PURCHASE AGREEMENT
QWEST CORPORATION
$1,500,000,000 of 8 7/8% Notes due March 15, 2012
March 7, 2002
Credit Suisse First Boston Corporation
Banc of America Securities LLC
Xxxxxx Brothers Inc.
ABN AMRO Incorporated
Commerzbank Capital Markets Corp.
First Union Securities, Inc.
c/o Credit Suisse First Boston Corporation
00 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
As Representatives of the several Initial Purchasers
named in Schedule I hereto
Ladies and Gentlemen:
Qwest Corporation, a Colorado corporation (the "COMPANY"), proposes to
issue and sell to the several Initial Purchasers listed in Schedule I hereto
(the "INITIAL PURCHASERS") for whom Credit Suisse First Boston Corporation, Banc
of America Securities LLC, Xxxxxx Brothers Inc., ABN AMRO Incorporated,
Commerzbank Capital Markets Corp. and First Union Securities, Inc. are acting as
representatives (the "REPRESENTATIVES"), $1,500,000,000 of 8 7/8% Notes due
March 15, 2012 (the "SECURITIES"). The Securities will be issued pursuant to the
provisions of an Indenture, dated as of October 15, 1999 (the "INDENTURE"),
between the Company and Bank One Trust Company, National Association, as trustee
(the "TRUSTEE").
Holders of the Securities (including the Initial Purchasers and their
direct and indirect transferees) will be entitled to the benefits of a
Registration Rights Agreement, dated as of March 12, 2002, among the Company and
the Initial Purchasers (the "REGISTRATION RIGHTS AGREEMENT"), pursuant to which
the Company will agree, among other things, to file with the Securities and
Exchange Commission (the "COMMISSION") a registration statement (the
"REGISTRATION STATEMENT") pursuant to the Securities Act of 1933, as amended
(the "SECURITIES Act") covering the offer to exchange the Securities for
securities with terms identical in all material respects to the Securities and
to use its reasonable best efforts to cause the Registration Statement to be
declared effective within the time periods and subject to the terms and
conditions specified therein.
The sale of the Securities to the Initial Purchasers will be made without
registration of the Securities under the Securities Act, in reliance upon
exemptions therefrom.
In connection with the sale of the Securities, the Company has prepared an
offering memorandum dated March 7, 2002 (the "OFFERING MEMORANDUM"), for the
information of the Initial Purchasers and for delivery to prospective purchasers
of the Securities. The term Offering Memorandum shall be deemed to mean and
include documents incorporated by reference therein. All references in this
Agreement to financial statements and schedules and other information which is
"contained," "included," "stated" or "given" in the Offering Memorandum (or
other references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
by reference in the Offering Memorandum.
The Company hereby agrees with the Initial Purchasers as follows:
1. The Company agrees to issue and sell the Securities to the several
Initial Purchasers as hereinafter provided, and each Initial Purchaser, upon the
basis of the representations and warranties herein contained, but subject to the
conditions hereinafter stated, agrees to purchase, severally and not jointly,
from the Company the respective principal amount of Securities set forth
opposite such Initial Purchaser's name in Schedule I hereto at a price (the
"PURCHASE PRICE") equal to 96.1054% of their principal amount, plus accrued
interest, if any, from March 12, 2002 to the date of payment and delivery.
2. The Company understands that the Initial Purchasers intend (i) to offer
privately pursuant to Rule 144A ("RULE 144A") and pursuant to Regulation S
("REGULATION S"), each under the Securities Act, their respective portions of
the Securities as soon after this Agreement has become effective as in the
judgment of the Initial Purchasers is advisable and (ii) initially to offer the
Securities upon the terms set forth in the Offering Memorandum.
The Company confirms that it has authorized the Initial Purchasers, subject
to the restrictions set forth below, to distribute copies of the Offering
Memorandum in connection with the offering of the Securities. Each Initial
Purchaser hereby severally makes to the Company the following representations
and agreements:
(i) it is a "qualified institutional buyer" ("QIB") within the
meaning of Rule 144A under the Securities Act ("RULE 144A") and an
"accredited investor" as defined in Regulation 501 promulgated under
the Securities Act; and
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(ii) (A) it will not solicit offers for, or offer to sell, the
Securities by any form of general solicitation or general advertising
(as those terms are used in Regulation D under the Securities Act
("REGULATION D")) and (B) it will solicit offers for the Securities
only from, and will offer the Securities only to, persons whom it
reasonably believes to be (x) in the case of offers inside the United
States, "qualified institutional buyers" within the meaning of Rule
144A and (y) in the case of offers outside the United States, to
persons other than U.S. persons, as defined under Regulation S
("FOREIGN PURCHASERS", which term shall include dealers or other
professional fiduciaries in the United States acting on a
discretionary basis for foreign beneficial owners (other than an
estate or trust)) that, in each case, in purchasing the Securities are
deemed to have represented and agreed as provided in the Offering
Memorandum.
With respect to offers and sales outside the United States, as described in
clause (ii)(B)(y) above, each Initial Purchaser hereby represents and agrees
with the Company and the Guarantor that:
(i) it understands that no action has been or will be taken by
the Company that would permit a public offering of the Securities, or
possession or distribution of the Offering Memorandum or any other
offering or publicity material relating to the Securities, in any
country or jurisdiction where action for that purpose is required;
(ii) it will comply with all applicable laws and regulations in
each jurisdiction in which it acquires, offers, sells or delivers
Securities or has in its possession or distributes the Offering
Memorandum or any such other material;
(iii) it understands that the Securities have not been and will
not be registered under the Securities Act and may not be offered or
sold within the United States or to, or for the account or benefit of,
U.S. persons except in accordance with Regulation S or pursuant to an
exemption from, or in a transaction not subject to, the registration
requirements of the Securities Act;
(iv) it has offered the Securities and will offer and sell the
Securities (x) as part of its distribution at any time and (y)
otherwise until 40 days after the later of the commencement of the
offering and the Delivery Date (as defined in Section 3 below), only
in accordance with Rule 903 of Regulation S. Accordingly, neither such
Initial Purchaser, nor any of its Affiliates, as defined under
Regulation S-X under the Securities Act, nor any persons acting on its
behalf has engaged or will engage in
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any directed selling efforts (within the meaning of Regulation S) with
respect to the Securities, and such Initial Purchaser, its Affiliates
and any such persons have complied and will comply with the offering
restrictions requirement of Regulation S;
(v) it agrees that (i) it has not offered or sold Securities and,
prior to six months after the issue date of such Securities, will not
offer or sell any such Securities to persons in the United Kingdom
except to persons whose ordinary activities involve them in acquiring,
holding, managing or disposing of investments (as principal or agent)
for the purposes of their businesses or otherwise in circumstances
which have not resulted and will not result in an offer to the public
in the United Kingdom within the meaning of the Public Offers of
Securities Regulations 1995, (ii) it has complied and will comply with
all applicable provisions of the Financial Services Xxx 0000 with
respect to anything done by it in relation to the Securities in, from
or otherwise involving the United Kingdom, and (iii) it has only
issued or passed on and will only issue or pass on in the United
Kingdom any document received by it in connection with an issue of
Securities to a person who is of a kind described in Article 11(3) of
the Financial Services Xxx 0000 (Investment Advertisements)
(Exemptions) Order 1996 (as amended) or is a person to whom such
document may otherwise lawfully be issued or passed on.
