EXECUTION COPY
WINSTAR COMMUNICATIONS, INC.
Series C 14-1/4% Senior Cumulative Exchangeable Preferred Stock Due 2007
(Initial Liquidation Preference $1,000 Per Share)
PURCHASE AGREEMENT
December 17, 1997
Xxxxxxx Xxxxx Xxxxxx
Xxxxxxx Brothers Inc
Credit Suisse First Boston Corporation
c/o Salomon Brothers Inc
Seven World Trade Center
New York, N.Y. 10048
Ladies and Gentlemen:
1. Introductory. WinStar Communications, Inc., a Delaware corporation
(the "Issuer"), and WinStar Credit Corp., a Delaware corporation and a wholly
owned subsidiary of the Issuer ("WCC" and together with the Issuer, the
"Sellers"), have 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") 157,500 shares and 17,500 shares, respectively, of the Issuer's
Series C 14-1/4% Senior Cumulative Exchangeable Preferred Stock Due 2007
(initial liquidation preference $1,000 per share) (the "Exchangeable Preferred
Stock"). The Company may, at its option, on any Scheduled Dividend Payment Date
following the Specified Debt Satisfaction Date (as such terms are defined in the
Offering Document described below), exchange all but not less than all of the
Exchangeable Preferred Stock then outstanding for Senior Subordinated Deferred
Interest Notes Due 2007 (the "Exchange Debentures"), and each holder of
outstanding shares of Exchangeable Preferred Stock will be entitled to receive
$1.00 Accumulated Amount (as defined in the Offering Document) of Exchange
Debentures for each $1.00 Liquidation Preference (as defined in the Offering
Document) of Exchangeable Preferred Stock held by such holder at the time of
such exchange. The Exchangeable Preferred Stock and the Exchange Debentures
issuable upon the exchange of the Exchangeable Preferred Stock are collectively
herein referred to as the "Offered Securities". Holders of shares of the
Exchangeable Preferred Stock or Exchange Debentures will have the registration
rights set forth in the Registration Rights Agreement dated the date hereof
among the Company and the Purchasers. The United States Securities Act of 1933
is herein referred to as the "Securities Act." For purposes of this Agreement,
"Xxxxxxx Xxxxx Xxxxxx" shall mean Salomon Brothers Inc.
The Sellers hereby agree with the several Purchasers as follows:
2. Representations and Warranties of the Issuer. The Sellers represent
and warrant to, and agree with, the several Purchasers that:
(a) A preliminary offering circular and an offering circular relating
to the Offered Securities being purchased by the Purchasers have been prepared
by the Issuer for use by the Purchasers in connection with the resale of the
Offered Securities. Such preliminary offering circular and offering circular, as
supplemented as of the date of this Agreement, together with any other document
approved by the Issuer for use in connection with the contemplated resale of the
Offered Securities are hereinafter collectively referred to as the "Offering
Document." On the date of this Agreement, the Offering Document does not, and at
the Closing Date (as defined below) 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 sen tence does not apply to
statements in or omissions from the Offering Document based upon written
information furnished to the Issuer by any Purchaser through Xxxxxxx Xxxxx
Xxxxxx specifically for use therein, it being understood and agreed that the
only such information is that described as such in Section 7(b). 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 Commission
or sent to stockholders pursu ant to the Securities Exchange Act of 1934 (the
"Exchange Act"), when they were filed with the Commission, conformed in all
material respects to the requirements of the Exchange Act and the rules and
regulations of the Commission thereunder.
(b) The Issuer has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware, with
corporate power and authority to own its properties and conduct its business as
described in the Offering Document; and the Issuer is duly qualified to do
business as a foreign corporation in good standing in all other jurisdictions in
which its ownership or lease of property or the conduct of its business requires
such qualification, except to the extent that the failure to be so qualified or
be in good standing would not have a material adverse effect on the condition
(financial or other), business, properties or results of operations of the
Issuer and its subsidiaries, taken as a whole (a "Material Adverse Effect"). The
Issuer is qualified to do business as a foreign corporation in the State of New
York.
