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Exhibit 1
SOUTHWESTERN XXXX TELEPHONE COMPANY
DEBT SECURITIES
UNDERWRITING AGREEMENT
July 8, 1997
To the Representative
named in Schedule I
hereto of the Underwriters
named in Schedule II hereto
Dear Sirs:
Southwestern Xxxx Telephone Company, a Missouri corporation (the
"Telephone Company" or "Company"), may issue and sell from time to time series
of its debt securities registered under the registration statement referred to
in Paragraph 1(a) hereof ("Securities" and individually "Security"). The
Securities will be issued under an Indenture, dated as of February 1, 1985, as
supplemented by a First Supplemental Indenture, dated as of June 1, 1991
(together, the "Indenture"), from the Telephone Company to The Bank of New
York, as Trustee, in one or more series, which series may vary as to interest
rates, maturities, redemption provisions and selling prices, with all such
terms for any particular series being determined at the time of sale. The
Telephone Company proposes to sell to the underwriters named in Schedule II
hereto ("Underwriters") for whom you are acting as representative
("Representative") a series of Securities, of the designation, with the terms
and in the aggregate principal amount specified in Schedule I hereto
("Underwriters Securities" and, individually, "Underwriters Security").
1. The Telephone Company represents and warrants to, and agrees
with, the several Underwriters that:
(a) A registration statement on Form S-3 with respect to the
Securities has been prepared by the Telephone Company in conformity with
the requirements of the Securities Act of 1933, as amended ("Act" or
"Securities Act"), and the rules and regulations ("Rules and
Regulations") of the Securities and Exchange Commission ("Commission" or
"SEC") thereunder and has become effective. As used in this Agreement,
(i) "Registration Statement" means that registration
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statement, as amended or supplemented to the date hereof (including all
documents incorporated therein by reference); (ii) "Preliminary
Prospectus" means each prospectus (including all documents incorporated
therein by reference) included in that Registration Statement, or
amendments thereto or supplements thereof, before it became effective
under the Act, including any prospectus filed with the Commission
pursuant to Rule 424(a) of the Rules and Regulations; (ii) "Basic
Prospectus" means the prospectus (including all documents incorporated
therein by reference) included in the Registration Statement; and (iv)
"Prospectus" means the Basic Prospectus, together with any prospectus
amendment or supplement (including in each case all documents
incorporated therein by reference) specifically relating to the
Underwritten Securities, as filed with, or mailed for filing to, the
Commission pursuant to paragraph (b) or (c) of Rule 424 of the Rules and
Regulations. The Commission has not issued any order preventing or
suspending the use of the Prospectus.
(b) The Registration Statement and each Prospectus contain, and
(in the case of any amendment or supplement to any such document, or any
material incorporated by reference in any such document, filed with the
Commission after the date as of which this representation is being made)
will contain at all times during the period specified in Paragraph 8(c)
hereof, all statements which are required by the Act, the Securities
Exchange Act of 1934, as amended ("Exchange Act"), the Trust Indenture
Act of 1939, as amended ("Trust Indenture Act"), and the rules and
regulations of the Commission under such Acts; the Indenture, including
any amendments and supplements thereto, pursuant to which the
Underwritten Securities will be issued, will conform with the
requirements of the Trust Indenture Act and the rules and regulations of
the Commission thereunder, and the Registration Statement and the
Prospectus do not, and (in the case of any amendment or supplement to
any such document, or any material incorporated by reference in any such
document, filed with the Commission after the date as of which this
representation is being made) will not at any time during the period
specified in Paragraph 8(c) hereof, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided that the Telephone Company makes no representation or warranty
as to information contained in or omitted from the Registration
Statement or the Prospectus in reliance upon and in conformity with
information furnished in writing to the Telephone Company through the
Representative by or on behalf of any Underwriter specifically for use
therein, or as to any statements in or omissions from the Statement of
Eligibility and Qualification of the Trustee under the Indenture.
(c) The Telephone Company is not in violation of its corporate
charter or bylaws or in default under any agreement, indenture or
instrument, the effect of which violation or default would be material
to the Telephone Company, the
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execution, delivery and performance of this Agreement and any Delayed
Delivery Contracts (as defined in Paragraph 3 hereof) and compliance by
the Telephone Company with the provisions of the Underwritten Securities
and the Indenture will not conflict with, result in the creation or
imposition of any lien, charge or encumbrance upon any of the assets of
the Telephone Company pursuant to the terms of, or constitute a default
under, any agreement, indenture or instrument, or result in a violation
of the corporate charter or bylaws of the Telephone Company or any
order, rule or regulation of any court or governmental agency having
jurisdiction over the Telephone Company; and except as required by the
Act, the Trust Indenture Act and applicable state securities laws, no
consent, authorization or order of, or filing or registration with, any
court or governmental agency is required for the execution, delivery and
performance of this Agreement, the Delayed Delivery Contract, if any,
and the Indenture.
(d) Except as described in or contemplated by the Registration
Statement and the Prospectus, there shall have not occurred any changes
or any development involving a prospective change, or affecting
particularly the business or properties of the Telephone Company or its
subsidiaries which materially impairs the investment quality of the
Underwritten Securities since the dates as of which information is given
in the Registration Statement and the Prospectus.
(e) On the Delivery Date (as defined in Paragraph 7 hereof) (i)
the Indenture will have been duly authorized, executed and delivered by
the Telephone Company and will constitute the legally binding obligation
of the Telephone Company, enforceable in accordance with its terms, (ii)
the Underwritten Securities will have been duly authorized and, upon
payment therefor as provided in this Agreement, will constitute legally
binding obligations of the Telephone Company entitled to the benefits of
the Indenture, and (iii) the Underwritten Securities and the Indenture
will conform to the descriptions thereof contained in the Prospectus.
(f) The Telephone Company has been duly incorporated, is validly
existing as a corporation in good standing under the laws of the State
of Missouri, with full corporate power and authority to own its
properties and conduct its business as described in the Prospectus, and
is duly qualified to do business as a foreign corporation and is in good
standing under the laws of each jurisdiction which requires such
qualification wherein it owns or leases properties or conducts business,
except where the failure to so qualify would not have a material adverse
effect on the Telephone Company.
(g) Except as described in the Prospectus, there is no material
litigation or governmental proceeding pending or, to the knowledge of
the Telephone Company, threatened against the Telephone Company which is
reasonably expected to result in any material adverse change in the
financial condition, results of operations,
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business or prospects of the Telephone Company or which is required to
be disclosed in the Registration Statement.
(h) The financial statements filed as part of the Registration
Statement or included in any Preliminary Prospectus or the Prospectus
present, or (in the case of any amendment or supplement to any such
document, or any material incorporated by reference in any such
document, filed with the Commission after the date as of which this
representation is being made) will present at all times during the
period specified in Paragraph 8(c) hereof, fairly, the financial
condition and results of operations of the Telephone Company, at the
dates and for the periods indicated, and have been, and (in the case of
any amendment or supplement to any such document, or any material
incorporated by reference in any such document, filed with the
Commission after the date as of which this representation is being made)
will be at all times during the period specified in Paragraph 8(c)
hereof, prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved
(except as described in the notes thereto).
(i) The documents incorporated by reference into any Preliminary
Prospectus or the Prospectus have been, and (in the case of any
amendment or supplement to any such document, or any material
incorporated by reference in any such document, filed with the
Commission after the date as of which this representation is being made)
will be, at all times during the period specified in Paragraph 8(c)
hereof, prepared by the Telephone Company in conformity with the
applicable requirements of the Act and the Rules and Regulations and the
Exchange Act and the rules and regulations of the Commission thereunder
and such documents have been, or (in the case of any amendment or
supplement to any such document, or any material incorporated by
reference in any such document, filed with the Commission after the date
as of which this representation is being made) will be at all times
during the period specified in Paragraph 8(c) hereof, timely filed as
required thereby.
(j) There are no contracts or other documents which are required
to be filed as exhibits to the Registration Statement by the Act or by
the Rules and Regulations, or which were required to be filed as
exhibits to any document incorporated by reference in the Prospectus by
the Exchange Act or the rules and regulations of the Commission
thereunder, which have not been filed as exhibits to the Registration
Statement or to such document or incorporated therein by reference as
permitted by the Rules and Regulations or the rules and regulations of
the Commission under the Exchange Act as required.
(k) No order, consent, approval, authorization, registration or
qualification of or with any governmental agency or body having
jurisdiction over the Telephone Company or any of its properties is
required for the issue and sale of the
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Underwritten Securities or the consummation by the Telephone Company of
the transactions contemplated by this Agreement or the Indenture, except
such as have been, or will have been prior to the Delivery Date,
obtained under the Act and the Trust Indenture Act and such consents,
approvals, authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection with the
purchase and distribution of the Underwritten Securities by the
Underwriters.
2. Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Telephone Company agrees
to sell to each Underwriter, severally and not jointly, and each Underwriter
agrees, severally and not jointly, to purchase from the Telephone Company, at
the purchase price and on the other terms set forth in Schedule I hereto, the
principal amount of the Underwritten Securities set forth opposite its name in
Schedule II hereto.
3. Any offer to purchase Underwritten Securities by institutional
investors solicited by the Underwriters for delayed delivery shall be made
pursuant to contracts substantially in the form of Exhibit A attached hereto,
with such changes therein as the Telephone Company and the Representative may
approve ("Delayed Delivery Contracts"). The Telephone Company shall have the
right, in its sole discretion, to approve or disapprove each such institutional
investor. Underwritten Securities which are subject to Delayed Delivery
Contracts are herein sometimes called "Delayed Delivery Underwritten
Securities" and Underwritten Securities which are not subject to Delayed
Delivery Contracts are herein sometimes called "Immediate Delivery Underwritten
Securities."
Contemporaneously with the purchase on the Delivery Date by the
Underwriters of the Immediate Delivery Underwritten Securities pursuant to this
Agreement, the Telephone Company will pay to the Representative, for the
account of the Underwriters, the compensation specified in Schedule I hereto
for arranging the sale of Delayed Delivery Underwritten Securities. The
Underwriters shall have no responsibility with respect to the validity or
performance of any Delayed Delivery Contracts.
For the purpose of determining the principal amount of Immediate
Delivery Underwritten Securities to be purchased by each Underwriter, there
shall be deducted from the principal amount of Underwritten Securities to be
purchased by such Underwriter as set forth in Schedule II hereto that portion
of the aggregate principal amount of Delayed Delivery Underwritten Securities
that the principal amount of Underwritten Securities to be purchased by such
Underwriter as set forth in Schedule II hereto bears to the aggregate principal
amount of Underwritten Securities set forth therein to be purchased by all of
the Underwriters (in each case as adjusted by the Representative to avoid
fractions of the minimum principal amount in which the Underwritten Securities
may be issued), except to the extent that the Representative determines, in its
discretion,
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that such deduction shall be otherwise than in such proportion and so advises
the Company.
4. [Reserved]
5. The Telephone Company shall not be obligated to deliver any
Underwritten Securities except upon payment for all Immediate Delivery
Underwritten Securities to be purchased pursuant to this Agreement as
hereinafter provided.
6. If any Underwriter defaults in the performance of its obligations
under this Agreement, the remaining non-defaulting Underwriters shall be
obligated to purchase the Immediate Delivery Underwritten Securities which the
defaulting Underwriter agreed but failed to purchase in the respective
proportions which the principal amount of Underwritten Securities set forth in
Schedule II hereto to be purchased by each remaining non-defaulting Underwriter
set forth therein bears to the aggregate principal amount of Underwritten
Securities set forth therein to be purchased by all the remaining non-
defaulting Underwriters; provided that the remaining non-defaulting
Underwriters shall not be obligated to purchase any Immediate Delivery
Underwritten Securities if the aggregate principal amount of Immediate Delivery
Underwritten Securities which the defaulting Underwriter or Underwriters agreed
but failed to purchase exceeds 9.09% of the total principal amount of
Underwritten Securities, and any remaining non-defaulting Underwriter shall not
be obligated to purchase more than 110% of the principal amount of Underwritten
Securities set forth in Schedule II hereto to be purchased by it. If the
foregoing maximums are exceeded, the remaining non-defaulting Underwriters, or
those other underwriters satisfactory to the Representative who so agree, shall
have the right, but shall not be obligated, to purchase, in such proportion as
may be agreed upon among them, all the Immediate Delivery Underwritten
Securities. If the remaining Underwriters or other underwriters satisfactory to
the Representative do not elect to purchase the Immediate Delivery Underwritten
Securities which the defaulting Underwriter or Underwriters agreed but failed
to purchase, this Agreement shall terminate without liability on the part of
any non-defaulting Underwriter, or the Telephone Company, except that the
Telephone Company will continue to be liable for the payment of expenses as set
forth in Paragraph 8(i) hereof.
Nothing contained in this Paragraph 6 shall relieve a defaulting
Underwriter of any liability it may have to the Telephone Company for damages
caused by its default. If other Underwriters are obligated or agree to purchase
the Immediate Delivery Underwritten Securities of a defaulting or withdrawing
Underwriter, either the Representative or the Telephone Company may postpone
the Delivery Date for up to seven full business days in order to effect any
changes that in the opinion of the Telephone Company or the Representative may
be necessary in the Registration Statement, the Prospectus or in any other
document or arrangement.
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7. Delivery of and payment for the Immediate Delivery Underwritten
Securities shall be made at such address, date and time as specified in
Schedule I hereto. This date and time are sometimes referred to as the
"Delivery Date." On the Delivery Date, the Telephone Company shall deliver the
Immediate Delivery Underwritten Securities to the Representative for the
account of each Underwriter against payment to or upon the order of the
Telephone Company of the purchase price by wire transfer of immediately
available funds settled through the New York Clearing House or such other
Clearing House as is named in Schedule I. Time shall be of the essence, and
delivery at the time and place specified pursuant to this Agreement is a
further condition of the obligation of each Underwriter hereunder. Upon
delivery, the Immediate Delivery Underwritten Securities shall be in such form
or forms and in such denominations as may be set forth in Schedule I. Immediate
Delivery Underwritten Securities in registered form shall be in such authorized
denominations and registered in such names as the Representative shall request
in writing not less than two full business days prior to the Delivery Date. For
the purpose of expediting the checking and packaging of the Immediate Delivery
Underwritten Securities, the Telephone Company shall make the Immediate
Delivery Underwritten Securities available for inspection by the Representative
in New York, New York not later than 2:00 P.M., local time, on the business day
prior to the Delivery Date. For purposes of Rule 15c6-1 under the Exchange
Act, the Delivery Date (if later than the otherwise applicable settlement date)
shall be the date for payment of funds and delivery of securities for all the
Immediate Delivery Underwritten Securities sold pursuant to the offering, other
than Delayed Delivery Underwritten Securities for which payment of funds and
delivery of securities shall be as hereinafter provided.
8. The Telephone Company agrees with the several Underwriters:
(a) The Telephone Company will furnish promptly to the
Representative and to counsel for the Underwriters signed copies of the
Registration Statement as originally filed and each amendment and
supplement thereto filed prior to the date hereof and relating to or
covering the Underwritten Securities, and a copy of the Prospectus filed
with the Commission, including all documents incorporated therein by
reference and all consents and exhibits filed therewith;
(b) The Telephone Company will deliver promptly to the
Representative such reasonable number of the following documents as the
Representative may request: (i) conformed copies of the Registration
Statement (excluding exhibits other than the computation of the ratio of
earnings to fixed charges, the Indenture and this Agreement), (ii) the
Prospectus and (iii) any documents incorporated by reference in the
Prospectus;
(c) During any period when a Prospectus relating to the
Underwritten Securities is required by law to be delivered, the
Telephone Company will not file
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any amendment of the Registration Statement nor will the Telephone
Company file any amendment or supplement to the Prospectus (except for
(i) an amendment or supplement consisting solely of the filing of a
document under the Exchange Act or (ii) a supplement relating to an
offering of securities other than the Underwritten Securities), unless
the Telephone Company has furnished you a copy of such proposed
amendment or supplement for your review prior to filing and will not
file any such proposed amendment or supplement to which you reasonably
object. Subject to the foregoing sentence, the Telephone Company will
cause the Prospectus and any amendment or supplement thereto to be filed
with the SEC as required pursuant to Rule 424 under the Securities Act.
The Telephone Company will promptly advise you (i) when the Prospectus
or any amendment or supplement thereto shall have been filed with the
SEC pursuant to Rule 424 under the Securities act, (ii) when any
amendment of the Registration Statement shall have become effective,
(iii) of any request by the SEC for any amendment of the Registration
Statement or amendment of or supplement to the Prospectus or for any
additional information, (iv) of the issuance by the SEC of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (v) of
the receipt by the Telephone Company of any notification with respect to
the suspension of the qualification of the Underwritten Securities for
sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose. The Telephone Company will promptly (upon
filing thereof) furnish you a copy of any amendment or supplement to the
Prospectus or Registration Statement not furnished to the Representative
for prior review pursuant to exception (i) or (ii) of the first sentence
of this subsection (a). The Telephone Company will use its best efforts
to prevent the issuance of any such stop order and, if issued, to obtain
as soon as possible the withdrawal thereof.
(d) If, at any time when a prospectus relating to the
Underwritten Securities is required to be delivered under the Securities
Act, any event occurs as a result of which the Registration Statement,
as then amended, or the Prospectus, as then supplemented, would include
any untrue statement of a material fact or omit to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it shall
be necessary to amend the Registration Statement or to supplement the
Prospectus to comply with the Securities Act or the Exchange Act or the
respective rules thereunder, the Telephone Company promptly will (i)
notify you of the happening of such event, (ii) prepare and file with
the SEC, subject to the first sentence of paragraph (c) of this Section
8, an amendment or supplement which will correct such statement or
omission or an amendment or supplement which will effect such compliance
and (iii) will supply any such amended or supplemented Prospectus to you
in such quantities as the Representative may reasonably request.
(e) As soon as practicable, the Telephone Company will make
generally available to its security holders and to the Representative an
earnings statement or
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statements of the Telephone Company which will satisfy the provisions of
Section 11(a) of the Securities Act and Rule 158 under the Securities
Act.
(f) During a period of five years after the date hereof, the
Telephone Company will furnish to the Representative copies of all
reports and financial statements furnished by the Telephone Company to
each securities exchange on which securities issued by the Telephone
Company may be listed pursuant to requirements of or agreements with
such exchange or to the Commission pursuant to the Exchange Act or any
rule or regulation of the Commission thereunder.
(g) The Telephone Company will endeavor to qualify the
Underwritten Securities for sale under the laws of such jurisdiction as
you may designate and will maintain such qualifications in effect so
long as required for the distribution of the Underwritten Securities,
provided that in connection therewith the Telephone Company shall not be
required to qualify as a foreign corporation or take any action which
would subject it to general or unlimited service of process in any
jurisdiction where it is not now so subject.
(h) The Telephone Company will pay the costs incident to the
authorization, issuance and delivery of the Underwritten Securities and
any taxes payable in that connection; the costs incident to the
preparation, printing and filing under the Act of the Registration
Statement and any amendments, supplements and exhibits thereto; the
costs of distributing the Registration Statement as originally filed and
each amendment and post-effective amendment thereof (including
exhibits), any Preliminary Prospectus, the Prospectus and any documents
incorporated by reference in any of the foregoing documents; the costs
of producing this Agreement, the Delayed Delivery Contracts, if any, and
the Indenture; fees paid to rating agencies in connection with the
rating of the Securities, including the Underwritten Securities; the
fees and expenses of qualifying the Underwritten Securities under the
securities laws of the several jurisdictions as provided in this
Paragraph and of preparing and printing a Blue Sky Memorandum and a
memorandum concerning the legality of the Securities, including the
Underwritten Securities, as an investment (including fees of counsel to
the Underwriters); and all other costs and expenses incident to the
performance of the Telephone Company's obligations under this Agreement;
provided that, except as provided in this Paragraph and in Paragraph 12
hereof, the Underwriters shall pay their own costs and expenses,
including the fees and expenses of their counsel, any transfer taxes on
the Underwritten Securities which they may sell and the expenses of
advertising any offering of the Underwritten Securities made by the
Underwriters; and
(i) Until the termination of the offering of the Underwritten
Securities, to timely file all documents, and any amendments to
previously filed documents,
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required to be filed by the Company pursuant to Sections 13(a), 13(c),
14 and 15(d) of the Exchange Act.
9. (a) The Telephone Company shall indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within
the meaning of the Act from and against any loss, claim, damage or
liability, joint or several, and any action in respect thereof, to which
that Underwriter or controlling person may become subject, under the Act
or otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or arises out of, or is
based upon, the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, and shall reimburse each Underwriter and such
controlling person for any legal and other expenses reasonably incurred
by that Underwriter or controlling person in investigating or defending
or preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred (but no more frequently than
annually); provided, however, that the Telephone Company shall not be
liable in any such case to the extent that any such loss, claim, damage,
liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement or omission or alleged omission
made in any Preliminary Prospectus, the Registration Statement or the
Prospectus in reliance upon and in conformity with written information
furnished to the Telephone Company through the Representative by or on
behalf of any Underwriter specifically for use therein. The foregoing
indemnity agreement is in addition to any liability which the Telephone
Company may otherwise have to any Underwriter or controlling person.
(b) Each Underwriter shall indemnify and hold harmless the
Telephone Company, each of their directors, each of their officers who
signed the Registration Statement and any person who controls the
Telephone Company, within the meaning of the Act from and against any
loss, claim, damage or liability, joint or several, and any action in
respect thereof, to which the Telephone Company, or any such director,
officer or controlling person may become subject, under the Act or
otherwise, insofar as such loss, claim, damage, liability or action
arises out of, or is based upon, any untrue statement or alleged untrue
statement of a material fact contained in any Preliminary Prospectus,
the Registration Statement or the Prospectus, or arises out of, or is
based upon, the omission or alleged omission to state therein a material
fact required to be stated therein or necessary to make the statements
therein not misleading, but in each case only to the extent that the
untrue statement or alleged untrue statement or omission or alleged
omission was made in reliance upon and in conformity with information
furnished in writing to the Telephone Company through the Representative
by or on behalf of that Underwriter specifically for use therein, and
shall reimburse the Telephone Company for any
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legal and other expenses reasonably incurred by the Telephone Company or
any such director, officer or controlling person in investigating or
defending or preparing to defend against any such loss, claim, damage,
liability or action as such expenses are incurred (but no more
frequently that annually). The foregoing indemnity agreement is in
addition to any liability which any Underwriter may otherwise have to
the Telephone Company or any of its directors, officers or controlling
or persons.
(c) Promptly after receipt by an indemnified party under this
Paragraph 9 of notice of any claim or the commencement of any action,
the indemnified party shall, if a claim in respect thereof it to be made
against the indemnifying party under this Paragraph 9, notify the
indemnifying party in writing of the claim or the commencement of that
action, provided that the failure to notify the indemnifying party shall
not relieve it from any liability which it may have to an indemnified
party otherwise than under Paragraph 9(a) or 9(b). If any such claim or
action shall be brought against an indemnified party, and it shall
notify the indemnifying party thereof, the indemnifying party shall be
entitled to participate therein, and, to the extent that it wishes,
jointly with any other similarly notified indemnifying party, to assume
the defense thereof with counsel satisfactory to the indemnified party.
After notice from the indemnifying party to the indemnified party of its
election to assume the defense of such claim or action, the indemnifying
party shall not be liable to the indemnified party under this Paragraph
9 for any legal or other expenses subsequently incurred by the
indemnified party in connection with the defense thereof other than
reasonable costs of investigation. If the indemnifying party shall not
elect to assume the defense of such action, such indemnifying party will
reimburse such indemnified party for the reasonable fees and expenses of
any counsel retained by them. In the event that the parties to any such
action (including impleaded parties) include both the Telephone Company
and one or more Underwriters and either (i) the indemnifying party or
parties and indemnified party or parties mutually agree or (ii)
representation of both the indemnifying party or parties and the
indemnified party or parties by the same counsel is inappropriate under
applicable standards of professional conduct or in the opinion of such
counsel due to actual or potential differing interests between them,
then the indemnifying party shall not have the right to assume the
defense of such action on behalf of such indemnified party and will
reimburse such indemnified party for the reasonable fees and expenses of
any counsel retained by them and satisfactory to the indemnifying party,
it being understood that the indemnifying party shall not, in connection
with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more
than one separate firm of attorneys for all such indemnified parties,
which firm shall be designated in writing by the Representative in the
case of an action in which one or more Underwriters or controlling
persons are indemnified parties and by the Telephone Company in the
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case of an action in which the Telephone Company or any of its
directors, officers or controlling persons are indemnified parties. The
indemnifying party or parties shall not be liable under this Agreement
with respect to any settlement made by any indemnified party or parties
without prior written consent by the indemnifying party or parties to
such settlement.
(d) If the indemnification provided for in this Paragraph 9
shall for any reason be unavailable to an indemnified party under
Paragraph 9(a) or 9(b) hereof in respect of any loss, claim, damage,
liability or any action in respect thereof, referred to therein, then
each indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action in
respect thereof, in such proportion as is appropriate to reflect the
relative benefits by the Telephone Company, on the one hand, and the
Underwriters, on the other hand, from the offering of the Underwritten
Securities. If, however, this allocation is not permitted by applicable
law, then each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, in such proportion as
shall be appropriate to reflect the relative benefits received by the
Telephone Company, on the one hand, and the Underwriters, on the other
hand, from the offering of the Underwritten Securities and the relative
fault of the Telephone Company, on the one hand, and the Underwriters,
on the other hand, with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect
thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Telephone Company, on the one hand,
and the Underwriters, on the other hand, with respect to such offering
shall be deemed to be in the same proportion as the total net proceeds
from the offering of the Underwritten Securities (before deducting
expenses) received by the Telephone Company bear to the total
underwriting discounts and commissions received by the Underwriters with
respect to such offering. The relative fault shall be determined by
reference to whether the untrue or alleged untrue statement of a
material fact or omission or alleged omission to state a material fact
relates to information supplied by the Telephone Company or the
Underwriters, the intent of the parties and their relative knowledge,
access to information and opportunity to correct or prevent such
statement or omission. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in
respect thereof, referred to above in this Paragraph 9(d) shall be
deemed to include, for purposes of this Paragraph 9(d), any legal or
other expenses reasonably incurred by such indemnified party in
connection with investigating or defending any such action or claim.
Notwithstanding the provisions of this Paragraph 9(d), no Underwriter
shall be required to contribute any amount in excess of the amount by
which the total price at which the Underwritten Securities underwritten
by it and distributed to the public were offered to the public exceeds
the amount of any damages which such Underwriter
-12-
13
has otherwise paid or become liable to pay by reason of any untrue or
alleged untrue statement or omission or alleged omission. No person
guilty of fraudulent misrepresentation (within the meaning of Section
11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. The Underwriters'
obligations to contribute as provided in this Paragraph 9(d) are several
in proportion to their respective underwriting obligations and not
joint.
(e) The agreements contained in this Paragraph 9 and the
representations, warranties and agreements of the Telephone Company in
Paragraph 1 and Paragraph 8 hereof shall survive the delivery of the
Underwritten Securities and shall remain in full force and effect,
regardless of any termination or cancellation of this Agreement or any
investigation made by or on behalf of any indemnified party.
10. The obligations of the Underwriters under this Agreement may be
terminated by the Representative, in its absolute discretion, by notice given
to and received by the Telephone Company prior to the delivery of and payment
for the Immediate Delivery Underwritten Securities, if, during the period
beginning on the date hereof to and including the Delivery Date, (a) trading in
securities generally on the New York Stock Exchange, Inc. is suspended or
materially limited, or (b) a banking moratorium is declared by either Federal
or New York State authorities, or (c) there shall have occurred any outbreak or
material escalation of hostilities or other calamity or crisis or the
declaration by the United States of war or a national emergency the effect of
which on the financial markets of the United States is material and adverse and
is such as to make it, in the reasonable judgment of the Representative,
impracticable or inadvisable to market such Underwritten Securities on the
terms and in the manner contemplated by the Prospectus, or (d) the Telephone
Company shall have received notice that any rating of any of the Telephone
Company's unsecured senior debt securities shall have been lowered by any
nationally recognized statistical rating organization (as defined in Rule
15c3-1 under the Exchange Act) or any such organization has publicly announced
that it has under surveillance or review, with possible negative implications,
the ratings of any of the Telephone Company's unsecured senior debt securities,
or (e) there shall have occurred any change, or any development involving a
prospective change, in or affecting particularly the business or properties of
the Telephone Company or its subsidiaries which, in the Representative's
reasonable judgment, materially impairs the investment quality of the
Underwritten Securities.
11. The respective obligations of the Underwriters under the
Agreement with respect to the Underwritten Securities are subject to the
accuracy, on the date hereof and on the Delivery Date, of the representations
and warranties of the Telephone Company contained herein, to performance by the
Telephone Company of its obligations hereunder, and to each of the following
additional terms and conditions applicable to the Underwritten Securities:
-13-
14
(a) At or before the Delivery Date, no stop order suspending the
effectiveness of the Registration Statement nor any order directed to
any document incorporated by reference in the Prospectus shall have been
issued and prior to that time no stop order proceeding shall have been
initiated or threatened by the Commission and no challenge shall have
been made by the Commission or its staff as to the accuracy or adequacy
of any document incorporated by reference in the Prospectus; any request
of the Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall have been
complied with; and after the date hereof the Telephone Company shall not
have filed with the Commission any amendment or supplement to the
Registration Statement or the Prospectus (or any document incorporated
by reference therein) that shall have been disapproved by the
Representative.
(b) No Underwriter shall have discovered and disclosed to the
Telephone Company on or prior to the Delivery Date that the Registration
Statement or the Prospectus contains an untrue statement of a fact which
is material or omits to state a fact which is material and is required
to be stated therein or is necessary to make the statements therein not
misleading.
(c) All corporate proceedings and other legal matters incident
to the authorization, form and validity of this Agreement, the
Underwritten Securities and the Indenture and the form of the
Registration Statement, the Prospectus (other than financial statements
and other financial data) and all other legal matters relating to this
Agreement and the transactions contemplated hereby shall be satisfactory
in all respects to Xxxxxxxx & Xxxxxxxx, counsel for the Underwriters,
and the Telephone Company shall have furnished to such counsel all
documents and information that they may reasonably request to enable
them to pass upon such matters.
(d) The Vice President and General Counsel to the Telephone
Company shall have furnished to the Representative his opinion addressed
to the Underwriters and dated the Delivery Date, as counsel, to the
effect that:
(i) the Telephone Company has been duly incorporated and
is validly existing as a corporation in good standing under the
laws of the State of Missouri, with full corporate power and
authority to own its properties and conduct its business as
described in the Prospectus, and is duly qualified to do business
as a foreign corporation and is in good standing under the laws
of each jurisdiction which requires such qualification wherein it
owns or leases properties or conducts business, except where the
failure to so qualify would not have a material adverse effect on
the Telephone Company;
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15
(ii) the Indenture has been duly authorized, executed and
delivered, has been duly qualified under the Trust Indenture Act,
and constitutes a legal, valid and binding instrument enforceable
against the Telephone Company in accordance with its terms
(subject, as to enforcement of remedies, to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws of general applicability
relating to or affecting creditors' rights generally from time to
time in effect and to general principles of equity);
(iii) to the best knowledge of such counsel, there is no
pending or threatened action, suit or proceeding before any court
or governmental agency, authority, body or any arbitrator
involving the Telephone Company of a character required to be
disclosed in the Registration Statement which is not adequately
disclosed in the Prospectus, and there is no franchise, contract
or other document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as an
exhibit, which is not described or filed as required; and the
statements included or incorporated by reference in the
Prospectus describing any legal proceedings or material contracts
or agreements relating to the Telephone Company fairly summarize
such matters; the Underwritten Securities, the Indenture and any
Delayed Delivery Contracts conform to the descriptions thereof
contained under the following (or comparable) captions of the
Prospectus: "Description of Debt Securities" and "Plan of
Distribution";
(iv) the Immediate Delivery Underwritten Securities have
been duly authorized, executed, authenticated, issued and
delivered and are valid and legally binding obligations of the
Telephone Company entitled to the benefits of the Indenture;
(v) the Delayed Delivery Underwritten Securities, if any,
have been duly authorized and, when executed, authenticated,
issued and delivered to, and paid for by, the respective
purchasers thereof in accordance with the Indenture and the
related Delayed Delivery Contracts, will be valid and legally
binding obligations of the Telephone Company entitled to the
benefits of the Indenture;
(vi) the Registration Statement and any amendments
thereto have become effective under the Securities Act; to the
best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued, no
proceedings for that purpose have been instituted or threatened,
and the Registration Statement, the Prospectus and each amendment
thereof or supplement thereto as of
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16
their respective effective or issue dates (other than the
financial statements and other financial and statistical
information contained therein as to which such counsel need
express no opinion) complied as to form in all material respects
with the applicable requirements of the Securities Act, the
Exchange Act and the Trust Indenture Act and the respective rules
and regulations thereunder; and such counsel has no reason to
believe that the Registration Statement, or any amendment
thereof, at the time it became effective or at the date of this
Agreement or at the Delivery Date, contained any untrue statement
of a material fact or omitted to state any material fact required
to be stated therein or necessary to make the statements therein
not misleading or that the Prospectus, at the date of this
Agreement or at the Delivery Date, included any untrue statement
of a material fact or omitted to state a material fact necessary
to make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(vii) this Agreement and the Delayed Delivery Contracts,
if any, have been duly authorized, executed and delivered by the
Telephone Company;
(viii) no order, consent, approval, authorization,
registration or qualification of or with any governmental agency
or body having jurisdiction over the Telephone Company or any of
its properties required for the issue and sale of the
Underwritten Securities or the consummation by the Telephone
Company of the transactions contemplated by this Agreement or the
Indenture, except such as have been obtained under the Securities
Act and the Trust Indenture Act and such consents, approvals,
authorizations, registrations or qualifications as may be
required under state securities or Blue Sky laws in connection
with the sale and distribution of the Underwritten Securities;
and
(ix) neither the execution and delivery of the
Indenture, this Agreement or any Delayed Delivery Contracts, the
issue and sale of the Underwritten Securities, nor the
consummation of any other of the transactions herein or therein
contemplated nor the fulfillment of the terms hereof or thereof
will conflict with, result in a breach of, or constitute a
default under, the charter or by-laws of the Telephone Company or
the terms of any indenture or other agreement or instrument known
to such counsel and to which the Telephone Company is a party or
by which the Telephone Company or any of its assets is bound, or
any order or regulation known to such counsel to be applicable to
the Telephone Company of any court, regulatory body,
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administrative agency, governmental body or arbitrator having
jurisdiction over the Telephone Company.
In rendering such opinion, such counsel may rely, as to the execution of the
Indenture by the Trustee, upon a certificate of the Trustee setting forth the
facts as to such execution.
In rendering such opinion, such counsel may also rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
Missouri upon the opinion of other counsel of good standing believed to be
reliable, provided that such counsel states in such opinion that such counsel
and the Representative are justified in relying upon the opinion of such other
counsel, and (B) as to matters of fact, to the extent deemed proper, on
certificates of responsible officers of the Telephone Company and public
officials.
In rendering such opinion with respect to clause (viii) above, insofar as it
relates to regulatory authorities in the states in which the Telephone Company
operates, such counsel may rely on the opinions of local counsel satisfactory
to such counsel.
(e) The Representative shall have received from Xxxxxxxx &
Xxxxxxxx, counsel for the Underwriters, such opinion or opinions, dated
the date hereof, with respect to the issuance and sale of the
Underwritten Securities, the Indenture, the Registration Statement, the
Prospectus and other related matters as the Representative may
reasonably require, and the Telephone Company shall have furnished to
such counsel such documents as they request for the purpose of enabling
them to pass upon such matters.
(f) The Telephone Company shall have furnished to the
Representative a certificate signed by its Chairman of the Board or its
President or a Vice President and its Treasurer or an Assistant
Treasurer stating that after reasonable investigation and to the best of
their knowledge:
(i) the representations and warranties of the Telephone
Company in this Agreement are true and correct in all material
respects on and as of the Delivery Date with the same effect as
if made on the Delivery Date; the Telephone Company has complied
with all the agreements and satisfied all the conditions on its
part to be performed or satisfied as a condition to the
obligation of the Underwriters to purchase the Underwritten
Securities hereunder; and the conditions set forth in Paragraphs
11(a) and 11(h) have been fulfilled;
(ii) as of the date of the Prospectus, the Registration
Statement and the Prospectus did not include any untrue statement
of a material fact and did not omit to state a material fact
required to be
-17-
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stated therein or necessary to make the statements therein not
misleading; and
(iii) since the date of the most recent financial
statements included or incorporated by reference in the
Prospectus, there has been no material adverse change in the
condition (financial or other), earnings, business or properties
of the Telephone Company and its subsidiaries, whether or not
arising from transactions in the ordinary course of business,
except as set forth in or contemplated in the Prospectus.
(g) The Telephone Company shall have furnished to the
Representative (i) a letter of Ernst & Young LLP, addressed to the Board
of Directors of the Telephone Company and the Underwriters and dated the
later of the effective date of the Registration Statement or the date of
the filing of the Telephone Company's latest Annual Report on Form 10-K,
of the type described in the American Institute of Certified Public
Accountants' Statement on Auditing Standards No. 72 and covering such
financial statement items as counsel for the Underwriters may reasonably
have requested and (ii) a letter of Ernst & Young LLP, addressed to the
Underwriters and dated the Delivery Date, stating, as of the date of
such letter (or, with respect to matters involving changes or
developments since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than five
days prior to the date of such letter), the conclusions and findings of
such firm with respect to the financial information and other matters
covered by its letter referred to in subclause (i) above and confirming
in all material respects the conclusions and findings set forth in such
prior letter.
(h) No order, consent, approval, authorization, registration or
qualification of or with any governmental agency or body having
jurisdiction over the Telephone Company or any of its properties is
required for the issue and sale of the Underwritten Securities or the
consummation by the Telephone Company of the transactions contemplated
by this Agreement or the Indenture, except such as have been, or will
have been prior to the Delivery Date, obtained under the Act and the
Trust Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the purchase and
distribution of the Underwritten Securities by the Underwriters.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance satisfactory to the
Representative.
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12. If the Telephone Company shall fail to tender the Immediate
Delivery Underwritten Securities for delivery to the Underwriters for any
reason permitted under this Agreement, or if the Underwriters shall decline to
purchase the Immediate Delivery Underwritten Securities for any reason
permitted under this Agreement (other than pursuant to Paragraph 6 or
Paragraphs 10(a) - (d) hereof), the Telephone Company shall reimburse the
Underwriters for the reasonable fees and expenses of their counsel and for such
other out-of-pocket expenses as shall have been incurred by them in connection
with this Agreement and the proposed purchase of Immediate Delivery
Underwritten Securities and the solicitation of any purchases of the Delayed
Delivery Underwritten Securities, and upon demand the Telephone Company shall
pay the full amount thereof to the Representative. If this Agreement is
terminated pursuant to Paragraph 6 hereof by reason of the default of one or
more Underwriters or pursuant to Paragraphs 10(a) - (d) hereof, the Telephone
Company shall not be obligated to reimburse any Underwriter on account of those
expenses.
13. The Telephone Company shall be entitled to act and rely upon any
request, consent, notice or agreement by, or on behalf of, the Representative.
Any notice by the Telephone Company to the Underwriters shall be sufficient if
given in writing or by facsimile transmission confirmed promptly in writing
addressed to the Representative at its address set forth in Schedule I hereto,
and any notice by the Underwriters to the Telephone Company shall be sufficient
if given in writing or by facsimile transmission confirmed promptly in writing
addressed to the Telephone Company at Xxx Xxxx Xxxxxx, Xxxx 0000, Xx. Xxxxx,
Xxxxxxxx 00000, Telecopy Number: (000) 000-0000, Attention of the Vice
President-Chief Financial Officer and Treasurer with a copy to the Vice
President-General Counsel and Secretary, Xxx Xxxx Xxxxxx, Xxxx 0000, Xx. Xxxxx,
XX 00000, Telecopy Number: (000) 000-0000.
14. This Agreement shall be binding upon the Underwriters, the
Telephone Company and their respective successors. This Agreement and the
terms and provisions hereof are for the sole benefit of only those persons,
except that (a) the representations, warranties, indemnities and agreements of
the Telephone Company contained in this Agreement shall also be deemed to be
for the benefit of the person or persons, if any, who control any Underwriter
within the meaning of Section 15 of the Act and (b) the indemnity agreement of
the Underwriters contained in Paragraph 9 hereof shall be deemed to be for the
benefit of directors of the Telephone Company, officers of the Telephone
Company who have signed the Registration Statement and any person controlling
the Telephone Company. Nothing in this Agreement is intended or shall be
construed to give any person, other than the persons referred to in this
Paragraph 14, any legal or equitable right, remedy or claim under or in respect
of this Agreement or any provision contained herein.
15. For purposes of this Agreement, "business day" means any day on
which the New York Stock Exchange, Inc. is open for trading.
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20
16. This Agreement may be executed by the parties hereto 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 instrument.
17. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAW OF NEW YORK.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this Agreement shall represent a binding agreement between the
Telephone Company and the several Underwriters.
Very truly yours,
SOUTHWESTERN XXXX TELEPHONE COMPANY
By: /s/ Xxxxx X. Xxxxxx
-------------------------------
Title: Treasurer
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The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
Xxxxxxx, Xxxxx & Co.
/s/ Xxxxxxx, Sachs & Co.
------------------------
(Xxxxxxx, Xxxxx & Co.)
For itself and as Representative of the several Underwriters named in Schedule
II to the foregoing Agreement.
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SCHEDULE I
Underwriting Agreement, dated July 8, 1997
Registration Statement No. 33-49967
Representative and Address: Xxxxxxx, Sachs & Co.
Xx. Xxxxx Xxxxx
00 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Underwritten Securities:
Indenture, dated as of February 1, 1985, as supplemented by the First
Supplemental Indenture, dated as of June 1, 1991, from Southwestern Xxxx
Telephone Company to The Bank of New York, as Trustee (the "Indenture").
As used in this Underwriting Agreement, references to "Underwritten
Securities" shall be deemed to be separate references to the 6 5/8%
Notes (as hereinafter defined) and the 7 3/8% Debentures (as hereinafter
defined), each of which constitutes a separate series of Securities
under the Indenture.
Designations: 6 5/8% Notes due July 15, 2007
("6 5/8% Notes")
7 3/8% Debentures due July 15, 2027
("7 3/8% Debentures")
Principal Amounts: 6 5/8% Notes: $250,000,000
7 3/8% Debentures: $150,000,000
Dates of Maturity: 6 5/8% Notes: July 15, 2007
7 3/8% Debentures: July 15, 2027
23
Interest Rates: 6 5/8% Notes: 6 5/8% per annum.
7 3/8% Debentures: 7 3/8% per annum. In each case
payable semi-annually on each January 15 and July
15, commencing January 15, 1998, to holders of
record at the close of business on the preceding
January 1 or July 1.
Purchase Prices: 6 5/8% Notes: 99.096% of the principal amount.
7 3/8% Debentures: 98.680% of the principal
amount. Plus, in each case, accrued interest, if
any, from July 11, 1997 to the date of delivery.
Redemption Provisions: The 6 5/8% Notes are not redeemable prior to
maturity.
The 7 3/8% Debentures are not redeemable prior to
July 15, 2007. On or after July 15, 2007 and prior
to maturity, the Telephone Company, at its option,
may redeem all or from time to time any part of the
7 3/8% Debentures upon not less than 30 but not
more than 60 days' notice at the following
redemption prices (expressed in percentages of the
principal amount) during the 12-month periods
beginning July 15:
Redemption
Year Price
---- ----------
2007 103.465%
2008 103.119
2009 102.772
2010 102.426
2011 102.079
2012 101.733
2013 101.386
2014 101.040
2015 100.693
2016 100.347
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and thereafter at 100% of the principal amount
thereof, in each case together with accrued
interest to the redemption date.
Form and Authorized The 6 5/8% Notes and the 7 3/8% Debentures each
will be Denominations: issued only in registered,
book-entry form in denominations of $1,000 and
integral multiples thereof. The 6 5/8% Notes and
the 7 3/8% Debentures each will be represented by a
global security or securities deposited with, or on
behalf of, The Depository Trust Company, and
registered in the name of Cede & Co., as nominee
for The Depository Trust Company.
Delivery Date, Time 10:00 a.m. (New York time)
and Location: July 11, 1997, at the offices of
Xxxxxxxx & Xxxxxxxx, 000 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000.
Specified Funds for Immediately available funds.
Payment of Purchase Price:
The Delayed Delivery There are no Delayed Delivery Contracts.
Contracts shall have
the following terms:
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25
SCHEDULE II
Principal Principal
Amount of Amount of
Underwritten Underwritten
Underwriter 6 5/8% Notes 7 3/8% Debentures
----------- ------------ -----------------
Xxxxxxx, Sachs & Co. . . . . . . . . . . . . . $ 84,000,000 $ 50,000,000
Xxxxxx Xxxxxxx & Co. Incorporated . . . . . . . 83,000,000 50,000,000
Salomon Brothers Inc . . . . . . . . . . . . . 83,000,000 50,000,000
------------ ------------
Total . . . . . . . . . . . . . . . . . $250,000,000 $150,000,000
============ ============
26
EXHIBIT A
SOUTHWESTERN XXXX TELEPHONE COMPANY
DELAYED DELIVERY CONTRACT
, 199
Southwestern Xxxx Telephone Company
Xxx Xxxx Xxxxxx
Xx. Xxxxx, Xxxxxxxx 00000
Dear Sirs:
The undersigned hereby agrees to purchase from Southwestern Xxxx
Telephone Company, a Missouri corporation (the "Telephone Company"), and the
Telephone Company hereby agrees to sell to the undersigned,
$
principal amount of the Telephone Company's above-captioned securities
("Securities"), offered by the Telephone Company's prospectus dated , 199 , as
supplemented by the prospectus supplement dated , 199 (collectively, the
"Prospectus"), receipt of a copy of which is hereby acknowledged, at a purchase
price of % of the principal amount thereof plus accrued interest from
, 199 to the Delivery Date (as defined in the next paragraph) and on the
further terms and conditions set forth in this Contract.
Payment for and delivery of the Securities to be purchased by the
undersigned shall be made on , 199 , herein called
the "Delivery Date".
At 10:00 A.M., New York time, on the Delivery Date, the
Securities to be purchased by the undersigned hereunder will be delivered by
the Telephone Company to the undersigned, and the undersigned will accept
delivery of such Securities and will make payment to the Telephone Company of
the purchase price therefor at the office of The Bank of New York. Payment
will be by certified or official bank check payable in next-day funds settled
through the New York Clearing House, or such other Clearing House as the
Telephone Company may designate, to or upon the order of the Telephone Company.
The Securities will be delivered in such authorized forms and denominations and
registered in such names as the undersigned may designate by written or
telegraphic
27
communication addressed to the Telephone Company not less than two full
business days prior to the Delivery Date or, if the undersigned fails to make a
timely designation in the foregoing manner, in the form of one definitive fully
registered certificate representing the Securities in the above principal
amount, registered in the name of the undersigned.
If any of the Securities are to be delivered to the undersigned
in bearer form, (i) the undersigned hereby represents that it is not a U.S.
person (or if it is a U.S. person it is a qualified financial institution) and
agrees that it will not offer to sell such Securities, directly or indirectly,
to any U.S. person other than a qualified financial institution and (ii) if the
undersigned is a dealer, that the undersigned also (A) represents that it has
not offered or sold and agrees that it will not offer, sell, or deliver any
such Securities within the United States or, directly or indirectly, to any
U.S. person other than a qualified financial institution and is not purchasing
any of such Securities for the account of any such U.S. person and (B) will
deliver to all purchasers of such Securities from it a written confirmation,
containing a statement to the effect set forth in clauses (i) and (ii) above.
As used herein, "United States" means the United States of America (including
the States and the District of Columbia), its territories, its possessions and
all other areas subject to its jurisdiction; "U.S. person" means a citizen or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or a political
subdivision thereof, or an estate or trust the income of which is subject to
United States Federal income taxation regardless of its source; and "qualified
financial institution" means a financial institution (as defined in Section
1.165-12(c)(1)(v) of the Treasury Department regulations) that provides a
written statement that it will comply with Section 165(j)(3)(A), (B), or (C) of
the Code and the regulations thereunder. Delivery of Securities in bearer form
shall be made only upon receipt of a certificate manually signed by the
undersigned, containing substantially the following:
"This is to certify that as of the date hereof (the date of
delivery of the Securities in bearer form), the above-captioned
Securities which are to be delivered to the undersigned in bearer form
are not being acquired by or on behalf of a U.S. person, or for offer to
resell or for resale to a U.S. person or, if any beneficial owner of the
Securities is a U.S. person, such U.S. person is a financial institution
(as defined in Treasury Department Regulations Section 1.165-12(c)(1)(v)
or acquiring through a financial institution and that the Securities are
held by a financial institution that has agreed to comply with the
requirements of Section 165(j)(3)(A), (B), or (C) of the Internal
Revenue Code of 1986, and the regulations thereunder. If the
undersigned is a clearing organization, the undersigned represents that
the certificate is based on statements provided to it by its member
organizations. As used herein, "United States" means the United States
of America (including the States and the District of Columbia), its
territories, its possessions and all other areas subject to its
jurisdiction; "U.S. person" means a citizen or resident of the United
States, a corporation, partnership or other entity created or organized
-2-
28
in or under the laws of the United States or a political subdivision
thereof, or an estate or trust the income of which is subject to United
States Federal income taxation regardless of its source; and a "clearing
organization" means an entity which is in the business of holding
obligations for member organizations and transferring obligations among
such members by credit or debit to the account of a member without the
necessity of physical delivery of the obligation. If the undersigned is
a dealer, the undersigned agrees to obtain a similar certificate from
each person entitled to delivery of any of the above-captioned
Securities in bearer form purchased from it. However, if the
undersigned has actual knowledge that the information contained in such
certificate is false, the undersigned will not deliver a Security in
temporary or definitive bearer form to the person who signed such
certificate notwithstanding the delivery of such certificate to the
undersigned. The undersigned will be deemed to have actual knowledge
that the beneficial owner is a U.S. person for this purpose if the
undersigned has a U.S. address for the beneficial owner of the
Security."
This Contract will terminate and be of no further force and
effect after , unless (i) on or before such date it
shall have been executed and delivered by both parties hereto and (ii) the
Telephone Company shall have sold to the Underwriters named in the Prospectus
the Immediate Delivery Underwritten Securities (as defined in the Underwriting
Agreement referred to in the Prospectus). The Telephone Company will mail or
deliver to the undersigned at its address set forth below a notice to that
effect, stating the date of the occurrence thereof, accompanied by copies of
the opinion of counsel for the Telephone Company delivered to such Underwriters
pursuant to Paragraph 11(d) of the Underwriting Agreement.
The obligation of the undersigned to accept delivery of and make
payment for the Securities on the Delivery Date will be subject to the
condition that the Securities shall not, on the Delivery Date, be an investment
prohibited by the laws of the jurisdiction to which the undersigned is subject,
the undersigned hereby representing that such an investment is not so
prohibited on the date hereof.
This Contract will inure to the benefit of and be binding upon
the parties hereto and their respective successors but will not be assignable
by either party hereto without the written consent of the other.
This Contract may be executed by any of the parties hereto 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 instrument.
It is understood that acceptance of any Delayed Delivery Contract
(as defined in said Underwriting Agreement) is in the Telephone Company's sole
discretion and,
-3-
29
without limiting the foregoing, need not be on a first-come, first-served
basis. If this Contract is acceptable to the Telephone Company, it is
requested that the Telephone Company sign the form of acceptance below and mail
or deliver one of the counterparts hereof to the undersigned at its address set
forth below. This will become a binding
-4-
30
contract between the Telephone Company and the undersigned when such
counterpart is so mailed or delivered.
Very truly yours,
By
-----------------------------------
-------------------------------------
Title
-------------------------------------
-------------------------------------
Address
Accepted as of , 199
SOUTHWESTERN XXXX TELEPHONE COMPANY
By
---------------------------------
Title:
-5-