Terms used in this Section 2 and not otherwise defined in this Agreement
have the meanings given to them by Regulation S.
3. (a) Delivery of and payment for the Securities shall be made at the
offices of Debevoise & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000, at
10:00 a.m., New York City time, on March 12, 2002, which date and time may be
postponed by agreement between the Initial Purchasers and the Company (such date
and time of delivery and payment for the Securities being referred to herein as
the "DELIVERY DATE"). Delivery of the Securities by the Company shall be made to
the Initial Purchasers against payment of the Purchase Price by the Initial
Purchasers; and payment for the Securities by the Initial Purchasers shall be
made against delivery to the Initial Purchasers of the Securities as set forth
below and effected either by wire transfer of immediately available funds to an
account with a bank, the account number and the ABA number for such bank to be
provided by the Company to the Initial Purchasers at least two business days in
advance of the Delivery Date, or by such other manner of payment as may be
agreed by the Company and the Initial Purchasers.
(b) The Company will deliver against payment of the Purchase Price the
Securities initially sold to QIBs, in the form of one or more permanent
global certificates (the "GLOBAL SECURITIES"), registered in the name of
Cede & Co., as
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nominee for The Depository Trust Company ("DTC") and with respect to
Securities to be resold to foreign purchasers by the Initial Purchasers, in
the form of one or more Regulation S global notes (collectively, the
"REGULATION S GLOBAL SECURITIES" and, together with the Restricted Global
Securities, the "GLOBAL SECURITIES") representing such Securities, with any
transfer taxes payable in connection with the transfer to the Initial
Purchasers of the Securities duly paid by the Company, registered in the
name of Cede & Co., as nominee for DTC. Beneficial interests in the
Securities initially sold to QIBs and foreign purchasers will be shown on,
and transfers thereof will be effected only through, records maintained in
book-entry form by DTC and its participants. The Global Securities will be
made available, at the request of any Initial Purchaser, for checking at
least 24 hours prior to such Delivery Date.
(c) Time shall be of the essence, and delivery at the time and place
specified pursuant to this Agreement is a further condition of the
obligations of each Initial Purchaser hereunder.
4. The Company represents and warrants to each Initial Purchaser that:
(a) the Offering Memorandum will not, in the form used by the Initial
Purchasers to confirm sales of the Securities and as of the Delivery Date,
contain any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein, in light of the
circumstances existing at such dates, not misleading; provided, however,
that this representation and warranty shall not apply to any statements or
omissions made in reliance upon and in conformity with written information
furnished to the Company by any Initial Purchaser, or on behalf of any
Initial Purchaser by the Representatives, specifically for use therein;
(b) the documents incorporated by reference in the Offering Memorandum
(the "INCORPORATED DOCUMENTS"), when they were filed with the Commission,
conformed in all material respects to the requirements of the Securities
Exchange Act of 1934, as amended (the "EXCHANGE ACT"), and the rules and
regulations of the Commission thereunder, and none of such documents
contained an untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading; and any further
documents so filed and incorporated by reference in the Offering
Memorandum, when such documents are filed with the Commission, will conform
in all material respects to the requirements of the Exchange Act, and will
not contain an untrue statement of a material fact or omit to state a
material fact necessary to make the statements therein, in light of the
circumstances under which they were made, not misleading;
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(c) (i) neither the Company, nor any of its subsidiaries, (x) is in
violation of its charter or by-laws, or (y) is in violation in any material
respect of any law, ordinance, governmental rule, regulation or court
decree to which it or its property or assets may be subject or has failed
to obtain any material license, permit, certificate, franchise or other
governmental authorization or permit necessary to the ownership of its
property or to the conduct of its business; or (ii) neither the Company,
nor any of its subsidiaries, nor, to the extent it could reasonably be
expected to result in or cause a Material Adverse Effect (as defined
below), Qwest Communications or any of its subsidiaries, is in default in
any material respect, and no event has occurred which, with notice or lapse
of time or both, would constitute such a default, in the due performance or
observance of any term, covenant or condition contained in any indenture,
mortgage, deed of trust, loan agreement or other agreement or instrument to
which it is a party or by which it is bound or to which any of its
properties or assets is subject, and which, in the case of Qwest
Communications and its subsidiaries only, is filed or incorporated by
reference as an exhibit to any of Qwest Communications' Incorporated
Documents. As used herein, "MATERIAL ADVERSE EFFECT" means any material
adverse change in or effect on the financial condition or results of
operations of the Company and its subsidiaries, taken as a whole.
(d) the financial statements of each of the Company and Qwest
Communications, together with the related schedules and notes thereto,
included and incorporated by reference in the Offering Memorandum present
fairly the consolidated financial position of the Company and Qwest
Communications respectively and their respective consolidated subsidiaries
as of the dates indicated and the statements of operations, shareowners'
equity and cash flows of the Company and Qwest Communications respectively
and their respective consolidated subsidiaries for the periods specified;
and said financial statements have been prepared in conformity with
generally accepted accounting principles and practices applied on a
consistent basis throughout the periods involved.
(e) since the respective dates as of which information is given in the
Offering Memorandum, except as otherwise stated therein, (A) there has been
no event or circumstance with respect to the Company and its subsidiaries
or Qwest Communications and its subsidiaries that could reasonably be
expected to constitute or result in a Material Adverse Effect (B) there
have been no transactions entered into by the Company or any of its
subsidiaries, other than those in the ordinary course of business, which
are material with respect to the Company and its subsidiaries, taken as a
whole, and (C) there has been no dividend or distribution of any kind
declared, paid or made by the Company on any class of its capital stock,
except a dividend of an aggregate of $627,000,000.
