Document:

EXECUTION COPY
                                                         SENIOR DISCOUNT NOTES

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                          WINSTAR COMMUNICATIONS, INC.
                                     Issuer

                     14-3/4% Senior Discount Notes Due 2010

                              --------------------

                                    INDENTURE

                           Dated as of April 10, 2000

                              ---------------------

                           UNITED STATES TRUST COMPANY
                                   OF NEW YORK
                                     Trustee

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<PAGE>

                                              CROSS-REFERENCE TABLE

  TIA                                                 Indenture
Section                                               Section
-------                                               ---------
310(a)(1)         ..............................            7.10
    (a)(2)        ..............................            7.10
    (a)(3)        ..............................            N.A.
    (a)(4)        ..............................            N.A.
    (b)           ..............................            7.08; 7.10
    (c)           ..............................            N.A.
311(a)            ..............................            7.11
    (b)           ..............................            7.11
    (c)           ..............................            N.A.
312(a)            ..............................            2.05
    (b)           ..............................            10.03
    (c)           ..............................            10.03
313(a)            ..............................            7.06
    (b)(1)        ..............................            N.A.
    (b)(2)        ..............................            7.06
    (c)           ..............................            10.02
    (d)           ..............................            7.06
314(a)            ..............................            4.02; 4.12
                                                            10.02
    (b)           ..............................            N.A.
    (c)(1)        ..............................            10.04
    (c)(2)        ..............................            10.04
    (c)(3)        ..............................            N.A.
    (d)           ..............................            N.A.
    (e)           ..............................            10.05
    (f)           ..............................            4.12
315(a)            ..............................            7.01
    (b)           ..............................            7.05; 10.02
    (c)           ..............................            7.01
    (d)           ..............................            7.01
    (e)           ..............................            6.11
316(a)(last sentence) ..........................            2.08
    (a)(1)(A)     ..............................            6.05
    (a)(1)(B)     ..............................            6.04
    (a)(2)        ..............................            N.A.
    (b)           ..............................            6.07
317(a)(1)         ..............................            6.08
    (a)(2)        ..............................            6.09
    (b)           ..............................            2.04
318(a)            ..............................            10.01

                           N.A. means Not Applicable.

------------------------------------------
Note:  This Cross-Reference Table shall not, for any purpose, be deemed to be
part of the Indenture.

<PAGE>

                                TABLE OF CONTENTS

                                    ARTICLE 1

                  Definitions and Incorporation by Reference

      SECTION 1.01.  Definitions ..................................... 1
      SECTION 1.02.  Other Definitions ...............................35
      SECTION 1.03.  Incorporation by Reference
                           of Trust Indenture Act ....................35
      SECTION 1.04.  Rules of Construction ...........................36

                                    ARTICLE 2

                                 The Securities

      SECTION 2.01.  Form and Dating .................................37
      SECTION 2.02.  Execution and Authentication ....................37
      SECTION 2.03.  Registrar and Paying Agent ......................38
      SECTION 2.04.  Paying Agent To Hold Money in Trust .............39
      SECTION 2.05.  Securityholder Lists ............................39
      SECTION 2.06.  Transfer and Exchange ...........................39
      SECTION 2.07.  Replacement Securities ..........................40
      SECTION 2.08.  Outstanding Securities;
                           When Securities Disregarded ...............40
      SECTION 2.09.  Temporary Securities ............................41
      SECTION 2.10.  Cancellation ....................................41
      SECTION 2.11.  Defaulted Interest ..............................41
      SECTION 2.12.  CUSIP, ISIN and Common Code Numbers .............41
      SECTION 2.13.  Issuance of Additional Securities ...............42

                                    ARTICLE 3

                                   Redemption

      SECTION 3.01.  Notices to Trustee ..............................43
      SECTION 3.02.  Selection of Securities To
                           Be Redeemed ...............................43
      SECTION 3.03.  Notice of Redemption ............................43
      SECTION 3.04.  Effect of Notice of Redemption ..................44
      SECTION 3.05.  Deposit of Redemption Price .....................45
      SECTION 3.06.  Securities Redeemed in Part .....................45

<PAGE>

                                                                               2

                                    ARTICLE 4

                                    Covenants

      SECTION 4.01.  Payment of Securities ...........................45
      SECTION 4.02.  SEC Reports .....................................45
      SECTION 4.03.  Limitation on Indebtedness ......................46
      SECTION 4.04.  Limitation on Restricted Payments ...............50
      SECTION 4.05.  Limitation on Restrictions on
                           Distributions from Restricted
                           Group Members .............................55
      SECTION 4.06.  Limitation on Sales of Assets and
                           Subsidiary Stock ..........................58
      SECTION 4.07.  Limitation on Affiliate Transactions. ...........62
      SECTION 4.08.  Limitation on the Sale or Issuance
                           of Capital Stock of Restricted
                           Group Members .............................64
      SECTION 4.09.  Change of Control ...............................66
      SECTION 4.10.  Limitation on Liens .............................67
      SECTION 4.11.  Limitation on Sale/Leaseback
                           Transactions ..............................68
      SECTION 4.12.  Compliance Certificate ..........................68
      SECTION 4.13.  Further Instruments and Acts ....................68

                                    ARTICLE 5

                                Successor Company

      SECTION 5.01.  When Company May Merge or
                           Transfer Assets ...........................69

                                    ARTICLE 6

                              Defaults and Remedies

      SECTION 6.01.  Events of Default ...............................70
      SECTION 6.02.  Acceleration ....................................72
      SECTION 6.03.  Other Remedies ..................................73
      SECTION 6.04.  Waiver of Past Defaults .........................73
      SECTION 6.05.  Control by Majority .............................73
      SECTION 6.06.  Limitation on Suits .............................74
      SECTION 6.07.  Rights of Holders to Receive
                           Payment ...................................74
      SECTION 6.08.  Collection Suit by Trustee ......................74
      SECTION 6.09.  Trustee May File Proofs of Claim ................75
      SECTION 6.10.  Priorities ......................................75
      SECTION 6.11.  Undertaking for Costs ...........................75
      SECTION 6.12.  Waiver of Stay or Extension Laws ................76

<PAGE>

                                                                               3

                                    ARTICLE 7

                                      Trustee

      SECTION 7.01.  Duties of Trustee ...............................76
      SECTION 7.02.  Rights of Trustee ...............................77
      SECTION 7.03.  Individual Rights of Trustee ....................78
      SECTION 7.04.  Trustee's Disclaimer ............................78
      SECTION 7.05.  Notice of Defaults ..............................78
      SECTION 7.06.  Reports by Trustee to Holders ...................79
      SECTION 7.07.  Compensation and Indemnity ......................79
      SECTION 7.08.  Replacement of Trustee ..........................80
      SECTION 7.09.  Successor Trustee by Merger .....................81
      SECTION 7.10.  Eligibility; Disqualification ...................81
      SECTION 7.11.  Preferential Collection of
                           Claims Against Company ....................81

                                    ARTICLE 8

                         Discharge of Indenture; Defeasance

      SECTION 8.01.  Discharge of Liability on
                           Securities; Defeasance ....................82
      SECTION 8.02.  Conditions to Defeasance ........................83
      SECTION 8.03.  Application of Trust Money ......................84
      SECTION 8.04.  Repayment to Company ............................84
      SECTION 8.05.  Indemnity for Government
                           Obligations ...............................85
      SECTION 8.06.  Reinstatement ...................................85

                                    ARTICLE 9

                                   Amendments

      SECTION 9.01.  Without Consent of Holders ......................85
      SECTION 9.02.  With Consent of Holders .........................86
      SECTION 9.03.  Compliance with Trust Indenture Act .............87
      SECTION 9.04.  Revocation and Effect of Consents
                           and Waivers ...............................87
      SECTION 9.05.  Notation on or Exchange of
                           Securities ................................88
      SECTION 9.06.  Trustee To Sign Amendments ......................88
      SECTION 9.07.  Payment for Consent .............................88

<PAGE>

                                                                               4

                                   ARTICLE 10

                                  Miscellaneous

      SECTION 10.01.  Trust Indenture Act Controls ...................88
      SECTION 10.02.  Notices ........................................89
      SECTION 10.03.  Communication by Holders with
                                Other Holders ........................89
      SECTION 10.04.  Certificate and Opinion as to
                             Conditions Precedent ....................89
      SECTION 10.05.  Statements Required in Certificate
                          or Opinion .................................90
      SECTION 10.06.  Rules by Trustee, Paying Agent and
                            Registrar ................................90
      SECTION 10.07.  Legal Holidays .................................90
      SECTION 10.08.  Governing Law ..................................91
      SECTION 10.09.  No Recourse Against Others .....................91
      SECTION 10.10.  Successors .....................................91
      SECTION 10.11.  Multiple Originals .............................91
      SECTION 10.12.  Table of Contents; Headings ....................91

Rule 144A/Regulation S Appendix

Exhibit 1 - Form of Face of Initial Security

Exhibit A - Form of Face of Exchange Security or Private
            Exchange Security

<PAGE>

                        INDENTURE dated as of April 10, 2000, between WINSTAR
                  COMMUNICATIONS, INC., a Delaware corporation (the "Company"),
                  and UNITED STATES TRUST COMPANY OF NEW YORK, a New York
                  corporation (the "Trustee").

            Each party agrees as follows for the benefit of the other party and
for the equal and ratable benefit of the Holders of the Company's Initial
Securities, Exchange Securities and Private Exchange Securities (collectively,
the "Securities"):

                                    ARTICLE 1

                   Definitions and Incorporation by Reference

            SECTION 1.01.  Definitions.

            "Accreted Value" means, as of any date (the "Specified Date"), the
amount provided below for each $1,000 principal amount at maturity of
Securities:

            (1) if the Specified Date occurs on one of the following dates
      (each, a "Semi-Annual Accrual Date"), the Accreted Value will equal the
      amount set forth below for such Semi-Annual Accrual Date:

    Semi-Annual                                Accreted
    Accrual Date                                Value
    ------------                                -----

    Issue Date . . . . . . . . . . . . . . . .$  489.90
    October 15, 2000 . . . . . . . . . . . . .   527.07
    April 15, 2001 . . . . . . . . . . . . . .   565.95
    October 15, 2001 . . . . . . . . . . . . .   607.68
    April 15, 2002 . . . . . . . . . . . . . .   652.50
    October 15, 2002 . . . . . . . . . . . . .   700.62
    April 15, 2003 . . . . . . . . . . . . . .   752.29
    October 15, 2003 . . . . . . . . . . . . .   807.78
    April 15, 2004 . . . . . . . . . . . . . .   867.35
    October 15, 2004 . . . . . . . . . . . . .   931.32
    April 15, 2005 . . . . . . . . . . . . . . 1,000.00

            (2)   if the Specified Date occurs between two Semi-Annual Accrual
                  Dates, the Accreted Value will be equal to the sum of (A) the
                  Accreted Value for the Semi-Annual Accrual Date immediately
                  preceding such Specified Date and (B) an amount equal to the
                  product of (x) the

<PAGE>

                                                                               2

                  Accreted Value for the immediately following Semi-Annual
                  Accrual Date less the Accreted Value for the immediately
                  preceding Semi-Annual Accrual Date multiplied by (y) a
                  fraction, the numerator of which is the number of days elapsed
                  from the immediately preceding Semi-Annual Accrual Date to the
                  Specified Date, using a 360-day year of 12 30-day months, and
                  the denominator of which is 180 (or, if the Semi-Annual
                  Accrual Date immediately preceding the Specified Date is the
                  Issue Date, the denominator of which is the number of days
                  from and including the Issue Date to and excluding the next
                  Semi-Annual Accrual Date); or

            (3)   if the Specified Date occurs after the last Semi-Annual
                  Accrual Date, the Accreted Value will equal $1,000.

            "Acquired Indebtedness" means Indebtedness of an entity outstanding
on the date on which an interest in such entity is acquired, by merger or
otherwise (other than Indebtedness Incurred in connection with, or to provide
all or any portion of the funds or credit support utilized to consummate, the
transaction or series of transactions pursuant to which such entity was
acquired).

            "Additional Securities" means, subject to the Company's compliance
with Section 4.03, 14-3/4% Senior Discount Notes Due 2010 issued from time to
time after the Issue Date under the terms of this Indenture (other than pursuant
to Section 2.06, 2.07, 2.09, 3.06, 4.06 or 4.09 of this Indenture and other than
Exchange Securities or Private Exchange Securities issued pursuant to an
exchange offer for other Securities outstanding under this Indenture).

            "Affiliate" of any specified Person means any other Person, directly
or indirectly, controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any Person means the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities, by contract or otherwise; and the terms
"controlling" and "controlled" have meanings correlative to the foregoing. For
purposes of Sections 4.04, 4.06 and 4.07 only, "Affiliate" shall also mean any
beneficial owner (other than Credit Suisse First Boston Private Equity Division
and any Affiliate of Credit

<PAGE>

                                                                               3

Suisse First Boston Private Equity Division) of Capital Stock representing 10%
or more of the total voting power of the Voting Stock (on a fully diluted basis)
of the Company or of rights or warrants to purchase such Capital Stock (whether
or not currently exercisable) and any Person who would be an Affiliate of any
such beneficial owner pursuant to the first sentence hereof.

            "Asset Disposition" means any sale, lease, transfer or other
disposition (or series of related sales, leases, transfers or dispositions) by
the Company or any Restricted Group Member, including any disposition by means
of a merger, consolidation or similar transaction (each referred to for the
purposes of this definition as a "disposition"), of:

            (1) any shares of Capital Stock of a Restricted Group Member (other
      than directors' qualifying shares or shares required by applicable law to
      be held by a Person other than the Company or a Restricted Group Member);

            (2) all or substantially all the assets of any division or line
      of business of the Company or any Restricted Group Member; or

            (3) any other assets of the Company or any Restricted Group Member
      outside of the ordinary course of business of the Company or such
      Restricted Group Member

(other than, in the case of clauses (1), (2) and (3)

                  (A) a disposition by a Restricted Group Member to the Company
            or by the Company or a Restricted Group Member to a Restricted Group
            Member;

                  (B) for purposes of Section 4.06 only, a disposition that
            constitutes a Restricted Payment permitted by Section 4.04 or a
            Permitted Investment;

                  (C) for purposes of Section 4.06 only, a sale of shares of
            Capital Stock of an Unrestricted Subsidiary for Fair Market Value;

                  (D) for purposes of Section 4.06 only, a disposition of
            Receivables in a Qualified Receivables Transaction; and

<PAGE>

                                                                               4

                  (E) a disposition of assets with a fair market value of less
            than $250,000 in a single transaction or series of related
            transactions).

            "Attributable Debt" in respect of a Sale/Leaseback Transaction
means, as at the time of determination, the present value (discounted at the
interest rate borne by the Securities, compounded annually) of the total
obligations of the lessee for rental payments during the remaining term of the
lease included in such Sale/Leaseback Transaction (including any period for
which such lease has been extended).

            "Average Life" means, as of the date of determination, with respect
to any Indebtedness, the quotient obtained by dividing:

            (1) the sum of the products of numbers of years from the date of
      determination to the dates of each successive scheduled principal payment
      of or redemption or similar payment with respect to such Indebtedness
      multiplied by the amount of such payment by

            (2) the sum of all such payments.

            "Board of Directors" means the Board of Directors of the Company or
any committee thereof duly authorized to act on behalf of such Board.

            "Business Day" means each day which is not a Legal Holiday.

            "Capital Lease Obligation" means an obligation that is required to
be classified and accounted for as a capital lease for financial reporting
purposes in accordance with GAAP, and the amount of Indebtedness represented by
such obligation shall be the capitalized amount of such obligation determined in
accordance with GAAP; and the Stated Maturity thereof shall be the date of the
last payment of rent or any other amount due under such lease prior to the first
date upon which such lease may be terminated by the lessee without payment of a
penalty.

            "Capital Stock" of any Person means any and all shares, interests,
rights to purchase, warrants, options, participations or other equivalents of or
interests in (however designated) equity of such Person, including any Preferred
Stock, but excluding any debt securities convertible into such equity.

<PAGE>

                                                                               5

            "Change of Control" means the occurrence of any of the following
events:

            (1) any "person" (as such term is used in Sections 13(d) and 14(d)
      of the Exchange Act), other than one or more Permitted Holders, is or
      becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under
      the Exchange Act, except that for purposes of this clause (1) such person
      shall be deemed to have "beneficial ownership" of all shares that any 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 35% of the total voting power of the Voting Stock of the
      Company; provided, however, that the Permitted Holders beneficially own
      (as defined in Rules 13d-3 and 13d-5 under the Exchange Act), directly or
      indirectly, in the aggregate a lesser percentage of the total voting power
      of the Voting Stock of the Company than such other person and do not have
      the right or ability by voting power, contract or otherwise to elect or
      designate for election a majority of the Board of Directors (for the
      purposes of this clause (1), such other person shall be deemed to
      beneficially own any Voting Stock of a Person (the "specified person")
      held by any other Person (the "parent entity"), if such other person is
      the beneficial owner (as defined above in this clause (1)), directly or
      indirectly, of more than 35% of the voting power of the Voting Stock of
      such parent entity and the Permitted Holders beneficially own (as defined
      in this proviso), directly or indirectly, in the aggregate a lesser
      percentage of the voting power of the Voting Stock of such parent entity
      and do not have the right or ability by voting power, contract or
      otherwise to elect or designate for election a majority of the board of
      directors of such parent entity);

            (2) individuals who on the Issue Date constituted the Board of
      Directors (together with any new directors whose election by such Board of
      Directors or whose nomination for election by the shareholders of the
      Company was approved by a vote of 66-2/3% of the directors of the Company
      then still in office who were either directors on the Issue Date or whose
      election or nomination for election was previously so approved) cease for
      any reason to constitute a majority of the Board of Directors then in
      office;

<PAGE>

                                                                               6

            (3) the adoption of a plan relating to the liquidation or
      dissolution of the Company; or

            (4) the merger or consolidation of the Company with or into another
      Person or the merger of another Person with or into the Company, or the
      sale of all or substantially all the assets of the Company (determined on
      a consolidated basis) to another Person (other than, in all such cases, a
      Person that is controlled by the Permitted Holders), other than a
      transaction following which in the case of a merger or consolidation
      transaction, securities that represented 100% of the Voting Stock of the
      Company immediately prior to such transaction (or other securities into
      which such securities are converted as part of such merger or
      consolidation transaction) constitute at least a majority of the voting
      power of the Voting Stock of the surviving Person in such merger or
      consolidation transaction.

            "Code" means the Internal Revenue Code of 1986, as amended.

            "Company" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor and, for purposes of
any provision contained herein and required by the TIA, each other obligor on
the indenture securities.

            "Consolidated Interest Expense" means, for any period, the total
interest expense of the Company and its Restricted Group Members (including the
total interest expense of unconsolidated Permitted International Joint
Ventures), plus, to the extent not included in such total interest expense, and
to the extent incurred by the Company or its Restricted Group Members, without
duplication:

            (1) interest expense attributable to capital leases and the interest
      expense attributable to leases constituting part of a Sale/Leaseback
      Transaction;

            (2) amortization of debt discount and debt issuance cost;

            (3) capitalized interest;

            (4) non-cash interest expenses;

            (5) commissions, discounts and other fees and charges owed with
      respect to letters of credit and bankers' acceptance financing;

<PAGE>

                                                                               7

            (6) net payments pursuant to Hedging Obligations;

            (7) Preferred Stock dividends in respect of all Preferred Stock of
      Restricted Group Members held by Persons other than the Company or a
      Restricted Group Member (other than dividends payable solely in Capital
      Stock (other than Disqualified Stock) of the issuer of such Preferred
      Stock);

            (8) interest incurred in connection with Investments in
      discontinued operations;

            (9) interest accruing on any Indebtedness of any other Person to the
      extent such Indebtedness is Guaranteed by (or secured by the assets of)
      the Company or any Restricted Group Member; and

            (10) the cash contributions to any employee stock ownership plan or
      similar trust to the extent such contributions are used by such plan or
      trust to pay interest or fees to any Person (other than the Company) in
      connection with Indebtedness Incurred by such plan or trust;

excluding, however, a portion of any such interest expense or other item listed
in clauses (1) through (10) above to the extent included therein solely as an
expense or other item of an unconsolidated Permitted International Joint Venture
and equal to the Third Party Ownership Interest in such Permitted International
Joint Venture.

            "Consolidated Leverage Ratio" as of any date of determination means
the ratio of (x) the aggregate amount of Indebtedness of the Company and its
Restricted Group Members as of such date of determination to (y) EBITDA for the
most recent four consecutive fiscal quarters ending at least 45 days prior to
such date of determination (the "Reference Period"); provided, however, that:

            (1) if the transaction giving rise to the need to calculate the
      Consolidated Leverage Ratio is an Incurrence of Indebtedness, the amount
      of such Indebtedness shall be calculated after giving effect on a pro
      forma basis to such Indebtedness as if such Indebtedness had been Incurred
      on the first day of the Reference Period;

            (2) if the Company or any Restricted Group Member has repaid,
      repurchased, defeased or otherwise discharged any Indebtedness that was
      outstanding as of the

<PAGE>

                                                                               8

      end of such fiscal quarter or if any Indebtedness is to be repaid,
      repurchased, defeased or otherwise discharged on the date of the
      transaction giving rise to the need to calculate the Consolidated Leverage
      Ratio (other than, in each case, Indebtedness Incurred under any revolving
      credit agreement), the aggregate amount of Indebtedness shall be
      calculated on a pro forma basis and EBITDA shall be calculated as if the
      Company or such Restricted Group Member had not earned the interest
      income, if any, actually earned during the Reference Period in respect of
      cash or Temporary Cash Investments used to repay, repurchase, defease or
      otherwise discharge such Indebtedness;

            (3) if since the beginning of the Reference Period the Company or
      any Restricted Group Member shall have made any Asset Disposition, the
      EBITDA for the Reference Period shall be reduced by an amount equal to the
      EBITDA (if positive) directly attributable to the assets which are the
      subject of such Asset Disposition for the Reference Period or increased by
      an amount equal to the EBITDA (if negative) directly attributable thereto
      for the Reference Period;

            (4) if since the beginning of the Reference Period the Company or
      any Restricted Group Member (by merger or otherwise) shall have made an
      Investment in any Restricted Group Member (or any Person which becomes a
      Restricted Group Member) or an acquisition of assets which constitutes all
      or substantially all of a business or one or more operating units of a
      business, EBITDA for the Reference Period shall be calculated after giving
      pro forma effect thereto (including the Incurrence of any Indebtedness) as
      if such Investment or acquisition occurred on the first day of the
      Reference Period; and

            (5) if since the beginning of the Reference Period any Person that
      subsequently became a Restricted Group Member or was merged with or into
      the Company or any Restricted Group Member since the beginning of such
      Reference Period shall have made any Asset Disposition, any Investment or
      acquisition of assets that would have required an adjustment pursuant to
      clause (3) or (4) above if made by the Company or a Restricted Group
      Member during the Reference Period, EBITDA for the Reference Period shall
      be calculated after giving pro forma effect thereto as if such Asset
      Disposition, Investment or acquisition occurred on the first day of the
      Reference Period.

<PAGE>

                                                                               9

            "Consolidated Net Income" means, for any period, the net income (or
loss) of the Company and its consolidated Restricted Group Members and (without
duplication) the Company's equity in the net income (or loss) of any
unconsolidated Permitted International Joint Ventures; provided, however, that
there shall not be included in such Consolidated Net Income:

            (1) any net income (or loss) of any Person (other than the Company)
      if such Person is not a Restricted Group Member, except that:

                  (A) subject to the exclusions contained in clauses (4) and (7)
            below, the Company's equity in the net income of any such Person for
            such period shall be included in such Consolidated Net Income up to
            the aggregate amount of cash actually distributed by such Person
            during such period to the Company or a Restricted Group Member as a
            dividend or other distribution (subject, in the case of a dividend
            or other distribution paid to a Restricted Group Member, to the
            limitations contained in clause (3) below); and

                  (B) the Company's equity in a net loss of any such Person for
            such period shall be included in determining such Consolidated Net
            Income;

            (2) any net income (or loss) of any Person acquired by the Company,
      a Subsidiary or a Permitted International Joint Venture in a pooling of
      interests transaction for any period prior to the date of such
      acquisition;

            (3) any net income (or loss) of any Restricted Group Member if such
      Restricted Group Member is subject to restrictions, directly or
      indirectly, on the payment of dividends or the making of distributions by
      such Restricted Group Member, directly or indirectly, to the Company,
      except that:

                  (A) subject to the exclusions contained in clauses (4) and (7)
            below, the Company's equity in the net income of any such Restricted
            Group Member for such period shall be included in such Consolidated
            Net Income up to the aggregate amount of cash distributed or capable
            of being distributed by such Restricted Group Member during such
            period to the Company or another Restricted Group Member as a
            dividend or other distribution (subject, in

<PAGE>

                                                                              10

            the case of a dividend or other distribution paid to another
            Restricted Group Member, to the limitation contained in this
            clause); and

                  (B) the Company's equity in a net loss of any such Restricted
            Group Member for such period shall be included in determining such
            Consolidated Net Income;

            (4) any gain (or loss) realized upon the sale or other disposition
      of any assets of the Company, its consolidated Subsidiaries or any other
      Person (including pursuant to any sale-and-leaseback arrangement) which is
      not sold or otherwise disposed of in the ordinary course of business and
      any gain (or loss) realized upon the sale or other disposition of any
      Capital Stock of any Person;

            (5) extraordinary gains or losses;

            (6) the cumulative effect of a change in accounting principles
      after the Issue Date; and

            (7) to the extent not otherwise excluded in accordance with GAAP,
      the net income (or loss) of any unconsolidated Permitted International
      Joint Venture in an amount that corresponds to the Third Party Ownership
      Interest in the income of such Permitted International Joint Venture on
      the last day of such period.

Notwithstanding the foregoing, for the purposes of Section 4.04 only, there
shall be excluded from Consolidated Net Income any repurchases, repayments or
redemptions of Investments, proceeds realized on the sale of the Investments or
return of capital to the Company or a Restricted Group Member to the extent such
repurchases, repayments, redemptions, proceeds or returns increase the amount of
Restricted Payments permitted under such covenant pursuant to Section
4.04(a)(3)(D).

            "Currency Agreement" means, in respect of a Person, any foreign
exchange contract, currency swap agreement or other similar agreement designed
to protect such Person against fluctuations in currency values.

            "Default" means any event which is, or after notice or passage of
time or both would be, an Event of Default.

<PAGE>

                                                                              11

            "Disqualified Stock" means, with respect to any Person, any Capital
Stock which by its terms (or by the terms of any security into which it is
convertible or for which it is exchangeable at the option of the holder) or upon
the happening of any event:

            (1) matures or is mandatorily redeemable (other than for Capital
      Stock that is not Disqualified Stock) pursuant to a sinking fund
      obligation or otherwise;

            (2) is convertible or exchangeable at the option of the holder
      for Indebtedness or Disqualified Stock; or

            (3) is mandatorily redeemable or must be purchased upon the
      occurrence of certain events or otherwise, in whole or in part;

in each case on or prior to the ninety-first day after the Stated Maturity of
the Securities; provided, however, that any Capital Stock that would not
constitute Disqualified Stock but for provisions thereof giving holders thereof
the right to require such Person to purchase or redeem such Capital Stock upon
the occurrence of an "asset sale" or "change of control" occurring prior to the
ninety-first day after the Stated Maturity of the Securities shall not
constitute Disqualified Stock if:

            (1) the "asset sale" or "change of control" provisions applicable to
      such Capital Stock are not more favorable to the holders of such Capital
      Stock than the terms applicable to the Securities in Section 4.06 and
      Section 4.09; and

            (2) any such requirement only becomes operative after compliance
      with such terms applicable to the Securities, including the purchase of
      any Securities tendered pursuant thereto.

            "EBITDA" for any period means the sum of Consolidated Net Income,
plus the following to the extent deducted in calculating such Consolidated Net
Income:

            (1) all income tax expense of the Company and its consolidated
      Restricted Group Members; provided, however, that a portion of the income
      tax expense of an unconsolidated Permitted International Joint Venture
      equal to the percentage of the net income (net loss) of such Permitted
      International Joint Venture allocated to the Company and its Restricted
      Subsidiaries in accor-

<PAGE>

                                                                              12

      dance with GAAP shall be included in EBITDA regardless of whether deducted
      in calculating Consolidated Net Income;

            (2) Consolidated Interest Expense; provided, however, that the
      portion of Consolidated Interest Expense attributable to an unconsolidated
      Permitted International Joint Venture shall be included in EBITDA
      regardless of whether deducted in calculating Consolidated Net Income;

            (3) depreciation and amortization expense of the Company and its
      consolidated Restricted Group Members (excluding amortization expense
      attributable to a prepaid operating activity item that was paid in cash in
      a prior period); provided, however, that a portion of the depreciation and
      amortization expense of an unconsolidated Permitted International Joint
      Venture equal to the percentage of the net income (net loss) of such
      Permitted International Joint Venture allocated to the Company and its
      Restricted Subsidiaries in accordance with GAAP shall be included in
      EBITDA regardless of whether deducted in calculating Consolidated Net
      Income; and

            (4) all other noncash charges of the Company and its consolidated
      Restricted Group Members (excluding any such noncash charge to the extent
      that it represents an accrual of or reserve for cash expenditures in any
      future period); provided, however, that a portion of all other noncash
      charges of an unconsolidated Permitted International Joint Venture equal
      to the percentage of the net income (net loss) of such Permitted
      International Joint Venture allocated to the Company and its Restricted
      Subsidiaries in accordance with GAAP shall be included in EBITDA
      regardless of whether deducted in calculating Consolidated Net Income;

in each case for such period. Notwithstanding the foregoing, the provision for
taxes based on the income or profits of, and the depreciation and amortization
and non-cash charges of, a Restricted Group Member shall be added to
Consolidated Net Income to compute EBITDA only to the extent (and in the same
proportion) that the net income of such Restricted Group Members was included in
calculating Consolidated Net Income and only if a corresponding amount would be
permitted at the date of determination to be dividended to the Company by such
Restricted Group Members without prior approval (that has not been obtained),

<PAGE>

                                                                              13

pursuant to the terms of its charter and all agreements, instruments, judgments,
decrees, orders, statutes, rules and governmental regulations applicable to such
Restricted Group Members or its stockholders.

            "Eligible Receivables" means, at any time, Receivables of the
Company and its Restricted Subsidiaries, as evidenced on the most recent monthly
consolidated balance sheet of the Company, arising in the ordinary course of
business of the Company or any Restricted Subsidiary.

            "Euro Equivalent" means with respect to any monetary amount in a
currency other than euros, at any time for determination thereof, the amount of
euros obtained by converting such foreign currency involved in such computation
into euros at the spot rate for the purchase of euros with the applicable
foreign currency as published in The Wall Street Journal in the "Exchange Rates"
column under the heading "Currency Trading" on the date two Business Days prior
to such determination.

            "Euro Notes" means the Company's 12-3/4% Senior Notes due 2010
denominated in Euro.

            "Exchange Act" means the Securities Exchange Act of 1934, as
amended.

            "Existing Senior Notes" means the 14% Senior Discount Notes due 2005
of the Company and the 14-1/2% Senior Deferred Interest Notes due 2005 of the
Company and the 12-1/2% Guaranteed Senior Secured Notes due 2004 of Winstar
Equipment II Corp. and the 12-1/2% Guaranteed Senior Secured Notes due 2004 of
Winstar Equipment Corp.

            "Existing Subordinated Notes" means the 10% Senior Subordinated
Notes due 2008 of the Company, the 15% Senior Subordinated Deferred Interest
Notes due 2007 of the Company and the 11% Senior Subordinated Deferred Interest
Notes due 2008 of the Company.

            "Fair Market Value" means, with respect to any Property (other than
cash), the price that could be negotiated in an arm's-length free market
transaction for cash, between a willing seller and a willing buyer, neither of
whom is under pressure or compulsion to complete the transaction. Unless
otherwise specified, (1) in the case of items with a Fair Market Value in excess
of $1,000,000 but less than or equal to $12.5 million, Fair Market Value shall
be determined by the chief financial officer or treasurer of the Company acting
in good faith and, if such Fair Market

<PAGE>

                                                                              14

Value is in excess of $2.0 million, shall be evidenced by an Officers'
Certificate and (2) in the case of items with a Fair Market Value in excess of
$12.5 million, Fair Market Value shall be determined by the Board of Directors
acting in good faith and shall be evidenced by a resolution of the Board of
Directors.

            "GAAP" means generally accepted accounting principles in the United
States of America as in effect as of the Issue Date, including those set forth
in

            (1) the opinions and pronouncements of the Accounting Principles
      Board of the American Institute of Certified Public Accountants,

            (2) statements and pronouncements of the Financial Accounting
      Standards Board,

            (3) such other statements by such other entity as approved by a
      significant segment of the accounting profession and

            (4) the rules and regulations of the SEC governing the inclusion of
      financial statements (including pro forma financial statements) in
      periodic reports required to be filed pursuant to Section 13 of the
      Exchange Act, including opinions and pronouncements in staff accounting
      bulletins and similar written statements from the accounting staff of the
      SEC. All ratios and computations based on GAAP contained in this Indenture
      shall be computed in conformity with GAAP.

            "Guarantee" means any obligation, contingent or otherwise, of any
Person directly or indirectly guaranteeing any Indebtedness of any Person and
any obligation, direct or indirect, contingent or otherwise, of such Person:

            (1) to purchase or pay (or advance or supply funds for the purchase
      or payment of) such Indebtedness of such Person (whether arising by virtue
      of partnership arrangements, or by agreements to keep-well, to purchase
      assets, goods, securities or services, to take-or-pay or to maintain
      financial statement conditions or otherwise); or

            (2) entered into for the purpose of assuring in any other manner the
      obligee of such Indebtedness of the payment thereof or to protect such
      obligee against loss in respect thereof (in whole or in part);

<PAGE>

                                                                              15

provided, however, that the term "Guarantee" shall not include endorsements for
collection or deposit in the ordinary course of business. The term "Guarantee"
used as a verb has a corresponding meaning. The term "Guarantor" shall mean any
Person Guaranteeing any obligation.

            "Hedging Obligations" of any Person means the obligations of such
Person pursuant to any Interest Rate Agreement or Currency Agreement.

            "Holder" or "Securityholder" means the Person in whose name a
Security is registered on the Registrar's books.

            "Incur" means issue, assume, Guarantee, incur or otherwise become
liable for; provided, however, that any Indebtedness or Capital Stock of a
Person existing at the time such Person becomes a Restricted Group Member
(whether by merger, consolidation, acquisition or otherwise) shall be deemed to
be Incurred by such Person at the time it becomes a Restricted Group Member. The
term "Incurrence" when used as a noun shall have a correlative meaning. The
accretion of principal of a non-interest bearing or other discount security
shall not be deemed the Incurrence of Indebtedness.

            "Indebtedness" means, with respect to any Person on any date of
determination (without duplication):

            (1) the principal in respect of (A) indebtedness of such Person for
      money borrowed and (B) indebtedness evidenced by notes, debentures, bonds
      or other similar instruments for the payment of which such Person is
      responsible or liable, including, in each case, any premium on such
      indebtedness to the extent such premium has become due and payable;

            (2) all Capital Lease Obligations of such Person and all
      Attributable Debt in respect of Sale/Leaseback Transactions entered into
      by such Person;

            (3) all obligations of such Person issued or assumed as the deferred
      purchase price of property, all conditional sale obligations of such
      Person and all obligations of such Person under any title retention
      agreement (but excluding trade accounts payable arising in the ordinary
      course of business);

            (4) all obligations of such Person for the reimbursement of any
      obligor on any letter of credit,

<PAGE>

                                                                              16

      bank guarantee, banker's acceptance, surety bond or performance bond;

            (5) the amount of all obligations of such Person with respect to the
      redemption, repayment or other repurchase of any Disqualified Stock of
      such Person or, with respect to any Preferred Stock of any Subsidiary or
      Restricted Group Member of such Person, the principal amount of such
      Preferred Stock to be determined in accordance with the Indenture (but
      excluding, in each case, any accrued dividends);

            (6) all obligations of the type referred to in clauses (1) through
      (5) of other Persons and all dividends of other Persons for the payment of
      which, in either case, such Person is responsible or liable, directly or
      indirectly, as obligor, guarantor or otherwise, including by means of any
      Guarantee;

            (7) all obligations of the type referred to in clauses (1) through
      (6) of other Persons secured by any Lien on any property or asset of such
      Person (whether or not such obligation is assumed by such Person), the
      amount of such obligation being deemed to be the lesser of the value of
      such property or assets and the amount of the obligation so secured; and

            (8) to the extent not otherwise included in this definition, Hedging
      Obligations of such Person.

