WINSTAR COMMUNICATIONS, INC.
WARRANT FOR THE PURCHASE OF SHARES OF
COMMON STOCK OF WINSTAR COMMUNICATIONS, INC.
No. [ ] Warrant to Purchase
[ ] Shares
THIS WARRANT AND THE SHARES OF COMMON STOCK PURCHASABLE HEREUNDER HAVE
NOT BEEN REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED, OR
ANY STATE SECURITIES LAWS AND MAY NOT BE OFFERED OR SOLD EXCEPT IN
COMPLIANCE THEREWITH. THIS WARRANT AND THE SHARES OF COMMON STOCK
PURCHASABLE HEREUNDER ARE ALSO SUBJECT TO ADDITIONAL RESTRICTIONS ON
TRANSFER, VOTING AND OTHER MATTERS AS SET FORTH IN THE AMENDED AND
RESTATED SHAREHOLDERS AGREEMENT, DATED AS OF [o], 2000 AMONG THE
COMPANY, THE HOLDER AND THE OTHER PARTIES THERETO, A COPY OF WHICH MAY
BE OBTAINED UPON REQUEST FROM THE COMPANY.
FOR VALUE RECEIVED, WINSTAR COMMUNICATIONS, INC., a Delaware
corporation (the "Company"), hereby certifies that [HOLDER], its successor or
permitted assigns (the "Holder"), is entitled, subject to the provisions of this
Warrant, to purchase from the Company, at the times specified herein, [o] fully
paid and non-assessable shares of Common Stock of the Company, par value $.01
per share (the "Warrant Shares"), at a purchase price per share equal to the
Exercise Price (as hereinafter defined). The number of Warrant Shares to be
received upon the exercise of this Warrant and the price to be paid for a
Warrant Share are subject to adjustment from time to time as hereinafter set
forth.
1. Definitions. The following terms, as used herein, have the
following meanings:
"Affiliate" shall have the meaning given to such term in Rule 12b-2
promulgated under the Securities and Exchange Act of 1934, as amended.
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"Business Day" means any day except a Saturday, Sunday or other day on
which commercial banks in the City of New York are authorized by law to close.
"Change of Control" means: (i) the sale, lease, transfer, conveyance or
other disposition (other than by way of merger or consolidation), in one or a
series of related transactions, of all or substantially all the assets of the
Company and its subsidiaries, taken as a whole, to any Person, (ii) the
consummation of any transaction or series of related transactions (including any
merger or consolidation) the result of which is that any Person, other than
William J. Rouhana, Jr., becomes the beneficial owner (as determined in
accordance with Rules 13d-3 and 13d-5 under the Exchange Act, except that a
Person will be deemed to have beneficial ownership of all shares that such
Person has the right to acquire, whether such right is exercisable immediately
or only after the passage of time), directly or indirectly, of more than 50% of
the Voting Securities of the Company, (iii) the first day on which a majority of
the members of the board of directors are not Continuing Directors, or (iv) any
transaction or series of related transactions with or involving any Person if,
immediately following such transaction or series of related transactions,
holders of the Common Stock outstanding immediately prior to such transaction or
series of related transactions own 50% or less of the outstanding voting
securities of the surviving or transferee corporation (or its parent
corporation).
"Common Stock" means the Common Stock, par value $.01 per share, of the
Company or other capital stock of the Company that is not preferred as to
liquidation or dividends or any other security for which this Warrant may be
exercised pursuant to paragraph 9 hereof after the occurrence of any of the
transactions described in such paragraph.
"Continuing Directors" means individuals who constituted the Board of
Directors of the Company on the date hereof (the "Incumbent Directors");
provided that any individual becoming a director during any year shall be
considered to be an Incumbent Director if such individual's election,
appointment or nomination was recommended or approved by at least two-thirds of
the other Incumbent Directors continuing in office following such election,
appointment or nomination present, in person or by telephone, at any meeting of
the Board of Directors of the Company, after the giving of a sufficient notice
to each Incumbent Director so as to provide a reasonable opportunity for such
Incumbent Directors to be present at such meeting.
"Equity-Linked Securities" shall mean any rights, options, warrants, or
other securities convertible into or exchangeable for shares of Common Stock.
"Exercise Price" means $25.00 per Warrant Share, such Exercise Price to
be adjusted from time to time as provided herein.
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"Expiration Date" means [o], 2005 at 5:00 p.m. New York City time.
"Fair Market Value" means, with respect to one share of Common Stock on
any date, the Current Market Price Per Common Share as defined in paragraph
8(f).