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(f) this Agreement has been duly authorized, executed and delivered by
the Company;
(g) the Indenture has been duly authorized, executed and delivered by
the Company and (assuming the due authorization, execution and delivery by
the Trustee) constitutes the legal, valid and binding agreement of the
Company enforceable against it in accordance with its terms, except as the
enforcement thereof may be limited by bankruptcy, insolvency (including,
without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law);
(h) the Registration Rights Agreement has been duly authorized by the
Company and, when executed and delivered by the Company, will constitute a
valid and binding agreement of the Company, enforceable against the Company
in accordance with its terms, except as the enforcement thereof may be
limited by bankruptcy, insolvency (including, without limitation, all laws
relating to fraudulent transfers), reorganization, moratorium or similar
laws affecting enforcement of creditors' rights generally and except as
enforcement thereof is subject to general principles of equity (regardless
of whether enforcement is considered in a proceeding in equity or at law),
and except that enforcement of rights to indemnification and contribution
contained therein may be limited by applicable Federal or state laws or the
public policy underlying such laws;
(i) the Securities have been duly authorized and, at the Delivery
Date, will have been duly executed by the Company and, when authenticated,
issued and delivered in the manner provided for in the Indenture and
delivered against payment of the purchase price therefor as provided in
this Agreement, will constitute legal, valid and binding obligations of the
Company, enforceable against the Company in accordance with their terms,
except as the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and will be in the form
contemplated by, and entitled to the benefits of, the Indenture;
(j) the Exchange Notes (as defined in the Registration Rights
Agreement) have been duly authorized and, when authenticated, issued and
delivered in the manner provided for in the Indenture and issued and
delivered in exchange for the Securities in the manner contemplated in the
Registration Rights Agreement, will constitute valid and binding
obligations of the Company,
7
enforceable against the Company in accordance with their terms, except as
the enforcement thereof may be limited by bankruptcy, insolvency
(including, without limitation, all laws relating to fraudulent transfers),
reorganization, moratorium or similar laws affecting enforcement of
creditors' rights generally and except as enforcement thereof is subject to
general principles of equity (regardless of whether enforcement is
considered in a proceeding in equity or at law), and will be in the form
contemplated by, and entitled to the benefits of, the Indenture;
(k) as of the Delivery Date, the Securities, the Exchange Notes, the
Indenture and the Registration Rights Agreement will conform in all
material respects to the respective statements relating thereto contained
in the Offering Memorandum;
(l) the execution, delivery and performance of this Agreement and the
Registration Rights Agreement and the consummation of the transactions
contemplated herein and therein (including, without limitation, the
issuance and sale of the Securities) and compliance by the Company with its
obligations hereunder and thereunder have been duly authorized by all
necessary corporate action and do not and will not, whether with or without
the giving of notice or passage of time or both, conflict with or
constitute a breach of, or default or Repayment Event (as defined below)
under, or result in the creation or imposition of any lien, charge or
encumbrance upon any property or assets of the Company or any of their
subsidiaries pursuant to, any contract, indenture, mortgage, deed of trust,
loan or credit agreement, note, lease or other agreement or instrument to
which the Company, Qwest Communications or any of their subsidiaries is a
party or by which it or any of them may be bound, or to which any of the
property or assets of the Company, Qwest Communications or any of their
subsidiaries is subject (collectively, "AGREEMENTS AND INSTRUMENTS")
(except for such conflicts, breaches or defaults or liens, charges or
encumbrances that would not result in a Material Adverse Effect), nor will
such action result in any violation of the provisions of the charter or
bylaws of the Company or any subsidiary of the Company or, to the best
knowledge of the Company, any applicable law, statute, rule, regulation,
judgment, order, writ or decree of any government, government
instrumentality or court, domestic or foreign, having jurisdiction over the
Company or any subsidiary of the Company or any of their assets, properties
or operations. As used herein, a "REPAYMENT EVENT" means any event or
condition which gives the holder of any note, debenture or other evidence
of indebtedness of the Company or any subsidiary of the Company (or any
person acting on such holder's behalf) the right to require the repurchase,
redemption or repayment of all or a portion of such indebtedness by the
Company or any subsidiary of the Company;
8
(m) other than as set forth in the Offering Memorandum, there is not
pending or, to the knowledge of the Company, threatened, any action, suit,
proceeding, inquiry or investigation to which the Company, Qwest
Communications or any of their subsidiaries is a party or to which the
assets, properties or operations of the Company, Qwest Communications or
any of their subsidiaries is subject, before or by any court or
governmental agency or body, domestic or foreign, which might reasonably be
expected to result in a Material Adverse Effect or which might reasonably
be expected to materially and adversely affect the assets, properties or
operations of the Company and its subsidiaries, taken as a whole, or the
consummation of the transactions contemplated by this Agreement or the
Indenture or the performance by the Company and its subsidiaries of their
respective obligations hereunder or thereunder;
(n) the Company and its subsidiaries possess such permits, licenses,
approvals, consents and other authorizations (collectively, "GOVERNMENTAL
LICENSES") issued by the appropriate federal, state, local or foreign
regulatory agencies or bodies necessary to conduct the business now
operated by them; the Guarantor and its subsidiaries are in compliance with
the terms and conditions of all such Governmental Licenses, except where
the failure so to comply would not, singly or in the aggregate, have a
Material Adverse Effect; all of the Governmental Licenses are valid and in
full force and effect, except when the invalidity of such Governmental
Licenses or the failure of such Governmental Licenses to be in full force
and effect would not have a Material Adverse Effect; and neither the
Company nor any of its subsidiaries has received any notice of proceedings
relating to the revocation or modification of any such Governmental
Licenses which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material Adverse
Effect;
(o) none of the Company or any of its affiliates (as defined in Rule
501(b) of Regulation D) has directly, or through any agent, sold, offered
for sale, solicited offers to buy or otherwise negotiated in respect of,
any security (as defined in the Securities Act) which is or will be
integrated with the sale of the Securities in a manner that would require
the registration under the Securities Act of the offering contemplated by
the Offering Memorandum;
(p) none of the Company or any of its affiliates (as defined in Rule
501(b) of Regulation D) of the Company or any person acting on its or their
behalf has offered or sold the Securities by means of any general
solicitation or general advertising within the meaning of Rule 502(c) under
the Securities Act, or by means of any directed selling efforts within the
meaning of Rule 902 of Regulation S, and the Company, any affiliate of the
Company and any person
9
acting on its or their behalf has complied with and will implement the
"offering restrictions" requirements of Regulation S;
(q) the Securities satisfy the requirements set forth in Rule
144A(d)(3) under the Securities Act;
(r) assuming the accuracy of the representations of the Initial
Purchasers contained in Section 2 hereof, it is not necessary in connection
with the offer, sale and delivery of the Securities in the manner
contemplated by this Agreement to register the Securities under the
Securities Act or to qualify the Indenture under the Trust Indenture Act of
1939, as amended (the "TRUST INDENTURE ACT"); and
(s) none of the transactions contemplated by this Agreement
(including, without limitation, the use of the proceeds from the sale of
the Securities) will violate or result in a violation of Section 7 of the
Exchange Act, or any regulation promulgated thereunder, including, without
limitation, Regulations T, U, and X of the Board of Governors of the
Federal Reserve System.