The amount of Indebtedness of any Person at any date shall be the outstanding
balance at such date of all unconditional obligations as described above and the
maximum liability, upon the occurrence of the contingency giving rise to the
obligation, of any contingent obligations at such date; provided, however, that
the amount of Indebtedness of any unconsolidated Permitted International Joint
Venture shall be reduced by an amount that corresponds to the Third Party
Ownership Interest in such Permitted International Joint Venture.

            "Indenture" means this Indenture as amended or supplemented from
time to time.

            "Interest Rate Agreement" means, in respect of a Person, any
interest rate swap agreement, interest rate cap agreement or other financial
agreement or arrangement designed to protect such Person against fluctuations in
interest rates.

<PAGE>

                                                                              17

            "Investee" means any Person (other than the Company or any
Restricted Group Member) in which the Company or any Restricted Group Member has
an Investment.

            "Investment" in any Person means any direct or indirect advance,
loan (other than advances to customers in the ordinary course of business that
are recorded as Receivables on the balance sheet of the lender) or other
extensions of credit (including by way of Guarantee or similar arrangement) or
capital contribution to (by means of any transfer of cash or other property to
others or any payment for property or services for the account or use of
others), or any purchase or acquisition of Capital Stock, Indebtedness or other
similar instruments issued by such Person.

            For purposes of the definitions of "Unrestricted Subsidiary",
"Restricted Payment" and "Permitted International Joint Venture", and for
purposes of Section 4.04 and Section 4.06:

            (1) "Investment" shall include the portion (proportionate to the
      Company's equity interest in such Subsidiary or other entity) of the Fair
      Market Value of the net assets of any (A) Subsidiary of the Company at the
      time that such Subsidiary is designated an Unrestricted Subsidiary or (B)
      Permitted International Joint Venture at the time that such entity is
      designated an Investee; provided, however, that if any Permitted
      International Joint Venture shall cease to satisfy the definition of
      "Permitted International Joint Venture" and is not designated promptly as
      a Restricted Subsidiary or an Unrestricted Subsidiary, it shall be deemed
      to have been designated as an Investee; provided further, however, that
      upon a redesignation of such Subsidiary as a Restricted Subsidiary or such
      Investee as a Permitted International Joint Venture, the Company shall be
      deemed to continue to have a permanent "Investment" in an Unrestricted
      Subsidiary or Investee, as applicable, equal to an amount (if positive)
      equal to (A) the Company's "Investment" in such entity at the time of such
      redesignation less (B) the portion (proportionate to the Company's equity
      interest in such entity) of the Fair Market Value of the net assets of
      such entity at the time of such redesignation; and

            (2) any property transferred to or from an Unrestricted Subsidiary
      or Investee shall be valued at its Fair Market Value at the time of such
      transfer.

<PAGE>

                                                                              18

            "Issue Date" means April 10, 2000.

            "Issue Date 2010 Senior Notes" means 2010 Senior Notes issued on the
Issue Date, the aggregate principal amount of such notes to be evidenced by an
Officers' Certificate.

            "Issue Date Euro Notes" means Euro Notes issued on the Issue Date,
the aggregate principal amount of such notes to be evidenced by an Officers'
Certificate.

            "Lien" means any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any conditional sale or other title
retention agreement or lease in the nature thereof).

            "Marketable Securities" means, with respect to any Asset
Disposition, any readily marketable equity securities of a corporation whose
primary business is the Telecommunications Business that are (i) traded on the
New York Stock Exchange, the American Stock Exchange or the Nasdaq National
Market and (ii) issued by a corporation having a total equity market
capitalization of not less than $250.0 million; provided, however, that the
excess of (A) the aggregate amount of securities of any one such corporation
held by the Company and any Restricted Group Member over (B) 20 times the
average daily trading volume of such securities during the 20 immediately
preceding trading days shall be deemed not to be Marketable Securities, as
determined on the date of the contract relating to such Asset Disposition.

            "Net Available Cash" from an Asset Disposition means cash payments
received therefrom (including any cash payments received by way of deferred
payment of principal pursuant to a note or installment receivable or otherwise
and proceeds from the sale or other disposition of any securities received as
consideration, but only as and when received, but excluding any other
consideration received in the form of assumption by the acquiring Person of
Indebtedness or other obligations relating to such properties or assets or
received in any other noncash form), in each case net of:

            (1) all legal, title and recording tax expenses, commissions and
      other fees and expenses incurred, and all Federal, state, provincial,
      foreign and local taxes required to be accrued as a liability under GAAP,
      as a consequence of such Asset Disposition;

<PAGE>

                                                                              19

            (2) all payments made on any Indebtedness which is secured by any
      assets subject to such Asset Disposition, in accordance with the terms of
      any Lien upon or other security agreement of any kind with respect to such
      assets, or which must by its terms, or in order to obtain a necessary
      consent to such Asset Disposition, or by applicable law, be repaid out of
      the proceeds from such Asset Disposition;

            (3) all distributions and other payments required to be made to
      minority interest holders in Restricted Group Members as a result of such
      Asset Disposition; and

            (4) the deduction of appropriate amounts provided by the seller as a
      reserve, in accordance with GAAP, against any liabilities associated with
      the property or other assets disposed in such Asset Disposition and
      retained by the Company or any Restricted Group Member after such Asset
      Disposition.

            "Net Cash Proceeds", with respect to any issuance or sale of Capital
Stock, means the cash proceeds of such issuance or sale net of attorneys' fees,
accountants' fees, underwriters' or placement agents' fees, discounts or
commissions and brokerage, consultant and other fees actually incurred in
connection with such issuance or sale and net of taxes paid or payable as a
result thereof.

            "Office.com" means Office.com Inc. and its successors.

            "Officer" means the Chairman of the Board, the President, any Vice
President, the Treasurer or the Secretary of the Company.

            "Officers' Certificate" means a certificate signed by two Officers.

            "Opinion of Counsel" means a written opinion from legal counsel who
is acceptable to the Trustee. The counsel may be an employee of or counsel to
the Company or the Trustee.

            "Permitted Credit Facility" means one or more credit agreements,
loan agreements, lease agreements, commercial paper facilities, Receivables
facilities or similar facilities, secured or unsecured, providing for revolving
credit loans, term loans, sales of receivables or letters of credit, entered
into from time to time by the

<PAGE>

                                                                              20

Company or its Restricted Group Members, and including any related notes,
Guarantees, collateral documents, instruments and agreements executed in
connection therewith, as the same may be amended, supplemented, modified,
restated or replaced from time to time. A Vendor Financing that otherwise
satisfies the foregoing definition will also constitute a Permitted Credit
Facility.

            "Permitted Holders" means William J. Rouhana, Jr. (or in the
event of his incompetence or death, his estate, heirs, executor,
administrator, committee or other personal representative (collectively,
"heirs")) or any Person controlled, directly or indirectly, by William J.
Rouhana, Jr. or his heirs.

            "Permitted International Joint Venture" means any entity (other than
a Subsidiary of the Company) all or substantially all of whose business is
outside the U.S. and that (i) based on a determination of the Board of
Directors, the Company has, directly or indirectly, the requisite control over
such entity to prevent it from Incurring Indebtedness, or taking any other
action at any time, in contravention of any of the provisions of this Indenture
that apply to a Permitted International Joint Venture, (ii) the Company or a
Restricted Subsidiary owns at least 331/3% of the Voting Stock of such entity
and the Third Party Ownership Interest of such entity does not exceed 662/3%,
(iii) such entity is engaged primarily in aspects of the Telecommunications
Business directly related to the Company's business and (iv) the Company has
designated such entity as a Permitted International Joint Venture pursuant to a
resolution of the Board of Directors.

            Any such designation by the Board of Directors shall be evidenced to
the Trustee by promptly filing with the Trustee a copy of the resolution of the
Board of Directors giving effect to such designation and an Officers'
Certificate certifying that such designation complied with the foregoing
provisions. The Board of Directors may designate any Permitted International
Joint Venture to no longer be a Permitted International Joint Venture and to be
treated as an Investee; provided, however, that such designation would be
permitted under Section 4.04. Any such designation by the Board of Directors
shall be evidenced to the Trustee by promptly filing with the Trustee a copy of
the resolution of the Board of Directors giving effect to such designation and
an Officers' Certificate certifying that such designation complied with the
foregoing provisions.

<PAGE>

                                                                              21

            "Permitted Investment" means an Investment by the Company or any
Restricted Group Member in:

            (1) the Company, a Restricted Group Member or a Person that will,
      upon the making of such Investment, become a Restricted Group Member;
      provided, however, that the primary business of such Restricted Group
      Member is the Telecommunications Business;

            (2) another Person if as a result of such Investment such other
      Person is merged or consolidated with or into, or transfers or conveys all
      or substantially all its assets to, the Company or a Restricted Group
      Member; provided, however, that such Person's primary business is the
      Telecommunications Business;

            (3) cash and Temporary Cash Investments;

            (4) Receivables owing to the Company or any Restricted Group
      Member;

            (5) Capital Stock of customers of the Company or any Restricted
      Group Member received in exchange for products and services provided in
      the ordinary course of business; provided, however, that the value of such
      products and services (calculated as the consideration received by the
      Company or such Restricted Group Member for such products and services in
      a comparable arm's-length transaction) shall not exceed $50.0 million
      during each successive 12-month period following the Issue Date;

            (6) payroll, travel and similar advances to cover matters that are
      expected at the time of such advances ultimately to be treated as expenses
      for accounting purposes and that are made in the ordinary course of
      business;

            (7) loans or advances to employees made in the ordinary course of
      business consistent with past practices of the Company or such Restricted
      Group Member or as part of a compensation scheme approved by the Board of
      Directors in an amount not to exceed $5.0 million at any one time
      outstanding;

            (8) stock, obligations or securities received in settlement of debts
      created in the ordinary course of business and owing to the Company or any
      Restricted Group Member or in satisfaction of judgments or settlement of
      claims or disputes;

<PAGE>

                                                                              22

            (9) shares of Capital Stock of an Unrestricted Subsidiary; provided,
      however, that such shares are being acquired from the Company or a
      Restricted Group Member; and

            (10) any Person to the extent such Investment represents the noncash
      portion (other than Marketable Securities) of the consideration received
      for an Asset Disposition as permitted pursuant to Section 4.06.

            "Permitted Liens" means, with respect to any Person:

            (1) pledges or deposits by such Person under worker's compensation
      laws, unemployment insurance laws or similar legislation, or good faith
      deposits in connection with bids, tenders, contracts (other than for the
      payment of Indebtedness) or leases to which such Person is a party, or
      deposits to secure public or statutory obligations of such Person or
      deposits of cash or United States government bonds to secure surety or
      appeal bonds to which such Person is a party, or deposits as security for
      contested taxes or import duties or for the payment of rent or similar
      operational requirements, in each case Incurred in the ordinary course of
      business;

            (2) Liens imposed by law, such as carriers', warehousemen's and
      mechanics' Liens, in each case for sums not yet due or being contested in
      good faith by appropriate proceedings or other Liens arising out of
      judgments or awards against such Person with respect to which such Person
      shall then be proceeding with an appeal or other proceedings for review
      and Liens arising solely by virtue of any statutory or common law
      provision relating to banker's Liens, rights of set-off or similar rights
      and remedies as to deposit accounts or other funds maintained with a
      creditor depository institution; provided, however, that (A) such deposit
      account is not a dedicated cash collateral account and is not subject to
      restrictions against access by the Company in excess of those set forth by
      regulations promulgated by the Federal Reserve Board and (B) such deposit
      account is not intended by the Company or any Restricted Group Member to
      provide collateral to the depository institution;

            (3) Liens for taxes not yet subject to penalties for nonpayment or
      which are being contested in good faith and by appropriate proceedings
      promptly insti-

<PAGE>

                                                                              23

      tuted and diligently concluded; provided, however, that such Person has
      created a reserve or other appropriate provision therefor as may be
      required by GAAP;

            (4) Liens in favor of issuers of letters of credit, bank guarantees,
      bankers' acceptances, surety bonds, bid bonds and performance bonds issued
      pursuant to the request of and for the account of such Person in the
      ordinary course of its business; provided, however, that the Indebtedness
      in respect thereto is permitted to be Incurred by Section 4.03;

            (5) minor survey exceptions, minor encumbrances, easements or
      reservations of, or rights of others for, licenses, rights-of-way, sewers,
      electric lines, telegraph and telephone lines and other similar purposes,
      or zoning or other restrictions as to the use of real property or Liens
      incidental to the conduct of the business of such Person or to the
      ownership of its properties which were not Incurred in connection with
      Indebtedness and which do not in the aggregate materially adversely affect
      the value of said properties or materially impair their use in the
      operation of the business of such Person;

            (6) Liens to secure Indebtedness permitted under the provisions
      described in Section 4.03(b)(1), Section 4.03(b)(5), Section 4.03(b)(8)
      (but with respect to Section 4.03(b)(8) only to the extent such
      Indebtedness constitutes Refinancing Indebtedness of Purchase Money
      Indebtedness) and Section 4.03(b)(10); provided, however, that any such
      Liens securing Indebtedness (other than Indebtedness pursuant to a
      Permitted Credit Facility) described in Section 4.03(b)(5) (or Refinancing
      Indebtedness thereof) may not extend to any property owned by the Company
      or any of the Restricted Group Members other than the property acquired
      with the proceeds from Indebtedness Incurred under such Section 4.03(b)(5)
      and the proceeds therefrom;

            (7) Liens existing on the Issue Date;

            (8) Liens on property or shares of Capital Stock of another Person
      at the time such other Person becomes a Subsidiary of such Person or a
      Permitted International Joint Venture; provided, however, that the Liens
      may not extend to any other property owned by such Person or any of its
      Restricted Group Members

<PAGE>

                                                                              24

      (other than assets and property affixed or appurtenant thereto);

            (9) Liens on property at the time such Person or any of its
      Subsidiaries or Permitted International Joint Ventures acquires the
      property, including any acquisition by means of a merger or consolidation
      with or into such Person or a Subsidiary of such Person; provided,
      however, that the Liens may not extend to any other property owned by such
      Person or any of its Restricted Group Members (other than assets and
      property affixed or appurtenant thereto);

            (10) Liens in favor of the Company or any Restricted Group Member
      on any property other than property of the Company;

            (11) Liens securing Hedging Obligations consisting of (A) Interest
      Rate Agreements or Currency Agreements directly related to Indebtedness
      that is, and is permitted to be incurred under this Indenture or (B)
      Currency Agreements used to hedge non-U.S. dollar currency exposures of
      the Company and its Restricted Group Members, entered into in accordance
      with customary industry practices for companies in the Telecommunications
      Business with international operations and not for purposes of
      speculation, in each case secured by a Lien on the same property securing
      such Hedging Obligations;

            (12) Liens incurred in the ordinary course of business of the
      Company or any of its Restricted Group Members with respect to obligations
      that do not exceed $10.0 million at any one time outstanding; provided,
      however, that

                  (A) such obligations are not Incurred in connection with
            the borrowing of money; and

                  (B) such Liens do not in the aggregate materially detract from
            the value of the property or materially impair the use thereof in
            the operation of business by the Company or such Restricted Group
            Member;

            (13) Liens on the Capital Stock of an Unrestricted Subsidiary; and

            (14) Liens to secure any Refinancing (or successive Refinancings) as
      a whole, or in part, of any

<PAGE>

                                                                              25

      Indebtedness secured by any Lien referred to in the foregoing clauses (7),
      (8) or (9); provided, however, that:

                  (A) such new Lien shall be limited to all or part of the same
            property and assets that secured or, under the written agreements
            pursuant to which the original Lien arose, could secure the original
            Lien (plus improvements and accessions to, such property or proceeds
            or distributions thereof); and

                  (B) the Indebtedness secured by such Lien at such time is not
            increased to any amount greater than the sum of (x) the outstanding
            principal amount or, if greater, committed amount of the
            Indebtedness described under clauses (7), (8) or (9) at the time the
            original Lien became a Permitted Lien and (y) an amount necessary to
            pay any fees and expenses, including premiums and defeasance costs,
            related to such refinancing, refunding, extension, renewal or
            replacement.

For purposes of this definition, the term "Indebtedness" shall be deemed to
include interest, fees and other amounts due on such Indebtedness.

            "Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint-stock company, trust,
unincorporated organization, government or any agency or political subdivision
thereof or any other entity.

            "Preferred Stock", as applied to the Capital Stock of any Person,
means Capital Stock of any class or classes (however designated) which is
preferred as to the payment of dividends or distributions, or as to the
distribution of assets upon any voluntary or involuntary liquidation or
dissolution of such Person, over shares of Capital Stock of any other class of
such Person.

            "Preferred Stock Exchange Offer" means an offer by the Company to
exchange any and all of its Series C Preferred Stock (or the exchange debentures
issuable in respect of such Series C Preferred Stock in accordance with its
terms) for 2010 Senior Notes and Securities.

            "principal" of a Security means the principal of the Security plus
the premium, if any, payable on the

<PAGE>

                                                                              26

Security which is due or overdue or is to become due at the relevant time.

            "Property" means, with respect to any Person, any interest of such
Person in any kind of property or asset, whether real, personal or mixed, or
tangible or intangible, including Capital Stock in, and other securities of, any
other Person. For purposes of any calculation required pursuant to this
Indenture the value of any Property shall be its Fair Market Value.

            "Public Equity Offering" means an underwritten primary public
offering of common stock of the Company pursuant to an effective registration
statement under the Securities Act.

            "Purchase Money Indebtedness" means Indebtedness (including Capital
Lease Obligations, Acquired Indebtedness, mortgage financings and purchase money
obligations) Incurred for the purpose of financing all or any part of the cost
of construction, installation, acquisition, lease, development or improvement by
the Company or any Restricted Group Member of any Telecommunications Assets of
the Company or any Restricted Group Member, including any related note,
Guarantees, collateral documents, instruments and agreements executed in
connection therewith, as the same may be amended, supplemented, modified or
restated from time to time.

            "Qualified Receivables Transaction" means an Incurrence of
Indebtedness of the Company or any Restricted Group Member pursuant to either
(1) credit facilities secured by Receivables or (2) Receivables purchase
facilities.

            "Receivables" means receivables, chattel paper, instruments,
documents or intangibles evidencing or relating to the right to payment of money
and proceeds and products thereof in each case generated in the ordinary course
of business.

            "Refinance" means, in respect of any Indebtedness, to refinance,
extend, renew, refund, repay, prepay, redeem, defease or retire, or to issue
other Indebtedness in exchange or replacement for, such indebtedness.
"Refinanced" and "Refinancing" shall have correlative meanings.

            "Refinancing Indebtedness" means Indebtedness that Refinances any
Indebtedness of the Company or any Restricted

<PAGE>

                                                                              27

Group Member existing on the Issue Date or Incurred in compliance with this
Indenture, including Indebtedness that Refinances Refinancing Indebtedness;
provided, however, that:

            (1) such Refinancing Indebtedness has a Stated Maturity no
      earlier than the Stated Maturity of the Indebtedness being Refinanced;

            (2) such Refinancing Indebtedness has an Average Life at the time
      such Refinancing Indebtedness is Incurred that is equal to or greater than
      the Average Life of the Indebtedness being Refinanced; and

            (3) such Refinancing Indebtedness has an aggregate principal amount
      (or if Incurred with original issue discount, an aggregate issue price)
      that is equal to or less than the aggregate principal amount (or if
      Incurred with original issue discount, the aggregate accreted value) then
      outstanding (plus fees and expenses, including any premium and defeasance
      costs) under the Indebtedness being Refinanced;

provided further, however, that Refinancing Indebtedness shall not include (A)
Indebtedness of a Subsidiary or a Permitted International Joint Venture that
Refinances Indebtedness of the Company or (B) Indebtedness of the Company or a
Restricted Group Member that Refinances Indebtedness of an Unrestricted
Subsidiary.

            "Registration Rights Agreement" means the Registration Rights
Agreement dated April 10, 2000, among the Company, Credit Suisse First Boston
Corporation, Salomon Smith Barney Inc., BNY Capital Markets, Inc. and CIBC
World Markets Corp., as representatives of the several initial purchasers
identified therein.

            "Restricted Group Member" means collectively each Restricted
Subsidiary and each Permitted International Joint Venture.

            "Restricted Payment" with respect to any Person means:

            (1) the declaration or payment of any dividends or any other
      distributions of any sort in respect of its Capital Stock (including any
      payment in connection with any merger or consolidation involving such
      Person) or similar payment to the direct or indirect holders of its
      Capital Stock (other than dividends or distribu-

<PAGE>

                                                                              28

      tions payable solely in its Capital Stock (other than Disqualified Stock),
      rights to purchase additional Capital Stock (other than Disqualified
      Stock) for cash and dividends or distributions payable solely to the
      Company or a Restricted Group Member, and other than pro rata dividends or
      other distributions made by a Restricted Group Member that is not a Wholly
      Owned Subsidiary to minority stockholders or holders of Third Party
      Ownership Interests (or owners of an equivalent interest in the case of a
      Restricted Group Member that is an entity other than a corporation) or
      holders of Third Party Ownership Interests);

            (2) the purchase, redemption or other acquisition or retirement for
      value of any Capital Stock of the Company or any direct or indirect parent
      of the Company held by any Person or of any Capital Stock of a Restricted
      Group Member held by any Affiliate of the Company (other than a Restricted
      Group Member), including the exercise of any option to exchange any
      Capital Stock (other than into Capital Stock of the Company that is not
      Disqualified Stock);

            (3) the purchase, repurchase, redemption, defeasance or other
      acquisition or retirement for value, prior to scheduled maturity,
      scheduled repayment or scheduled sinking fund payment of any Subordinated
      Obligations of such Person (other than the purchase, repurchase or other
      acquisition of Subordinated Obligations purchased in anticipation of
      satisfying a sinking fund obligation, principal installment or final
      maturity, in each case due within one year of the date of such purchase,
      repurchase or other acquisition); or

            (4) the making of any Investment (other than a Permitted
      Investment) in any Person.

            "Restricted Subsidiary" means any Subsidiary of the Company that is
not an Unrestricted Subsidiary.

            "Sale/Leaseback Transaction" means an arrangement relating to
property owned by the Company or a Restricted Group Member on the Issue Date or
thereafter acquired by the Company or a Restricted Subsidiary whereby the
Company or a Restricted Group Member transfers such property to a Person (other
than the Company or a Restricted Group Member) and the Company or a Restricted
Group Member leases it from such Person.

<PAGE>

                                                                              29

            "SEC" means the Securities and Exchange Commission.

            "Secured Indebtedness" means any Indebtedness of the Company secured
by a Lien on property of the Company or any Restricted Group Member.

            "Senior Indebtedness" means:

            (1) Indebtedness of the Company, whether outstanding on the Issue
      Date or thereafter Incurred; and

            (2) accrued and unpaid interest (including interest accruing on or
      after the filing of any petition in bankruptcy or for reorganization
      relating to the Company to the extent postfiling interest is allowed in
      such proceeding) in respect of (A) indebtedness of the Company for money
      borrowed and (B) indebtedness evidenced by notes, debentures, bonds or
      other similar instruments for the payment of which the Company is
      responsible or liable

unless, in the case of clauses (1) and (2), in the instrument creating or
evidencing the same or pursuant to which the same is outstanding, it is provided
that such obligations are subordinate in right of payment to the Securities;
provided, however, that Senior Indebtedness shall not include:

            (1) any obligation of the Company to any Subsidiary or Permitted
      International Joint Venture;

            (2) any liability for Federal, state, local or other taxes owed
      or owing by the Company;

            (3) any accounts payable or other liability to trade creditors
      arising in the ordinary course of business (including guarantees thereof
      or instruments evidencing such liabilities);

            (4) any Indebtedness of the Company (and any accrued and unpaid
      interest in respect thereof) which is subordinate or junior in any respect
      to any other Indebtedness or other obligation of the Company; or

            (5) that portion of any Indebtedness which at the time of Incurrence
      is Incurred in violation of this Indenture.

<PAGE>

                                                                              30

            "Securities" means the Securities issued under this Indenture.

            "Series C Preferred Stock" means the Series C 14-1/4% Senior
Cumulative Exchangeable Preferred Stock due 2007 of the Company issued and
outstanding on the Issue Date.

            "Significant Restricted Group Member" means any Restricted Group
Member that would be a "Significant Subsidiary" of the Company within the
meaning of Rule 1-02 under Regulation S-X promulgated by the SEC, assuming for
the purpose of this definition that a Permitted International Joint Venture that
is not a Subsidiary of the Company is a Subsidiary of the Company.

            "Stated Maturity" means, with respect to any security, the date
specified in such security as the fixed date on which the final payment of
principal of such security is due and payable, including pursuant to any
mandatory redemption provision (but excluding any provision providing for the
repurchase of such security at the option of the holder thereof upon the
happening of any contingency beyond the control of the issuer unless such
contingency has occurred).

            "Subordinated Obligation" means any Indebtedness of the Company
(whether outstanding on the Issue Date or thereafter Incurred) which is
subordinate or junior in right of payment to the Securities pursuant to a
written agreement to that effect.

            "Subsidiary" means, with respect to any Person, any corporation,
association, partnership or other business entity of which more than 50% of the
total voting power of shares of Voting Stock is at the time owned or controlled,
directly or indirectly, by:

            (1) such Person;

            (2) such Person and one or more Subsidiaries of such Person; or

            (3) one or more Subsidiaries of such Person.

            "Telecommunications Assets" means (a) any Property (other than cash,
cash equivalents and securities) used in the Telecommunications Business; (b)
for purposes of Section 4.03, Section 4.04 and Section 4.10 only, Capital Stock
of any Person, or (c) for all other purposes of this Indenture, Capital Stock of
a Restricted Group Member or a

<PAGE>

                                                                              31

Person that becomes a Restricted Group Member as a result of the acquisition of
such Capital Stock by the Company or another Restricted Group Member, in each
case, acquired from any Person (other than a Subsidiary of the Company or a
Permitted International Joint Venture) in a bona fide transaction; provided,
however, that, in the case of clause (b) or (c), such Person is primarily
engaged in the Telecommunications Business.

            "Telecommunications Business" means the business of (i)
transmitting, or providing services relating to the transmission of, voice,
video or data through transmission facilities, (ii) constructing, creating,
developing or producing communications networks, related network transmission
equipment, software, devices and content for use in a communications or content
distribution business, (iii) data center management, computer and application
outsourcing, computer systems integration, reengineering of computer software,
information services and web hosting and any services related thereto or (iv)
evaluating, participating or pursuing any other activity or opportunity that is
primarily related to those identified in (i), (ii) or (iii) above or in
furtherance thereof, including, without limitation, any business conducted by
the Company or any Restricted Group Member on the Issue Date; provided, however,
that the determination of what constitutes a Telecommunications Business shall
be made in good faith by the Board of Directors.

            "Temporary Cash Investments" means any of the following:

            (1) any investment in direct obligations of the United States of
      America or any agency thereof or obligations guaranteed by the United
      States of America or any agency thereof;

            (2) investments in time deposit accounts, certificates of deposit,
      money market deposits, bankers' acceptances and repurchase obligations
      maturing within 365 days of the date of acquisition thereof issued by a
      bank or trust company which is organized under the laws of the United
      States of America, any state thereof or any foreign country recognized by
      the United States, and which bank or trust company has capital, surplus
      and undivided profits aggregating in excess of $500,000,000 (or the
      foreign currency equivalent thereof) and has outstanding debt which is
      rated "A" (or such similar equivalent rating) or higher by at least one
      nationally

<PAGE>

                                                                              32

      recognized statistical rating organization (as defined in Rule 436 under
      the Securities Act) or any money-market fund sponsored by a registered
      broker dealer or mutual fund distributor;

            (3) repurchase obligations with a term of not more than 30 days for
      underlying securities of the types described in clause (1) above entered
      into with a bank meeting the qualifications described in clause (2) above;

            (4) investments in commercial paper, maturing not more than 270 days
      after the date of acquisition, issued by a corporation (other than an
      Affiliate of the Company) organized and in existence under the laws of the
      United States of America, any state thereof or any foreign country
      recognized by the United States of America with a rating at the time as of
      which any investment therein is made of "P-1" (or higher) according to
      Moody's Investors Service, Inc. or "A-1" (or higher) according to Standard
      and Poor's Ratings Group;

            (5) investments in securities with maturities of one year or less
      from the date of acquisition issued or fully guaranteed by any state,
      commonwealth or territory of the United States of America, or by any
      political subdivision or taxing authority thereof, and rated at least "A"
      by Standard & Poor's Ratings Group or "A" by Moody's Investors Service,
      Inc.;

            (6) auction rate preferred stocks of any corporation maturing within
      90 days after the date of acquisition rated at least "A" by Standard and
      Poor's Ratings Group; and

            (7) any investment in a registered investment company investing
      exclusively in investments of the types described in clauses (1) through
      (6) above.

            "Third Party Ownership Interest" in a Permitted International Joint
Venture means a percentage equal to the difference between 100% and the
percentage of the net income (net loss) of such Permitted International Joint
Venture allocated to the Company and its Restricted Subsidiaries in accordance
with GAAP.

            "TIA" means the Trust Indenture Act of 1939 (15 U.S.C.
ss.ss. 77aaa-77bbbb) as in effect on the date of this Indenture.

<PAGE>

                                                                              33

            "Trustee" means the party named as such in this Indenture until a
successor replaces it and, thereafter, means the successor.

            "Trust Officer" means the Chairman of the Board, the President or
any other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.

            "2008 Senior Notes" means the Company's 12-1/2% Senior Notes due
2008.

            "2010 Senior Notes" means the Company's 12-3/4% Senior Notes due
2010 denominated in U.S. dollars.

            "Uniform Commercial Code" means the New York Uniform Commercial Code
as in effect from time to time.

            "Unrestricted Subsidiary" means:

            (1) Office.com;

            (2) Winstar Credit Corp.;

            (3) any Subsidiary of the Company that at the time of determination
      shall be designated an Unrestricted Subsidiary by the Board of Directors
      in the manner provided below; and

            (4) any Subsidiary of an Unrestricted Subsidiary.

The Board of Directors may designate any Subsidiary of the Company (including
any newly acquired or newly formed Subsidiary) to be an Unrestricted Subsidiary
unless such Subsidiary or any of its Subsidiaries owns any Capital Stock or
Indebtedness of, or holds any Lien on any property of, the Company (other than
Capital Stock (other than Disqualified Stock) of the Company contributed to such
Unrestricted Subsidiary and promptly transferred by such Unrestricted Subsidiary
in exchange for Telecommunications Assets) or any other Subsidiary of the
Company that is not a Subsidiary of the Subsidiary to be so designated or is the
obligor on any Indebtedness a default on which would result in a default on any
Indebtedness of the Company or a Restricted Subsidiary; provided, however, that
either (A) the Subsidiary to be so designated has total assets of $10,000 or
less or (B) if such Subsidiary has assets greater than $10,000, such designation
would be permitted under Section 4.04.

<PAGE>

                                                                              34

            The Board of Directors may designate any Unrestricted Subsidiary to
be a Restricted Subsidiary; provided, however, that immediately after giving
effect to such designation (A) the Consolidated Leverage Ratio would be no worse
than the Consolidated Leverage Ratio determined immediately prior to such
designation, (B) all Liens and Indebtedness of such Unrestricted Subsidiary
outstanding immediately following such designation would, if Incurred at such
time, have been permitted to be Incurred at such time for all purposes of this
Indenture and (C) no Default shall have occurred and be continuing. Any such
designation by the Board of Directors shall be evidenced to the Trustee by
promptly filing with the Trustee a copy of the resolution of the Board of
Directors giving effect to such designation and an Officers' Certificate
certifying that such designation complied with the foregoing provisions.

            "U.S. Dollar Equivalent" means with respect to any monetary
amount in a currency other than U.S. dollars, at any time for determination
thereof, the amount of U.S. dollars obtained by converting such foreign
currency involved in such computation into U.S. dollars at the spot rate for
the purchase of U.S. dollars with the applicable foreign currency as
published in The Wall Street Journal in the "Exchange Rates" column under the
heading "Currency Trading" on the date two Business Days prior to such
determination.

            Except as described in Section 4.03, whenever it is necessary to
determine whether the Company has complied with any covenant in this Indenture
or a Default has occurred and an amount is expressed in a currency other than
U.S. dollars, such amount will be treated as the U.S. Dollar Equivalent
determined as of the date such amount is initially determined in such currency.

            "U.S. Government Obligations" means direct obligations (or
certificates representing an ownership interest in such obligations) of the
United States of America (including any agency or instrumentality thereof) for
the payment of which the full faith and credit of the United States of America
is pledged and which are not callable at the issuer's option.

            "Vendor Financing" means any financing or other credit or deferred
payment arrangement provided by a supplier, manufacturer or lessor of
Telecommunications Assets or any Affiliate thereof.

<PAGE>

                                                                              35

            "Voting Stock" of a Person means all classes of Capital Stock or
other interests (including partnership interests) of such Person then
outstanding and normally entitled (without regard to the occurrence of any
contingency) to vote in the election of directors, managers or trustees thereof.

            "Wholly Owned Subsidiary" means a Restricted Subsidiary all the
Capital Stock of which (other than directors' qualifying shares) is owned by the
Company or one or more Wholly Owned Subsidiaries.

            SECTION 1.02.  Other Definitions.

                                                         Defined in
                                Term                      Section
                                ----                      -------

      "Affiliate Transaction"............................  4.07
      "Appendix".........................................  2.01
      "Bankruptcy Law"...................................  6.01
      "Change of Control Offer"..........................  4.09(b)
      "covenant defeasance option".......................  8.01(b)
      "Custodian"........................................  6.01
      "Event of Default".................................  6.01
      "Initial Lien".....................................  4.10
      "legal defeasance option"..........................  8.01(b)
      "Legal Holiday".................................... 10.07
      "Offer"............................................  4.06(b)
      "Offer Amount".....................................  4.06(c)(2)
      "Offer Period".....................................  4.06(c)(2)
      "Paying Agent".....................................  2.03
      "Purchase Date"....................................  4.06(c)(1)
      "Registrar"........................................  2.03
      "Successor Company"................................  5.01

            SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
This Indenture is subject to the mandatory provisions of the TIA which are
incorporated by reference in and made a part of this Indenture. The following
TIA terms have the following meanings:

            "Commission" means the SEC;

            "indenture securities" means the Securities;

            "indenture security holder" means a Securityholder;

            "indenture to be qualified" means this Indenture;

<PAGE>

                                                                              36

            "indenture trustee" or "institutional trustee" means the Trustee;
and

            "obligor" on the indenture securities means the Company and any
other obligor on the indenture securities.

            All other TIA terms used in this Indenture that are defined by the
TIA, defined by TIA reference to another statute or defined by SEC rule have the
meanings assigned to them by such definitions.

            SECTION 1.04. Rules of Construction. Unless the context otherwise
requires:

            (1) a term has the meaning assigned to it;

            (2) an accounting term not otherwise defined has the meaning
      assigned to it in accordance with GAAP;

            (3) "or" is not exclusive;

            (4) "including" means including without limitation;

            (5) words in the singular include the plural and words in the
      plural include the singular;

            (6) unsecured Indebtedness shall not be deemed to be subordinate or
      junior to Secured Indebtedness merely by virtue of its nature as unsecured
      Indebtedness;

            (7) the principal amount of any noninterest bearing or other
      discount security at any date shall be the principal amount thereof that
      would be shown on a balance sheet of the issuer dated such date prepared
      in accordance with GAAP;

            (8) the principal amount of any Preferred Stock shall be (i) the
      maximum liquidation value of such Preferred Stock or (ii) the maximum
      mandatory redemption or mandatory repurchase price with respect to such
      Preferred Stock, whichever is greater; and

            (9) all references to the date the Securities were originally issued
      shall refer to the Issue Date.