"Person" means an individual, partnership, corporation, trust, joint
stock company, association, joint venture, or any other entity or organization,
including a government or political subdivision or an agency or instrumentality
thereof.
"Securities Purchase Agreement" means the Securities Purchase Agreement
dated as of November 7, 2000 among the Company and the investors party thereto.
"Senior G Preferred Stock" means the Company's Series G Senior
Cumulative Participating Convertible Preferred Stock, $.01 par value per share.
"Senior H Preferred Stock" means the Company's Series H Senior
Cumulative Participating Convertible Preferred Stock, $.01 par value per share.
"Shareholders Agreement" means the Amended and Restated Shareholders
Agreement dated as of the date hereof among the Company, the Holder and the
other parties listed on the signature pages thereto.
"Subsidiary" means, with respect to any Person, any entity of which
Voting Securities having ordinary voting power to elect a majority of the board
of directors or other persons performing similar functions are at the time
directly or indirectly owned by such Person.
"Voting Securities" means securities of the Company ordinarily having
the power to vote for the election of directors of the Company; provided that
when the term "Voting Securities" is used with respect to any other Person it
means the capital stock or other equity interests of any class or kind
ordinarily having the power to vote for the election of directors or other
members of the governing body of such Person.
"Warrants" means the Warrants issued to the subscribers pursuant to the
Securities Purchase Agreement.
2. Exercise of Warrant.
(a) The Holder is entitled to exercise this Warrant in whole
or in part at any time and from time to time during the period
commencing on the earlier of (i) the date which is 180 days from the
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date hereof and (ii) the date on which a Change of Control occurs and
ending on the Expiration Date or, if such day is not a Business Day,
then on the next succeeding day that shall be a Business Day. To
exercise this Warrant, the Holder shall execute and deliver to the
Company a Warrant Exercise Notice substantially in the form annexed
hereto, this Warrant Certificate duly executed by the Holder and
payment of the applicable Exercise Price. Upon such delivery and
payment, the Holder shall be deemed to be the holder of record of the
Warrant Shares subject to such exercise, notwithstanding that the
stock transfer books of the Company shall then be closed or that
certificates representing such Warrant Shares shall not then be
actually delivered to the Holder. Notwithstanding anything herein to
the contrary, in lieu of payment in cash of the applicable Exercise
Price, the Holder may elect to exchange this Warrant in whole or in
part (A) for a number of shares of Common Stock equal to the number of
Warrant Shares evidenced by the portion of the Warrant Shares so
exchanged (the "Exchange Warrant Shares") minus a number of shares of
Common Stock having the aggregate Fair Market Value equal to the
aggregate Exercise Price for the Exchange Warrant Shares or (B) upon
delivery by the Holder of a number of securities of the Company having
the aggregate Fair Market Value equal to the aggregate Exercise Price
for the Exchange Warrant Shares, for a number of shares of Common
Stock equal to the Exchange Warrant Shares.
(b) The Exercise Price may be paid in cash or by certified
or official bank check or bank cashier's check payable to the order of
the Company or by any combination of such cash or check. The Company
shall pay any and all documentary, stamp or similar issue or transfer
taxes payable in respect of the issue or delivery of the Warrant
Shares.
(c) If the Holder exercises this Warrant in part, this
Warrant Certificate shall be surrendered by the Holder to the Company
and a new Warrant Certificate of the same tenor and for the
unexercised number of Warrant Shares shall be executed by the Company.
The Company shall register the new Warrant Certificate in the name of
the Holder or in such name or names of its transferee pursuant to
paragraph 6 hereof as may be directed in writing by the Holder and
deliver the new Warrant Certificate to the Person or Persons entitled
to receive the same.
(d) Upon surrender of this Warrant Certificate in conformity
with the foregoing provisions, the Company shall transfer to the
Holder of this Warrant Certificate appropriate evidence of ownership
of the shares of Common Stock or other securities or property
(including any money) to which the Holder is entitled, registered or
otherwise placed in, or payable to the order of, the name or names of
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the Holder or such transferee as may be directed in writing by the
Holder, and shall deliver such evidence of ownership and any other
securities or property (including any money) to the Person or Persons
entitled to receive the same, together with an amount in cash in lieu
of any fraction of a share as provided in paragraph 5 below.
3. Restrictive Legend. Certificates representing shares of Common
Stock issued pursuant to this Warrant shall bear a legend substantially in the
form of the legend set forth on the first page of this Warrant Certificate to
the extent that and for so long as such legend is required pursuant to the
Shareholders Agreement.
