EXHIBIT 1.1
QWEST COMMUNICATIONS INTERNATIONAL INC.
$450,505,000 8.29% Senior Discount Notes Due 2008
PURCHASE AGREEMENT
Dated: January 22, 1998
QWEST COMMUNICATIONS INTERNATIONAL INC.
$450,505,000 8.29% SENIOR DISCOUNT NOTES DUE 2008
PURCHASE AGREEMENT
New York, New York
January 22, 1998
Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Qwest Communications International Inc., a Delaware corporation (the "Company"),
proposes to issue and sell to Salomon Brothers Inc (the "Initial Purchaser")
$450,505,000 aggregate principal amount at maturity of its 8.29% Senior Discount
Notes Due 2008 (the "Securities"). The Securities are to be issued under an
indenture (the "Indenture") dated as of the Closing Date (as defined herein)
between the Company and Bankers Trust Company, as trustee.
The sale of the Securities to the Initial Purchaser will be made without
registration of the Securities under the Securities Act of 1933, as amended (the
"Securities Act"), in reliance upon exemptions from the registration
requirements of the Securities Act. The Initial Purchaser has advised the
Company that it will offer and sell the Securities purchased hereunder in
accordance with Section 4 hereof as soon as it deems advisable.
The holders of the Securities will be entitled to the benefits of a Registration
Agreement dated as of the Closing Date between the Company and Salomon Brothers
Inc (the "Registration Agreement"), pursuant to which the Company will file a
registration statement with the Securities and Exchange Commission (the
"Commission") registering the Securities or New Securities (referred to in the
Registration Agreement) under the Securities Act.
In connection with the sale of the Securities, the Company has prepared a final
offering memorandum, dated January 22, 1998 (the "Final Memorandum"). The Final
Memorandum sets forth certain information concerning the Company and the
Securities. The Company hereby confirms that it has authorized the use of the
Final Memorandum, and any amendment or supplement thereto, in connection with
the offer and sale of the Securities by the Initial Purchaser. Unless stated to
the contrary, all references herein to the Final Memorandum are to the Final
Memorandum at the Execution Time (as defined in Section 6 hereof) and are not
meant to include any amendment or supplement subsequent to the Execution Time.
1. Representations and Warranties. The Company represents and warrants
to the Initial Purchaser as set forth below in this Section 1.
(a) The Final Memorandum, at the date hereof, does not, and at the Closing Date
(as defined below) will not (and any amendment or supplement thereto, at the
date thereof and at the Closing Date, will not), contain 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; provided, however, that the Company makes no
representation or warranty as to the information contained in or omitted from
the Final Memorandum, or any amendment or supplement thereto, in reliance upon
and in conformity with information furnished in writing to the Company by or on
behalf of the Initial Purchaser specifically for inclusion therein.
(b) Each of the Company and its subsidiaries has been duly incorporated, is
validly existing as a corporation in good standing under the laws of the
jurisdiction of its incorporation, has full power (corporate and other) to own
or lease its properties and conduct its business as described in the Final
Memorandum, and is duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases material properties or conducts material
business, except where the failure to be qualified would not have a material
adverse effect on the Company or any of its subsidiaries.
(c) The Company has full power (corporate and other) to enter into and to
perform its obligations under this Agreement, the Indenture, the Registration
Agreement and the Securities.
(d) The issued shares of capital stock of each of the Company's subsidiaries
have been duly authorized and validly issued, are fully paid and nonassessable
and, except as otherwise set forth in the Final Memorandum, are owned
beneficially by the Company free and clear of any security interests, liens,
encumbrances, equities or claims.
(e) The Company has an authorized, issued and outstanding capitalization as set
forth in the Final Memorandum. All of the issued shares of capital stock of the
Company have been duly authorized and validly issued and are fully paid and
nonassessable.
(f) The consolidated financial statements and schedules of the Company and its
consolidated subsidiaries included in the Final Memorandum fairly present the
financial position of the Company and its consolidated subsidiaries and the
results of operations and changes in financial condition as of the dates and for
the periods therein specified. Such financial statements and schedules have been
prepared in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as otherwise noted
therein). The selected financial data set forth under the caption "Selected
Consolidated Financial Data" in the Final Memorandum fairly present, on the
basis stated in the Final Memorandum, the information included therein. The pro
forma financial statements and other pro forma financial information included or
incorporated by reference in the Final Memorandum present fairly the information
shown therein, have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements, have been properly
compiled on the pro forma bases described therein and the assumptions used in
the preparation thereof are reasonable and the adjustments used therein are
appropriate to give effect to the transactions or circumstances referred to
therein.
(g) KPMG Peat Marwick LLP, who have certified certain financial statements of
the Company and its consolidated subsidiaries and delivered their report with
respect to the audited consolidated financial statements and schedules included
in the Final Memorandum, are independent public accountants within the meaning
of the Securities Act and the applicable rules and regulations thereunder.
Xxxxxxxxx Xxxxx & Co., who have audited certain financial statements of
SuperNet, Inc. included in the Final Memorandum and delivered their report with
respect thereto, are independent public accountants within the meaning of the
Securities Act and the applicable rules and regulations thereunder. Xxxxx
Xxxxxxxx LLC, who have audited certain financial statements of Phoenix Network,
Inc. included in the Final Memorandum and delivered their report with respect
thereto, are independent public accountants within the meaning of the Securities
Act and the applicable rules and regulations thereunder.
(h) This Agreement has been duly authorized, executed, and delivered by
the Company.
(i) The Registration Agreement has been duly authorized by the Company and, when
duly executed and delivered by the Company, will constitute a legal, valid and
binding obligation of the Company enforceable against the Company in accordance
with its terms (subject, as to the enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect, general principles of
equity and to the enforcement of the indemnification or contribution provisions
contained therein).
(j) The Indenture has been duly authorized by the Company and, when duly
executed and delivered by the Company and the Trustee, will constitute a valid
and binding instrument enforceable against the Company in accordance with its
terms (subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting creditors' rights
generally from time to time in effect, and general principles of equity); the
Securities have been duly and validly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchaser pursuant to this Agreement, will
constitute valid and binding obligations of the Company entitled to the benefits
of the Indenture; and the statements set forth under the heading "Description of
the Notes" in the Final Memorandum, insofar as such statements purport to
summarize certain provisions of the Securities and the Indenture, provide a fair
summary of such provisions.
(k) No legal or governmental proceedings are pending to which the Company or any
of its subsidiaries is a party or to which the property of the Company or any of
its subsidiaries is subject that are not described in the Final Memorandum, and
no such proceedings have been threatened against the Company or any of its
subsidiaries or with respect to any of their respective properties, except in
each case for such proceedings that, if the subject of an unfavorable decision,
ruling or finding, would not, singly or in the aggregate, result in a material
adverse change in the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company and its subsidiaries.