<PAGE>

                                                                              37

                                    ARTICLE 2

                                 The Securities

            SECTION 2.01. Form and Dating. Provisions relating to the Initial
Securities, the Private Exchange Securities and the Exchange Securities are set
forth in the Rule 144A/Regulation S Appendix attached hereto (the "Appendix")
which is hereby incorporated in and expressly made part of this Indenture. The
Initial Securities and the Trustee's certificate of authentication shall be
substantially in the form of Exhibit 1 to the Appendix which is hereby
incorporated in and expressly made a part of this Indenture. The Exchange
Securities, the Private Exchange Securities and the Trustee's certificate of
authentication shall be substantially in the form of Exhibit A, which is hereby
incorporated in and expressly made a part of this Indenture. The Securities may
have notations, legends or endorsements required by law, stock exchange rule,
agreements to which the Company is subject, if any, or usage (provided that any
such notation, legend or endorsement is in a form acceptable to the Company).
Each Security shall be dated the date of its authentication. The terms of the
Securities set forth in the Appendix and Exhibit A are part of the terms of this
Indenture.

            SECTION 2.02. Execution and Authentication. Two Officers shall sign
the Securities for the Company by manual or facsimile signature.

            If an Officer whose signature is on a Security no longer holds that
office at the time the Trustee authenticates the Security, the Security shall be
valid nevertheless.

            A Security shall not be valid until an authorized signatory of the
Trustee manually signs the certificate of authentication on the Security. The
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture.

            On the Issue Date and on consummation of the Preferred Stock
Exchange Offer, the Trustee shall authenticate and deliver up to an aggregate of
$930,443,000 aggregate principal amount at maturity of 14-3/4% Senior Discount
Notes Due 2010 (inclusive of any Initial Securities issued in connection with
the Preferred Stock Exchange Offer) and, at any time and from time to time
thereafter, the Trustee shall authenticate and deliver Securities for original
issue in an aggregate principal amount specified in

<PAGE>

                                                                              38

such order, in each case upon a written order of the Company signed by two
Officers or by an Officer and either an Assistant Treasurer or an Assistant
Secretary of the Company. Such order shall specify the amount of the Securities
to be authenticated and the date on which the original issue of Securities is to
be authenticated and, in the case of an issuance of Additional Securities
pursuant to Section 2.13 after the Issue Date, shall certify that such issuance
is in compliance with Section 4.03.

           The Trustee may appoint an authenticating agent reasonably
acceptable to the Company to authenticate the Securities. Unless limited by the
terms of such appointment, an authenticating agent may authenticate Securities
whenever the Trustee may do so. Each reference in this Indenture to
authentication by the Trustee includes authentication by such agent. An
authenticating agent has the same rights as any Registrar, Paying Agent or agent
for service of notices and demands.

           SECTION 2.03. Registrar and Paying Agent. The Company shall
maintain an office or agency where Securities may be presented for registration
of transfer or for exchange (the "Registrar") and an office or agency where
Securities may be presented for payment (the "Paying Agent"). The Registrar
shall keep a register of the Securities and of their transfer and exchange. The
Company may have one or more co-registrars and one or more additional paying
agents. The term "Paying Agent" includes any additional paying agent.

           The Company shall enter into an appropriate agency agreement with
any Registrar, Paying Agent or co-registrar not a party to this Indenture, which
shall incorporate the terms of the TIA. The agreement shall implement the
provisions of this Indenture that relate to such agent. The Company shall notify
the Trustee of the name and address of any such agent. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such and shall be
entitled to appropriate compensation therefor pursuant to Section 7.07. The
Company or any Wholly Owned Subsidiary incorporated or organized within The
United States of America may act as Paying Agent, Registrar, co-registrar or
transfer agent.

           The Company initially appoints the Trustee as Registrar and Paying
Agent in connection with the Securities.

<PAGE>

                                                                              39

           SECTION 2.04. Paying Agent To Hold Money in Trust. Prior to each
due date of the principal and interest on any Security, the Company shall
deposit with the Paying Agent a sum sufficient to pay such principal and
interest when so becoming due. The Company shall require each Paying Agent
(other than the Trustee) to agree in writing that the Paying Agent shall hold in
trust for the benefit of Securityholders or the Trustee all money held by the
Paying Agent for the payment of principal of or interest on the Securities and
shall notify the Trustee of any default by the Company in making any such
payment. If the Company or a Subsidiary acts as Paying Agent, it shall segregate
the money held by it as Paying Agent and hold it as a separate trust fund. The
Company at any time may require a Paying Agent to pay all money held by it to
the Trustee and to account for any funds disbursed by the Paying Agent. Upon
complying with this Section, the Paying Agent shall have no further liability
for the money delivered to the Trustee.

           SECTION 2.05. Securityholder Lists. The Trustee shall preserve in
as current a form as is reasonably practicable the most recent list available to
it of the names and addresses of Securityholders. If the Trustee is not the
Registrar, the Company shall furnish to the Trustee, in writing at least five
Business Days before each interest payment date and at such other times as the
Trustee may request in writing, a list in such form and as of such date as the
Trustee may reasonably require of the names and addresses of Securityholders.

           SECTION2.06. Transfer and Exchange. The Securities shall be issued
in registered form and shall be transferable only upon the surrender of a
Security for registration of transfer. When a Security is presented to the
Registrar or a co-registrar with a request to register a transfer, the Registrar
shall register the transfer as requested if the requirements of this Indenture
and Section 8-401(1) of the Uniform Commercial Code are met. When Securities are
presented to the Registrar or a co-registrar with a request to exchange them for
an equal principal amount of Securities of other denominations, the Registrar
shall make the exchange as requested if the same requirements are met. No
service charge shall be made for any registration of transfer or exchange, but
the Company may require payment of a sum sufficient to cover any transfer tax,
assessments or similar governmental charge payable in connection therewith
(other than any such transfer taxes, assessments or similar governmental charge
payable upon exchange or transfer pursuant to Sections 3.06, 4.06, 4.09 and
9.05).

<PAGE>

                                                                              40

           SECTION 2.07. Replacement Securities. If a mutilated Security is
surrendered to the Registrar or if the Holder of a Security claims that the
Security has been lost, destroyed or wrongfully taken, the Company shall issue
and the Trustee shall authenticate a replacement Security if the requirements of
Section 8-405 of the Uniform Commercial Code are met and the Holder satisfies
any other reasonable requirements of the Trustee. If required by the Trustee or
the Company, such Holder shall furnish an indemnity bond sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, the
Paying Agent, the Registrar and any co-registrar from any loss which any of them
may suffer if a Security is replaced. The Company and the Trustee may charge the
Holder for their expenses in replacing a Security.

           Every replacement Security is an additional obligation of the
Company.

           SECTION 2.08. Outstanding Securities; When Securities Disregarded.
Securities outstanding at any time are all Securities authenticated by the
Trustee except for those canceled by it, those delivered to it for cancellation
and those described in this Section as not outstanding. A Security does not
cease to be outstanding because the Company or an Affiliate of the Company holds
the Security.

           If a Security is replaced pursuant to Section 2.07, it ceases to be
outstanding unless the Trustee and the Company receive proof satisfactory to
them that the replaced Security is held by a bona fide purchaser.

           If the Paying Agent segregates and holds in trust, in accordance
with this Indenture, on a redemption date or maturity date money sufficient to
pay all principal and interest payable on that date with respect to the
Securities (or portions thereof) to be redeemed or maturing, as the case may be,
then on and after that date such Securities (or portions thereof) cease to be
outstanding and interest on them ceases to accrue.

           Notwithstanding any other provisions of this Indenture to the
contrary, in determining whether the Holders of the required principal amount of
Securities have concurred in any direction, waiver or consent, Securities owned
by the Company or by any Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Company shall be
disregarded and deemed not to be outstanding, except that, for the purpose of
determining whether the Trustee shall be protected in

<PAGE>

                                                                              41

relying on any such direction, waiver or consent, only Securities which the
Trustee knows are so owned shall be so disregarded. Also, subject to the
foregoing, only Securities outstanding at the time shall be considered in any
such determination.

           SECTION 2.09. Temporary Securities. Until definitive Securities are
ready for delivery, the Company may prepare and the Trustee shall authenticate
temporary Securities. Temporary Securities shall be substantially in the form of
definitive Securities but may have variations that the Company considers
appropriate for temporary Securities. Without unreasonable delay, the Company
shall prepare and the Trustee shall authenticate definitive Securities and
deliver them in exchange for temporary Securities.

           SECTION 2.10. Cancellation. The Company at any time may deliver
Securities to the Trustee for cancellation. The Registrar and the Paying Agent
shall forward to the Trustee any Securities surrendered to them for registration
of transfer, exchange or payment. The Trustee and no one else shall cancel and
destroy (subject to the record retention requirements of the Exchange Act) all
Securities surrendered for registration of transfer, exchange, payment or
cancellation and deliver a certificate of such destruction to the Company unless
the Company directs the Trustee to deliver canceled Securities to the Company.
The Company may not issue new Securities to replace Securities it has redeemed,
paid or delivered to the Trustee for cancellation.

           SECTION 2.11. Defaulted Interest. If the Company defaults in a
payment of interest on the Securities, the Company shall pay defaulted interest
(plus interest on such defaulted interest to the extent lawful) in any lawful
manner. The Company may pay the defaulted interest to the persons who are
Securityholders on a subsequent special record date. The Company shall fix or
cause to be fixed any such special record date and payment date to the
reasonable satisfaction of the Trustee and shall promptly mail to each
Securityholder a notice that states the special record date, the payment date
and the amount of defaulted interest to be paid.

           SECTION 2.12.CUSIP, ISIN and Common Code Numbers. The Company in
issuing the Securities may use "CUSIP", "ISIN" or "Common Code" numbers (if then
generally in use) and, if so, the Trustee shall use "CUSIP" numbers, "ISIN or
"Common Code" in notices of redemption as a convenience to Holders; provided,
however, that any such

<PAGE>

                                                                              42

notice may state that no representation is made as to the correctness of such
numbers either as printed on the Securities or as contained in any notice of a
redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such numbers.

           SECTION 2.13. Issuance of Additional Securities. The Company shall
be entitled, subject to its compliance with Section 4.03, to issue Additional
Securities under this Indenture which shall have identical terms as the Initial
Securities issued on the Issue Date and in exchange for the Series C Preferred
Stock or any exchange debentures issued in exchange for the Series C Preferred
Stock, other than with respect to the date of issuance and issue price;
provided, however, that the maximum aggregate Accreted Value of Additional
Securities (determined as of their issue date) issued by the Company shall not
exceed $250.0 million. The Initial Securities issued on the Issue Date and in
exchange for the Series C Preferred Stock or any exchange debentures issued in
exchange for the Series C Preferred Stock, any Additional Securities and all
Exchange Securities or Private Exchange Securities issued in exchange therefor
shall be treated as a single class for all purposes under this Indenture.

           With respect to any Additional Securities, the Company shall set
forth in a resolution of the Board of Directors and an Officers' Certificate, a
copy of each of which shall be delivered to the Trustee, the following
information:

            (1) the aggregate principal amount at maturity of such Additional
      Securities to be authenticated and delivered pursuant to this Indenture;

            (2) the issue price, the issue date and the CUSIP number, ISIN
      number and Common Code number of such Additional Securities; provided,
      however, that, except for Additional Securities issued pursuant to the
      Preferred Stock Exchange Offer, no Additional Securities may be issued at
      a price that would cause such Additional Securities to have "original
      issue discount" within the meaning of Section 1273 of the Code (other than
      "original issue discount" in an equal amount to that of any existing
      Securities); and

            (3) whether such Additional Securities shall be Transfer Restricted
      Securities and issued in the form

<PAGE>

                                                                              43

      of Initial Securities as set forth in the Appendix to this Indenture or
      shall be issued in the form of Exchange Securities as set forth in
      Exhibit A.

                                   ARTICLE 3

                                   Redemption

            SECTION 3.01. Notices to Trustee. If the Company elects to redeem
Securities pursuant to paragraph 5 of the Securities, it shall notify the
Trustee in writing of the redemption date, the principal amount at maturity of
Securities to be redeemed and the paragraph of the Securities pursuant to which
the redemption will occur.

            The Company shall give each notice to the Trustee provided for in
this Section at least 30 days before the redemption date unless the Trustee
consents to a shorter period. Such notice shall be accompanied by an Officers'
Certificate and an Opinion of Counsel from the Company to the effect that such
redemption will comply with the conditions herein.

            SECTION 3.02. Selection of Securities To Be Redeemed. If fewer than
all the Securities are to be redeemed, the Trustee shall select the Securities
to be redeemed pro rata or by lot or by a method that complies with applicable
legal and securities exchange requirements, if any, and that the Trustee in its
sole discretion shall deem to be fair and appropriate and in accordance with
methods generally used at the time of selection by fiduciaries in similar
circumstances. The Trustee shall make the selection from outstanding Securities
not previously called for redemption. The Trustee may select for redemption
portions of the principal amount at maturity of Securities that have
denominations larger than $1,000. Securities and portions of them the Trustee
selects shall be in principal amounts at maturity of $1,000 or a whole multiple
of $1,000. Provisions of this Indenture that apply to Securities called for
redemption also apply to portions of Securities called for redemption. The
Trustee shall notify the Company promptly of the Securities or portions of
Securities to be redeemed.

            SECTION 3.03. Notice of Redemption. At least 30 days but not more
than 60 days before a date for redemption of Securities, the Company shall mail
a notice of redemption by first-class mail to each Holder of Securities to be
redeemed at such Holder's registered address.

<PAGE>

                                                                              44

            The notice shall identify the Securities to be redeemed and shall
state:

            (1) the redemption date;

            (2) the redemption price;

            (3) the name and address of the Paying Agent;

            (4) that Securities called for redemption must be surrendered to
      the Paying Agent to collect the redemption price;

            (5) if fewer than all the outstanding Securities are to be
      redeemed, the identification and principal amounts at maturity of the
      particular Securities to be redeemed;

            (6) that, unless the Company defaults in making such redemption
      payment, interest on Securities (or portion thereof) called for redemption
      ceases to accrue on and after the redemption date; and

            (7) that no representation is made as to the correctness or accuracy
      of the CUSIP number, ISIN or Common Code number, if any, listed in such
      notice or printed on the Securities.

            At the Company's request (which request may be revoked by the
Company at any time prior to the time at which the Trustee shall have given such
notice to the Holders), the Trustee shall give the notice of redemption in the
Company's name and at the Company's expense. In such event, the Company shall
provide the Trustee with the information required by this Section.

            SECTION 3.04. Effect of Notice of Redemption. Once notice of
redemption is mailed, Securities called for redemption become due and payable on
the redemption date and at the redemption price stated in the notice. Upon
surrender to the Paying Agent, such Securities shall be paid at the redemption
price stated in the notice, plus accrued interest to the redemption date
(subject to the right of Holders of record on the relevant record date to
receive interest due on the related interest payment date). Failure to give
notice or any defect in the notice to any Holder shall not affect the validity
of the notice to any other Holder.

<PAGE>

                                                                              45

            SECTION 3.05. Deposit of Redemption Price. On or prior to the
redemption date, the Company shall deposit with the Paying Agent (or, if the
Company or a Subsidiary is the Paying Agent, shall segregate and hold in trust)
money sufficient to pay the redemption price of and accrued interest on all
Securities to be redeemed on that date other than Securities or portions of
Securities called for redemption which have been delivered by the Company to the
Trustee for cancellation.

            SECTION 3.06. Securities Redeemed in Part. Upon surrender of a
Security that is redeemed in part, the Company shall execute and the Trustee
shall authenticate for the Holder (at the Company's expense) a new Security
equal in principal amount at maturity to the unredeemed portion of the Security
surrendered.

                                    ARTICLE 4

                                    Covenants

            SECTION 4.01. Payment of Securities. The Company shall promptly pay
the principal of and interest on the Securities on the dates and in the manner
provided in the Securities and in this Indenture. Principal and interest shall
be considered paid on the date due if on such date the Trustee or the Paying
Agent holds in accordance with this Indenture money sufficient to pay all
principal and interest then due.

            The Company shall pay interest on overdue principal at the rate
specified therefor in the Securities, and it shall pay interest on overdue
installments of interest at the same rate to the extent lawful.

            SECTION 4.02. SEC Reports. Notwithstanding that the Company may not
be subject to the reporting requirements of Section 13 or 15(d) of the Exchange
Act, the Company will file with the SEC and provide the Trustee and
Securityholders with such annual reports and such information, documents and
other reports as are specified in Sections 13 and 15(d) of the Exchange Act and
applicable to a U.S. corporation subject to such Sections, such information,
documents and other reports to be so filed and provided at the times specified
for the filing of such information, documents and reports under such Sections.
In addition, the Company will furnish to the Holder of the Securities and to
prospective investors, upon the requests of such Holders, any information
required to be delivered pursuant to

<PAGE>

                                                                              46

Rule 144A(d)(4) under the Securities Act so long as any Securities are not
freely transferable under the Securities Act. The Company also shall comply with
the other provisions of TIA ss. 314(a).

            SECTION 4.03. Limitation on Indebtedness. (a) The Company will not,
and will not permit any Restricted Group Member to, Incur, directly or
indirectly, any Indebtedness; provided, however, that the Company will be
entitled to Incur Indebtedness if, on the date of such Incurrence and after
giving effect thereto on a pro forma basis, the Consolidated Leverage Ratio
would be less than 6.0 to 1.

            (b) Notwithstanding Section 4.03(a), so long as no Default has
occurred and is continuing, the Company and the Restricted Group Members will be
entitled to Incur any or all of the following Indebtedness:

            (1) Indebtedness Incurred pursuant to one or more Permitted Credit
      Facilities; provided, however, that, after giving effect to any such
      Incurrence, the aggregate principal amount of such Indebtedness then
      outstanding does not exceed (A) the greater of (x) $1.15 billion and (y)
      85% of Eligible Receivables less (B) the sum of (i) all principal payments
      with respect to such Indebtedness (other than Indebtedness Incurred
      pursuant to the revolving loan portion of a Permitted Credit Facility)
      pursuant to Section 4.06(a)(3)(A) and (ii) the principal amount of such
      Indebtedness assumed by a transferee in any Asset Disposition;

            (2) Indebtedness owed to and held by the Company or a Restricted
      Group Member; provided, however, that (A) any subsequent issuance or
      transfer of any Capital Stock or the occurrence of any other event which
      results in any such Restricted Group Member ceasing to be a Restricted
      Group Member or any subsequent transfer of such Indebtedness (other than
      to the Company or another Restricted Group Member) shall be deemed, in
      each case, to constitute the Incurrence of such Indebtedness by the
      obligor thereon and (B) if the Company is the obligor on such
      Indebtedness, such Indebtedness is not secured and is expressly
      subordinated to the prior payment in full in cash of all obligations with
      respect to the Securities;

<PAGE>

                                                                              47

            (3) the Securities (other than any Additional Securities),
      the 2008 Senior Notes, the Issue Date 2010 Senior Notes and the
      Issue Date Euro Notes;

            (4) Indebtedness outstanding on the Issue Date (other than
      Indebtedness described in clause (1), (2) or (3) of this Section 4.03(b))
      and any exchange debentures issued in exchange for the Series C Preferred
      Stock in accordance with its terms or Initial Securities or 2010 Senior
      Notes issued in exchange for such exchange debentures or Series C
      Preferred Stock;

            (5) Purchase Money Indebtedness; provided, however, that, to the
      extent such Purchase Money Indebtedness is Incurred by a Restricted Group
      Member, such Purchase Money Indebtedness shall be Incurred pursuant to a
      Permitted Credit Facility or a Vendor Financing; provided further,
      however, that the amount of such Purchase Money Indebtedness does not
      exceed 100% of the cost and directly related expenses of the construction,
      installation, acquisition, lease, insurance, shipping, development or
      improvement of, or any service agreement, maintenance agreement, warranty
      agreement or similar agreement in respect of, the applicable
      Telecommunications Assets;

            (6) Indebtedness of the Company in an amount which, when taken
      together with the amount of all other Indebtedness of the Company Incurred
      pursuant to this clause (6) and then outstanding, does not exceed two
      times the sum of (x) the aggregate Net Cash Proceeds received by the
      Company from the issuance or sale of Capital Stock (other than
      Disqualified Stock) of the Company (other than an issuance or sale to a
      Subsidiary of the Company or a Permitted International Joint Venture and
      other than an issuance or sale to an employee stock ownership plan or to a
      trust established by the Company, any of its Subsidiaries or any Permitted
      International Joint Venture for the benefit of their employees) and (y)
      the fair market value of any Capital Stock (other than Disqualified Stock)
      of the Company issued to any Person (other than a Subsidiary of the
      Company or a Permitted International Joint Venture) (i) in exchange for
      Telecommunications Assets or (ii) in exchange for Capital Stock of another
      Person a substantial majority of the assets of which consist of
      Telecommunications Assets in a transaction pursuant to which such other
      Person becomes a Restricted Group Member, in each case received or issued,
      as the case may be, on or subsequent to

<PAGE>

                                                                              48

      February 1, 2000; provided, however, that such Net Cash Proceeds or fair
      market value have not served as a basis for making a Restricted Payment
      pursuant to Section 4.04(a)(3)(B), Section 4.04(b)(1) or Section
      4.04(b)(5);

            (7) Indebtedness of a Restricted Group Member Incurred and
      outstanding on or prior to the date on which such Subsidiary (in the case
      of a Restricted Subsidiary) or an interest in such entity (in the case of
      a Permitted International Joint Venture) was acquired by the Company
      (other than Indebtedness Incurred in connection with, or to provide all or
      any portion of the funds or credit support utilized to consummate, the
      transaction or series of related transactions pursuant to which such
      Subsidiary (in the case of a Restricted Subsidiary) or an interest in such
      entity (in the case of a Permitted International Joint Venture) was
      acquired by the Company); provided, however, that on the date of such
      acquisition and after giving pro forma effect thereto, the Company would
      have been able to Incur at least $1.00 of additional Indebtedness pursuant
      to Section 4.03(a);

            (8) Refinancing Indebtedness in respect of Indebtedness Incurred
      pursuant to Section 4.03(a) or pursuant to clause (3), (4), (5) or (7) of
      this Section 4.03(b) or this clause (8); provided, however, that any
      Refinancing Indebtedness Incurred by a Restricted Group Member in respect
      of Indebtedness Incurred pursuant to clause (5) of this Section 4.03(b) is
      Incurred pursuant to a Permitted Credit Facility or a Vendor Financing;

            (9) Hedging Obligations consisting of (A) Interest Rate Agreements
      or Currency Agreements directly related to Indebtedness permitted to be
      Incurred by the Company pursuant to this Indenture; provided, however,
      that the notional amount of any such Hedging Obligation does not exceed
      the amount of Indebtedness to which such Hedging Obligation relates or (B)
      Currency Agreements used to hedge non-U.S. dollar currency exposures of
      the Company and its Restricted Group Members, entered into in accordance
      with customary industry practices for companies in the Telecommunications
      Business with international operations and not for purposes of
      speculation;

            (10) Indebtedness solely in respect of letters of credit, bank
      guarantees, banker's acceptances, cash

<PAGE>

                                                                              49

      deposits, surety bonds, bid bonds and performance bonds Incurred in the
      ordinary course of business; provided, however, that such instruments or
      deposits do not support any Indebtedness other than Indebtedness which, if
      Incurred by the Company, would be permitted to be Incurred pursuant to
      another provision of this Section 4.03;

            (11) Indebtedness of the Company or a Restricted Group Member
      consisting of a Guaranty of Indebtedness of a Restricted Group Member
      permitted to be Incurred under this Indenture; provided, however, that the
      entity providing the Guaranty would have been able to Incur such
      Indebtedness under this Indenture; and

            (12) Indebtedness of the Company or a Restricted Group Member in an
      aggregate principal amount which, when taken together with all other
      Indebtedness of the Company and the Restricted Group Members outstanding
      on the date of such Incurrence (other than Indebtedness permitted by
      clauses (1) through (11) of this Section 4.03(b) or Section 4.03(a)) does
      not exceed $50.0 million.

            (c) Notwithstanding the foregoing, the Company will not Incur any
Indebtedness pursuant to Section 4.03(b) (other than the Incurrence of (1) any
exchange debentures issued in exchange for the Series C Preferred Stock in
accordance with its terms or Initial Securities or 2010 Senior Notes issued in
exchange for such exchange debentures or Series C Preferred Stock and (2) any
Indebtedness issued in exchange for the Existing Subordinated Notes) if the
proceeds thereof are used, directly or indirectly, to Refinance any Subordinated
Obligations unless such Indebtedness shall be subordinated to the Securities to
at least the same extent as such Subordinated Obligations.

            (d) For purposes of determining compliance with this Section 4.03,
(1) in the event that an item of Indebtedness meets the criteria of more than
one of the types of Indebtedness described above, the Company, in its sole
discretion, will classify such item of Indebtedness at the time of Incurrence
and only be required to include the amount and type of such Indebtedness in one
of the above clauses and (2) the Company will be entitled to divide and classify
an item of Indebtedness in more than one of the types of Indebtedness described
above.

            (e) For purposes of determining compliance with any U.S. dollar or
euro-denominated restriction on the

<PAGE>

                                                                              50

Incurrence of Indebtedness where the Indebtedness Incurred is denominated in a
different currency, the amount of such Indebtedness will be the U.S. Dollar
Equivalent or Euro Equivalent, as the case may be, determined on the date of the
Incurrence of such Indebtedness, provided, however, that if any such
Indebtedness denominated in a different currency is subject to a Currency
Agreement with respect to U.S. dollars or euros, as the case may be, covering
all principal, premium, if any, and interest payable on such Indebtedness the
amount of such Indebtedness expressed in U.S. dollars or euros will be as
provided in such Currency Agreement. The principal amount of any Refinancing
Indebtedness Incurred in the same currency as the Indebtedness, being Refinanced
will be the Euro Equivalent or U.S. Dollar Equivalent, as appropriate, of the
Indebtedness Refinanced, except to the extent that (1) such U.S. Dollar
Equivalent or Euro Equivalent was determined based on a Currency Agreement, in
which case the Refinancing Indebtedness will be determined in accordance with
the preceding sentence, and (2) the principal amount of the Refinancing
Indebtedness exceeds the principal amount of the Indebtedness being Refinanced,
in which case the U.S. Dollar Equivalent or Euro Equivalent of such excess, as
appropriate, will be determined on the date such Refinancing Indebtedness is
Incurred.

            SECTION 4.04. Limitation on Restricted Payments. (a) The Company
will not, and will not permit any Restricted Group Member, directly or
indirectly, to make a Restricted Payment if at the time the Company or such
Restricted Group Member makes such Restricted Payment:

            (1) a Default shall have occurred and be continuing (or
      would result therefrom);

            (2) after giving effect thereto on a pro forma basis, the Company is
      not entitled to Incur an additional $1.00 of Indebtedness pursuant to
      Section 4.03(a); or

            (3) the aggregate amount of such Restricted Payment and all other
      Restricted Payments since the Issue Date would exceed the sum of (without
      duplication):

                  (A) the amount of (x) cumulative EBITDA during the period
            (taken as a single accounting period) beginning on the first day of
            the fiscal quarter of the Company beginning after the Issue Date and
            ending on the last day of the most recent

<PAGE>

                                                                              51

            fiscal quarter ending at least 45 days prior to the date of such
            Restricted Payment minus (y) the product of 1.5 times cumulative
            Consolidated Interest Expense during such period; plus

                  (B) subject to Section 4.04(c), 100% of the aggregate Net Cash
            Proceeds received by the Company from the issuance or sale of its
            Capital Stock (other than Disqualified Stock) subsequent to the
            Issue Date (other than an issuance or sale to a Subsidiary of the
            Company or a Permitted International Joint Venture and other than an
            issuance or sale to an employee stock ownership plan or to a trust
            established by the Company, any of its Subsidiaries or any Permitted
            International Joint Venture for the benefit of their employees);
            provided, however, that such Net Cash Proceeds have not served as a
            basis to make a Restricted Payment pursuant to Section 4.04(b)(1) or
            Section 4.04(b)(5); plus

                  (C) the amount by which Indebtedness of the Company or a
            Restricted Group Member is reduced on the Company's consolidated
            balance sheet upon the conversion or exchange (other than by a
            Subsidiary of the Company or a Permitted International Joint
            Venture) subsequent to the Issue Date of any Indebtedness of the
            Company or a Restricted Group Member for or into Capital Stock
            (other than Disqualified Stock) of the Company (less the amount of
            any cash, or the fair value of any other property (other than
            Capital Stock of the Company that is not Disqualified Stock),
            distributed by the Company or a Restricted Group Member upon such
            conversion or exchange); plus

                  (D) an amount equal to the sum of (x) the net reduction in the
            Investments (other than Permitted Investments) made by the Company
            or any Restricted Group Member in any Person resulting from
            repurchases, repayments or redemptions of such Investments by such
            Person, proceeds realized on the sale of such Investment, proceeds
            representing the return of capital (excluding dividends and
            distributions), in each case received by the Company or any
            Restricted Group Member, and (y) if an Unrestricted Subsidiary is
            designated as a Restricted Group Member or an Investee is designated
            as a Restricted Group Member or becomes a Restricted Subsidiary, the
            portion (proportionate

<PAGE>

                                                                              52

            to the Company's equity interest in such Subsidiary or Investee) of
            the fair market value of the net assets of such Unrestricted
            Subsidiary or Investee at the time such Unrestricted Subsidiary is
            designated a Restricted Group Member or such Investee is designated
            as a Restricted Group Member or becomes a Restricted Subsidiary;
            provided, however, that the foregoing sum shall not exceed, in the
            case of any such Person, Unrestricted Subsidiary or Investee, the
            amount of Investments (excluding Permitted Investments) previously
            made (and treated as a Restricted Payment and included in the
            calculation of the amount of Restricted Payments) by the Company or
            any Restricted Group Member in such Person, Unrestricted Subsidiary
            or Investee.

            (b) The provisions of Section 4.04(a) shall not prohibit:

            (1) subject to Section 4.04(c), any Restricted Payment made out of
      the Net Cash Proceeds of the substantially concurrent sale of (or
      specified with particularity at the time of the sale of, and subsequently
      made with such Net Cash Proceeds of), or made by exchange for, Capital
      Stock (other than Disqualified Stock) of the Company (other than Capital
      Stock issued or sold to a Subsidiary of the Company or a Permitted
      International Joint Venture or an employee stock ownership plan or to a
      trust established by the Company, any of its Subsidiaries or any Permitted
      International Joint Venture for the benefit of their employees); provided,
      however, that such Net Cash Proceeds have not served as a basis for making
      any other Restricted Payment; provided further, however, that (A) such
      Restricted Payment shall be excluded in the calculation of the amount of
      Restricted Payments and (B) the Net Cash Proceeds from any such sale (to
      the extent so used for such Restricted Payment) shall be excluded from the
      calculation of amounts under Section 4.04(a)(3)(B);

            (2) any purchase, repurchase, redemption, defeasance or other
      acquisition or retirement for value of Subordinated Obligations made by
      exchange for, or out of the proceeds of the substantially concurrent sale
      of (or specified with particularity at the time of the sale of, and
      subsequently made with such proceeds of), Indebtedness which is permitted
      to be Incurred pursuant to Section 4.03; provided, however, that such

<PAGE>

                                                                              53

      purchase, repurchase, redemption, defeasance or other acquisition or
      retirement for value shall be excluded in the calculation of the amount of
      Restricted Payments;

            (3) dividends paid within 60 days after the date of declaration
      thereof if at such date of declaration such dividend would have complied
      with this Section 4.04; provided, however, that at the time of payment of
      such dividend, no other Default shall have occurred and be continuing (or
      result therefrom); provided further, however, that such dividend shall be
      included in the calculation of the amount of Restricted Payments;

            (4) so long as no Default has occurred and is continuing, the
      repurchase or other acquisition of shares of Capital Stock of the Company
      from employees, former employees, directors or former directors of the
      Company, any of its Subsidiaries or any Permitted International Joint
      Venture (or permitted transferees of such employees, former employees,
      directors or former directors), pursuant to the terms of agreements
      (including employment agreements) or plans (or amendments thereto)
      approved by the Board of Directors under which such individuals purchase
      or sell or are granted the option to purchase or sell, shares of such
      Capital Stock; provided, however, that the aggregate amount of such
      repurchases and other acquisitions (other than repurchases and
      acquisitions made pursuant to agreements in effect on the Issue Date)
      shall not exceed $5.0 million in any calendar year (with unused amounts
      being carried forward indefinitely); provided further, however, that such
      repurchases and other acquisitions shall be included in the calculation of
      the amount of Restricted Payments;

            (5) subject to Section 4.04(c), Investments in any Person a
      substantial majority of the assets of which consist of Telecommunications
      Assets; provided, however, that the Fair Market Value of all such
      Investments made pursuant to this clause (5) (measured on the date each
      such Investment was made) and then outstanding, does not exceed the sum of
      $100.0 million, plus the sum of (x) the aggregate Net Cash Proceeds
      received by the Company from the issuance or sale of Capital Stock (other
      than Disqualified Stock) of the Company (other than an issuance or sale to
      a Subsidiary of the Company or a Permitted International Joint Venture and
      other than an issuance or sale to an employee stock

<PAGE>

                                                                              54

      ownership plan or to a trust established by the Company, any of its
      Subsidiaries or any Permitted International Joint Venture for the benefit
      of their employees) and (y) the fair market value of any Capital Stock
      (other than Disqualified Stock) of the Company issued to any Person (other
      than a Subsidiary of the Company or a Permitted International Joint
      Venture) (i) in exchange for Telecommunications Assets or (ii) in exchange
      for Capital Stock of another Person a substantial majority of the assets
      of which consist of Telecommunications Assets in a transaction pursuant to
      which such other Person becomes a Restricted Group Member, in each case
      received or issued, as the case may be, subsequent to February 1, 2000;
      provided, however, that such Net Cash Proceeds or fair market value have
      not served as a basis for making any other Restricted Payment; provided
      further, however, that (A) such Investments shall be excluded in the
      calculation of the amount of Restricted Payments and (B) the Net Cash
      Proceeds from any such issuance or sale of Capital Stock (to the extent so
      used for such Restricted Payment) shall be excluded from the calculation
      of amounts under Section 4.04(a)(3)(B);

            (6) Investments in any Person whose primary business it is to
      directly (or indirectly through subsidiaries) own or hold licenses granted
      by the Federal Communications Commission or any other governmental entity
      with authority to grant telecommunications or radio frequency licenses or
      authorizations; provided, however, that the Company or a Restricted Group
      Member shall, at the time of making such Investment, have an active role
      in the management or operation of such Person and in the provision of
      telecommunications services by such Person; provided further, however,
      that such Investment shall be included in the calculation of the amount of
      Restricted Payments;

            (7) the exchange or purchase and retirement of (A) the Series C
      Preferred Stock for (i) exchange debentures in accordance with the terms
      of the Series C Preferred Stock or (ii) cash or Indebtedness of the
      Company or (B) the Existing Subordinated Notes for cash or Indebtedness of
      the Company; provided, however, that such exchange or purchase and
      retirement shall be excluded in the calculation of the amount of
      Restricted Payments;

<PAGE>

                                                                              55

            (8) cash payments in lieu of the issuance of fractional shares in
      connection with stock splits or upon the conversion into Capital Stock of
      the Company (other than Disqualified Stock) of any security of the Company
      or any convertible Indebtedness of the Company; provided, however, that
      such exchange and retirement shall be excluded in the calculation of the
      amount of Restricted Payments;

            (9) Investments in Office.com, the fair market value of which
      (measured on the date each such Investment is made) does not exceed (x) in
      the case of an Investment to be made on or immediately after the Issue
      Date, $50.0 million, and (y) during each of the three 12-month periods
      following the Issue Date, $25.0 million per year (with unused annual
      amounts being carried over to future periods even if such periods occur
      after the third anniversary of the Issue Date); provided, however, that
      such Investments shall be excluded in the calculation of the amount of
      Restricted Payments; and

            (10) Investments, the aggregate Fair Market Value (measured on the
      date each such Investment was made) of which, when taken together with the
      Fair Market Value of all other Investments made pursuant to this clause
      (10) then outstanding, does not exceed $10.0 million; provided, however,
      that such Investment shall be included in the calculation of the amount of
      Restricted Payments.