4. Reservation of Shares. The Company hereby agrees that at all times
there shall be reserved for issuance and delivery upon exercise of this Warrant
such number of its authorized but unissued shares of Common Stock or other
securities of the Company from time to time issuable upon exercise of this
Warrant as will be sufficient to permit the exercise in full of this Warrant.
All such shares shall be duly authorized and, when issued upon such exercise,
shall be validly issued, fully paid and non-assessable, free and clear of all
liens, security interests, charges and other encumbrances or restrictions on
sale and free and clear of all preemptive rights, except to the extent set forth
in the Shareholders Agreement.
5. Fractional Shares. No fractional shares or scrip representing
fractional shares shall be issued upon the exercise of this Warrant and in lieu
of delivery of any such fractional share upon any exercise hereof, the Company
shall pay to the Holder an amount in cash equal to such fraction multiplied by
the Current Market Price Per Common Share (as defined in paragraph 8(f)) at the
date of such exercise.
6. Exchange, Transfer or Assignment of Warrant.
(a) This Warrant and the Warrant Shares are subject to the
provisions of the Shareholders Agreement, including the restrictions
on transfer. Each holder of this Warrant Certificate by holding the
same, consents and agrees that the registered holder hereof may be
treated by the Company and all other Persons dealing with this Warrant
Certificate as the absolute owner hereof for any purpose and as the
Person entitled to exercise the rights represented hereby. The Holder,
by its acceptance of this Warrant, will be subject to the provisions
of, and will have the benefits of, the Shareholders Agreement to the
extent set forth therein, including the transfer restrictions therein.
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(b) Subject to compliance with the transfer restrictions set
forth in the Shareholders Agreement, upon surrender of this Warrant to
the Company, together with the attached Warrant Assignment Form duly
executed, the Company shall, without charge, execute and deliver a new
Warrant in the name of any transferee named in such instrument of
assignment and, if the Holder's entire interest is not being assigned,
in the name of the Holder and this Warrant shall promptly be canceled.
7. Loss or Destruction of Warrant. Upon receipt by the Company of
evidence satisfactory to it (in the exercise of its reasonable discretion) of
the loss, theft, destruction or mutilation of this Warrant Certificate, and (in
the case of loss, theft or destruction) of reasonably satisfactory
indemnification, and upon surrender and cancellation of this Warrant
Certificate, if mutilated, the Company shall execute and deliver a new Warrant
Certificate of like tenor and date.
8. Anti-dilution Provisions.
(a) In case the Company shall at any time after the date
hereof (i) declare a dividend or make a distribution on Common Stock
payable in Common Stock, (ii) subdivide or split the outstanding
Common Stock, (iii) combine or reclassify the outstanding Common Stock
into a smaller number of shares, or (iv) issue any shares of its
capital stock in a reclassification of Common Stock (including any
such reclassification in connection with a consolidation or merger in
which the Company is the surviving or continuing corporation), the
Exercise Price in effect at the time of the record date for such
dividend or distribution or of the effective date of such subdivision,
split, combination or reclassification shall be proportionately
adjusted so that, giving effect to paragraph 8(j), the exercise of
this Warrant after such time shall entitle the holder to receive the
aggregate number of shares of Common Stock or other securities of the
Company (or shares of any security into which such shares of Common
Stock have been reclassified pursuant to clause 8(a)(iii) or 8(a)(iv)
above) which, if this Warrant had been exercised immediately prior to
such time, such holder would have owned upon such exercise and been
entitled to receive by virtue of such dividend, distribution,
subdivision, split, combination or reclassification. Such adjustment
shall be made successively whenever any event listed above shall
occur.
