QWEST COMMUNICATIONS INTERNATIONAL INC.
$555,890,000 9.47% Senior Discount Notes Due 2007
PURCHASE AGREEMENT
Dated: October 9, 1997
1.1-1
QWEST COMMUNICATIONS INTERNATIONAL INC.
$555,890,000 9.47% SENIOR DISCOUNT NOTES DUE 2007
PURCHASE AGREEMENT
New York, New York
October 9, 1997
Salomon Brothers Inc
Donaldson, Lufkin & Jenrette Securities Corporation Merrill Lynch, Pierce,
Fenner & Smith Incorporated As Representatives of the Initial Purchasers c/o
Salomon Brothers Inc Seven World Trade Center New York, New York 10048
Ladies and Gentlemen:
Qwest Communications International Inc., a Delaware
corporation (the "Company"), proposes to issue and sell to the parties named in
Schedule I hereto (the "Initial Purchasers"), for whom you are acting as
representatives (the "Representatives"), $555,890,000 aggregate principal amount
at maturity of its 9.47% Senior Discount Notes Due 2007 (the "Securities"). The
Securities are to be issued under an indenture (the "Indenture") dated as of
October 15, 1997 between the Company and Bankers Trust Company, as trustee. If
you are the only Initial Purchasers, all references herein to the
Representatives shall be deemed to be to the Initial Purchasers.
The sale of the Securities to the Initial Purchasers will be
made without registration of the Securities under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. You have advised the Company
that the Initial Purchasers will offer and sell the Securities purchased by them
hereunder in accordance with Section 4 hereof as soon as you deem advisable.
The holders of the Securities will be entitled to the benefits
of a Registration Agreement dated as of October 15, 1997 between the Company and
Salomon Brothers Inc (the "Registration Agreement"), pursuant to which the
Company will file a registration statement with the Securities and Exchange
Commission (the "Commission") registering the Securities or New Securities
(referred to in the Registration Agreement) under the Securities Act.
In connection with the sale of the Securities, the Company has
prepared a final offering memorandum, dated October 9, 1997 (the "Final
Memorandum"). The Final Memorandum sets forth certain information concerning the
Company and the Securities. The Company hereby confirms that it has authorized
the use of the Final Memorandum, and any amendment or supplement thereto, in
connection with the offer and sale of the Securities by the Initial Purchasers.
Unless stated to the contrary, all references herein to the Final Memorandum are
to the Final Memorandum at the Execution Time (as defined in Section 6 hereof)
and are not meant to include any amendment or supplement subsequent to the
Execution Time.
1.1-1
1. Representations and Warranties. The Company represents and warrants to
each Initial Purchaser as set forth below in this Section 1.
(a) The Final Memorandum, at the date hereof, does not, and at
the Closing Date (as defined below) will not (and any amendment or
supplement thereto, at the date thereof and at the Closing Date, will
not), contain any untrue statement of a material fact or omit to state
any material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not misleading;
provided, however, that the Company makes no representation or warranty
as to the information contained in or omitted from the Final
Memorandum, or any amendment or supplement thereto, in reliance upon
and in conformity with information furnished in writing to the Company
by or on behalf of the Initial Purchasers through the Representatives
specifically for inclusion therein.
(b) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has full power
(corporate and other) to own or lease its properties and conduct its
business as described in the Final Memorandum, and is duly qualified to
do business as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification wherein it
owns or leases material properties or conducts material business,
except where the failure to be qualified would not have a material
adverse effect on the Company or any of its subsidiaries.
(c) The Company has full power (corporate and other) to enter
into and to perform its obligations under this Agreement, the
Indenture, the Registration Agreement and the Securities.
(d) The issued shares of capital stock of each of the
Company's subsidiaries have been duly authorized and validly issued,
are fully paid and nonassessable and, except as otherwise set forth in
the Final Memorandum, are owned beneficially by the Company free and
clear of any security interests, liens, encumbrances, equities or
claims.
(e) The Company has an authorized, issued and outstanding
capitalization as set forth in the Final Memorandum. All of the issued
shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable.
(f) The consolidated financial statements and schedules of the
Company and its consolidated subsidiaries included in the Final
Memorandum fairly present the financial position of the Company and its
consolidated subsidiaries and the results of operations and changes in
financial condition as of the dates and for the periods therein
specified. Such financial statements and schedules have been prepared
in accordance with generally accepted accounting principles
consistently applied throughout the periods involved (except as
otherwise noted therein). The selected financial data set forth under
the caption "Selected Consolidated Financial Data" in the Final
Memorandum fairly present, on the basis stated in the Final Memorandum,
the information included therein.
(g) KPMG Peat Marwick LLP, who have certified certain
financial statements of the Company and its consolidated subsidiaries
and delivered their report with respect to the audited consolidated
financial statements and schedules included in the Final Memorandum,
are independent public accountants within the meaning of the Securities
Act and the applicable rules and regulations thereunder.
1.1-2
(h) This Agreement has been duly authorized, executed, and
delivered by the Company.
(i) The Registration Agreement has been duly authorized by the
Company and, when duly executed and delivered by the Company, will
constitute a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms (subject,
as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect, general
principles of equity and to the enforcement of the indemnification or
contribution provisions contained therein).
(j) The Indenture has been duly authorized by the Company and,
when duly executed and delivered by the Company and the Trustee, will
constitute a valid and binding instrument enforceable against the
Company in accordance with its terms (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from
time to time in effect, and general principles of equity); the
Securities have been duly and validly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchasers pursuant to this
Agreement, will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture; and the statements set forth
under the heading "Description of the Notes" in the Final Memorandum,
insofar as such statements purport to summarize certain provisions of
the Securities and the Indenture, provide a fair summary of such
provisions.
(k) No legal or governmental proceedings are pending to which
the Company or any of its subsidiaries is a party or to which the
property of the Company or any of its subsidiaries is subject that are
not described in the Final Memorandum, and no such proceedings have
been threatened against the Company or any of its subsidiaries or with
respect to any of their respective properties, except in each case for
such proceedings that, if the subject of an unfavorable decision,
ruling or finding, would not, singly or in the aggregate, result in a
material adverse change in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company
and its subsidiaries.
(l) The issuance, offering and sale of the Securities to the
Initial Purchasers by the Company pursuant to this Agreement, the
performance by the Company of its obligations under this Agreement, the
Registration Agreement, the Indenture and the Securities, the
consummation of the transactions herein and therein and the application
of proceeds from the sale of the Securities as described in the Final
Memorandum do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority,
except such as have been obtained and such as may be required under
state securities or blue sky laws and except as may be required under
the Securities Act and the rules and regulations thereunder with
respect to the Registration Agreement and transactions contemplated
thereunder or (ii) conflict with or result in a breach or violation of
any of the terms and provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or any of their
respective properties are bound, or the charter documents or by-laws of
the Company or any of its subsidiaries, or any statute or any judgment,
decree, order, rule or
1.1-3
regulation of any court or other governmental authority or any
arbitrator applicable to the Company or any of its subsidiaries.
(m) The Company has not (i) taken, directly or indirectly, any
action designed to cause or to result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities or (ii) paid or agreed to pay to
any person any compensation for soliciting another to purchase any
securities of the Company (except for the sale of Securities by the
Initial Purchasers under this Agreement).
(n) Subsequent to the respective dates as of which information
is given in the Final Memorandum, (i) the Company and its subsidiaries
have not incurred any material liability or obligation, direct or
contingent, nor entered into any material transaction whether or not in
the ordinary course of business; (ii) the Company has not purchased any
of its outstanding capital stock, nor declared, paid or otherwise made
any dividend or distribution of any kind on its capital stock; (iii)
there has not been any material change in the capital stock, short-term
debt or long-term debt of the Company and its consolidated
subsidiaries, except in each case as described in or contemplated by
the Final Memorandum; and (iv) there has not been any material adverse
change in the condition (financial or otherwise), earnings, business
affairs or business prospects of the Company and its consolidated
subsidiaries whether or not arising in the ordinary course of business.
(o) The Company and each of its subsidiaries own or hold all
items of property owned or held by each of them free and clear of any
security interests, liens, encumbrances, equities, claims and other
defects, except such as do not materially and adversely affect the
value of such property and do not interfere with the use made or
proposed to be made of such property by the Company or such subsidiary,
and any real property and buildings held under lease by the Company or
any such subsidiary are held under valid, subsisting and enforceable
leases, with such exceptions as are not material and do not interfere
with the use made or proposed to be made of such property and buildings
by the Company or such subsidiary, in each case except as described in
or contemplated by the Final Memorandum.
(p) No labor dispute with the employees of the Company or any
of its subsidiaries exists or is threatened or imminent that could
result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of
the Company and its subsidiaries, except as described in or
contemplated by the Final Memorandum.