5. The Company covenants and agrees with each of the several Initial
Purchasers as follows:
(a) to deliver to the Initial Purchasers as many copies of the
Offering Memorandum (including all amendments and supplements thereto) as
the Initial Purchasers may reasonably request;
(b) before distributing any amendment or supplement to the Offering
Memorandum, to furnish to the Representatives a copy of the proposed
amendment or supplement for review and not to distribute any such proposed
amendment or supplement to which the Representatives reasonably object;
(c) if, at any time prior to the earlier of (i) nine months from the
date of the Offering Memorandum and (ii) notice by the Representatives to
the Company of the completion of the initial placement of the Securities,
any event shall occur as a result of which the Offering Memorandum as then
amended or supplemented would include an 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 if it is necessary to amend or supplement the Offering
Memorandum to comply with law, forthwith to prepare and furnish, at the
expense of the Company, to the Initial Purchasers and to the dealers (whose
names and addresses the Representatives will furnish to the Company) to
which Securities may have been sold by the Initial Purchasers on
10
behalf of the Initial Purchasers and to any other dealers upon request,
such amendments or supplements to the Offering Memorandum as may be
necessary to correct such statement or omission or to effect compliance
with law;
(d) to endeavor to qualify the Securities for offer and sale under the
securities or Blue Sky laws of such jurisdictions as the Representatives
shall reasonably request and to continue such qualification in effect so
long as reasonably required for distribution of the Securities; provided
that the Company shall not be required to file a general consent to service
of process in any jurisdiction;
(e) during the period of two years after the date hereof, to furnish
to the Initial Purchasers, as soon as practicable after the end of each
fiscal year, a copy of the Company's annual report to shareholders, if any,
for such year, and to furnish to the Initial Purchasers and to counsel to
the Initial Purchasers, (i) as soon as available, a copy of each report of
the Company filed with the Commission under the Exchange Act or mailed to
stockholders, and (ii) from time to time, such other information concerning
the Company as the Initial Purchasers may reasonably request;
(f) during the period beginning on the date hereof and continuing to
and including the Business Day following the Delivery Date, not to,
directly or indirectly, sell, offer to sell, grant any option for the sale
of, or otherwise dispose of, any of its senior debt securities having a
maturity of one year or more without the prior written consent of the
Representatives;
(g) to use the net proceeds received by the Company from the sale of
the Securities pursuant to this Agreement in the manner specified in the
Offering Memorandum under the heading "Use of Proceeds";
(h) to furnish to the holders of the Securities no later than 90 days
after the end of each fiscal year an annual report (including a balance
sheet and statements of income, stockholders' equity and cash flows of the
Company and its consolidated subsidiaries certified by independent public
accountants) and, as soon as practicable after the end of each of the first
three quarters of each fiscal year (beginning with the fiscal quarter
ending after the date of the Offering Memorandum), consolidated summary
financial information of the Company and its subsidiaries of such quarter
in reasonable detail;
(i) during the period of two years after the Delivery Date, the
Company will not, and will not permit any of its controlled "affiliates"
(as defined in Rule 144 under the Securities Act) to, resell any of the
Securities which
11
constitute "restricted securities" under Rule 144 that have been reacquired
by any of them;
(j) whether or not the transactions contemplated by this Agreement are
consummated or this Agreement is terminated, to pay or cause to be paid all
costs and expenses incident to the performance of its obligations hereunder
and under the Registration Rights Agreement, including without limiting the
generality of the foregoing, all fees, costs and expenses (i) incident to
the preparation, issuance, execution, authentication and delivery of the
Securities, including any expenses of the Trustee, (ii) incident to the
preparation, printing and distribution of the Offering Memorandum
(including all exhibits, amendments and supplements thereto), (iii)
incurred in connection with the registration or qualification and
determination of eligibility for investment of the Securities under the
laws of such jurisdictions as the Representatives may designate (including
reasonable fees of counsel for the Initial Purchasers and their
disbursements) and the printing of memoranda relating thereto, (iv) in
connection with the approval for trading of the Securities on any
securities exchange or inter-dealer quotation system, if so requested, (v)
in connection with the printing (including word processing and duplication
costs) and delivery of this Agreement, the Indenture, any Preliminary and
Supplemental Blue Sky Memoranda and any Legal Investment Survey and the
furnishing to Initial Purchasers and dealers of copies of the Offering
Memorandum, including mailing and shipping, as herein provided, (vi)
payable to rating agencies in connection with the rating of the Securities,
if applicable, and (vii) any expenses incurred by the Company in connection
with a "road show" presentation to potential investors;
(k) while the Securities remain outstanding and are "restricted
securities" within the meaning of Rule 144(a)(3) and cannot be sold without
restriction under Rule 144(k) under the Securities Act, the Company will,
during any period in which the Company is not subject to Section 13 or
15(d) under the Exchange Act or is not complying with the reporting
requirements thereof, make available to the purchasers and any holder of
Securities in connection with any sale thereof and any prospective
purchaser of Securities and securities analysts, in each case upon request,
the information specified in, and meeting the requirements of, Rule
144A(d)(4) under the Securities Act (or any successor thereto);
(l) the Company will not take any action prohibited by Regulation M
under the Exchange Act, in connection with the distribution of the
Securities contemplated hereby;
(m) neither the Company nor any of its affiliates (as defined in Rule
501(b) of Regulation D under the Securities Act) or any person acting on
behalf
12
of the Company or such affiliate will solicit any offer to buy or offer or
sell the Securities by means of any form of general solicitation or general
advertising, including: (i) any advertisement, article, notice or other
communication published in any newspaper, magazine or similar medium or
broadcast over television or radio; and (ii) any seminar or meeting whose
attendees have been invited by any general solicitation or general
advertising;
(n) neither the Company nor any of its affiliates (as defined in Rule
144(a)(1) under the Securities Act) nor any person acting on behalf of any
of the foregoing will engage in any directed selling efforts with respect
to the Securities within the meaning of Regulation S; and
(o) neither the Company nor any of its affiliates (as defined in
Regulation 501(b) of Regulation D under the Securities Act) nor any person
acting on behalf of the Company or such affiliate will sell, offer for sale
or solicit offers to buy or otherwise negotiate in respect of any security
(as defined in the Securities Act) which will be integrated with the sale
of the Securities in a manner which would require the registration under
the Securities Act of the Securities and the Company will take all action
that is appropriate or necessary to assure that its offerings of other
securities will not be integrated for purposes of the Securities Act with
the offering contemplated hereby.