(l) The issuance, offering and sale of the Securities to the Initial Purchaser
by the Company pursuant to this Agreement, the performance by the Company of its
obligations under this Agreement, the Registration Agreement, the Indenture and
the Securities, the consummation of the transactions herein and therein and the
application of proceeds from the sale of the Securities as described in the
Final Memorandum do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority, except such
as have been obtained and such as may be required under state securities or blue
sky laws and except as may be required under the Securities Act and the rules
and regulations thereunder with respect to the Registration Agreement and
transactions contemplated thereunder or (ii) conflict with or result in a breach
or violation of any of the terms and provisions of, or constitute a default
under, any indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party or by
which the Company or any of its subsidiaries or any of their respective
properties are bound, or the charter documents or by-laws of the Company or any
of its subsidiaries, or any statute or any judgment, decree, order, rule or
regulation of any court or other governmental authority or any arbitrator
applicable to the Company or any of its subsidiaries.
(m) The Company has not (i) taken, directly or indirectly, any action designed
to cause or to result in, or that has constituted or which might reasonably be
expected to constitute, the stabilization or manipulation of the price of any
security of the Company to facilitate the sale or resale of the Securities or
(ii) paid or agreed to pay to any person any compensation for soliciting another
to purchase any securities of the Company (except for the sale of Securities by
the Initial Purchaser under this Agreement).
(n) Subsequent to the respective dates as of which information is given in the
Final Memorandum, (i) the Company and its subsidiaries have not incurred any
material liability or obligation, direct or contingent, nor entered into any
material transaction whether or not in the ordinary course of business; (ii) the
Company has not purchased any of its outstanding capital stock, nor declared,
paid or otherwise made any dividend or distribution of any kind on its capital
stock; (iii) there has not been any material change in the capital stock,
short-term debt or long-term debt of the Company and its consolidated
subsidiaries, except in each case as described in or contemplated by the Final
Memorandum; and (iv) there has not been any material adverse change in the
condition (financial or otherwise), earnings, business affairs or business
prospects of the Company and its consolidated subsidiaries whether or not
arising in the ordinary course of business.
(o) The Company and each of its subsidiaries own or hold all items of property
owned or held by each of them free and clear of any security interests, liens,
encumbrances, equities, claims and other defects, except such as do not
materially and adversely affect the value of such property and do not interfere
with the use made or proposed to be made of such property by the Company or such
subsidiary, and any real property and buildings held under lease by the Company
or any such subsidiary are held under valid, subsisting and enforceable leases,
with such exceptions as are not material and do not interfere with the use made
or proposed to be made of such property and buildings by the Company or such
subsidiary, in each case except as described in or contemplated by the Final
Memorandum.
(p) No labor dispute with the employees of the Company or any of its
subsidiaries exists or is threatened or imminent that could result in a material
adverse change in the condition (financial or otherwise), business prospects,
net worth or results of operations of the Company and its subsidiaries, except
as described in or contemplated by the Final Memorandum.
(q) The Company and its subsidiaries own or possess all material patents, patent
applications, trademarks, service marks, trade names, licenses, copyrights and
proprietary or other confidential information currently employed by them in
connection with their respective businesses, and neither the Company nor any
such subsidiary has received any notice of infringement of or conflict with
asserted rights of any third party with respect to any of the foregoing which,
singly or in the aggregate, if the subject of an unfavorable decision, ruling or
finding, would result in a material adverse change in the condition (financial
or otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, except as described in or contemplated by the
Final Memorandum.
(r) The Company and each of its subsidiaries are insured by insurers of
recognized financial responsibility against such losses and risks and in such
amounts as are prudent and customary in the businesses in which they are
engaged; neither the Company nor any such subsidiary has been refused any
insurance coverage sought or applied for; and neither the Company nor any such
subsidiary has any reason to believe that it will not be able to renew its
existing insurance coverage as and when such coverage expires or to obtain
similar coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the condition
(financial or otherwise), business prospects, net worth or results of operations
of the Company and its subsidiaries, except as described in or contemplated by
the Final Memorandum.
(s) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the Company
any loans or advances to such subsidiary from the Company or from transferring
any of such subsidiary's property or assets to the Company or any other
subsidiary of the Company, except as described in or contemplated by the Final
Memorandum.
(t) The Company and its subsidiaries possess all certificates, orders, permits,
licenses, authorizations, consents and approvals of and from, and have made all
filings and registrations with, the appropriate federal, state or foreign
regulatory authorities necessary to own, lease, license and use their properties
and assets and to conduct their respective businesses, and neither the Company
nor any such subsidiary is in violation of or has received any notice of
proceedings relating to the revocation or modification of any such certificates,
orders, permits, licenses, authorizations, consents or approvals, or the
qualification or rejection of any such filing or registration which, singly or
in the aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, except as described in or contemplated by the
Final Memorandum.
(u) The Company has filed all foreign, federal, state and local tax returns that
are required to be filed or has requested extensions thereof and has paid all
taxes required to be paid by it and any other assessment, fine or penalty levied
against it, to the extent that any of the foregoing is due and payable, except
for any such tax, assessment, fine or penalty that is currently being contested
in good faith or as described in or contemplated by the Final Memorandum.
(v) Neither the Company nor any of its subsidiaries is in violation of any
federal or state law or regulation relating to occupational safety and health or
to the storage, handling or transportation of hazardous or toxic materials and
the Company and its subsidiaries have received all permits, licenses or other
approvals required of them under applicable federal and state occupational
safety and health and environmental laws and regulations to conduct their
respective businesses, and the Company and each such subsidiary is in compliance
with all terms and conditions of any such permit, license or approval, except
any such violation of law or regulation, failure to receive required permits,
licenses or other approvals or failure to comply with the terms and conditions
of such permits, licenses or approvals, which would not, singly or in the
aggregate, result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, except as described in or contemplated by the
Final Memorandum.
(w) Each certificate signed by any officer of the Company and delivered to the
Initial Purchaser or Counsel for the Initial Purchaser shall be deemed to be a
representation and warranty by the Company (and not individually by such
officer) to the Initial Purchaser as to the matters covered thereby.
(x) The Company and each of its subsidiaries maintain a system of internal
accounting controls sufficient to provide reasonable assurance that (i)
transactions are executed in accordance with management's general or specific
authorizations; (ii) transactions are recorded as necessary to permit
preparation of financial statements in conformity with generally accepted
accounting principles and to maintain asset accountability; (iii) access to
assets is permitted only in accordance with management's general or specific
authorization; and (iv) the recorded accountability for assets is compared with
the existing assets at reasonable and appropriate intervals and appropriate
action is taken with respect to any differences.
(y) No default exists, and no event has occurred which, with notice or lapse of
time or both, would constitute a default in the due performance and observance
of any term, covenant or condition of any indenture, mortgage, deed of trust,
lease or other agreement or instrument to which the Company or any of its
subsidiaries is a party or by which the Company or any of its subsidiaries or
any of their respective properties is bound or may be affected in any material
adverse respect with regard to property, business or operations of the Company
and its subsidiaries.
(z) Neither the Company, nor any of its Affiliates (as defined in Rule 501(b) of
Regulation D under the Securities Act ("Regulation D")), nor any person acting
on its or their behalf has, directly or indirectly, made offers or sales of any
security, or solicited offers to buy any security, under circumstances that
would require the registration of the Securities under the Securities Act.
