COMMON STOCK PURCHASE AGREEMENT
This COMMON STOCK PURCHASE AGREEMENT (this "Agreement") is made as of
April 19, 1999, by and between BELLSOUTH ENTERPRISES, INC., a Georgia
corporation (the "Purchaser"), and QWEST COMMUNICATIONS INTERNATIONAL INC., a
Delaware corporation (the "Company").
RECITALS
A. The Company desires to sell to the Purchaser, and the Purchaser
desires to purchase from the Company, 20,350,000 shares of the Company's Common
Stock, $0.01 par value per share (the "Common Stock"), on the terms and
conditions set forth in this Agreement.
B. Concurrently herewith, the Purchaser is entering into the Common
Stock Purchase Agreement dated as of April 19, 1999 (the "Other Purchase
Agreement"), by and between the Purchaser and Anschutz Company, a Delaware
corporation (the "Principal Stockholder"), for the purchase of 16,650,000 shares
of Common Stock (the "Other Shares") on the terms and conditions set forth in
the Other Purchase Agreement.
C. Concurrently herewith, the Company and the Purchaser are entering
into a Registration Rights Agreement dated as of even date herewith by and
between the Company and the Purchaser (the "Registration Rights Agreement"), to
provide for the registration under the Securities Act of 1933, as amended (the
"Securities Act"), of the disposition of the shares of Common Stock purchased
under this Agreement and the Other Purchase Agreement pursuant to the terms
thereof.
AGREEMENT
The parties agree as follows:
ARTICLE I
AGREEMENT TO PURCHASE AND SELL COMMON STOCK
1.1 Agreement to Purchase and Sell Common Stock. Upon the terms and subject to
the conditions of this Agreement, the Company hereby agrees to sell to the
Purchaser at the Closing (as defined in Section 2.1), and the Purchaser agrees
to purchase from the Company at the Closing, 20,350,000 newly issued shares
(each, a "Share" and collectively, the "Shares") of Common Stock at $94.50 per
Share for an aggregate purchase price of $1,923,075,000.00 (the "Purchase
Price").
ARTICLE II
CLOSING DATE; DELIVERY
2.1 Closing Date. The Closing of the purchase and sale of the Shares hereunder
(the "Closing") shall be held at the offices of the Company at 10:00 a.m. on the
third business day after the satisfaction or waiver of the conditions set forth
in Articles V and VI, or at
such other time and place as the Company and the Purchaser mutually agree,
and shall be held simultaneously with the closing of the Other Purchase
Agreement (the date of the Closing being hereinafter referred to as the "Closing
Date").
2.2 Delivery. At the Closing, the Company will deliver to the Purchaser a
certificate or certificates representing the Shares against payment of the
aggregate Purchase Price by wire transfer of immediately available funds to an
account designated by the Company. The certificate or certificates representing
the Shares shall be subject to a legend restricting transfer under the
Securities Act and referring to restrictions on transfer herein, such legend to
be substantially as follows:
"The shares represented by this certificate have been acquired
for investment and have not been registered under the Securities Act of
1933, as amended. Such shares may not be sold or transferred in the
absence of such registration or an opinion of counsel reasonably
satisfactory to the Company as to the availability of an exemption from
registration.
The shares represented by this certificate are subject to
restrictions on transfer, including any sale, pledge or other
hypothecation, set forth in an agreement dated as of April 19, 1999,
between the Company and BellSouth Enterprises, Inc., a copy of which
agreement may be obtained at no cost by written request made by the
holder of record of this certificate to the secretary of the Company at
the Company's principal executive offices."
The Company agrees to remove from the Shares (or from the Other Shares,
as the case may be), (1) the legend set forth in the second preceding paragraph
in connection with a transfer pursuant to an effective Registration Statement
(as defined in the Registration Rights Agreement) or upon receipt of an opinion
of counsel in form and substance reasonably satisfactory to the Company that the
Shares are eligible for transfer without registration under the Securities Act
(or, as the case may be, the legend set forth in the corresponding paragraph of
the Other Purchase Agreement in connection with a transfer pursuant to an
effective Registration Statement or upon receipt of an opinion of counsel in
form and substance reasonably satisfactory to the Company and the Seller that
the Other Shares are eligible for transfer without registration under the
Securities Act), and (2) the legend set forth in the immediately preceding
paragraph at such time as the Shares may be transferred in compliance with
Article VII or upon the termination of the covenants of Article VII (or, as the
case may be, the legend set forth in the corresponding paragraph of the Other
Purchase Agreement at such time as the Other Shares may be transferred in
compliance with Article VII hereof or upon the termination of the covenants of
Article VII hereof).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser as follows:
3.1 Corporate Existence and Power. The Company (1) is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Delaware,
(2) has all necessary corporate power and authority and all
material licenses, authorizations, consents and approvals required to own,
lease, license or use its properties now owned, leased, licensed or used and
proposed to be owned, leased, licensed or used and to carry on its business as
now conducted and proposed to be conducted, (3) is duly qualified as a foreign
corporation under the laws of each jurisdiction in which qualification is
required either to own, lease, license or use its properties now owned, leased,
licensed or used or to carry on its business as now conducted, except where the
failure to effect or obtain such qualification, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect
(as defined in Section 8.1) on the Company, and (4) has all necessary corporate
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder.
3.2 Authorization; Contravention.
(a) The execution and delivery by the Company of this Agreement and the
performance by the Company of its obligations under this Agreement, and the
authorization, sale, issuance and delivery of the Shares hereunder, have been
duly authorized by all necessary corporate action and do not and will not
contravene, violate, result in a breach of or constitute a default under, (1)
its certificate of incorporation or bylaws, (2) any regulation of any
Governmental Entity (as defined in Section 8.1) or any decision, ruling, order
or award of any arbitrator by which it or any of its properties may be bound or
affected, or (3) any agreement, indenture or other instrument to which it is a
party or by which it or its properties may be bound or affected, except in each
case referred to in the preceding clauses for contraventions, violations,
breaches or defaults that, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on the Company, or
materially impair or restrict the Company's power to perform its obligations as
contemplated under said agreements. Upon their issuance and delivery pursuant to
this Agreement, the Shares will be validly issued, fully paid and nonassessable
and free and clear of any liens. The issuance and sale of the Shares will not
give rise to any preemptive rights, rights of first refusal or other rights to
acquire Common Stock on behalf of any Person (as defined in Section 8.1).
(b) The Board of Directors of the Company, by resolutions duly adopted at a
meeting duly called and held and not subsequently rescinded or modified in any
way, has duly approved (the "Board Approval") for all purposes, including for
purposes of Section 203 of the Delaware General Corporation Law ("DGCL ss.203"),
(1) this Agreement; (2) the issuance of the Shares to the Purchaser, (3) the
acquisition by the Purchaser of the Shares and the Other Shares, (4) if the
Purchaser shall acquire the Shares pursuant to this Agreement, the acquisition
by the Purchaser of any additional shares (or percentage ownership) of Common
Stock as and to the extent permitted or contemplated under Sections 7.1(a) or
(b) of this Agreement, and (5) the other transactions contemplated hereby.
3.3 SEC Documents. The Company has filed with the Securities and Exchange
Commission (the "SEC") all reports, schedules, forms, statements and other
documents required by the Securities Act or the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), to be filed by the Company since June 27, 1997
(collectively, and in each case including all exhibits and schedules thereto and
documents incorporated by reference therein, the "Company SEC Documents"). As of
their respective dates, except to the extent revised or superseded by a
subsequent filing with the SEC on or before the date of this
Agreement, the Company SEC Documents filed by the Company complied in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and none of the Company SEC Documents (including any
and all financial statements included therein) filed by the Company as of such
dates contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Except as set forth in the Company SEC Documents, neither the
Company nor any of its subsidiaries has any material liabilities or obligations
of any nature (whether accrued, absolute, contingent or otherwise) which would
reasonably be expected to have a Material Adverse Effect on the Company.
3.4 Approvals. In reliance on the representations of the Purchaser contained in
Sections 4.5, 4.7, 4.8 and 4.9, no consent, approval or authorization of or
designation, declaration or filing with any Governmental Entity on the part of
the Company is required in connection with the due execution and delivery of
this Agreement, or the offer, sale or issuance of the Shares (or the sale of the
Other Shares pursuant to the Other Purchase Agreement), except for (a) those
required under the Xxxx-Xxxxx-Xxxxxx Antitrust Improvements Act of 1976, as
amended (the "HSR Act"), (b) such filings as may be required to be made with the
SEC and the National Association of Securities Dealers, Inc. (the "NASD"), and
(c) such filings as may be required to be made with certain state agencies.
3.5 Binding Effect. This Agreement constitutes the legally valid and binding
obligation of the Company enforceable against it in accordance with its terms,
except as may be limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors' rights generally and
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.
3.6 Financial Information. The consolidated balance sheet of the Company and its
consolidated subsidiaries as of December 31, 1998, and the related consolidated
statements of operations and stockholders' equity and cash flows for the fiscal
year then ended, reported on by KPMG Peat Marwick LLP, true and complete copies
of which have been delivered to the Purchaser, comply as to form in all material
respects with applicable accounting requirements and the published rules and
regulations of the SEC with respect thereto, have been prepared in accordance
with U.S. generally accepted accounting principles ("GAAP") applied on a
consistent basis and fairly present the consolidated financial position of the
Company and its consolidated subsidiaries as of that date and their consolidated
results of operations and cash flows for the year then ended.
3.7 Absence of Certain Changes or Events. Except as disclosed in the Company SEC
Documents filed, or as otherwise publicly disclosed, prior to the date hereof,
since December 31, 1998, there has not been (1) any declaration, setting aside
or payment of any dividend or distribution (whether in cash, stock or property)
with respect to any of the Company's capital stock, (2) any split, combination
or reclassification of any of its capital stock or any issuance or the
authorization of any issuance of any other securities in respect of, in lieu of
or in substitution for shares of its capital stock, (3) any damage, destruction
or loss of
property, whether or not covered by insurance, that has or would
reasonably be expected to have a Material Adverse Effect on the Company, (4) any
change in accounting methods, principles or practices by the Company materially
affecting its assets, liabilities, or business, except insofar as may have been
required by a change in GAAP or (5) any event or state of facts that,
individually or in the aggregate, has had or would reasonably be expected to
have a Material Adverse Effect on the Company.
3.8 Litigation.
(a) There is no action, suit or proceeding pending or, to the Company's
knowledge, threatened against the Company or any of its subsidiaries that (1)
impairs (or, if successful, would so impair) in any material respect the ability
of the Company to perform its obligations under this Agreement and the
Registration Rights Agreement (or the ability of the Principal Stockholder to
perform its obligations under the Other Purchase Agreement), or (2) restricts in
any material respect or prohibits (or, if successful, would so restrict or
prohibit) the sale of the Shares to the Purchaser (or the sale of the Other
Shares under the Other Purchase Agreement).
(b) Except as disclosed in the Company SEC Documents filed with the SEC on or
prior to the date hereof, there is no action, suit or proceeding pending or, to
the Company's knowledge, threatened against the Company or any of its
subsidiaries that, individually or in the aggregate, if determined adversely to
any of them, would reasonably be expected to have a Material Adverse Effect on
the Company.
3.9 Capitalization.
(a) As of the date of this Agreement, the authorized capital stock of the
Company consists of 600,000,000 shares of the Common Stock and 25,000,000 shares
of preferred stock, par value $0.01 per share, of the Company (the "Company
Preferred Stock").
(b) As of March 31, 1999, there were (1) 350,735,529 shares of the Common Stock
issued and outstanding, (2) no shares of the Common Stock held in the treasury
of the Company, (3) no shares of the Company Preferred Stock issued and
outstanding, (4) 40,725,059 shares of the Common Stock reserved for issuance
upon exercise of outstanding stock options issued by the Company to current or
former employees and directors of the Company and its subsidiaries, and (5)
10,163,380 shares of the Common Stock reserved for issuance upon exercise of
authorized but unissued stock options.
(c) All outstanding shares of the Common Stock are duly authorized, validly
issued, fully paid and nonassessable, free from any liens created by the Company
with respect to the issuance and delivery thereof and not subject to preemptive
rights.
(d) No Person (other than the Purchaser and the Principal Stockholder) has the
right to cause the Company to register shares of Common Stock on a registration
statement filed pursuant to the Registration Rights Agreement.
3.10 Absence of Certain Agreements. There are no material discussions between
the Company and any Person that, as of the date hereof, would reasonably be
expected
to lead to an agreement within 30 days after the date hereof for (1) a
transaction resulting in a Change of Control, (2) a transaction involving the
Company that would include the acquisition of Beneficial Ownership by a Person
of more than 5% of the outstanding Voting Stock (as defined in Section 8.1), or
(3) the acquisition by the Company of any business for an aggregate purchase
price (including assumption of indebtedness) of at least $1,500,000,000.00.
3.11 No Broker. The Company has not engaged, consented to or authorized any
broker, finder or intermediary to act on its behalf, directly or indirectly, as
a broker, finder or intermediary in connection with the transactions
contemplated by this Agreement. The Company hereby agrees to indemnify and hold
harmless the Purchaser from and against all fees, commissions or other payments
owing to any party acting on behalf of the Company hereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company as follows:
4.1 Corporate Existence and Power. The Purchaser (1) is a corporation duly
incorporated, validly existing and in good standing under the laws of the State
of Georgia, (2) has all necessary corporate power and authority and all material
licenses, authorizations, consents and approvals required to own, lease, license
or use its properties now owned, leased, licensed or used and proposed to be
owned, leased, licensed or used and to carry on its business as now conducted
and proposed to be conducted, (3) is duly qualified as a foreign corporation
under the laws of each jurisdiction in which qualification is required either to
own, lease, license or use its properties now owned, leased, licensed or used or
to carry on its business as now conducted, except where the failure to effect or
obtain such qualification, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect on the Purchaser, and
(4) has all necessary corporate power and authority to execute and deliver this
Agreement and to perform its obligations hereunder.
4.2 Authorization; Contravention. The execution and delivery by the Purchaser of
this Agreement and the performance by the Purchaser of its obligations under
this Agreement, have been duly authorized by all necessary corporate action and
do not and will not contravene, violate, result in a breach of or constitute a
default under, (1) its articles of incorporation or bylaws, or (2) any
regulation of any Governmental Entity or any decision, ruling, order or award of
any arbitrator by which it or any of its properties may be bound or affected,
except in each case referred to in the preceding clauses for contraventions,
violations, breaches or defaults that, individually or in the aggregate, would
not reasonably be expected to have a Material Adverse Effect on the Purchaser.
4.3 Approvals. No consent, approval or authorization of or designation,
declaration or filing with any Governmental Entity on the part of the Purchaser
is required in connection with the due execution and delivery of this Agreement,
or the acquisition of the Shares by Purchaser, except for (a) those required
under the HSR Act, and (b) such filings as may be required to be made with the
SEC.
4.4 Binding Effect. This Agreement constitutes the legally valid and binding
obligation of the Purchaser enforceable against it in accordance with its terms,
except as may be
limited by bankruptcy, insolvency, reorganization, moratorium
or other similar laws relating to or affecting creditors' rights generally and
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.
4.5 Investment. The Purchaser is acquiring the Shares for investment for its own
account, not as a nominee or agent, and not with a view to, or for resale in
connection with, any distribution thereof. The Purchaser understands that the
Shares have not been registered under the Securities Act by reason of a specific
exemption from the registration provisions of the Securities Act which depends
upon, among other things, the bona fide nature of the investment intent and the
accuracy of the Purchaser's representations and warranties contained herein.
4.6 Disclosure of Information. The Purchaser has had full access to all
information it considers necessary or appropriate to make an informed investment
decision with respect to the Shares to be purchased by the Company under this
Agreement. The Purchaser further has had an opportunity to ask questions and
receive answers from the Purchaser regarding the terms and conditions of the
offering of the Shares and to obtain additional information necessary to verify
any information furnished to the Purchaser or to which the Purchaser had access.
4.7 Investment Experience. The Purchaser understands that the purchase of the
Shares involves substantial risk. The Purchaser has experience as an investor in
securities of companies and acknowledges that it is able to fend for itself, can
bear the economic risk of its investment in the Shares and has such knowledge
and experience in financial or business matters that it is capable of evaluating
the merits and risks of this investment in the Shares and protecting its own
interests in connection with this investment.
4.8 Accredited Investor Status. The Purchaser is an "accredited investor"
within the meaning of Regulation D promulgated under the Securities Act.
4.9 Restricted Securities. The Purchaser understands that the Shares to be
purchased by the Purchaser hereunder are characterized as "restricted
securities" under the Securities Act inasmuch as they are being acquired from
the Company in a transaction not involving a public offering and that under the
Securities Act and applicable regulations thereunder such securities may be
resold without registration under the Securities Act only in certain limited
circumstances. The Purchaser is familiar with Rule 144 of the Securities Act, as
presently in effect, and understands the resale limitations imposed thereby and
by the Securities Act.
4.10 Investigation. The Purchaser has conducted its own investigation of the
Company and hereby acknowledges that the only representations and warranties of
the Company in connection with the Purchaser's investment are those expressly
made by the Company in Article III of this Agreement, and the Company hereby
acknowledges that such representations and warranties are unaffected by the
Purchaser's investigation of the Company.
4.11 No Broker. The Purchaser hereby agrees to indemnify and hold harmless the
Company from and against all fees, commissions or other payments owing to any
party acting on behalf of the Purchaser hereunder.
ARTICLE V
CONDITIONS TO OBLIGATION OF THE PURCHASER
The Purchaser's obligation to purchase the Shares at the Closing is
subject to the fulfillment on or prior to the Closing Date of the following
conditions:
5.1 Representations and Warranties. Each of the representations and warranties
of the Company contained in Article III will be true and correct on and as of
the date hereof and (except to the extent such representations and warranties
speak as of a particular date) true and correct in all material respects as of
the Closing Date with the same effect as though such representations and
warranties had been made on and as of the Closing Date; provided, however, that
for purposes of this Section 5.1 only, the representations and warranties
contained in Sections 3.1, 3.3, 3.6, 3.7, 3.8(b) and 3.10 shall be deemed to be
true and correct on and as of the Closing Date unless the failure or failures of
such representations and warranties to be so true and correct (without regard to
materiality qualifiers contained therein), individually or in the aggregate,
results or would reasonably be expected to result in a Material Adverse Effect
on the Company. The Purchaser shall have received a certificate signed by an
officer of the Company to such effect on the Closing Date.
5.2 Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Company on or prior to the Closing Date shall
have been performed or complied with in all material respects. The Purchaser
shall have received a certificate signed by an officer of the Company to such
effect on the Closing Date.
5.3 HSR Act. The waiting period (and any extensions thereof) under the HSR Act
applicable to the transactions contemplated hereby shall have expired or been
terminated.
5.4 No Order Pending. There shall not then be in effect any order
enjoining or restraining the sale and purchase of the Shares.
5.5 No Law Prohibiting or Restricting Sale of the Shares. There shall not be in
effect any law, rule or regulation prohibiting or restricting the sale and
purchase of the Shares, or requiring any consent or approval of any Person which
shall not have been obtained to sell and purchase the Shares, with full benefits
afforded the Common Stock.
5.6 Registration Rights Agreement. The Registration Rights Agreement shall
not have been terminated.
5.7 Other Purchase Agreement. The Purchaser and the Principal Stockholder shall
have consummated the acquisition by the Purchaser of 16,650,000 shares of Common
Stock from the Principal Stockholder pursuant to the terms of the Other Purchase
Agreement (unless such acquisition shall not have been consummated as a result
of a breach by the Purchaser thereunder).
5.8 Master Agreement. The Master Agreement dated April 19, 1999, by and between
the Company and the Purchaser (the "Master Agreement") shall not have been
terminated (or notice of termination provided) in accordance with the terms
thereof.
5.9 Opinion of Counsel. The Purchaser shall have received an opinion dated as of
the Closing Date of O'Melveny & Xxxxx LLP, counsel to the Company, substantially
in the form attached hereto as Exhibit A.
ARTICLE VI
CONDITIONS TO OBLIGATION OF THE COMPANY
The Company's obligation to sell and issue the Shares at the Closing is
subject to the fulfillment on or prior to the Closing Date of the following
conditions:
6.1 Representations and Warranties. The representations and warranties of the
Purchaser contained in Article IV will be true and correct on and as of the date
hereof and (except to the extent such representations and warranties speak as of
a particular date) true and correct in all material respects as of the Closing
Date with the same effect as though such representations and warranties had been
made on and as of the Closing Date; provided, however, that for purposes of this
Section 6.1 only, such representations and warranties shall be deemed to be true
and correct on and as of the Closing Date unless the failure or failures of such
representations and warranties to be so true and correct (without regard to
materiality qualifiers contained therein), individually or in the aggregate,
results or would reasonably be expected to result in a Material Adverse Effect
on the Purchaser. The Company shall have received a certificate signed on behalf
of the Purchaser by an officer of the Purchaser to such effect on the Closing
Date.
6.2 Covenants. All covenants, agreements and conditions contained in this
Agreement to be performed by the Purchaser on or prior to the Closing Date shall
have been performed or complied with in all material respects. The Company shall
have received a certificate signed on behalf of the Purchaser by an officer of
the Purchaser to such effect on the Closing Date.
6.3 HSR Act. The waiting period (and any extensions thereof) under the HSR Act
applicable to the transactions contemplated hereby shall have expired or been
terminated.
6.4 No Order Pending. There shall not then be in effect any order
enjoining or restraining the sale and purchase of the Shares.
6.5 No Law Prohibiting or Restricting the Sale of the Shares. There shall not be
in effect any law, rule or regulation prohibiting or restricting the sale and
purchase of the Shares, or requiring any consent or approval of any Person which
shall not have been obtained to sell and purchase the Shares.
6.6 Registration Rights Agreement. The Registration Rights Agreement
shall not have been terminated.
6.7 Other Purchase Agreement. The Purchaser and the Principal Stockholder shall
have consummated the acquisition by the Purchaser of 16,650,000 shares of Common
Stock from the Principal Stockholder pursuant to the terms of the Other Purchase
Agreement (unless such acquisition shall not have been consummated as a result
of a breach by the Principal Stockholder thereunder).
6.8 Master Agreement. The Master Agreement shall not have been terminated (or
notice of termination provided) in accordance with the terms thereof.
ARTICLE VII
COVENANTS OF THE PURCHASER AND THE COMPANY
7.1 Purchase Restrictions.
(a) Other than pursuant to the transactions contemplated by this Agreement and
the Other Purchase Agreement, the Purchaser shall not, and shall not cause or
permit its Affiliates or any Group (as defined in Section 8.1) including the
Purchaser or any of its Affiliates to, acquire shares of the Common Stock, which
when combined with shares of the Common Stock then owned by the Purchaser and
its subsidiaries would result in the Purchaser Beneficially Owning (as defined
in Section 8.1) more than 20% of the shares of the Common Stock then issued and
outstanding (the "Standstill Cap"), except pursuant to a transaction or series
of transactions at prices and on terms approved by the Board of Directors of the
Company; provided, however, that (1) if the Company or the Principal Stockholder
sells to any Person or Group shares of Common Stock such that, as a result of
such sale such Person or Group would Beneficially Own more than 5% of the shares
of the Common Stock then issued and outstanding and such Person or Group is
subject to an agreement with the Company or the Principal Stockholder
restricting or prohibiting the acquisition of Beneficial Ownership of additional
shares of Common Stock, the Standstill Cap will be increased to that maximum
percentage of shares of Voting Stock the Beneficial Ownership of which such
other Person or Group is permitted to acquire pursuant to such agreement (to the
extent it exceeds the Standstill Cap), and (2) if the Company or the Principal
Stockholder sells to any Person or Group a number of shares of Common Stock such
that, to the actual knowledge of the Company or the Principal Stockholder (as
applicable) at the time of such sale, as a result of such sale such Person or
Group would Beneficially Own more than 10% of the shares of the Common Stock
then issued and outstanding and such Person or Group is not subject to an
agreement with the Company or the Principal Stockholder (as applicable)
restricting or prohibiting the acquisition of Beneficial Ownership of additional
shares of Common Stock, the Standstill Cap will be terminated; provided,
further, that clause (2) of the foregoing proviso shall not apply with respect
to, and the Standstill Cap shall not terminate upon, issuances or sales of
Common Stock (A) in connection with acquisitions by the Company of all the
outstanding equity securities, or all or substantially all the assets, of a
Person in one or more transactions, or (B) to any Person required under Section
13(f) of the Exchange Act to file a Form 13F with respect to the Company or to a
Person who, as a result of such Transfer, would become a Form 13F Filer (a "Form
13F Filer").
(b) Nothing in this Section 7.1 shall require the Purchaser or its
subsidiaries to transfer any shares of Common Stock if the aggregate percentage
ownership of the Purchaser and its subsidiaries is increased as a result of any
action taken by the Company or its subsidiaries
including, without limitation, by reason of any reclassification,
recapitalization, stock split, reverse stock split, combination or exchange of
shares, redemption, repurchase or cancellation of shares or any other similar
transaction.
(c) Notwithstanding the Board Approval as set forth in Section 3.2(b), as a
matter of contract under this Agreement, and not under the provisions of DGCL
ss.203, the Purchaser hereby agrees that if the Closing occurs and the Shares
are acquired by the Purchaser, pursuant to this Agreement, the Purchaser will be
subject to all of the terms and restrictions set forth in DGCL ss.203, and will
be entitled to all of the rights set forth in DGCL ss.203, to the extent
applicable to the Purchaser by the terms of DGCL ss.203, in each case as if the
terms of DGCL ss.203 were set forth in their entirety in this Section 7.1(c);
provided, however, that for purposes hereof, the term "interested stockholder"
as set forth in DGCL ss.203 shall be deemed to refer to "20%" in all cases where
it in fact refers to "15%." The present and future stockholders of the Company
(or any successor corporation) are hereby expressly made third-party
beneficiaries of the provisions of this Section 7.1(c).
(d) In the event that the Company shall adopt a stockholder rights plan with
provisions that are triggered by the acquisition of Beneficial Ownership (or any
similar concept) of a specified percentage of the Company's Common Stock (a
"Trigger Percentage"), the Company agrees that, for purposes of determining
application of the stockholder rights plan to the Purchaser, the plan will be
deemed to refer to "20%" in all cases where it in fact refers to any Trigger
Percentage that is below 20%.
7.2 Sale Restrictions.
(a) The Purchaser shall not, and shall not cause or permit its Affiliates or any
Group including the Purchaser or any of its wholly-owned subsidiaries to
directly or indirectly offer, sell, transfer, assign, exchange, grant an option
to purchase, encumber, pledge, hypothecate or otherwise dispose of the
Beneficial Ownership of shares of Common Stock, whether in one or more
transactions (any such act or series of acts, a "Transfer"), except in
compliance with all applicable requirements of law and upon the receipt of
necessary approvals of any Governmental Entity.
(b) Until the earlier of (x) the second anniversary of the Closing Date, and (y)
60 days after termination of the Master Agreement (other than by reason of
breach thereof by the Purchaser), but in no event earlier than fourteen months
after the Closing Date (such date, the "Sale Restriction Termination Date"), the
Purchaser shall not, and shall not cause or permit its subsidiaries or any Group
including the Purchaser or any of its subsidiaries to, directly or indirectly
Transfer any shares of Common Stock, other than in one or more of the following
transactions: (1) a Transfer pursuant to a tender offer or exchange offer
subject to Section 14 of the Exchange Act (or any successor provision) (an
"Offer") for outstanding shares of Common Stock that the Company has not, within
10 days of the commencement thereof (or such longer period as may then be
permitted under applicable law for the Company's initial recommendation with
respect to such Offer), publicly recommended that such Offer not be accepted;
and (2) any other Transfer which has been approved by the Board of Directors of
the Company.
(c) From and after the Sale Restriction Termination Date, the Purchaser shall
not, and shall not cause or permit its subsidiaries or any Group including the
Purchaser or any of its subsidiaries to directly or indirectly Transfer any
shares of Common Stock to any Person that, to the actual knowledge of the
Purchaser, would result in such Person Beneficially Owning more than 5% of the
shares of Common Stock then issued and outstanding, except (1) pursuant to a
transaction or series of transactions at prices and on terms approved by the
Board of Directors of the Company, (2) pursuant to an underwritten offering, or
(3) to a Form 13F Filer.
(d) From and after the Sale Restriction Termination Date, the Purchaser shall
not, and shall not cause or permit its Affiliates or any Group including the
Purchaser or any of its Affiliates to directly or indirectly Transfer (1) more
than 9,250,000 shares of Common Stock in the aggregate in any calendar quarter,
or (2) in any event, more than 4,625,000 shares of Common Stock in the aggregate
in any calendar month, in each case, except (A) pursuant to a transaction or
series of transactions at prices and on terms approved by the Board of Directors
of the Company, or (B) if such Transfer is pursuant to an underwritten public
offering, the Purchaser, such Affiliate or such Group may Transfer 18,500,000
shares, in the aggregate, less any Shares otherwise Transferred in any calendar
quarter in which the underwritten public offering occurs.
(e) Subject to Section 7.2(a), nothing in this Agreement (including, without
limitation, Section 7.2(d)) shall prevent or restrict the Purchaser and its
Affiliates from Transferring any Shares (1) to and among each other, provided
that any such transferee shall agree in writing to be bound hereby, or (2) to
the Principal Stockholder or its Affiliates.
7.3 Other Restrictions.
(a) Neither the Purchaser nor any of its subsidiaries shall, without the
approval of the Board of Directors of the Company, (1) make any public comment
or proposal with respect to any Acquisition Proposal involving the Company, (2)
become a member of a Group (other than a Group comprised solely of the Purchaser
and its subsidiaries) with respect to the Common Stock or other equity
securities of the Company, (3) solicit proxies or initiate, propose or become a
participant in a solicitation (as such terms are defined in Regulation 14A under
the Exchange Act) with respect to the Company in opposition to any matter which
has been recommended by the Board of Directors of the Company or in favor of any
matter which has not been approved by the Board of Directors of the Company, (4)
enter into any discussions, negotiations, arrangements or understandings with
any third party with respect to any of the foregoing, or (5) disclose to any
third party any intention, plan or arrangement inconsistent with the foregoing.
Notwithstanding the foregoing, the Purchaser or its Affiliates may make an
Acquisition Proposal (as defined in Section 8.1) to the Board of Directors of
the Company which is subject to approval by the Board of Directors of the
Company and which does not require the Company to make a public announcement.
Other than as set forth in the immediately preceding sentence, neither the
Purchaser nor its Affiliates shall, without approval of the Board of Directors,
take any actions with respect to any Acquisition Proposal (including any
Acquisition Proposal made by the Purchaser or its Affiliates) that would require
the Company to make a public announcement.
(b) Notwithstanding anything in this Agreement to the contrary, (1) if the
Company or the Principal Stockholder sells to any Person or Group (other than
the Principal Stockholder or its Affiliates) shares of Common Stock such that,
as a result of such sale such Person or Group would Beneficially own more than
5% of the shares of the Common Stock then issued and outstanding, and such
Person or Group is subject to an agreement with the Company restricting or
prohibiting the actions of such Person or Group in respect of matters similar to
those addressed in Section 7.3(a), the provisions of Section 7.3(a) (and those
of Section 8.4 relating thereto) will be revised to be the same as the
corresponding provisions of such Person's or Group's standstill provision to the
extent that such revisions would cause the Purchaser's standstill provisions to
be less restrictive to the Purchaser, and (2) if the Company or the Principal
Stockholder sells to any Person or Group (other than the Principal Stockholder
or its Affiliates) shares of Common Stock such that, as a result of such sale
such Person or Group would Beneficially own 10% or more of the shares of the
Common Stock then issued and outstanding, and such Person or Group is not
subject to an agreement with the Company restricting or prohibiting the actions
of such Person or Group in respect of matters similar to those addressed in
Section 7.3(a), the provisions of Section 7.3(a) (and those of Section 8.4
relating thereto) will terminate.
(c) The Company shall provide the Purchaser with written notice of the
occurrence of any of the events set forth in the first proviso of Section
7.1(a), or in Section 7.3(b).
7.4 Early Termination. Notwithstanding anything in this Agreement to the
contrary, the obligations that the Purchaser and its Affiliates and
representatives have under Sections 7.1 (other than Section 7.1(c)), 7.2 (other
than Section 7.2(d)) and 7.3 will terminate upon, without further action by any
Person the earliest to occur of (1) the public announcement by or on behalf of
any Person or Group (other than the Purchaser and its Affiliates) of the
commencement of an Offer to acquire Beneficial Ownership of outstanding shares
of Common Stock such that after such acquisition such Person or Group would
Beneficially Own more than 30% of the outstanding shares of Voting Stock, but
only if (A) the Company has not, within 10 days after announcement of such Offer
(or such longer period as may then be permitted under applicable law for the
Company's initial recommendation with respect to such Offer), publicly
recommended that such Offer not be accepted, or (B) all of the material
conditions to such Offer relating to the elimination or satisfaction of the
material defensive provisions established by the Company, including any rights
plan or similar defensive provision of the Company, have been satisfied or
waived; (2) the receipt by the Company of an Acquisition Proposal from any
Person or Group (other than the Purchaser and its Affiliates), but only if the
Company has not, within 10 days after receipt of such Acquisition Proposal,
rejected such Acquisition Proposal; (3) the public announcement by or on behalf
of any Person or Group (other than the Purchaser and its Affiliates) of the
commencement of a bona fide proxy or consent solicitation subject to Section 14
of the Exchange Act (or any successor provision) to elect or remove a majority
of the directors of the Company which is not, within 10 days after the
announcement of such proxy or consent solicitation (or such longer period as may
then be permitted under applicable law for the Company's initial recommendation
with respect to such Offer if such a period is specified) publicly opposed by
the Company's Board of Directors and which would, if successful, result in a
change in the composition of a majority of the Board of Directors of the
Company; (4) the occurrence of a Change of Control (as defined in Section 8.1)
of the Company; (5) the
acceptance or approval by the Company of an Acquisition
Proposal or recommendation by the Company that an Offer be accepted; (6) the
public announcement by the Company that it is "for sale"; (7) the execution of a
definitive agreement with any Person or Group (other than the Principal
Stockholder or its Affiliates) to acquire shares of Common Stock such that, as a
result of such acquisition such Person or Group would Beneficially Own more than
30% of the shares of the Common Stock then issued and outstanding, and (8) the
execution of a definitive agreement with any Person or Group (other than the
Principal Stockholder or its Affiliates) to acquire shares of Common Stock such
that, as a result of such acquisition such Person or Group would Beneficially
Own more than 20% of the shares of Common Stock of the Company and at such time
the Principal Stockholder and its Affiliates Beneficially Own less than 20% of
the shares of Common Stock of the Company. The Company shall provide the
Purchaser with prompt written notice of the occurrence of any of the events set
forth in (i) Section 7.4(1)(B), (ii) the receipt by the Company of an
Acquisition Proposal from any Person or Group (such notice to be provided within
10 days after receipt thereof, but without disclosing the terms thereof or the
identity of such Person or Group), (iii) Section 7.4(4), (iv) Section 7.4(5), or
(v) Section 7.4(6).
7.5 Strategic Sessions; Director.
(a) Prior to the Regulatory Relief Date (as defined in Section 8.1), the
Purchaser shall be entitled to designate, at its option, a representative (the
"Purchaser Representative") to meet (telephonically or otherwise) periodically,
but not less frequently than once every three months, with the Chairman of the
Board, Chief Executive Officer or President of the Company (the "Company
Representative"). The Company shall make the sole determination as to the
identity of the Company Representative and shall give the Purchaser 15 days
notice of who the Company Representative shall be, and the Purchaser
Representative will be an executive of equivalent or higher seniority of
BellSouth Corporation. The Company Representative shall also provide to
Purchaser Representative of all materials delivered to the Company's Board of
Directors (other than those he deems to be inappropriate), and promptly (but in
any event within 3 business days) following any meeting of the Company's Board
of Directors, shall discuss with the Purchaser Representative the general
matters covered in such meeting of the Board of Directors, in each case, subject
to the proviso in the next sentence. At such meeting between the Company
Representative and the Purchaser Representative, the Company Representative will
disclose to the Purchaser Representative in all material respects the substance
of any discussions relating to the strategic plans of the Company that took
place among the Company's Board of Directors at any regular or special meeting
since the date of the last meeting between the Purchaser Representative and the
Company Representative; provided, however, that (1) the Purchaser shall agree to
keep strictly confidential any information relating to the Company that the
Purchaser Representative shall obtain in connection with the foregoing, and
shall (A) not disclose such information, in whole or in part, to any Person
other than the Chairman of the Board, Chief Executive Officer, President,
Executive Vice Presidents, Vice President of Corporate Development or General
Counsel of BellSouth Corporation (the "Key Officials") for any reason
whatsoever, and (B) inform the Purchaser Representative and the Key Officials of
the confidential nature of such information and of applicable securities laws
and other laws in connection therewith (or, subject to Section 7.5(c), at any
time thereafter, in the case of the resignation or removal of the Purchaser
Director); and (2) the Company Representative shall not be obligated to disclose
to the Purchaser Representative (A) sensitive competitive information of the
Company or (B) any other information if doing so could, in the
judgment of the Company Representative, violate any obligation or duty
(whether contractual, statutory, fiduciary or otherwise) to which the Company or
its officers, directors or employees were then subject (including, without
limitation, obligations of confidentiality) or otherwise subject the Company or
any of such Persons to any liability or otherwise materially and adversely
affect the interests of the Company.
(b) After the Regulatory Relief Date (or, subject to Section 7.5(c), at any time
thereafter, in the case of the resignation or removal of the Purchaser
Director), the Purchaser shall be entitled to designate, at its option, one
individual who shall be reasonably satisfactory to the Company at time of
initial designation (the "Purchaser Director"). Promptly following such
designation, the Board of Directors of the Company will take all action
necessary to elect the Purchaser Director as a member of the Board of Directors
of the Company, and thereafter the Company shall continue to nominate the
Purchaser Director, solicit proxies and otherwise encourage his re-election, in
each case to the extent it takes such action with respect to the other
directors, to serve until such time as provided in Section 7.5(c). The Purchaser
Director shall not be entitled to receive (A) sensitive competitive information
of the Company or (B) any other information if doing so could, in the judgment
of the Chairman or Chief Executive Officer of the Company, violate any
obligation or duty (whether contractual, statutory, fiduciary or otherwise) to
which the Company or its officers, directors or employees were then subject
(including, without limitation, obligations of confidentiality) or otherwise
subject the Company or any of such Persons to any liability or otherwise
materially and adversely affect the interests of the Company.
(c) Notwithstanding anything in this Agreement to the contrary, the obligations
that the Company and its Affiliates and representatives have under this Section
7.5 will terminate, without further action by any Person, upon the earliest to
occur of (1) termination of the Master Agreement, and (2) the Transfer by the
Purchaser of more than 9,250,000 shares of Common Stock. At such time, or if
earlier requested to do so by the Chairman of the Board of Directors of the
Company, the Purchaser Director, if any, shall promptly resign his position as a
member of the Company's Board of Directors.
7.6 Company Actions. The Company shall not repurchase Shares of Common Stock,
reorganize its capital structure or take other similar action such that, as a
result of such action, the Purchaser shall Beneficially Own more than 10% of the
Shares of Common Stock then issued and outstanding.
ARTICLE VIII
MISCELLANEOUS
8.1 Certain Definitions. As used in this Agreement:
(a) The term "Acquisition Proposal" shall mean a bona fide written proposal
received by the Company from any Person or Group that contemplates a transaction
which, if effected, would constitute a Change of Control of the Company.
(b) The term "Affiliate" shall have the meaning given such term in Rule 12b-2
under the Exchange Act.
(c) The terms "Beneficial Ownership" and "Beneficial Owner" shall have the
meanings given such terms in Section 13(d)(3) of the Exchange Act and the rules
and regulations promulgated thereunder.
(d) The term "Change of Control" shall mean (1) an acquisition of, or the
entering into of a definitive agreement with the Company to acquire, Voting
Stock by a Person or Group (other than the Principal Stockholder or its
Affiliates) in a purchase or transaction or series of purchases or transactions
if immediately thereafter such Person or Group has, or would have, Beneficial
Ownership of more than 50% of the combined voting power of the Company's then
outstanding Voting Stock; (2) the execution of an agreement providing for a
tender offer, merger, consolidation or reorganization, or series of such related
transactions involving the Company, unless both (x) the stockholders of the
Company, immediately after such transaction or transactions shall Beneficially
Own at least 50% of the Voting Stock of the Company (or, if the Company shall
not be the surviving company in such merger, consolidation or reorganization,
such surviving company), and (y) the Company is not subject to an agreement that
contemplates that individuals who are then directors of the Company (or
individuals designated by the Company at or before the closing of such
transaction) shall constitute less than a majority of the directors of the
Company (or such surviving company, as the case may be) after the closing of
such transaction; (3) a change or changes in the membership of the Company's
Board of Directors which represent a change of a majority or more of such
membership during any twelve month period (unless such change or changes in
membership are caused by the actions of the then existing Board of Directors and
do not occur within twelve months of the commencement, threat or proposal of an
Election Contest (as such term is defined in Rule 14a-11 of Regulation 14A under
the Exchange Act), tender offer or other transaction which would constitute a
Change of Control under (1) or (2) of this Section 8.1(b)); (4) a sale of all or
substantially all of the Company's assets; or (5) an Insolvency Proceeding (as
defined in Section 8.1).
(e) The term "Governmental Entity" shall mean any agency, bureau, commission,
court, department, official, political subdivision, tribunal or other
instrumentality of any government, whether federal, state, county or local,
domestic or foreign.
(f) The term "Group" shall have the meaning given such term in Section 13(d)(3)
of the Exchange Act and the rules and regulations promulgated thereunder.
(g) The term "Insolvency Proceeding" shall mean (1) an assignment for the
benefit of creditors, (2) the filing by the Company of a petition to have the
Company adjudged insolvent, bankrupt or seeking a reorganization or liquidation
under any law relating to bankruptcy, insolvency or receivership, (3) an
appointment of a receiver or trustee for all or substantially all of the assets
of the Company unless appointed without the Company's consent, in which case if
after 60 days such appointment has not been vacated or stayed, (4) a public
admission in writing of the Company's inability to pay its debts as they come
due, or (5) the adoption of a plan of liquidation or dissolution by the Board of
Directors of the Company.
(h) The term "Material Adverse Effect" shall mean, with respect to any Person, a
material adverse effect on the business, properties, operations, or condition
(financial or otherwise) of such Person (and its subsidiaries), taken as a
whole.
(i) The term "Person" shall mean any person, individual, corporation,
partnership, trust or other non-governmental entity or any governmental agency,
court, authority or other body (whether foreign, federal, state, local or
otherwise).
(j) The term "Regulatory Relief Date" shall mean the date on which the Purchaser
and the Company mutually agree that the Purchaser and/or one or more of its
Affiliates have obtained all necessary federal and state regulatory approvals to
provide originating landline, interLATA long-distance service (and currently
prohibited terminating services) in five states (including either Florida or
Georgia) pursuant to the Communications Act of 1934, as amended by the
Telecommunications Act of 1996.
(k) The term "Voting Stock" shall mean (1) the Common Stock and any other
securities issued by the Company having the ordinary power to vote in the
election of directors of the Company (other than securities having such power
only upon the happening of a contingency), and (2) the common stock and any
other securities issued by any successor to the Company pursuant to a merger,
consolidation or reorganization having the ordinary power to vote in the
election of directors of such successor company (other than securities having
such power only upon the happening of a contingency).
(l) As used herein, any references to specified numbers (but not percentages) of
Shares or of Common Stock shall be deemed to be references to such number of
Shares or of Common Stock as may be adjusted in the event of any change in the
capital stock of the Company by reason of stock dividends, split-ups, reverse
split-ups, mergers, recapitalizations, subdivisions, conversions, exchanges of
shares or the like occurring after the date of this Agreement.
8.2 Further Assurances.
(a) Each of the Company and the Purchaser shall use its commercially reasonable
efforts to take all actions required under any law, rule or regulation to ensure
that the conditions to the Closing set forth herein are satisfied on or before
the Closing Date.
(b) In furtherance and not in limitation of the foregoing, each of the Company
and the Purchaser hereby agrees to make an appropriate filing of a Notification
and Report Form pursuant to the HSR Act with respect to the transactions
contemplated hereby and by the Other Purchase Agreement as promptly as
practicable after the date hereof (but in no event later than five business days
after the date hereof) or (y) if later, five business days after the receipt by
the Purchaser of all information from the Company reasonably necessary for the
Purchaser's preparation of such filing) and to supply as promptly as practicable
any additional information and documentary material that may be requested
pursuant to the HSR Act and to use commercially reasonably efforts to cause the
expiration or early termination of the applicable waiting periods under the HSR
Act as soon as practicable. Nothing in this Section 8.2 shall require any of the
Company and its Affiliates or the Purchaser and its Affiliates to sell or
otherwise dispose of, or permit the sale or other disposition of, any assets,
whether as a condition to obtaining any approval from a Governmental Entity or
any other Person for any other reason. In addition to any other remedies
available to the Company, if the Notification and Report Form is not filed
within the period specified in the first sentence of this Section 8.2(b)
for any reason other than a delay by the Company, the Company may, within 5
business days after the date of such filing and by written notice to the
Purchaser, extend the Termination Date (as defined in Section 8.10) for such
number of days beyond the period specified above that the filing was delayed.
(c) Each of the Company and the Purchaser shall, in connection with the efforts
referenced in Section 8.2(a), use commercially reasonable efforts to obtain all
requisite approvals and authorizations for the sale and purchase of the Shares
under the HSR Act or any other law, rule, regulation, order or decree
(collectively, the "Laws"). In furtherance and not in limitation of the
foregoing, each of the Company and the Purchaser shall (1) cooperate in all
respects with each other in connection with any filing or submission and in
connection with any investigation or other inquiry, including any proceeding
initiated by a private party, (2) promptly inform the other party of any
communication received by such party from, or given by such party to any
Governmental Entity and of any material communication received or given in
connection with any proceeding by a private party, in each case regarding any of
the transactions contemplated hereby, and (3) permit the other party to review
any communication given by it to, and consult with each other in advance of any
meeting or conference with, any Governmental Entity or, in connection with any
proceeding by a private party, with any other Person, and to the extent
permitted by the Governmental Entity or other Person, give the other party the
opportunity to attend and participate in such meetings and conferences.
(d) In furtherance and not in limitation of the covenants of the parties
contained in Sections 8.2(a), (b) and (c), if any administrative or judicial
action or proceeding, including any proceeding by a private party, is instituted
(or threatened to be instituted) challenging the purchase of the Shares
contemplated by this Agreement as violative of any Law, each of the Company and
the Purchaser shall cooperate in all respects with each other and use
commercially reasonable efforts to contest and resist any such action or
proceeding and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by this Agreement. Notwithstanding
the foregoing or any other provision of this Agreement, nothing in this Section
8.2 shall limit a party's right to terminate this Agreement pursuant to Section
8.10, so long as such party has complied with this Section 8.2.
(e) If any objections are asserted with respect to the transactions contemplated
hereby under any Law or if any suit is instituted by any Governmental Entity or
any private party challenging the purchase of the Shares contemplated hereby as
violative of any Law, each of the Company and the Purchaser shall use
commercially reasonable efforts to resolve any such objections or challenge as
such Governmental Entity or private party may have to such transactions under
such Law so as to permit consummation of the transactions contemplated by this
Agreement.
8.3 Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York, without regard to principles
of conflicts of law.
8.4 Survival; Termination of Covenants. The representations and warranties in
Articles III and IV of this Agreement shall survive until 30 days following the
filing by the Company with the SEC of its first annual report on Form 10-K after
the date hereof, except for the representations and warranties in Sections 3.5,
3.9 and 3.11, and in Sections 4.4 through 4.11 hereof, which shall continue to
survive. The covenants and agreements of the Purchaser under (a) Sections 7.1
(other than in 7.1(c)) and 7.3 hereof shall terminate on the second anniversary
of the Closing Date, and (b) Section 7.2 hereof that by their terms survive the
Sale Restriction Termination Date shall terminate on the fifth anniversary of
the Closing Date, in each case subject to earlier termination thereof as set
forth in Section 7.4. The covenants and agreements of the Company in Section 7.6
shall terminate on the earlier of the fifth anniversary of the date hereof and
the date on which the Purchaser shall have Transferred all the Shares.
8.5 Successors and Assigns. This Agreement shall be binding upon and shall inure
to the benefit of the parties hereto and their respective successors and
permitted assigns. Neither party may assign this Agreement or any of its rights
or obligations hereunder to any Person without the prior written consent of the
other party; provided that the Purchaser may assign its rights and obligations
hereunder to any of BellSouth Corporation and its direct or indirect,
wholly-owned subsidiaries.
8.6 Amendments; Etc. No amendment, modification, termination, or waiver of any
provision of this Agreement, and no consent to any departure by a party to this
Agreement from any provision of this Agreement, shall be effective unless it
shall be in writing and signed and delivered by the other party to this
Agreement, and then it shall be effective only in the specific instance and for
the specific purpose for which it is given.
8.7 Entire Agreement. This Agreement and the Registration Rights Agreement
embody the entire agreement and understanding of the parties and supersede all
prior agreements or understandings with respect to the subject matter thereof.
8.8 Notices. All notices, requests and other communications to any party under
this Agreement shall be in writing. Communications may be made by telecopy or
similar writing. Each communication shall be given to the party at its address
set forth below or at any other address as the party may specify for this
purpose by notice to the other party. Each communication shall be effective (1)
if given by telecopy, when the telecopy is transmitted to the proper address and
the receipt of the transmission is confirmed, (2) if given by mail, 72 hours
after the communication is deposited in the mails properly addressed with first
class postage prepaid or (3) if given by any other means, when delivered to the
proper address and a written acknowledgement of delivery is received.
(a) If to the Company, to:
Qwest Communications International Inc.
000 Xxxxx Xxxxx
000 Xxxxxxxxxxx Xxxxxx
Xxxxxx, Xxxxxxxx 00000
Facsimile Number: (000) 000-0000
Attention: Chief Financial Officer
with a copy addressed as set forth above but to the
attention of General Counsel, Facsimile
Number: (000) 000-0000
and with an additional copy to:
Xxxxxx X. Xxxxxxxx
O'Melveny & Xxxxx LLP
0000 Xxxxxx xx xxx Xxxxx, Xxxxx 000
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Facsimile Number: (000) 000-0000
(b) If to the Purchaser, to:
BellSouth Enterprises, Inc.
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxx 0000
Xxxxxxx, Xxxxxxx 00000-0000
Facsimile Number: (000) 000-0000
Attention: Xxxxx X. Xxxxx
and with additional copies to:
BellSouth Corporation
0000 Xxxxxxxxx Xxxxxx, X.X.
Xxxxxxx, Xxxxxxx 00000-0000
Facsimile Number: (000) 000-0000
Attention: E. Xxxx Xxxxxxxx
Fried, Frank, Harris, Xxxxxxx & Xxxxxxxx
Xxx Xxx Xxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Facsimile Number: (000) 000-0000
Attention: Xxxx X. Xxxxxxxxx
8.9 Fees, Costs and Expenses. All fees, costs and expenses (including attorneys'
fees and expenses) incurred by either party hereto in connection with the
preparation, negotiation and execution of this Agreement and the consummation of
the transactions contemplated hereby, shall be the sole and exclusive
responsibility of such party; provided, however, that the Purchaser shall pay
the filing fee for the Notification and Report Form pursuant to the HSR Act.
8.10 Termination.
(a) This Agreement may be terminated at any time prior to the Closing Date:
(1) by mutual written consent of the Company and the Purchaser;
(2) by either the Company or the Purchaser if the other materially
breaches this Agreement and such breach remains uncured for 30
days after receipt by the breaching party of written notice
thereof;
(3) by either the Company or the Purchaser if the Closing Date shall not have
occurred on or before the date that is 120 days after the date of this
Agreement (the "Termination Date"), unless prior to the Termination Date
any party reasonably determines that it is substantially unlikely that the
conditions to such party's obligations will be fulfilled by the Termination
Date and delivers to the other party a notice to such effect, in which case
this Agreement will terminate within ten days after receipt of such notice
by the other party. The right to terminate this Agreement under this
Section 8.10(a)(3) shall be not available to any party whose failure to
fulfill any obligation under this Agreement has been the cause of, or
resulted in, the failure of any condition to be satisfied.
(b) In the event of termination of this Agreement by either the Company or the
Purchaser as provided in this Section 8.10, this Agreement shall forthwith
become null and void and there shall be no liability or obligation on the part
of the Company or the Purchaser except with respect to Sections 3.11, 4.11 and
8.9 and this Section 8.10(b); provided, however, that in the case of termination
as provided in Section 8.10(a)(2), the breaching party shall not be absolved
from any liability with respect to breach of this Agreement.
8.11 Severability of Provisions. Any provision of this Agreement that is
prohibited or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of the prohibition or unenforceability without
invalidating the remaining provisions of this Agreement or affecting the
validity or enforceability of the provision in any other jurisdiction.
8.12 Publicity. The Company and the Purchaser shall agree on the form and
content of the initial public announcement which shall be made concerning this
Agreement and the transactions contemplated hereby, and neither the Company nor
the Purchaser shall make such public announcement without the consent of the
other, except as required by law.
8.13 Headings and References. Section headings in this Agreement are included
for the convenience of reference only and do not constitute a part of this
Agreement for any other purpose. References to parties, express beneficiaries
and sections in this Agreement are references to the parties to or the express
beneficiaries and sections of this Agreement, as the case may be, unless the
context shall require otherwise.
8.14 Counterparts; Effectiveness. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if all
signatures were on the same instrument.
8.15 Exclusive Jurisdiction. Each party (1) agrees that any action, complaint,
counterclaim, investigation, petition, suit or other proceeding, whether civil
or criminal, in law or in equity, or before any arbitrator, court or
Governmental Entity (each, an "Action"), with respect to this Agreement or any
transaction contemplated by this Agreement shall be brought exclusively in the
courts of the State of New York or of the United States of America for the
Southern District of New York, in each case sitting in the Borough of Manhattan,
State of New York, (2) accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of those courts and (3)
irrevocably waives any objection, including, without limitation, any objection
to the laying of venue or based on the grounds of forum non conveniens, which it
may now or hereafter have to the bringing of any legal action in those
jurisdictions; provided, however, that any party may assert in an Action in any
other jurisdiction or venue each mandatory defense, third-party claim or similar
claim that, if not so asserted in such Action, may thereafter not be asserted by
such party in an original Action in the courts referred to in clause (1) above.
8.16 Waiver of Jury Trial. Each party waives any right to a trial by jury in any
Action to enforce or defend any right under this Agreement or any amendment,
instrument, document or agreement delivered, or which in the future may be
delivered, in connection with this Agreement and agrees that any Action shall be
tried before a court and not before a jury.
8.17 Non-Recourse. No recourse under this Agreement shall be had against any
"controlling person" (within the meaning of Section 20 of the Exchange Act) of
any party or the stockholders, directors, officers, employees, agents and
Affiliates of such party or such controlling persons, whether by the enforcement
of any assessment or by any legal or equitable proceeding, or by virtue of any
Regulation, it being expressly agreed and acknowledged that no personal
liability whatsoever shall attach to, be imposed on or otherwise be incurred by
such controlling person, stockholder, director, officer, employee, agent or
Affiliate, as such, for any obligations of such party under this Agreement or
for any claim based on, in respect of or by reason of such obligations or their
creation; provided, however, that nothing contained in this Section 8.17 shall
be deemed to be a waiver by the Company or any such controlling person,
stockholder, director, officer, employee, agent or Affiliate of the Company of
their respective liabilities under applicable federal or state securities laws,
rules or regulations.
[Remainder of Page Intentionally Left Blank]
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
BELLSOUTH ENTERPRISES, INC.
By: /s/ Xxxxx X. Xxxxx
Name: Xxxxx X. Xxxxx
Title: Authorized Signatory
QWEST COMMUNICATIONS INTERNATIONAL INC.
By: /s/ Drake S. Tempest
Drake S. Tempest
Executive Vice President and
General Counsel
S-1
Exhibit A
Form of Opinion of Counsel to the Company
April ___, 1999
[VOLCANO]
Attention:
Ladies and Gentlemen:
We have acted as counsel to Qwest Communications International Inc., a
Delaware corporation (the "Company"), in connection with the Common Stock
Purchase Agreement dated as of April ___, 1999, by and between [Volcano], a
__________ corporation ("[Volcano]") and the Company (the "Purchase Agreement").
We are providing this opinion to you at the request of the Company pursuant to
Section 5.9 of the Purchase Agreement.
In our capacity as such counsel, we have examined originals or copies
of those corporate and other records and documents we considered appropriate.
As to relevant factual matters, we have relied upon, among other
things, the Company's factual representations in an Officer's Certificate dated
April ___, 1999, a copy of which has been delivered to you. In addition, we have
obtained and relied upon those certificates of public officials we considered
appropriate.
We have assumed the genuineness of all signatures, the authenticity of
all documents submitted to us as originals and the conformity with originals of
all documents submitted to us as copies.
On the basis of such examination, our reliance upon the assumptions in
this opinion and our consideration of those questions of law we considered
relevant, and subject to the limitations and qualifications in this opinion, we
are of the opinion that the Shares have been duly authorized by all necessary
corporate action on the part of the Company and, upon payment for and delivery
of the Shares in accordance with the Purchase Agreement and the countersigning
of the certificate or certificates representing the Shares by a duly authorized
signatory of the registrar for the Common Stock, the Shares will be validly
issued, fully paid and non-assessable.
The law covered by this opinion is limited to the present Delaware
General Corporation Law. We express no opinion as to the laws of any other
jurisdiction and no opinion regarding the statutes, administrative decisions,
rules, regulations or requirements of any county, municipality, subdivision or
local authority of any jurisdiction.
This opinion is furnished by us as counsel for the Company and may be
relied upon by you only in connection with the consummation of the transactions
contemplated by the Purchase Agreement. It may not be used or relied upon by you
for any other purpose or by any other person, nor may copies be delivered to any
other person, without in each instance our prior written consent. This opinion
is expressly limited to the matters set forth above and we render no opinion,
whether by implication or otherwise, as to any other matters. We assume no
obligation to update or supplement this opinion to reflect any facts or
circumstances which may hereafter come to our attention, or any changes in laws
which may hereafter occur.
Respectfully submitted,
COMMON STOCK PURCHASE AGREEMENT
by and between
QWEST COMMUNICATIONS INTERNATIONAL INC.
and
BELLSOUTH ENTERPRISES, INC.
Dated as of April 19, 1999
TABLE OF CONTENTS
Page
ARTICLE I
AGREEMENT TO PURCHASE AND SELL COMMON STOCK
1.1 Agreement to Purchase and Sell Common Stock.......................1
ARTICLE II
CLOSING DATE; DELIVERY
2.1 Closing Date......................................................1
2.2 Delivery..........................................................2
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.1 Corporate Existence and Power.....................................2
3.2 Authorization; Contravention......................................3
3.3 SEC Documents.....................................................3
3.4 Approvals.........................................................4
3.5 Binding Effect....................................................4
3.6 Financial Information.............................................4
3.7 Absence of Certain Changes or Events..............................4
3.8 Litigation........................................................5
3.9 Capitalization....................................................5
3.10 Absence of Certain Agreements.....................................5
3.11 No Broker.........................................................6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
4.1 Corporate Existence and Power.....................................6
4.2 Authorization; Contravention......................................6
4.3 Approvals.........................................................6
4.4 Binding Effect....................................................6
4.5 Investment........................................................7
4.6 Disclosure of Information.........................................7
4.7 Investment Experience.............................................7
4.8 Accredited Investor Status........................................7
4.9 Restricted Securities.............................................7
4.10 Investigation.....................................................7
4.11 No Broker.........................................................8
TABLE OF CONTENTS
(continued)
Page
ARTICLE V
CONDITIONS TO OBLIGATION OF THE PURCHASER
5.1 Representations and Warranties....................................8
5.2 Covenants.........................................................8
5.3 HSR Act...........................................................8
5.4 No Order Pending..................................................8
5.5 No Law Prohibiting or Restricting Sale of the Shares..............8
5.6 Registration Rights Agreement.....................................8
5.7 Other Purchase Agreement..........................................8
5.8 Master Agreement..................................................9
5.9 Opinion of Counsel................................................9
ARTICLE VI
CONDITIONS TO OBLIGATION OF THE COMPANY
6.1 Representations and Warranties....................................9
6.2 Covenants.........................................................9
6.3 HSR Act...........................................................9
6.4 No Order Pending..................................................9
6.5 No Law Prohibiting or Restricting the Sale of the Shares..........9
6.6 Registration Rights Agreement.....................................9
6.7 Other Purchase Agreement.........................................10
6.8 Master Agreement.................................................10
ARTICLE VII
COVENANTS OF THE PURCHASER AND THE COMPANY
7.1 Purchase Restrictions............................................10
7.2 Sale Restrictions................................................11
7.3 Other Restrictions...............................................12
7.4 Early Termination................................................13
7.5 Strategic Sessions; Director.....................................14
7.6 Company Actions..................................................15
ARTICLE VIII
MISCELLANEOUS
8.1 Certain Definitions..............................................15
8.2 Further Assurances...............................................17
TABLE OF CONTENTS
(continued)
Page
8.3 Governing Law....................................................18
8.4 Survival; Termination of Covenants...............................19
8.5 Successors and Assigns...........................................19
8.6 Amendments; Etc..................................................19
8.7 Entire Agreement.................................................19
8.8 Notices..........................................................19
8.9 Fees, Costs and Expenses.........................................20
8.10 Termination......................................................20
8.11 Severability of Provisions.......................................21
8.12 Publicity........................................................21
8.13 Headings and References..........................................21
8.14 Counterparts; Effectiveness......................................21
8.15 Exclusive Jurisdiction...........................................21
8.16 Waiver of Jury Trial.............................................22
8.17 Non-Recourse.....................................................22