(b) In case the Company shall issue or sell any Common Stock
(other than Common Stock issued (i) upon exercise of the Warrants,
(ii) pursuant to the Company's stock option plans or pursuant to any
similar Common Stock-related compensation plan or arrangement for
employees, directors and/or individual consultants of the Company and
its Subsidiaries approved by the Company's Board of Directors, (iii)
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upon exercise or conversion of any security the issuance of which
caused an adjustment under paragraphs 8(c) or 8(d) hereof, (iv)
pursuant to the securities and agreements of the Company existing as
of the date hereof and set forth in Section 3.21 of the Disclosure
Schedule to the Securities Purchase Agreement, (v) after the second
anniversary of the date hereof, as a dividend payment on any series of
preferred stock of the Company that has not been authorized and issued
as of the date hereof to the extent that such Common Stock has been
valued for purposes of such dividend at no less than 97% of the
Current Market Price Per Common Share on the date the number of shares
to be issued is fixed, (vi) upon exercise of warrants granted to the
lenders, lessors and other financing parties of the Company and its
Subsidiaries as additional consideration in connection with bona fide
financing arrangements which do not in the aggregate, on a cumulative
basis, exceed 0.333% of the outstanding Common Stock or (vii) in a
transaction which results in an adjustment pursuant to paragraph 8(a)
above) without consideration or for a consideration per share less
than the (A) the Exercise Price on the date of such issuance if such
issuance occurs on or before the second anniversary of the date hereof
and (B) the Current Market Price Per Common Share on the date on which
the price of such securities is fixed if such issuance occurs after
the second anniversary of the date hereof (the applicable price for
such issuance being referred to herein as the "Applicable Price"), the
Exercise Price to be in effect after such issuance or sale shall be
determined by multiplying the Exercise Price in effect immediately
prior to such issuance or sale by a fraction, the numerator of which
shall be the sum of (x) the number of shares of Common Stock
outstanding immediately prior to the time of such issuance or sale
multiplied by the Applicable Price immediately prior to such issuance
or sale and (y) the aggregate consideration, if any, to be received by
the Company upon such issuance or sale, and the denominator of which
shall be the product of the aggregate number of shares of Common Stock
outstanding immediately after such issuance or sale and the Applicable
Price immediately prior to such issuance or sale, but in no event will
such fraction exceed 1. In case any portion of the consideration to be
received by the Company shall be in a form other than cash, the fair
market value of such noncash consideration shall be utilized in the
foregoing computation. Such fair market value shall be determined by
the Board of Directors of the Company; provided that if the holders of
the Warrants representing a majority of the Common Stock then issuable
under the Warrants shall object to any such determination, the Board
of Directors shall retain an independent appraiser reasonably
satisfactory to such holders to determine such fair market value. The
Holder shall be notified promptly of any consideration other than cash
received by the Company and furnished with a description of the
consideration and the fair market value thereof, as determined by the
Board of Directors.
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(c) In case the Company shall fix a record date for the
issuance of any Equity-Linked Securities (other than the Company's
Series B Preferred Stock) to the holders of its Common Stock or other
securities entitling such holders to subscribe for or purchase shares
of Common Stock (or securities convertible into or exchangeable for
shares of Common Stock) at a price per share of Common Stock (or
having a conversion price or exchange price per share of Common Stock,
if it is a security convertible into or exchangeable for shares of
Common Stock) less than the Applicable Price on such record date, the
maximum number of shares of Common Stock issuable upon exercise,
conversion or exchange of such Equity-Linked Securities shall be
deemed to have been issued and outstanding as of such record date and
the Exercise Price shall be adjusted pursuant to paragraph 8(b)
hereof, as though such maximum number of shares of Common Stock had
been so issued for an aggregate consideration payable by the holders
of such Equity-Linked Securities prior to their receipt of such shares
of Common Stock. In case any portion of such consideration shall be in
a form other than cash, the fair market value of such noncash
consideration shall be determined as set forth in paragraph 8(b)
hereof. Such adjustment shall be made successively whenever such
record date is fixed; and in the event (i) that such Equity-Linked
Securities are not so issued or expire unexercised, or (ii) of a
change in the number of shares of Common Stock to which the holders of
such Equity-Linked Securities are entitled (other than pursuant to
adjustment provisions therein which are comparable to those contained
in this paragraph 8), the Exercise Price shall again be adjusted to be
the Exercise Price which would then be in effect in the case of clause
(i), if such record date had not been fixed, or in the case of clause
(ii), if such holder had initially been entitled to such changed
number of shares of Common Stock.