(aa) Neither the Company, nor any of its Affiliates, nor any person acting on
its or their behalf has engaged in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with any offer or
sale of the Securities in the United States.
(bb) The Securities satisfy the eligibility requirements of Rule 144A(d)(3)
under the Securities Act.
(cc) Neither the Company, nor any of its Affiliates, nor any person acting on
its or their behalf has engaged in any directed selling efforts with respect to
the Securities, and each of them has complied with the offering restrictions
requirement of Regulation S ("Regulation S") under the Securities Act. Terms
used in this paragraph have the meanings given to them by Regulation S.
(dd) The Company as of the Execution Time expects to be and as of the Closing
Date will have been advised by the National Association of Securities Dealers,
Inc. PORTAL Market that the Securities have been designated "PORTAL-eligible
securities" in accordance with the rules and regulations of the National
Association of Securities Dealers, Inc.
(ee) The Company is not, and upon the issuance and sale of the Securities as
herein contemplated and the application of the net proceeds therefrom as
described in the Final Memorandum will not be, an "investment company" within
the meaning of the Investment Company Act of 1940, as amended (the "Investment
Company Act"), without taking account of any exemption arising out of the number
of holders of the Company's securities.
(ff) The Company will conduct its operations in a manner that will not subject
it to registration as an investment company under the Investment Company Act.
(gg) The information provided by the Company pursuant to Section 5(h) hereof
will not, at the date thereof, contain 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.
(hh) There is no franchise, contract or other document of a character that would
be required to be described or referred to in the Final Memorandum, if it were a
prospectus filed as part of a registration statement on Form S-1 under the
Securities Act, that is not described or referred to as would be so required,
and the description thereof or references thereto are correct in all material
respects.
(ii) Subject to compliance by the Initial Purchaser with the representations and
warranties set forth in Section 4, it is not necessary in connection with the
offer, sale and delivery of the Securities to the Initial Purchaser and the
resale to each subsequent purchaser in the manner contemplated by this Agreement
and the Final Memorandum to register the Securities under the Securities Act or
to qualify the Indenture under the Trust Indenture Act of 1939, as amended.
2. Purchase and Sale. Subject to the terms and conditions and in reliance upon
the representations and warranties herein set forth, the Company agrees to sell
to the Initial Purchaser, and the Initial Purchaser agrees to purchase from the
Company, at a purchase price of 66.474% of the aggregate principal amount at
maturity thereof, plus amortization of original issue discount, if any, from
January 29, 1998 to the Closing Date, $450,505,000 aggregate principal amount at
maturity of Securities.
3. Delivery and Payment. Delivery of and payment for the Securities shall be
made at 10:00 AM, New York City time, on January 29, 1998, or such later date
(not later than February 5, 1998) as the Initial Purchaser shall designate,
which date and time may be postponed by agreement between the Initial Purchaser
and the Company (such date and time of delivery and payment for the Securities
being herein called the "Closing Date"). Delivery of the Securities shall be
made to the Initial Purchaser against payment by the Initial Purchaser of the
purchase price thereof to or upon the order of the Company by wire transfer of
federal funds or other immediately available funds or such other manner of
payment as may be agreed by the Company and the Initial Purchaser. Delivery of
the Securities shall be made at such location as the Initial Purchaser shall
reasonably designate at least one business day in advance of the Closing Date
and payment for the Securities shall be made at the office of Shearman &
Sterling ("Counsel for the Initial Purchaser"), 000 Xxxxxxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx. Certificates for the Securities shall be registered in such names and
in such denominations as the Representatives may request not less than three
full business days in advance of the Closing Date.
The Company agrees to have the Securities available for inspection, checking and
packaging by the Initial Purchaser in New York, New York, not later than 1:00 PM
on the business day prior to the Closing Date.
4. Offering of Securities. The Initial Purchaser represents and warrants to
and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell, any Securities
except (i) to those it reasonably believes to be qualified institutional buyers
(as defined in Rule 144A under the Securities Act) and that, in connection with
each such sale, it has taken or will take reasonable steps to ensure that the
purchaser of such Securities is aware that such sale is being made in reliance
on Rule 144A, or (ii) in accordance with the restrictions set forth in Exhibit A
hereto.
(b) Neither it nor any person acting on its behalf has made or will make
offers or sales of the Securities by means of any form of general solicitation
or general advertising (within the meaning of Regulation D) in the United
States.
5. Agreements. The Company agrees with the Initial Purchaser that:
(a) The Company will furnish to the Initial Purchaser and to Counsel for the
Initial Purchaser, without charge, during the period referred to in paragraph
(c) below, as many copies of the Final Memorandum and any amendments and
supplements thereto as it may reasonably request. The Company will pay the
expenses of printing or other production of all documents relating to the
offering.
(b) The Company will not amend or supplement the Final Memorandum without the
prior written consent of the Initial Purchaser as contemplated by paragraph (c)
below.
(c) If at any time prior to the completion of the sale of the Securities by the
Initial Purchaser, any event occurs as a result of which the Final Memorandum,
as then amended or supplemented, 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 if it should be necessary to amend or supplement the
Final Memorandum to comply with applicable law, the Company will promptly notify
the Initial Purchaser of the same and, subject to the requirements of paragraph
(b) of this Section 5, will prepare and provide as promptly as practicable to
the Initial Purchaser pursuant to paragraph (a) of this Section 5 an amendment
or supplement which will correct such statement or omission or effect such
compliance.
(d) The Company will arrange for the qualification of the Securities for sale by
the Initial Purchaser under the laws of such jurisdictions as the Initial
Purchaser may reasonably designate and will maintain such qualifications in
effect so long as required for the sale of the Securities. The Company will
promptly advise the Initial Purchaser of the receipt by the Company 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.
(e) The Company will not, and will not permit any of its Affiliates to, resell
any Securities that have been acquired by any of them.
(f) Neither the Company, nor any of its Affiliates, nor any person acting on its
or their behalf will, directly or indirectly, make offers or sales of any
security, or solicit offers to buy any security, under circumstances that would
require the registration of the Securities under the Securities Act.
(g) Neither the Company, nor any of its Affiliates, nor any person acting on its
or their behalf will engage in any form of general solicitation or general
advertising (within the meaning of Regulation D) in connection with any offer or
sale of the Securities in the United States.
(h) So long as any of the Securities are "restricted securities" within the
meaning of Rule 144(a)(3) under the Securities Act, the Company will, unless it
becomes subject to and complies with Section 13 or 15(d) of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), provide to each holder of
such restricted securities and to each prospective purchaser (as designated by
such holder) of such restricted securities, upon the request of such holder or
prospective purchaser, any information required to be provided by Rule
144A(d)(4) under the Securities Act. This covenant is intended to be for the
benefit of the holders, and the prospective purchasers designated by such
holders, from time to time of such restricted securities.