(c) Each subsidiary of the Issuer, including WCC, has been duly
incorporated and is an existing corporation in good standing under the laws of
the jurisdiction of its incorporation, with corporate power and authority to own
its properties and conduct its business as described in the Offering Document;
and each subsidiary of the Issuer is duly qualified to do business as a foreign
corporation in good standing in all other jurisdictions in which its ownership
or lease of property or the conduct of its business requires such qualification,
except to the extent that the failure to be so qualified or be in good standing
would not have a Material Adverse Effect; all of the issued and out standing
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 subsidi ary owned by the Issuer, directly or through subsidiaries, is owned
free from liens, encumbrances and defects.
(d) The Exchangeable Preferred Stock has been duly authorized by the
Issuer; and when the Exchangeable Preferred Stock has been delivered by the
Sellers and paid for pursuant to this Agreement on the Closing Date (as defined
below), such Exchangeable Preferred Stock will be validly issued, fully paid and
nonassessable and will conform, in all material respects, to the description
thereof contained in the Offering Document; and the issuance of the Offered
Securities is not subject to preemptive or other similar rights. Each of the
indenture between the Issuer and United States Trust Company of New York (in
such capacity, the "Trustee") that will
govern the Exchange Debentures (the "Indenture") and the Exchange Debentures has
been duly authorized; and when the Indenture has been duly executed and
delivered and the Exchange Debentures have been executed and authenticated in
accordance with the Indenture and delivered in exchange for the Exchangeable
Preferred Stock, the Exchange Debentures 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 the general equity principles; and the Exchange Debentures
conform, in all material respects, to the description thereof contained in the
Offering Document.
(e) The Registration Rights Agreement (as defined herein) has been duly
authorized, executed and delivered; Registration Rights Agreement constitutes a
valid and legally binding obligation of the Issuer, enforceable in accordance
with its 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
rights to indemnity and contribution may be limited by federal and state
securities laws and public policy considerations.
(f) Except as contemplated by this Agreement or as disclosed in the
Offering Document, there are no contracts, agreements or understandings between
the Sellers and any person that would give rise to a valid claim against the
Sellers or any Purchaser for a brokerage commission, finder's fee or other like
payment in connection with the transactions contemplated by this Agreement.
(g) No consent, approval, authorization, or order of, or filing with,
any governmental agency or body or any court is required for the consummation of
the transactions contemplated by this Agreement in connection with the issuance
and sale of the Offered Securities by the Sellers, other than as may be required
under the Securities Act and the Rules and Regulations of the Commission
thereunder with respect to the Registration Rights Agreement among the Issuer
and the Purchasers dated the date hereof (the "Registration Rights Agreement")
and the transactions contemplated thereunder, and such as may be required by
securities or blue sky laws of any state of the United States or of any foreign
jurisdiction in connection with the offer and sale of the Offered Securities.
(h) The execution, delivery and performance of 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
Sellers or any subsidiary of the Issuer or any of their properties, (ii) any
agreement or instrument to which the Sellers or any subsidiary of the Issuer is
a party or by which the Sellers or any subsidiary of the Issuer is bound or to
which any of the properties of the Sellers or any subsidiary of the Issuer is
subject, or (iii) the charters or by-laws of the Sellers or any subsidiary of
the Issuer, 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 and
WCC as contemplated by this Agreement.
(i) This Agreement has been duly authorized, executed and delivered by
the Sellers.
(j) Except as disclosed in the Offering Document, the Issuer and its
subsidi aries 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.
(k) 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 relat ing 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.
(l) 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.
(m) 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 (xxxxxx xxxxxx, "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 deter
mined adversely to the Issuer or any of its subsidiaries, would individually or
in the aggregate have a Material Adverse Effect.
(n) 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.
(o) 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 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.
(p) 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 account ing 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 state ment amounts.
(q) 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 either of the Issuer and its
subsidiaries taken as a whole (it being understood that the acquisition of
certain assets from US ONE Communications Corp., the acquisition from Telesoft
Corp. of its Internet services subsidiary and the execution of an agreement by
the Issuer to acquire substantially all the assets (the "MIDCOM Acquisition") of
MIDCOM Communications, Inc. ("MIDCOM") (or the termination of such agreement), 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 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.
(r) 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.
(s) 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.
(t) 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.
(u) 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.
(v) The Issuer is subject to Section 13 or 15(d) of the Exchange Act.
(w) 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 poli cies of the Federal Communications
Commission (the "FCC").
(x) 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.
(y) 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.
(z) The Issuer and its subsidiaries have duly filed in a timely manner
all mate rial 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.
(aa) 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.
3. Purchase, Sale and Delivery of Offered Securities; Payment of
Underwriting Discount. On the basis of the representations, warranties and
agreements herein con tained, but subject to the terms and conditions herein set
forth, the Sellers hereby agree to sell to the Purchasers, and the Purchasers
hereby agree, severally and not jointly, to purchase from the Sellers, the
number of shares of Exchangeable Preferred Stock set forth opposite the names of
the Purchasers in Schedule A hereto, at a purchase price of $962.50 per share
plus accrued dividends (if any) from December 22, 1997 to the Closing Date (as
hereinafter defined).
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 United
States Trust Company of New York (in such capacity, the "Transfer Agent") as
custodian for The Depository Trust Company ("DTC") and registered in the name of
Cede & Co., as nominee for DTC. Interests in any permanent Global Securities
will be held only in book-entry form through DTC, except in limited
circumstances (which are described in the Offering Document). Payment for the
Offered Securities shall be made by the Purchasers in Federal (same day) funds
by wire transfer to an account previously designated to Xxxxxxx Xxxxx Xxxxxx by
the Issuer at a bank acceptable to Xxxxxxx Xxxxx Xxxxxx, at the office of
Xxxxxxx, Swaine & Xxxxx, Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, X.X.
10019-7475 at 10:00 A.M. (New York time), on December 22, 1997 (the "Closing
Date"), against delivery to the Transfer Agent 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, except in either case in
accordance with Regulation S (or Rule 144A if avail able) 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 advertise ment, 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 Act 1986 with respect to
anything done by it in relation to the Offered Securities in, from or otherwise
involving the United Kingdom; and (iii) it has only issued or passed on and will
only issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Offered Securities to a person who is of a kind
described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1996
or is a person to whom such document may otherwise lawfully be issued or passed
on.
(f) Each Purchaser agrees that promptly following the completion of its
initial resale of all the Offered Securities purchased by such Purchaser
pursuant to this Agreement, it will notify the Issuer in writing thereof.
5. Certain Agreements of the Issuer. The Issuer agrees with the
several Purchasers that:
(a) The Issuer will advise Xxxxxxx Xxxxx Xxxxxx promptly of any
proposal to amend or supplement the Offering Document and will not effect such
amendment or supplementation without Xxxxxxx Xxxxx Xxxxxx'x 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 Xxxxxxx Xxxxx
Xxxxxx 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 Xxxxxxx Xxxxx Xxxxxx'x 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 Xxxxxxx Xxxxx Xxxxxx 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 Xxxxxxx Xxxxx Xxxxxx
reasonably requests, and the Issuer will furnish to Xxxxxxx Xxxxx Xxxxxx 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 indepen dent 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 Xxxxxxx Xxxxx Xxxxxx
(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 pro spective 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 docu ments.
(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 Xxxxxxx Xxxxx Xxxxxx reasonably designates and will
continue such qualifications in effect so long as required for the resale of the
Offered Securities by the Purchasers; provided, however, that the Issuer will
not be required to qualify as a foreign corporation or to file a general consent
to service of process in any such state.
(d) During the period of five years after the Closing Date, the Issuer
will furnish to Xxxxxxx Xxxxx Xxxxxx 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 Xxxxxxx Xxxxx Xxxxxx 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 Xxxxxxx Xxxxx Xxxxxx 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
the Issuer's obligations under this Agreement and the Indenture, including (i)
the fees and expenses of the Transfer Agent and the Trustee, (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; (ii) 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; (iii) the cost of any advertising approved by the Issuer in
connection with the issue of the Offered Securities; (iv) 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 Xxxxxxx Xxxxx Xxxxxx designates
and the printing of memoranda relating thereto; (v) any fees charged by
investment rating agencies for the rating of the Offered Securities; and (vi)
all expenses incurred in distributing the Offering Document (includ ing any
amendments and supplements thereto) to the Purchasers.
(i) In connection with the offering, until Xxxxxxx Xxxxx Xxxxxx 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 other wise 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 Exchangeable Preferred Stock attached as Exhibit A to the
Certificate of Designation relating to the Exchangeable Preferred Stock and as
Exhibit 1 to the Rule 144A/Regulation S Appendix to the 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) Graubard Xxxxxx & 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 Xxxxxxx Xxxxx Xxxxxx may reasonably require, and the
Issuer shall have furnished to such counsel such docu ments 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.
(d) The Company shall have filed with the Secretary of State of the
State of Delaware the Certificate of Designation for the Exchangeable Preferred
Stock.
(e) The Purchasers shall have received upon the execution of this
Agreement and at the Closing Date, letters from Xxxxx Xxxxxxxx LLP, dated
respectively as of the date hereof and as of the Closing Date, in form and
substance satisfactory to the Purchasers, confirming that they are independent
accountants within the meaning of the
Securities Act and the applicable published rules and regulations thereunder and
that they have performed a review of the unaudited condensed consolidated
balance sheet as of September 30, 1997, and unaudited condensed consolidated
statements of operations and cash flows of the Issuer for the nine-month periods
ended September 30, 1996 and 1997 in accordance with Statement on Auditing
Standards No. 71, and stating in effect that:
(i) in their opinion the audited financial statements included
in the Offering Document and reported on by them comply as to form in
all material respects with the applicable accounting requirements of
the Securities Act and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Issuer and its subsidiaries;
their limited review, in accor dance with standards established under
Statement on Auditing Standards No. 71, of the unaudited condensed
consolidated balance sheet as of September 30, 1997, and unaudited
condensed consolidated statements of operations and cash flows of the
Issuer for the nine-month period ended September 30, 1996 and 1997;
carrying out certain specified procedures (but not an examination in
accordance with generally accepted auditing standards) which would not
neces sarily reveal matters of significance with respect to the
comments set forth in such letter; a reading of the minutes of the
meetings of the stockholders, directors and executive, finance and
audit committees of the Issuer and its sub sidiaries; and inquiries of
certain officials of the Issuer who have responsibility for financial
and accounting matters of the Issuer and its subsidiaries as to trans
actions and events subsequent to September 30, 1997, nothing came to
their attention which caused them to believe that:
(1) any unaudited financial statements included in
the Offering Document do not comply as to form in all material
respects with appli cable accounting requirements of the
Securities Act and with the pub lished rules and regulations
of the Commission with respect to financial statements
included or incorporated in quarterly reports on Form 10-Q
under the Securities Exchange Act of 1934; or that any
material modifi cations should be made to such unaudited
financial statements for them to be in conformity with
generally accepted accounting principles applied on a basis
substantially consistent with that of the audited financial
state ments included or incorporated in the Offering Document;
and
(2) with respect to the period subsequent to
September 30, 1997, there were any changes, at a specified
date not more than five days prior to the date of the letter,
in the capital stock or paid-in capital, increase in long-term
debt, less current portion or any decreases in the
consolidated net current assets or stockholders' equity of the
Issuer and its subsidi aries as compared with the amounts
shown on the September 30, 1997, consolidated balance sheet
included in the Offering Document, or for the period from
October 1, 1997, to such specified date there were any
decreases, as compared with the corresponding period in the
previous year in consolidated operating revenues or increases
in total or per share amounts of net loss of the Issuer and
its subsidiaries except in all instances for changes or
decreases set forth in such letter, in which case
the letter shall be accompanied by an explanation by the
Issuer as to the significance thereof unless said explanation
is not deemed necessary by the Purchaser.
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical informa tion derived from the
general accounting records of the Issuer and its subsidi aries) set
forth in the Offering Document, including the information set forth
under the captions "Offering Circular Summary", "Risk Factors", "Use of
Proceeds", "Capitalization", "Selected Historical Financial Data",
"Management's Discussion and Analysis of Financial Condition and
Results of Operations" and "Business" in the Offering Document agrees
with the account ing records of the Company and its subsidiaries,
excluding any questions of legal interpretation; and
(iv) they have performed certain agreed-upon procedures on the
unaudited pro forma financial statements included in the Offering
Document (the "pro forma financial statements"); inquired of certain
officials of the Issuer who have responsibility for financial and
accounting matters; proven the arithmetic accuracy of the application
of the pro forma adjustments to the historical amounts in the pro forma
financial statements; and stated their findings.
References to the Offering Document in this paragraph (e) include any
supplement thereto at the date of the letter.
(f) Subsequent to the date hereof or, if earlier, the dates as of which
information is given in the Offering Document (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified in the
letter or letters referred to in paragraph (e) of this Section 6 or (ii) any
change, or any development involving a prospective change, in or affecting the
condition (financial or otherwise), earnings, business or properties of the
Issuer and its subsidiaries, taken as a whole, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Offering Document (exclusive of any supplement thereto) and
except for a termination of the asset purchase agreement relating to the MIDCOM
Acquisition, the effect of which, in any case referred to in clause (i) or (ii)
above, is, in the sole judgment of the Purchasers, so material and adverse as to
make it impractical or inadvisable to proceed with the offering or delivery of
the Offered Securities as contemplated by the Offering Document (exclusive of
any amendment thereof).
(g) The Issuer shall have issued a press release concerning the MIDCOM
Acquisition as soon as practicable on December 17, 1997, but in any case no
later than 5:00 p.m. EST on December 17, 1997; provided, however, that no such
press release need be issued if the Issuer determines by such time not to
proceed with the MIDCOM Acquisition.
(h) In the event the Issuer determines not to proceed with the MIDCOM
Acquisition, the Chief Executive Officer of the Issuer shall have conducted a
conference call no later than the Closing Date with the investors to whom the
Purchasers are initially reselling the Exchangeable Preferred Stock.
The Issuer will furnish the Purchasers with such conformed copies of
such opinions, certificates, letters and documents as the Purchasers reasonably
request. Xxxxxxx Xxxxx Xxxxxx 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 state ments
therein, in the light of the circumstances under which they were made, not mis
leading, and will reimburse each Purchaser for any legal or other expenses
reasonably incurred by such 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 any Purchaser through
Xxxxxxx Xxxxx Xxxxxx specifically for use therein, it being under stood and
agreed that the only such information consists of the information described as
such in subsection (b) below.
(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 Xxxxxxx Xxxxx Xxxxxx
specifically for use therein (it being understood and agreed that the only such
information consists of the statements set forth in the last paragraph of the
cover page and under the heading "Plan of Distribution" in the Offering
Document), 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 infor mation 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. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Purchasers, by notice given to the Issuer prior to
delivery of and pay ment for the Offered Securities, if prior to such time (i)
trading in any of the Issuer's securities shall have been suspended by the
Commission or the Nasdaq National Market or trading in securities generally on
the Nasdaq National Market or the New York Stock Exchange shall have been
suspended or limited or minimum prices shall have been established on such
Market or Exchange, (ii) a banking moratorium shall have been declared either by
Federal or New York State authorities or (iii) there shall have occurred any
outbreak or escalation of hostilities, declaration by the United States of a
national emergency or war or other calamity or crisis the effect of which on
financial markets is such as to make it, in the judgment of the Purchasers,
impracticable or inad visable to proceed with the offering or delivery of the
Offered Securities as contem plated by the 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 Xxxxxxx Xxxxx Xxxxxx General Counsel (fax
no.: (000) 000-0000) and confirmed to the General Counsel, Xxxxxxx Xxxxx Xxxxxx
at Seven World Trade Center, New York, New York 10048, or, if sent to the Issuer
will be mailed, delivered or electronically transmitted and confirmed to 000
Xxxx Xxxxxx, Xxx Xxxx, XX 00000 (fax 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.
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:
WinStar Credit Corp.
By________________________________
Name:
Title:
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
Salomon Brothers Inc
Credit Suisse First Boston Corporation
By Salomon Brothers Inc
By_____________________________________
Name:
Title:
SCHEDULE A
Number of Shares
of Exchangeable
Purchaser Preferred Stock
--------------------- ----------------
Salomon Brothers Inc 105,000
Credit Suisse First
Boston Corporation 70,000
----------------
175,000
================
A-1
ANNEX I
The opinion of Graubard Xxxxxx & Xxxxxx, to be delivered
pursuant to Section 6(a) of the Purchase Agreement, shall be to the effect that:
1. Each of the Issuer and WCC 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.
2. Each of the Indenture, the Offered Securities and the
Registration Rights Agreement has been duly authorized, and the Registration
Rights Agreement has been duly executed and delivered and conforms in all
material respects to the description thereof contained in the Offering Document;
and the Exchangeable Preferred Stock and the Registration Rights Agreement
constitute valid and legally binding obligations of the Issuer enforceable in
accordance with their terms, subject to bankruptcy, insolvency, fraudulent
transfer, reorganization, moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to general equity principles;
and, with respect to the Registration Rights Agreement, except that rights to
indemnity and contribution may be limited by federal and state securities laws
and public policy considerations.