            (c) The amounts determined pursuant to Section 4.04(a)(3)(B),
Section 4.04(b)(1) and Section 4.04(b)(5) based on Net Cash Proceeds received
from the issuance or sale of Capital Stock (or the Fair Market Value of Capital
Stock issued) shall be reduced to the extent such Net Cash Proceeds or Fair
Market Value have served as the basis for Incurring any Indebtedness pursuant to
Section 4.03(b)(6) and such Indebtedness (including any Refinancings thereof)
remains outstanding.

            SECTION 4.05. Limitation on Restrictions on Distributions from
Restricted Group Members. The Company will not, and will not permit any
Restricted Group Member to, create or otherwise cause or permit to exist or
become effective any consensual encumbrance or restriction on the ability of any
Restricted Group Member to (a) pay dividends or make any other distributions on
its Capital Stock to the Company or a Restricted Group Member or pay any
Indebtedness owed to the Company, (b) make any loans or advances to the

<PAGE>

                                                                              56

Company or a Restricted Group Member or (c) transfer any of its property or
assets to the Company or a Restricted Group Member, except:

            (1) any encumbrance or restriction pursuant to an agreement
      in effect at or entered into on the Issue Date;

            (2) any encumbrance or restriction with respect to a Restricted
      Group Member pursuant to an agreement relating to any Indebtedness
      Incurred by such Restricted Group Member on or prior to the date on which
      such Subsidiary (in the case of a Restricted Subsidiary) or an interest in
      such entity (in the case of a Permitted International Joint Venture) was
      acquired by the Company (other than Indebtedness Incurred as consideration
      in, or to provide all or any portion of the funds or credit support
      utilized to consummate, the transaction or series of related transactions
      pursuant to which such Subsidiary (in the case of a Restricted Subsidiary)
      or entity (in the case of a Permitted International Joint Venture) became
      a Restricted Group Member or was acquired by the Company) and outstanding
      on such date;

            (3) any encumbrance or restriction pursuant to an agreement
      effecting a Refinancing of Indebtedness Incurred pursuant to an agreement
      referred to in Section 4.05(1) or Section 4.05(2) or this clause (3) or
      contained in any amendment to an agreement referred to in Section 4.05(1)
      or Section 4.05(2) or this clause (3); provided, however, that the
      encumbrances and restrictions with respect to such Restricted Group Member
      contained in any such refinancing agreement or amendment are no less
      favorable to the Securityholders than encumbrances and restrictions with
      respect to such Restricted Group Member contained in such predecessor
      agreements;

            (4) any encumbrance or restriction pursuant to a Permitted Credit
      Facility; provided, however, that (a) the outstanding Indebtedness under
      such Permitted Credit Facility does not exceed the amounts permitted under
      Section 4.03(b)(1), Section 4.03(b)(5) and Section 4.03(b)(8) (but with
      respect to Section 4.03(b)(8) only to the extent such Indebtedness
      constitutes Refinancing Indebtedness of Purchase Money Indebtedness), (b)
      such restrictions (other than following an event of default under such
      Permitted Credit Facility) permit dividends and distributions

<PAGE>

                                                                              57

      necessary to permit the Company to satisfy its obligations on the
      Securities, and (c) the chief financial officer of the Company determines
      in good faith that (1) any such restrictions contained in any such
      Permitted Credit Facility are no more restrictive, taken as a whole, than
      those contained in a credit facility with terms that are commercially
      reasonable for a borrower engaged in a business comparable to the Company
      that has substantially comparable Indebtedness, and (2) any such
      restrictions will not materially affect the Company's ability to make
      principal, premium or interest payments on the Securities;

            (5) any encumbrance or restriction arising under any
      applicable law or action or at the request of a governmental
      regulatory authority;

            (6) in the case of clause (c) above, any such encumbrance or
      restriction consisting of customary non assignment provisions in leases,
      including leases in respect of data centers and indefeasible rights of
      use, governing leasehold interests to the extent such provisions restrict
      the transfer of the lease or the property leased thereunder;

            (7) in the case of clause (c) above, restrictions contained in
      security agreements or mortgages securing Indebtedness of the Company or a
      Restricted Group Member to the extent such restrictions restrict the
      transfer of the property subject to such security agreements or mortgages;

            (8) in the case of clause (c) above, restrictions imposed in
      connection with the grant or acquisition of radio frequency spectrum (to
      the extent such restrictions restrict the transfer of such radio frequency
      spectrum) or common carrier licenses or their equivalent (to the extent
      such restrictions restrict the transfer of such licenses);

            (9) in the case of clause (c) above, restrictions relating to the
      property or assets of an unconsolidated Permitted International Joint
      Venture, not relating to any Indebtedness, and that do not, individually
      or in the aggregate, detract from the value of the property or assets of
      the Permitted International Joint Venture in any material respect;

            (10) in the case of clause (c) above, customary provisions arising
      or agreed to in the ordinary course

<PAGE>

                                                                              58

      of business, not relating to any Indebtedness, and that do not,
      individually or in the aggregate, detract from the value of the property
      or assets of the Company or any Restricted Group Member in any material
      respect; and

            (11) any restriction with respect to a Restricted Group Member
      imposed pursuant to an agreement entered into for the sale or disposition
      of all or substantially all the Capital Stock or assets of such Restricted
      Group Member pending the closing of such sale or disposition.

            SECTION 4.06. Limitation on Sales of Assets and Subsidiary Stock.
(a) The Company will not, and will not permit any Restricted Group Member to,
directly or indirectly, consummate any Asset Disposition unless:

            (1) the Company or such Restricted Group Member receives
      consideration at the time of such Asset Disposition at least equal to the
      Fair Market Value (including as to the value of all noncash
      consideration), of the shares and assets subject to such Asset
      Disposition;

            (2) at least 75% of the consideration thereof received by the
      Company or such Restricted Group Member is in the form of cash or cash
      equivalents, Marketable Securities or Telecommunications Assets; and

            (3) an amount equal to 100% of the Net Available Cash from such
      Asset Disposition is applied by the Company (or such Restricted Group
      Member, as the case may be)

                  (A) first, to the extent the Company or such Restricted Group
            Member elects (or is required by the terms of any Indebtedness), to
            prepay, repay, redeem or purchase (x) Senior Indebtedness of the
            Company that is either secured Indebtedness or has a Stated Maturity
            prior to the Stated Maturity of the Securities or (y) Indebtedness
            (other than any Disqualified Stock) of a Restricted Group Member (in
            each case other than Indebtedness owed to the Company or an
            Affiliate of the Company) within one year from the later of the date
            of such Asset Disposition or the receipt of such Net Available Cash;

<PAGE>

                                                                              59

                  (B) second, to the extent of the balance of such Net Available
            Cash after application in accordance with clause (A), to the extent
            the Company elects, to acquire Telecommunications Assets within one
            year from the later of the date of such Asset Disposition or the
            receipt of such Net Available Cash; and

                  (C) third, to the extent of the balance of such Net Available
            Cash after application in accordance with clauses (A) and (B), to
            make an offer to the holders of the Securities (and to holders of
            other Senior Indebtedness that have a right to be included in such
            offer) to purchase Securities (and such other Senior Indebtedness)
            pursuant to and subject to the conditions contained in Section
            4.06(b);

provided, however, that in connection with any prepayment, repayment or purchase
of Indebtedness pursuant to clause (A) or (C) above, the Company or such
Restricted Group Member shall permanently retire such Indebtedness (other than
Indebtedness Incurred pursuant to the revolving loan portion of a Permitted
Credit Facility) and shall cause the related loan commitment (if any) to be
permanently reduced in an amount equal to the principal amount so prepaid,
repaid or purchased.

            Notwithstanding the foregoing provisions of this Section 4.06, the
Company and the Restricted Group Members will not be required to apply any Net
Available Cash in accordance with this Section 4.06 except to the extent that
the aggregate Net Available Cash from all Asset Dispositions which are not
applied in accordance with this Section 4.06 exceeds $5.0 million. Pending
application of Net Available Cash pursuant to this Section 4.06, such Net
Available Cash shall be invested in Permitted Investments.

            For the purposes of this Section 4.06, the following are deemed to
be cash or cash equivalents:

            (1) the assumption of Indebtedness of the Company or any Restricted
      Group Member and the release of the Company or such Restricted Group
      Member from all liability on such Indebtedness in connection with such
      Asset Disposition; and

            (2) securities received by the Company or any Restricted Group
      Member from the transferee that are

<PAGE>

                                                                              60

      promptly converted by the Company or such Restricted Group Member into
      cash or cash equivalents.

            (b) In the event of an Asset Disposition that requires the purchase
of Securities (and other Senior Indebtedness) pursuant to Section 4.06(a)(3)(C),
the Company shall purchase Securities tendered pursuant to an offer by the
Company for the Securities (and such other Senior Indebtedness) (the "Offer") at
a purchase price of 100% of their Accreted Value (or, if other than the
Securities, 100% of their principal amount or, in the event such other Senior
Indebtedness was issued with significant original issue discount, 100% of the
accreted value thereof), without premium, plus accrued but unpaid interest (or,
in respect of such other Senior Indebtedness, such lesser price, if any, as may
be provided for by the terms of such Senior Indebtedness) in accordance with the
procedures (including prorationing in the event of oversubscription) set forth
in Section 4.06(c). If the aggregate purchase price of Securities (and any other
Senior Indebtedness) tendered pursuant to the Offer exceeds the Net Available
Cash allotted to their purchase, the Company shall select the Securities and
other Senior Indebtedness to be purchased on a pro rata basis but in round
denominations, which in the case of the Securities will be denominations of
$1,000 principal amount at maturity or multiples thereof. The Company shall not
be required to make an Offer to purchase Securities (and other Senior
Indebtedness) pursuant to this Section 4.06 if the Net Available Cash available
therefor is less than $10.0 million (which lesser amount shall be carried
forward for purposes of determining whether such an Offer is required with
respect to the Net Available Cash from any subsequent Asset Disposition). Upon
completion of an Offer, the amount of Net Available Cash that served as the
basis for such Offer will be reset at zero for purposes of Section 4.06(a).

            (c) (1) Promptly, and in any event within 10 days after the Company
becomes obligated to make an Offer, the Company shall deliver to the Trustee and
send, by first-class mail to each Holder, a written notice stating that the
Holder may elect to have his Securities purchased by the Company either in whole
or in part (subject to prorating as described in Section 4.06(b) in the event
the Offer is oversubscribed) in integral multiples of $1,000 of principal amount
at maturity, at the applicable purchase price. The notice shall specify a
purchase date not less than 30 days nor more than 60 days after the date of such
notice (the "Purchase Date") and shall contain such information concerning the
business of the Company which the

<PAGE>

                                                                              61

Company in good faith believes will enable such Holders to make an informed
decision (which at a minimum will include (A) the most recently filed Annual
Report on Form 10-K (including audited consolidated financial statements) of the
Company, the most recent subsequently filed Quarterly Report on Form 10-Q and
any Current Report on Form 8-K of the Company filed subsequent to such Quarterly
Report, other than Current Reports describing Asset Dispositions otherwise
described in the offering materials (or corresponding successor reports), (B) a
description of material developments in the Company's business, if any,
subsequent to the date of the latest of such Reports, and (C) if material,
appropriate pro forma financial information) and all instructions and materials
necessary to tender Securities pursuant to the Offer, together with the
information contained in clause (3).

            (2) Not later than the date upon which written notice of an Offer is
delivered to the Trustee as provided below, the Company shall deliver to the
Trustee an Officers' Certificate as to (A) the amount of the Offer (the "Offer
Amount"), including information as to any other Senior Indebtedness included in
the Offer, (B) the allocation of the Net Available Cash from the Asset
Dispositions pursuant to which such Offer is being made and (C) the compliance
of such allocation with the provisions of Section 4.06(a) and (b). On such date,
the Company shall also irrevocably deposit with the Trustee or with a Paying
Agent (or, if the Company is acting as its own Paying Agent, segregate and hold
in trust) in Temporary Cash Investments, maturing on the last day prior to the
Purchase Date or on the Purchase Date if funds are immediately available by open
of business, an amount equal to the Offer Amount to be held for payment in
accordance with the provisions of this Section. If the Offer includes other
Senior Indebtedness, the deposit described in the preceding sentence may be made
with any other paying agent pursuant to arrangements satisfactory to the
Trustee. Upon the expiration of the period for which the Offer remains open (the
"Offer Period"), the Company shall deliver to the Trustee for cancellation the
Securities or portions thereof which have been properly tendered to and are to
be accepted by the Company. The Trustee shall, on the Purchase Date, mail or
deliver payment (or cause the delivery of payment) to each tendering Holder in
the amount of the purchase price. In the event that the aggregate purchase price
of the Securities delivered by the Company to the Trustee is less than the Offer
Amount applicable to the Securities, the Trustee shall deliver the excess to the
Company immediately after the expiration of the Offer Period for application in
accordance with this Section 4.06.

<PAGE>

                                                                              62

            (3) Holders electing to have a Security purchased shall be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the Purchase Date. Holders shall be entitled to withdraw their election
if the Trustee or the Company receives not later than two Business Days prior to
the Purchase Date, a telex, facsimile transmission or letter setting forth the
name of the Holder, the principal amount at maturity of the Security which was
delivered for purchase by the Holder and a statement that such Holder is
withdrawing his election to have such Security purchased. Holders whose
Securities are purchased only in part shall be issued new Securities equal in
principal amount at maturity to the unpurchased portion of the Securities
surrendered.

            (4) At the time the Company delivers Securities to the Trustee which
are to be accepted for purchase, the Company shall also deliver an Officers'
Certificate stating that such Securities are to be accepted by the Company
pursuant to and in accordance with the terms of this Section. A Security shall
be deemed to have been accepted for purchase at the time the Trustee, directly
or through an agent, mails or delivers payment therefor to the surrendering
Holder.

            (d) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue of its compliance with
such securities laws or regulations.

            SECTION 4.07. Limitation on Affiliate Transactions. (a) The Company
will not, and will not permit any Restricted Group Member to, enter into or
permit to exist any transaction (including the purchase, sale, lease or exchange
of any property, employee compensation arrangements or the rendering of any
service) with, or for the benefit of, any Affiliate of the Company (an
"Affiliate Transaction") unless:

            (1) the terms of the Affiliate Transaction are no less favorable to
      the Company or such Restricted Group Member than those that could be
      obtained at the time of

<PAGE>

                                                                              63

      the Affiliate Transaction in arm's-length dealings with a Person who is
      not an Affiliate;

            (2) if such Affiliate Transaction or series of related Affiliate
      Transactions involves an amount in excess of $12.5 million, the terms of
      the Affiliate Transaction are set forth in writing and either (A) a
      committee of the Board of Directors a majority of whose members are
      disinterested with respect to such transaction or (B) a majority of the
      non-employee directors of the Company disinterested with respect to such
      Affiliate Transaction have determined in good faith that the criteria set
      forth in clause (1) are satisfied and that the relevant Affiliate
      Transaction is in the best interest of the Company or such Restricted
      Group Member and have approved the relevant Affiliate Transaction as
      evidenced by a Board Resolution; and

            (3) if such Affiliate Transaction or series of related Affiliate
      Transactions involves an amount in excess of $25.0 million, the Board of
      Directors shall also have received a written opinion from an investment
      banking firm, accounting firm or appraisal firm of national prominence
      that is not an Affiliate of the Company to the effect that such Affiliate
      Transaction is fair, from a financial standpoint, to the Company and its
      Restricted Group Members.

            (b)  The provisions of Section 4.07(a) will not prohibit:

            (1) any Investment (other than a Permitted Investment) or other
      Restricted Payment, in each case permitted to be made pursuant to Section
      4.04;

            (2) the entering into, maintaining or performance of any employment
      contract, collective bargaining agreement, benefit plan, program or
      arrangement, related trust agreement or any other similar arrangement for
      or with any employee, officer or director heretofore or hereafter entered
      into in the ordinary course of business, including vacation, health,
      insurance, deferred compensation, retirement, savings or other similar
      plans;

            (3) the payment of compensation, performance of indemnification or
      contribution obligations, or an issuance, grant or award of stock,
      options, or other equity-related interests or other securities, to

<PAGE>

                                                                              64

      employees, officers or directors in the ordinary course of business;

            (4) the payment of reasonable fees to directors of the Company and
      its Restricted Group Members who are not employees of the Company or its
      Restricted Group Members;

            (5) any transaction with a Restricted Group Member or joint venture
      or similar entity that would constitute an Affiliate Transaction solely
      because the Company or a Restricted Group Member owns an equity interest
      in or otherwise controls such Restricted Group Member, joint venture or
      similar entity;

            (6) the issuance or sale of any Capital Stock (other than
      Disqualified Stock) of the Company; and

            (7) transactions with respect to the provision of Telecommunications
      Business services, including wireline or wireless transmission capacity,
      the lease or sharing or other use of cable or fiber optic lines,
      equipment, rights-of-way or other access rights between the Company or any
      Restricted Group Member and any other Person; provided, however, that, in
      the case of this clause (7), such transaction complies with Section
      4.07(a)(1) and is in the best interest of the Company or such Restricted
      Group Member.

            SECTION 4.08.  Limitation on the Sale or Issuance of Capital
Stock of Restricted Group Members.  The Company

            (i) will not and will not permit any Restricted Group Member to
issue, transfer, convey, sell or otherwise dispose of any Capital Stock of any
Restricted Group Member other than to the Company or a Restricted Group Member
and

            (ii) will not permit any Person other than the Company or a
Restricted Group Member to own any Capital Stock of any Restricted Group Member,
other than directors' qualifying shares or shares required by applicable law to
be held by a Person other than the Company or a Restricted Group Member

except, in each case, for:

            (a) a sale, transfer, conveyance or other disposition by the Company
      or a Restricted Group Member of 100% of the Capital Stock of a Restricted
      Group

<PAGE>

                                                                              65

      Member sold in a transaction not prohibited by Section 4.06;

            (b) an issuance, sale, transfer, conveyance or other disposition of
      the Capital Stock of a Restricted Group Member sold in a transaction not
      prohibited by Section 4.06 if, after giving effect thereto, such
      Restricted Group Member remains a Restricted Group Member and the Net Cash
      Proceeds of such issuance (other than an issuance by a Permitted
      International Joint Venture), sale, transfer, conveyance or other
      disposition are applied in accordance with Section 4.06;

            (c) an issuance, sale, transfer, conveyance or other
      disposition of Capital Stock of a Restricted Group Member such
      that,

                  (1) immediately after giving effect thereto, such Restricted
            Group Member would no longer constitute a Restricted Group Member,

                  (2) any remaining Investment in such Restricted Group Member
            by the Company or any other Restricted Subsidiary would have been
            permitted to be made at such time under Section 4.04 (and for
            purposes of Section 4.04, such Investment will be deemed to have
            been made at such time) and

                  (3) the Net Cash Proceeds of such issuance (other than an
            issuance by a Permitted International Joint Venture), sale,
            transfer, conveyance or other disposition are applied in accordance
            with Section 4.06;

            (d) Capital Stock of a Restricted Group Member issued and
      outstanding on the Issue Date or the date of formation of such Restricted
      Group Member and, in each case, held by Persons other than the Company or
      any Restricted Group Member and any additional Capital Stock (other than
      Disqualified Stock) issued as dividends or distributions on such Capital
      Stock or pursuant to preemptive or similar rights;

            (e) Capital Stock of a Restricted Group Member issued and
      outstanding prior to the time that such Person becomes a Restricted Group
      Member; and

<PAGE>

                                                                              66

            (f) any non-convertible Preferred Stock constituting
      Indebtedness and permitted to be Incurred under Section 4.03.

            SECTION 4.09. Change of Control. (a) Upon the occurrence of a
Change of Control, each Holder shall have the right to require that the Company
purchase such Holder's Securities at a purchase price in cash equal to 101% of
the Accreted Value thereof plus accrued and unpaid interest, if any, to the date
of purchase (subject to the right of holders of record on the relevant record
date to receive interest on the relevant interest payment date), in accordance
with the terms contemplated in Section 4.09(b).

            (b) Within 30 days following any Change of Control, the Company
shall mail a notice to each Holder with a copy to the Trustee (the "Change of
Control Offer") stating:

            (1) that a Change of Control has occurred and that such Holder has
      the right to require the Company to purchase such Holder's Securities at a
      purchase price in cash equal to 101% of the Accreted Value thereof plus
      accrued and unpaid interest, if any, to the date of purchase (subject to
      the right of Holders of record on the relevant record date to receive
      interest on the relevant interest payment date);

            (2) the circumstances and relevant facts regarding such Change of
      Control (including information with respect to pro forma historical
      income, cash flow and capitalization, each after giving effect to such
      Change of Control);

            (3) the purchase date (which shall be no earlier than 30 days nor
      later than 60 days from the date such notice is mailed); and

            (4) the instructions determined by the Company, consistent with this
      Section, that a Holder must follow in order to have its Securities
      purchased.

            (c) Holders electing to have a Security purchased will be required
to surrender the Security, with an appropriate form duly completed, to the
Company at the address specified in the notice at least three Business Days
prior to the purchase date. Holders will be entitled to withdraw their election
if the Trustee or the Company receives not later than two Business Days prior to
the purchase date, a telegram, telex, facsimile transmission or letter setting

<PAGE>

                                                                              67

forth the name of the Holder, the principal amount at maturity of the Security
which was delivered for purchase by the Holder and a statement that such Holder
is withdrawing his election to have such Security purchased.

            (d) On the purchase date, all Securities purchased by the Company
under this Section shall be delivered by the Company to the Trustee for
cancellation, and the Company shall pay the purchase price plus accrued and
unpaid interest, if any, to the Holders entitled thereto.

            (e) Notwithstanding the foregoing provisions of this Section, the
Company shall not be required to make a Change of Control Offer upon a Change of
Control if a third party makes the Change of Control Offer in the manner, at the
times and otherwise in compliance with the requirements set forth in this
Section applicable to a Change of Control Offer made by the Company and
purchases all Securities validly tendered and not withdrawn under such Change of
Control Offer.

            (f) The Company shall comply, to the extent applicable, with the
requirements of Section 14(e) of the Exchange Act and any other securities laws
or regulations in connection with the repurchase of Securities pursuant to this
Section. To the extent that the provisions of any securities laws or regulations
conflict with provisions of this Section, the Company shall comply with the
applicable securities laws and regulations and shall not be deemed to have
breached its obligations under this Section by virtue of its compliance with
such securities laws or regulations.

            SECTION 4.10. Limitation on Liens. The Company will not, and will
not permit any Restricted Group Member to, directly or indirectly, Incur or
suffer to exist or become effective any Lien (the "Initial Lien") of any nature
whatsoever on any of its property (including Capital Stock), whether owned at
the Issue Date or thereafter acquired, or upon any income or profits therefrom
(other than Permitted Liens) to secure any Indebtedness, without effectively
providing that the Securities shall be secured (1) equally and ratably with (or
prior to) the Indebtedness so secured for so long as such Indebtedness is so
secured or (2) in the event such Indebtedness constitutes Subordinated
Obligations, prior to such Indebtedness for so long as such Indebtedness is so
secured.

            Any Lien created for the benefit of the Holders of the Securities
pursuant to this Section shall provide by its terms that such Lien shall be
automatically and uncondi-

<PAGE>

                                                                              68

tionally released and discharged upon the release and discharge of the Initial
Lien.

            SECTION 4.11. Limitation on Sale/Leaseback Transactions. The
Company will not, and will not permit any Restricted Group Member to, directly
or indirectly, enter into, assume, guarantee or otherwise become liable with
respect to any Sale/Leaseback Transaction with respect to any property unless:

            (1) the Company or such Restricted Group Member would be entitled to
      (A) Incur Indebtedness in an amount equal to the Attributable Debt with
      respect to such Sale/Leaseback Transaction pursuant to Section 4.03 and
      (B) create a Lien on such property securing such Attributable Debt without
      equally and ratably securing the Securities pursuant to Section 4.10;

            (2) the net proceeds received by the Company or any Restricted Group
      Member in connection with such Sale/Leaseback Transaction are at least
      equal to the Fair Market Value of such property; and

            (3) the Company applies the proceeds of such transaction in
      compliance with Section 4.06.

            SECTION 4.12. Compliance Certificate. The Company shall deliver to
the Trustee within 120 days after the end of each fiscal year of the Company an
Officers' Certificate stating that in the course of the performance by the
signers of their duties as Officers of the Company they would normally have
knowledge of any Default and whether or not the signers know of any Default that
occurred during such period. If they do, the certificate shall describe the
Default, its status and what action the Company is taking or proposes to take
with respect thereto. The Company also shall comply with TIA ss. 314(a)(4).

            SECTION 4.13. Further Instruments and Acts. Upon request of the
Trustee, the Company will execute and deliver such further instruments and do
such further acts as may be reasonably necessary or proper to carry out more
effectively the purpose of this Indenture.

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                                                                              69

                                    ARTICLE 5

                               Successor Company

            SECTION 5.01. When Company May Merge or Transfer Assets. (a) The
Company shall not consolidate with or merge with or into, or convey, transfer or
lease, in one transaction or a series of transactions, directly or indirectly,
all or substantially all its assets to, any Person, unless:

            (1) the resulting, surviving or transferee Person (the "Successor
      Company") shall be a Person organized and existing under the laws of the
      United States of America, any State thereof or the District of Columbia
      and the Successor Company (if not the Company) shall expressly assume, by
      an indenture supplemental hereto, executed and delivered to the Trustee,
      in form satisfactory to the Trustee, all the obligations of the Company
      under the Securities, this Indenture and the Registration Rights
      Agreement;

            (2) immediately after giving pro forma effect to such transaction
      (and treating any Indebtedness which becomes an obligation of the
      Successor Company or any Subsidiary as a result of such transaction as
      having been Incurred by the Successor Company or such Subsidiary at the
      time of such transaction), no Default shall have occurred and be
      continuing;

            (3) immediately after giving pro forma effect to such transaction,
      the Consolidated Leverage Ratio of the Successor Company shall be no worse
      than the Consolidated Leverage Ratio of the Company determined immediately
      prior to such transaction;

            (4) if, as a result of any such transaction, property or assets of
      the Successor Company would become subject to a Lien subject to Section
      4.10, the Successor Company shall have secured the Securities as required
      by said Section; and

            (5) the Company shall have delivered to the Trustee an Officers'
      Certificate and an Opinion of Counsel, each stating that such
      consolidation, merger or transfer and such supplemental indenture (if any)
      comply with this Indenture;

provided, however, that clauses (3) and (4) will not be applicable to (A) a
Restricted Subsidiary consolidating

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                                                                              70

with, merging into or transferring all or part of its properties and assets to
the Company or (B) the Company merging with an Affiliate of the Company solely
for the purpose and with the sole effect of reincorporating the Company in
another jurisdiction.

            The Successor Company shall be the successor to the Company and
shall succeed to, and be substituted for, and may exercise every right and power
of, the Company under this Indenture, but the predecessor Company in the case of
a conveyance, transfer or lease shall not be released from the obligation to pay
the principal of and interest on the Securities.

                                    ARTICLE 6

                             Defaults and Remedies

            SECTION 6.01. Events of Default. An "Event of Default" occurs if:

            (1) the Company defaults in any payment of interest on any Security
      when the same becomes due and payable, and such default continues for a
      period of 30 days;

            (2) the Company (i) defaults in the payment of the principal of any
      Security when the same becomes due and payable at its Stated Maturity,
      upon optional redemption, upon declaration or otherwise, or (ii) fails to
      redeem or purchase Securities when required pursuant to this Indenture or
      the Securities;

            (3) the Company fails to comply with Section 5.01;

            (4) the Company fails to comply with Section 4.02, 4.03, 4.04, 4.05,
      4.06, 4.07, 4.08, 4.09, 4.10 or 4.11 (other than a failure to purchase
      Securities when required under Section 4.06 or 4.09) and such failure
      continues for 30 days after the notice specified below;

            (5) the Company fails to comply with any of its agreements in the
      Securities or this Indenture (other than those referred to in clause (1),
      (2), (3) or (4) above) and such failure continues for 60 days after the
      notice specified below;

            (6) Indebtedness of the Company or any Restricted Group Member is
      not paid within any applicable grace

<PAGE>

                                                                              71

      period after final maturity or is accelerated by the holders thereof
      because of a default and the total amount of such Indebtedness unpaid or
      accelerated exceeds $25.0 million, or its foreign currency equivalent at
      the time;

            (7) the Company or any Significant Restricted Group Member pursuant
      to or within the meaning of any Bankruptcy Law:

                  (A) commences a voluntary case;

                  (B) consents to the entry of an order for relief
            against it in an involuntary case;

                  (C) consents to the appointment of a Custodian of it
            or for any substantial part of its property; or

                  (D) makes a general assignment for the benefit of its
            creditors;

      or takes any comparable action under any foreign laws relating to
      insolvency;

            (8) a court of competent jurisdiction enters an order or decree
      under any Bankruptcy Law that:

                  (A) is for relief against the Company or any
            Significant Restricted Group Member in an involuntary case;

                  (B) appoints a Custodian of the Company or any
            Significant Restricted Group Member or for any substantial
            part of its property; or

                  (C) orders the winding up or liquidation of the
            Company or any Significant Restricted Group Member;

      or any similar relief is granted under any foreign laws and the
      order or decree remains unstayed and in effect for 60 days; or

            (9) any judgment or decree for the payment of money in excess of
      $25.0 million or its foreign currency equivalent at the time is entered
      against the Company or any Restricted Group Member, remains outstanding
      for a period of 60 consecutive days following the entry of such judgment
      or decree and is

<PAGE>

                                                                              72

      not discharged, waived or the execution thereof stayed within 10 days
      after the notice specified below.

            The foregoing will constitute Events of Default whatever the reason
for any such Event of Default and whether it is voluntary or involuntary or is
effected by operation of law or pursuant to any judgment, decree or order of any
court or any order, rule or regulation of any administrative or governmental
body.

            The term "Bankruptcy Law" means Title 11, United States Code, or any
similar Federal or state law for the relief of debtors. The term "Custodian"
means any receiver, trustee, assignee, liquidator, custodian or similar official
under any Bankruptcy Law.

            A Default under clauses (4), (5) or (9) is not an Event of Default
until the Trustee or the holders of at least 25% in principal amount at maturity
of the outstanding Securities notify the Company of the Default and the Company
does not cure such Default within the time specified after receipt of such
notice. Such notice must specify the Default, demand that it be remedied and
state that such notice is a "Notice of Default".

            The Company shall deliver to the Trustee, within 30 days after the
occurrence thereof, written notice in the form of an Officers' Certificate of
any Event of Default under clause (6) and any event which with the giving of
notice or the lapse of time would become an Event of Default under clause (4),
(5) or (9), its status and what action the Company is taking or proposes to take
with respect thereto.

            SECTION 6.02. Acceleration. If an Event of Default (other than an
Event of Default specified in Section 6.01(7) or (8) with respect to the
Company) occurs and is continuing, the Trustee by notice to the Company, or the
Holders of at least 25% in principal amount at maturity of the Securities by
notice to the Company and the Trustee, may declare the Accreted Value of and
accrued but unpaid interest on all the Securities to be due and payable. Upon
such a declaration, such principal and interest shall be due and payable
immediately. If an Event of Default specified in Section 6.01(7) or (8) with
respect to the Company occurs, the Accreted Value of and interest on all the
Securities shall ipso facto become and be immediately due and payable without
any declaration or other act on the part of the Trustee or any Securityholders.
The Holders of a majority in principal amount at maturity of the Securities by
notice to the Trustee may rescind an acceleration and its

<PAGE>

                                                                              73

consequences if the rescission would not conflict with any judgment or decree
and if all existing Events of Default have been cured or waived except
nonpayment of principal or interest that has become due solely because of
acceleration. No such rescission shall affect any subsequent Default or impair
any right consequent thereto.

            SECTION 6.03. Other Remedies. If an Event of Default occurs and is
continuing, the Trustee may pursue any available remedy to collect the payment
of principal of or interest on the Securities or to enforce the performance of
any provision of the Securities or this Indenture.

            The Trustee may maintain a proceeding even if it does not possess
any of the Securities or does not produce any of them in the proceeding. A delay
or omission by the Trustee or any Securityholder in exercising any right or
remedy accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.

            SECTION 6.04. Waiver of Past Defaults. The Holders of a majority in
principal amount at maturity of the Securities by notice to the Trustee may
waive an existing Default and its consequences except (i) a Default in the
payment of the principal of or interest on a Security (ii) a Default arising
from the failure to redeem or purchase any Security when required pursuant to
this Indenture or (iii) a Default in respect of a provision that under Section
9.02 cannot be amended without the consent of each Securityholder affected. When
a Default is waived, it is deemed cured, but no such waiver shall extend to any
subsequent or other Default or impair any consequent right.

            SECTION 6.05. Control by Majority. The Holders of a majority in
principal amount at maturity of the Securities may direct the time, method and
place of conducting any proceeding for any remedy available to the Trustee or of
exercising any trust or power conferred on the Trustee. However, the Trustee may
refuse to follow any direction that conflicts with law or this Indenture or,
subject to Section 7.01, that the Trustee determines is unduly prejudicial to
the rights of other Securityholders or would involve the Trustee in personal
liability; provided, however, that the Trustee may take any other action deemed
proper by the Trustee that is not inconsistent with such direction. Prior to
taking any action hereunder, the Trustee shall be entitled to indemnification
satisfactory to

<PAGE>

                                                                              74

it in its sole discretion against all losses and expenses caused by taking or
not taking such action.

            SECTION 6.06. Limitation on Suits. Except to enforce the right to
receive payment of principal, premium (if any) or interest when due, no
Securityholder may pursue any remedy with respect to this Indenture or the
Securities unless:

            (1) the Holder gives to the Trustee written notice stating
      that an Event of Default is continuing;

            (2) the Holders of at least 25% in principal amount at maturity of
      the Securities make a written request to the Trustee to pursue the remedy;

            (3) such Holder or Holders offer to the Trustee reasonable
      security or indemnity against any loss, liability or expense;

            (4) the Trustee does not comply with the request within 60 days
      after receipt of the request and the offer of security or indemnity; and

            (5) the Holders of a majority in principal amount at maturity of the
      Securities do not give the Trustee a direction inconsistent with the
      request during such 60-day period.

            A Securityholder may not use this Indenture to prejudice the rights
of another Securityholder or to obtain a preference or priority over another
Securityholder.

            SECTION 6.07. Rights of Holders to Receive Payment. Notwithstanding
any other provision of this Indenture, the right of any Holder to receive
payment of principal of and interest on the Securities held by such Holder, on
or after the respective due dates expressed in the Securities, or to bring suit
for the enforcement of any such payment on or after such respective dates, shall
not be impaired or affected without the consent of such Holder.

            SECTION 6.08. Collection Suit by Trustee. If an Event of Default
specified in Section 6.01(1) or (2) occurs and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount then due and owing (together with interest on any
unpaid interest to the extent lawful) and the amounts provided for in Section
7.07.

<PAGE>

                                                                              75

            SECTION 6.09. Trustee May File Proofs of Claim. The Trustee may
file such proofs of claim and other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee and the Securityholders
allowed in any judicial proceedings relative to the Company, its creditors or
its property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Holders in any election of a trustee in bankruptcy or other
Person performing similar functions, and any Custodian in any such judicial
proceeding is hereby authorized by each Holder to make payments to the Trustee
and, in the event that the Trustee shall consent to the making of such payments
directly to the Holders, to pay to the Trustee any amount due it for the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and its counsel, and any other amounts due the Trustee under Section
7.07.