(i) Neither the Company nor any of its Affiliates nor any person acting on its
or their behalf will engage in any directed selling efforts with respect to the
Securities, and each of them will comply with the offering restrictions
requirement of Regulation S. Terms used in this paragraph have the meanings
given to them by Regulation S.
(j) The Company will cooperate with the Initial Purchaser and use its best
efforts to permit the Securities to be eligible for clearance and settlement
through The Depository Trust Company.
(k) The Company will not, until 180 days following the Closing Date, without the
prior written consent of the Initial Purchaser, offer, sell or contract to sell,
or otherwise dispose of, directly or indirectly, or announce the offering of,
any debt securities issued or guaranteed by the Company (other than the
Securities or as otherwise contemplated by the Registration Agreement).
(l) The Company will use the net proceeds received by it from the sale of
the Securities in the manner specified in the Final Memorandum under "Use of
Proceeds."
6. Conditions to the Obligations of the Initial Purchaser. The obligations of
the Initial Purchaser to purchase the Securities shall be subject to the
accuracy of the representations and warranties on the part of the Company
contained herein at the date and time that this Agreement is executed and
delivered by the parties hereto (the "Execution Time") and the Closing Date, to
the accuracy of the statements of the Company made in any certificates pursuant
to the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) The Company shall have furnished to the Initial Purchaser the opinion of
Xxxxx Xxxxxxx & Xxxx LLP, counsel for the Company, dated the Closing Date, to
the effect that:
(i) each of the Company, Qwest Corporation ("QC"), Qwest Communications
Corporation ("QCC") and Qwest Transmission Inc. ("QTI") (collectively, the
"Subsidiaries" and individually, a "Subsidiary") has been duly incorporated and
is validly existing as a corporation in good standing under the laws of the
jurisdiction in which it is organized, with full corporate power and authority
to own its properties and conduct its business as described in the Final
Memorandum, and is duly qualified to do business as a foreign corporation and is
in good standing under the laws of each jurisdiction that requires such
qualification in which it owns or leases material properties or conducts
material business, except for such jurisdictions where the failure to so qualify
or to be in good standing would not, singly or in the aggregate, have a material
adverse effect on the Company and the Subsidiaries, and the Company has full
corporate power and authority to enter into and perform its obligations under
this Agreement, the Registration Agreement, the Indenture and the Securities;
(ii) all of the outstanding shares of capital stock of the Company and each of
the Subsidiaries have been duly and validly authorized and issued and are fully
paid and nonassessable, and, except as otherwise set forth in the Final
Memorandum, all outstanding shares of capital stock of the Subsidiaries are
owned by the Company either directly or through a wholly owned Subsidiary, free
and clear of (to the best of such counsel's knowledge after due inquiry) any
security interests and any other claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization is as set forth in
the Final Memorandum;
(iv) the Indenture has been duly authorized, executed and delivered and
constitutes a legal, valid and binding instrument enforceable against the
Company in accordance with its terms (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium or other laws affecting creditors' rights generally from
time to time in effect, and to general equitable principles); the Securities
have been duly and validly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered to and paid for by
the Initial Purchaser pursuant to this Agreement, will constitute legal, valid
and binding obligations of the Company (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium or other laws affecting creditors' rights generally from
time to time in effect, and to general equitable principles) entitled to the
benefits of the Indenture; and the Securities and the Indenture conform as to
legal matters in all material respects to the descriptions thereof set forth
under the heading "Description of the Notes" in the Final Memorandum;
(v) the information contained in the Final Memorandum under the headings
"Description of Certain Indebtedness," "Certain United States Federal Income
Taxes" and "Certain Transactions" fairly summarizes in all material respects the
matters therein described and to the extent that such statements purport to
describe certain provisions of U.S. federal laws, rules or regulations, have
been reviewed by such counsel and are correct as to legal matters in all
material respects;
(vi) this Agreement has been duly authorized, executed and delivered
by the Company;
(vii) the Registration Agreement has been duly authorized, executed and
delivered by the Company, and constitutes legal, valid and binding obligations
of the Company enforceable against the Company in accordance with its terms
(subject, as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium or other laws
affecting creditors' rights generally from time to time in effect, and to
general principles of equity), and further such counsel expresses no opinion as
to the enforceability of the indemnification or contribution provisions
contained therein, and the Registration Agreement conforms as to legal matters
in all material respects to the description thereof contained in the Final
Memorandum;
(viii) no consent, approval, authorization or order of any court or governmental
agency or body (other than such as may be required under the applicable
securities laws of the various jurisdictions in which the Securities will be
offered or sold, as to which such counsel expresses no opinion, or as required
in connection with the transactions contemplated by the Registration Agreement)
is required in connection with the due authorization, execution and delivery of
this Agreement, the Registration Agreement or the Indenture or for the offering,
issuance, sale or delivery of the Securities to the Initial Purchaser or the
resale of the Securities by the Initial Purchaser in accordance with this
Agreement;
(ix) the issue and sale of the Securities, the execution and delivery of this
Agreement, the Registration Agreement, the Indenture and the Securities, the
consummation of the transactions contemplated by this Agreement and the
application of proceeds from the sale of the Securities as described in the
Final Memorandum and the compliance by the Company with its obligations under
this Agreement, the Registration Agreement, the Indenture or the Securities,
will not conflict with, result in a breach or violation of, or constitute a
default under any applicable law or the charter or by-laws of the Company or any
of the Subsidiaries or the terms of any indenture or other agreement or
instrument known to such counsel to which the Company or any of the Subsidiaries
is a party or bound or any judgment, order or decree known to such counsel to be
applicable to the Company or any of the Subsidiaries of any court, regulatory
body, administrative agency, governmental body or arbitrator having jurisdiction
over the Company or any of the Subsidiaries;
(x) assuming the accuracy of the representations and warranties and compliance
with the agreements contained in this Agreement, no registration of the
Securities under the Securities Act is required, and no qualification of the
Indenture under the Trust Indenture Act of 1939 is necessary, for the purchase
by the Initial Purchaser of the Securities, or the offer and sale by the Initial
Purchaser of the Securities, in each case, in the manner contemplated by this
Agreement (and not taking into account the transactions contemplated by the
Registration Agreement);
(xi) the Company is not an "investment company" within the meaning of the
Investment Company Act of 1940 without taking account of any exemption arising
out of the number of holders of the Company's securities;
(xii) no legal or governmental proceedings are pending to which the Company or
any of its Subsidiaries is a party or to which the property of the Company or
any of its Subsidiaries is subject, as would be required to be described in the
Final Memorandum, that are not described in the Final Memorandum and, to the
best of such counsel's knowledge after due inquiry, no such proceedings have
been threatened against the Company or any of its subsidiaries or with respect
to any of their respective properties; there is no franchise, contract or other
document of a character that would be required to be described or referred to in
the Final Memorandum, if it were a prospectus filed as part of a registration
statement on Form S-1 under the Securities Act, that is not described or
referred to as would be so required, and the descriptions thereof or references
thereto are correct in all material respects; and the statements in the Final
Memorandum under the caption "Business ? Legal Proceedings" present the
information that would be called for, if the Final Memorandum were a prospectus
filed as part of a registration statement on Form S-1 under the Securities Act,
with respect to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein;
(xiii) to the best of such counsel's knowledge, there are no statutes or
regulations that would be required to be described in the Final Memorandum, if
it were a prospectus filed as part of a registration statement on Form S-1 under
the Securities Act, that are not described as would be so required; and
(xiv) to the best of such counsel's knowledge, (a) neither the Company nor any
Subsidiary is in violation of its charter or by-laws and (b) no default by the
Company or any Subsidiary exists in the due performance or observance of any
material obligation, agreement, covenant or condition contained in any contract
or other document that is described or referred to in the Final Memorandum,
except in the case of (b) only, to the extent that any such default would not
have a material adverse effect on the condition (financial or otherwise) or
operations of the Company on a consolidated basis;
Such counsel shall also state that they have no reason to believe that at the
Execution Time or at the Closing Date the Final Memorandum contained an untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading; provided, however, that such counsel
expresses no belief as to the financial statements, including the notes thereto,
or supporting schedules or other financial and accounting data included in the
Final Memorandum.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of New York, the
State of Colorado, the United States or the General Corporation Law of the State
of Delaware, to the extent such counsel deems proper and as specified in such
opinion, upon the opinion of other counsel (including internal counsel) of good
standing whom such counsel believes to be reliable and who are satisfactory to
Counsel for the Initial Purchaser and (B) as to matters of fact, to the extent
deemed proper, on certificates of responsible officers of the Company and public
officials.