6. The several obligations of the Initial Purchasers hereunder to
purchase the Securities on the Delivery Date are subject to the performance by
the Company of its obligations hereunder and to the following additional
conditions:
(a) the representations and warranties of the Company contained herein
are true and correct on and as of the Delivery Date as if made on and as of
the Delivery Date, the statements of the officers of the Company made
pursuant to Section 6(d) hereof are true and correct and the Company shall
have complied with all agreements and all conditions on its part to be
performed or satisfied hereunder at or prior to the Delivery Date;
(b) except as previously disclosed to the Initial Purchasers by the
Company in writing prior to the execution of this Agreement, there shall
not have occurred any downgrading, nor shall any notice have been given of
(i) any downgrading, (ii) any intended or potential downgrading or (iii)
any review or possible change that does not indicate an improvement, in the
rating accorded any debt securities of or guaranteed by the Company or
Qwest Communications by any "nationally recognized statistical rating
organization", as such term is defined for purposes of Rule 436(g)(2) under
the Securities Act;
13
(c) since the respective dates as of which information is given in the
Offering Memorandum, there shall not have been any change in the financial
condition of the Company and its subsidiaries, taken as a whole, or Qwest
Communications and its subsidiaries, taken as a whole, or in the earnings,
affairs or business prospects of the Company and its subsidiaries, taken as
a whole, or Qwest Communications and its subsidiaries, taken as a whole,
otherwise than as set forth or contemplated in the Offering Memorandum as
of March 7, 2002, the effect of which is, in the judgment of the
Representatives, so material and adverse as to make it impracticable or
inadvisable to proceed with the offering or the delivery of the Securities
on the Delivery Date on the terms and in the manner contemplated in the
Offering Memorandum;
(d) the Representatives shall have received on and as of the Delivery
Date a certificate of the President, any Vice President, the Treasurer, any
Assistant Treasurer or the Associate General Counsel of the Company in
which such officers shall state that, to the best of their knowledge after
reasonable investigation, the representations and warranties of the Company
in this Agreement are true and correct as if made at and as of the Delivery
Date, that the Company has complied in all material respects with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Delivery Date and that, since the
respective dates as of which information is given in the Offering
Memorandum, (x) there has been no material adverse change in the financial
condition or results of operations of the Company and its subsidiaries,
taken as a whole, and (y) there has been no change in the financial
condition or results of operations of Qwest Communications and its
subsidiaries, taken as a whole, that could reasonably be expected to result
in or constitute a Material Adverse Effect, except as set forth in or
contemplated by the Offering Memorandum as of March 7, 2002;
(e) Holme Xxxxxxx & Xxxx LLP shall have furnished to the Initial
Purchasers their written opinion, dated the Delivery Date, in form and
substance satisfactory to the Initial Purchasers, to the effect that:
(i) The Company is a corporation duly incorporated, and is
validly existing and in good standing under the laws of the State of
Colorado, with corporate power to own, lease and operate its
properties and to carry on its business as now being conducted.
(ii) The execution, delivery and performance of this Agreement by
the Company have been duly authorized by all necessary corporate
action on the part of the Company, and this Agreement has been duly
executed and delivered by the Company.
14
(iii) The execution, delivery and performance of the Indenture by
the Company has been duly authorized by all necessary corporate action
on the part of the Company, and the Indenture has been duly executed
and delivered by the Company.
(iv) The Registration Rights Agreement has been duly authorized
by all necessary corporate action on the part of the Company, and the
Registration Rights Agreement has been duly executed and delivered by
the Company.
(v) The Securities have been duly authorized by all necessary
corporate action on the part of the Company.
(vi) The Exchange Notes (as defined in the Registration Rights
Agreement) have been duly authorized by all necessary corporate action
on the part of the Company.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and of public officials.
The opinion of Holme Xxxxxxx & Xxxx LLP described above shall be
rendered to the Initial Purchasers at the request of the Company and shall
so state therein.
(f) O'Melveny & Xxxxx LLP shall have furnished to the Initial
Purchasers their written opinion, dated the Delivery Date, in form and
substance satisfactory to the Initial Purchasers, to the effect that:
(i) The Indenture constitutes the legally valid and binding
obligation of the Company, enforceable against the Company in
accordance with its terms, except as may be limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws relating to or
affecting creditor's rights generally (including, without limitation,
fraudulent conveyance laws) and by general principles of equity,
including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible
unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity or at law.
(ii) The Securities, when duly executed and authenticated in the
manner contemplated by the Indenture and issued and delivered to the
Initial Purchasers against payment therefor in accordance with the
provisions hereof, will be legally valid and binding obligations of
the
15
Company entitled to the benefits of the Indenture, enforceable against
the Company in accordance with their terms, except as may be limited
by bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditor's rights generally (including,
without limitation, fraudulent conveyance laws), and by general
principles of equity including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the
possible unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity or at law.
(iii) The Exchange Securities, when duly executed in the manner
contemplated in the Indenture and issued and delivered in exchange for
the Securities in the manner contemplated in the Registration Rights
Agreement, will be legally valid and binding obligations of the
Company, enforceable against the Company in accordance with their
terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws relating to affecting
creditor's rights generally (including, without limitation, fraudulent
conveyance laws), and by general principles of equity including,
without limitation, concepts of materiality, reasonableness, good
faith and fair dealing and the possible unavailability of specific
performance or injunctive relief, regardless of whether considered in
a proceeding in equity or at law.
(iv) The Registration Rights Agreement constitutes the legally
valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms, except as may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws
relating to or affecting creditor's rights generally (including,
without limitation, fraudulent conveyance laws) and by general
principles of equity, including, without limitation, concepts of
materiality, reasonableness, good faith and fair dealing and the
possible unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity or at law,
and except that no opinion is expressed with respect to the provisions
contained in [Section 4] of the Registration Rights Agreement.
(v) No order, consent, permit or approval of or filing with any
federal governmental authority is required on the part of the Company
for the execution and delivery of this Agreement, the Indenture or the
issuance and sale of the Securities to the Initial Purchasers pursuant
to the terms of this Agreement, except such as may be required under
applicable blue sky or state securities laws.
16
(vi) The statements in the Offering Memorandum under the headings
"Description of Notes", "Exchange Offer; Registration Rights" and
"Notice to Investors", insofar as they summarize provisions of the
Indenture or the Securities or constitute a summary of certain
provisions of the documents referred to therein, fairly summarize the
matters referred to therein.
(vii) The Securities satisfy the requirement set forth in Rule
144A(d)(3) under the Securities Act.
(viii) Based upon the representations, warranties and agreements
of the Company in Sections 4(o), 4(p), 4(q), 5(m), 5(n), 5(o) and 6(a)
of this Agreement and of the Initial Purchasers in Section 2 of this
Agreement and on the truth and accuracy of the representations and
agreements deemed to be made by the purchasers of the Securities
contained in the Offering Memorandum, it is not necessary in
connection with the offer, sale and delivery of the Securities to the
Initial Purchasers under this Agreement or in connection with the
initial resale of such Securities by the Initial Purchasers in
accordance with Section 2 of this Agreement to register the Securities
under the Securities Act or to qualify the Indenture under the Trust
Indenture Act; provided, however, that such counsel need not express
any opinion with respect to the conditions under which the Securities
may be further resold.