(d) In case the Company shall sell or issue any
Equity-Linked Securities (other than pursuant to the securities and
agreements of the Company existing as of the date hereof and set forth
on Section 3.21 of the Disclosure Schedule to the Series H
Subscription Agreement or options or other securities issued pursuant
to a plan or arrangement described in clause 8(b)(ii)), and the price
per share of Common Stock of such Equity- Linked Securities
(including, if applicable, the price at which they may be exercised)
is less than the Applicable Price, the maximum number of shares of
Common Stock issuable upon exercise, conversion or exchange of such
Equity-Linked Securities shall be deemed to have been issued and
outstanding as of the date of such sale or issuance, and the Exercise
Price shall be adjusted pursuant to paragraph 8(b) hereof as though
such maximum number of shares of Common Stock had been so issued for
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an aggregate consideration equal to the aggregate consideration paid
for such Equity-Linked Securities and the aggregate consideration
payable by the holders of such Equity-Linked Securities prior to their
receipt of such shares of Common Stock. In case any portion of such
consideration shall be in a form other than cash, the fair market
value of such noncash consideration shall be determined as set forth
in paragraph 8(b) hereof. Such adjustment shall be made successively
whenever such Equity-Linked Securities are issued; and in the event
(i) that such Equity-Linked Securities expire unexercised, or (ii) of
a change in the number of shares of Common Stock to which the holders
of such Equity-Linked Securities are entitled (other than pursuant to
adjustment provisions therein comparable to those contained in this
paragraph 8 as they may be amended pursuant to paragraph 8(b)), the
Exercise Price shall again be adjusted to be the Exercise Price which
would then be in effect in the case of clause (i), if such
Equity-Linked Securities had not been issued, or in the case of clause
(ii), if such holders had initially been entitled to such changed
number of shares of Common Stock. No adjustment of the Exercise Price
shall be made pursuant to this paragraph 8(d) to the extent that the
Exercise Price shall have been adjusted pursuant to paragraph 8(c)
upon the setting of any record date relating to such Equity-Linked
Securities and such adjustment fully reflects the number of shares of
Common Stock to which the holders of such Equity-Linked Securities are
entitled and the price payable therefor.
(e) In case the Company shall fix a record date for the
making of a distribution to holders of Common Stock (including any
such distribution made in connection with a consolidation or merger in
which the Company is the surviving or continuing corporation) of
evidences of indebtedness, cash, assets or other property (other than
dividends payable in Common Stock or rights, options or warrants
referred to in, and for which an adjustment is made pursuant to,
paragraph 8(c) hereof), the Exercise Price to be in effect after such
record date shall be determined by multiplying the Exercise Price in
effect immediately prior to such record date by a fraction, the
numerator of which shall be the Applicable Price on such record date,
less the fair market value (determined as set forth in paragraph 8(b)
hereof) of the portion of the assets, cash, other property or evidence
of indebtedness so to be distributed which is applicable to one share
of Common Stock, and the denominator of which shall be such Applicable
Price. Such adjustments shall be made successively whenever such a
record date is fixed; and in the event that such distribution is not
so made, the Exercise Price shall again be adjusted to be the Exercise
Price which would then be in effect if such record date had not been
fixed.
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(f) For the purpose of any computation under paragraph 5 or
paragraph 8(b), 8(c), 8(d) or 8(e) hereof, on any determination date,
the "Current Market Price Per Common Share" shall mean the average
(weighted by daily trading volume) of the Daily Prices (as defined
below) per share of the Common Stock for the 20 consecutive trading
days ending five days prior to such date. "Daily Price" means (A) if
the shares of Common Stock then are listed and traded on the New York
Stock Exchange, Inc. ("NYSE"), the closing price on such day as
reported on the NYSE Composite Transactions Tape; (B) if the shares of
Common Stock then are not listed and traded on the NYSE, the closing
price on such day as reported by the principal national securities
exchange on which the shares are listed and traded; (C) if the shares
of Common Stock then are not listed and traded on any such securities
exchange, the last reported sale price on such day on the National
Market of the National Association of Securities Dealers, Inc.
Automated Quotation System ("NASDAQ"); or (D) if the shares of Common
Stock then are not listed and traded on any such securities exchange
and not traded on the NASDAQ National Market, the average of the
highest reported bid and lowest reported asked price on such day as
reported by NASDAQ.
(g) No adjustment in the Exercise Price shall be required
unless such adjustment would require an increase or decrease of at
least two percent in such price; provided that any adjustments which
by reason of this paragraph 8(g) are not required to be made shall be
carried forward and taken into account at such time when such
adjustments would in the aggregate require an increase or decrease of
at least two percent in such price. All calculations under this
paragraph 8 shall be made to the nearest four decimal points.
(h) Notwithstanding anything contained herein to the
contrary, in the event the Company issues securities to another Person
containing anti- dilution provisions that are materially more
favorable to holders of such securities than the provisions set forth
in this paragraph 8, such more favorable provisions shall apply to
this Warrant with respect to adjustments to the Exercise Price and/or
number of Warrant Shares to be made in connection with any future
issuance of securities by the Company if the holders of a majority of
the outstanding shares of the Series H Preferred Stock shall have
elected to have such provisions apply to the Series H Preferred Stock
pursuant to the terms thereof. Materially more favorable provisions
shall include, without limitation, any full-ratchet provision. In
addition, if the Company issues any securities with a re-set
provision, any applicable adjustments to the Exercise Price and/or
number of Warrant Shares shall be made both at the time of the
issuance of such securities and at the time of the re-set, provided
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that if the initial issuance occurs on or prior to the second
anniversary of the date hereof, the "Applicable Price" for purposes of
any adjustments made at the time of the re-set shall be the Exercise
Price at the time of the re-set, irrespective of when the re-set
occurs.