All references in this Section 6(a) to the Final Memorandum shall be deemed to
include any amendment or supplement thereto at the Closing Date.
(b) The Company shall have furnished to the Initial Purchaser the opinion of
Xxxxxxxx & Xxxxxxxx LLP, special federal regulatory counsel for the Company,
dated the Closing Date, to the effect that:
(i) (A) the execution and delivery of this Agreement, the Registration Agreement
and the Indenture by the Company and the issue and sale of the Securities
contemplated hereby and thereby do not violate (1) the Communications Act of
1934 (the "Communications Act"), (2) the Telecommunications Act of 1996 (the
"Telecom Act of 1996") or (3) any rules or regulations of the Federal
Communications Commission (the "FCC") applicable to the Company or its
subsidiaries, and (B) no authorization of or filing with the FCC is necessary
for the execution and delivery of this Agreement, the Registration Agreement or
the Indenture by the Company and the issue and sale of the Securities
contemplated hereby and thereby in accordance with the terms hereof and thereof;
(ii) QCC is a nondominant carrier authorized by the FCC to provide domestic
interstate interexchange telecommunications services as described in such
opinion without any further order, license, permit or other authorization by the
FCC. QCC also has been granted Section 214 authority by the FCC to provide
international switched resale telecommunications services as described in such
opinion. QCC has on file with the FCC tariffs applicable to its domestic
interstate and international services. No other FCC authority is required, and
no other tariffs are required to be filed under the rules and regulations of the
FCC, for the conduct of QCC's telecommunications business as described in the
Final Memorandum;
(iii) QTI is a microwave carrier authorized by the FCC and holds the licenses
listed in such opinion. No further FCC authority is required for the conduct of
QTI's microwave telecommunications business as described in the Final
Memorandum, except to the extent that the absence of any such authority, singly
or in the aggregate, would not have a material adverse effect on the business or
operations of the Company or its subsidiaries taken as a whole;
(iv) FSI Acquisition Corp. is a private carrier not subject to Title II
common carrier regulation under the Communications Act, as amended by the
Telecom Act of 1996;
(v) (A) QCC and QTI in all material respects (1) have made all reports and
filings, and paid all fees, required by the FCC; and (2) have all certificates,
orders, permits, licenses, authorizations, consents and approvals of and from,
and have made all filings and registrations with, the FCC necessary to own,
lease, license and use their properties and assets and to conduct their business
in the manner described in the Final Memorandum; and (B) to the best of such
counsel's knowledge, neither QCC nor QTI has received any notice of proceedings
relating to the revocation or modification of any such certificates, orders,
permits, licenses, authorizations, consents or approvals, or the qualification
or rejection of any such filing or registration, the effect of which, singly or
in the aggregate, would have a material adverse effect on the business or
operations of the Company and its subsidiaries taken as a whole as described in
the Final Memorandum;
(vi) to the best of such counsel's knowledge, neither QCC nor QTI is in
violation of, or in default under, the Communications Act, as amended by the
Telecom Act of 1996, or the rules or regulations of the FCC, the effect of
which, singly or in the aggregate, would have a material adverse effect on the
business or operations of the Company and its subsidiaries taken as a whole as
described in the Final Memorandum;
(vii) (A) no decree or order of the FCC is outstanding against QCC or QTI and
(B) to the best of such counsel's knowledge, no formal litigation, proceeding,
inquiry or investigation has been commenced or threatened, and no formal notice
of violation or order to show cause has been issued, against QCC or QTI before
or by the FCC (except for any matters described in such opinion, which, if the
subject of an unfavorable decision, would not have a material adverse effect on
the business or operations of the Company and its subsidiaries taken as a whole
as described in the Final Memorandum); and
(viii) the statements in the Final Memorandum under the captions "Risk
Factors?Regulation Risks" and "Regulation," insofar as such statements
constitute a summary of the legal matters, documents or proceedings of the FCC
with respect to the telecommunications regulation referred to therein, are
accurate in all material respects and fairly summarize all matters referred to
therein.
(c) (A) The Company shall have furnished to the Initial Purchaser the opinion of
Xxxxxx, MacBride, Xxxxxx, Xxxxxxx & Xxxxxxx, LLP, special state regulatory
counsel for the Company for the State of California, dated the Closing Date, to
the effect that:
(i) (x) the execution and delivery of this Agreement, the Registration Agreement
and the Indenture by the Company and the issue and sale of the Securities
contemplated hereby and thereby do not violate (1) any laws administered by,
rules, regulations or published policies of, the California Public Utilities
Commission (the "California PUC") ("PUC Laws") or any other state laws governing
the provision of telecommunications services in the State of California
("Telecommunications Laws") applicable to the Company or its subsidiaries, or
(2) any decree from any California court relating to telecommunications matters,
and (y) no authorization of or filing with the California PUC in the State of
California is necessary for the execution and delivery of this Agreement, the
Registration Agreement or the Indenture by the Company and the issue and sale of
the Securities contemplated hereby and thereby in accordance with the terms
hereof and thereof;
(ii) QCC is certified, registered or otherwise authorized, or is not required to
obtain authority, to provide intrastate interexchange telecommunications
services in the State of California. QCC has a tariff on file in the State of
California and no further tariffs are required to be filed by QCC or the Company
in the State of California to conduct the Company's telecommunications business
as described in the Final Memorandum;
(iii) (x) QCC and the Company (1) have made all reports and filings, and paid
all fees, required by the California PUC in the State of California; and (2)
have all certificates, orders, permits, licenses, authorizations, consents and
approvals of and from, and have made all filings and registrations with, the
California PUC in the State of California necessary to own, lease, license and
use their properties and assets and to conduct their business in the manner
described in the Final Memorandum; and (y) neither QCC nor the Company has
received any notice of proceedings relating to the revocation or modification of
any such certificates, orders, permits, licenses, authorizations, consents or
approvals, or the qualification or rejection of any such filing or registration,
the effect of which, singly or in the aggregate, would have a material adverse
effect on the Company's, and its subsidiaries' taken as a whole,
telecommunications business or operations, as described in the Final Memorandum;
(iv) neither the Company nor QCC is in violation of, or in default under any PUC
Laws or any Telecommunications Laws, the effect of which, singly or in the
aggregate, would have a material adverse effect on the Company's, and its
subsidiaries' taken as a whole, telecommunications business or operations, as
described in the Final Memorandum; and
(v) (x) no decree or order of the California PUC in the State of California is
outstanding against the Company or any of its subsidiaries and (y) no formal
litigation, proceeding, inquiry or investigation has been commenced or
threatened, and no notice of violation or order to show cause has been issued,
against the Company or any of its subsidiaries before or by the California PUC
or any other regulatory agency in the State of California.