            SECTION 6.10. Priorities. If the Trustee collects any money or
property pursuant to this Article 6, it shall pay out the money or property in
the following order:

            FIRST:  to the Trustee for amounts due under Section 7.07;

            SECOND:  to Securityholders for amounts due and unpaid on
      the Securities for principal and interest, ratably, without
      preference or priority of any kind, according to the amounts due
      and payable on the Securities for principal and interest,
      respectively; and

            THIRD:  to the Company.

            The Trustee may fix a record date and payment date for any payment
to Securityholders pursuant to this Section. At least 15 days before such record
date, the Company shall mail to each Securityholder and the Trustee a notice
that states the record date, the payment date and amount to be paid.

            SECTION 6.11. Undertaking for Costs. In any suit for the
enforcement of any right or remedy under this Indenture or in any suit against
the Trustee for any action taken or omitted by it as Trustee, a court in its
discretion may require the filing by any party litigant in the suit of an
undertaking to pay the costs of the suit, and the court in its discretion may
assess reasonable costs, including reasonable attorneys' fees, against any party
litigant in the suit, having due regard to the merits and good faith of the
claims or defenses made by the party litigant. This Section

<PAGE>

                                                                              76

does not apply to a suit by the Trustee, a suit by a Holder pursuant to Section
6.07 or a suit by Holders of more than 10% in principal amount at maturity of
the Securities.

            SECTION 6.12. Waiver of Stay or Extension Laws. The Company (to the
extent it may lawfully do so) shall not at any time insist upon, or plead, or in
any manner whatsoever claim or take the benefit or advantage of, any stay or
extension law wherever enacted, now or at any time hereafter in force, which may
affect the covenants or the performance of this Indenture; and the Company (to
the extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and shall not hinder, delay or impede the execution
of any power herein granted to the Trustee, but shall suffer and permit the
execution of every such power as though no such law had been enacted.

                                    ARTICLE 7

                                     Trustee

            SECTION 7.01. Duties of Trustee. (a) If an Event of Default has
occurred and is continuing, the Trustee shall exercise the rights and powers
vested in it by this Indenture and use the same degree of care and skill in
their exercise as a prudent Person would exercise or use under the circumstances
in the conduct of such Person's own affairs.

            (b) Except during the continuance of an Event of Default:

            (1) the Trustee undertakes to perform such duties and only such
      duties as are specifically set forth in this Indenture and no implied
      covenants or obligations shall be read into this Indenture against the
      Trustee; and

            (2) in the absence of bad faith on its part, the Trustee may
      conclusively rely, as to the truth of the statements and the correctness
      of the opinions expressed therein, upon certificates or opinions furnished
      to the Trustee and conforming to the requirements of this Indenture.
      However, the Trustee shall examine the certificates and opinions to
      determine whether or not they conform to the requirements of this
      Indenture.

<PAGE>

                                                                              77

            (c) The Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act or its own wilful misconduct,
except that:

            (1) this paragraph does not limit the effect of paragraph (b)
      of this Section;

            (2) the Trustee shall not be liable for any error of judgment made
      in good faith by a Trust Officer unless it is proved that the Trustee was
      negligent in ascertaining the pertinent facts; and

            (3) the Trustee shall not be liable with respect to any action it
      takes or omits to take in good faith in accordance with a direction
      received by it pursuant to Section 6.05.

            (d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.

            (e) The Trustee shall not be liable for interest on any money
received by it except as the Trustee may agree in writing with the Company.

            (f) Money held in trust by the Trustee need not be segregated from
other funds except to the extent required by law.

            (g) No provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur financial liability in the
performance of any of its duties hereunder or in the exercise of any of its
rights or powers, if it shall have reasonable grounds to believe that repayment
of such funds or adequate indemnity against such risk or liability is not
reasonably assured to it.

            (h) Every provision of this Indenture relating to the conduct or
affecting the liability of or affording protection to the Trustee shall be
subject to the provisions of this Section and to the provisions of the TIA.

            SECTION 7.02. Rights of Trustee. (a) The Trustee may rely on any
document believed by it to be genuine and to have been signed or presented by
the proper person. The Trustee need not investigate any fact or matter stated in
the document.

            (b) Before the Trustee acts or refrains from acting, it may require
an Officers' Certificate or an

<PAGE>

                                                                              78

Opinion of Counsel. The Trustee shall not be liable for any action it takes or
omits to take in good faith in reliance on the Officers' Certificate or Opinion
of Counsel.

            (c) The Trustee may act through agents and shall not be responsible
for the misconduct or negligence of any agent appointed with due care.

            (d) The Trustee shall not be liable for any action it takes or omits
to take in good faith which it believes to be authorized or within its rights or
powers; provided, however, that the Trustee's conduct does not constitute wilful
misconduct or negligence.

            (e) The Trustee may consult with counsel, and the advice or opinion
of counsel with respect to legal matters relating to this Indenture and the
Securities shall be full and complete authorization and protection from
liability in respect to any action taken, omitted or suffered by it hereunder in
good faith and in accordance with the advice or opinion of such counsel.

            SECTION 7.03. Individual Rights of Trustee. The Trustee in its
individual or any other capacity may become the owner or pledgee of Securities
and may otherwise deal with the Company or its Affiliates with the same rights
it would have if it were not Trustee. Any Paying Agent, Registrar, co-registrar
or co-paying agent may do the same with like rights. However, the Trustee must
comply with Sections 7.10 and 7.11.

            SECTION 7.04. Trustee's Disclaimer. The Trustee shall not be
responsible for and makes no representation as to the validity or adequacy of
this Indenture or the Securities, it shall not be accountable for the Company's
use of the proceeds from the Securities, and it shall not be responsible for any
statement of the Company in the Indenture or in any document issued in
connection with the sale of the Securities or in the Securities other than the
Trustee's certificate of authentication.

            SECTION 7.05. Notice of Defaults. If a Default occurs and is
continuing and if it is known to the Trustee, the Trustee shall mail to each
Securityholder notice of the Default within 90 days after it occurs. Except in
the case of a Default in payment of principal of or interest on any Security
(including payments pursuant to the mandatory redemption provisions of such
Security, if any), the Trustee may withhold the notice if and so long as a
committee of its

<PAGE>

                                                                              79

Trust Officers in good faith determines that withholding the notice is in the
interests of Securityholders.

            SECTION 7.06. Reports by Trustee to Holders. As promptly as
practicable after each May 15 beginning with the May 15 following the date of
this Indenture, and in any event prior to July 15 in each year, the Trustee
shall mail to each Securityholder a brief report dated as of May 15 that
complies with TIA ss. 313(a). The Trustee also shall comply with TIA ss. 313(b).

            A copy of each report at the time of its mailing to Securityholders
shall be filed with the SEC and each stock exchange (if any) on which the
Securities are listed. The Company agrees to notify promptly the Trustee
whenever the Securities become listed on any stock exchange and of any delisting
thereof.

            SECTION 7.07. Compensation and Indemnity. The Company shall pay to
the Trustee from time to time reasonable compensation for its services. The
Trustee's compensation shall not be limited by any law on compensation of a
trustee of an express trust. The Company shall reimburse the Trustee upon
request for all reasonable out-of-pocket expenses incurred or made by it,
including costs of collection, in addition to the compensation for its services.
Such expenses shall include the reasonable compensation and expenses,
disbursements and advances of the Trustee's agents, counsel, accountants and
experts. The Company shall indemnify the Trustee against any and all loss,
liability or expense (including attorneys' fees) incurred by it in connection
with the administration of this trust and the performance of its duties
hereunder. The Trustee shall notify the Company promptly of any claim for which
it may seek indemnity. Failure by the Trustee to so notify the Company shall not
relieve the Company of its obligations hereunder. The Company shall defend the
claim and the Trustee may have separate counsel and the Company shall pay the
fees and expenses of such counsel. The Company need not reimburse any expense or
indemnify against any loss, liability or expense incurred by the Trustee through
the Trustee's own wilful misconduct, negligence or bad faith.

            To secure the Company's payment obligations in this Section, the
Trustee shall have a lien prior to the Securities on all money or property held
or collected by the Trustee other than money or property held in trust to pay
principal of and interest on particular Securities.

<PAGE>

                                                                              80

            The Company's payment obligations pursuant to this Section shall
survive the discharge of this Indenture. When the Trustee incurs expenses after
the occurrence of a Default specified in Section 6.01(7) or (8) with respect to
the Company, the expenses are intended to constitute expenses of administration
under the Bankruptcy Law.

            SECTION 7.08. Replacement of Trustee. The Trustee may resign at any
time by so notifying the Company. The Holders of a majority in principal amount
at maturity of the Securities may remove the Trustee by so notifying the Trustee
and may appoint a successor Trustee. The Company shall remove the Trustee if:

            (1) the Trustee fails to comply with Section 7.10;

            (2) the Trustee is adjudged bankrupt or insolvent;

            (3) a receiver or other public officer takes charge of the
      Trustee or its property; or

            (4) the Trustee otherwise becomes incapable of acting.

            If the Trustee resigns, is removed by the Company or by the Holders
of a majority in principal amount at maturity of the Securities and such Holders
do not reasonably promptly appoint a successor Trustee, or if a vacancy exists
in the office of Trustee for any reason (the Trustee in such event being
referred to herein as the retiring Trustee), the Company shall promptly appoint
a successor Trustee.

            A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon the
resignation or removal of the retiring Trustee shall become effective, and the
successor Trustee shall have all the rights, powers and duties of the Trustee
under this Indenture. The successor Trustee shall mail a notice of its
succession to Securityholders. The retiring Trustee shall promptly transfer all
property held by it as Trustee to the successor Trustee, subject to the lien
provided for in Section 7.07.

            If a successor Trustee does not take office within 60 days after the
retiring Trustee resigns or is removed, the retiring Trustee or the Holders of
10% in principal amount at maturity of the Securities may petition any court of
competent jurisdiction for the appointment of a successor Trustee.

<PAGE>

                                                                              81

            If the Trustee fails to comply with Section 7.10, any Securityholder
may petition any court of competent jurisdiction for the removal of the Trustee
and the appointment of a successor Trustee.

            Notwithstanding the replacement of the Trustee pursuant to this
Section, the Company's obligations under Section 7.07 shall continue for the
benefit of the retiring Trustee.

            SECTION 7.09. Successor Trustee by Merger. If the Trustee
consolidates with, merges or converts into, or transfers all or substantially
all its corporate trust business or assets to, another corporation or banking
association, the resulting, surviving or transferee corporation without any
further act shall be the successor Trustee.

            In case at the time such successor or successors by merger,
conversion or consolidation to the Trustee shall succeed to the trusts created
by this Indenture any of the Securities shall have been authenticated but not
delivered, any such successor to the Trustee may adopt the certificate of
authentication of any predecessor trustee, and deliver such Securities so
authenticated; and in case at that time any of the Securities shall not have
been authenticated, any successor to the Trustee may authenticate such
Securities either in the name of any predecessor hereunder or in the name of the
successor to the Trustee; and in all such cases such certificates shall have the
full force which it is anywhere in the Securities or in this Indenture provided
that the certificate of the Trustee shall have.

            SECTION 7.10. Eligibility; Disqualification. The Trustee shall at
all times satisfy the requirements of TIA ss. 310(a). The Trustee shall have a
combined capital and surplus of at least $50,000,000 as set forth in its most
recent published annual report of condition. The Trustee shall comply with TIA
ss. 310(b); provided, however, that there shall be excluded from the operation
of TIA ss. 310(b)(1) any indenture or indentures under which other securities or
certificates of interest or participation in other securities of the Company are
outstanding if the requirements for such exclusion set forth in TIA ss.
310(b)(1) are met.

            SECTION 7.11. Preferential Collection of Claims Against Company. The
Trustee shall comply with TIA ss. 311(a), excluding any creditor relationship
listed in TIA

<PAGE>

                                                                              82

ss. 311(b). A Trustee who has resigned or been removed shall be subject to TIA
ss. 311(a) to the extent indicated.

                                    ARTICLE 8

                       Discharge of Indenture; Defeasance

            SECTION 8.01. Discharge of Liability on Securities; Defeasance. (a)
When (1) the Company delivers to the Trustee all outstanding Securities (other
than Securities replaced pursuant to Section 2.07) for cancellation or (2) all
outstanding Securities have become due and payable, whether at maturity or on a
redemption date as a result of the mailing of a notice of redemption pursuant to
Article 3 hereof and the Company irrevocably deposits with the Trustee funds
sufficient to pay at maturity or upon redemption all outstanding Securities,
including interest thereon to maturity or such redemption date (other than
Securities replaced pursuant to Section 2.07), and if in either case the Company
pays all other sums payable hereunder by the Company, then this Indenture shall,
subject to Section 8.01(c), cease to be of further effect. The Trustee shall
acknowledge satisfaction and discharge of this Indenture on demand of the
Company accompanied by an Officers' Certificate and an Opinion of Counsel and at
the cost and expense of the Company.

            (b) Subject to Sections 8.01(c) and 8.02, the Company at any time
may terminate (1) all its obligations under the Securities and this Indenture
("legal defeasance option") or (2) its obligations under Sections 4.02, 4.03,
4.04, 4.05, 4.06, 4.07, 4.08, 4.09, 4.10 and 4.11 and the operation of Sections
6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of Sections
6.01(7) and (8), with respect only to Significant Restricted Group Members) and
the limitations contained in Sections 5.01(a)(3) and (4) ("covenant defeasance
option"). The Company may exercise its legal defeasance option notwithstanding
its prior exercise of its covenant defeasance option.

            If the Company exercises its legal defeasance option, payment of the
Securities may not be accelerated because of an Event of Default with respect
thereto. If the Company exercises its covenant defeasance option, payment of the
Securities may not be accelerated because of an Event of Default specified in
Sections 6.01(4), 6.01(6), 6.01(7), 6.01(8) and 6.01(9) (but, in the case of
Sections 6.01(7) and (8), with respect only to Significant Restricted Group

<PAGE>

                                                                              83

Members) or because of the failure of the Company to comply with Section
5.01(a)(3) or (4).

            Upon satisfaction of the conditions set forth herein and upon
request of the Company, the Trustee shall acknowledge in writing the discharge
of those obligations that the Company terminates.

            (c) Notwithstanding clauses (a) and (b) above, the Company's
obligations in Sections 2.03, 2.04, 2.05, 2.06, 2.07, 2.08, 7.07 and 7.08 and in
this Article 8 shall survive until the Securities have been paid in full.
Thereafter, the Company's obligations in Sections 7.07, 8.04 and 8.05 shall
survive.

            SECTION 8.02. Conditions to Defeasance. The Company may exercise
its legal defeasance option or its covenant defeasance option only if:

            (1) the Company irrevocably deposits in trust with the
      Trustee money or U.S. Government Obligations for the payment of
      principal of and interest on the Securities to maturity or
      redemption, as the case may be;

            (2) the Company delivers to the Trustee a certificate from a
      nationally recognized firm of independent accountants expressing their
      opinion that the payments of principal and interest when due and without
      reinvestment on the deposited U.S. Government Obligations plus any
      deposited money without investment will provide cash at such times and in
      such amounts as will be sufficient to pay principal and interest when due
      on all the Securities to maturity or redemption, as the case may be;

            (3) 123 days pass after the deposit is made and during the 123-day
      period no Default specified in Sections 6.01(7) or (8) with respect to the
      Company occurs which is continuing at the end of the period;

            (4) the deposit does not constitute a default under any
      other agreement binding on the Company;

            (5) the Company delivers to the Trustee an Opinion of Counsel to the
      effect that the trust resulting from the deposit does not constitute, or
      is qualified as, a regulated investment company under the Investment
      Company Act of 1940;

<PAGE>

                                                                              84

            (6) in the case of the legal defeasance option, the Company shall
      have delivered to the Trustee an Opinion of Counsel stating that (A) the
      Company has received from, or there has been published by, the Internal
      Revenue Service a ruling, or (B) since the date of this Indenture there
      has been a change in the applicable Federal income tax law, in either case
      to the effect that, and based thereon such Opinion of Counsel shall
      confirm that, the Securityholders will not recognize income, gain or loss
      for Federal income tax purposes as a result of such defeasance and will be
      subject to Federal income tax on the same amounts, in the same manner and
      at the same times as would have been the case if such defeasance had not
      occurred;

            (7) in the case of the covenant defeasance option, the Company shall
      have delivered to the Trustee an Opinion of Counsel to the effect that the
      Securityholders will not recognize income, gain or loss for Federal income
      tax purposes as a result of such covenant defeasance and will be subject
      to Federal income tax on the same amounts, in the same manner and at the
      same times as would have been the case if such covenant defeasance had not
      occurred; and

            (8) the Company delivers to the Trustee an Officers' Certificate and
      an Opinion of Counsel, each stating that all conditions precedent to the
      defeasance and discharge of the Securities as contemplated by this Article
      8 have been complied with.

            Before or after a deposit, the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future date in
accordance with Article 3.

            SECTION 8.03. Application of Trust Money. The Trustee shall hold in
trust money or U.S. Government Obligations deposited with it pursuant to this
Article 8. It shall apply the deposited money and the money from U.S. Government
Obligations through the Paying Agent and in accordance with this Indenture to
the payment of principal of and interest on the Securities.

            SECTION 8.04. Repayment to Company. The Trustee and the Paying
Agent shall promptly turn over to the Company upon request any excess money or
securities held by them at any time.

            Subject to any applicable abandoned property law, the Trustee and
the Paying Agent shall pay to the Company

<PAGE>

                                                                              85

upon request any money held by them for the payment of principal or interest
that remains unclaimed for two years, and, thereafter, Securityholders entitled
to the money must look to the Company for payment as general creditors.

            SECTION 8.05. Indemnity for Government Obligations. The Company
shall pay and shall indemnify the Trustee against any tax, fee or other charge
imposed on or assessed against deposited U.S. Government Obligations or the
principal and interest received on such U.S. Government Obligations.

            SECTION 8.06. Reinstatement. If the Trustee or Paying Agent is
unable to apply any money or U.S. Government Obligations in accordance with this
Article 8 by reason of any legal proceeding or by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Securities shall be revived and reinstated as though no
deposit had occurred pursuant to this Article 8 until such time as the Trustee
or Paying Agent is permitted to apply all such money or U.S. Government
Obligations in accordance with this Article 8; provided, however, that, if the
Company has made any payment of interest on or principal of any Securities
because of the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money or U.S. Government Obligations held by the Trustee or Paying Agent.

                                    ARTICLE 9

                                   Amendments

            SECTION 9.01. Without Consent of Holders. The Company and the
Trustee may amend this Indenture or the Securities without notice to or consent
of any Securityholder:

            (1) to cure any ambiguity, omission, defect or
      inconsistency;

            (2) to comply with Article 5;

            (3) to provide for uncertificated Securities in addition to or in
      place of certificated Securities; provided, however, that the
      uncertificated Securities are issued in registered form for purposes of
      Section 163(f) of the Code or in a manner such that the

<PAGE>

                                                                              86

      uncertificated Securities are described in Section 163(f)(2)(B) of the
      Code;

            (4) to add guarantees with respect to the Securities or to
      secure the Securities;

            (5) to add to the covenants of the Company for the benefit
      of the Holders or to surrender any right or power herein
      conferred upon the Company;

            (6) to comply with any requirements of the SEC in connection with
      qualifying, or maintaining the qualification of, this Indenture under the
      TIA; or

            (7) to make any change that does not adversely affect the
      rights of any Securityholder.

            After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.

            SECTION 9.02. With Consent of Holders. The Company and the Trustee
may amend this Indenture or the Securities without notice to any Securityholder
but with the written consent of the Holders of at least a majority in principal
amount at maturity of the Securities then outstanding (including consents
obtained in connection with a tender offer or exchange for the Securities).
However, without the consent of each Securityholder affected thereby, an
amendment may not:

            (1) reduce the amount of Securities whose Holders must
      consent to an amendment;

            (2) reduce the rate of or extend the time for payment of
      interest on any Security;

            (3) reduce the principal amount at maturity or Accreted
      Value of or extend the Stated Maturity of any Security;

            (4) reduce the amount payable upon the redemption of any Security or
      change the time at which any Security may be redeemed in accordance with
      Article 3;

            (5) make any Security payable in money other than that
      stated in the Security;

<PAGE>

                                                                              87

            (6) make any changes in the ranking or priority of any
      Security that would adversely affect the Securityholders; or

            (7) make any change in Section 6.04 or 6.07 or the second
      sentence of this Section.

            It shall not be necessary for the consent of the Holders under this
Section to approve the particular form of any proposed amendment, but it shall
be sufficient if such consent approves the substance thereof.

            After an amendment under this Section becomes effective, the Company
shall mail to Securityholders a notice briefly describing such amendment. The
failure to give such notice to all Securityholders, or any defect therein, shall
not impair or affect the validity of an amendment under this Section.

            SECTION 9.03. Compliance with Trust Indenture Act. Every amendment
to this Indenture or the Securities shall comply with the TIA as then in effect.

            SECTION 9.04. Revocation and Effect of Consents and Waivers. A
consent to an amendment or a waiver by a Holder of a Security shall bind the
Holder and every subsequent Holder of that Security or portion of the Security
that evidences the same debt as the consenting Holder's Security, even if
notation of the consent or waiver is not made on the Security. However, any such
Holder or subsequent Holder may revoke the consent or waiver as to such Holder's
Security or portion of the Security if the Trustee receives the notice of
revocation before the date the amendment or waiver becomes effective. After an
amendment or waiver becomes effective, it shall bind every Securityholder. An
amendment or waiver becomes effective upon the execution of such amendment or
waiver by the Trustee.

            The Company may, but shall not be obligated to, fix a record date
for the purpose of determining the Securityholders entitled to give their
consent or take any other action described above or required or permitted to be
taken pursuant to this Indenture. If a record date is fixed, then
notwithstanding the immediately preceding paragraph, those Persons who were
Securityholders at such record date (or their duly designated proxies), and only
those Persons, shall be entitled to give such consent or to revoke any consent
previously given or to take any such action, whether or not such Persons
continue to be Holders

<PAGE>

                                                                              88

after such record date. No such consent shall be valid or effective for more
than 120 days after such record date.

            SECTION 9.05. Notation on or Exchange of Securities. If an
amendment changes the terms of a Security, the Trustee may require the Holder of
the Security to deliver it to the Trustee. The Trustee may place an appropriate
notation on the Security regarding the changed terms and return it to the
Holder. Alternatively, if the Company or the Trustee so determines, the Company
in exchange for the Security shall issue and the Trustee shall authenticate a
new Security that reflects the changed terms. Failure to make the appropriate
notation or to issue a new Security shall not affect the validity of such
amendment.

            SECTION 9.06. Trustee To Sign Amendments. The Trustee shall sign
any amendment authorized pursuant to this Article 9 if the amendment does not
adversely affect the rights, duties, liabilities or immunities of the Trustee.
If it does, the Trustee may but need not sign it. In signing such amendment the
Trustee shall be entitled to receive indemnity reasonably satisfactory to it and
to receive, and (subject to Section 7.01) shall be fully protected in relying
upon, an Officers' Certificate and an Opinion of Counsel stating that such
amendment is authorized or permitted by this Indenture.

            SECTION 9.07. Payment for Consent. Neither the Company nor any
Affiliate of the Company shall, directly or indirectly, pay or cause to be paid
any consideration, whether by way of interest, fee or otherwise, to any Holder
for or as an inducement to any consent, waiver or amendment of any of the terms
or provisions of this Indenture or the Securities unless such consideration is
offered to be paid to all Holders that so consent, waive or agree to amend in
the time frame set forth in solicitation documents relating to such consent,
waiver or agreement.

                                   ARTICLE 10

                                 Miscellaneous

            SECTION 10.01. Trust Indenture Act Controls. If any provision of
this Indenture limits, qualifies or conflicts with another provision which is
required to be included in this Indenture by the TIA, the required provision
shall control.

<PAGE>

                                                                              89

            SECTION 10.02. Notices. Any notice or communication shall be in
writing and delivered in person, mailed by first-class mail or transmitted by
facsimile (with written confirmation of receipt) addressed as follows:

            if to the Company:

                  Winstar Communications, Inc.
                  685 Third Avenue
                  Thirty-first Floor
                  New York, New York 10017
                  Facsimile: 212-584-4001

                  Attention of General Counsel

            if to the Trustee:

                  United States Trust Company of New York
                  114 West 47th Street
                  New York, New York 10036-1532
                  Facsimile: 212-852-1627

                  Attention of Corporate Trust Division

            The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.

            Any notice or communication mailed to a Securityholder shall be
mailed to the Securityholder at the Securityholder's address as it appears on
the registration books of the Registrar and shall be sufficiently given if so
mailed within the time prescribed.

            Failure to mail a notice or communication to a Securityholder or any
defect in it shall not affect its sufficiency with respect to other
Securityholders. If a notice or communication is mailed in the manner provided
above, it is duly given, whether or not the addressee receives it.

            SECTION 10.03. Communication by Holders with Other Holders.
Securityholders may communicate pursuant to TIA ss. 312(b) with other
Securityholders with respect to their rights under this Indenture or the
Securities. The Company, the Trustee, the Registrar and anyone else shall have
the protection of TIA ss. 312(c).

            SECTION 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by

<PAGE>

                                                                              90

the Company to the Trustee to take or refrain from taking any action under this
Indenture, the Company shall furnish to the Trustee:

            (1) an Officers' Certificate in form and substance reasonably
      satisfactory to the Trustee stating that, in the opinion of the signers,
      all conditions precedent, if any, provided for in this Indenture relating
      to the proposed action have been complied with; and

            (2) an Opinion of Counsel in form and substance reasonably
      satisfactory to the Trustee stating that, in the opinion of such counsel,
      all such conditions precedent have been complied with.

            SECTION 10.05. Statements Required in Certificate or Opinion. Each
certificate or opinion with respect to compliance with a covenant or condition
provided for in this Indenture shall include:

            (1) a statement that the individual making such certificate
      or opinion has read such covenant or condition;

            (2) a brief statement as to the nature and scope of the examination
      or investigation upon which the statements or opinions contained in such
      certificate or opinion are based;

            (3) a statement that, in the opinion of such individual, he has made
      such examination or investigation as is necessary to enable him to express
      an informed opinion as to whether or not such covenant or condition has
      been complied with; and

            (4) a statement as to whether or not, in the opinion of such
      individual, such covenant or condition has been complied with.

            SECTION 10.06. Rules by Trustee, Paying Agent and Registrar. The
Trustee may make reasonable rules for action by or a meeting of Securityholders.
The Registrar and the Paying Agent may make reasonable rules for their
functions.

            SECTION 10.07. Legal Holidays. A "Legal Holiday" is a Saturday, a
Sunday or a day on which banking institutions are not required to be open in the
State of New York. If a payment date is a Legal Holiday, payment shall be made
on the next succeeding day that is not a Legal Holiday, and no interest shall
accrue for the intervening period. If a

<PAGE>

                                                                              91

regular record date is a Legal Holiday, the record date shall not be affected.

            SECTION 10.08. Governing Law. This Indenture and the Securities
shall be governed by, and construed in accordance with, the laws of the State of
New York but without giving effect to applicable principles of conflicts of law
to the extent that the application of the laws of another jurisdiction would be
required thereby.

            SECTION 10.09. No Recourse Against Others. A director, officer,
employee or stockholder, as such, of the Company shall not have any liability
for any obligations of the Company under the Securities or this Indenture or for
any claim based on, in respect of or by reason of such obligations or their
creation. By accepting a Security, each Securityholder shall waive and release
all such liability. The waiver and release shall be part of the consideration
for the issue of the Securities.

            SECTION 10.10. Successors. All agreements of the Company in this
Indenture and the Securities shall bind its successors. All agreements of the
Trustee in this Indenture shall bind its successors.

            SECTION 10.11. Multiple Originals. The parties may sign any number
of copies of this Indenture. Each signed copy shall be an original, but all of
them together represent the same agreement. One signed copy is enough to prove
this Indenture.

            SECTION 10.12. Table of Contents; Headings. The table of contents,
cross-reference sheet and headings of the Articles and Sections of this
Indenture have been inserted for convenience of reference only, are not intended
to be considered a part hereof and shall not modify or restrict any of the terms
or provisions hereof.

<PAGE>

                                                                              92

            IN WITNESS WHEREOF, the parties have caused this Indenture to be
duly executed as of the date first written above.

                                WINSTAR COMMUNICATIONS, INC.,

                                by  /s/ Frederic E. Rubin
                                ------------------------
                                Name:  Frederic E. Rubin
                                Title: Senior Vice President, Treasurer

                                UNITED STATES TRUST COMPANY
                                OF NEW YORK,

                                by  Gerard F. Ganey
                                ------------------------
                                Name: Gerard F. Ganey
                                Title: Senior Vice President

<PAGE>

                                                 RULE 144A/REGULATION S APPENDIX

                   PROVISIONS RELATING TO INITIAL SECURITIES,
                           PRIVATE EXCHANGE SECURITIES
                             AND EXCHANGE SECURITIES

      1. Definitions

      1.1  Definitions

      For the purposes of this Appendix the following terms shall have the
meanings indicated below:

            "Depository" means The Depository Trust Company, its nominees and
their respective successors.

            "Exchange Securities" means (1) the 14-3/4% Senior Discount Notes
Due 2010 issued pursuant to the Indenture in connection with a Registered
Exchange Offer pursuant to a Registration Rights Agreement and (2) Additional
Securities, if any, issued pursuant to a registration statement filed with the
SEC under the Securities Act.

            "Initial Purchasers" means (1) with respect to the Initial
Securities issued on the Issue Date, the entities identified as Purchasers in
the Purchase Agreement, and (2) with respect to each issuance of Additional
Securities, the Persons purchasing such Additional Securities under the related
Purchase Agreement.

            "Initial Securities" means (1) up to $930,443,000 aggregate
principal amount at maturity of 14-3/4% Senior Discount Notes Due 2010 issued on
either the Issue Date or on consummation of the Preferred Stock Exchange Offer
and (2) Additional Securities, if any, issued in a transaction exempt from the
registration requirements of the Securities Act.

            "Private Exchange" means the offer by the Company, pursuant to a
Registration Rights Agreement, to the Initial Purchasers to issue and deliver to
each Initial Purchaser, in exchange for the Initial Securities held by the
Initial Purchaser as part of its initial distribution, a like aggregate
principal amount at maturity of Private Exchange Securities.

            "Private Exchange Securities" means any 14-3/4% Senior Discount
Notes Due 2010 issued in connection with a Private Exchange.

<PAGE>

                                                                               2

            "Purchase Agreement" means (1) with respect to the Initial
Securities issued on the Issue Date, the Purchase Agreement dated March 27, 2000
among the Company and the Initial Purchasers, and (2) with respect to each
issuance of Additional Securities, the purchase agreement or underwriting
agreement among the Company and the Persons purchasing such Additional
Securities.

            "QIB" means a "qualified institutional buyer" as defined in Rule
144A.

            "Registered Exchange Offer" means the offer by the Company, pursuant
to a Registration Rights Agreement, to certain Holders of Initial Securities, to
issue and deliver to such Holders, in exchange for the Initial Securities, a
like aggregate principal amount at maturity of Exchange Securities registered
under the Securities Act.

            "Registration Rights Agreement" means (1) with respect to the
Initial Securities issued on the Issue Date, the Registration Rights Agreement
dated April 10, 2000, among the Company and the Initial Purchasers, and (2) with
respect to each issuance of Additional Securities issued in a transaction exempt
from the registration requirements of the Securities Act, the registration
rights agreement, if any, among the Company and the Persons purchasing such
Additional Securities under the related Purchase Agreement.

            "Securities" means the Initial Securities, the Exchange Securities
and the Private Exchange Securities, treated as a single class.

            "Securities Act" means the Securities Act of 1933.

            "Securities Custodian" means the custodian with respect to a Global
Security (as appointed by the Depository), or any successor Person thereto and
shall initially be the Trustee.

            "Shelf Registration Statement" means the registration statement
issued by the Company in connection with the offer and sale of Initial
Securities or Private Exchange Securities pursuant to a Registration Rights
Agreement.

            "Transfer Restricted Securities" means Securities that bear or are
required to bear the legend set forth in Section 2.3(b) hereto.

<PAGE>

                                                                               3

      1.2  Other Definitions

                                                          Defined in
            Term                                          Section:
            ----                                          --------

      "Agent Members"....................................  2.1(b)
      "Global Security"..................................  2.1(a)
      "Regulation S".....................................  2.1(a)
      "Restricted Global Security".......................  2.1(a)
      "Rule 144A"........................................  2.1(a)

      2.   The Securities.

      2.1 (a) Form and Dating. Initial Securities offered and sold to a QIB in
reliance on Rule 144A under the Securities Act ("Rule 144A") or in reliance on
Regulation S under the Securities Act ("Regulation S"), in each case as provided
in a Purchase Agreement, and Private Exchange Securities, as provided in a
Registration Rights Agreement, shall be issued initially in the form of one or
more permanent global Securities in definitive, fully registered form without
interest coupons with the global securities legend and restricted securities
legend set forth in Exhibit 1 hereto (each, a "Restricted Global Security"),
which shall be deposited on behalf of the purchasers of the Initial Securities
represented thereby with the Trustee, at its principal corporate trust office,
as custodian for the Depository (or with such other custodian as the Depository
may direct), and registered in the name of the Depository or a nominee of the
Depository, duly executed by the Company and authenticated by the Trustee as
hereinafter provided. The aggregate principal amount at maturity of the Global
Securities may from time to time be increased or decreased by adjustments made
on the records of the Trustee and the Depository or its nominee as hereinafter
provided. Exchange Securities shall be issued in global form (with the global
securities legend set forth in Exhibit 1 hereto) or in certificated form at the
option of the Holders thereof from time to time. Exchange Securities issued in
global form and Restricted Global Securities are sometimes referred to in this
Appendix as "Global Securities."

            (b) Book-Entry Provisions. This Section 2.1(b) shall apply only to a
Global Security deposited with or on behalf of the Depository.

            The Company shall execute and the Trustee shall, in accordance with
this Section 2.1(b), authenticate and deliver initially one or more Global
Securities that (a) shall be registered in the name of the Depository for such
Global Security or Global Securities or the nominee of

<PAGE>

                                                                               4

such Depository and (b) shall be delivered by the Trustee to such Depository or
pursuant to such Depository's instructions or held by the Trustee as custodian
for the Depository.

            Members of, or participants in, the Depository ("Agent Members")
shall have no rights under this Indenture with respect to any Global Security
held on their behalf by the Depository or by the Trustee as the custodian of the
Depository or under such Global Security, and the Company, the Trustee and any
agent of the Company or the Trustee shall be entitled to treat the Depository as
the absolute owner of such Global Security for all purposes whatsoever.
Notwithstanding the foregoing, nothing herein shall prevent the Company, the
Trustee or any agent of the Company or the Trustee from giving effect to any
written certification, proxy or other authorization furnished by the Depository
or impair, as between the Depository and its Agent Members, the operation of
customary practices of such Depository governing the exercise of the rights of a
holder of a beneficial interest in any Global Security.

            (c) Certificated Securities. Except as provided in this Section 2.1
or Section 2.3 or 2.4, owners of beneficial interests in Restricted Global
Securities shall not be entitled to receive physical delivery of certificated
Securities.

      2.2 Authentication. The Trustee shall authenticate and deliver: (1) on
either the Issue Date or on consummation of the Preferred Stock Exchange Offer,
an aggregate principal amount at maturity of up to $930,443,000 14-3/4% Senior
Discount Notes Due 2010 (inclusive of any Initial Securities issued in
connection with the Preferred Stock Exchange Offer), (2) any Additional
Securities for an original issue in an aggregate principal amount at maturity
specified in the written order of the Company pursuant to Section 2.02 of the
Indenture and (3) Exchange Securities or Private Exchange Securities for issue
only in a Registered Exchange Offer or a Private Exchange, respectively,
pursuant to a Registration Rights Agreement, for a like principal amount at
maturity of Initial Securities, in each case upon a written order of the Company
signed by two Officers or by an Officer and either an Assistant Treasurer or an
Assistant Secretary of the Company. Such order shall specify the amount of the
Securities to be authenticated and the date on which the original issue of
Securities is to be authenticated and, in the case of any issuance of Additional
Securities pursuant to Section 2.13 of the Indenture, shall certify that such
issuance is in compliance with Sections 2.13 and 4.03 of the Indenture.

<PAGE>

                                                                               5

      2.3  Transfer and Exchange.

            (a) Transfer and Exchange of Global Securities. (i) The transfer and
exchange of Global Securities or beneficial interests therein shall be effected
through the Depository, in accordance with this Indenture (including applicable
restrictions on transfer set forth herein, if any) and the procedures of the
Depository therefor. A transferor of a beneficial interest in a Global Security
shall deliver to the Registrar a written order given in accordance with the
Depository's procedures containing information regarding the participant account
of the Depository to be credited with a beneficial interest in the Global
Security. The Registrar shall, on accordance with such instructions instruct the
Depository to credit to the account of the Person specified in such instructions
a beneficial interest in the Global Security and to debit the account of the
Person making the transfer the beneficial interest in the Global Security being
transferred.

            (ii) Notwithstanding any other provisions of this Appendix (other
than the provisions set forth in Section 2.4), a Global Security may not be
transferred as a whole except by the Depository to a nominee of the Depository
or by a nominee of the Depository to the Depository or another nominee of the
Depository or by the Depository or any such nominee to a successor Depository or
a nominee of such successor Depository.

            (iii) In the event that a Restricted Global Security is exchanged
for Securities in certificated registered form pursuant to Section 2.4 of this
Appendix, prior to the consummation of a Registered Exchange Offer or the
effectiveness of a Shelf Registration Statement with respect to such Securities,
such Securities may be exchanged only in accordance with such procedures as are
substantially consistent with the provisions of this Section 2.3 (including the
certification requirements set forth on the reverse of the Initial Securities
intended to ensure that such transfers comply with Rule 144A or Regulation S, as
the case may be) and such other procedures as may from time to time be adopted
by the Company.

            (b)  Legend.

            (i) Except as permitted by the following paragraphs (ii), (iii) and
      (iv), each Security certificate evidencing the Restricted Global
      Securities (and all Securities issued in exchange therefor or in
      substi-

<PAGE>

                                                                               6

      tution thereof) shall bear a legend in substantially the following form:

            THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
            TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF
            1933 (THE "SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED,
            SOLD OR OTHERWISE TRANSFERRED IN THE ABSENCE OF SUCH REGISTRATION OR
            AN APPLICABLE EXEMPTION THEREFROM. EACH PURCHASER OF THIS SECURITY
            IS HEREBY NOTIFIED THAT THE SELLER OF THIS SECURITY MAY BE RELYING
            ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5 OF THE SECURITIES
            ACT PROVIDED BY RULE 144A THEREUNDER.

            THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY
            THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE
            TRANSFERRED, ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A
            PERSON WHOM THE SELLER REASONABLY BELIEVES IS A QUALIFIED
            INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A UNDER THE SECURITIES
            ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE 144A, (III)
            OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE
            WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO EXEMPTION
            FROM REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144
            THEREUNDER (IF AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE
            REGISTRATION STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES
            (I) THROUGH (V) IN ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF
            ANY STATE OF THE UNITED STATES, AND (B) THE HOLDER WILL, AND EACH
            SUBSEQUENT HOLDER IS REQUIRED TO, NOTIFY ANY PURCHASER OF THIS
            SECURITY FROM IT OF THE RESALE RESTRICTIONS REFERRED TO IN (A)
            ABOVE.

            (ii) Upon any sale or transfer of a Transfer Restricted Security
      (including any Transfer Restricted Security represented by a Restricted
      Global Security) pursuant to Rule 144 under the Securities Act, the
      Registrar shall permit the transferee thereof to exchange such Transfer
      Restricted Security for a certificated Security that does not bear the
      legend set forth above and rescind any restriction on the transfer of such
      Transfer Restricted Security, if the transferor thereof certifies in
      writing to the Registrar that such sale or transfer was made in reliance
      on Rule 144 (such certification to be in the form set forth on the reverse
      of the Security).

<PAGE>

                                                                               7

            (iii) After a transfer of any Initial Securities or Private Exchange
      Securities pursuant to and during the period of the effectiveness of a
      Shelf Registration Statement with respect to such Initial Securities or
      Private Exchange Securities, as the case may be, all requirements
      pertaining to legends on such Initial Security or such Private Exchange
      Security will cease to apply, the requirements requiring any such Initial
      Security or such Private Exchange Security issued to certain Holders be
      issued in global form will cease to apply, and a certificated Initial
      Security or Private Exchange Security or an Initial Security or Private
      Exchange Security in global form, in each case without restrictive
      transfer legends, will be available to the transferee of the Holder of
      such Initial Securities or Private Exchange Securities upon exchange of
      such transferring Holder's certificated Initial Security or Private
      Exchange Security or directions to transfer such Holder's interest in the
      Global Security, as applicable.

            (iv) Upon the consummation of a Registered Exchange Offer with
      respect to the Initial Securities, all requirements pertaining to such
      Initial Securities that Initial Securities issued to certain Holders be
      issued in global form will still apply with respect to Holders of such
      Initial Securities that do not exchange their Initial Securities, and
      Exchange Securities in certificated or global form will be available to
      Holders that exchange such Initial Securities in such Registered Exchange
      Offer.

            (v) Upon the consummation of a Private Exchange with respect to the
      Initial Securities, all requirements pertaining to such Initial Securities
      that Initial Securities issued to certain Holders be issued in global form
      will still apply with respect to Holders of such Initial Securities that
      do not exchange their Initial Securities, and Private Exchange Securities
      in global form with the global securities legend and the Restricted
      Securities Legend set forth in Exhibit 1 hereto will be available to
      Holders that exchange such Initial Securities in such Private Exchange.

            (c) Cancellation or Adjustment of Global Security. At such time as
all beneficial interests in a Global Security have either been exchanged for
certificated Securities, redeemed, purchased or canceled, such Global Security
shall be returned to the Depository for cancellation or retained and canceled by
the Trustee. At any time prior to such cancellation, if any beneficial interest
in a

<PAGE>

                                                                               8

Global Security is exchanged for certificated Securities, redeemed, purchased or
canceled, the principal amount at maturity of Securities represented by such
Global Security shall be reduced and an adjustment shall be made on the books
and records of the Trustee (if it is then the Securities Custodian for such
Global Security) with respect to such Global Security, by the Trustee or the
Securities Custodian, to reflect such reduction.

            (d) Obligations with Respect to Transfers and Exchanges of
Securities.

            (i) To permit registrations of transfers and exchanges, the Company
      shall execute and the Trustee shall authenticate certificated Securities
      and Global Securities at the Registrar's or co-registrar's request.

            (ii) No service charge shall be made for any registration of
      transfer or exchange, but the Company may require payment of a sum
      sufficient to cover any transfer tax, assessments, or similar governmental
      charge payable in connection therewith (other than any such transfer
      taxes, assessments or similar governmental charge payable upon exchange or
      transfer pursuant to Sections 3.06, 4.06, 4.09 and 9.05 of the Indenture).

            (iii) The Registrar or co-registrar shall not be required to
      register the transfer of or exchange of any Security for a period
      beginning 15 Business Days before the mailing of a notice of an offer to
      repurchase or redeem Securities or 15 Business Days before an interest
      payment date.

            (iv) Prior to the due presentation for registration of transfer of
      any Security, the Company, the Trustee, the Paying Agent, the Registrar or
      any co-registrar may deem and treat the person in whose name a Security is
      registered as the absolute owner of such Security for the purpose of
      receiving payment of principal of and interest on such Security and for
      all other purposes whatsoever, whether or not such Security is overdue,
      and none of the Company, the Trustee, the Paying Agent, the Registrar or
      any co-registrar shall be affected by notice to the contrary.

            (v) All Securities issued upon any transfer or exchange pursuant to
      the terms of the Indenture shall evidence the same debt and shall be
      entitled to the

<PAGE>

                                                                               9

      same benefits under the Indenture as the Securities surrendered upon such
      transfer or exchange.

            (e)  No Obligation of the Trustee.

            (i) The Trustee shall have no responsibility or obligation to any
      beneficial owner of a Global Security, a member of, or a participant in
      the Depository or other Person with respect to the accuracy of the records
      of the Depository or its nominee or of any participant or member thereof,
      with respect to any ownership interest in the Securities or with respect
      to the delivery to any participant, member, beneficial owner or other
      Person (other than the Depository) of any notice (including any notice of
      redemption) or the payment of any amount, under or with respect to such
      Securities. All notices and communications to be given to the Holders and
      all payments to be made to Holders under the Securities shall be given or
      made only to or upon the order of the registered Holders (which shall be
      the Depository or its nominee in the case of a Global Security). The
      rights of beneficial owners in any Global Security shall be exercised only
      through the Depository subject to the applicable rules and procedures of
      the Depository. The Trustee may rely and shall be fully protected in
      relying upon information furnished by the Depository with respect to its
      members, participants and any beneficial owners.

            (ii) The Trustee shall have no obligation or duty to monitor,
      determine or inquire as to compliance with any restrictions on transfer
      imposed under this Indenture or under applicable law with respect to any
      transfer of any interest in any Security (including any transfers between
      or among Depository participants, members or beneficial owners in any
      Global Security) other than to require delivery of such certificates and
      other documentation or evidence as are expressly required by, and to do so
      if and when expressly required by, the terms of the Indenture, and to
      examine the same to determine substantial compliance as to form with the
      express requirements hereof.

      2.4  Certificated Securities.

           (a) A Restricted Global Security deposited with the Depository or
with the Trustee as custodian for the Depository pursuant to Section 2.1 shall
be transferred to the beneficial owners thereof in the form of certificated
Securities in an aggregate principal amount at maturity equal to the principal
amount at maturity of such Global

<PAGE>

                                                                              10

Security, in exchange for such Global Security, only if such transfer complies
with Section 2.3 and (i) the Depository notifies the Company that it is
unwilling or unable to continue as Depository for such Restricted Global
Security or if at any time such Depository ceases to be a "clearing agency"
registered under the Exchange Act and a successor depositary is not appointed by
the Company within 90 days of such notice, (ii) an Event of Default has occurred
and is continuing or (iii) the Company, in its sole discretion, notifies the
Trustee in writing that it elects to cause the issuance of certificated
Securities under the Indenture.

            (b) Any Restricted Global Security that is transferable to the
beneficial owners thereof pursuant to this Section shall be surrendered by the
Depository to the Trustee located at its principal corporate trust office in the
Borough of Manhattan, The City of New York, to be so transferred, in whole or
from time to time in part, without charge, and the Trustee shall authenticate
and deliver, upon such transfer of each portion of such Restricted Global
Security, an equal aggregate principal amount at maturity of certificated
Initial Securities of authorized denominations. Any portion of a Restricted
Global Security transferred pursuant to this Section shall be executed,
authenticated and delivered only in denominations of $1,000 principal amount at
maturity and any integral multiple thereof and registered in such names as the
Depository shall direct. Any certificated Initial Security or Private Exchange
Security delivered in exchange for an interest in the Restricted Global Security
shall, except as otherwise provided by Section 2.3(b), bear the restricted
securities legend set forth in Exhibit 1 hereto.

            (c) Subject to the provisions of Section 2.4(b), the registered
Holder of a Global Security shall be entitled to grant proxies and otherwise
authorize any Person, including Agent Members and Persons that may hold
interests through Agent Members, to take any action which a Holder is entitled
to take under the Indenture or the Securities.

            (d) In the event of the occurrence of either of the events specified
in Section 2.4(a), the Company shall promptly make available to the Trustee a
reasonable supply of certificated Securities in definitive, fully registered
form without interest coupons.

<PAGE>

                                                                       EXHIBIT 1
                                                                              to
                                                 RULE 144A/REGULATION S APPENDIX

                       [FORM OF FACE OF INITIAL SECURITY]

                           [Global Securities Legend]

            UNLESS THIS GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"),
NEW YORK, NEW YORK, TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY GLOBAL SECURITY ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
DTC (AND ANY PAYMENT IS MADE TO CEDE & CO., OR TO SUCH OTHER ENTITY AS IS
REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC) ANY TRANSFER, PLEDGE OR OTHER
USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS
THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

            TRANSFERS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF DTC OR TO A SUCCESSOR THEREOF OR SUCH
SUCCESSOR'S NOMINEE AND TRANSFERS OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE REFERRED TO ON THE REVERSE HEREOF.

                         [Restricted Securities Legend]

            THIS SECURITY (OR ITS PREDECESSOR) WAS ORIGINALLY ISSUED IN A
TRANSACTION EXEMPT FROM REGISTRATION UNDER THE SECURITIES ACT OF 1933 (THE
"SECURITIES ACT"), AND THIS SECURITY MAY NOT BE OFFERED, SOLD OR OTHERWISE
TRANSFERRED OF IN THE ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION
THEREFROM. EACH PURCHASER OF THIS SECURITY IS HEREBY NOTIFIED THAT THE SELLER OF
THIS SECURITY MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.

            THE HOLDER OF THIS SECURITY AGREES FOR THE BENEFIT OF THE COMPANY
THAT (A) THIS SECURITY MAY BE OFFERED, RESOLD, PLEDGED OR OTHERWISE TRANSFERRED,
ONLY (I) TO THE COMPANY, (II) IN THE UNITED STATES TO A PERSON WHOM THE SELLER
REASONABLY BELIEVES IS A QUALIFIED INSTITUTIONAL BUYER (AS DEFINED IN RULE 144A
UNDER THE SECURITIES ACT) IN A TRANSACTION MEETING THE REQUIREMENTS OF RULE
144A, (III) OUTSIDE THE UNITED STATES IN AN OFFSHORE TRANSACTION IN ACCORDANCE
WITH RULE 904 UNDER THE SECURITIES ACT, (IV) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER (IF
AVAILABLE) OR (V) PURSUANT TO AN EFFECTIVE REGISTRATION

<PAGE>

                                                                             2

STATEMENT UNDER THE SECURITIES ACT, IN EACH OF CASES (I) THROUGH (V) IN
ACCORDANCE WITH ANY APPLICABLE SECURITIES LAWS OF ANY STATE OF THE UNITED
STATES, AND (B) THE HOLDER WILL, AND EACH SUBSEQUENT HOLDER IS REQUIRED TO,
NOTIFY ANY PURCHASER OF THIS SECURITY FROM IT OF THE RESALE RESTRICTIONS
REFERRED TO IN (A) ABOVE.

                        [Original Issue Discount Legend]

FOR PURPOSES OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED
(THE "CODE"), THIS SECURITY HAS ORIGINAL ISSUE DISCOUNT. FOR PURPOSES OF SECTION
1273 OF THE CODE, THE ISSUE PRICE IS $489.90 AND THE AMOUNT OF ORIGINAL ISSUE
DISCOUNT IS $1,247.60, IN EACH CASE PER $1,000 PRINCIPAL AMOUNT OF THIS
SECURITY. FOR PURPOSES OF SECTION 1275 OF THE CODE, THE ISSUE DATE OF THIS
SECURITY IS APRIL 10, 2000. FOR PURPOSES OF SECTION 1272 OF THE CODE, THE YIELD
TO MATURITY (COMPOUNDED SEMIANNUALLY ON APRIL 15 AND OCTOBER 15) IS 14.75%.

<PAGE>
No.                                                               $
    -------------                                                  -----------
CUSIP No.:
ISIN No.:
Common Code No.:

                     14-3/4% Senior Discount Notes Due 2010

            Winstar Communications, Inc., a Delaware corporation,
promises to pay to                 , or registered assigns, the
principal sum of _________ Dollars on April 15, 2010.

            Interest Payment Dates:  April 15 and October 15,
commencing October 15, 2005.

            Record Dates:  April 15 and October 15.

            Additional provisions of this Security are set forth on the other
side of this Security.

Dated:
                                    WINSTAR COMMUNICATIONS, INC.,

                                      by
                                          ------------------------------
                                          Name:
                                          Title:

                                      by
                                          ------------------------------
                                          Name:
                                          Title:
TRUSTEE'S CERTIFICATE OF
      AUTHENTICATION

UNITED STATES TRUST COMPANY
  OF NEW YORK,
  as Trustee, certifies
        that this is one of
        the Securities referred
        to in the Indenture.

 by
    -----------------------------
         Authorized Signatory

<PAGE>

                   [FORM OF REVERSE SIDE OF INITIAL SECURITY]

                     14-3/4% Senior Discount Notes Due 2010

1.  Interest

            Winstar Communications, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above; provided,
however, that if a Registration Default (as defined in the Registration Rights
Agreement) occurs, additional interest will accrue on this Security at a rate of
0.25% per annum (increasing by an additional 0.25% per annum after each
consecutive 90-day period that occurs after the date on which such Registration
Default occurs up to a maximum additional interest rate of 1.00%) from and
including the date on which any such Registration Default shall occur to but
excluding the date on which all Registration Defaults have been cured.

            From April 10, 2000 until April 15, 2005, interest on the Securities
will accrue at a rate of 14-3/4% per annum and be compounded semiannually on
each Semi-Annual Accrual Date, but (except as provided below) will not be
payable in cash. From and after April 15, 2005, the Company will pay interest
semiannually on April 15 and October of each year. Interest will be computed on
the basis of a 360-day year of twelve 30-day months. The Company will pay
interest on overdue principal at 1% per annum in excess of the above rate and
will pay interest on overdue installments of interest at such higher rate to the
extent lawful.

            "Accreted Value" means, as of any date (the "Specified Date"), the
amount provided below for each $1,000 principal amount of Securities:

            (1) if the Specified Date occurs on one of the following dates
      (each, a "Semi-Annual Accrual Date"), the Accreted Value will equal the
      amount set forth below for such Semi-Annual Accrual Date:

       Semi-Annual                                   Accreted
       -----------                                   --------
       Accrual Date                                   Value
       ------------                                   -----

       Issue Date . . . . . . . . . . . . . . . . $  489.90

<PAGE>

                                                                               2

       October 15, 2000 . . . . . . . . . . . . .    527.07
       April 15, 2001 . . . . . . . . . . . . . .    565.95
       October 15, 2001 . . . . . . . . . . . . .    607.68
       April 15, 2002 . . . . . . . . . . . . . .    652.50
       October 15, 2002 . . . . . . . . . . . . .    700.62
       April 15, 2003 . . . . . . . . . . . . . .    752.29
       October 15, 2003 . . . . . . . . . . . . .    807.78
       April 15, 2004 . . . . . . . . . . . . . .    867.35
       October 15, 2004 . . . . . . . . . . . . .    931.32
       April 15, 2005 . . . . . . . . . . . . . .  1,000.00

            (2)   if the Specified Date occurs between two Semi-Annual Accrual
                  Dates, the Accreted Value will be equal to the sum of (A) the
                  Accreted Value for the Semi-Annual Accrual Date immediately
                  preceding such Specified Date and (B) an amount equal to the
                  product of (x) the Accreted Value for the immediately
                  following Semi-Annual Accrual Date less the Accreted Value for
                  the immediately preceding Semi-Annual Accrual Date multiplied
                  by (y) a fraction, the numerator of which is the number of
                  days elapsed from the immediately preceding Semi-Annual
                  Accrual Date to the Specified Date, using a 360-day year of 12
                  30-day months, and the denominator of which is 180 (or, if the
                  Semi-Annual Accrual Date immediately preceding the Specified
                  Date is the Issue Date, the denominator of which is the number
                  of days from and including the Issue Date to and excluding the
                  next Semi-Annual Accrual Date); or

            (3)   if the Specified Date occurs after the last Semi-Annual
                  Accrual Date, the Accreted Value will equal $1,000.

2.  Method of Payment

            The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the April 1 or October 1 next preceding the interest payment date
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Securities represented by a
Global

<PAGE>

                                                                               3

Security (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest) by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on a certificated Security will be made by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than 30
days immediately preceding the relevant due date for payment (or such other date
as the Trustee may accept in its discretion).

3.  Paying Agent and Registrar

            Initially, United States Trust Company of New York, a New York
corporation (the "Trustee"), will act as Paying Agent and Registrar. The Company
may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.

4.  Indenture

            The Company issued the Securities under an Indenture dated as of
April 10, 2000 (the "Indenture"), between the Company and the Trustee. The terms
of the Securities include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.

            The Securities are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities up to a specified amount pursuant to
Section 2.13 of the Indenture. The Initial Securities issued on the Issue Date,
any Additional Securities and all Exchange Securities or Private Exchange
Securities issued in exchange therefor will be treated as a single class for all

<PAGE>

                                                                               4

purposes under the Indenture. The Indenture contains covenants that limit the
ability of the Company and its Restricted Group Members to incur additional
indebtedness; pay dividends or distributions on, or redeem or repurchase capital
stock; make investments; issue or sell capital stock of Restricted Group
Members; engage in transactions with affiliates; create liens on assets;
transfer or sell assets; guarantee indebtedness; restrict dividends or other
payments of Restricted Group Members; consolidate, merge or transfer all or
substantially all of its assets and the assets of its Restricted Group Members;
and engage in sale/leaseback transactions. These covenants are subject to
important exceptions and qualifications.

5.  Optional Redemption

            Except as set forth below, the Company shall not be entitled to
redeem the Securities at its option prior to April 15, 2005.

            On and after April 15, 2005, the Company shall be entitled at its
option to redeem all or a portion of the Securities upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed in percentages of
Accreted Value on the redemption date), plus accrued interest to the redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period commencing on April 15 of the years set forth below:

                                         Redemption
            Period                          Price
            ------                          -----

            2005                          107.375%
            2006                          104.917
            2007                          102.458
            2008 and thereafter           100.000%

            In addition, prior to April 15, 2003, the Company shall be entitled
at its option on one or more occasions to redeem Securities (which includes
Additional Securities, if any) in an aggregate principal amount at maturity not
to exceed 35% of the aggregate principal amount at maturity of the Securities
(which includes Additional Securities, if any) originally issued at a redemption
price (expressed as a percentage of Accreted Value) of 114.750%, plus accrued
and unpaid interest to the redemption date, with the net cash proceeds from one
or more Public Equity Offerings; provided, however, that (1) at least 65% of
such aggregate principal

<PAGE>

                                                                               5

amount at maturity of Securities (which includes Additional Securities, if any)
remains outstanding immediately after the occurrence of each such redemption
(other than Securities held, directly or indirectly, by the Company or its
Affiliates); and (2) each such redemption occurs within 90 days after the
closing date of the related Public Equity Offering.

6.  Notice of Redemption

            Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 principal amount at maturity may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of and
accrued interest on all Securities (or portions thereof) to be redeemed on the
redemption date is deposited with the Paying Agent on or before the redemption
date and certain other conditions are satisfied, on and after such date interest
ceases to accrue on such Securities (or such portions thereof) called for
redemption.

7.  Put Provisions

            Upon a Change of Control, any Holder of Securities will have the
right to cause the Company to repurchase all or any part of the Securities of
such Holder at a repurchase price equal to 101% of the Accreted Value of the
Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.

8.  Denominations; Transfer; Exchange

            The Securities are in registered form without coupons in
denominations of $1,000 principal amount at maturity and whole multiples of
$1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer of or exchange any Securities selected for redemption (except, in
the case of a Security to be redeemed

<PAGE>

                                                                               6

in part, the portion of the Security not to be redeemed) or any Securities for a
period of 15 days before a selection of Securities to be redeemed or 15 days
before an interest payment date.

9.  Persons Deemed Owners

            The registered Holder of this Security may be treated as the owner
of it for all purposes.

10.  Unclaimed Money

            If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.

11.  Discharge and Defeasance

            Subject to certain conditions, the Company at any time shall be
entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.

12.  Amendment, Waiver

            Subject to certain exceptions set forth in the Indenture, (i) the
Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount at maturity outstanding of
the Securities and (ii) any default or noncompliance with any provision may be
waived with the written consent of the Holders of a majority in principal amount
at maturity outstanding of the Securities. Subject to certain exceptions set
forth in the Indenture, without the consent of any Securityholder, the Company
and the Trustee shall be entitled to amend the Indenture or the Securities to
cure any ambiguity, omission, defect or inconsistency, or to comply with Article
5 of the Indenture, or to provide for uncertificated Securities in addition to
or in place of certificated Securities, or to add guarantees with respect to the
Securities or to secure the Securities, or to add additional covenants or
surrender rights and powers

<PAGE>

                                                                               7

conferred on the Company, or to comply with any request of the SEC in connection
with qualifying the Indenture under the Act, or to make any change that does not
adversely affect the rights of any Securityholder.

13.  Defaults and Remedies

            Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon acceleration or otherwise, or failure by the Company to
purchase Securities when required; (iii) failure by the Company to comply with
other agreements in the Indenture or the Securities, in certain cases subject to
notice and lapse of time; (iv) certain accelerations (including failure to pay
within any grace period after final maturity) of other Indebtedness of the
Company if the amount accelerated (or so unpaid) exceeds $25.0 million; (v)
certain events of bankruptcy or insolvency with respect to the Company and the
Significant Restricted Group Members; and (vi) certain judgments or decrees for
the payment of money in excess of $25.0 million. If an Event of Default occurs
and is continuing, the Trustee or the Holders of at least 25% in principal
amount at maturity of the Securities may declare all the Securities to be due
and payable immediately. Certain events of bankruptcy or insolvency are Events
of Default which will result in the Securities being due and payable immediately
upon the occurrence of such Events of Default.

            Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount at maturity of the Securities may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Securityholders
notice of any continuing Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in the interest of the
Holders.

14.  Trustee Dealings with the Company

            Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations

<PAGE>

                                                                               8

owed to it by the Company or its Affiliates and may otherwise deal with the
Company or its Affiliates with the same rights it would have if it were not
Trustee.

15.  No Recourse Against Others

            A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.

16.  Authentication

            This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.

17.  Abbreviations

            Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).

18.  CUSIP, ISIN and Common Code Numbers

            Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. To the extent such
numbers have been issued, the Company has caused ISIN and Common Code numbers to
be similarly printed on the Securities and has similarly instructed the Trustee.
No representation is made as to the accuracy of such numbers either as printed
on the Securities or as contained in any notice of redemption and reliance may
be placed only on the other identification numbers placed thereon.

<PAGE>

                                                                               9

19.  Holders' Compliance with Registration Rights Agreement.

            Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.

20.  Governing Law.

            THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

            The Company will furnish to any Securityholder upon written request
and without charge to the Security holder a copy of the Indenture which has in
it the text of this Security in larger type. Requests may be made to:

            Winstar Communications, Inc.
            685 Third Avenue
            Thirty-first Floor
            New York, NY 10019

            Attention:  General Counsel

<PAGE>

--------------------------------------------------------------------------------

                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

      (Print or type assignee's name, address and zip code)

      (Insert assignee's soc. sec. or tax I.D. No.)

and irrevocably appoint                           agent to transfer
this Security on the books of the Company.  The agent may substitute
another to act for him.

--------------------------------------------------------------------------------

Date:                Your Signature:
     -------------                  --------------------------------------------

--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.

In connection with any transfer of any of the Securities evidenced by this
certificate occurring prior to the expiration of the period referred to in Rule
144(k) under the Securities Act after the later of the date of original issuance
of such Securities and the last date, if any, on which such Securities were
owned by the Company or any Affiliate of the Company, the undersigned confirms
that such Securities are being transferred in accordance with its terms:

CHECK ONE BOX BELOW

      (1)   |_|    to the Company; or

      (2)   |_|    pursuant to an effective registration statement under the
                   Securities Act of 1933; or

      (3)   |_|   inside the United States to a "qualified
                  institutional buyer" (as defined in Rule 144A under
                  the Securities Act of 1933) that purchases for its
                  own account or for the

<PAGE>

                                                                               2

                  account of a qualified institutional buyer to whom notice is
                  given that such transfer is being made in reliance on Rule
                  144A, in each case pursuant to and in compliance with Rule
                  144A under the Securities Act of 1933; or

      (4)   |_|   outside the United States in an offshore transaction within
                  the meaning of Regulation S under the Securities Act of 1933
                  in compliance with Rule 904 under the Securities Act of 1933;
                  or

      (5)   |_|   pursuant to the exemption from registration provided
                  by Rule 144 under the Securities Act of 1933.

      Unless one of the boxes is checked, the Trustee will refuse to register
      any of the Securities evidenced by this certificate in the name of any
      person other than the registered holder thereof; provided, however, that
      if box (4) or (5) is checked, the Trustee shall be entitled to require,
      prior to registering any such transfer of the Securities, such legal
      opinions, certifications and other information as the Company has
      reasonably requested to confirm that such transfer is being made pursuant
      to an exemption from, or in a transaction not subject to, the registration
      requirements of the Securities Act of 1933, such as the exemption provided
      by Rule 144 under such Act.

                                    ------------------------------------
                                         Signature

Signature Guarantee:

----------------------------        -----------------------------------------
Signature must be guaranteed        Signature

      Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.
--------------------------------------------------------------------------------

<PAGE>

              TO BE COMPLETED BY PURCHASER IF (3) ABOVE IS CHECKED.

            The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, and is aware that the sale to it is being made in reliance on Rule 144A
and acknowledges that it has received such information regarding the Company as
the undersigned has requested pursuant to Rule 144A or has determined not to
request such information and that it is aware that the transferor is relying
upon the undersigned's foregoing representations in order to claim the exemption
from registration provided by Rule 144A.

Dated:
      --------------------          --------------------------------------------
                                    NOTICE:  To be executed by
                                              an executive officer

<PAGE>

                      [TO BE ATTACHED TO GLOBAL SECURITIES]

              SCHEDULE OF INCREASES OR DECREASES IN GLOBAL SECURITY

            The following increases or decreases in this Global Security have
been made:

Date of          Amount of       Amount of      Principal       Signature of
Exchange         decrease in     increase in    amount at       authorized
                 Principal       Principal      maturity of     officer of
                 amount at       amount at      this Global     Trustee or
                 maturity of     maturity of    Security        Securities
                 this Global     this Global    following such  Custodian
                 Security        Security       decrease or
                                                increase)

<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE

            If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.09 of the Indenture, check the box:

                                       / /

            If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.09 of the Indenture, state the amount
in principal amount at maturity:
$
 --------------

Date:                   Your Signature:
     -----------------                 -----------------------------------------
                                        (Sign exactly as your name
                                        appears on the other side
                                        of this Security.)

Signature Guarantee:
                     -----------------------------------------------
                           (Signature must be guaranteed)

      Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.

<PAGE>

                                                                       EXHIBIT A

                       [FORM OF FACE OF EXCHANGE SECURITY
                          OR PRIVATE EXCHANGE SECURITY]

                                      */**/

                        [Original Issue Discount Legend]

            FOR PURPOSES OF SECTION 1273 OF THE INTERNAL REVENUE CODE OF 1986,
AS AMENDED (THE "CODE"), THIS SECURITY HAS ORIGINAL ISSUE DISCOUNT. FOR PURPOSES
OF SECTION 1273 OF THE CODE, THE ISSUE PRICE IS $489.90 AND THE AMOUNT OF
ORIGINAL ISSUE DISCOUNT IS $1,247.60, IN EACH CASE PER $1,000 PRINCIPAL AMOUNT
OF THIS SECURITY. FOR PURPOSES OF SECTION 1275 OF THE CODE, THE ISSUE DATE OF
THIS SECURITY IS APRIL 10, 2000. FOR PURPOSES OF SECTION 1272 OF THE CODE, THE
YIELD TO MATURITY (COMPOUNDED SEMIANNUALLY ON APRIL 15 AND OCTOBER 15) IS
14.75%.

------------------------------

*/[If the Security is to be issued in global form add the Global Securities
Legend from Exhibit 1 to Appendix A and the attachment from such Exhibit 1
captioned "[TO BE ATTACHED TO GLOBAL SECURITIES] - SCHEDULE OF INCREASES OR
DECREASES IN GLOBAL SECURITY".]

<PAGE>

                                                                               2

**/[If the Security is a Private Exchange Security issued in a Private Exchange
to an Initial Purchaser holding an unsold portion of its initial allotment, add
the Restricted Securities Legend from Exhibit 1 to Appendix A and replace the
Assignment Form included in this Exhibit A with the Assignment Form included in
such Exhibit 1.]

<PAGE>

No.                                                            $
    -------------                                               ----------------
CUSIP No.:
ISIN No.:
Common Code No.:

                     14-3/4% Senior Discount Notes Due 2010

            Winstar Communications, Inc., a Delaware corporation,
promises to pay to              , or registered assigns, the principal
sum of                Dollars on April 15, 2010.

            Interest Payment Dates:  April 15 and October 15,
commencing October 15, 2005.

            Record Dates:  April 1 and October 1.

            Additional provisions of this Security are set forth on the other
side of this Security.

Dated:

                                    WINSTAR COMMUNICATIONS, INC.,

                                      by

                                          ---------------------------------
                                          Name:
                                          Title:

                                      by

                                          ---------------------------------
                                          Name:
                                          Title:

TRUSTEE'S CERTIFICATE OF
      AUTHENTICATION

UNITED STATES TRUST COMPANY
  OF NEW YORK
  as Trustee, certifies
        that this is one of
        the Securities referred
        to in the Indenture.

 by
    -----------------------------

<PAGE>

                                                                               2

         Authorized Signatory

<PAGE>

                   [FORM OF REVERSE SIDE OF [EXCHANGE SECURITY
                          OR PRIVATE EXCHANGE] SECURITY

                     14-3/4% Senior Discount Notes Due 2010

1.  Interest

            Winstar Communications, Inc., a Delaware corporation (such
corporation, and its successors and assigns under the Indenture hereinafter
referred to, being herein called the "Company"), promises to pay interest on the
principal amount of this Security at the rate per annum shown above.

            From April 10, 2000 until April 15, 2005, interest on the Securities
will accrue at a rate of 14-3/4% per annum and be compounded semiannually on
each Semi-Annual Accrual Date, but (except as provided below) will not be
payable in cash. From and after April 15, 2005, the Company will pay interest
semiannually on April 15 and October 15 of each year. Interest will be computed
on the basis of a 360-day year of twelve 30-day months. The Company will pay
interest on overdue principal at 1% per annum in excess of the above rate and
will pay interest on overdue installments of interest at such higher rate to the
extent lawful.

            "Accreted Value" means, as of any date (the "Specified Date"), the
amount provided below for each $1,000 principal amount of Securities:

      (1) if the Specified Date occurs on one of the following dates (each, a
"Semi-Annual Accrual Date"), the Accreted Value will equal the amount set forth
below for such Semi-Annual Accrual Date:

Semi-Annual                                  Accreted
-----------                                  --------
Accrual Date                                   Value
------------                                   -----

Issue Date . . . . . . . . . . . . . . . .  $  489.90
October 15, 2000 . . . . . . . . . . . . .     527.07
April 15, 2001 . . . . . . . . . . . . . .     565.95
October 15, 2001 . . . . . . . . . . . . .     607.68
April 15, 2002 . . . . . . . . . . . . . .     652.50
October 15, 2002 . . . . . . . . . . . . .     700.62
April 15, 2003 . . . . . . . . . . . . . .     752.29
October 15, 2003 . . . . . . . . . . . . .     807.78
April 15, 2004 . . . . . . . . . . . . . .     867.35

<PAGE>

                                                                               2

October 15, 2004 . . . . . . . . . . . . .     931.32
April 15, 2005 . . . . . . . . . . . . . .   1,000.00

      (2)   if the Specified Date occurs between two Semi-Annual Accrual Dates,
            the Accreted Value will be equal to the sum of (A) the Accreted
            Value for the Semi-Annual Accrual Date immediately preceding such
            Specified Date and (B) an amount equal to the product of (x) the
            Accreted Value for the immediately following Semi-Annual Accrual
            Date less the Accreted Value for the immediately preceding Semi-
            Annual Accrual Date multiplied by (y) a fraction, the numerator of
            which is the number of days elapsed from the immediately preceding
            Semi-Annual Accrual Date to the Specified Date, using a 360-day year
            of 12 30-day months, and the denominator of which is 180 (or, if the
            Semi-Annual Accrual Date immediately preceding the Specified Date is
            the Issue Date, the denominator of which is the number of days from
            and including the Issue Date to and excluding the next Semi-Annual
            Accrual Date); or

      (3)   if the Specified Date occurs after the last Semi-Annual Accrual
            Date, the Accreted Value will equal $1,000.