(i) In the event that, at any time as a result of the
provisions of this paragraph 8, the holder of this Warrant upon
subsequent exercise shall become entitled to receive any shares of
capital stock or other securities of the Company other than Common
Stock, the number of such other shares so receivable upon exercise of
this Warrant shall thereafter be subject to adjustment from time to
time in a manner and on terms as nearly equivalent as practicable to
the provisions contained herein.
(j) Upon each adjustment of the Exercise Price as a result
of the calculations made in paragraphs 8(a), 8(b), 8(c), 8(d) or 8(e)
hereof, the number of shares for which this Warrant is exercisable
immediately prior to the making of such adjustment shall thereafter
evidence the right to purchase, at the adjusted Exercise Price, that
number of shares of Common Stock obtained by (i) multiplying the
number of shares covered by this Warrant immediately prior to this
adjustment of the number of shares by the Exercise Price in effect
immediately prior to such adjustment of the Exercise Price and (ii)
dividing the product so obtained by the Exercise Price in effect
immediately after such adjustment of the Exercise Price.
(k) The Company shall notify all Holders of the fixing of a
record date for the purpose of payment of a cash dividend to holders
of Common Stock as soon as reasonably practicable, but in no event
less than 20 days prior to any such record date.
(l) Not less than 10 nor more than 30 days prior to the
record date or effective date, as the case may be, of any action which
requires or might require an adjustment or readjustment pursuant to
this paragraph 8, the Company shall forthwith file in the custody of
the secretary or any assistant secretary at its principal executive
office and with its stock transfer agent or its warrant agent, if any,
an officers' certificate showing the adjusted Exercise Price
determined as herein provided, setting forth in reasonable detail the
facts requiring such adjustment and the manner of computing such
adjustment. Each such officers' certificate shall be signed by the
chairman, president or chief financial officer of the Company and by
the secretary or any assistant secretary of the Company. Each such
officers' certificate shall be made available at all reasonable times
for inspection by the Holder or any holder of a Warrant executed and
delivered pursuant to paragraph 6 and the Company shall, forthwith
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after each such adjustment, mail a copy, by first-class mail, of such
certificate to the Holder.
(m) The Holder shall, at its option, be entitled to receive,
in lieu of the adjustment pursuant to paragraph 8(e) otherwise
required thereof, on the date of exercise of this Warrant, the
evidences of indebtedness, other securities, cash, property or other
assets which such Holder would have been entitled to receive if it had
exercised its Warrant for shares of Common Stock immediately prior to
the record date with respect to such distribution. The Holder may
exercise its option under this paragraph 8(m) by delivering to the
Company a written notice of such exercise within 21 days after the
effectiveness (determined pursuant to paragraph 11) of the delivery by
the Company of the certificate of adjustment required pursuant to
paragraph 8(l) to be delivered by the Company in connection with such
distribution.
(n) Notwithstanding any provision herein to the contrary, in
connection with any issuance or distribution of Warrant Shares (and/or
any other securities of the Company) as to which the Hart-Scott-Rodino
Antitrust Improvements Act of 1976, as amended (the "HSR Act"), would,
but for this paragraph, be applicable, such Warrant Shares (and/or
other securities of the Company) shall carry no right to vote for
directors of the Company until the person or entity (as defined under
the HSR Act) acquiring such Warrant Shares has complied with the
filing and waiting period requirements of the HSR Act.
(o) If on the first anniversary of the date hereof, the
Current Market Price Per Common Share is less than $25, the Exercise
Price shall be reduced to such Current Market Price Per Common Share.
(p) The Company shall not take any action that would cause
an adjustment of the Exercise Price pursuant to this paragraph 8
unless it has complied with all statutes, rules and regulations
applicable thereto at that time, including any and all regulations or
the principal trading market on which the Common Stock is then
trading, including, if necessary, any shareholder approval requirement
under NASD Rule 4460(i), as it may be amended from time to time.