(ix) The documents incorporated by reference in the Offering
Memorandum, on the respective dates they were filed, appeared on their
face to comply in all material respects with the requirements as to
form for reports on Form 10-K, Form 10-Q, Form 8-K and Form 8-A, as
the case may be, under the Exchange Act, as amended, and Form S-4
under the Securities Act, and the related rules and regulations in
effect at the respective dates of their filings, except that such
counsel need express no opinion concerning the financial statements
and other financial information contained or incorporated by reference
therein.
In rendering such opinion, such counsel may rely as to matters of
fact, to the extent such counsel deems proper, on certificates of
responsible officers of the Company and of public officials. Such counsel
may also rely as to matters of Colorado law upon the opinion of Holme
Xxxxxxx & Xxxx LLP without independent verification. Such counsel need
express no opinion as to matters relating to the Federal Communications
Commission or any state public utilities commission or similar authority
for the Company or the Guarantor, as applicable.
17
In addition, such counsel may state that in connection with such
counsel's participation in conferences in connection with the preparation
of the Offering Memorandum, such counsel has not independently verified the
accuracy, completeness or fairness of the statements contained or
incorporated therein, and the limitations inherent in the examination made
by such counsel and the knowledge available to such counsel are such that
such counsel is unable to assume, and does not assume, any responsibility
for such accuracy, completeness or fairness (except as otherwise
specifically stated in paragraph (vii) above). However, such counsel shall
state that on the basis of such counsel's review of the Offering Memorandum
and the documents incorporated by reference therein and their participation
in conferences in connection with the preparation of the Offering
Memorandum, such counsel does not believe that the Offering Memorandum and
the documents incorporated therein, considered as a whole, as of its issue
date or on the date of the opinion, contained any untrue statement of a
material fact or omitted to state a material fact necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading. However, such counsel need express no opinion or
belief as to the financial statements and other financial information
contained or incorporated by reference in the Offering Memorandum or in the
documents incorporated therein by reference.
Such opinion may state that it does not address the impact on the
opinions contained therein of any litigation or ruling relating to the
divestiture by American Telephone and Telegraph Company of ownership of its
operating telephone companies (the "DIVESTITURE").
The opinion of O'Melveny & Xxxxx LLP described above shall be rendered
to the Initial Purchasers at the request of the Company and shall so state
therein.
(g) Xxxx X. Xxxx, Esq., Associate General Counsel for the Company
shall have furnished to the Initial Purchasers his written opinion, dated
the Delivery Date, in form and substance satisfactory to the Initial
Purchasers, to the effect that:
(i) The execution, delivery and performance of this Agreement and
the Registration Rights Agreement have been duly authorized by all
necessary corporate action on the part of the Company, and this
Agreement has been duly executed and delivered by the Company.
(ii) All state regulatory consents, approvals, authorizations or
other orders (except as to the state securities or blue sky laws, as
to which such counsel need express no opinion) legally required for
the execution
18
of the Indenture and the issuance and sale of the Securities to the
Initial Purchasers pursuant to the terms of this Agreement have been
obtained; provided that such counsel may rely on opinions of local
counsel satisfactory to such counsel.
(iii) To such counsel's knowledge, there is not pending or
threatened any action, suit, proceeding, inquiry or investigation to
which the Company, Qwest Communications or any of their subsidiaries
is a party or to which the assets, properties or operations of the
Company, Qwest Communications or any of their subsidiaries is subject,
before or by any court or governmental agency or body, domestic or
foreign, which (a) might reasonably be expected to result in a
Material Adverse Effect, or (b) might reasonably be expected to
materially and adversely affect the consummation by the Company of the
transactions contemplated by this Agreement, the Registration Rights
Agreement or the Securities or the Indenture or the performance by the
Company of its obligations hereunder or thereunder.
(iv) The execution, delivery and performance of this Agreement
and the Registration Rights Agreement by the Company will not (A)
violate the charter or bylaws of the Company, or (B) violate, breach
or result in a default under any material contract, indenture,
mortgage, loan agreement, note, lease or other material agreement
known to such counsel to which the Company or Qwest Communications is
a party or to which any of their respective properties or assets are
subject (except for such violations, loans and defaults as could not
reasonably be expected to result in a Material Adverse Effect);
provided that such counsel need express no opinion as to the effect of
the Company's performance of its obligations under this Agreement or
the Registration Rights Agreement on the compliance by the Company or
Qwest Communications with financial covenants in any such contract,
indenture, mortgage, loan agreement, note, lease or other agreement.
(v) To such counsel's knowledge, neither the Company nor any of
its subsidiaries is in violation of its charter or bylaws.
Such counsel may state that is does not address the impact of the
opinions contained therein on any litigation or ruling relating to the
Divestiture. Such counsel need express no opinion with respect to matters
relating to the Federal Communications Commission or state public utilities
commissions for the Company.
19
(h) Xxxxx & Xxxxxxx L.L.P. shall have furnished to the Initial
Purchasers their written opinion, dated the Delivery Date, in form and
substance satisfactory to the Initial Purchasers, to the effect that no
consent, approval, authorization or other action by, or filing or
registration with, any federal or state government authority (collectively,
"GOVERNMENTAL ACTION") is required in connection with the execution and
delivery by the Company of this Agreement or the issuance and sale of the
Securities to the Initial Purchasers pursuant to the terms of this
Agreement (collectively, the "SECURITIES Transaction"), provided that such
counsel need express no opinion therein with respect to any Governmental
Action that may be required that does not materially affect the validity of
the Securities Transaction, and except for a pre-issuance filing with the
State of Washington pursuant to RCW 80.08.040 (which filing has been made),
and except for post-issuance filings with the States of Washington and
Oregon, pursuant to WAC 000-000-000 and ORS 860-027-0032, respectively;
(i) on the date of the issuance of the Offering Memorandum and also on
the Delivery Date, Xxxxxx Xxxxxxxx LLP shall have furnished to the Initial
Purchasers letters, dated the respective dates of delivery thereof, in form
and substance satisfactory to the Representatives, containing statements
and information of the type customarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Offering Memorandum;
(j) the Initial Purchasers shall have received on and as of the
Delivery Date an opinion of Debevoise & Xxxxxxxx, counsel to the Initial
Purchasers, with respect to the validity of the Indenture and the
Securities, and such other related matters as the Initial Purchasers may
reasonably request, and such counsel shall have received such papers and
information as they may reasonably request to enable them to pass upon such
matters;
(k) the Initial Purchasers shall have received prior to the Delivery
Date a copy of the Registration Rights Agreement, in form and substance
satisfactory to the Initial Purchasers, duly executed by the Company, and
the Registration Rights Agreement shall be in full force and effect at the
Delivery Date; and
(l) on or prior to the Delivery Date the Company shall have furnished
to the Initial Purchasers such further certificates and documents as the
Initial Purchasers shall reasonably request.
