WINSTAR COMMUNICATIONS, INC.
$325,000,000 12-1/2% Senior Notes Due 2008
$168,300,000 12-3/4% Senior Notes Due 2010
PURCHASE AGREEMENT
March 27, 2000
CREDIT SUISSE FIRST BOSTON CORPORATION
XXXXXXX XXXXX XXXXXX INC.
BNY CAPITAL MARKETS, INC.
CIBC WORLD MARKETS CORP.
As Representatives of the several Purchasers
c/o Credit Suisse First Boston Corporation,
Xxxxxx Xxxxxxx Xxxxxx
Xxx Xxxx, X.X. 10010
Ladies and Gentlemen:
1. Introductory. Winstar Communications, Inc., a Delaware corporation (the
"Issuer" or "Winstar"), has agreed, subject to the terms and conditions stated
herein, to issue and sell to the several initial purchasers named in Schedule A
hereto (the "Purchasers") $325,000,000 principal amount of the Issuer's 12-1/2%
Senior Notes due 2008 (the "2008 Senior Notes") and $168,300,000 principal
amount of the Issuer's 12- 3/4% Senior Notes Due 2010 (the "2010 Senior Notes")
and, together with the 2008 Senior Notes, the "Offered Securities"). Each of the
2008 Senior Notes, the 2010 Senior Notes and the Senior Discount Notes (as
defined herein) will be issued under a separate indenture, each dated as of
April 10, 2000 (each, an "Indenture" and together, the "Indentures") between the
Issuer and United States Trust Company of New York, as Trustee (the "Trustee").
The United States Securities Act of 1933 is herein referred to as the
"Securities Act."
The Issuer has made a tender offer (the "Tender Offer") to purchase for
cash any and all of (i) its outstanding 14% Senior Discount Notes Due 2005 (the
"14% Notes") and 14-1/2% Senior Deferred Interest Notes Due 2005 (the "14-1/2%
Notes"), (ii) the outstanding 12-1/2% Guaranteed Senior Secured Notes Due 2004
(the "WEC Notes") of Winstar Equipment Corp., a Delaware corporation ("WEC"),
and (iii) the outstanding 12-1/2% Guaranteed Senior Secured Notes Due 2004 (the
"WEC II Notes" and, together with the 14% Notes, the 14-1/2% Notes and the WEC
Notes, the "Existing Senior Notes") of Winstar Equipment II Corp., a Delaware
corporation ("WEC II"), on the terms and subject to the conditions set forth in
the Offer to Purchase and Consent Solicitation Statement dated March 3, 2000
(the "Tender Offer Statement"). The Issuer will amend (the "Issuer Proposed
Senior Notes Amendments") certain provisions of the indenture governing the 14%
Notes dated October 23, 1995 (the "14% Notes Indenture") between the Issuer and
United States Trust Company of New York, as trustee ("U.S. Trust"), and the
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indenture governing the 14-1/2% Notes dated March 1, 1997 (the "14-1/2% Notes
Indenture") between the Issuer and U.S. Trust. The Issuer and WEC will amend
(the "WEC Proposed Amendments") certain provisions of the indenture governing
the WEC Notes dated March 1, 1997 (the "WEC Notes Indenture") among the Issuer,
WEC and U.S. Trust. The Issuer and WEC II will amend (the "WEC II Proposed
Amendments" and, together with the Issuer Proposed Senior Notes Amendments and
the WEC Proposed Amendments, the "Proposed Senior Notes Amendments") the
indenture governing the WEC II Notes dated August 1, 1997 (the "WEC II Notes
Indenture" and, together with the 14% Notes Indenture, the 14-1/2% Notes
Indenture and the WEC Notes Indenture, the "Senior Notes Indentures") among the
Issuer, WEC II and U.S. Trust. The Proposed Senior Notes Amendments are
contained in supplements to the Indentures executed by the Issuer and U.S.
Trust; the Issuer, WEC and U.S. Trust; and the Issuer, WEC II and U.S. Trust, as
the case may be (the "Senior Notes Supplemental Indentures"). The Senior Notes
Supplemental Indentures were executed on March 17, 2000, and the Proposed Senior
Notes Amendments will become operative when the Existing Senior Notes are
accepted for purchase by the Issuer pursuant to the Tender Offer (the first date
on which such event occurs being herein referred to as the "Settlement Date").
The Issuer has made an offer (the "Exchange Offer") to exchange (i) 2010
Senior Notes or the Issuer's 14-3/4% Senior Discount Notes due 2010 (the "Senior
Discount Notes"), 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 Senior Subordinated Notes"), held by qualified
institutional buyers and institutional accredited investors under the Securities
Act that can make the investment representations set forth in the consent and
letter of transmittal (the "Qualified Offeree Transmittal Letter") circulated in
connection with the Exchange Offer ("Qualified Offerees"), on the terms and
subject to the conditions set forth in the Confidential Offering Circular and
Consent Solicitation Statement dated March 3, 2000, as supplemented March 17,
2000, March 21, 2000, March 22, 2000 and March 27, 2000 (the "Exchange Offer
Circular"). All 2010 Senior Notes and Senior Discount Notes to be issued in
connection with the Exchange Offer and all 2010 Senior Notes and Senior Discount
Notes to be issued to Specified Holders (and their transferees) in exchange for
Exchange Debentures (whether pursuant to the Preferred Stock Transaction
Agreements or otherwise) are referred to herein as the "Additional Notes". In
connection with the Exchange Offer, the Issuer will amend (the "Proposed Senior
Subordinated Notes Amendments") certain provisions of (i) the indenture
governing the 10% Notes dated as of March 15, 1998 (the "10% Notes Indenture")
between the Issuer and U.S. Trust, (ii) the indenture governing the 15% Notes
dated as of October 1, 1997 (the "15% Notes Indenture") between the Company and
U.S. Trust 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 Senior Subordinated Notes Indentures")
between the Company and U.S. Trust. The Proposed Senior Subordinated Notes
Amendments are contained in supplements to each of the Existing Senior
Subordinated Notes Indentures between the Company and U.S. Trust (the "Senior
Subordinated Notes Supplemental Indentures" and, together with the Senior Notes
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Supplemental Indentures, the "Supplemental Indentures"). The Senior Subordinated
Notes Supplemental Indentures were executed prior to the date hereof, and the
Proposed Senior Subordinated Notes Amendments will become operative when the
Existing Subordinated Notes are accepted for exchange by the Company pursuant to
the Exchange Offer on the Settlement Date.