2.  Method of Payment

            The Company will pay interest on the Securities (except defaulted
interest) to the Persons who are registered holders of Securities at the close
of business on the April 1 or October 1 next preceding the interest payment date
even if Securities are canceled after the record date and on or before the
interest payment date. Holders must surrender Securities to a Paying Agent to
collect principal payments. The Company will pay principal and interest in money
of the United States that at the time of payment is legal tender for payment of
public and private debts. Payments in respect of the Securities represented by a
Global Security (including principal, premium and interest) will be made by wire
transfer of immediately available funds to the accounts specified by The
Depository Trust Company. The Company will make all payments in respect of a
certificated Security (including principal, premium and interest) by mailing a
check to the registered address of each Holder thereof; provided, however, that
payments on a certificated Security will be made by wire transfer to a U.S.
dollar account maintained by the payee with a bank in the United States if such
Holder elects payment by wire transfer by giving written notice to the Trustee
or the Paying Agent to such effect designating such account no later than

<PAGE>

                                                                               3

30 days immediately preceding the relevant due date for payment (or such other
date as the Trustee may accept in its discretion).

3.  Paying Agent and Registrar

            Initially, United States Trust Company of New York, a New York
corporation (the "Trustee"), will act as Paying Agent and Registrar. The Company
may appoint and change any Paying Agent, Registrar or co-registrar without
notice. The Company or any of its domestically incorporated Wholly Owned
Subsidiaries may act as Paying Agent, Registrar or co-registrar.

4.  Indenture

            The Company issued the Securities under an Indenture dated as of
April 10, 2000 (the "Indenture"), between the Company and the Trustee. The terms
of the Securities include those stated in the Indenture and those made part of
the Indenture by reference to the Trust Indenture Act of 1939 (15 U.S.C. ss.ss.
77aaa-77bbbb) as in effect on the date of the Indenture (the "Act"). Terms
defined in the Indenture and not defined herein have the meanings ascribed
thereto in the Indenture. The Securities are subject to all such terms, and
Securityholders are referred to the Indenture and the Act for a statement of
those terms.

            The Securities are general unsecured obligations of the Company. The
Company shall be entitled, subject to its compliance with Section 4.03 of the
Indenture, to issue Additional Securities up to a specified amount pursuant to
Section 2.13 of the Indenture. The Initial Securities issued on the Issue Date,
any Additional Securities and all Exchange Securities or Private Exchange
Securities issued in exchange therefor will be treated as a single class for all
purposes under the Indenture. The Indenture contains covenants that limit the
ability of the Company and its Restricted Group Members to incur additional
indebtedness; pay dividends or distributions on, or redeem or repurchase capital
stock; make investments; issue or sell capital stock of Restricted Group
Members; engage in transactions with affiliates; create liens on assets;
transfer or sell assets; guarantee indebtedness; restrict dividends or other
payments of Restricted Group Members; consolidate, merge or transfer all or
substantially all of its assets and the assets of its Restricted Group Members;
and engage in sale/leaseback transactions. These covenants are subject to
important exceptions and qualifications.

<PAGE>

                                                                               4

5.  Optional Redemption

            Except as set forth below, the Company shall not be entitled to
redeem the Securities at its option prior to April 15, 2005.

            On and after April 15, 2005, the Company shall be entitled at its
option to redeem all or a portion of the Securities upon not less than 30 nor
more than 60 days' notice, at the redemption prices (expressed in percentages of
Accreted Value, on the redemption date) plus accrued interest to the redemption
date (subject to the right of Holders of record on the relevant record date to
receive interest due on the relevant interest payment date), if redeemed during
the 12-month period commencing on 2005 of the years set forth below:

                                                   Redemption
            Period                                   Price
            ------                                   -----

            2005                                   107.375%
            2006                                   104.917
            2007                                   102.458
            2008 and thereafter                    100.00%

            In addition, prior to April 15, 2003, the Company shall be entitled
at its option on one or more occasions to redeem Securities (which includes
Additional Securities, if any) in an aggregate principal amount at maturity not
to exceed 35% of the aggregate principal amount at maturity of the Securities
(which includes Additional Securities, if any) originally issued at a redemption
price (expressed as a percentage of Accreted Value) of 114.750%, plus accrued
and unpaid interest to the redemption date, with the net cash proceeds from one
or more Public Equity Offerings; provided, however, that (1) at least 65% of
such aggregate principal amount at maturity of Securities (which includes
Additional Securities, if any) remains outstanding immediately after the
occurrence of each such redemption (other than Securities held, directly or
indirectly, by the Company or its Affiliates); and (2) each such redemption
occurs within 90 days after the closing date of the related Public Equity
Offering.

6.  Notice of Redemption

            Notice of redemption will be mailed at least 30 days but not more
than 60 days before the redemption date to each Holder of Securities to be
redeemed at his registered address. Securities in denominations larger than
$1,000 principal amount at maturity may be redeemed in part but only in whole
multiples of $1,000. If money sufficient to pay the redemption price of

<PAGE>

                                                                               5

and accrued interest on all Securities (or portions thereof) to be redeemed on
the redemption date is deposited with the Paying Agent on or before the
redemption date and certain other conditions are satisfied, on and after such
date interest ceases to accrue on such Securities (or such portions thereof)
called for redemption.

7.  Put Provisions

            Upon a Change of Control, any Holder of Securities will have the
right to cause the Company to repurchase all or any part of the Securities of
such Holder at a repurchase price equal to 101% of the Accreted Value of the
Securities to be repurchased plus accrued interest to the date of repurchase
(subject to the right of holders of record on the relevant record date to
receive interest due on the related interest payment date) as provided in, and
subject to the terms of, the Indenture.

8.  Denominations; Transfer; Exchange

            The Securities are in registered form without coupons in
denominations of $1,000 principal amount at maturity and whole multiples of
$1,000. A Holder may transfer or exchange Securities in accordance with the
Indenture. The Registrar may require a Holder, among other things, to furnish
appropriate endorsements or transfer documents and to pay any taxes and fees
required by law or permitted by the Indenture. The Registrar need not register
the transfer of or exchange any Securities selected for redemption (except, in
the case of a Security to be redeemed in part, the portion of the Security not
to be redeemed) or any Securities for a period of 15 days before a selection of
Securities to be redeemed or 15 days before an interest payment date.

9.  Persons Deemed Owners

            The registered Holder of this Security may be treated as the owner
of it for all purposes.

10.  Unclaimed Money

            If money for the payment of principal or interest remains unclaimed
for two years, the Trustee or Paying Agent shall pay the money back to the
Company at its request unless an abandoned property law designates another
Person. After any such payment, Holders entitled to the money must look only to
the Company and not to the Trustee for payment.

<PAGE>

                                                                               6

11.  Discharge and Defeasance

            Subject to certain conditions, the Company at any time shall be
entitled to terminate some or all of its obligations under the Securities and
the Indenture if the Company deposits with the Trustee money or U.S. Government
Obligations for the payment of principal and interest on the Securities to
redemption or maturity, as the case may be.

12.  Amendment, Waiver

            Subject to certain exceptions set forth in the Indenture, (i) the
Indenture and the Securities may be amended with the written consent of the
Holders of at least a majority in principal amount at maturity outstanding of
the Securities and (ii) any default or noncompliance with any provision may be
waived with the written consent of the Holders of a majority in principal amount
at maturity outstanding of the Securities. Subject to certain exceptions set
forth in the Indenture, without the consent of any Securityholder, the Company
and the Trustee shall be entitled to amend the Indenture or the Securities to
cure any ambiguity, omission, defect or inconsistency, or to comply with Article
5 of the Indenture, or to provide for uncertificated Securities in addition to
or in place of certificated Securities, or to add guarantees with respect to the
Securities or to secure the Securities, or to add additional covenants or
surrender rights and powers conferred on the Company, or to comply with any
request of the SEC in connection with qualifying the Indenture under the Act, or
to make any change that does not adversely affect the rights of any
Securityholder.

13.  Defaults and Remedies

            Under the Indenture, Events of Default include (i) default for 30
days in payment of interest on the Securities; (ii) default in payment of
principal on the Securities at maturity, upon redemption pursuant to paragraph 5
of the Securities, upon acceleration or otherwise, or failure by the Company to
purchase Securities when required; (iii) failure by the Company to comply with
other agreements in the Indenture or the Securities, in certain cases subject to
notice and lapse of time; (iv) certain accelerations (including failure to pay
within any grace period after final maturity) of other Indebtedness of the
Company if the amount accelerated (or so unpaid) exceeds $25.0 million; (v)
certain events of bankruptcy or insolvency with respect to the Company and the
Significant Restricted Group Members; and (vi) certain judgments or decrees for
the payment of

<PAGE>

                                                                               7

money in excess of $25.0 million. If an Event of Default occurs and is
continuing, the Trustee or the Holders of at least 25% in principal amount at
maturity of the Securities may declare all the Securities to be due and payable
immediately. Certain events of bankruptcy or insolvency are Events of Default
which will result in the Securities being due and payable immediately upon the
occurrence of such Events of Default.

            Securityholders may not enforce the Indenture or the Securities
except as provided in the Indenture. The Trustee may refuse to enforce the
Indenture or the Securities unless it receives indemnity or security
satisfactory to it. Subject to certain limitations, Holders of a majority in
principal amount at maturity of the Securities may direct the Trustee in its
exercise of any trust or power. The Trustee may withhold from Securityholders
notice of any continuing Default (except a Default in payment of principal or
interest) if it determines that withholding notice is in the interest of the
Holders.

14.  Trustee Dealings with the Company

            Subject to certain limitations imposed by the Act, the Trustee under
the Indenture, in its individual or any other capacity, may become the owner or
pledgee of Securities and may otherwise deal with and collect obligations owed
to it by the Company or its Affiliates and may otherwise deal with the Company
or its Affiliates with the same rights it would have if it were not Trustee.

15.  No Recourse Against Others

            A director, officer, employee or stockholder, as such, of the
Company or the Trustee shall not have any liability for any obligations of the
Company under the Securities or the Indenture or for any claim based on, in
respect of or by reason of such obligations or their creation. By accepting a
Security, each Securityholder waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Securities.

16.  Authentication

            This Security shall not be valid until an authorized signatory of
the Trustee (or an authenticating agent) manually signs the certificate of
authentication on the other side of this Security.

<PAGE>

                                                                               8

17.  Abbreviations

            Customary abbreviations may be used in the name of a Securityholder
or an assignee, such as TEN COM (=tenants in common), TEN ENT (=tenants by the
entireties), JT TEN (=joint tenants with rights of survivorship and not as
tenants in common), CUST (=custodian), and U/G/M/A (=Uniform Gift to Minors
Act).

18.  CUSIP, ISIN and Common Code Numbers

            Pursuant to a recommendation promulgated by the Committee on Uniform
Security Identification Procedures the Company has caused CUSIP numbers to be
printed on the Securities and has directed the Trustee to use CUSIP numbers in
notices of redemption as a convenience to Securityholders. To the extent such
numbers have been issued, the Company has caused ISIN and Common Code numbers to
be similarly printed on the Securities and has similarly instructed the Trustee.
No representation is made as to the accuracy of such numbers either as printed
on the Securities or as contained in any notice of redemption and reliance may
be placed only on the other identification numbers placed thereon.

19.  Holders' Compliance with Registration Rights Agreement

            Each Holder of a Security, by acceptance hereof, acknowledges and
agrees to the provisions of the Registration Rights Agreement, including the
obligations of the Holders with respect to a registration and the
indemnification of the Company to the extent provided therein.

20.  Governing Law

            THIS SECURITY SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW YORK BUT WITHOUT GIVING EFFECT TO APPLICABLE
PRINCIPLES OF CONFLICTS OF LAW TO THE EXTENT THAT THE APPLICATION OF THE LAWS OF
ANOTHER JURISDICTION WOULD BE REQUIRED THEREBY.

<PAGE>

                                                                               9

            The Company will furnish to any Securityholder upon written request
and without charge to the Securityholder a copy of the Indenture which has in it
the text of this Security in larger type. Requests may be made to:

            Winstar Communications, Inc.
            685 Third Avenue
            Thirty-first Floor
            New York, NY 10019

            Attention:  General Counsel

<PAGE>

--------------------------------------------------------------------------------

                                 ASSIGNMENT FORM

To assign this Security, fill in the form below:

I or we assign and transfer this Security to

      (Print or type assignee's name, address and zip code)

      (Insert assignee's soc. sec. or tax I.D. No.)

and irrevocably appoint                           agent to transfer
this Security on the books of the Company.  The agent may substitute
another to act for him.

--------------------------------------------------------------------------------

Date:               Your Signature:
     --------------                ---------------------------------------------

--------------------------------------------------------------------------------
Sign exactly as your name appears on the other side of this Security.

<PAGE>

                       OPTION OF HOLDER TO ELECT PURCHASE

            If you want to elect to have this Security purchased by the Company
pursuant to Section 4.06 or 4.09 of the Indenture, check the box:

                                      / /

            If you want to elect to have only part of this Security purchased by
the Company pursuant to Section 4.06 or 4.09 of the Indenture, state the amount
in principal amount at maturity:
$
 ----------

Date:               Your Signature:
     --------------                ---------------------------------------------
                                   (Sign exactly as your name
                                   appears on the other side
                                   of this Security.)

Signature Guarantee:
                     -----------------------------------------------
                           (Signature must be guaranteed)

      Signatures must be guaranteed by an "eligible guarantor institution"
meeting the requirements of the Registrar, which requirements include membership
or participation in the Security Transfer Agent Medallion Program ("STAMP") or
such other "signature guarantee program" as may be determined by the Registrar
in addition to, or in substitution for, STAMP, all in accordance with the
Securities Exchange Act of 1934, as amended.WINSTAR COMMUNICATIONS, INC.

                   $325,000,000 12-1/2% Senior Notes Due 2008

                   $646,343,000 12-3/4% Senior Notes Due 2010

               $930,443,000 14-3/4% Senior Discount Notes Due 2010

                          REGISTRATION RIGHTS AGREEMENT

                                                                 April 10, 2000

CREDIT SUISSE FIRST BOSTON CORPORATION
SALOMON SMITH BARNEY INC.
BNY CAPITAL MARKETS, INC.
CIBC WORLD MARKETS CORP.
ABN AMRO INCORPORATED
BARCLAYS CAPITAL INC.
CREDIT LYONNAIS SECURITIES (USA) INC.
DRESDNER KLEINWORT BENSON NORTH AMERICA LLC
FLEETBOSTON ROBERTSON STEPHENS INC.
J.P. MORGAN SECURITIES INC.
RBC DOMINION SECURITIES CORPORATION
SG COWEN SECURITIES CORPORATION
SCOTIA CAPITAL (USA) INC.
TD SECURITIES (USA) INC.

c/o CREDIT SUISSE FIRST BOSTON CORPORATION

         Eleven Madison Avenue
         New York, New York  10010

Ladies and Gentlemen:

     Winstar Communications, Inc., a Delaware corporation (the "Issuer") has
agreed to issue and sell, upon the terms set forth in a purchase agreement of
even date herewith (the "Purchase Agreement"), to the initial purchasers listed
in Schedule A to the Purchase Agreement ("Initial Purchasers"), $325,000,000 of
the Issuer's 12-1/2% Senior Notes Due 2008 (the "2008 Senior Notes") and
$168,300,000 of the Issuer's 12-3/4% Senior Notes Due 2010 (the "2010 Senior
Notes" and, together with the 2008 Senior Notes, the "Offered Securities"). Each
of the 2010 Senior Notes and the 2008 Senior Notes will be issued pursuant to a
separate Indenture, each dated as of April 10, 2000 (each, an "Indenture" and
together, the "Indentures"), between the Issuer and United States Trust Company
of New York, as trustee (the "Trustee").

     The Issuer has made an offer (the "Exchange Offer") to exchange (i) 2010
Senior Notes or its 14-3/4% Senior Discount Notes Due 2010 (the "Senior Discount
Notes"), or any combination thereof, for any and all of its outstanding 10%
Senior Subordinated Notes Due 2008 and (ii) a combination of 2010 Senior Notes
and Senior Discount Notes for any and all of its outstanding 15% Senior
Subordinated Deferred Interest Notes Due 2007 and its 11% Senior Subordinated
Deferred Interest Notes Due 2008, held by certain qualified offerees, on the
terms and subject to the conditions set forth in the Confidential Offering
Circular and Consent Solicitation Statement dated March 3, 2000.

     The Issuer has entered into agreements (the "Preferred Stock Transaction
Agreements") with the holders (the "Specified Holders") of more than 75% of the
outstanding shares of the Series C 14 1/4% Senior Cumulative Exchangeable
Preferred Stock due 2007 of the Issuer (the "Series C Preferred Stock"),
including (A) an agreement by the Specified Holders to waive any defaults under
the certificate of designation governing the Series C Preferred Stock resulting
from the Issuer's proposed refinancing and certain other events, (B) the
Issuer's agreement to issue, on June 15, 2000, exchange debentures (the
"Exchange Debentures") in exchange for all of the Series C Preferred Stock, as
provided by the terms of the Series C Preferred Stock certificate of
designation, (C) an agreement by the Specified Holders that certain restrictive
covenants and default provisions in the indenture that will govern the Exchange
Debentures will be eliminated and (D) the Issuer's agreement to exchange all of
the Exchange Debentures held by the Specified Holders for a combination of 2010

<PAGE>

Senior Notes and Senior Discount Notes and the Holders' agreement to participate
in such exchange.

     The 2010 Senior Notes and Senior Discount Notes to be issued in connection
with the Exchange Offer, the 2010 Senior Notes and Senior Discount Notes to be
issued in connection with the exchange of Exchange Debentures for Senior
Discount Notes (whether pursuant to the Preferred Stock Transaction Agreements
or otherwise) and the Offered Securities are referred to herein as the "Initial
Securities". As an inducement to the Initial Purchasers, the Issuer agrees with
the Initial Purchasers, for the benefit of the holders of the outstanding
Initial Securities (including, without limitation, the Initial Purchasers), the
Exchange Securities (as defined below) and the Private Exchange Securities (as
defined below) (collectively the "Holders"), as follows:

     1. Registered Exchange Offer. Unless not permitted by applicable law (after
the Issuer has complied with the ultimate paragraph of this Section 1), the
Issuer shall prepare and, not later than 90 days (such 90th day being a "Filing
Deadline") after the date on which the Initial Purchasers purchase the Offered
Securities pursuant to the Purchase Agreement (the "Closing Date"), file with
the Securities and Exchange Commission (the "Commission") a registration
statement (the "Exchange Offer Registration Statement") on an appropriate form
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to a proposed offer (the "Registered Exchange Offer") to the Holders of
outstanding Transfer Restricted Securities (as defined in Section 6 hereof), who
are not prohibited by any law or policy of the Commission from participating in
the Registered Exchange Offer, to issue and deliver to such Holders, in exchange
for the Initial Securities, a like aggregate principal amount (or principal
amount at maturity in the case of Initial Securities that are Senior Discount
Notes) of debt securities of the Issuer issued under the applicable Indenture,
identical in all material respects to the applicable Initial Securities and
registered under the Securities Act (the "Exchange Securities"). The Issuer
shall use its best efforts to (i) cause such Exchange Offer Registration
Statement to become effective under the Securities Act within 180 days after the
Closing Date (such 180th day being an "Effectiveness Deadline") and (ii) keep
the Exchange Offer Registration Statement effective for not less than 30 days
(or longer, if required by applicable law) after the date notice of the
Registered Exchange Offer is mailed to the Holders (such period being called the
"Exchange Offer Registration Period").

     If the Issuer commences the Registered Exchange Offer, the Issuer (i) will
be entitled to consummate the Registered Exchange Offer 30 days after such
commencement (provided that the Issuer has accepted all the Initial Securities
theretofore validly tendered in accordance with the terms of the Registered
Exchange Offer) and (ii) will be required to consummate the Registered Exchange
Offer no later than 40 days after the date on which the Exchange Offer
Registration Statement is declared effective (such 40th day being the
"Consummation Deadline").

     Following the declaration of the effectiveness of the Exchange Offer
Registration Statement, the Issuer shall promptly commence the Registered
Exchange Offer, it being the objective of such Registered Exchange Offer to
enable each Holder of Transfer Restricted Securities electing to exchange the
Initial Securities for Exchange Securities (assuming that such Holder is not an
affiliate of the Issuer within the meaning of the Securities Act, acquires the
Exchange Securities in the ordinary course of such Holder's business and has no
arrangements with any person to participate in the distribution of the Exchange
Securities and is not prohibited by any law or policy of the Commission from
participating in the Registered Exchange Offer) to trade such Exchange
Securities from and after their receipt without any limitations or restrictions
under the Securities Act and without material restrictions under the securities
laws of the several states of the United States.

     The Issuer acknowledges that, pursuant to current interpretations by the
Commission's staff of Section 5 of the Securities Act, in the absence of an
applicable exemption therefrom, (i) each Holder which is a broker-dealer
electing to exchange Initial Securities, acquired for its own account as a
result of market making activities or other trading activities, for Exchange
Securities (an "Exchanging Dealer"), is required to deliver a prospectus
containing the information set forth in (a) Annex A hereto on the cover, (b)
Annex B hereto in the "Exchange Offer Procedures" section and the "Purpose of
the Exchange Offer" section, and (c) Annex C hereto in the "Plan of
Distribution" section of such prospectus in connection with a sale of any such
Exchange Securities received by such Exchanging Dealer pursuant to the
Registered Exchange Offer and (ii) an Initial Purchaser that elects to sell
Securities (as defined below) acquired in exchange for Initial Securities
constituting any portion of an unsold allotment, is required to deliver a
prospectus containing the information required by Items 507 or 508 of Regulation
S-K under the Securities Act, as applicable, in connection with such sale.

     The Issuer shall use its best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement the prospectus
contained therein, in order to permit such prospectus to be lawfully delivered
by all persons subject to the prospectus delivery requirements of the Securities
Act for such period of time as such persons must comply with such requirements

                                        2
<PAGE>

in order to resell the Exchange Securities; provided, however, that (i) in the
case where such prospectus and any amendment or supplement thereto must be
delivered by an Exchanging Dealer or an Initial Purchaser, such period shall be
the lesser of 180 days and the date on which all Exchanging Dealers and the
Initial Purchasers have sold all Exchange Securities held by them (unless such
period is extended pursuant to Section 3(j) below) and (ii) the Issuer shall
make such prospectus and any amendment or supplement thereto available to any
broker-dealer for use in connection with any resale of any Exchange Securities
for a period of not less than 180 days after the consummation of the Registered
Exchange Offer.

     If, upon consummation of the Registered Exchange Offer, any Initial
Purchaser holds Offered Securities acquired by it as part of its initial
distribution, the Issuer, simultaneously with the delivery of the Exchange
Securities pursuant to the Registered Exchange Offer, shall issue and deliver to
such Initial Purchaser upon the written request of such Initial Purchaser, in
exchange (the "Private Exchange") for the Offered Securities held by such
Initial Purchaser, a like principal amount of debt securities of the Issuer
issued under the applicable Indenture and identical in all material respects to
the applicable Offered Securities (the "Private Exchange Securities"). The
Initial Securities, the Exchange Securities and the Private Exchange Securities
are herein collectively called the "Securities".

     In connection with the Registered Exchange Offer, the Issuer shall:

          (a) mail to each Holder a copy of the prospectus forming part of the
     Exchange Offer Registration Statement, together with an appropriate letter
     of transmittal and related documents;

          (b) keep the Registered Exchange Offer open for not less than 30 days
     (or longer, if required by applicable law) after the date notice thereof is
     mailed to the Holders;

          (c) utilize the services of a depositary for the Registered Exchange
     Offer with an address in the Borough of Manhattan, The City of New York,
     which may be the Trustee or an affiliate of the Trustee;

          (d) permit Holders to withdraw tendered Securities at any time prior
     to the close of business, New York time, on the last business day on which
     the Registered Exchange Offer shall remain open; and

          (e) otherwise comply with all applicable laws.

     As soon as practicable after the close of the Registered Exchange Offer or
the Private Exchange, as the case may be, the Issuer shall:

          (x) accept for exchange all the Securities validly tendered and not
     withdrawn pursuant to the Registered Exchange Offer and the Private
     Exchange;

          (y) deliver to the Trustee for cancellation all the Initial Securities
     so accepted for exchange; and

          (z) cause the Trustee to authenticate and deliver promptly to each
     Holder of the Initial Securities, Exchange Securities or Private Exchange
     Securities, as the case may be, equal in principal amount (or principal
     amount at maturity in the case of Initial Securities that are Senior
     Discount Notes) to the Initial Securities of such Holder so accepted for
     exchange.

     Each Indenture will provide that the Exchange Securities will not be
subject to the transfer restrictions set forth in such Indenture and that all
the Securities will issued pursuant to such Indenture vote and consent together
on all matters as one class and that none of the Securities issued pursuant to
such Indenture will have the right to vote or consent as a class separate from
one another on any matter.

     Interest on each Exchange Security and Private Exchange Security issued
pursuant to the Registered Exchange Offer and in the Private Exchange will
accrue from the last interest payment date on which interest was paid or
accrued, as the case may be, on the Initial Securities surrendered in exchange
therefor or, if no interest has been paid on the Initial Securities, from the
date of original issue of the Initial Securities.

     Each Holder participating in the Registered Exchange Offer shall be
required to represent to the Issuer that at the time of the consummation of the
Registered Exchange Offer (i) any Exchange Securities received by such Holder
will be acquired in the ordinary course of business, (ii) such Holder will have
no arrangements or understanding with any person to participate in the
distribution of the Securities or the Exchange Securities within the meaning of
the Securities Act, (iii) such Holder is not an "affiliate," as defined in Rule
405 of the Securities Act, of the Issuer or if it is an affiliate, such Holder

                                        3

<PAGE>

will comply with the registration and prospectus delivery requirements of the
Securities Act to the extent applicable, (iv) if such Holder is not a
broker-dealer, that it is not engaged in, and does not intend to engage in, the
distribution of the Exchange Securities and (v) if such Holder is a
broker-dealer, that it will receive Exchange Securities for its own account in
exchange for Initial Securities that were acquired as a result of market-making
activities or other trading activities and that it will be required to
acknowledge that it will deliver a prospectus in connection with any resale of
such Exchange Securities.

     Notwithstanding any other provisions hereof, the Issuer will ensure that
(i) any Exchange Offer Registration Statement and any amendment thereto and any
prospectus forming part thereof and any supplement thereto complies in all
material respects with the Securities Act and the rules and regulations
thereunder, (ii) any Exchange Offer Registration Statement and any amendment
thereto does not, when it becomes effective, contain an untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading and (iii) any prospectus
forming part of any Exchange Offer Registration Statement, and any supplement to
such prospectus, does not include an untrue statement of a material fact or omit
to state a material fact required to be stated therein or necessary in order to
make the statements therein, in the light of the circumstances under which they
were made, not misleading.

     If following the date hereof there has been announced a change in
Commission policy with respect to exchange offers that in the reasonable opinion
of counsel to the Issuer raises a substantial question as to whether the
Registered Exchange Offer is permitted by applicable federal law, the Issuer
will seek a no-action letter or other favorable decision from the Commission
allowing the Issuer to consummate the Registered Exchange Offer. The Issuer will
pursue the issuance of such a decision to the Commission staff level. In
connection with the foregoing, the Issuer will take all such other reasonable
actions as may be requested by the Commission or otherwise reasonably required
in connection with the issuance of such decision, including without limitation
(i) participating in telephonic conferences with the Commission, (ii) delivering
to the Commission staff an analysis prepared by counsel to the Issuer setting
forth the legal bases, if any, upon which such counsel has concluded that the
Registered Exchange Offer should be permitted and (iii) diligently pursuing a
resolution (which need not be favorable) by the Commission staff.

     2. Shelf Registration. If, (i) because of any change in law or in
applicable interpretations thereof by the staff of the Commission, the Issuer is
not permitted to effect a Registered Exchange Offer, as contemplated by Section
1 hereof, (ii) the Registered Exchange Offer is not consummated by the 220th day
after the Closing Date, (iii) any Initial Purchaser so requests with respect to
the Initial Securities (or the Private Exchange Securities) not eligible to be
exchanged for Exchange Securities in the Registered Exchange Offer and held by
it following consummation of the Registered Exchange Offer or (iv) any Holder
(other than an Exchanging Dealer) is not eligible to participate in the
Registered Exchange Offer or, in the case of any Holder (other than an
Exchanging Dealer) that participates in the Registered Exchange Offer, such
Holder does not receive freely tradeable Exchange Securities on the date of the
exchange and any such Holder so requests, the Issuer shall take the following
actions (the date on which any of the conditions described in the foregoing
clauses (i) through (iv) occur, including in the case of clauses (iii) or (iv)
the receipt of the required notice, being a "Trigger Date"):

          (a) The Issuer shall promptly (but in no event more than 30 days after
     the Trigger Date (such 30th day being a "Filing Deadline")) file with the
     Commission and thereafter use its best efforts to cause to be declared
     effective no later than 140 days after the Trigger Date (such 140th day
     being an "Effectiveness Deadline") a registration statement (the "Shelf
     Registration Statement" and, together with the Exchange Offer Registration
     Statement, a "Registration Statement") on an appropriate form under the
     Securities Act relating to the offer and sale of the Transfer Restricted
     Securities by the Holders thereof from time to time in accordance with the
     methods of distribution set forth in the Shelf Registration Statement and
     Rule 415 under the Securities Act (hereinafter, the "Shelf Registration");
     provided, however, that no Holder (other than an Initial Purchaser) shall
     be entitled to have the Securities held by it covered by such Shelf
     Registration Statement unless such Holder agrees in writing to be bound by
     all the provisions of this Agreement applicable to such Holder.

          (b) The Issuer shall use its best efforts to keep the Shelf
     Registration Statement continuously effective in order to permit the
     prospectus included therein to be lawfully delivered by the Holders of the
     relevant Securities, for a period of two years (or for such longer period
     if extended pursuant to Section 3(j) below) from the date of its
     effectiveness or such shorter period that will terminate when all the
     Securities covered by the Shelf Registration Statement (i) have been sold
     pursuant thereto or (ii) are no longer restricted securities (as defined

                                        4

<PAGE>

     in Rule 144 under the Securities Act, or any successor rule thereof). The
     Issuer shall be deemed not to have used its best efforts to keep the Shelf
     Registration Statement effective during the requisite period if it
     voluntarily takes any action that would result in Holders of Securities
     covered thereby not being able to offer and sell such Securities during
     that period, unless such action is required by applicable law.

          (c) Notwithstanding any other provisions of this Agreement to the
     contrary, the Issuer shall cause the Shelf Registration Statement and the
     related prospectus and any amendment or supplement thereto, as of the
     effective date of the Shelf Registration Statement, amendment or
     supplement, (i) to comply in all material respects with the applicable
     requirements of the Securities Act and the rules and regulations of the
     Commission and (ii) not to contain any untrue statement of a material fact
     or omit to state a material fact required to be stated therein or necessary
     in order to make the statements therein, in light of the circumstances
     under which they were made, not misleading.

     3. Registration Procedures. In connection with any Shelf Registration
contemplated by Section 2 hereof and, to the extent applicable, any Registered
Exchange Offer contemplated by Section 1 hereof, the following provisions shall
apply:

          (a) The Issuer shall (i) furnish to each Initial Purchaser, prior to
     the filing thereof with the Commission, a copy of the Registration
     Statement and each amendment thereof and each supplement, if any, to the
     prospectus included therein and, in the event that an Initial Purchaser
     (with respect to any portion of an unsold allotment from the original
     offering) is participating in the Registered Exchange Offer or the Shelf
     Registration Statement, the Issuer shall use its best efforts to reflect in
     each such document, when so filed with the Commission, such comments as
     such Initial Purchaser reasonably and timely may propose; (ii) include the
     information set forth in Annex A hereto on the cover, in Annex B hereto in
     the "Exchange Offer Procedures" section and the "Purpose of the Exchange
     Offer" section and in Annex C hereto in the "Plan of Distribution" section
     of the prospectus forming a part of the Exchange Offer Registration
     Statement and include the information set forth in Annex D hereto in the
     Letter of Transmittal delivered pursuant to the Registered Exchange Offer;
     (iii) if requested by an Initial Purchaser, include the information
     required by Items 507 or 508 of Regulation S-K under the Securities Act, as
     applicable, in the prospectus forming a part of the Exchange Offer
     Registration Statement; (iv) include within the prospectus contained in the
     Exchange Offer Registration Statement a section entitled "Plan of
     Distribution," reasonably acceptable to the Initial Purchasers, which shall
     contain a summary statement of the positions taken or policies made by the
     staff of the Commission with respect to the potential "underwriter" status
     of any broker-dealer that is the beneficial owner (as defined in Rule 13d-3
     under the Securities Exchange Act of 1934, as amended (the "Exchange Act"))
     of Exchange Securities received by such broker-dealer in the Registered
     Exchange Offer (a "Participating Broker-Dealer"), whether such positions or
     policies have been publicly disseminated by the staff of the Commission or
     such positions or policies, in the reasonable judgment of the Initial
     Purchasers based upon advice of counsel (which may be in-house counsel),
     represent the prevailing views of the staff of the Commission; and (v) in
     the case of a Shelf Registration Statement, include the names of the
     Holders who propose to sell Securities pursuant to the Shelf Registration
     Statement as selling securityholders.

          (b) The Issuer shall give written notice to the Initial Purchasers,
     the Holders of the Securities and any Participating Broker-Dealer from whom
     the Issuer has received prior written notice that it will be a
     Participating Broker-Dealer in the Registered Exchange Offer (which notice
     pursuant to clauses (ii)-(v) hereof shall be accompanied by an instruction
     to suspend the use of the prospectus until the requisite changes have been
     made):

               (i) when the Registration Statement or any amendment thereto has
          been filed with the Commission and when the Registration Statement or
          any post-effective amendment thereto has become effective;

               (ii) of any request by the Commission for amendments or
          supplements to the Registration Statement or the prospectus included
          therein or for additional information;

               (iii) of the issuance by the Commission of any stop order
          suspending the effectiveness of the Registration Statement or the
          initiation of any proceedings for that purpose;

               (iv) of the receipt by the Issuer or its legal counsel of any
          notification with respect to the suspension of the qualification of
          the Securities for sale in any jurisdiction or the initiation or
          threatening of any proceeding for such purpose; and

                                        5

<PAGE>

               (v) of the happening of any event that requires the Issuer to
          make changes in the Registration Statement or the prospectus in order
          that the Registration Statement or the prospectus does not contain an
          untrue statement of a material fact nor omit to state a material fact
          required to be stated therein or necessary to make the statements
          therein (in the case of the prospectus, in light of the circumstances
          under which they were made) not misleading.

          (c) The Issuer shall make every reasonable effort to obtain the
     withdrawal at the earliest possible time, of any order suspending the
     effectiveness of the Registration Statement.

          (d) The Issuer shall furnish to each Holder of Securities included
     within the coverage of the Shelf Registration, without charge, at least one
     copy of the Shelf Registration Statement and any post-effective amendment
     thereto, including financial statements and schedules, and, if the Holder
     so requests in writing, all exhibits thereto (including those, if any,
     incorporated by reference).

          (e) The Issuer shall deliver to each Exchanging Dealer and each
     Initial Purchaser, and to any other Holder who so requests, without charge,
     at least one copy of the Exchange Offer Registration Statement and any
     post-effective amendment thereto, including financial statements and
     schedules, and, if any Initial Purchaser or any such Holder requests, all
     exhibits thereto (including those incorporated by reference).

          (f) The Issuer shall, during the Shelf Registration Period, deliver to
     each Holder of Securities included within the coverage of the Shelf
     Registration, without charge, as many copies of the prospectus (including
     each preliminary prospectus) included in the Shelf Registration Statement
     and any amendment or supplement thereto as such person may reasonably
     request. The Issuer consents, subject to the provisions of this Agreement,
     to the use of the prospectus or any amendment or supplement thereto by each
     of the selling Holders of the Securities in connection with the offering
     and sale of the Securities covered by the prospectus, or any amendment or
     supplement thereto, included in the Shelf Registration Statement.