7. (a) The Company agrees to indemnify and hold harmless each Initial
Purchaser from and against any loss, claim, damage or liability, joint or
several, or any action in respect thereof to which that Initial Purchaser may
become subject, as incurred, insofar as such loss, claim, damage, liability or
action arises out of, or is based upon,
20
(i) any untrue statement or alleged untrue statement of a material fact
contained in the Offering Memorandum or in any amendment or supplement thereto
and (ii) the omission or alleged omission to state in the Offering Memorandum or
in any amendment or supplement thereto, any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, and will reimburse each Initial Purchaser, as incurred, for any
legal or other expenses reasonably incurred by such Initial Purchaser in
connection with investigating or defending any such loss, claim, damage,
liability or action or amounts paid in settlement of any litigation or
investigation or proceeding related thereto if such settlement is effected with
the written consent of the Company; provided, however, that the Company shall
not be liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue statement or
alleged untrue statement or omission or alleged omission made in the Offering
Memorandum, or in any such amendment or supplement, in reliance upon and in
conformity with the written information furnished to the Company through the
Representatives by or on behalf of any Initial Purchaser specifically for
inclusion therein which information consists solely of the information specified
in Section 7(e). The foregoing indemnity agreement is in addition to any
liability which the Company may otherwise have to any Initial Purchaser.
(b) Each Initial Purchaser, severally and not jointly, shall indemnify
and hold harmless the Company from and against any loss, claim, damage or
liability, joint or several, or any action in respect thereof, to which the
Company may become subject, under the Securities Act or otherwise, insofar
as such loss, claim, damage, liability or action arises out of, or is based
upon, (i) any untrue statement or alleged untrue statement of a material
fact contained in the Offering Memorandum or in any amendment or supplement
thereto or (ii) the omission or alleged omission to state in the Offering
Memorandum or in any amendment or supplement thereto, any material fact
necessary to make the statements therein not misleading, but only to the
extent that the untrue statement or alleged untrue statement or omission or
alleged omission was made in reliance upon and in conformity with the
written information furnished to the Company through the Representatives by
or on behalf of that Initial Purchaser specifically for inclusion therein
and set forth in Section 7(e), and shall reimburse the Company promptly
upon demand for any legal or other expenses reasonably incurred by the
Company in connection with investigating or defending or preparing to
defend against any such loss, claim, damage, liability or action as such
expenses are incurred. The foregoing indemnity agreement is in addition to
any liability which any Initial Purchaser may otherwise have to the
Company.
(c) Promptly after receipt by an indemnified party under this Section
7 of notice of any claim or the commencement of any action, the indemnified
party shall, if a claim in respect thereof is to be made against the
indemnifying party under this Section 7, notify the indemnifying party in
writing of the claim or
21
the commencement of that action; provided, however, that the failure to
notify the indemnifying party shall not relieve it from any liability which
it may have under this Section 7 except to the extent it has been
materially prejudiced by such failure and, provided, further, that the
failure to notify the indemnifying party shall not relieve it from any
liability which it may have to an indemnified party otherwise than under
this Section 7. If any such claim or action shall be brought against an
indemnified party, and it shall notify the indemnifying party thereof, the
indemnifying party shall be entitled to participate therein and, to the
extent that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel reasonably
satisfactory to the indemnified party. After notice from the indemnifying
party to the indemnified party of its election to assume the defense of
such claim or action, the indemnifying party shall not be liable to the
indemnified party under this Section 7 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided,
however, that the Initial Purchasers shall have the right to employ one
separate counsel (which counsel shall be reasonably satisfactory to the
indemnifying party) to represent jointly the Initial Purchasers who may be
subject to liability arising out of any claim in respect of which indemnity
may be sought by the Initial Purchasers against the Company under this
Section 7 if, in the opinion of counsel for such Initial Purchasers it is
advisable for such Initial Purchasers to be jointly represented by separate
counsel, and in that event the reasonable fees and expenses of such
separate counsel shall be paid by the Company. No indemnifying party shall,
(i) without the prior written consent of the indemnified parties (which
consent shall not be unreasonably withheld), settle or compromise or
consent to the entry of any judgment with respect to any pending or
threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or
action) unless such settlement, compromise or consent includes an
unconditional release of each indemnified party from all liability arising
out of such claim, action, suit or proceeding, or (ii) be liable for any
settlement of any such action effected without its written consent (which
consent shall not be unreasonably withheld), but if settled with its
written consent, the indemnifying party agrees to indemnify and hold
harmless any indemnified party from and against any loss or liability by
reason of such settlement.
(d) If the indemnification provided for in this Section 7 shall for
any reason be unavailable or insufficient to hold harmless an indemnified
party under Section 7(a) or 7(b) in respect of any loss, claim, damage or
liability, or any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or
22
liability, or action in respect thereof, (i) in such proportion as shall be
appropriate to reflect the relative benefits received by the Company on the
one hand and the Initial Purchasers on the other from the offering of the
Securities, or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to
reflect not only the relative benefits referred to in clause (i) above but
also the relative fault of the Company on the one hand and the Initial
Purchasers on the other with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect
thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Initial
Purchasers on the other with respect to such offering shall be deemed to be
in the same proportion as the total net proceeds from the offering of the
Securities purchased under this Agreement (before deducting expenses)
received by the Company on the one hand, and the total discounts and
commissions received by the Initial Purchasers with respect to the
Securities purchased under this Agreement, on the other hand, bear to the
total gross proceeds from the offering of the Securities under this
Agreement. The relative fault shall be determined by reference to whether
the untrue or alleged untrue statement of a material fact or omission or
alleged omission to state a material fact relates to information supplied
by the Company or the Initial Purchasers, the intent of the parties and
their relative knowledge, access to information and opportunity to correct
or prevent such statement or omission. The Company and the Initial
Purchasers agree that it would not be just and equitable if contributions
pursuant to this Section 7(d) were to be determined by pro rata allocation
(even if the Initial Purchasers were treated as one entity for such
purpose) or by any other method of allocation which does not take into
account the equitable considerations referred to herein. The amount paid or
payable by an indemnified party as a result of the loss, claim, damage or
liability, or action in respect thereof, referred to above in this Section
shall be deemed to include, for purposes of this Section 7(d), any legal or
other expenses reasonably incurred by such indemnified party in connection
with investigating or defending any such action or claim. Notwithstanding
the provisions of this Section 7(d), no Initial Purchaser shall be required
to contribute any amount in excess of the amount by which the total price
at which the Securities purchased by it were offered to investors exceeds
the amount of any damages which such Initial Purchaser has otherwise paid
by reason of any 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. The Initial Purchasers' obligations to contribute as
provided in this Section 7(d) are several in proportion to their respective
obligations and not joint.
23
(e) The Initial Purchasers severally confirm, and the Company
acknowledges, that the statements in paragraph number 4, in the third and
fourth sentences in paragraph number 5, in paragraph number 7, in paragraph
number 11 and paragraph number 14 under the heading "Plan of Distribution"
in the Offering Memorandum constitute the only information furnished in
writing to the Company through the Representatives by or on behalf of the
Initial Purchasers specifically for inclusion in the Offering Memorandum.
