to the Purchasers and any holder of Offered
Securities a copy of the restrictions on transfer applicable to the Offered
Securities.
(f) During the period of two years after the Closing Date, the Issuer
will not, and will not permit any of its affiliates (as defined in Rule 144
under the Securities Act) to, resell any of the Offered Securities that have
been reacquired by any of them.
(g) During the period of two years after the Closing Date, the Issuer
will not be or become, an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be registered under
Section 8 of the Investment Company Act, and the Issuer is not, or will not be
or become, a closed-end investment company required to be registered, but not
registered, under the Investment Company Act.
(h) The Issuer will pay all expenses incidental to the performance of
the Issuer's obligations under this Agreement and the Indenture, including (i)
the fees and expenses of the Trustee and its professional advisers; (ii) all
expenses in connection with the execution, issue, authentication, packaging and
initial delivery of the Offered Securities, the preparation and printing of this
Agreement, the Offered Securities, the Indenture, the Offering Document and
amendments and supplements thereto, and any other document relating to the
issuance, offer, sale and delivery of the Offered Securities; (iii) the cost of
qualifying the Offered Securities for trading in The Private Offerings, Resale
and Trading through Automated Linkages (PORTAL) market and any expenses
incidental thereto; (iv) the cost of any advertising approved by the Issuer in
connection with the issue of the Offered Securities; (v) any expenses (including
fees and disbursements of counsel) incurred in connection with qualification of
the Offered Securities for sale under the laws of such jurisdictions in the
United States and Canada as CSFBC designates and the printing of memoranda
relating thereto; (vi) any fees charged by investment rating agencies for the
rating of the Offered Securities; and (vii) all expenses incurred in
distributing the Offering Document (including any amendments and supplements
thereto) to the Purchasers. The Issuer will also pay or reimburse the Purchasers
for 50% of the reasonable fees and expenses of the Purchasers' counsel, Cravath,
Swaine & Xxxxx, incurred in connection with the transactions contemplated in
this Agreement.
(i) In connection with the offering, until CSFBC shall have notified
the Issuer and the other Purchasers of the completion of the resale of the
Offered Securities, neither the Issuer nor any of its affiliates has or will
(unless required by the terms of the indenture governing such Offered
Securities), either alone or with one or more other persons, bid for or purchase
for any account in which it or any of its affiliates has a beneficial interest
any Offered Securities or attempt to induce any person to purchase any Offered
Securities; and neither they nor any of their affiliates will make bids or
purchases for the purpose of creating actual, or apparent, active trading in, or
of raising the price of, the Offered Securities.
(j) The Issuer will not at any time offer, sell, contract to sell,
pledge or otherwise dispose of, directly or indirectly, any securities under
circumstances where such offer, sale, pledge, contract or disposition would
cause the exemption afforded by Section 4(2) of the Securities Act or the safe
harbor of Regulation S thereunder to cease to be applicable to the offer and
sale of the Offered Securities.
11
(k) The Issuer will cause each Offered Security to bear the legend set
forth in the form of Note attached as Exhibit 1 to the Rule 144A/ Regulation S
Appendix to the relevant Indenture until such legend shall no longer be
necessary or advisable because the Offered Securities are no longer subject to
the restrictions on transfer described therein.
6. Conditions of the Obligations of the Purchasers. The obligations of
the several Purchasers to purchase and pay for the Offered Securities will be
subject to performance by the Issuer of its obligations hereunder and to the
following additional conditions precedent:
(a) The Purchasers shall have received opinions, dated the Closing
Date, of (i) Xxxxxxxx Mollen & Xxxxxx, counsel for the Issuer, and (ii) Xxxxxxx
Xxxx & Xxxxxxxxx, counsel for the Issuer on FCC matters, in each case
substantially to the effect set forth in Annex I and Annex II, respectively.
(b) The Purchasers shall have received from Cravath, Swaine & Xxxxx,
counsel for the Purchasers (or, if such counsel shall fail to deliver such
opinion, other counsel reasonably acceptable to the Purchasers), such opinion or
opinions, dated the Closing Date, with respect to the incorporation of the
Issuer, the validity of the Offered Securities, the exemption from registration
for the offer and sale of the Offered Securities by the Issuer to the several
Purchasers and the resales by the several Purchasers as contemplated hereby and
other related matters as CSFBC may reasonably require, and the Issuer shall have
furnished to such counsel such documents as they reasonably request for the
purpose of enabling them to pass upon such matters.
(c) The Purchasers shall have received a certificate, dated the Closing
Date, of the Chief Executive Officer or any Vice President and the Treasurer or
a principal financial or accounting officer of the Issuer in which such
officers, to the best of their knowledge after reasonable investigation, shall
state that the Issuer has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied here under at or prior to
the Closing Date.
The Issuer will furnish the Purchasers with such conformed copies of
such opinions, certificates, letters and documents as the Purchasers reasonably
request. CSFBC may in its sole discretion waive on behalf of the Purchasers
compliance with any conditions to the obligations of the Purchasers hereunder,
whether in respect of the Closing Date or otherwise.
7. Indemnification and Contribution. (a) The Issuer will indemnify and
hold harmless each Purchaser against any losses, claims, damages or liabilities,
joint or several, to which such Purchaser may become subject, under the
Securities Act or the Exchange Act or otherwise, insofar as such losses, claims,
damages or liabilities (or actions in respect thereof) arise out of or are based
upon any breach of any of the representations and warranties of the Issuer
contained herein or any untrue statement or alleged untrue statement of any
material fact contained in the Offering Document, or any amendment or supplement
thereto, or arise out of or are based upon the omission or alleged omission to
state therein a material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made, not misleading,
and will reimburse each Purchaser for any legal or other expenses reason ably
incurred by such Purchaser in connection with investigating or defending any
such
12
loss, claim, damage, liability or action as such expenses are incurred;
provided, how ever, that the Issuer will not be liable in any such case to the
extent that any such loss, claim, damage or liability arises out of or is based
upon an untrue statement or alleged untrue statement in or omission or alleged
omission from any of such documents in reliance upon and in conformity with
written information furnished to the Issuer by any Purchaser through CSFBC
specifically for use therein.
(b) Each Purchaser will severally and not jointly indemnify and hold
harmless the Issuer against any losses, claims, damages or liabilities to which
the Issuer may become subject, under the Securities Act or the Exchange Act or
otherwise, insofar as such losses, claims, damages or liabilities (or actions in
respect thereof) arise out of or are based upon any untrue statement or alleged
untrue statement of any material fact contained in the Offering Document, or any
amendment or supplement thereto, or arise out of or are based upon the omission
or the alleged omission to state therein a material fact necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading, in each case to the extent, but only to the extent,
that such untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with written information
furnished to the Issuer by such Purchaser through CSFBC specifically for use
therein, and will reimburse any legal or other expenses reasonably incurred by
the Issuer in connection with investigating or defending any such loss, claim,
damage, liability or action as such expenses are incurred.
(c) Promptly after receipt by an indemnified party under this Section
of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to partici xxxx 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 satis factory
to such indemnified party (who shall not, except with the consent of the indem
nified 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 uncondi tional release of such indemnified party from all liability
on any claims that are the subject matter of such action.
(d) If the indemnification provided for in this Section is unavailable
or insuf ficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indem nified party as a result of the losses, claims, damages or
liabilities referred to in sub section (a) or (b) above (i) in such proportion
as is appropriate to reflect the relative benefits received by the Issuer on the
one hand and the Purchasers on the other from the offering of the Offered
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Issuer on the one hand and the Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Issuer on the one hand and
the Purchasers on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses but after
deducting the Purchasers' discounts and commissions) received by the Issuer bear
to the total discounts and commissions received by the Purchasers from the
Issuer under this Agreement. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Issuer or the Purchasers and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
party as a result of the losses, claims, damages or liabilities referred to in
the first sentence of this subsection (d) shall be deemed to include any legal
or other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price at which the Offered Securities purchased by it were
resold exceeds the amount of any damages which such Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. The Purchasers' obligations in this subsection (d) to
contribute are several in proportion to their respective purchase obligations
and not joint.
(e) The obligations of the Issuer under this Section shall be in
addition to any liability which the Issuer may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Purchaser within the meaning of the Securities Act or the Exchange Act; and the
obligations of the Purchasers under this Section shall be in addition to any
liability which the respective Purchasers may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Issuer within the meaning of the Securities Act or the Exchange Act.
8. Certain Other Post-Closing Obligations of the Issuer and the
Guarantor. (a) Upon delivery of the Offering Document to the Purchasers as
provided in Section 5(a), the Issuer shall cause the following additional
documents to be delivered to the Purchasers:
(i) a letter, dated the date of the Offering Document, of
Xxxxx Xxxxxxxx LLP, in form substantially similar to the letter
delivered to the Purchasers by such firm in connection with the
transactions contemplated by the August Offering Document, with such
changes as are appropriate.
(ii) a letter from Xxxxxxxx Mollen & Xxxxxx, counsel for the
Issuer, stating that such counsel have no reason to believe that the
Offering Document, as of such date, contained any untrue statement of a
material fact or omitted to
13
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, in form substantially similar to the
letter delivered to the Purchasers by such counsel in connection with
the transactions contemplated by the August Offering Document, with
such changes as are appropriate; it being understood that such counsel
need express no opinion as to the financial statements or other
financial data contained in the Offering Document.
(b) In connection with the delivery of the Offering Document to the
Purchasers, the Issuer and the Purchasers shall execute a letter setting forth
all information furnished to the Issuer by the Purchasers through CSFBC
specifically for use therein, which information shall be substantially identical
to such information provided in connection with the August Offering Document.
9. Survival of Certain Representations and Obligations. The respective
indem nities, agreements, representations, warranties and other statements of
the Issuer or their officers and of the several Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Purchaser, the Issuer or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Purchasers will be mailed, delivered or electronically transmitted
and confirmed to the Purchasers, c/o Credit Suisse First Boston Corporation,
Eleven Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000, Attention: Investment Banking
Department--Transactions Advisory Group, or, if sent to the Issuer will be
mailed, delivered or electronically transmitted and confirmed to 000 Xxxx
Xxxxxx, Xxx Xxxx, XX 00000, facsimile no. (000) 000-0000, Attention: Xxxxxxx
Xxxxxx; provided, however, that any notice to a Purchaser pursuant to Section 7
will be mailed, delivered or electronically transmitted and confirmed to such
Purchaser.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 7, and no other person will have any
right or obligation here under, except that holders of Offered Securities shall
be entitled to enforce the agree ments for their benefit contained in the second
and third sentences of Section 5(b) hereof against the Issuer as if such holders
were parties thereto.
12. Counterparts. This Agreement may be executed in any number of
counter parts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the law of the State of New York without regard to
principles of conflicts of laws.
The Issuer hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
14
If the foregoing is in accordance with the Purchasers' understanding of
our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement among the Issuer and the several
Purchasers in accordance with its terms.
Very truly yours,
WinStar Communications, Inc.
By:
------------------------------
Name:
Title:
The foregoing Purchase Agreement is hereby confirmed and accepted as of the date
first above written.
Credit Suisse First Boston Corporation
BT Xxxx Xxxxx Incorporated
By Credit Suisse First Boston Corporation
By:
-----------------------------
Name:
Title:
SCHEDULE A
Principal Amount
of Offered
Purchaser Securities
Credit Suisse First Boston $60,000,000
Corporation
BT Xxxx Xxxxx 40,000,000
Incorporated
--------------
$100,000,000
==============
A-1