(B) The Company shall have furnished to the Initial Purchaser the opinion of
Xxxxxxxxxxx, Xxxxx Xxxxxx, Xxxxxx, Xxxxx & XxXxxxxx LLP, special state
regulatory counsel for the Company for the State of Texas, dated the Closing
Date, to the effect that:
(i) (x) the execution and delivery of this Agreement, the Registration Agreement
and the Indenture by the Company and the issue and sale of the Securities do not
violate any telecommunications laws of the State of Texas applicable to the
Company or QCC or, to the best of such counsel's knowledge, any decree from any
court of the State of Texas relating to the telecommunications operations of the
Company or QCC, and (y) no authorization of or filing with the Public Utility
Commission of Texas (the "Texas PUC") is necessary for the execution and
delivery of this Agreement, the Registration Agreement or the Indenture by the
Company or the issue and sale of the Securities contemplated hereby and thereby
in accordance with the terms of this Agreement;
(ii) QCC is duly registered with the Texas PUC and authorized to provide
intrastate telecommunications services in Texas and no further authority is
required to be obtained by QCC or the Company from the Texas PUC to conduct the
Company's telecommunications business as described in the Final Memorandum. QCC
has a registration and price list on file in Texas and no further tariffs are
required to be filed by QCC or the Company with the Texas PUC to conduct the
Company's telecommunications business as described in the Final Memorandum;
(iii) (x) QCC and the Company (1) have made all reports and filings required by
the Texas PUC; and (2) have all certificates, orders, permits, licenses,
authorizations, consents and approvals of and from, and have made all filings
and registrations with, the Texas PUC necessary to own, lease, license and use
their properties and assets and to conduct the Company's telecommunications
business in the manner described in the Final Memorandum; and (y) neither QCC
nor the Company has received any notice of proceedings from the Texas PUC
relating to the revocation or modification of any such certificates, orders,
permits, licenses, authorizations, consents or approvals, or the qualification
or rejection of any such filing or registration, the effect of which, singly or
in the aggregate, would have a material adverse effect on the business or
operations of the Company and its subsidiaries taken as a whole as described in
the Final Memorandum;
(iv) neither QCC nor the Company is in violation of, or in default under the
telecommunications laws of the State of Texas, the effect of which, singly or in
the aggregate, would have a material adverse effect on the business or
operations of the Company and its subsidiaries taken as a whole as described in
the Final Memorandum; and
(v) (x) no decree or order of the Texas PUC is outstanding against QCC or the
Company and (y) no formal litigation, proceeding, inquiry or investigation has
been commenced or threatened, and no formal notice of violation or order to show
cause has been issued, against QCC or the Company before or by the Texas PUC.
(d) The Company shall have furnished to the Initial Purchaser the opinion of
Xxxxxx Xxxxxxx, internal counsel for the Company, dated the Closing Date, to the
effect that:
(i) (A) the execution and delivery of this Agreement, the Registration Agreement
and the Indenture by the Company and the issuance and sale of the Securities
contemplated hereby and thereby do not violate (1) any state telecommunications
laws or regulations ("State Telecommunications Laws") applicable to the Company
or QCC, QTI or FSI Acquisition Corp. (together, the "Operating Subsidiaries") or
(2) any decree from any court relating to the telecommunications operations of
the Company or the Operating Subsidiaries, and (B) no authorization of or filing
with any Public Utilities Commission or other state regulatory authority ("State
Regulatory Agency") is necessary for the execution and delivery of this
Agreement, the Registration Agreement or the Indenture by the Company and the
issuance and sale of the Securities contemplated hereby and thereby in
accordance with the terms hereof and thereof;
(ii) QCC is certified, registered or otherwise authorized, or is not required to
obtain authority to provide, intrastate interexchange telecommunications
services in the respective states listed in such opinion. No further authority
is required to be obtained by the Company or any of the Operating Subsidiaries
from any such state to conduct the telecommunications business as described in
the Final Memorandum. QCC has a tariff or price list on file in each of the
states requiring such a filing as identified in such opinion. No further tariffs
are currently required to be filed by the Company or any of the Operating
Subsidiaries in any such state to conduct the telecommunications business as
described in the Final Memorandum;
(iii) except to the extent that the following would not have, singly or in the
aggregate, a material adverse effect on the business or operations of the
Company and its subsidiaries as described in the Final Memorandum: (A) the
Company and QCC (1) have made all reports and filings, and paid all fees,
required by State Regulatory Agencies; and (2) have all certificates, orders,
permits, licenses, authorizations, consents and approvals of and from, and have
made all filings and registrations with, State Regulatory Authorities necessary
to own, lease, license and use their properties and assets and to conduct
business in the manner described in the Final Memorandum; and (B) neither the
Company nor QCC has received any notice of proceedings relating to the
revocation or modification of any such certificates, orders, permits, licenses,
authorizations, consents or approvals, or the qualification or rejection of any
such filing or registration;
(iv) to the best of such counsel's knowledge, neither the Company nor QCC is in
violation of, or in default under, any State Telecommunications Law, the effect
of which, singly or in the aggregate, would have a material adverse effect on
the business or operations of the Company and its subsidiaries as described in
the Final Memorandum;
(v) (A) no decree or order of any State Regulatory Agency is outstanding against
the Company or any of the Operating Subsidiaries and (B) no formal litigation,
proceeding, inquiry or investigation has been commenced or, to such counsel's
knowledge, threatened, and no formal notice of violation or order to show cause
has been issued, against the Company or any of the Operating Subsidiaries before
or by any State Regulatory Agency, the effect of which, singly or in the
aggregate, would have a material adverse effect on the business or operations of
the Company and its subsidiaries as described in the Final Memorandum; and
(vi) the statements in the Final Memorandum under the captions "Risk
Factors?Regulation Risks" and "Regulation," insofar as such statements
constitute a summary of the legal matters, documents or proceedings of the FCC
and State Regulatory Agencies with respect to telecommunications regulation
referred to therein, are accurate in all material respects and fairly summarize
all matters referred to therein, as of the date of publication of the Final
Memorandum.