(f) The respective indemnities, representations, warranties and
agreements of the Company and the Initial Purchasers contained in this
Agreement or made by or on behalf of them, respectively, pursuant to this
Agreement, will survive the delivery of and payment for the Securities and
will 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 of them or any person controlling any of them.
8. Notwithstanding anything herein contained, this Agreement may be
terminated in the absolute discretion of the Initial Purchasers, by notice given
to the Company, if after the execution and delivery of this Agreement and prior
to the Delivery Date (i) trading generally shall have been suspended or
materially limited on or by, as the case may be, any of the New York Stock
Exchange, the American Stock Exchange, the NASDAQ National Market, the Chicago
Board Options Exchange, the Chicago Mercantile Exchange or the Chicago Board of
Trade or there has been any major disruption of settlements of securities or
clearance services in the United States, (ii) trading of any securities of or
guaranteed by the Company or Qwest Communications shall have been suspended on
any exchange or in any over-the-counter market, (iii) a general moratorium on
commercial banking activities in New York shall have been declared by either
Federal or New York State authorities or (iv) there shall have occurred any
outbreak or escalation of hostilities or any change in financial markets or any
calamity or crisis, including without limitation as a result of terrorist
activities, that, in the judgment of the Initial Purchasers, is material and
adverse and which, in the judgment of the Initial Purchasers, makes it
impracticable to market the Securities on the terms and in the manner
contemplated in the Offering Memorandum.
9. This Agreement shall become effective upon the execution and delivery
hereof by the parties hereto.
10. If, on the Delivery Date any one or more of the Initial Purchasers
shall fail or refuse to purchase Securities which it or they have agreed to
purchase hereunder on such date, and the aggregate principal amount of
Securities which such defaulting Initial Purchaser or Initial Purchasers agreed
but failed or refused to purchase is not more than one-tenth of the aggregate
principal amount of the Securities to be purchased on such date, the other
Initial Purchasers shall be obligated severally in the proportions that the
24
principal amount of Securities set forth opposite their respective names in
Schedule I bears to the aggregate principal amount of Securities set forth
opposite the names of all such non-defaulting Initial Purchasers, or in such
other proportions as the Initial Purchasers may specify, to purchase the
Securities which such defaulting Initial Purchaser or Initial Purchasers agreed
but failed or refused to purchase on such date; provided that in no event shall
the principal amount of Securities that any Initial Purchaser has agreed to
purchase pursuant to Section 1 be increased pursuant to this Section 10 by an
amount in excess of one-tenth of such principal amount of Securities without the
written consent of such Initial Purchaser. If, on the Delivery Date any Initial
Purchaser or Initial Purchasers, shall fail or refuse to purchase Securities
which it or they have agreed to purchase hereunder on such date, and the
aggregate principal amount of Securities with respect to which such default
occurs is more than one-tenth of the aggregate principal amount of Securities to
be purchased on such date, and arrangements satisfactory to the Initial
Purchasers and the Company for the purchase of such Securities are not made
within 36 hours after such default, this Agreement shall terminate without
liability on the part of any non-defaulting Initial Purchaser or the Company. In
any such case either the Initial Purchasers or the Company shall have the right
to postpone the Delivery Date, but in no event for longer than seven days, in
order that the required changes, if any, in the Offering Memorandum or in any
other documents or arrangements may be effected. Any action taken under this
paragraph shall not relieve any defaulting Initial Purchaser from liability in
respect of any default of such Initial Purchaser under this Agreement.
11. If this Agreement shall be terminated by the Initial Purchasers, or
any of them, because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of this Agreement, or
if for any reason the Company shall be unable to perform its obligations under
this Agreement or any condition of the Initial Purchasers' obligations cannot be
fulfilled, (i) the Company shall remain responsible for the expenses to be paid
or reimbursed by them pursuant to Section 5(j) and (ii) except in the event this
Agreement is terminated pursuant to clauses (i), (iii) or (iv) of Section 8, the
Company agrees to reimburse the Initial Purchasers or such Initial Purchasers as
have so terminated this Agreement with respect to themselves, severally, for the
out-of-pocket expenses reasonably incurred by such Initial Purchasers in
connection with this Agreement or the offering contemplated hereunder, not
exceeding $75,000, and for the fees and disbursements of their counsel in
connection with this offering.
12. This Agreement shall inure to the benefit of and be binding upon the
Company, the Initial Purchasers, any controlling persons referred to herein and
their respective successors and assigns. Nothing expressed or mentioned in this
Agreement is intended or shall be construed to give any other person, firm or
corporation any legal or equitable right, remedy or claim under or in respect of
this Agreement or any provision
25
herein contained. No purchaser of Securities from any Initial Purchaser shall be
deemed to be a successor by reason merely of such purchase.
13. All notices and other communications hereunder shall be in writing and
shall be deemed to have been duly given if mailed or transmitted by any standard
form of telecommunication. Notices to the Initial Purchasers shall be given to
the Initial Purchasers c/o Credit Suisse First Boston Corporation, Transactions
Advisory Group, 00 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000 (Fax: 000-000-0000).
Notices to the Company shall be given to it at 0000 Xxxxxxxxxx Xxxxxx, Xxxxxx,
Xxxxxxxx 00000 (telefax: (000) 000-0000); Attention: Xxxxx Xxxxxx, with a copy
to General Counsel (telefax: (000) 000-0000).
14. This Agreement may be signed in counterparts, each of which shall be
an original and all of which together shall constitute one and the same
instrument.
15. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK, WITHOUT GIVING EFFECT TO THE CONFLICTS OF
LAWS PROVISIONS THEREOF.
26
If the foregoing is in accordance with your understanding, please sign
and return counterparts hereof.
Very truly yours,
QWEST CORPORATION
By: /s/ Xxxxx Xxxxx
-------------------------------------
Name:
Title:
Accepted: March 7, 2002
By: CREDIT SUISSE FIRST BOSTON CORPORATION
By: /s/ Xxxxxxx Xxxxxxxx
---------------------------------------
Name: Xxxxxxx Xxxxxxxx
Title: Director
For themselves and as Representatives of
the other Initial Purchasers named in
Schedule I hereto.
27
SCHEDULE 1
AGGREGATE PRINCIPAL AMOUNT OF
INITIAL PURCHASER SECURITIES TO BE PURCHASED
----------------- -----------------------------
Credit Suisse First Boston Corporation .......... $1,050,000,000
Banc of America Securities LLC .................. 180,000,000
Xxxxxx Brothers Inc. ............................ 180,000,000
ABN AMRO Incorporated ........................... 30,000,000
Commerzbank Capital Markets Corp. ............... 30,000,000
First Union Securities, Inc. .................... 30,000,000
Total .................................. $1,500,000,000
==============
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