          (g) The Issuer shall deliver to each Initial Purchaser, any Exchanging
     Dealer, any Participating Broker-Dealer and such other persons required to
     deliver a prospectus following the Registered Exchange Offer, without
     charge, as many copies of the final prospectus included in the Exchange
     Offer Registration Statement and any amendment or supplement thereto as
     such persons may reasonably request. The Issuer consents, subject to the
     provisions of this Agreement, to the use of the prospectus or any amendment
     or supplement thereto by any Initial Purchaser, if necessary, any
     Participating Broker-Dealer and such other persons required to deliver a
     prospectus following the Registered Exchange Offer in connection with the
     offering and sale of the Exchange Securities covered by the prospectus, or
     any amendment or supplement thereto, included in such Exchange Offer
     Registration Statement.

          (h) Prior to any public offering of the Securities pursuant to any
     Registration Statement the Issuer shall register or qualify or cooperate
     with the Holders of the Securities included therein and their respective
     counsel in connection with the registration or qualification of the
     Securities for offer and sale under the securities or "blue sky" laws of
     such states of the United States as any Holder of the Securities reasonably
     requests in writing and do any and all other acts or things necessary or
     advisable to enable the offer and sale in such jurisdictions of the
     Securities covered by such Registration Statement; provided, however, that
     the Issuer shall not be required to (i) qualify generally to do business in
     any jurisdiction where it is not then so qualified or (ii) take any action
     which would subject it to general service of process or to taxation in any
     jurisdiction where it is not then so subject.

          (i) The Issuer shall cooperate with the Holders of the Securities to
     facilitate the timely preparation and delivery of certificates representing
     the Securities to be sold pursuant to any Registration Statement free of
     any restrictive legends and in such denominations and registered in such
     names as the Holders may request a reasonable period of time prior to sales
     of the Securities pursuant to such Registration Statement.

          (j) Upon the occurrence of any event contemplated by paragraphs (ii)
     through (v) of Section 3(b) above during the period for which the Issuer is
     required to maintain an effective Registration Statement, the Issuer shall
     promptly prepare and file a post-effective amendment to the Registration
     Statement or a supplement (by way of incorporation by reference from an
     Exchange Act report or otherwise) to the related prospectus and any other
     required document so that, as thereafter delivered to Holders of the
     Securities or purchasers of Securities, the prospectus will not contain an

                                        6

<PAGE>

     untrue statement of a material fact or omit 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.
     If the Issuer notifies the Initial Purchasers, the Holders of the
     Securities and any known Participating Broker-Dealer in accordance with
     paragraphs (ii) through (v) of Section 3(b) above to suspend the use of the
     prospectus until the requisite changes to the prospectus have been made,
     then the Initial Purchasers, the Holders of the Securities and any such
     Participating Broker-Dealers shall suspend use of such prospectus, and
     (unless and until the Securities covered thereby are eligible for sale
     under Rule 144(k) under the Securities Act) the period of effectiveness of
     the Shelf Registration Statement provided for in Section 2(b) above and the
     Exchange Offer Registration Statement provided for in Section 1 above shall
     each be extended by the number of days from and including the date of the
     giving of such notice to and including the date when the Initial
     Purchasers, the Holders of the Securities and any known Participating
     Broker-Dealer shall have received such amended or supplemented prospectus
     pursuant to this Section 3(j).

          (k) Not later than the effective date of the applicable Registration
     Statement, the Issuer will provide a CUSIP number for the Initial
     Securities, the Exchange Securities or the Private Exchange Securities, as
     the case may be, and provide the Registrar and Transfer Agent (as defined
     in the applicable Indenture) or the applicable trustee with printed
     certificates for the Initial Securities, the Exchange Securities or the
     Private Exchange Securities, as the case may be, in a form eligible for
     deposit with The Depository Trust Company.

          (l) The Issuer will comply with all rules and regulations of the
     Commission to the extent and so long as they are applicable to the
     Registered Exchange Offer or the Shelf Registration and will make generally
     available to its security holders (or otherwise provide in accordance with
     Section 11(a) of the Securities Act) an earnings statement satisfying the
     provisions of Section 11(a) of the Securities Act, no later than 45 days
     after the end of a 12-month period (or 90 days, if such period is a fiscal
     year) beginning with the first month of the Issuer's first fiscal quarter
     commencing after the effective date of the Registration Statement, which
     statement shall cover such 12-month period.

          (m) The Issuer shall cause the Indentures to be qualified under the
     Trust Indenture Act of 1939, as amended, in a timely manner and containing
     such changes, if any, as shall be necessary for such qualification. In the
     event that such qualification would require the appointment of a new
     trustee under an Indenture, the Issuer shall appoint a new trustee
     thereunder pursuant to the applicable provisions of such Indenture.

          (n) The Issuer may require each Holder of Securities to be sold
     pursuant to the Shelf Registration Statement to furnish to the Issuer such
     information regarding the Holder and the distribution of the Securities as
     the Issuer may from time to time reasonably require for inclusion in the
     Shelf Registration Statement, and the Issuer may exclude from such
     registration the Securities of any Holder that fails to furnish such
     information within a reasonable time after receiving such request.

          (o) The Issuer shall enter into such customary agreements (including,
     if requested, an underwriting agreement in customary form) and take all
     such other action, if any, as any Holder of the Securities shall reasonably
     request in order to facilitate the disposition of the Securities pursuant
     to any Shelf Registration.

          (p) In the case of any Shelf Registration, the Issuer shall (i) make
     reasonably available for inspection by the Holders of the Securities, any
     underwriter participating in any disposition pursuant to the Shelf
     Registration Statement and any attorney, accountant or other agent retained
     by the Holders of the Securities or any such underwriter all relevant
     financial and other records, pertinent corporate documents and properties
     of the Issuer and (ii) cause the Issuer's officers, directors, employees,
     accountants and auditors to supply all relevant information reasonably
     requested by the Holders of the Securities or any such underwriter,
     attorney, accountant or agent in connection with the Shelf Registration
     Statement, in each case, as shall be reasonably necessary to enable such
     persons, to conduct a reasonable investigation within the meaning of
     Section 11 of the Securities Act; provided, however, that the foregoing
     inspection and information gathering shall be coordinated on behalf of the
     Initial Purchasers by you and on behalf of the other parties, by one
     counsel designated by and on behalf of such other parties as described in
     Section 4 hereof; provided, further, that any records, documents,
     properties or information that are designated by the Issuer as confidential
     at the time of delivery of such records, documents, properties or
     information shall be kept confidential by such persons, unless (i) such
     records, documents, properties or information are in the public domain or
     otherwise publicly available, (ii) disclosure of such records, documents,
     properties or information is required by court or administrative order or
     (iii) disclosure of such records, documents, properties or information, in
     the written opinion of counsel to such person, is otherwise required by law

                                        7
<PAGE>

     (including, without limitation, pursuant to the requirements of the
     Securities Act)

          (q) In the case of any Shelf Registration, the Issuer, if requested by
     any Holder of Securities covered thereby, shall cause (i) its counsel to
     deliver an opinion and updates thereof relating to the Securities in
     customary form addressed to such Holders and the managing underwriters, if
     any, thereof and dated, in the case of the initial opinion, the effective
     date of such Shelf Registration Statement (it being agreed that the matters
     to be covered by such opinion shall include, without limitation, the due
     incorporation and good standing of the Issuer and its subsidiaries; the due
     authorization, execution and delivery of the relevant agreement of the type
     referred to in Section 3(o) hereof; the due authorization, execution,
     authentication and issuance, and the validity and enforceability, of the
     applicable Securities; the absence of governmental approvals required to be
     obtained in connection with the Shelf Registration Statement, the offering
     and sale of the applicable Securities, or any agreement of the type
     referred to in Section 3(o) hereof; the compliance as to form of such Shelf
     Registration Statement and any documents incorporated by reference therein
     and of each Indenture with the requirements of the Securities Act and the
     Trust Indenture Act, respectively; and, as of the date of the opinion and
     as of the effective date of the Shelf Registration Statement or most recent
     post-effective amendment thereto, as the case may be, the absence from such
     Shelf Registration Statement and the prospectus included therein, as then
     amended or supplemented, and from any documents incorporated by reference
     therein of an untrue statement of a material fact or the omission to state
     therein a material fact required to be stated therein or necessary to make
     the statements therein not misleading (in the case of any such documents,
     in the light of the circumstances existing at the time that such documents
     were filed with the Commission under the Exchange Act); (ii) its officers
     to execute and deliver all customary documents and certificates and updates
     thereof reasonably requested by any underwriters of the applicable
     Securities and (iii) its independent public accountants to provide to the
     selling Holders of the applicable Securities and any underwriter therefor a
     comfort letter in customary form and covering matters of the type
     customarily covered in comfort letters in connection with primary
     underwritten offerings, subject to receipt of appropriate documentation as
     contemplated, and only if permitted, by Statement of Auditing Standards No.
     72.

          (r) In the case of the Registered Exchange Offer, if requested by any
     Initial Purchaser or any known Participating Broker-Dealer, the Issuer
     shall cause (i) its counsel to deliver to such Initial Purchaser or such
     Participating Broker-Dealer a signed opinion in the form set forth in the
     forms described in Section 6(c) of the Purchase Agreement with such changes
     as are customary in connection with the preparation of a Registration
     Statement and (ii) its independent public accountants to deliver to such
     Initial Purchaser or such Participating Broker-Dealer a comfort letter, in
     customary form, meeting the requirements as to the substance thereof as set
     forth in Section 6(a) and (f) of the Purchase Agreement, with appropriate
     date changes.

          (s) If a Registered Exchange Offer or a Private Exchange is to be
     consummated, upon delivery of the Initial Securities by Holders to the
     Issuer (or to such other Person as directed by the Issuer) in exchange for
     the Exchange Securities or the Private Exchange Securities, as the case may
     be, the Issuer shall mark, or cause to be marked, on the Initial Securities
     so exchanged that such Initial Securities are being canceled in exchange
     for the Exchange Securities or the Private Exchange Securities, as the case
     may be; in no event shall the Initial Securities be marked as paid or
     otherwise satisfied.

          (t) The Issuer shall (a) if the Initial Securities have been rated
     prior to the initial sale of such Initial Securities, use its best efforts
     to confirm such ratings will apply to the Securities covered by a
     Registration Statement, or (b) if the Initial Securities were not
     previously rated, use commercially reasonable efforts to cause the
     Securities covered by a Registration Statement to be rated with the
     appropriate rating agencies, if so requested by Holders of a majority in
     aggregate principal amount of Securities covered by such Registration
     Statement, or by the managing underwriters, if any.

          (u) In the event that any broker-dealer registered under the Exchange
     Act shall underwrite any Securities or participate as a member of an
     underwriting syndicate or selling group or "assist in the distribution"
     (within the meaning of the Conduct Rules (the "Rules") of the National
     Association of Securities Dealers, Inc. ("NASD")) thereof, whether as a
     Holder of such Securities or as an underwriter, a placement or sales agent
     or a broker or dealer in respect thereof, or otherwise, the Issuer will
     assist such broker-dealer in complying with the requirements of such Rules,
     including, without limitation, by (i) if such Rules, including Rule 2720,
     shall so require, engaging (solely, except in the case of an Initial
     Purchaser, at the broker-dealer's expense) a "qualified independent
     underwriter" (as defined in Rule 2720) to participate in the preparation of
     the Registration Statement relating to such Securities, to exercise usual
     standards of due diligence in respect thereto and, if any portion of the
     offering contemplated by such Registration Statement is an underwritten

                                        8
<PAGE>
     offering or is made through a placement or sales agent, to recommend the
     yield of such Securities, (ii) indemnifying any such qualified independent
     underwriter to the extent of the indemnification of underwriters provided
     in Section 5 hereof and (iii) providing such information to such
     broker-dealer as may be required in order for such broker-dealer to comply
     with the requirements of the Rules.

          (v) The Issuer shall use its best efforts to take all other steps
     necessary to effect the registration of the Securities covered by a
     Registration Statement contemplated hereby.

     4. Registration Expenses. The Issuer shall bear all fees and expenses
incurred by the Issuer in connection with the performance of its obligations
under Sections 1 through 3 hereof, whether or not the respective Registered
Exchange Offer or a Shelf Registration is filed or becomes effective, and, in
the event of a Shelf Registration, shall bear or reimburse the Holders of the
Securities covered thereby for the reasonable fees and disbursements of one firm
of counsel designated by the Holders of a majority in principal amount of the
Securities covered thereby to act as counsel for the Holders of the Securities
in connection therewith. Each Holder of the Securities shall pay all
underwriting discounts, if any, and commissions and transfer taxes, if any,
relating to the sale or disposition of such Holder's Securities.

     5. Indemnification. (a) The Issuer agrees to indemnify and hold harmless
each Holder of the Securities, any Participating Broker-Dealer and each person,
if any, who controls such Holder or such Participating Broker-Dealer within the
meaning of the Securities Act or the Exchange Act (each Holder, any
Participating Broker-Dealer and such controlling persons are referred to
collectively as the "Indemnified Parties") from and against any losses, claims,
damages or liabilities, joint or several, or any actions in respect thereof
(including, but not limited to, any losses, claims, damages, liabilities or
actions relating to purchases and sales of the Securities) to which each
Indemnified Party may become subject under the Securities Act, the Exchange Act
or otherwise, insofar as such losses, claims, damages, liabilities or actions
arise out of or are based upon any untrue statement or alleged untrue statement
of a material fact contained in a Registration Statement or prospectus or in any
amendment or supplement thereto or in any preliminary prospectus relating to a
Shelf Registration, or arise out of, or are based upon, the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, and shall reimburse, as
incurred, the Indemnified Parties for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action in respect thereof; provided, however, that
(i) the Issuer shall not be liable in any such case to the extent that such
loss, claim, damage or liability arises out of or is based upon any untrue
statement or alleged untrue statement or omission or alleged omission made in a
Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to a Shelf Registration in reliance
upon and in conformity with written information pertaining to such Holder and
furnished to the Issuer by or on behalf of such Holder specifically for
inclusion therein and (ii) with respect to any untrue statement or omission or
alleged untrue statement or omission made in any preliminary prospectus relating
to a Shelf Registration Statement, the indemnity agreement contained in this
subsection (a) shall not inure to the benefit of any Holder or Participating
Broker-Dealer from whom the person asserting any such losses, claims, damages or
liabilities purchased the Securities concerned, to the extent that a prospectus
relating to such Securities was required to be delivered by such Holder or
Participating Broker-Dealer under the Securities Act in connection with such
purchase and any such loss, claim, damage or liability of such Holder or
Participating Broker-Dealer results from the fact that there was not sent or
given to such person, at or prior to the written confirmation of the sale of
such Securities to such person, a copy of the final prospectus if the Issuer had
previously furnished copies thereof to such Holder or Participating
Broker-Dealer; provided further, however, that this indemnity agreement will be
in addition to any liability which the Issuer may otherwise have to such
Indemnified Party. The Issuer shall also indemnify underwriters, their officers
and directors and each person who controls such underwriters within the meaning
of the Securities Act or the Exchange Act to the same extent as provided above
with respect to the indemnification of the Holders of the Securities if
requested by such Holders.

     (b) Each Holder of the Securities, severally and not jointly, will
indemnify and hold harmless the Issuer and each person, if any, who controls the
Issuer within the meaning of the Securities Act or the Exchange Act from and
against any losses, claims, damages or liabilities or any actions in respect
thereof, to which the Issuer or any such controlling person may become subject
under the Securities Act, the Exchange Act or otherwise, insofar as such losses,
claims, damages, liabilities or actions arise out of or are based upon any
untrue statement or alleged untrue statement of a material fact contained in a
Registration Statement or prospectus or in any amendment or supplement thereto
or in any preliminary prospectus relating to a Shelf Registration, or arise out
of or are based upon the omission or alleged omission to state therein a
material fact necessary to make the statements therein not misleading, but in
each case only to the extent that the untrue statement or omission or alleged
untrue statement or omission was made in reliance upon and in conformity with

                                        9
<PAGE>

     written information pertaining to such Holder and furnished to the Issuer
     by or on behalf of such Holder specifically for inclusion therein; and,
     subject to the limitation set forth immediately preceding this clause,
     shall reimburse, as incurred, the Issuer for any legal or other expenses
     reasonably incurred by the Issuer or any such controlling person in
     connection with investigating or defending any loss, claim, damage,
     liability or action in respect thereof. This indemnity agreement will be in
     addition to any liability which such Holder may otherwise have to the
     Issuer or any of its controlling persons.

     (c) Promptly after receipt by an indemnified party under this Section 5 of
notice of the commencement of any action or proceeding (including a governmental
investigation), such indemnified party will, if a claim in respect thereof is to
be made against the indemnifying party under this Section 5, notify the
indemnifying party of the commencement thereof; but the omission so to notify
the indemnifying party will not, in any event, relieve the indemnifying party
from any obligations to any indemnified party other than the indemnification
obligation provided in paragraph (a) or (b) above. In case any such action is
brought against any indemnified party, and it notifies the indemnifying party of
the commencement thereof, the indemnifying party will be entitled to participate
therein and, to the extent that it may wish, jointly with any other indemnifying
party similarly notified, to assume the defense thereof, with counsel reasonably
satisfactory to such indemnified party (who shall not, except with the consent
of the indemnified party, 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 5 for any legal or other expenses, other
than reasonable costs of investigation, subsequently incurred by such
indemnified party in connection with the defense thereof. No indemnifying party
shall, without the prior written consent of the indemnified party, effect any
settlement of any pending or threatened action in respect of which any
indemnified party is or could have been a party and indemnity could have been
sought hereunder by such indemnified party unless such settlement includes an
unconditional release of such indemnified party from all liability on any claims
that are the subject matter of such action, and does not include a statement as
to or an admission of fault, culpability or a failure to act by or on behalf of
any indemnified party.

     (d) If the indemnification provided for in this Section 5 is unavailable or
insufficient to hold harmless an indemnified party under subsections (a) or (b)
above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities (or actions in respect thereof) referred to in subsection (a) or (b)
above (i) in such proportion as is appropriate to reflect the relative benefits
received by the indemnifying party or parties on the one hand and the
indemnified party on the other from the exchange of the respective Securities,
pursuant to the Registered Exchange Offer, or (ii) if the allocation provided by
the foregoing clause (i) is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits referred to in
clause (i) above but also the relative fault of the indemnifying party or
parties on the one hand and the indemnified party on the other in connection
with the statements or omissions that resulted in such losses, claims, damages
or liabilities (or actions in respect thereof) as well as any other relevant
equitable considerations. The relative fault of the parties 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 on the one hand or
such Holder or such other indemnified party, as the case may be, on the other,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such 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 any other provision of this
Section 5(d), the Holders of the Securities shall not be required to contribute
any amount in excess of the amount by which the net proceeds received by such
Holders from the sale of the Securities pursuant to a Registration Statement
exceeds the amount of damages which such Holders have otherwise been required to
pay by reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. For purposes
of this paragraph (d), each person, if any, who controls such indemnified party
within the meaning of the Securities Act or the Exchange Act shall have the same
rights to contribution as such indemnified party and each person, if any, who
controls the Issuer within the meaning of the Securities Act or the Exchange Act
shall have the same rights to contribution as the Issuer.

     (e) The agreements contained in this Section 5 shall survive the sale of
the Securities pursuant to a Registration Statement and shall remain in full
force and effect, regardless of any termination or cancellation of this
Agreement or any investigation made by or on behalf of any indemnified party.

     6. Additional Interest Under Certain Circumstances. (a) Additional interest
(the "Additional Interest") with respect to the Securities shall be assessed as
follows if any of the following events occur (each such event in clauses (i)
through (iv) below being herein called a "Registration Default"):

                                       10

<PAGE>
          (i) any Registration Statement required by this Agreement is not filed
     with the Commission on or prior to the applicable Filing Deadline;

          (ii) any Registration Statement required by this Agreement is not
     declared effective by the Commission on or prior to the applicable
     Effectiveness Deadline;

          (iii) the Registered Exchange Offer has not been consummated on or
     prior to the Consummation Deadline; or

          (iv) any Registration Statement required by this Agreement has been
     declared effective by the Commission but (A) such Registration Statement
     thereafter ceases to be effective or (B) such Registration Statement or the
     related prospectus ceases to be usable in connection with resales of
     Transfer Restricted Securities during the periods specified herein because
     either (1) any event occurs as a result of which the related prospectus
     forming part of such Registration Statement would include any untrue
     statement of a material fact or omit to state any material fact necessary
     to make the statements therein in the light of the circumstances under
     which they were made not misleading, or (2) it shall be necessary to amend
     such Registration Statement or supplement the related prospectus, to comply
     with the Securities Act or the Exchange Act or the respective rules
     thereunder.

Each of the foregoing will constitute a Registration Default whatever the reason
for any such event and whether it is voluntary or involuntary or is beyond the
control of the Issuer or pursuant to operation of law or as a result of any
action or inaction by the Commission.

     Additional Interest shall accrue on the Securities to which the
Registration Default relates over and above the interest set forth in the title
of the Securities from and including the date on which any such Registration
Default shall occur (except under the circumstances described in (b) below) to
but excluding the date on which all such Registration Defaults have been cured,
at a rate of 0.25% per annum (the "Additional Interest Rate") for the first
90-day period. The Additional Interest Rate shall increase by an additional
0.25% per annum with respect to each subsequent 90-day period until all
Registration Defaults have been cured, up to a maximum Additional Interest Rate
of 1.0% per annum.

     (b) A Registration Default referred to in Section 6(a)(iv) hereof shall be
deemed not to have occurred and be continuing in relation to a Shelf
Registration Statement or the related prospectus if (i) such Registration
Default has occurred solely as a result of (x) the filing of a post-effective
amendment to such Shelf Registration Statement to incorporate annual audited
financial information with respect to the Issuer where such post-effective
amendment is not yet effective and needs to be declared effective to permit
Holders to use the related prospectus or (y) other material events, with respect
to the Issuer that would need to be described in such Shelf Registration
Statement or the related prospectus and (ii) in the case of clause (y), the
Issuer is proceeding promptly and in good faith to amend or supplement
(including by way of filing documents under the Exchange Act which are
incorporated by reference into such Shelf Registration Statement) such Shelf
Registration Statement and related prospectus to describe such events; provided,
however, that in any case if such Registration Default occurs for a continuous
period in excess of 45 days, Additional Interest shall be payable in accordance
with the above paragraph from the 46th day after such Registration Default
occurs until such Registration Default is cured or until the Company is no
longer required pursuant to this Agreement to keep such Registration Statement
effective or such Registration Statement or prospectus useable.

     (c) Any amounts of Additional Interest due pursuant to Section 6(a) will be
payable in cash, (A) in the case of the Senior Discount Notes and any Private
Exchange Securities exchanged therefor, on each Semi- Annual Interest Accrual
Date or Interest Payment Date (each as defined in the Indenture governing the
Senior Discount Notes), as the case may be, commencing with the first
Semi-Annual Accrual Date following the applicable Registration Default, and (B)
in the case of the Senior Notes and any Private Exchange Securities exchanged
therefor, on each Interest Payment Date (as defined in the Indenture governing
the Senior Notes), commencing with the first such Interest Payment Date
following the applicable Registration Default. The amount of Additional Interest
will be determined by multiplying the Additional Interest Rate by, (A) in the
case of the Senior Discount Notes and any Private Exchange Securities exchanged
therefor, the Accumulated Amount (as defined in the Indenture governing such
Securities) of such Securities on the relevant Additional Interest payment date
and (B) in the case of the Senior Notes and any Private Exchange Securities
exchanged therefor, the principal amount of such Securities, in each case,
multiplied by a fraction, the numerator of which is the number of days such
Additional Interest Rate was applicable during such period (determined on the
basis of a 360-day year comprised of twelve 30-day months), and the denominator
of which is 360. Payments of Additional Interest on the Securities will be made
to the Holders of such Securities on the regular record date (or, if there is no
regular record date, the date 15 days prior to such Additional Interest payment
date) immediately preceding the relevant Additional Interest payment date.

                                       11

<PAGE>
     (d) "Transfer Restricted Securities" means each Security until (i) the date
on which such Security has been exchanged by a person other than a broker-dealer
for a freely transferable Exchange Security in the Registered Exchange Offer,
(ii) following the exchange by a broker-dealer in the Registered Exchange Offer
of an Initial Security for an Exchange Security, the date on which such Exchange
Security is sold to a purchaser who receives from such broker-dealer on or prior
to the date of such sale a copy of the prospectus contained in the Exchange
Offer Registration Statement, (iii) the date on which such Security has been
effectively registered under the Securities Act and disposed of in accordance
with the Shelf Registration Statement or (iv) the date on which such Security is
distributed to the public pursuant to Rule 144 under the Securities Act or is
saleable pursuant to Rule 144(k) under the Securities Act.

     7. Rules 144 and 144A. The Issuer shall use its best efforts to file the
reports required to be filed by it under the Securities Act and the Exchange Act
in a timely manner and, if at any time the Issuer is not required to file such
reports, it will, upon the request of any Holder of Transfer Restricted
Securities, make publicly available other information so long as necessary to
permit sales of its securities pursuant to Rules 144 and 144A. The Issuer
covenants that it will take such further action as any Holder of Securities may
reasonably request, all to the extent required from time to time to enable such
Holder to sell Securities without registration under the Securities Act within
the limitation of the exemptions provided by Rules 144 and 144A (including the
requirements of Rule 144A(d)(4)). The Issuer will provide a copy of this
Agreement to prospective purchasers of Initial Securities identified to the
Issuer by the Initial Purchasers upon request. Upon the request of any Holder of
Initial Securities, the Issuer shall deliver to such Holder a written statement
as to whether it has complied with such requirements. Notwithstanding the
foregoing, nothing in this Section 7 shall be deemed to require the Issuer to
register any of its securities pursuant to the Exchange Act.

     8. Underwritten Registrations. If any of the Transfer Restricted Securities
covered by any Shelf Registration are to be sold in an underwritten offering,
the investment banker or investment bankers and manager or managers that will
administer the offering ("Managing Underwriters") will be selected by the
Holders of a majority in aggregate principal amount of such Transfer Restricted
Securities to be included in such offering.

     No person may participate in any underwritten registration hereunder unless
such person (i) agrees to sell such person's Transfer Restricted Securities on
the basis reasonably provided in any underwriting arrangements approved by the
persons entitled hereunder to approve such arrangements and (ii) completes and
executes all questionnaires, powers of attorney, indemnities, underwriting
agreements and other documents reasonably required under the terms of such
underwriting arrangements.

     9. Miscellaneous.

     (a) Remedies. The Issuer acknowledges and agrees that any failure by the
Issuer to comply with its obligations under Section 1 and 2 hereof may result in
material irreparable injury to the Initial Purchasers or the Holders for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of any such failure,
the Initial Purchasers or any Holder may obtain such relief as may be required
to specifically enforce the Issuer's obligations under Sections 1 and 2 hereof.
The Issuer further agrees to waive the defense in any action for specific
performance that a remedy at law would be adequate.

     (b) No Inconsistent Agreements. The Issuer will not on or after the date of
this Agreement enter into any agreement with respect to its securities that is
inconsistent with the rights granted to the Holders in this Agreement or
otherwise conflicts with the provisions hereof. The rights granted to the
Holders hereunder do not in any way conflict with and are not inconsistent with
the rights granted to the holders of the Issuer's securities under any agreement
in effect on the date hereof.

     (c) Amendments and Waivers. The provisions of this Agreement may not be
amended, modified or supplemented, and waivers or consents to departures from
the provisions hereof may not be given, except by the Issuer and the written
consent of the Holders of a majority in principal amount of the Securities
affected by such amendment, modification, supplement, waiver or consents.

     (d) Notices. All notices and other communications provided for or permitted
hereunder shall be made in writing by hand delivery, first-class mail, facsimile
transmission, or air courier which guarantees overnight delivery:

          (1) if to a Holder of the Securities, at the most current address
given by such Holder to the Issuer.

                                       12

<PAGE>

                  (2)  if to the Initial Purchasers:

                           Credit Suisse First Boston Corporation
                           Eleven Madison Avenue
                           New York, NY 10010-3629
                           Fax No.:  (212) 325-8278
                           Attention:  Transactions Advisory Group

         with a copy to:

                           Cravath, Swaine & Moore
                           Worldwide Plaza
                           825 Eighth Avenue
                           New York, NY 10019-7475
                           Attention:  Kris F. Heinzelman

                  (3)      if to the Issuer, at the following address:

                           Winstar Communications, Inc.
                           685 Third Avenue
                           New York, NY 10017
                           Fax No.: (212) 584-4001
                           Attention:  Timothy Graham

         with a copy to:

                           Graubard Mollen & Miller
                           600 Third Avenue
                           New York, NY  10016
                           Attention:  David A. Miller

     All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; three business
days after being deposited in the mail, postage prepaid, if mailed; when receipt
is acknowledged by recipient's facsimile machine operator, if sent by facsimile
transmission; and on the day delivered, if sent by overnight air courier
guaranteeing next day delivery.

     (e) Third Party Beneficiaries. The Holders shall be third party
beneficiaries to the agreements made hereunder between the Issuer, on the one
hand, and the Initial Purchasers, on the other hand, and shall have the right to
enforce such agreements directly to the extent they may deem such enforcement
necessary or advisable to protect their rights or the rights of Holders
hereunder.

     (f) Successors and Assigns. This Agreement shall be binding upon the Issuer
and its successors and assigns.

     (g) Counterparts. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.

     (h) Headings. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.

     (i) Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO PRINCIPLES
OF CONFLICTS OF LAWS.

     (j) Severability. If any one or more of the provisions contained herein, or
the application thereof in any circumstance, is held invalid, illegal or
unenforceable, the validity, legality and enforceability of any such provision
in every other respect and of the remaining provisions contained herein shall
not be affected or impaired thereby.

     (k) Securities Held by the Issuer. Whenever the consent or approval of
Holders of a specified percentage of principal amount of Securities is required
hereunder, Securities held by the Issuer or its affiliates (other than
subsequent Holders of Securities if such subsequent Holders are deemed to be

                                       13

<PAGE>

affiliates solely by reason of their holdings of such Securities) shall not be
counted in determining whether such consent or approval was given by the Holders
of such required percentage.

     If the foregoing is in accordance with your understanding of our agreement,
please sign and return to the Issuer a counterpart hereof, whereupon this
instrument, along with all counterparts, will become a binding agreement among
the several Initial Purchasers and the Issuer in accordance with its terms.

                                            Very truly yours,

                                            WINSTAR COMMUNICATIONS, INC.,

                                                /s/ Kenneth J. Zinghini
                                            By:______________________________
                                               Name:  Kenneth J. Zinghini
                                               Title: Senior Vice President

The foregoing Registration
Rights Agreement is hereby confirmed
and accepted as of the date first
above written.

CREDIT SUISSE FIRST BOSTON CORPORATION
SALOMON SMITH BARNEY INC.
BNY CAPITAL MARKETS, INC.
CIBC WORLD MARKETS CORP.
ABN AMRO INCORPORATED
BARCLAYS CAPITAL INC.
CREDIT LYONNAIS SECURITIES (USA) INC.
DRESDNER KLEINWORT BENSON NORTH AMERICA LLC
FLEETBOSTON ROBERTSON STEPHENS INC.
J.P. MORGAN SECURITIES INC.
RBC DOMINION SECURITIES CORPORATION
SG COWEN SECURITIES CORPORATION
SCOTIA CAPITAL (USA) INC.
TD SECURITIES (USA) INC.

By:  CREDIT SUISSE FIRST BOSTON CORPORATION

by   /s/ Robert A. Hansen
    ------------------------------------
    Name:   Robert A. Hansen
    Title:  Director

                                       14

<PAGE>

                                                                        ANNEX A

     Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. The Letter
of Transmittal states that by so acknowledging and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act. This Prospectus, as it may be amended or
supplemented from time to time, may be used by a broker-dealer in connection
with resales of Exchange Securities received in exchange for Initial Securities
where such Initial Securities were acquired by such broker-dealer as a result of
market-making activities or other trading activities. The Issuer has agreed
that, for a period of 180 days after the Expiration Date (as defined herein), it
will make this Prospectus available to any broker-dealer for use in connection
with any such resale. See "Plan of Distribution."

<PAGE>

                                                                         ANNEX B

     Each broker-dealer that receives Exchange Securities for its own account in
exchange for Initial Securities, where such Initial Securities were acquired by
such broker-dealer as a result of market-making activities or other trading
activities, must acknowledge that it will deliver a prospectus in connection
with any resale of such Exchange Securities. See "Plan of Distribution."

<PAGE>

                                                                         ANNEX C

                              PLAN OF DISTRIBUTION

     Each broker-dealer that receives Exchange Securities for its own account
pursuant to the Exchange Offer must acknowledge that it will deliver a
prospectus in connection with any resale of such Exchange Securities. This
Prospectus, as it may be amended or supplemented from time to time, may be used
by a broker-dealer in connection with resales of Exchange Securities received in
exchange for Initial Securities where such Initial Securities were acquired as a
result of market-making activities or other trading activities. The Issuer has
agreed that, for a period of 180 days after the Expiration Date, it will make
this prospectus, as amended or supplemented, available to any broker-dealer for
use in connection with any such resale. In addition, until              , 200 ,
all dealers effecting transactions in the Exchange Securities may be required to
deliver a prospectus.(1)

     The Issuer will not receive any proceeds from any sale of Exchange
Securities by broker-dealers. Exchange Securities received by broker-dealers for
their own account pursuant to the Exchange Offer may be sold from time to time
in one or more transactions in the over-the-counter market, in negotiated
transactions, through the writing of options on the Exchange Securities or a
combination of such methods of resale, at market prices prevailing at the time
of resale, at prices related to such prevailing market prices or negotiated
prices. Any such resale may be made directly to purchasers or to or through
brokers or dealers who may receive compensation in the form of commissions or
concessions from any such broker-dealer or the purchasers of any such Exchange
Securities. Any broker-dealer that resells Exchange Securities that were
received by it for its own account pursuant to the Exchange Offer and any broker
or dealer that participates in a distribution of such Exchange Securities may be
deemed to be an "underwriter" within the meaning of the Securities Act and any
profit on any such resale of Exchange Securities and any commission or
concessions received by any such persons may be deemed to be underwriting
compensation under the Securities Act. The Letter of Transmittal states that, by
acknowledging that it will deliver and by delivering a prospectus, a
broker-dealer will not be deemed to admit that it is an "underwriter" within the
meaning of the Securities Act.

     For a period of 180 days after the Expiration Date the Issuer will promptly
send additional copies of this Prospectus and any amendment or supplement to
this Prospectus to any broker-dealer that requests such documents in the Letter
of Transmittal. The Issuer has agreed to pay all expenses incident to the
Exchange Offer (including the expenses of one counsel for the Holders of the
Securities) other than commissions or concessions of any brokers or dealers and
will indemnify the Holders of the Securities (including any broker-dealers)
against certain liabilities, including liabilities under the Securities Act.

--------
(1) In addition, the legend required by Item 502(e) of Regulation S-K will
appear on the back cover page of the Exchange Offer prospectus.

<PAGE>

                                                                     ANNEX D

[ ] CHECK HERE IF YOU ARE A BROKER-DEALER AND WISH TO RECEIVE 10 ADDITIONAL
COPIES OF THE PROSPECTUS AND 10 COPIES OF ANY AMENDMENTS OR SUPPLEMENTS THERETO.

           Name:
           Address:

If the undersigned is not a broker-dealer, the undersigned represents that it is
not engaged in, and does not intend to engage in, a distribution of Exchange
Securities. If the undersigned is a broker-dealer that will receive Exchange
Securities for its own account in exchange for Initial Securities that were
acquired as a result of market-making activities or other trading activities, it
acknowledges that it will deliver a prospectus in connection with any resale of
such Exchange Securities; however, by so acknowledging and by delivering a
prospectus, the undersigned will not be deemed to admit that it is an
"underwriter" within the meaning of the Securities Act.

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