The Issuer has entered into agreements (the "Preferred Stock Transaction
Agreements") 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 Issuer (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 Issuer'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 (the "Exchange Debentures Indenture") that
will govern the Exchange Debentures will be eliminated and (D) the Company's
agreement to exchange all of the Exchange Debentures held by the Specified
Holders for 2010 Senior Notes and Senior Discount Notes on June 16, 2000 and the
Holders' agreement to participate in such exchange.
The Tender Offer, the Exchange Offer, the transactions (the "Preferred
Stock Transaction") contemplated by the Preferred Stock Transaction Agreements
and the transactions contemplated by this Agreement are referred to herein
collectively as the "Refinancing".
The Issuer hereby agrees with the several Purchasers as follows:
2. Representations and Warranties of the Issuer. The Issuer represents and
warrants to, and agrees with, the several Purchasers that:
(a) A preliminary offering circular and an offering circular relating to
the Offered Securities to be offered by the Purchasers have been prepared by the
Issuer. Such preliminary offering circular and offering circular, as both are
supplemented as of the date of this Agreement, together with any other document
approved by the Issuer for use in connection with the contemplated resale of the
Offered Securities are hereinafter collectively referred to as the "Offering
Document." On the date thereof, the Offering Document 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 Offering Document based upon written
information furnished to the Issuer by any Purchaser through Credit Suisse First
Boston Corporation ("CSFBC") specifically for use therein, it being understood
and agreed that the only such information is that described as such in Section
7(b). Winstar's Annual Report on Form 10-K most recently filed with the
Securities and Exchange Commission (the "Commission") and all subsequent reports
(collectively, the "Exchange Act Reports") which have been filed by Winstar with
the Commission or sent to stockholders pursuant to the Securities Exchange Act
of 1934 (the "Exchange Act"), when they were filed with the Commission,
conformed in all material respects to the requirements of the Exchange Act and
the rules and regulations of the Commission thereunder.
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(b) The Issuer has been duly incorporated and is an existing corporation
in good standing under the laws of the State of Delaware, with corporate power
and authority to own its properties and conduct its business as described in the
Offering Document; and the Issuer is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its ownership
or lease of property or the conduct of its business requires such qualification,
except to the extent that the failure to be so qualified or be in good standing
would not have a material adverse effect on the condition (financial or other),
business, properties or results of operations of the Issuer and its
subsidiaries, taken as a whole (a "Material Adverse Effect"). The Issuer is
qualified to do business as a foreign corporation in the State of New York.
(c) Each Significant Subsidiary (as defined in Regulation S-X under the
Exchange Act) of the Issuer has been duly incorporated and is an existing
corporation in good standing under the laws of the jurisdiction of its
incorporation, with corporate power and authority to own its properties and
conduct its business as described in the Offering Document; and each subsidiary
of the Issuer is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its owner ship or lease of property
or the conduct of its business requires such qualification, except to the extent
that the failure to be so qualified or be in good standing would not have a
Material Adverse Effect; all of the issued and outstanding capital stock of each
subsidiary of the Issuer has been duly authorized and validly issued and is
fully paid and nonassessable; and the capital stock of each subsidiary owned by
the Issuer, directly or through subsidiaries, is owned free from liens,
encumbrances and defects.
(d) Each of the Indentures and the Registration Rights Agreement (as
defined below) has been duly authorized; the Offered Securities and the
Additional Notes 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) and the Additional Notes are delivered in exchange for existing
Senior Subordinated Notes in the Exchange Offer or in exchange for Exchange
Debentures, the Indentures and the Registration Rights Agreement (as defined
below) will have been duly executed and delivered, such Offered Securities and
Additional Notes will have been duly executed, authenticated, issued and
delivered and will conform, in all material respects, to the description thereof
contained in the Offering Document and the Indentures, the Registration Rights
Agreement and such Offered Securities and Additional Notes will constitute valid
and legally binding obligations of the Issuer, enforceable in accordance with
their terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability relating to
or affecting creditors' rights and to general equity principles; and, with
respect to the Registration Rights Agreement, except that rights to indemnity
and contribution may be limited by federal and state securities laws and public
policy considerations.
(e) Except as contemplated by this Agreement or as disclosed in the
Offering Document, there are no contracts, agreements or understandings between
the Issuer and any person that would give rise to a valid claim against the
Issuer or any Purchaser for a brokerage commission, finder's fee or other like
payment in connection with the transactions contemplated by this Agreement.
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(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 Tender Offer, the Exchange Offer, the Preferred Stock Transaction or the
transactions contemplated by this Agreement in connection with the issuance and
sale of the Offered Securities by the Issuer, other than as may be required
under the Securities Act and the Rules and Regulations of the Commission
thereunder with respect to the Registration Rights Agreement among the Issuer
and the Purchasers to be dated as of the Closing Date (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 Indentures, the
Registration Rights Agreement and this Agreement, the consummation of the Tender
Offer, the Exchange Offer, and the Preferred Stock Transaction, and the issuance
and sale of the Offered Securities and the Additional Notes 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
consummate the Refinancing, including, without limitation, to authorize, issue
and sell the Offered Securities to be sold by the Issuer as contemplated by this
Agreement and the Additional Notes as contemplated by the Exchange Offer
Circular and the Preferred Stock Transaction.
(h) This Agreement has been duly authorized, executed and delivered by the
Issuer.
(i) Except as disclosed in the Offering Document, and except for liens
granted under the Issuer's accounts receivable securitization facility, the
Issuer and its subsidiaries have good and marketable title to all real
properties and all other properties and assets owned by them, in each case free
from liens, encumbrances and defects that would materially affect the value
thereof or materially interfere with the use made or to be made thereof by them;
and, except as disclosed in the Offering Document, the Issuer and its
subsidiaries hold any leased real or personal property under valid and enforce
able 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.
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(k) No labor dispute with the employees of the Issuer or any of its
subsidiaries exists or, to the knowledge of the Issuer, is imminent that could
reasonably be expected to have a Material Adverse Effect.
(l) The Issuer and its subsidiaries own, possess or can acquire on
reasonable terms, adequate trademarks, trade names and other rights to
inventions, know-how, patents, copyrights, confidential information and other
intellectual property (collectively, "intellectual property rights") necessary
to conduct the business as now operated by them, or used in the conduct of the
business as now operated by them, except to the extent that the failure to own
or possess or the inability to acquire such intellectual property rights would
not individually or in the aggregate have a Material Adverse Effect; and the
Issuer has not received any notice of infringement of or conflict with asserted
rights of others with respect to any intellectual property rights that, if
determined adversely to the Issuer or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect.
(m) Except as disclosed in the Offering Document, neither the Issuer nor
any of its subsidiaries is in violation of any statute, rule, regulation,
decision or order of any governmental agency or body or any court, domestic or
foreign, relating to the use, disposal or release of hazardous or toxic
substances or relating to the protection or restoration of the environment or
human exposure to hazardous or toxic substances (collectively, "environmental
laws"), owns or operates any real property contaminated with any substance that
is subject to any environmental laws, is liable for any off-site disposal or
contamination pursuant to any environmental laws, or is subject to any claim
relating to any environmental laws, which violation, contamination, liability or
claim would individually or in the aggregate have a Material Adverse Effect; and
the Issuer is not aware of any pending investigation which might lead to such a
claim.
(n) Except as disclosed in the Offering Document, there are no pending
actions, suits or proceedings against or affecting the Issuer, any of its
subsidiaries or any of their respective properties that, individually or in the
aggregate, could reason ably be expected to have a Material Adverse Effect, or
to materially and adversely affect the ability of the Issuer to perform its
obligations under any of the Indentures, the Registration Rights Agreement or
this Agreement, to consummate the Tender Offer, the Exchange Offer or the
Preferred Stock Transaction or which are otherwise material in the context of
the sale of the Offered Securities; and, to the Issuer's knowledge, no such
actions, suits or proceedings are threatened or contemplated.
(o) The financial statements included in the Offering Document present
fairly the financial position of the Issuer and its consolidated subsidiaries 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 in the Offering Document 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.
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(p) Except as disclosed in the Offering Document, since the date of the
latest audited financial statements included in the Offering Document, there has
been no material adverse change, nor any development or event involving a
prospective material adverse change, in the condition (financial or other),
business, properties or results of operations of the Issuer and its subsidiaries
taken as a whole (it being understood that a change in the price of the Issuer's
common stock or the continuation of operating losses consistent with the
Issuer's historical results shall be deemed not to be, in and of themselves,
such a material adverse change), and, except as disclosed in or contemplated by
the Offering Document, there has been no dividend or distribution of any kind
declared, paid or made by the Issuer on any class of its capital stock.
(q) The Issuer is not an open-end investment company, unit investment trust
or face-amount certificate company that is or is required to be registered under
Section 8 of the United States Investment Company Act of 1940 (the "Investment
Company Act"), nor is it a closed-end investment company required to be
registered, but not registered, thereunder; and the Issuer is not and, after
giving effect to the offering and sale of the Offered Securities, the
application of the proceeds thereof as described in the Offering Document and
the consummation of the Tender Offer, the Exchange Offer and the Preferred Stock
Transaction, 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.
(t) 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.
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(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 held as of March 1, 2000 by the Issuer and its subsidiaries
(other than experimental licenses in the 38 GHz portions of the radio spectrum
and licenses granted to the Issuer or its subsidiaries or acquired from Local
Area Telecommunications, Inc. that are not in the 38 GHz portion of the radio
spectrum 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 Issuer nor any of its
subsidiaries has any knowledge of any investigation, notice of apparent
liability, violation, forfeiture or other order or complaint issued by or before
any court or regulatory body, including the FCC, or of any other proceedings
(other than proceedings relating to the wireless communications industries
generally 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 Issuer 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 Issuer 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 Issuer
were in violation of the FCC's processing rules. The Issuer 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 Issuer
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 Issuer
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 Issuer's license in Ft.
Lauderdale, Florida. The Issuer 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 Issuer 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.
(x) Except as disclosed in the Offering Document, 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 Issuer or any of its
subsidiaries thereunder.
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(y) The Issuer and its subsidiaries have duly filed in a timely manner all
material filings, reports, applications, documents, instruments and information
required to be filed by them under the Communications Act, and all such filings
are true, correct and complete in all material respects.
(z) Neither the Issuer nor any of its subsidiaries has any reason to
believe that any of the Licenses will not be renewed in the ordinary course.
(aa) Each of the Supplemental Indentures has been duly authorized; and when
the Existing Senior Notes and the Existing Senior Subordinated Notes have been
delivered to the Issuer, WEC and WEC II, as the case may be, and paid for
pursuant to the Tender Offer and the Exchange Offer, respectively, on the
Settlement Date, the Supplemental Indentures will have been duly executed and
delivered.
(bb) Each of the Tender Offer Statement and the Exchange Offer Circular (as
amended or supplemented as of the date hereof) 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 pricing supplement contemplated by the
Exchange Offer Circular will not 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.
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 97.25%
of the principal amount thereof, plus accrued interest from April 10, 2000 to
the Closing Date, in respect of the 2008 Senior Notes, and 97.25% of the
principal amount thereof, plus accrued interest from April 10, 2000 to the
Closing Date, in respect of the 2010 Senior Notes.
The Issuer hereby agrees to deliver against payment of the purchase price
the Offered Securities of each series in the form of one or more permanent
global securities in definitive form (the "Global Securities") deposited with
the Trustee as custodian for The Depository Trust Company ("DTC") and registered
in the name of Cede & Co., as nominee for DTC. Interests in any permanent Global
Securities will be held only in book-entry form through DTC, except in limited
circumstances (which are described in the Offering Document). Payment for the
Offered Securities shall be made by the Purchasers in Federal (same day) funds
by wire transfer to an account previously desig nated to CSFBC by the Issuer at
a bank acceptable to CSFBC, at the office of Cravath, Swaine & Xxxxx, Worldwide
Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, X.X. 10019-7475 at 10:00 A.M. (New York
time), on April 10, 2000, or at such other time not later than seven full
business days thereafter as CSFBC and the Issuer determine, such time being
herein referred to as the "Closing Date", against delivery to the Trustee as
custodian for DTC of the Global Securities representing all of the Offered
Securities. The Global Securities will be made available for examination at the
offices of Cravath, Swaine & Xxxxx at least 24 hours prior to the Closing Date.
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4. Representations and Agreements by Purchasers; Resale by Purchasers.
(a) Each Purchaser severally represents and warrants to the Issuer that it
is an "accredited investor" within the meaning of Regulation D under the
Securities Act.
(b) Each Purchaser severally acknowledges that the Offered Securities have
not been registered under the Securities Act and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
except in accordance with Regulation S or pursuant to an exemption from the
registration requirements of the Securities Act. Each Purchaser severally
represents and agrees that it has offered and sold the Offered Securities, and
will offer and sell the Offered Securities only in 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 remuneration that purchases the
Offered Securities from it during the restricted period a confirmation or notice
to substantially the following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered or
sold within the United States or to, or for the account or benefit of, U.S.
persons (i) as part of their distribution at any time or (ii) otherwise
until 40 days after the later of the date of the commencement of the
offering and the closing date, except in either case in accordance with
Regulation S (or Rule 144A if available) under the Securities Act."
Unless otherwise defined herein, terms used in this subsection (b) have the
meanings given to them by Regulation S.
(c) Each Purchaser severally agrees that it and each of its affiliates has
not entered and will not enter into any contractual arrangement with respect to
the dis tribution of the Offered Securities except for any such arrangements
with the other Purchasers or affiliates of the other Purchasers or with the
prior written consent of the Issuer.
(d) Each Purchaser severally agrees that it and each of its affiliates has
not offered or sold, and will not offer or sell, the Offered Securities in the
United States by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act,
including, but not limited to (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar media or broadcast
over television or radio, or (ii) any seminar or meeting whose attendees have
been invited by any general solicitation or general advertising. Each Purchaser
severally agrees, with respect to resales made in reliance on Rule 144A of any
of the Offered Securities, to deliver either with the confirmation of such
11
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 Act 1986 with respect to anything done by it in relation to
the Offered Securities in, from or otherwise involving the United Kingdom; and
(iii) it has only issued or passed on and will only issue or pass on in the
United Kingdom any document received by it in connection with the issue of the
Offered Securities to a person who is of a kind described in Article 11(3) of
the Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
1996 or is a person to whom such document may otherwise lawfully be issued or
passed on.
(f) Each Purchaser agrees that promptly following the completion of its
initial resale of all the Offered Securities purchased by such Purchaser
pursuant to this Agreement, it will notify CSFBC thereof and CSFBC will promptly
notify the Issuer thereafter.
5. Certain Agreements of the Issuer. The Issuer agrees with the several
Purchasers that:
(a) The Issuer will advise CSFBC promptly of any proposal to amend or
supplement the Offering Document and will not effect such amendment or
supplementation without CSFBC's consent (which consent shall not be unreasonably
withheld). If, at any time prior to the completion of the resale of the Offered
Securities by the Purchasers, any event occurs as a result of which the Offering
Document as then amended or supplemented would include an untrue statement of a
material fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, or if it is necessary at any such time to amend or
supplement the Offering Document to comply with any 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 the Purchasers 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 the Purchasers reasonably request,
and the Issuer will furnish to CSFBC on the Closing Date four copies of the
Offering Document signed by a duly authorized officer of the Issuer, one of
which will include the independent accountants' reports with respect to the
financial statements included therein manually signed by such independent
accountants. At any time when the Issuer is not subject to Section 13 or 15(d)
of the Exchange Act, the Issuer will promptly furnish or cause to be furnished
to CSFBC and, upon request, to each of the other Purchasers and, upon request of
12
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 jurisdiction.
(d) During the period of five years after the Closing Date, the Issuer will
furnish to CSFBC and, upon request, to each of the other Purchasers, as soon as
practicable after the end of each fiscal year, a copy of the Issuer's annual
report to stockholders for such year; and the Issuer will furnish to CSFBC and,
upon request, to each of the other Purchasers (i) as soon as available, a copy
of each report and any definitive proxy statement of the Issuer filed with the
Commission under the Exchange Act or mailed to stockholders and (ii) from time
to time, such other publicly available information concerning the Issuer as the
Purchasers may reasonably request.
(e) During the period of two years after the Closing Date, the Issuer will,
upon request, furnish to the Purchasers and any holder of Offered Securities a
copy of the restrictions on transfer applicable to the Offered Securities.
(f) During the period of two years after the Closing Date, the Issuer will
not, and will not permit any of its affiliates (as defined in Rule 144 under the
Securities Act) to, resell any of the Offered Securities that have been
reacquired by any of them.
(g) During the period of two years after the Closing Date, the Issuer will
not be or become, an open-end investment company, unit investment trust or
face-amount certificate company that is or is required to be registered under
Section 8 of the Investment Company Act, and the Issuer is not, or will not be
or become, a closed-end 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 its
obligations under this Agreement and the Indentures, including (i) the fees and
expenses of the Trustee and its professional advisers; (ii) all expenses in
connection with the execution, issue, authentication, packaging and initial
delivery of the Offered Securities, the preparation and printing of this
Agreement, the Offered Securities, the Indentures, 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
13
fees and disbursements of counsel) incurred in connection with qualification of
the Offered Securities for sale under the laws of such jurisdictions in the
United States and Canada as CSFBC designates and the printing of memoranda
relating thereto; (vi) any fees charged by investment rating agencies for the
rating of the Offered Securities; and (vii) all expenses incurred in
distributing the Offering Document (including any amendments and supplements
thereto) to the Purchasers. The Issuer will also pay or reimburse the Purchasers
(to the extent incurred by them) for all travel expenses of the Issuer's
officers and employees and any other expenses of the Issuer in connection with
attending or hosting meetings with prospective purchasers of the Offered
Securities from the Purchasers.
(i) In connection with the offering, until CSFBC shall have notified the
Issuer and the other Purchasers of the completion of the resale of the Offered
Securities, neither the Issuer nor any of its affiliates has or will (unless
required by the terms of the indenture governing such Offered Securities),
either alone or with one or more other persons, bid for or purchase for any
account in which it or any of its affiliates has a beneficial interest any
Offered Securities or attempt to induce any person to purchase any Offered
Securities; and neither they nor any of their affiliates will make bids or
purchases for the purpose of creating actual, or apparent, active trading in, or
of raising the price of, the Offered Securities.
(j) The Issuer will not at any time offer, sell, contract to sell, pledge
or otherwise dispose of, directly or indirectly, any securities under
circumstances where such offer, sale, pledge, contract or disposition would
cause the exemption afforded by Section 4(2) of the Securities Act or the safe
harbor of Regulation S thereunder to cease to be applicable to the offer and
sale of the Offered Securities.
(k) The Issuer will cause each Offered Security to bear the legend set
forth in the form of Note attached as Exhibit 1 to the Rule 144A/ Regulation S
Appendix to the applicable Indenture until such legend shall no longer be
necessary or advisable because the Offered Securities are no longer subject to
the restrictions on transfer described therein.
(l) The Issuer will cause the final offering circular to be delivered to
each participant in the Exchange Offer.
6. Conditions of the Obligations of the Purchasers. The obligations of the
several Purchasers to purchase and pay for the Offered Securities will be
subject to the accuracy of the representations and warranties on the part of the
Issuer herein, to the accuracy of the certificates of officers of the Issuer
delivered pursuant to the provisions hereof, to the performance by the Issuer of
its obligations hereunder and to the following additional conditions precedent:
(a) The Purchasers shall have received a letter, dated the date of this
Agreement of Xxxxx Xxxxxxxx LLP, in agreed form, confirming that they are
independent public accountants within the meaning of the Securities Act and the
applicable published rules and regulations thereunder ("Rules and Regulations")
and stating to the effect that:
(i) in their opinion the financial statements examined by them and
included in the Offering Document comply as to form in all material
respects with the applicable accounting requirements of the Securities Act
and the related published Rules and Regulations;
14
(ii) on the basis of a reading of the latest available interim
financial statements of the Issuer, inquiries of certain officials of the
Issuer who have responsibility for financial and accounting matters and
other specified procedures, nothing came to their attention that caused
them to believe that:
(A) at March 20, 2000, there was any change in the capital stock
or paid-in capital, increase in long-term debt or any decreases in
consolidated net current assets or stockholders' equity of the Issuer
and its subsidiaries, on a consolidated basis as compared with amounts
shown on the December 31, 1999 audited consolidated balance sheet
included in the Offering Document; or
(B) for the period from January 1, 2000 to March 20, 2000, there
were any decreases, as compared with the corresponding period in the
preceding year, in consolidated operating revenues or any increases in
the total or per-share amounts of net loss; or
(C) the unaudited pro forma condensed consolidated financial
statements included in the Offering Document do not comply as to form
in all material respects with the applicable accounting requirements
of the Securities Act and the Rules and Regulations 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 the Offering Document discloses have occurred
or may occur or which are described in such letter; and
(iii) they have compared specified dollar amounts (or percentages
derived from such dollar amounts) and other financial information contained
in the Offering Document (in each case to the extent that such dollar
amounts, percentages and other financial information are derived from the
general accounting records of the Issuer and its subsidiaries subject to
the internal controls of the Issuer's accounting system or are derived
directly from such records by analysis or computation) with the results
obtained from inquiries, a reading of such general accounting records and
other procedures specified in such letter and have found such dollar
amounts, percentages and other financial information to be in agreement
with such results, except as otherwise specified in such letter.
(b) Subsequent to the execution and delivery of this Agreement, there shall
not have occurred (i) a change in U.S. or international financial, political or
economic conditions or currency exchange rates or exchange controls as would, in
the reasonable judgment of CSFBC, be likely to prejudice materially the success
of the proposed issue, sale or distribution of the Offered Securities, whether
in the primary market or in respect of dealings in the secondary market, or (ii)
(A) any change, or any development or event involving a prospective change, in
the condition (financial or other), business, properties or results of
15
operations of the Issuer and its subsidiaries taken as one enterprise which, in
the judgment of CSFBC, is material and adverse and makes it impractical or
inadvisable to proceed with completion of the offering or the sale of and
payment for the Offered Securities (it being understood that a change in the
price of the Issuer's common stock or the continuation of operating losses
consistent with the Issuer's historical results shall be deemed not to be, in
and of itself, a material adverse change); (B) any downgrading in the rating of
any debt securities of the Issuer by any "nationally recognized statistical
rating organization" (as defined for purposes of Rule 436(g) under the
Securities Act), or any public announcement that any such organization has under
surveillance or review its rating of any debt securities of the Issuer (other
than an announcement with positive implications of a possible upgrading, and no
implication of a possible downgrading, of such rating); (C) any 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 Issuer on any
exchange or in the over-the-counter market; (D) any banking moratorium declared
by U.S. Federal or New York authorities; or (E) any outbreak or escalation of
major hostilities in which the United States is involved, any declaration of war
by Congress or any other substantial national or international calamity or
emergency if, in the judgment of CSFBC, the effect of any such outbreak,
escalation, declaration, calamity or emergency makes it impractical or
inadvisable to proceed with completion of the offering or sale of and payment
for the Offered Securities.
(c) The Purchasers shall have received an opinion, dated the Closing Date,
of Graubard Xxxxxx & Xxxxxx, counsel for the Issuer, substantially to the effect
set forth in (i)-(ix) below, and of Xxxxxxx Xxxx & Xxxxxxxxx, regulatory counsel
for the Issuer, substantially to the effect set forth in (x)-(xvii) below:
(i) Issuer has been duly incorporated and is an existing corporation
in good standing under the laws of the State of Delaware, with corporate
power and authority to own its properties and conduct its business as
described in the Offering Document;
(ii) Each of the Indentures and the Registration Rights Agreement has
been duly authorized; the Offered Securities and the Additional Notes have
been duly authorized; and when the Offered Securities are delivered and
paid for pursuant to this Agreement on the Closing Date and the Additional
Notes are delivered in exchange for existing Senior Subordinated Notes in
the Exchange Offer or in exchange for Exchange Debentures, the Indentures
and the Registration Rights Agreement will have been duly executed and
delivered, such Offered Securities and Additional Notes will have been duly
executed, authenticated, issued and delivered and will conform, in all
material respects, to the description thereof contained in the Offering
Document and the Indentures, the Registration Rights Agreement and such
Offered Securities and Additional Notes will constitute valid and legally
binding obligations of the Issuer, enforceable in accordance with their
terms, subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity
principles; and, with respect to the Registration Rights Agreement, except
that rights to indemnity and contribution may be limited by federal and
state securities laws and public policy considerations;
16
(iii) The Issuer is not and, after giving effect to the offering and
sale of the Offered Securities and the application of the proceeds thereof
as described in the Offering Document and the consummation of the Tender
Offer, the Exchange Offer and the Preferred Stock Transaction, 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 Tender Offer, the Exchange Offer, the Preferred Stock
Transaction or the transactions contemplated by this Agreement in
connection with the issuance or sale of the Offered Securities by the
Issuer and the consummation of the transactions under the Registration
Rights Agreement, other than as may be required under the Securities Act
and the Rules and Regulations of the Commission thereunder with respect to
the Registration Rights Agreement and the transactions contemplated
thereunder and such as may be required by securities or blue sky laws of
the various states of the United States and of foreign jurisdictions in
connection with the offer and sale of the Offered Securities;
(v) The execution, delivery and performance of the Indentures, the
Registration Rights Agreement and this Agreement, the consummation of the
Tender Offer, the Exchange Offer and the Preferred Stock Transaction, and
the issuance and sale of the Offered Securities and the Additional Notes
and compliance with the terms and provisions thereof will not result in a
breach or violation of any of the terms and provisions of, or constitute a
default under, (A) any statute, rule or regulation or any order known to
such counsel of any governmental agency or body or any court having
jurisdiction over the Issuer or any subsidiary of the Issuer or any of its
properties, (B) any agreement or instrument listed as an exhibit to the
Issuer's Annual Report on Form 10-K most recently filed with the Commission
or listed as an exhibit to or filed with any subsequent reports filed by
the Issuer under the Exchange Act through the date of this Agreement, to
which the Issuer or any such subsidiary is a party or by which the Issuer
or any such subsidiary is bound or to which any of the properties of the
Issuer or any such subsidiary is subject, or (C) the charter or by-laws of
the Issuer or any such subsidiary, except, in the case of clause (A) or
(B), breaches, violations or defaults that individually or in the aggregate
would not have a Material Adverse Effect; and the Issuer has full power and
corporate authority to authorize, issue and sell the Offered Securities to
be sold by the Issuer as contemplated by this Agreement and the Additional
Notes as contemplated by the Exchange Offer Circular and the Preferred
Stock Transaction;
(vi) Such counsel have no reason to believe that the Offering
Document, or any amendment or supplement thereto, as of the date thereof or
as of the Closing Date, contained any untrue statement of a material fact
or omitted to state any material fact required to be stated therein or
necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading; it being understood that such
counsel need express no opinion as to the financial statements or other
financial data contained in or omitted from the Offering Document;
17
(vii) The descriptions in the Offering Document of statutes, legal and
governmental proceedings and contracts and other documents are accurate in
all material respects and fairly present the information purported to be
described therein;
(viii) This Agreement has been duly authorized, executed and delivered
by the Issuer;
(ix) Based upon the accuracy of the representations and warranties of
the Issuer set forth in Section 2(t) of this Agreement, of the Purchasers
in Section 4 hereof, of the Qualified Offerees in the Qualified Offeree
Transmittal Letter and of the Specified Holders in the Preferred Stock
Transaction Agreements, it is not necessary in connection with (i) the
offer, sale and delivery of the Offered Securities by the Issuer to the
several Purchasers pursuant to this Agreement, (ii) the resales of the
Offered Securities by the several Purchasers in the manner contemplated by
this Agreement, or (iii) the issuance of the Additional Notes in the
Exchange Offer or in exchange for Exchange Debentures held by the Specified
Holders, to register the Offered Securities or the Additional Notes under
the Securities Act, and it is not necessary to qualify the Indentures under
the Trust Indenture Act of 1939, as amended, other than in connection with
the Issuer's obligations under the Registration Rights Agreement;
(x) No prior or subsequent consent, approval, authorization or order
of the FCC is required to be obtained, and no prior or subsequent notice to
or filing with the FCC is required to be made, in connection with the
offering of Offered Securities;
(xi) To the best of such counsel's knowledge, the Issuer and its
subsidiaries are in compliance in all material respects with all material
terms and conditions of each License;
(xii) To the best of such counsel's knowledge, all of the Licenses are
currently valid and in full force and effect, and there is no
investigation, notice of apparent liability, violation, forfeiture or other
order of complaint issued by or before any court or regulatory body,
including the FCC, or of any other proceedings (other than proceedings
relating to the wireless communications industries generally 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;
(xiii) Such counsel is not aware of any event or instance in which the
Issuer was not in compliance with all applicable and material rules,
regulations and policies of the FCC pertaining to the Licenses;
(xiv) Such counsel is not aware of the occurrence of any event which
(i) results in, or after notice or lapse of time or both would result in,
revocation, suspension, 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
18
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 Issuer or any of its subsidiaries thereunder;
(xv) To the best of such counsel's knowledge, the Issuer and its
subsidiaries have duly filed in a timely manner all material filings,
reports, applications, documents, instruments and information required to
be filed by them under the Communications Act pertaining to the Licenses;
(xvi) Such counsel is not aware of any reason to believe that any of
the Licenses will not be renewed in the ordinary course; and
(xvii) 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 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 Issuer and its subsidiaries. As of the
date of such letter, and except as otherwise discussed in such letter, such
counsel is not aware of any official FCC action that may permit or is
likely to lead to the revocation, nonrenewal, modification, impairment,
restriction, or suspension of any License or any right or authority
thereunder in whole or in part.
(d) The Purchasers shall have received from Cravath, Swaine & Xxxxx,
counsel for the Purchasers, such opinion or opinions, dated the Closing Date,
with respect to the incorporation of the Issuer, the validity of the Offered
Securities, the Offering Document, the exemption from registration for the offer
and sale of the Offered Securities by the Issuer to the several Purchasers and
the resales by the several Purchasers as contemplated hereby and other related
matters as CSFBC may reasonably require, and the Issuer shall have furnished to
such counsel such documents as they reasonably request for the purpose of
enabling them to pass upon such matters.
(e) The Purchasers shall have received a certificate, dated the Closing
Date, of the Chief Executive Officer or any Vice President and a principal
financial or accounting officer of the Issuer in which such officers, to the
best of their knowledge after reasonable investigation, shall state that the
representations and warranties of the Issuer in this Agreement are true and
19
correct, that the Issuer has complied with all agreements and satisfied all
conditions on its part to be performed or satisfied hereunder at or prior to the
Closing Date, and that, subsequent to the dates of the most recent financial
statements in the Offering Document there has been no material adverse change,
nor any development or event involving a prospective material adverse change, in
the condition (financial or other), business, properties or results of
operations of the Issuer and its subsidiaries taken as a whole except as set
forth in or contemplated by the Offering Document or as described in such
certificate.
(f) The Purchasers shall have received a letter, dated the Closing Date, of
Xxxxx Xxxxxxxx LLP which meets the requirements of subsection (a) of this
Section 6, except that the specified date referred to in such subsection will be
a date not more than five days prior to the Closing Date for the purposes of
this subsection.
(g) Each of the Preferred Stock Transaction Agreements shall be in full
force and effect as of the Closing Date, and the Company and U.S. Trust shall
have entered into the supplemental indenture to the Exchange Debentures
Indenture contemplated by the Preferred Stock Transaction Agreements.
(h) The commitment letter between the Issuer and Credit Suisse First
Boston, New York branch, Citicorp North America, Inc., The Bank of New York and
CIBC, Inc. dated as of March 9, 2000 with respect to the proposed $1.0 billion
credit facility of the Issuer shall be in full force and effect as of the
Closing Date.
(i) Each of the Supplemental Indentures shall be in full force and effect
and the Proposed Senior Notes Amendments and the Proposed Senior Subordinated
Notes Amendments shall be effective.
(j) The respective minimum tender conditions of the Tender Offer and the
Exchange Offer (as set forth in the Tender Offer Statement and the Exchange
Offer Circular, respectively) shall have been satisfied, and the Issuer shall
consummate the Tender Offer and the Exchange Offer concurrent with the closing
of the offering of the Offered Securities.
(k) 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 the Refinancing, and no development in any pending litigation with
respect to the Refinancing shall have occurred by or before any agency, court or
other governmental body of any jurisdiction, except for such orders, denials, or
proceedings as would not have a Material Adverse Effect.
(l) The Registration Rights Agreement shall have been executed and shall be
in full force and effect.
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, its directors and officers and each person, if any, who
controls such Purchaser within the meaning of Section 15 of the Securities Act,
20
against any losses, claims, damages or liabilities, joint or several, to which
such Purchaser may become subject, under the Securities Act or the Exchange Act
or otherwise, insofar as such losses, claims, damages or liabilities (or actions
in respect thereof) arise out of or are based upon any breach of any of the
representations and warranties of the Issuer contained herein or any untrue
statement or alleged untrue statement of any material fact contained in the
Offering Document, or any amendment or supplement thereto, or any related
preliminary offering circular, or arise out of or are based upon the omission or
alleged omission to state therein a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they were
made, not misleading, and will reimburse each Purchaser for any legal or other
expenses reasonably incurred by each Purchaser in connection with investigating
or defending any such loss, claim, damage, liability or action as such expenses
are incurred; provided, however, that the Issuer will not be liable in any such
case to the extent that any such loss, claim, damage or liability arises out of
or is based upon an untrue statement or alleged untrue statement in or omission
or alleged omission from any of such documents in reliance upon and in
conformity with written information furnished to the Issuer by such Purchaser
through CSFBC specifically for use therein, it being understood and agreed that
the only such information consists of the information described as such in
subsection (b) below; provided further, however, that with respect to any untrue
statement or alleged untrue statement in or omission or alleged omission from
any preliminary offering circular, the indemnity agreement contained in this
subsection (a) shall not inure to the benefit of any Purchaser that sold the
Offered Securities concerned to the person asserting any such losses, claims,
damages or liabilities, to the extent that such sale was an initial resale by
such Purchaser and any such loss, claim, damage or liability of such Purchaser
results from the fact that there was not sent or given to such person, at or
prior to the written confirmation of the sale of such Offered Securities to such
person, a copy of the Offering Document if the Issuer had previously furnished
copies thereof to such Purchaser and such Offering Document corrected such
untrue statement or omission or alleged untrue statement or omission.
(b) Each Purchaser will severally and not jointly indemnify and hold
harmless the Issuer, its directors and officers and each person, if any, who
controls the Issuer within the meaning of Section 15 of the Securities Act,
against any losses, claims, damages or liabilities to which the Issuer may
become subject, under the Securities Act or the Exchange Act or otherwise,
insofar as such losses, claims, damages or liabilities (or actions in respect
thereof) arise out of or are based upon any untrue statement or alleged untrue
statement of any material fact contained in the Offering Document, or any
amendment or supplement thereto, or any related preliminary offering circular,
or arise out of or are based upon the omission or the alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Issuer by such
Purchaser specifically for use therein, and will reimburse any legal or other
expenses reasonably incurred by the Issuer in connection with investigating or
defending any such loss, claim, damage, liability or action as such expenses are
incurred, it being understood and agreed that the only such information
furnished by any Purchaser consists of the following information in the Offering
Document furnished on behalf of the Purchasers: under the caption "Plan of
Distribution," (i) the first sentence of the third paragraph thereunder, (ii)
the second sentence of the seventh paragraph thereunder and (iii) the fifth,
ninth and tenth paragraphs thereunder.
21
(c) Promptly after receipt by an indemnified party under this Section of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel reasonably satisfactory to
such indemnified party (who shall not, except with the consent of the
indemnified party (which consent shall not be unreasonably withheld), be counsel
to the indemnifying party), and after notice from the indemnifying party to such
indemnified party of its election so to assume the defense thereof, the
indemnifying party will not be liable to such indemnified party under this
Section for any legal or other expenses subsequently incurred by such
indemnified party in connection with the defense thereof other than reasonable
costs of investigation. No indemnifying party shall, without the prior written
consent of the indemnified party (which consent shall not be unreasonably
withheld), effect any settlement of any pending or threatened action in respect
of which any indemnified party is or could have been a party and indemnity could
have been sought hereunder by such indemnified party unless such settlement
includes an unconditional release of such indemnified party from all liability
on any claims that are the subject matter of such action and does not include a
statement as to or an admission of fault, culpability or failure to act by or on
behalf of any indemnified party.
(d) If the indemnification provided for in this Section is unavailable or
insufficient to hold harmless an indemnified party under subsection (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Issuer on the
one hand and the Purchasers on the other from the offering of the Offered
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Issuer on the one hand and the Purchasers on the other in
connection with the statements or omissions which resulted in such losses,
claims, damages or liabilities as well as any other relevant equitable
considerations. The relative benefits received by the Issuer on the one hand and
the Purchasers on the other shall be deemed to be in the same proportion as the
total net proceeds from the offering (before deducting expenses but after
deducting the Purchasers' discounts and commissions) received by the Issuer bear
to the total discounts and commissions received by the Purchasers from the
Issuer under this Agreement. The relative fault shall be determined by reference
to, among other things, whether the untrue or alleged untrue statement of a
material fact or the omission or alleged omission to state a material fact
relates to information supplied by the Issuer or the Purchasers and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such untrue statement or omission. The amount paid by an indemnified
22
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. Default of Purchasers. If any Purchaser or Purchasers default in their
obligations to purchase Offered Securities hereunder and the aggregate number of
shares of Offered Securities that such defaulting Purchaser or Purchasers agreed
but failed to purchase does not exceed 10% of the aggregate principal amount of
the Offered Securities, CSFBC may make arrangements satisfactory to the Issuer
for the purchase of such Offered Securities by other persons, including any of
the Purchasers, but if no such arrangements are made by the Closing Date, the
non-defaulting Purchasers shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Offered Securities that such
defaulting Purchasers agreed but failed to purchase. If any Purchaser or
Purchasers so default and the aggregate number of shares of Offered Securities
with respect to which such default or defaults occur exceeds 10% of the
aggregate principal amount of the Offered Securities and arrangements
satisfactory to CSFBC and the Issuer for the purchase of such Offered Securities
by other persons are not made within 36 hours after such default, this Agreement
will terminate without liability on the part of any non-defaulting Purchaser or
the Issuer, except as provided in Section 9. As used in this Agreement, the term
"Purchaser" includes any person substituted for a Purchaser under this Section.
Nothing herein will relieve a defaulting Purchaser from liability for its
default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Issuer or its officers and of the several Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Purchaser, the Issuer or any of its representatives, officers or
directors or any controlling person, and will survive delivery of and payment
for the Offered Securities. If for any reason the purchase of the Offered
Securities by the Purchasers is not consummated, the Issuer shall remain
responsible for the expenses to be paid or reimbursed by them pursuant to
Section 5 (other than with respect to a defaulting Purchaser) and the respective
obligations of the Issuer and the Purchasers pursuant to Section 7 shall remain
23
in effect. If the purchase of the Offered Securities by the Purchasers is not
consummated for any reason other than solely because of the termination of this
Agreement pursuant to Section 8 or solely because of the occurrence of any event
specified in clause (C), (D) or (E) of Section 6(b)(ii), the Issuer will
reimburse the Purchasers for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if sent
to the Purchasers will be mailed, delivered or telecopied and confirmed to the
Purchasers, c/o Credit Suisse First Boston Corporation, Xxxxxx Xxxxxxx Xxxxxx,
Xxx Xxxx, XX 00000 Attention: Transaction Advisory Group or, if sent to the
Issuer, will be mailed, delivered or electronically transmitted and confirmed to
it at 000 Xxxxx Xxxxxx, Xxxxxx- xxxxx Xxxxx, Xxx Xxxx, XX 00000, Attention:
Xxxxxxx Xxxxxx; provided, however, that any notice to a Purchaser pursuant to
Section 7 will be mailed, delivered or telecopied and confirmed to such
Purchaser.
11. Successors. This Agreement will inure to the benefit of and be binding
upon the parties hereto and their respective successors and the controlling
persons referred to in Section 7, and no other person will have any right or
obligation hereunder, except that holders of Offered Securities shall be
entitled to enforce the agreements for their benefit contained in the second and
third sentences of Section 5(b) hereof against the Issuer as if such holders
were parties thereto.
12. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
13. Applicable Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York without regard to principles
of conflicts of laws.
Each of the parties hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
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.
/s/ Xxxxxxx X. Xxxxxxxx
By ________________________________
Name: Xxxxxxx X. Xxxxxxxx
Title: Senior Vice President
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
CREDIT SUISSE FIRST BOSTON CORPORATION
/s/ Xxxxxx X. Xxxxxx
By ___________________________________
Name: Xxxxxx X. Xxxxxx
Title: Director
Acting on behalf of itself and as the
Representative of the several
Purchasers.
SCHEDULE A
Principal Amount Principal Amount
of 2008 Senior of 2010 Senior
Purchasers Notes Notes
---------- --------------------- -----------------
Credit Suisse First Boston Corporation............. $66,700,000 $34,500,000
Xxxxxxx Xxxxx Xxxxxx Inc........................... 66,700,000 34,500,000
BNY Capital Markets, Inc........................... 65,270,000 34,170,000
CIBC World Markets Corp............................ 48,030,000 24,430,000
ABN AMRO Incorporated.............................. 7,830,000 4,070,000
Barclays Capital Inc............................... 7,830,000 4,070,000
Credit Lyonnais Securities (USA) Inc............... 7,830,000 4,070,000
Dresdner Kleinwort Xxxxxx North
America LLC........................................ 7,830,000 4,070,000
FleetBoston Xxxxxxxxx Xxxxxxxx Inc................. 7,830,000 4,070,000
X.X. Xxxxxx Securities Inc......................... 7,830,000 4,070,000
RBC Dominion Securities Corporation................ 7,830,000 4,070,000
XX Xxxxx Securities Corporation.................... 7,830,000 4,070,000
Scotia Capital (USA) Inc........................... 7,830,000 4,070,000
TD Securities (USA) Inc............................ 7,830,000 4,070,000
--------- ---------
Total.............................................. $325,000,000 $168,300,000
============ =============
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