9. Consolidation, Merger, or Sale of Assets. In case of any
consolidation of the Company with, or merger of the Company into, any other
Person, any merger of another Person into the Company (other than a merger which
does not result in any reclassification, conversion, exchange or cancellation of
outstanding shares of Common Stock) or any sale or transfer of all or
substantially all of the assets of the Company or of the Person formed by such
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consolidation or resulting from such merger or which acquires such assets, as
the case may be, the Holder shall have the right thereafter to exercise this
Warrant for the kind and amount of securities, cash and other property
receivable upon such consolidation, merger, sale or transfer by a holder of the
number of shares of Common Stock for which this Warrant may have been exercised
immediately prior to such consolidation, merger, sale or transfer, assuming (i)
such holder of Common Stock is not a Person with which the Company consolidated
or into which the Company merged or which merged into the Company or to which
such sale or transfer was made, as the case may be ("constituent Person"), or an
Affiliate of a constituent Person and (ii) in the case of a consolidation,
merger, sale or transfer which includes an election as to the consideration to
be received by the holders, such holder of Common Stock failed to exercise its
rights of election, as to the kind or amount of securities, cash and other
property receivable upon such consolidation, merger, sale or transfer (provided
that if the kind or amount of securities, cash and other property receivable
upon such consolidation, merger, sale or transfer is not the same for each share
of Common Stock held immediately prior to such consolidation, merger, sale or
transfer by other than a constituent Person or an Affiliate thereof and in
respect of which such rights of election shall not have been exercised
("non-electing share"), then for the purpose of this paragraph 9 the kind and
amount of securities, cash and other property receivable upon such
consolidation, merger, sale or transfer by each non-electing share shall be
deemed to be the kind and amount so receivable per share by a plurality of the
non-electing shares). Adjustments for events subsequent to the effective date of
such a consolidation, merger and sale of assets shall be as nearly equivalent as
may be practicable to the adjustments provided for in this Warrant. In any such
event, effective provisions shall be made in the certificate or articles of
incorporation of the resulting or surviving or continuing corporation, in any
contract of sale, conveyance, lease or transfer, or otherwise so that the
provisions set forth herein for the protection of the rights of the Holder shall
thereafter continue to be applicable; and any such resulting or surviving or
continuing corporation shall expressly assume the obligation to deliver, upon
exercise, such shares of stock, other securities, cash and property. The
provisions of this paragraph 9 shall similarly apply to successive
consolidations, mergers, sales, leases or transfers.
10. Mandatory Exercise or Exchange. If on any date after the date
which is 180 days from the date hereof, the Current Market Price Per Common
Share equals or exceeds 155% of the "conversion price" (as defined in the
Certificate of Designations, Preferences and Rights of the Series G Preferred
Stock) of the Series G Preferred Stock, on such date, the Company may elect, by
written notice delivered to the Holder no later than five business days after
such date, to require that this Warrant be exercised or exchanged within 30 days
after the delivery of such notice. If the Company does not receive notice from
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the Holder during such 30-day period regarding the election for an exercise or
exchange, the Holder shall be deemed to have elected to exchange this Warrant.
11. Notices. Any notice, demand or delivery authorized by this Warrant
Certificate shall be in writing and shall be given to the Holder or the Company
as the case may be, at its address (or telecopier number) set forth on the
signature page hereof, or such other address (or telecopier number) as shall
have been furnished to the party giving or making such notice, demand or
delivery. Each such notice, demand or delivery shall be effective (i) if given
by telecopy, when such telecopy is transmitted to the telecopy number specified
herein and the appropriate confirmation is received, (ii) if given by mail, 72
hours after such communication is deposited in the mails with first class
postage prepaid, addressed as aforesaid or (iii) if given by any other means,
when delivered at the address specified in this paragraph 11.
12. Rights of the Holder. Prior to the exercise of any Warrant, the
Holder shall not, by virtue hereof, be entitled to any rights of a shareholder
of the Company, including, without limitation, the right to vote, to receive
dividends or other distributions or to receive any notice of meetings of
shareholders or any notice of any proceedings of the Company except as may be
specifically provided for herein.
13. GOVERNING LAW. THIS WARRANT CERTIFICATE AND ALL RIGHTS ARISING
HEREUNDER SHALL BE CONSTRUED AND DETERMINED IN ACCORDANCE WITH THE INTERNAL LAWS
OF THE STATE OF NEW YORK, AND THE PERFORMANCE THEREOF SHALL BE GOVERNED AND
ENFORCED IN ACCORDANCE WITH SUCH LAWS.