3. The Issuer is not, and, after giving effect to the offering
and sale of the Offered Securities and the application of the proceeds thereof
as described in the Offering Document, will not be an "investment company" as
defined in the Investment Company Act.
4. No consent, approval, authorization or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in connection
with the issuance or sale of the Offered Securities by the Issuer and WCC 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 there under 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.
5. The execution, delivery and performance of the Registration
Rights Agreement and this Agreement, and the issuance and sale of the Offered
Securities and compliance with the terms and provisions thereof will not result
in a breach or violation of any of the terms and provisions of, or constitute a
default under, (A) any statute, rule or regulation or any order known to such
counsel of any governmental agency or body or any court having jurisdiction over
either of the Sellers or any subsidiary of the Issuer or any of their
properties, (B) any agreement or instrument listed as an exhibit to WinStar'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 WinStar under the
Exchange Act through September 30, 1997, to which the Issuer or any such
subsidiary is a party or by which the Issuer or any such subsidiary is bound or
to which any of the properties of the Issuer or any such subsidiary is subject,
or (C) the charter or by-laws
2
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 such
Issuer as contemplated by this Agreement.
6. The descriptions in the Offering Document of statutes,
legal and governmental proceedings and contracts and other documents are
accurate in all mate rial respects and fairly present the information purported
to be described therein.
7. This Agreement has been duly authorized, executed and
delivered by each of the Issuer and WCC.
8. Based upon the accuracy of the representations and
warranties of the Issuer set forth in Section 2(u) of this Agreement and of the
Purchasers in Section 4 hereof, it is not necessary in connection with (i) the
offer, sale and delivery of the Offered Securities by the Issuer to the several
Purchasers pursuant to this Agreement or (ii) the resales of the Offered
Securities by the several Purchasers in the manner con templated by this
Agreement, to register the Offered Securities under the Securities Act or to
qualify an indenture in respect thereof under the Trust Indenture Act, other
than in connection with the Issuer's obligations under the Registration Rights
Agreement.
In addition, such counsel shall state that such counsel have
no reason to believe that the Offering Document, or any amendment or supplement
thereto, as of the date hereof and as of the Closing Date, contained any untrue
statement or a material fact or omitted to state any material fact required to
be stated therein or necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; it being understood
that such counsel need express no opinion as to the financial statements or
other financial data contained in the Offering Document. Insofar as the
preceding sentence relates to MIDCOM or its assets, business, operations or
affairs, it is based solely on such counsel's review of MIDCOM's filing on Form
10-K dated December 31, 1996, and its filing on Form 10-Q dated September 30,
1997, and discussions with personnel of the Issuer responsible for negotiating
the asset purchase agreement relating to the MIDCOM Acquisition.
1
ANNEX II
The opinion of Xxxxxxx Xxxx & Xxxxxxxxx, to be delivered
pursuant to Section 6(a) of the Purchase Agreement, shall be to the effect that:
1. 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.
2. To the best of such counsel's knowledge, the Issuer and its
subsidi aries are in compliance in all material respects with all material terms
and conditions of each License.
3. We are not aware of any event or instance in which the
Issuer is not in compliance with all applicable and material rules, regulations
and policies of the FCC pertaining to the Licenses.
4. 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 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.
5. We are not aware of any event 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.
6. To the best of such counsel's knowledge, the Issuer and its
subsidi aries 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.
7. We are not aware of any reason to believe that any of the
Licenses will not be renewed in the ordinary course.
8. The FCC has the authority, under certain circumstances, to
modify radio licenses that it has issued. The FCC may propose and/or adopt rules
to auction portions of the 38.6 GHz - 40.0 GHz and surrounding radio spectrum
available for commercial use. The FCC may also propose and/or adopt rules to
segment portions of the 38.6 GHz - 40.0 GHz and surrounding radio spectrum. In
that event, the FCC may adopt changes to the existing regulations governing 38
GHz licensees, which could have an impact on the scope of the Licenses and the
operations of WCI and its subsidiaries. As of the date of this letter, we are
not aware of any official FCC action that may permit or is likely to lead to the
revocation, nonrenewal, modification,
2
impairment, restriction, or suspension of any License or any right of authority
thereunder in whole or in part.