(e) The Initial Purchaser shall have received from Counsel for the Initial
Purchaser such opinion or opinions, dated the Closing Date, with respect to the
issuance and sale of the Securities, the Final Memorandum (as amended or
supplemented at the Closing Date) and other related matters as the Initial
Purchaser may reasonably require, and the Company shall have furnished or made
available to such counsel such documents as they request for the purpose of
enabling them to pass upon such matters.
(f) The Company shall have furnished to the Initial Purchaser a certificate of
the Company, signed by (1) the President and Chief Executive Officer and (2) the
Vice President ? Finance, Treasurer and Chief Financial Officer of the Company,
dated the Closing Date, to the effect that the signers of such certificate have
carefully reviewed the Final Memorandum, any amendment or supplement to the
Final Memorandum and this Agreement and that:
(i) the representations and warranties of the Company in this Agreement are true
and correct in all material respects on and as of the Closing Date with the same
effect as if made on the Closing Date, and the Company has complied with all the
agreements and satisfied all the conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date; and
(ii) since the date of the most recent financial statements included in the
Final Memorandum, there has been no material adverse change in the condition
(financial or otherwise), earnings, business affairs or business prospects or
properties of the Company and its subsidiaries, whether or not arising from
transactions in the ordinary course of business, except as set forth in or
contemplated in the Final Memorandum (exclusive of any amendment or supplement
thereto).
(g) (i) (A) At the Execution Time, KPMG Peat Marwick LLP shall have furnished to
the Initial Purchaser a letter dated such date, in form and substance
satisfactory to the Initial Purchaser, containing statements and information of
the type ordinarily included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial information of
the Company contained in the Final Memorandum and (B) at the Closing Date, KPMG
Peat Marwick LLP shall have furnished to the Initial Purchaser a letter dated
such date, in form and substance satisfactory to the Initial Purchaser, to the
effect that they reaffirm the statements made in the letter furnished pursuant
to preceding sentence, except that the specified date referred to shall be a
date not more than three business days prior to the Closing Date.
(ii) At the Closing Date, Xxxxxxxxx, Xxxxx & Co. and Xxxxx Xxxxxxxx
LLP, each shall have furnished to the Initial Purchaser a letter dated such
date, in form and substance satisfactory to the Initial Purchaser, containing
statements and information of the type ordinarily included in accountants'
"comfort letters" to underwriters with respect to the financial statements and
certain financial information of SuperNet, Inc. and Phoenix Network, Inc.,
respectively, contained in the Final Memorandum.
(h) Subsequent to the Execution Time or, if earlier, the dates as of which
information is given in the Final Memorandum, there shall not have been (i) any
change or decrease specified in the letters referred to in paragraph (g) of this
Section 6 or (ii) any change, or any development involving a prospective change,
in or affecting the business or properties of the Company and its subsidiaries
the effect of which, in any case referred to in clause (i) or (ii) above, is, in
the judgment of the Initial Purchaser, so material and adverse as to make it
impractical or inadvisable to market the Securities as contemplated by the Final
Memorandum.
(i) Prior to the Closing Date, the Company shall have furnished to the Initial
Purchaser such reasonable further information, certificates and documents as the
Initial Purchaser may reasonably request.
(j) At the Closing Date, the Company's $250,000,000 Series B 10?% Senior Notes
Due 2007 (the "Series B Notes") shall be rated at least B+ by Standard & Poor's
Corporation and B2 by Xxxxx'x Investors Service Inc. and since the date of this
Agreement there shall not have occurred a downgrading in the rating assigned to
the Series B Notes by any "nationally recognized statistical rating agency", as
that term is defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act, and no such organization shall have publicly announced that it
has its rating of the Series B Notes under surveillance or review.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement, or if
any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Initial Purchaser and Counsel for the Initial Purchaser,
this Agreement and all obligations of the Initial Purchaser hereunder may be
cancelled at, or at any time prior to, the Closing Date by the Initial
Purchaser. Notice of such cancellation shall be given to the Company in writing,
by facsimile or by telephone confirmed in writing.
The documents required to be delivered by this Section 6 shall be delivered at
the office of Counsel for the Initial Purchaser, at 000 Xxxxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx, or such other place as the Initial Purchaser and the Company
shall mutually agree, on the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities provided for herein
is not consummated because any condition to the obligations of the Initial
Purchaser set forth in Section 6 hereof is not satisfied, because of any
termination pursuant to Section 10 hereof or because of any refusal, inability
or failure on the part of the Company to perform any agreement herein or comply
with any provision hereof other than by reason of a default by the Initial
Purchaser in payment for the Securities on the Closing Date, the Company will
reimburse the Initial Purchaser upon demand for all reasonable out-of-pocket
expenses (including reasonable fees and disbursements of counsel) that shall
have been incurred by it in connection with the proposed purchase and sale of
the Securities.
8. Indemnification and Contribution. (a) The Company agrees to indemnify and
hold harmless the Initial Purchaser, the directors, officers, employees and
agents of the Initial Purchaser and each person who controls the Initial
Purchaser within the meaning of either the Securities Act or the Exchange Act
against any and all losses, claims, damages or liabilities, joint or several, to
which they or any of them may become subject under the Securities Act, the
Exchange Act or other federal or state statutory law or regulation, at common
law or otherwise, insofar as such losses, claims, damages or liabilities (or
actions in respect thereof) arise out of or are based upon any untrue statement
or alleged untrue statement of a material fact contained in the Final Memorandum
or any information provided by the Company to any holder or prospective
purchaser of Securities pursuant to Section 5(h), or in any amendment thereof or
supplement thereto, 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, in the light of the circumstances
under which they were made, not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by them in connection with investigating or defending any such loss,
claim, damage, liability or action; provided, however, that the Company will not
be liable in any such case to the extent that any such loss, claim, damage or
liability arises out of or is based upon any such untrue statement or alleged
untrue statement or omission or alleged omission made in the Final Memorandum,
or in any amendment thereof or supplement thereto, in reliance upon and in
conformity with written information furnished to the Company by or on behalf of
the Initial Purchaser specifically for inclusion therein. This indemnity
agreement will be in addition to any liability which the Company may otherwise
have.
(b) The Initial Purchaser agrees to indemnify and hold harmless the Company, its
directors, its officers, and each person who controls the Company within the
meaning of either the Securities Act or the Exchange Act, to the same extent as
the foregoing indemnity from the Company to the Initial Purchaser, but only with
reference to written information relating to the Initial Purchaser furnished to
the Company by or on behalf of the Initial Purchaser specifically for inclusion
in the Final Memorandum (or in any amendment or supplement thereto). This
indemnity agreement will be in addition to any liability which the Initial
Purchaser may otherwise have. The Company acknowledges that the statements set
forth in the last paragraph of the cover page and under the heading "Plan of
Distribution" in the Final Memorandum constitute the only information furnished
in writing by or on behalf of the Initial Purchaser for inclusion in the Final
Memorandum (or in any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this Section 8 of
notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 8, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party (i) will not relieve the
indemnifying party from liability under paragraph (a) or (b) above unless and to
the extent the indemnifying party did not otherwise learn of such action and
such failure results in the forfeiture by the indemnifying party of substantial
rights and defenses and (ii) 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. The
indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be satisfactory to
the indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, 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.
(d) In the event that the indemnity provided in paragraph (a) or (b) of this
Section 8 is unavailable to or insufficient to hold harmless an indemnified
party for any reason, the Company and the Initial Purchaser agree to contribute
to the aggregate losses, claims, damages and liabilities (including legal or
other expenses reasonably incurred in connection with investigating or defending
same) (collectively "Losses") to which the Company and the Initial Purchaser may
be subject in such proportion as is appropriate to reflect the relative benefits
received by the Company and by the Initial Purchaser from the offering of the
Securities; provided, however, that in no case shall the Initial Purchaser be
responsible for any amount in excess of the purchase discount or commission
applicable to the Securities purchased by the Initial Purchaser hereunder. If
the allocation provided by the immediately preceding sentence is unavailable for
any reason, the Company and the Initial Purchaser shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company and of the Initial Purchaser in connection
with the statements or omissions which resulted in such Losses as well as any
other relevant equitable considerations.
Benefits received by the Company shall be deemed to be equal to the total net
proceeds from the offering (before deducting expenses), and benefits received by
the Initial Purchaser shall be deemed to be equal to the total purchase
discounts and commissions received by the Initial Purchaser from the Company in
connection with the purchase of the Securities hereunder. Relative fault shall
be determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Company or the Initial Purchaser. The
Company and the Initial Purchaser agree that it would not be just and equitable
if contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), 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 Section 8,
each person who controls the Initial Purchaser within the meaning of either the
Securities Act or the Exchange Act and each director, officer, employee and
agent of the Initial Purchaser shall have the same rights to contribution as the
Initial Purchaser, and each person who controls the Company within the meaning
of either the Securities Act or the Exchange Act and each officer and director
of the Company shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions of this paragraph
(d).
9. Intentionally Omitted.
10. Termination. This Agreement shall be subject to termination in the
absolute discretion of the Initial Purchaser, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time (i)
trading in the Company's Common Stock shall have been suspended by the
Commission or the Nasdaq Stock Market's National Market ("Nasdaq") or trading in
securities generally on the New York Stock Exchange or Nasdaq shall have been
suspended or limited or minimum prices shall have been established on the New
York Stock Exchange or Nasdaq, (ii) a banking moratorium shall have been
declared either by federal or New York state authorities or (iii) there shall
have occurred any outbreak or escalation of hostilities, declaration by the
United States of a national emergency or war or other calamity or crisis the
effect of which on financial markets is such as to make it, in the judgment of
the Initial Purchaser, impracticable or inadvisable to proceed with the offering
or delivery of the Securities as contemplated by the Final Memorandum.
11. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company or
its officers and of the Initial Purchaser set forth in or made pursuant to this
Agreement will remain in full force and effect, regardless of any investigation
made by or on behalf of the Initial Purchaser or the Company or any of the
officers, directors or controlling persons referred to in Section 8 hereof, and
will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancellation of this
Agreement.
12. Notices. All communications hereunder will be in writing and effective only
on receipt, and, if sent to the Initial Purchaser, will be mailed, delivered or
telecopied and confirmed to them, care of Salomon Brothers Inc, at Seven World
Trade Center, New York, New York 10048, attention: Legal Department; or, if sent
to the Company, will be mailed, delivered or telecopied and confirmed to it at
000 Xxxxxxxxxxx Xxxxxx, Xxxxx 0000, Xxxxxx, Xxxxxxxx 00000, attention: Xxxxxx X.
Xxxxxxx, Esq.
13. Successors. This Agreement will inure to the benefit of and be binding upon
the parties hereto and their respective successors and the officers and
directors and controlling persons referred to in Section 8 hereof, and, except
as expressly set forth in Section 5(h) hereof, no other person will have any
right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
15. Business Day. For purposes of this Agreement, "business day" means each
Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in The City of New York, New York are authorized or
obligated by law, executive order or regulation to close.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
Agreement and your acceptance shall represent a binding agreement between the
Company and you.
Very truly yours,
QWEST COMMUNICATIONS
INTERNATIONAL INC.
By /s/
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
Salomon Brothers Inc
By: SALOMON BROTHERS INC
By /s/
Name:
Title:
EXHIBIT A
Selling Restrictions for Offers and
Sales outside the United States
(1) (a) 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 under the Securities Act or pursuant to an exemption from the registration
requirements of the Securities Act. The Initial Purchaser represents and agrees
that, except as otherwise permitted by Section 4(a)(i) of the Agreement to which
this is an exhibit, it has offered and sold the Securities, and will offer and
sell the Securities, (i) as part of its distribution at any time and (ii)
otherwise until 40 days after the later of the commencement of the offering and
the Closing Date, only in accordance with Rule 903 of Regulation S under the
Securities Act. Accordingly, the Initial Purchaser represents and agrees that
neither it, nor any of its affiliates nor any person acting on its behalf has
engaged or will engage in any directed selling efforts with respect to the
Securities, and that it has complied and will comply with the offering
restrictions requirement of Regulation S. The Initial Purchaser agrees that, at
or prior to the confirmation of sale of Securities (other than a sale of
Securities pursuant to Section 4(a)(i) of the Agreement to which this is an
exhibit), it shall have sent to each distributor, dealer or person receiving a
selling concession, fee or other remuneration that purchases Securities from it
during the restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under the U.S.
Securities Act of 1933 (the "Securities Act") and may not be offered or sold
within the United States or to, or for the account or benefit of, U.S. persons
(i) as part of their distribution at any time or (ii) otherwise until 40 days
after the later of the commencement of the offering and January 29, 1997, except
in either case in accordance with Regulation S or Rule 144A under the Securities
Act. Terms used above have the meanings given to them by Regulation S."
(b) The Initial Purchaser also represents and agrees that it has not entered and
will not enter into any contractual arrangement with any distributor with
respect to the distribution of the Securities, except with its affiliates or
with the prior written consent of the Company.
(c) Terms used in this section have the meanings given to them by
Regulation S.
(2) The Initial Purchaser represents, warrants and agrees that (i) it has not
offered or sold, and will not offer or sell, any 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 business or 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 Regulation 1995 (the "Regulations"),
(ii) it has complied and will comply with all applicable provisions of the
Financial Services Act 1986 of the United Kingdom and the Regulations 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, to any person in the United Kingdom any
document received by it in connection with the issue of the Securities if that
person is of a kind described in Article 11(3) of the Financial Services Act
1986 (Investment Advertisements) (Exemptions) Order 1995 or is a person to whom
the document may otherwise lawfully be issued or passed on.