14. Jurisdiction. The parties hereto agree that any suit, action or
proceeding seeking to enforce or interpret any provision of this Warrant may
only be brought in the United States District Court for the Southern District of
New York or any New York State court sitting in New York City, and each party
hereby consents to the exclusive jurisdiction of such courts (and of the
appropriate appellate courts therefrom) in any such suit, action or proceeding
and irrevocably waives, to the fullest extent permitted by law, any objection
which it may now or hereafter have to the laying of the venue of any such suit,
action or proceeding in any such court or that any such suit, action or
proceeding which is brought in any such court has been brought in an
inconvenient forum. Process in any such suit, action or proceeding may be served
on any party anywhere in the world, whether within or without the jurisdiction
of any such court. Without limiting the foregoing, each party agrees that
service of process on such party as provided in paragraph 11 shall be deemed
effective service of process on such party. WITH RESPECT TO A PROCEEDING IN ANY
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SUCH COURT, EACH PARTY IRREVOCABLY WAIVES AND RELEASES TO THE OTHERS ITS RIGHT
TO A TRIAL BY JURY, AND AGREES THAT IT WILL NOT SEEK A TRIAL BY JURY IN ANY SUCH
PROCEEDING.
15. Amendments; Waivers. Any provision of this Warrant Certificate may
be amended or waived if, and only if, such amendment or waiver is in writing and
signed by the Company and the holders of the Warrants representing a majority of
the Common Stock then issuable under the Warrants. No failure or delay by either
party in exercising any right, power or privilege hereunder shall operate as a
waiver thereof nor shall any single or partial exercise thereof preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege. The rights and remedies herein provided shall be cumulative and not
exclusive of any rights or remedies provided by law.
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IN WITNESS WHEREOF, the Company has duly caused this Warrant
Certificate to be signed by its duly authorized officer and to be dated as of
[o], 2000.
WINSTAR COMMUNICATIONS, INC.
By: ___________________________
Name:
Title:
Address for notices:
-------------------
685 Third Avenue
New York, NY 10017
Facsimile: (212) 792-9348
Attention: Timothy R. Graham
Acknowledged and Agreed:
[HOLDER]
By: ___________________________
Name:
Title:
Address for notices:
-------------------
<PAGE>
WARRANT EXERCISE OR EXCHANGE NOTICE
To: Winstar Communications, Inc.
The undersigned irrevocably exercises the Warrant for the purchase of
[ ] shares of Common Stock (the "Shares"), par value $.01 per share, of Winstar
Communications, Inc. (the "Company") at the Exercise Price currently in effect
pursuant to the Warrant and herewith makes payment of $[ ] (such payment being
made in cash or by certified or official bank or bank cashier's check payable to
the order of the Company or by any permitted combination of such cash or check),
all on the terms and conditions specified in the within Warrant Certificate,
surrenders this Warrant Certificate and all right, title and interest therein to
the Company and directs that the Shares deliverable upon the exercise of this
Warrant be registered or placed in the name and at the address specified below
and delivered thereto.
-OR-
The undersigned irrevocably exchanges the Warrant for [ ] shares of
Common Stock (the "Shares"), par value $.01 per share, of Winstar
Communications, Inc. (the "Company"), all on the terms and conditions specified
in the within Warrant Certificate, surrenders this Warrant Certificate and all
right, title and interest therein to the Company and directs that the Shares
deliverable upon the exchange of this Warrant be registered or placed in the
name and at the address specified below and delivered thereto.
Date:[ ].
--------------------------------
(Signature of Owner)
--------------------------------
(Address)
--------------------------------
<PAGE>
Securities and/or check to be issued to: ______________________________________
Please insert social security or identifying number:___________________________
Name: _________________________________________________________________________
Street Address: _______________________________________________________________
City, State and Zip Code: _____________________________________________________
Any unexercised portion of the Warrant evidenced by the within Warrant
Certificate to be issued to:
Please insert social security or identifying number: __________________________
Name: _________________________________________________________________________
Street Address: _______________________________________________________________
City, State and Zip Code: _____________________________________________________
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WARRANT ASSIGNMENT FORM
Dated [ ]
FOR VALUE RECEIVED, [ ] hereby sells,
assigns and transfers unto [ ] (the "Assignee"),
(please type or print in block letters)
(insert address)
its right to purchase up to [ ] shares of Common Stock represented by
this Warrant and does hereby irrevocably constitute and appoint
[ ] Attorney, to transfer the same on the
books of the Company, with full power of substitution in the premises.
Signature:
