1
EXHIBIT 4.1
$450,000,000
IXC COMMUNICATIONS, INC.
9% SENIOR SUBORDINATED NOTES DUE 2008
PURCHASE AGREEMENT
April 16, 1998
Credit Suisse First Boston Corporation
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxx Xxxxxxx & Co. Incorporated
Nationsbanc Xxxxxxxxxx Securities LLC,
c/o Credit Suisse First Boston Corporation,
Eleven Madison Avenue,
New York, N.Y. 10010-3629
Dear Sirs:
1. Introductory. IXC Communications, Inc., a Delaware corporation (the
"Company"), proposes, subject to the terms and conditions stated herein, to
issue and sell to the several initial purchasers named in Schedule A hereto (the
"Purchasers") $450,000,000 principal amount of its 9% Senior Subordinated Notes
Due 2008 ("Offered Securities") to be issued under an indenture, dated as of
April 21, 1998 (the "Indenture"), between the Company and IBJ Xxxxxxxx Bank &
Trust Company, as Trustee (the "Trustee"). The United States Securities Act of
1933 is herein referred to as the "Securities Act."
The Company hereby agrees with the several Purchasers as follows:
2. Representations and Warranties of the Company. The Company represents
and warrants to, and agrees with, the several Purchasers that:
(a) A preliminary offering circular and an offering circular
relating to the Offered Securities to be offered by the Purchasers have
been prepared by the Company. Such preliminary offering circular and
offering circular, as supplemented as of the date of this Agreement,
together with any other document approved by the Company for use in
connection with the contemplated resale of the Offered Securities are
hereinafter collectively referred to as the "Offering Document". On the
date of this Agreement, the Offering Document does not
2
include any untrue statement of a material fact or omit to state any
material fact necessary in order to make the statements therein, in the
light of the circumstances under which they were made, not misleading.
The preceding sentence does not apply to statements in or omissions from
the Offering Document based upon written information furnished to the
Company by any Purchaser through Credit Suisse First Boston Corporation
("CSFBC") specifically for use therein, it being understood and agreed
that the only such information is that described as such in Section
7(b). Except as disclosed in the Offering Document, on the date of this
Agreement, the Company's Annual Report on Form 10-K most recently filed
with the Securities and Exchange Commission (the "Commission") and all
subsequent reports (collectively, the "Exchange Act Reports") which have
been filed by the Company with the Commission or sent to stockholders
pursuant to the Securities Exchange Act of 1934 (the "Exchange Act") do
not 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, except for
forward-looking statements contained in the liquidity and capital
resources discussions in such Exchange Act Reports that have been
superseded by the Offering Document. Such documents, when they were
filed with the Commission, conformed in all material respects to the
requirements of the Exchange Act and the rules and regulations of the
Commission thereunder.
(b) The Company has been duly incorporated and is an existing
corporation in good standing under the laws of the State of Delaware,
with power and authority (corporate and other) to own its properties and
conduct its business as described in the Offering Document; and the
Company is duly qualified to do business as a foreign corporation in
good standing in all other jurisdictions in which its ownership or lease
of property or the conduct of its business requires such qualification
except to the extent the failure to be so qualified would not have a
material adverse effect on the condition (financial or other), business,
properties or results of operations of the Company and its subsidiaries
taken as a whole (a "Material Adverse Effect").
(c) Each subsidiary of the Company has been duly incorporated and
is an existing corporation in good standing under the laws of the
jurisdiction of its incorporation, with power and authority (corporate
and governmental) to own its properties and conduct its business as
described in the Offering Document; and each subsidiary of the Company
is duly qualified to do business as a foreign corporation in good
standing in all other jurisdictions in which its ownership or lease of
property or the conduct of its business requires such qualification
except to the extent the failure to be so qualified would not have a
Material Adverse Effect; all of the issued and outstanding capital stock
of each subsidiary of the Company has been duly authorized and validly
issued and is fully paid and nonassessable and the capital stock (or
similar ownership interests) of each subsidiary owned by the Company,
directly or through subsidiaries, is owned free
3
from liens, encumbrances and defects except for directors' qualifying
shares. For purposes of this clause (c), PSI Net Inc., Progress
International L.L.C. and Marca-Tel X. Xxx C.V. shall not be deemed to be
subsidiaries of the Company.
(d) The Indenture has been duly authorized; the Offered
Securities have been duly authorized; and when the Offered Securities
are delivered and paid for pursuant to this Agreement on the Closing
Date (as defined below), the Indenture will have been duly executed and
delivered, such Offered Securities will have been duly executed,
authenticated, issued and delivered and will conform to the description
thereof contained in the Offering Document and the Indenture and such
Offered Securities will constitute valid and legally binding obligations
of the Company, enforceable in accordance with their terms.
(e) Except as disclosed in the Offering Document, there are no
contracts, agreements or understandings between the Company and any
person that would give rise to a valid claim against the Company or any
Purchaser for a brokerage commission, finder's fee or other like payment
in connection with the transactions contemplated by this Agreement.
(f ) No consent, approval, authorization, or order of, or filing
with, any governmental agency or body or any court is required for the
consummation of the transactions contemplated by this Agreement in
connection with the issuance and sale of the Offered Securities by the
Company other than as may be required under the Securities Act and the
Rules and Regulations of the Commission thereunder with respect to the
Registration Rights Agreement (as defined) and the transactions
contemplated thereunder, and such as may be required by securities or
blue sky laws of any state of the United States or of any foreign
jurisdiction in connection with the offer and sale of the Offered
Securities.
(g ) The execution, delivery and performance of the Indenture,
the Registration Rights Agreement and this Agreement, and the issuance
and sale of the Offered Securities and compliance with the terms and
provisions thereof will not result in a breach or violation of any of
the terms and provisions of, or constitute a default under, any statute,
rule, regulation or order of any governmental agency or body or any
court, domestic or foreign, having jurisdiction over the Company or any
subsidiary of the Company or any of their properties, or any agreement
or instrument listed as an exhibit to or filed with any subsequent
reports filed by the Company under the Exchange Act through April 15,
1998 to which the Company or any such subsidiary is a party or by which
the Company or any such subsidiary is bound or to which any of the
properties of the Company or any such subsidiary is subject, or the
charter or by-laws of the Company or any such subsidiary, and the
Company has full corporate power and authority to authorize, issue and
sell the Offered Securities as contemplated by this Agreement.
4
(h) The Registration Rights Agreement has been duly authorized by
the Company and, when executed and delivered, will conform in all
material respects to the description thereof contained in the Offering
Document. The Registration Rights Agreement when validly executed and
delivered by the Company will constitute a valid and binding obligation
of the Company and will be enforceable against it in accordance with its
terms, except as the right to indemnity and contribution may be limited
by state or federal securities laws or the public policy underlying such
laws.
(i ) This Agreement has been duly authorized, executed and
delivered by the Company.
(j) Except as disclosed in the Offering Document, the Company and
its subsidiaries have good and marketable title to all real properties
and all other properties and assets owned by them, in each case free
from liens, encumbrances and defects that would materially affect the
value thereof or materially interfere with the use made or to be made
thereof by them; and except as disclosed in the Offering Document, the
Company and its subsidiaries hold any leased real or personal property
under valid and enforceable leases with no exceptions that would
materially interfere with the use made or to be made thereof by them.
(k) The Company and its subsidiaries possess adequate
certificates, authorities or permits issued by appropriate governmental
agencies or bodies necessary to conduct the business now operated by
them except for such certificates, authorities or permits where the lack
thereof would not have a Material Adverse Effect, and have not received
any notice of proceedings relating to the revocation or modification of
any such certificate, authority or permit that, if determined adversely
to the Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect.
(l) No labor dispute with the employees of the Company or any
subsidiary exists or, to the knowledge of the Company, is imminent that
might have a Material Adverse Effect.
(m) The Company and its subsidiaries own, possess or can acquire
on reasonable terms, adequate trademarks, trade names and other rights
to inventions, know-how, patents, copyrights, confidential information
and other intellectual property (collectively, "intellectual property
rights") necessary to conduct the business now operated by them, or
presently employed by them, and have not received any notice of
infringement of or conflict with asserted rights of others with respect
to any intellectual property rights that, if determined adversely to the
5
Company or any of its subsidiaries, would individually or in the
aggregate have a Material Adverse Effect.
(n) Except as disclosed in the Offering Document, neither the
Company nor any of its subsidiaries is in violation of any statute, any
rule, regulation, decision or order of any governmental agency or body
or any court, domestic or foreign, relating to the use, disposal or
release of hazardous or toxic substances or relating to the protection
or restoration of the environment or human exposure to hazardous or
toxic substances (collectively, "environmental laws"), owns or operates
any real property contaminated with any substance that is subject to any
environmental laws, is liable for any off-site disposal or contamination
pursuant to any environmental laws, or is subject to any claim relating
to any environmental laws, which violation, contamination, liability or
claim would individually or in the aggregate have a Material Adverse
Effect; and the Company is not aware of any pending investigation which
might lead to such a claim.
(o) Except as disclosed in the Offering Document, there are no
pending actions, suits or proceedings against or affecting the Company,
any of its subsidiaries or any of their respective properties that, if
determined adversely to the Company or any of its subsidiaries, would
individually or in the aggregate have a Material Adverse Effect or would
materially and adversely affect the ability of the Company to perform
its obligations under the Indenture, the Registration Rights Agreement
or this Agreement, or which are otherwise material in the context of the
sale of the Offered Securities; and to the Company's knowledge, no such
actions, suits or proceedings are threatened or contemplated.
(p) The financial statements included in the Offering Document
present fairly the financial position of the Company and its
consolidated subsidiaries as of the dates shown and their results of
operations and cash flows for the periods shown, and such financial
statements have been prepared in conformity with generally accepted
accounting principles in the United States applied on a consistent
basis; and the assumptions used in preparing the pro forma financial
statements included in the Offering Document provide a reasonable basis
for presenting the significant effects directly attributable to the
transactions or events described therein, the related pro forma
adjustments give appropriate effect to those assumptions, and the pro
forma columns therein reflect the proper application of those
adjustments to the corresponding historical financial statement amounts.
(q) Except as disclosed in the Offering Document, since the date
of the latest audited financial statements included in the Offering
Document there has been no material adverse change, nor any development
or event involving a prospective material adverse change, in the
condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries
6
taken as a whole, and, except as disclosed in or contemplated by the
Offering Document, there has been no dividend or distribution of any
kind declared, paid or made by the Company on any class of its capital
stock.
(r) The Company is not an open-end investment company, unit
investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the United States
Investment Company Act of 1940 (the "Investment Company Act"); and the
Company is not and, after giving effect to the offering and sale of the
Offered Securities and the application of the proceeds thereof as
described in the Offering Document, will not be an "investment company"
as defined in the Investment Company Act.
(s) No securities of the same class (within the meaning of Rule
144A(d)(3) under the Securities Act) as the Offered Securities are
listed on any national securities exchange registered under Section 6 of
the Exchange Act or quoted in a U.S. automated inter-dealer quotation
system.
(t) Assuming the accuracy of the representations of the
Purchasers contained in Section 4, the offer and sale of the Offered
Securities in the manner contemplated by this Agreement will be exempt
from the registration requirements of the Securities Act by reason of
Section 4(2) thereof and Regulation S thereunder; and it is not
necessary to qualify an indenture in respect of the Offered Securities
under the United States Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act").
(u) Neither the Company, nor any of its affiliates, nor any
person acting on its or their behalf (i) has, within the six-month
period prior to the date hereof, offered or sold in the United States or
to any U.S. person (as such terms are defined in Regulation S under the
Securities Act) the Offered Securities or any security of the same class
or series as the Offered Securities or (ii) has offered or will offer or
sell the Offered Securities (A) in the United States by means of any
form of general solicitation or general advertising within the meaning
of Rule 502(c) under the Securities Act or (B) with respect to any such
securities sold in reliance on Rule 903 of Regulation S ("Regulation S")
under the Securities Act, by means of any directed selling efforts
within the meaning of Rule 902(b) of Regulation S. The Company, its
affiliates and any person acting on its or their behalf have complied
and will comply with the offering restrictions requirement of Regulation
S. The Company has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered Securities
except for this Agreement.
(v) The Company is subject to Section 13 or 15(d) of the Exchange
Act.
(w) The Company and its subsidiaries are, and will remain, in
compliance
7
in all material respects with the Communications Act of 1934, as amended
by the Telecommunications Act of 1996 (the "Communications Act"), and
with all applicable rules, regulations and policies of the Federal
Communications Commission (the "FCC").
(x) The Company has provided to the Purchasers a complete and
accurate list of all licenses granted to the Company and its
subsidiaries by the FCC (the "Licenses"). All of the Licenses are
currently valid and in full force and effect except for Licenses that
individually or in the aggregate would not have a Material Adverse
Effect. Neither of the Company nor any of its subsidiaries have any
knowledge of any investigation, notice of apparent liability, violation,
forfeiture or other order or complaint issued by or before any court or
regulatory body, including the FCC, or of any other proceedings which
could in any manner materially threaten or adversely affect the validity
or continued effectiveness of any of the Licenses.
(y) No event has occurred which (i) results in, or after notice
or lapse of time or both would result in, revocation, suspension,
adverse modification, non-renewal, impairment, restriction or
termination of, or order of forfeiture with respect to, any License or
(ii) materially and adversely affects or could reasonably be expected in
the future to materially adversely affect any of the rights of the
Company or any of its subsidiaries thereunder.
(z) The Company and its subsidiaries have duly filed in a timely
manner all material filings, reports, applications, documents,
instruments and information required to be filed by them under the
Communications Act, and all such filings are true, correct and complete
in all material respects.
(aa) Neither of the Company nor any of its subsidiaries have any
reason to believe that any of the Licenses will not be renewed in the
ordinary course.
3. Purchase, Sale and Delivery of Offered Securities. On the basis of
the representations, warranties and agreements herein contained, but subject to
the terms and conditions herein set forth, the Company agrees to sell to the
Purchasers, and the Purchasers agree, severally and not jointly, to purchase
from the Company, the respective principal amounts of Offered Securities set
forth opposite the names of the several Purchasers in Schedule A hereto, at a
purchase price of 97.125% of the principal amount thereof plus accrued interest
(if any) from April 16, 1998 to the Closing Date (as hereinafter defined).
The Company will deliver against payment of the purchase price the
Offered Securities in the form of one or more permanent global securities in
definitive form (the "Global Securities") deposited with the Trustee as
custodian for The Depository Trust
8
Company ("DTC") and registered in the name of Cede & Co., as nominee for DTC.
Interests in any permanent Global Securities will be held only in book-entry
form through DTC, except in the limited circumstances described in the Offering
Document. Payment for the Offered Securities shall be made by the Purchasers in
Federal (same day) funds by two wire transfers to an account designated to CSFBC
by the Company at a bank acceptable to CSFBC, at the office of Cravath, Swaine &
Xxxxx, Worldwide Plaza, 000 Xxxxxx Xxxxxx, Xxx Xxxx, XX 00000-0000 at 10:00 A.M.
(New York time), on April 21, 1998, or at such other time not later than seven
full business days thereafter as CSFBC and the Company determine, such time
being herein referred to as the "Closing Date", against delivery to the IBJ
Shroder Bank & Trust Company as custodian for DTC of the Global Securities
representing all of the Offered Securities. The first wire shall be in the
principal amount of $386,557,500 and the second wire shall be in the principal
amount of $50,505,000 for an aggregate total of $437,062,500. The Global
Securities will be made available for checking at the office of Cravath, Swaine
& Xxxxx at least 24 hours prior to the Closing Date.
4. Representations by Purchasers; Resale by Purchasers.
(a) Each Purchaser severally represents and warrants to the
Company that it is a "qualified institutional buyer" within the meaning
of Rule 144A under the Securities Act.
(b) Each Purchaser severally acknowledges that the Offered
Securities have not been registered under the Securities Act and may not
be offered or sold within the United States or to, or for the account or
benefit of, U.S. persons except in accordance with Regulation S or
pursuant to an exemption from the registration requirements of the
Securities Act. Each Purchaser severally represents and agrees that it
has offered and sold the Offered Securities, and will offer and sell the
Offered 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 or Rule
144A under the Securities Act ("Rule 144A"). Accordingly, neither such
Purchaser nor its affiliates, nor any persons acting on its or their
behalf, have engaged or will engage in any directed selling efforts with
respect to the Offered Securities, and such Purchaser, its affiliates
and all persons acting on its or their behalf have complied and will
comply with the offering restrictions requirement of Regulation S. Each
Purchaser severally agrees that, at or prior to confirmation of sale of
the Offered Securities, other than a sale pursuant to Rule 144A, such
Purchaser will have sent to each distributor, dealer or person receiving
a selling concession, fee or other remuneration that purchases the
Offered 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
9
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 date of the commencement of the
offering and the closing date, except in either case in accordance with
Regulation S (or Rule 144A if available) under the Securities Act. Terms
used above have the meanings given to them by Regulation S."
Terms used in this subsection (b) have the meanings given to them
by Regulation S.
(c) Each Purchaser severally agrees that it and each of its
affiliates has not entered and will not enter into any contractual
arrangement with respect to the distribution of the Offered Securities
except for any such arrangements with the other Purchasers or affiliates
of the other Purchasers or with the prior written consent of the
Company.
(d) Each Purchaser severally agrees that it and each of its
affiliates will not offer or sell the Offered Securities in the United
States by means of any form of general solicitation or general
advertising within the meaning of Rule 502(c) under the Securities Act,
including, but not limited to (i) any advertisement, article, notice or
other communication published in any newspaper, magazine or similar
media or broadcast over television or radio, or (ii) any seminar or
meeting whose attendees have been invited by any general solicitation or
general advertising. Each Purchaser severally agrees, with respect to
resales made in reliance on Rule 144A of any of the Offered Securities,
to deliver either with the confirmation of such resale or otherwise
prior to settlement of such resale a notice to the effect that the
resale of such Offered Securities has been made in reliance upon the
exemption from the registration requirements of the Securities Act
provided by Rule 144A.
(e) Each of the Purchasers severally represents and agrees that
(i) it has not offered or sold and prior to the date six months after
the date of issue of the Offered Securities will not offer or sell any
Offered Securities to persons in the United Kingdom except to persons
whose ordinary activities involve them in acquiring, holding, managing
or disposing of investments (as principal or agent) for the purposes of
their businesses or otherwise in circumstances which have not resulted
and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulations 1995;
(ii) it has complied and will comply with all applicable provisions of
the Financial Services Xxx 0000 with respect to anything done by it in
relation to the Offered Securities in, from or otherwise involving the
United Kingdom; and (iii) it has only issued or passed on and will only
issue or pass on in the United Kingdom any document received by it in
connection with the issue of the Offered Securities to a person who is
of a kind described in Article 11(3) of the Financial Services Xxx 0000
10
(Investment Advertisements) (Exemptions) Order 1996 or is a person to
whom such document may otherwise lawfully be issued or passed on.
5. Certain Agreements of the Company. The Company agrees with the
several Purchasers that:
(a) The Company will advise CSFBC promptly of any proposal to
amend or supplement the Offering Document and will not effect such
amendment or supplementation without CSFBC's consent, which should not
be unreasonably withheld or delayed. If, at any time prior to the
completion of the resale of the Offered Securities by the Purchasers,
any event occurs as a result of which the Offering Document as then
amended or supplemented would include an untrue statement of a material
fact or omit to state any material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading, the Company promptly will notify CSFBC of
such event and promptly will prepare, at its own expense, an amendment
or supplement which will correct such statement or omission or effect
such compliance. Neither CSFBC's consent to, nor the Purchaser's
delivery to offerees or investors of, any such amendment or supplement
shall constitute a waiver of any of the conditions set forth in Section
6.
(b) The Company will furnish to CSFBC copies of any preliminary
offering circular, the Offering Document and all amendments and
supplements to such documents, in each case as soon as available and in
such quantities as CSFBC requests, and the Company will furnish to CSFBC
on the Closing Date three copies of the Offering Document signed by a
duly authorized officer of the Company, one of which will include the
independent accountants' reports therein manually signed by such
independent accountants. At any time when the Company is not subject to
Section 13 or 15(d) of the Exchange Act, the Company will promptly
furnish or cause to be furnished to CSFBC (and, upon request, to each of
the other Purchasers) and, upon request of holders and prospective
purchasers of the Offered Securities, to such holders and purchasers,
copies of the information required to be delivered to holders and
prospective purchasers of the Offered Securities pursuant to Rule
144A(d)(4) under the Securities Act (or any successor provision thereto)
in order to permit compliance with Rule 144A in connection with resales
by such holders of the Offered Securities. The Company will pay the
expenses of printing and distributing to the Purchasers all such
documents.
(c) The Company will use its commercially reasonable efforts
arrange for the qualification of the Offered Securities for sale under
the laws of such jurisdictions in the United States and Canada as CSFBC
designates and will
11
continue such qualifications in effect so long as required for the
resale of the Offered Securities by the Purchasers, provided that the
Company will not be required to qualify as a foreign corporation or to
file a general consent to service of process in any such state.
(d) During the period of five years after the Closing Date, the
Company will furnish to CSFBC and, upon request, to each of the other
Purchasers, as soon as practicable after the end of each fiscal year, a
copy of its annual report to stockholders for such year; and the Company
will furnish to CSFBC and, upon request, to each of the other Purchasers
(i) as soon as available, a copy of each report and any definitive proxy
statement of the Company filed with the Commission under the Exchange
Act or mailed to stockholders, and (ii) from time to time, such other
information concerning the Company as CSFBC may reasonably request.
(e) During the period of two years after the Closing Date, the
Company will, upon request, furnish to CSFBC, Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated, Xxxxxx Xxxxxxx & Co. Incorporated,
NationsBanc Xxxxxxxxxx Securities LLC and any holder of Offered
Securities a copy of the restrictions on transfer applicable to the
Offered Securities.
(f) During the period of two years after the Closing Date, the
Company will not, and will not permit any of its affiliates (as defined
in Rule 144 under the Securities Act other than affiliates who purchase
Offerered Securities from the Purchasers at the Closing Date) to, resell
any of the Offered Securities that have been reacquired by any of them.
(g) During the period of two years after the Closing Date, the
Company will not be or become, an open-end investment company, unit
investment trust or face-amount certificate company that is or is
required to be registered under Section 8 of the Investment Company Act.
(h) The Company will pay all expenses incidental to the
performance of its obligations under this Agreement, the Indenture and
the Registration Rights Agreement, including (i) the fees and expenses
of the Trustee, Fiscal Agent, Depositary and its professional advisers;
(ii) all expenses in connection with the execution, issue,
authentication, packaging and initial delivery of the Offered
Securities, the preparation of this Agreement, the Registration Rights
Agreement, the Offered Securities, the Indenture, the preparation and
printing of the Offering Document and amendments and supplements
thereto, and any other document relating to the issuance, offer, sale
and delivery of the Offered Securities; (iii) the cost of listing the
Offered Securities and qualifying the Offered Securities for trading in
The PortalSM Market ("PORTAL") and any expenses incidental thereto; (iv)
the cost of any advertising approved by the Company in connection with
the
12
issue of the Offered Securities; (v) for any expenses (including fees
and disbursements of counsel) incurred in connection with qualification
of the Offered Securities for sale under the laws of such jurisdictions
in the United States and Canada as CSFBC designates and the printing of
memoranda relating thereto (vi) for any fees charged by investment
rating agencies for the rating of the Securities; and (vii) for expenses
incurred in distributing the Offering Document (including any amendments
and supplements thereto) to the Purchasers. The Company will also pay or
reimburse the Purchasers (to the extent incurred by them) for all travel
expenses of the Company's officers and employees and any other expenses
of the Company in connection with attending or hosting meetings with
prospective purchasers of the Offered Securities from the Purchasers.
(i) In connection with the offering, until CSFBC shall have
notified the Company and the other Purchasers of the completion of the
resale of the Offered Securities, neither the Company nor any of its
affiliates has or will, either alone or with one or more other persons,
bid for or purchase for any account in which it or any of its affiliates
has a beneficial interest any Offered Securities or attempt to induce
any person to purchase any Offered Securities; and neither it nor any
of its affiliates will make bids or purchases for the purpose of
creating actual, or apparent, active trading in, or of raising the price
of, the Offered Securities.
(j) For a period of 90 days after the date of the initial
offering of the Offered Securities by the Purchasers, the Company will
not offer, sell, contract to sell, pledge or otherwise dispose of,
directly or indirectly, any United States dollar-denominated debt
securities issued or guaranteed by the Company and having a maturity of
more than one year from the date of issue or publicly disclose the
intention to make such offer, sale, pledge or disposal without the prior
written consent of CSFB. The Company will not at any time offer, sell,
contract to sell, pledge or otherwise dispose of, directly or
indirectly, any securities under circumstances where such offer, sale,
pledge, contract or disposition would cause the exemption afforded by
Section 4(2) of the Securities Act or the safe harbor of Regulation S
thereunder to cease to be applicable to the offer and sale of the
Offered Securities.
(k) The Company will cause each Offered Security to bear the
legend set forth in the form of Note attached as Exhibit 1 to the Rule
144A/Regulation S Appendix to the relevant Indenture until such legend
shall no longer be necessary or advisable because the Offered Securities
are no longer subject to the restrictions on transfer described therein.
6. Conditions of the Obligations of the Purchasers. The obligations of
the several Purchasers to purchase and pay for the Offered Securities on the
Closing Date
13
will be subject to the accuracy of the representations and warranties on the
part of the Company herein, to the accuracy of the written statements of
officers of the Company made pursuant to the provisions hereof, to the
performance by the Company of its obligations hereunder and to the following
additional conditions precedent:
(a) The Purchasers shall have received a letter, dated the date
of this Agreement, of Ernst & Young LLP, in agreed form, confirming that
they are independent public accountants within the meaning of the
Securities Act and the applicable published rules and regulations
thereunder ("Rules and Regulations") and to the effect that:
(i) in their opinion the financial statements examined by
them and included in the Offering Document comply as to form in
all material respects with the applicable accounting requirements
of the Securities Act and the related published Rules and
Regulations;
(ii) on the basis of a reading of the latest available
interim financial statements of the Company, inquiries of
officials of the Company who have responsibility for financial
and accounting matters and other specified procedures, nothing
came to their attention that caused them to believe that:
(A) the unaudited financial statements included in
the Offering Document do not comply as to form in all
material respects with the applicable accounting
requirements of the Securities Act and the related
published Rules and Regulations or any material
modifications should be made to such unaudited financial
statements for them to be in conformity with generally
accepted accounting principles;
(B) at the date of the latest available balance
sheet read by such accountants, or at a subsequent
specified date not more than three business days prior to
the date of this Agreement, there was any change in the
capital stock or any increase in short-term indebtedness
or long-term debt and capital lease obligations of the
Company and its consolidated subsidiaries or, at the date
of the latest available balance sheet read by such
accountants, there was any decrease in consolidated total
assets or stockholders' equity, as compared with amounts
shown on the latest balance sheet included in the Offering
Document; or
(C) for the period from the closing date of the
latest income statement included in the Offering Document
to the closing date of the latest available income
statement read by such accountants
14
there were any decreases, as compared with the
corresponding period of the previous year and with the
period of corresponding length ended the date of the
latest income statement included in the Offering
Document, in operating income (loss), net operating
revenue, increase in consolidated loss before
extraordinary item, or in the amount that earnings were
inadequate to cover combined fixed charges;
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases which are described in such
letter; and
(iii) they have compared specified dollar amounts (or
percentages derived from such dollar amounts) and other financial
information contained in the Offering Document (in each case to
the extent that such dollar amounts, percentages and other
financial information are derived from the general accounting
records of the Company and its subsidiaries subject to the
internal controls of the Company's accounting system or are
derived directly from such records by analysis or computation)
with the results obtained from inquiries, a reading of such
general accounting records and other procedures specified in
such letter and have found such dollar amounts, percentages and
other financial information to be in agreement with such
results, except as otherwise specified in such letter.
(iv) (A) they have read the unaudited pro forma combined
condensed balance sheet as of December 31, 1997 and unaudited pro
forma combined condensed statement of operations of December 31,
1997.
(B) inquired of certain officials of the Company who have
responsibility for financial and accounting matters about:
(I) the basis for their determination of the pro
forma adjustments, and
(II) whether the unaudited pro forma condensed
consolidated financial statements referred to in (v)
comply as to form in all material respects with the
applicable accounting requirements of the Securities Act.
(C) proved the arithmetic accuracy of the application of
the pro forma adjustments.
(v) based on the procedures described in (iv), nothing
came to their attention that caused them to believe that the
unaudited pro forma
15
condensed consolidated financial statements included in the
Offering Document do not comply as to form in all material
respects with the applicable accounting requirements of the
Securities Act and that the pro forma adjustments have not been
properly applied to the historical amounts in the compilation of
those statements.
(b) The Purchasers shall have received a letter, dated the date
of this Agreement, of Xxxxxx Xxxxxxxx LLP, in agreed form, confirming
that they are independent public accountants within the meaning of the
Securities Act and the applicable published Rules and Regulations
thereunder and to the effect that:
(i) (A) they have read the unaudited pro forma combined
statements of operations of Network Long Distance, Inc. ("NLD")
for the twelve months ended December 31, 1997 and years ended
March 31, 1997 and 1996.
(B) inquired of certain officials of NLD who have
responsibility for financial and accounting matters about:
(I) the basis for their determination of the pro
forma adjustments, and
(II) whether the unaudited pro forma combined
statements of operations referred to in (v) comply as to
form in all material respects with the applicable
accounting requirements of the Securities Act.
(C) proved the arithmetic accuracy of the application of
the pro forma adjustments.
(ii) nothing came to their attention that cause them to
believe that the unaudited pro forma combined statement of
operations referred to in (i) included in the Offering Document
do not comply as to form in all material respects with the
applicable accounting requirements of the Securities Act and that
the pro forma adjustments have not been properly applied to the
historical amounts in the compilation of those statements.
(c) The Purchasers shall have received a letter dated the date of
this Agreement, of Xxxxxx Xxxxxxxx LLP-Mexico, in agreed form,
confirming that they are independent public accountants within the
meaning of the Securities Act and the applicable published rules and
regulations thereunder and to the effect that:
16
(i) in connection with Marca Tel, S.A. de C.V., Marca Tel
International, S.A. de C.V. and Grupo Marca Tel, S.A. de C.V.
("Marca Tel"), in their opinion the financial statements examined
by them and included in the Offering Document comply as to form
in all material respects with the applicable accounting
requirements of the Securities Act and the related published
Rules and Regulations;
(ii) a reading of the latest available interim financial
statements of Marca Tel, inquiries of officials of the Company
who have responsibility for financial and accounting matters and
other specified procedures, nothing came to their attention that
caused them to believe that:
(A) the unaudited financial statements included in
the Offering Document do not comply as to form in all
material respects with the applicable accounting
requirements of the Securities Act and the related
published Rules and Regulations or any material
modifications should be made to such unaudited financial
statements for them to be in conformity with generally
accepted accounting principles;
(B) at the date of the latest available balance
sheet read by such accountants, or at a subsequent
specified date not more than three business days prior to
the date of this Agreement, there was any change in the
capital stock or any increase in short-term indebtedness
or long-term debt or decrease in consolidated net current
assets, net assets or stockholder's equity, as compared
with amounts shown on the latest balance sheet included in
the Offering Document; or
(C) for the period from the closing date of the
latest income statement included in the Offering Document
to the closing date of the latest available income
statement read by such accountants there were any
decreases, as compared with the corresponding period of
the previous year in consolidated net revenue or increase
in combined net loss, increase in consolidated loss before
extraordinary item, net loss or in the amount that
earnings were inadequate to cover combined fixed charges;
except in all cases set forth in clauses (B) and (C) above for
changes, increases or decreases.
(d) Subsequent to the execution and delivery of this Agreement,
there shall not have occurred (i) a change in U.S. or international
financial, political or
17
economic conditions or currency exchange rates or exchange controls as
would, in the judgment of CSFBC, be likely to prejudice materially the
success of the proposed issue, sale or distribution of the Offered
Securities, whether in the primary market or in respect of dealings in
the secondary market, or (ii) (A) any change, or any development or
event involving a prospective change, in the condition (financial or
other), business, properties or results of operations of the Company or
its subsidiaries which, in the judgment of a majority in interest of the
Purchasers including CSFBC, is material and adverse and makes it
impractical or inadvisable to proceed with completion of the offering or
the sale of and payment for the Offered Securities; (B) any downgrading
in the rating of any debt securities or preferred stock of the Company
by any "nationally recognized statistical rating organization" (as
defined for purposes of Rule 436(g) under the Securities Act), or any
public announcement that any such organization has under surveillance or
review its rating of any debt securities or preferred stock of the
Company (other than an announcement with positive implications of a
possible upgrading, and no implication of a possible downgrading, of
such rating); (C) any suspension or limitation of trading in securities
generally on the New York Stock Exchange, or any setting of minimum
prices for trading on such exchange, or any suspension of trading of any
securities of the Company on any exchange or in the over-the-counter
market; (D) any banking moratorium declared by U.S. Federal or, New York
authorities; or (E) any outbreak or escalation of major hostilities in
which the United States is involved, any declaration of war by Congress
or any other substantial national or international calamity or emergency
if, in the judgment of a majority in interest of the Purchasers
including CSFBC, the effect of any such outbreak, escalation,
declaration, calamity or emergency makes it impractical or inadvisable
to proceed with completion of the offering or sale of and payment for
the Offered Securities.
(e) The Purchasers shall have received an opinion, dated the
Closing Date, of Xxxxxxx & XxXxxxxx, a Professional Law Corporation,
counsel for the Company, substantially to the effect that (subject to
customary assumptions and disclaimers and except that no opinion shall
be given as to laws other than the laws of the State of California, the
General Corporation Law of Delaware and the U. S. Federal law:
(i) The Company has been duly incorporated and is an
existing corporation in good standing under the laws of the State
of Delaware, with power and authority (corporate and other) to
own its properties and conduct its business as described in the
Offering Document; and the Company is duly qualified to do
business as a foreign corporation in good standing in all other
jurisdictions in which its ownership or lease of property or the
conduct of its business requires such qualification except to
18
the extent the failure to be so qualified would not have a
Material Adverse Effect;
(ii) The Indenture has been duly authorized; the Offered
Securities have been duly authorized; and when the Offered
Securities are delivered and paid for pursuant to this Agreement
on the Closing Date, the Indenture will have been duly executed,
authenticated, issued and delivered and will conform to the
description thereof contained in the Offering Document and the
Indenture and such Offered Securities will constitute valid and
legally binding obligations of the Company enforceable in
accordance with their terms, subject to bankruptcy, insolvency,
fraudulent transfer, reorganization, moratorium and similar laws
of general applicability relating to or affecting creditors'
rights and to general equity principles; and except as the right
to indemnity and contribution may be limited by state or federal
securities laws or the public policy underlying such laws;
(iii) The Company is not and, after giving effect to the
offering and sale of the Offered Securities and the application
of the proceeds thereof as described in the Offering Document,
will not be an "investment company" as defined in the Investment
Company Act;
(iv) No consent, approval, authorization or order of, or
filing with, any governmental agency or body or any court is
required for the consummation of the transactions contemplated by
this Agreement in connection with the issuance or sale of the
Offered Securities by the Company, and the consummation of the
transactions under the Registration Rights Agreement, other than
as may be required under the Securities Act and the Rules and
Regulations of the Commission thereunder with respect to the
Registration Rights Agreement and the transactions contemplated
thereunder and such as may be required by securities or blue sky
laws of the various states of the United States and of foreign
jurisdiction in connection with the offer and sale of the Offered
Securities;
(v) The execution, delivery and performance of the
Indenture, the Registration Rights Agreement and this Agreement
and the issuance and sale of the Offered Securities and
compliance with the terms and provisions thereof will not result
in a breach or violation of any of the terms and provisions of,
or constitute a default under, any statute, rule, regulation or
order of any governmental agency or body or any court having
jurisdiction over the Company or any subsidiary of the Company or
any of their properties, or any agreement or instrument listed as
an exhibit to the Company's Annual Report on Form 10-K most
recently filed
19
with the Commission or listed as an exhibit to or filed with any
subsequent reports filed by the Company under the Exchange Act
through April 15, 1998, to which the Company or any such
subsidiary is a party or by which the Company or any such
subsidiary is bound or to which any of the properties of the
Company or any such subsidiary is subject, or the charter or
by-laws of the Company or any such subsidiary, and the Company
has full power and authority to authorize, issue and sell the
Offered Securities as contemplated by this Agreement;
(vi) Such counsel have no reason to believe that the
Offering Document, or any amendment or supplement thereto, as of
the date hereof and as of the Closing Date, contained any untrue
statement of a material fact or omitted to state any material
fact necessary to make the statements therein not misleading; it
being understood that such counsel need express no opinion as to
the financial statements or other financial data contained in the
Offering Document;
(vii) The Registration Rights Agreement has been duly
authorized by the Company and, when executed and delivered, will
conform in all material respects to the description thereof
contained in the Offering Document; the Registration Rights
Agreement, when validly executed and delivered by the Company,
will constitute a valid and binding obligation of the Company and
will be enforceable against it in accordance with its terms,
subject to bankruptcy, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights and to
general equity principles; and except as the right to indemnity
and contribution may be limited by state or federal securities
laws or the public policy underlying such laws;
(viii) This Agreement has been duly authorized, executed
and delivered by the Company;
(ix) Assuming the accuracy of the representations of the
Purchasers contained in Section 4, it is not necessary in
connection with (i) the offer, sale and delivery of the Offered
Securities by the Company to the several Purchasers pursuant to
this Agreement or (ii) the resales of the Offered Securities by
the several Purchasers in the manner contemplated by this
Agreement, to register the Offered Securities under the
Securities Act or to qualify an indenture in respect thereof
under the Trust Indenture Act;
(x) To the best of such counsel's knowledge, the Company
and its
20
subsidiaries are in compliance in all material respects with all
material terms and conditions of the Communications Act of 1934,
as amended by the Communications Act and with all applicable and
material rules, regulations and policies of the FCC pertaining
to the Licenses;
(xi) To the best of such counsel's knowledge, all of the
Licenses are currently valid and in full force and effect, and
there is no investigation, notice of apparent liability,
violation, forfeiture or other order or complaint issued by or
before any court or regulatory body, including the FCC, or of any
other proceedings (other than proceedings relating to the
wireless communications industries generally) which could in any
manner materially threaten or adversely affect the validity or
continued effectiveness of any of the Licenses;
(xii) To the best of such counsel's knowledge, no event
has occurred which (i) results in, or after notice or lapse of
time or both would result in, revocation, suspension, adverse
modification, non-renewal, impairment, restriction or
termination of, or order of forfeiture with respect to, any
License or (ii) materially and adversely affects or could
reasonably be expected in the future to materially adversely
affect any of the rights of the Company or any of its
subsidiaries thereunder;
(xiii) To the best of such counsel's knowledge, the
Company and its subsidiaries have duly filed in a timely manner
all material filings, reports, applications, documents,
instruments and information required to be filed by them under
the Communications Act pertaining to the Licenses; and
(xiv) To the best of such counsel's knowledge, there is no
reason to believe that any of the Licenses will not be renewed in
the ordinary course.
The opinions set forth in clauses (iv) as applicable, (vii), as
applicable, (x), (xi), (xii), (xiii) and (xiv) may be given by Reboul,
McMurray, Xxxxx, Xxxxxxx & Kristol and Xxxxxxxxx & Belendiuk, P.C.,
counsel to the Company on FCC matters.
(d) The Purchasers shall have received from Cravath, Swaine &
Xxxxx, counsel for the Purchasers, such opinion or opinions, dated the
Closing Date, with respect to the incorporation of the Company, the
validity of the Offered Securities, the Offering Document, the exemption
from registration for the offer and sale of the Offered Securities by
the Company to the several Purchasers and the resales by the several
Purchasers as contemplated hereby and other related matters as CSFBC may
require, and the Company shall have furnished to such counsel such
documents as they request for the purpose of enabling them to pass upon
such
21
matters.
(e) The Purchasers shall have received a certificate, dated the
Closing Date, of the President or any Vice President and a principal
financial or accounting officer of the Company in which such officers,
to the best of their knowledge after reasonable investigation, shall
state that the representations and warranties of the Company in this
Agreement are true and correct, that the Company has complied with all
agreements and satisfied all conditions on its part to be performed or
satisfied hereunder at or prior to the Closing Date, and that,
subsequent to the dates of the most recent financial statements in the
Offering Document there has been no material adverse change, nor any
development or event involving a prospective material adverse change, in
the condition (financial or other), business, properties or results of
operations of the Company and its subsidiaries taken as a whole except
as set forth in or contemplated by the Offering Document or as described
in such certificate.
(f) The Purchasers shall have received a letter, dated the
Closing Date, of Ernst & Young LLP which meets the requirements of
subsection (a) of this Section, except that the specified date referred
to in such subsection will be a date not more than three business days
prior to the Closing Date for the purposes of this subsection.
(g) The Purchasers shall have received a letter, dated the
Closing Date, of Xxxxxx Xxxxxxxx LLP which meets the requirements of
Subsection (b) of this Section, except that the specified date referred
to in such subsection will be a date not more than three business days
prior to the Closing Date for the purposes of the subsection.
(h) The Purchasers shall have received a letter, dated the
Closing Date, of Xxxxxx Xxxxxxxx LLP which meets the requirements of
Subsection (c) of this Section except that the specified date referred
to in such subsection will be a date not more than three business days
prior to the Closing Date for the purpose of the subsection.
The Company will furnish the Purchasers with such conformed copies of
such opinions, certificates, letters and documents as the Purchasers reasonably
request. CSFBC may in its sole discretion waive on behalf of the Purchasers
compliance with any conditions to the obligations of the Purchasers hereunder,
whether in respect of the Closing Date or otherwise.
7. Indemnification and Contribution.
22
(a) The Company will indemnify and hold harmless each Purchaser
against any losses, claims, damages or liabilities, joint or several, to which
such Purchaser may become subject, under the Securities Act or the Exchange Act
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 any material fact contained in the Offering
Document, or any amendment or supplement thereto, or any related preliminary
offering circular, Exchange Act Reports and the press release issued by the
Company and attached as an exhibit thereto, or arise out of or are based upon
the omission or alleged omission to state therein a material fact necessary in
order to make the statements therein, in the light of the circumstances under
which they were made, not misleading, and will reimburse each Purchaser for any
legal or other expenses reasonably incurred by such Purchaser in connection with
investigating or defending any such loss, claim, damage, liability or action as
such expenses are incurred; 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 an untrue statement or alleged untrue
statement in or omission or alleged omission from any of such documents in
reliance upon and in conformity with written information furnished to the
Company by any Purchaser through CSFBC specifically for use therein, it being
understood and agreed that the only such information consists of the information
described as such in subsection (b) below; provided further, however, that with
respect to any untrue statement or alleged untrue statement in or omission or
alleged omission from any preliminary offering circular, the indemnity agreement
contained in this subsection (a) shall not inure to the benefit of any Purchaser
that sold the Offered Securities concerned to the person asserting any such
losses, claims, damages or liabilities, to the extent that such sale was an
initial resale by such Purchaser and any such loss, claim, damage or liability
of such Purchaser results from the fact that there was not sent or given to such
person, at or prior to the written confirmation of the sale of such Offered
Securities to such person, a copy of the Offering Document if the Company had
previously furnished copies thereof to such Purchaser and such Offering Document
corrected such untrue statement or omission or alleged untrue statement or
omission.
.
(b) Each Purchaser severally and not jointly will indemnify and hold
harmless the Company against any losses, claims, damages or liabilities to which
the Company may become subject, under the Securities Act or the Exchange Act 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 any material fact contained in the Offering Document, or any
amendment or supplement thereto, or any related preliminary offering circular,
or arise out of or are based upon the omission or the alleged omission to state
therein a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not misleading, in
each case to the extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was made in reliance
upon and in conformity with written information furnished to the Company by such
Purchaser through CSFBC
23
specifically for use therein, and will reimburse any legal or other expenses
reasonably incurred by the Company in connection with investigating or defending
any such loss, claim, damage, liability or action as such expenses are incurred,
it being understood and agreed that the only such information furnished by any
Purchaser consists of (i) the following information in the Offering Document:
the last paragraph at the bottom of the cover page concerning the terms of the
offering by the Purchasers, the legend concerning over-allotments and
stabilizing on the inside front cover page and the concession and reallowance
figures appearing in the first paragraph under the caption "Plan of
Distribution" and the statements under the caption "Risk Factors--Absence of
Public Market"; "Restrictions on Transferability" regarding the intention of the
Purchasers to make a market in the Offered Securities.
(c) Promptly after receipt by an indemnified party under this Section 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
subsection (a) or (b) above, notify the indemnifying party of the commencement
thereof; but the omission so to notify the indemnifying party will not relieve
it from any liability which it may have to any indemnified party otherwise than
under subsection (a) or (b) above. In case any such action is brought against
any indemnified party and it notifies the indemnifying party of the commencement
thereof, the indemnifying party will be entitled to participate therein and, to
the extent that it may wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel satisfactory to such
indemnified party (who shall not, except with the consent of the indemnified
party, be counsel to the indemnifying party), and after notice from the
indemnifying party to such indemnified party of its election so to assume the
defense thereof, the indemnifying party will not be liable to such indemnified
party under this Section for any legal or other expenses subsequently incurred
by such indemnified party in connection with the defense thereof other than
reasonable costs of investigation. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened action in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party unless such settlement includes an unconditional release of
such indemnified party from all liability on any claims that are the subject
matter of such action.
(d) If the indemnification provided for in this Section is unavailable
or insufficient to hold harmless an indemnified party under subsection (a) or
(b) above, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of the losses, claims, damages or
liabilities referred to in subsection (a) or (b) above (i) in such proportion as
is appropriate to reflect the relative benefits received by the Company on the
one hand and the Purchasers on the other from the offering of the Offered
Securities or (ii) if the allocation provided by clause (i) above is not
permitted by applicable law, in such proportion as is appropriate to reflect not
only the relative benefits referred to in clause (i) above but also the relative
fault of the Company on the one hand and the Purchasers on the other in
connection with the
24
statements or omissions which resulted in such losses, claims, damages or
liabilities as well as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the Purchasers on the other
shall be deemed to be in the same proportion as the total net proceeds from the
offering (before deducting expenses) received by the Company bear to the total
discounts and commissions received by the Purchasers from the Company under this
Agreement. The relative fault shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or the
omission or alleged omission to state a material fact relates to information
supplied by the Company or the Purchasers and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
untrue statement or omission. The amount paid by an indemnified party as a
result of the losses, claims, damages or liabilities referred to in the first
sentence of this subsection (d) shall be deemed to include any legal or other
expenses reasonably incurred by such indemnified party in connection with
investigating or defending any action or claim which is the subject of this
subsection (d). Notwithstanding the provisions of this subsection (d), no
Purchaser shall be required to contribute any amount in excess of the amount by
which the total price at which the Offered Securities purchased by it were
resold exceeds the amount of any damages which such Purchaser has otherwise been
required to pay by reason of such untrue or alleged untrue statement or omission
or alleged omission. The Purchasers' obligations in this subsection (d) to
contribute are several in proportion to their respective purchase obligations
and not joint.
(e) The obligations of the Company under this Section shall be in
addition to any liability which the Company may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls any
Purchaser within the meaning of the Securities Act or the Exchange Act; and the
obligations of the Purchasers under this Section shall be in addition to any
liability which the respective Purchasers may otherwise have and shall extend,
upon the same terms and conditions, to each person, if any, who controls the
Company within the meaning of the Securities Act or the Exchange Act.
8. Default of Purchasers. If any Purchaser or Purchasers default in
their obligations to purchase Offered Securities hereunder and the aggregate
principal amount Offered Securities that such defaulting Purchaser or Purchasers
agreed but failed to purchase does not exceed 10% of the total principal amount
Offered Securities, CSFBC may make arrangements satisfactory to the Company for
the purchase of such Offered Securities by other persons, including any of the
Purchasers, but if no such arrangements are made by such the Closing Date, the
non-defaulting Purchasers shall be obligated severally, in proportion to their
respective commitments hereunder, to purchase the Offered Securities that such
defaulting Purchasers agreed but failed to purchase. If any Purchaser or
Purchasers so default and the aggregate principal amount of Offered Securities
with respect to which such default or defaults occur exceeds 10% of the total
25
principal amount of Offered Securities and arrangements satisfactory to CSFBC
and the Company for the purchase of such Offered Securities by other persons are
not made within 36 hours after such default, this Agreement will terminate
without liability on the part of any non-defaulting Purchaser or the Company,
except as provided in Section 9. As used in this Agreement, the term "Purchaser"
includes any person substituted for a Purchaser under this Section. Nothing
herein will relieve a defaulting Purchaser from liability for its default.
9. Survival of Certain Representations and Obligations. The respective
indemnities, agreements, representations, warranties and other statements of the
Company or its officers and of the several Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation, or statement as to the results thereof, made by or on behalf
of any Purchaser, the Company or any of their respective representatives,
officers or directors or any controlling person, and will survive delivery of
and payment for the Offered Securities. If this Agreement is terminated
pursuant to Section 8 or if for any reason the purchase of the Offered
Securities by the Purchasers is not consummated, the Company shall remain
responsible for the expenses to be paid or reimbursed by it pursuant to Section
5 and the respective obligations of the Company and the Purchasers pursuant to
Section 7 shall remain in effect. If the purchase of the Offered Securities by
the Purchasers is not consummated for any reason other than solely because of
the termination of this Agreement pursuant to Section 8 or the occurrence of any
event specified in clause (C), (D) or (E) of Section 6(b)(ii), the Company will
reimburse the Purchasers for all out-of-pocket expenses (including fees and
disbursements of counsel) reasonably incurred by them in connection with the
offering of the Offered Securities.
10. Notices. All communications hereunder will be in writing and, if
sent to the Purchasers will be mailed, delivered faxed and confirmed to the
Purchasers, c/o Credit Suisse First Boston Corporation, Eleven Madison Avenue,
New York, N.Y. 10010-3629, Attention: Investment Banking
Department--Transactions Advisory Group, or, if sent to the Company, will be
mailed, delivered or electronically transmitted and confirmed to it at 5000
Plaza on the Lake, Xxxxx 000, Xxxxxx, Xxxxx 00000, Attention: Chief Financial
Officer; provided, however, that any notice to a Purchaser pursuant to Section 7
will be mailed, delivered or faxed and confirmed to such Purchaser.
11. Successors. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the
controlling persons referred to in Section 7, and no other person will have any
right or obligation hereunder, except that holders of Offered Securities shall
be entitled to enforce the agreements for their benefit contained in the second
and third sentences of Section 5(b) hereof against the Company as if such
holders were parties thereto.
12. Representation of Purchasers. You will act for the several
Purchasers in connection with this purchase, and any action under this Agreement
taken by you will be
26
binding upon all the Purchasers.
13. Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same Agreement.
14. APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK WITHOUT REGARD TO
PRINCIPLES OF CONFLICTS OF LAWS.
The Company hereby submits to the non-exclusive jurisdiction of the
Federal and state courts in the Borough of Manhattan in The City of New York in
any suit or proceeding arising out of or relating to this Agreement or the
transactions contemplated hereby.
27
If the foregoing is in accordance with the Purchasers' understanding of
our agreement, kindly sign and return to us one of the counterparts hereof,
whereupon it will become a binding agreement between the Company and the several
Purchasers in accordance with its terms.
Very truly yours,
IXC COMMUNICATIONS, INC.
By: /s/ Xxxxxx X. Xxxxxxx
----------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: Vice President of Finance and
Chief Accounting Officer
The foregoing Purchase Agreement
is hereby confirmed and accepted
as of the date first above written.
Acting on behalf of itself and as the
Representative of the several
Purchasers
Credit Suisse First Boston Corporation
By: /s/ J. Xxxxx Xxxxxxx
---------------------------
Name: J. Xxxxx Xxxxxxx
Title: Director
28
SCHEDULE A
PRINCIPAL AMOUNT OF
PURCHASERS OFFERED SECURITIES
---------- ------------------
Credit Suisse First Boston Corporation...................... $225,000,000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated ......... 90,000,000
Xxxxxx Xxxxxxx & Co. Incorporated........................... 90,000,000
NationsBanc Xxxxxxxxxx Securities LLC....................... 45,000.000
------------
Total................................. $450,000,000