(q) The Company and its subsidiaries own or possess all
material patents, patent applications, trademarks, service marks, trade
names, licenses, copyrights and proprietary or other confidential
information currently employed by them in connection with their
respective businesses, and neither the Company nor any such subsidiary
has received any notice of infringement of or conflict with asserted
rights of any third party with respect to any of the foregoing which,
singly or in the aggregate, if the subject of an unfavorable decision,
ruling or finding, would result in a material adverse change in the
condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and its subsidiaries, except as
described in or contemplated by the Final Memorandum.
1.1-4
(r) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied
for; and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not materially and adversely affect the
condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and its subsidiaries, except as
described in or contemplated by the Final Memorandum.
(s) No subsidiary of the Company is currently prohibited,
directly or indirectly, from paying any dividends to the Company, from
making any other distribution on such subsidiary's capital stock, from
repaying to the Company any loans or advances to such subsidiary from
the Company or from transferring any of such subsidiary's property or
assets to the Company or any other subsidiary of the Company, except as
described in or contemplated by the Final Memorandum.
(t) The Company and its subsidiaries possess all certificates,
orders, permits, licenses, authorizations, consents and approvals of
and from, and have made all filings and registrations with, the
appropriate federal, state or foreign regulatory authorities necessary
to own, lease, license and use their properties and assets and to
conduct their respective businesses, and neither the Company nor any
such subsidiary is in violation of or has received any notice of
proceedings relating to the revocation or modification of any such
certificates, orders, permits, licenses, authorizations, consents or
approvals, or the qualification or rejection of any such filing or
registration which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a material
adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Final
Memorandum.
(u) The Company has filed all foreign, federal, state and
local tax returns that are required to be filed or has requested
extensions thereof and has paid all taxes required to be paid by it and
any other assessment, fine or penalty levied against it, to the extent
that any of the foregoing is due and payable, except for any such tax,
assessment, fine or penalty that is currently being contested in good
faith or as described in or contemplated by the Final Memorandum.
(v) Neither the Company nor any of its subsidiaries is in
violation of any federal or state law or regulation relating to
occupational safety and health or to the storage, handling or
transportation of hazardous or toxic materials and the Company and its
subsidiaries have received all permits, licenses or other approvals
required of them under applicable federal and state occupational safety
and health and environmental laws and regulations to conduct their
respective businesses, and the Company and each such subsidiary is in
compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to
receive required permits, licenses or other approvals or failure to
comply with the terms and conditions of such permits, licenses or
approvals which would not, singly or in the aggregate, result in a
material adverse change in the condition (financial or otherwise),
business prospects, net worth or results of operations of the Company
1.1-5
and its subsidiaries, except as described in or contemplated by the
Final Memorandum.
(w) Each certificate signed by any officer of the Company and
delivered to the Representatives or Counsel for the Initial Purchasers
shall be deemed to be a representation and warranty by the Company (and
not individually by such officer) to the Initial Purchasers as to the
matters covered thereby.
(x) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded accountability for assets is compared with the
existing assets at reasonable and appropriate intervals and appropriate
action is taken with respect to any differences.
(y) No default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or any of their
respective properties is bound or may be affected in any material
adverse respect with regard to property, business or operations of the
Company and its subsidiaries.
(z) Neither the Company, nor any of its Affiliates (as defined
in Rule 501(b) of Regulation D under the Securities Act ("Regulation
D")), nor any person acting on its or their behalf has, directly or
indirectly, made offers or sales of any security, or solicited offers
to buy any security, under circumstances that would require the
registration of the Securities under the Securities Act.
(aa) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation
D) in connection with any offer or sale of the Securities in the United
States.
(bb) The Securities satisfy the eligibility requirements of Rule 144A(d)(3)
under the Securities Act.
(cc) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf has engaged in any directed
selling efforts with respect to the Securities, and each of them has
complied with the offering restrictions requirement of Regulation S
("Regulation S") under the Securities Act. Terms used in this paragraph
have the meanings given to them by Regulation S.
(dd) The Company as of the Execution Time expects to be and as
of the Closing Date will have been advised by the National Association
of Securities Dealers, Inc. PORTAL Market that the Securities have been
designated "PORTAL-eligible securities" in accordance with the rules
and regulations of the National Association of Securities Dealers, Inc.
1.1-6
(ee) The Company is not, and upon the issuance and sale of the
Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Final Memorandum will not be, an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended (the "Investment Company Act"), without taking
account of any exemption arising out of the number of holders of the
Company's securities.
(ff) The Company will conduct its operations in a manner that
will not subject it to registration as an investment company under the
Investment Company Act.
(gg) The information provided by the Company pursuant to
Section 5(h) hereof will not, at the date thereof, contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(hh) There is no franchise, contract or other document of a
character that would be required to be described or referred to in the
Final Memorandum, if it were a prospectus filed as part of a
registration statement on Form S-1 under the Securities Act, that is
not described or referred to as would be so required, and the
description thereof or references thereto are correct in all material
respects.
(ii) Subject to compliance by the Initial Purchaser with the
representations and warranties set forth in Section 4, it is not
necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchasers and the resale to each subsequent
purchaser in the manner contemplated by this Agreement and the Final
Memorandum to register the Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as
amended.
2. Purchase and Sale. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to each Initial Purchaser, and each Initial Purchaser
agrees, severally and not jointly, to purchase from the Company, at a purchase
price of 61.6807% of the aggregate principal amount at maturity thereof, plus
amortization of original issue discount, if any, from October 15, 1997 to the
Closing Date, the aggregate principal amount at maturity of Securities set forth
opposite such Initial Purchaser's name in Schedule I hereto.
3. Delivery and Payment. Delivery of and payment for the
Securities shall be made at 10:00 AM, New York City time, on October 15, 1997,
or such later date (not later than October 22, 1997) as the Representatives
shall designate, which date and time may be postponed by agreement between the
Representatives and the Company or as provided in Section 9 hereof (such date
and time of delivery and payment for the Securities being herein called the
"Closing Date"). Delivery of the Securities shall be made to the Representatives
for the respective accounts of the Initial Purchasers against payment by the
Initial Purchasers through the Representatives of the purchase price thereof to
or upon the order of the Company by wire transfer of federal funds or other
immediately available funds or such other manner of payment as may be agreed by
the Company and the Representatives. Delivery of the Securities shall be made at
such location as the Representatives shall reasonably designate at least one
business day in advance of the Closing Date and payment for the Securities shall
be made at the office of Shearman & Sterling ("Counsel for the Initial
Purchasers"), 599 Lexington Avenue, New York, New York. Certificates for the
Securities shall be registered in such names and in such denominations as the
Representatives may request not less than three full business days in advance of
the Closing Date.
1.1-7
The Company agrees to have the Securities available for
inspection, checking and packaging by the Representatives in New York, New York,
not later than 1:00 PM on the business day prior to the Closing Date.
4. Offering of Securities. Each Initial Purchaser, severally and not
jointly, represents and warrants to and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell,
any Securities except (i) to those it reasonably believes to be
qualified institutional buyers (as defined in Rule 144A under the
Securities Act) and that, in connection with each such sale, it has
taken or will take reasonable steps to ensure that the purchaser of
such Securities is aware that such sale is being made in reliance on
Rule 144A, or (ii) in accordance with the restrictions set forth in
Exhibit A hereto.
(b) Neither it nor any person acting on its behalf has made or will make
offers or sales of the Securities by means of any form of general solicitation
or general advertising (within the meaning of Regulation D) in the United
States.
5. Agreements. The Company agrees with each Initial Purchaser that:
(a) The Company will furnish to each Initial Purchaser and to
Counsel for the Initial Purchasers, without charge, during the period
referred to in paragraph (c) below, as many copies of the Final
Memorandum and any amendments and supplements thereto as it may
reasonably request. The Company will pay the expenses of printing or
other production of all documents relating to the offering.
(b) The Company will not amend or supplement the Final
Memorandum without the prior written consent of the Representatives as
contemplated by paragraph (c) below.
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the
Representatives), any event occurs as a result of which the Final
Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it
should be necessary to amend or supplement the Final Memorandum to
comply with applicable law, the Company will promptly notify the
Representatives of the same and, subject to the requirements of
paragraph (b) of this Section 5, will prepare and provide as promptly
as practicable to the Representatives pursuant to paragraph (a) of this
Section 5 an amendment or supplement which will correct such statement
or omission or effect such compliance.
(d) The Company will arrange for the qualification of the
Securities for sale by the Initial Purchasers under the laws of such
jurisdictions as the Initial Purchasers may reasonably designate and
will maintain such qualifications in effect so long as required for the
sale of the Securities. The Company will promptly advise the
Representatives of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities for
sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose.
1.1-8
(e) The Company will not, and will not permit any of its
Affiliates to, resell any Securities that have been acquired by any of
them.
(f) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will, directly or indirectly, make
offers or sales of any security, or solicit offers to buy any security,
under circumstances that would require the registration of the
Securities under the Securities Act.
(g) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will engage in any form of general
solicitation or general advertising (within the meaning of Regulation
D) in connection with any offer or sale of the Securities in the United
States.
(h) So long as any of the Securities are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities
Act, the Company will, unless it becomes subject to and complies with
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), provide to each holder of such restricted
securities and to each prospective purchaser (as designated by such
holder) of such restricted securities, upon the request of such holder
or prospective purchaser, any information required to be provided by
Rule 144A(d)(4) under the Securities Act. This covenant is intended to
be for the benefit of the holders, and the prospective purchasers
designated by such holders, from time to time of such restricted
securities.
(i) Neither the Company nor any of its Affiliates nor any
person acting on its or their behalf will engage in any directed
selling efforts with respect to the Securities, and each of them will
comply with the offering restrictions requirement of Regulation S.
Terms used in this paragraph have the meanings given to them by
Regulation S.
(j) The Company will cooperate with the Representatives and
use its best efforts to permit the Securities to be eligible for
clearance and settlement through The Depository Trust Company.
(k) The Company will not, until 180 days following the Closing
Date, without the prior written consent of the Representatives, offer,
sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any debt securities issued or
guaranteed by the Company (other than the Securities or as otherwise
contemplated by the Registration Agreement).
(l) The Company will use the net proceeds received by it from
the sale of the Securities in the manner specified in the Final
Memorandum under "Use of Proceeds."
6. Conditions to the Obligations of the Initial Purchasers.
The obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained herein at the date and time that this Agreement is executed
and delivered by the parties hereto (the "Execution Time") and the Closing Date,
to the accuracy of the statements of the Company made in any certificates
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
1.1-9
(a) The Company shall have furnished to the Representatives
the opinion of Holme Roberts & Owen LLP, counsel for the Company, dated
the Closing Date, to the effect that:
(i) each of the Company, Qwest Corporation ("QC"),
Qwest Communications Corporation ("QCC") and Qwest
Transmission Inc. ("QTI") (collectively, the "Subsidiaries"
and individually, a "Subsidiary") has been duly incorporated
and is validly existing as a corporation in good standing
under the laws of the jurisdiction in which it is organized,
with full corporate power and authority to own its properties
and conduct its business as described in the Final Memorandum,
and is duly qualified to do business as a foreign corporation
and is in good standing under the laws of each jurisdiction
that requires such qualification in which it owns or leases
material properties or conducts material business, except for
such jurisdictions where the failure to so qualify or to be in
good standing would not, singly or in the aggregate, have a
material adverse effect on the Company and the Subsidiaries,
and the Company has full corporate power and authority to
enter into and perform its obligations under this Agreement,
the Registration Agreement, the Indenture and the Securities;
(ii) all of the outstanding shares of capital stock
of the Company and each of the Subsidiaries have been duly and
validly authorized and issued and are fully paid and
nonassessable, and, except as otherwise set forth in the Final
Memorandum, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company either directly or
through a wholly owned Subsidiary, free and clear of (to the
best of such counsel's knowledge after due inquiry) any
security interests and any other claims, liens or
encumbrances;
(iii) the Company's authorized equity capitalization
is as set forth in the Final Memorandum;
(iv) the Indenture has been duly authorized, executed
and delivered and constitutes a legal, valid and binding
instrument enforceable against the Company in accordance with
its terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium or other laws affecting creditors'
rights generally from time to time in effect, and to general
equitable principles); the Securities have been duly and
validly authorized and, when executed and authenticated in
accordance with the provisions of the Indenture and delivered
to and paid for by the Initial Purchasers pursuant to this
Agreement, will constitute legal, valid and binding
obligations of the Company (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization,
insolvency, fraudulent conveyance, moratorium or other laws
affecting creditors' rights generally from time to time in
effect, and to general equitable principles) entitled to the
benefits of the Indenture; and the Securities and the
Indenture conform as to legal matters in all material respects
to the descriptions thereof set forth under the heading
"Description of the Notes" in the Final Memorandum;
(v) the information contained in the Final Memorandum
under the headings "Description of Certain Indebtedness,"
"Certain United States Federal Income Taxes" and "Certain
Transactions" fairly summarizes in all material respects the
matters therein
1.1-10
described and to the extent that such statements purport to
describe certain provisions of U.S. federal laws, rules or
regulations, have been reviewed by such counsel and are
correct as to legal matters in all material respects;
(vi)this Agreement has been duly authorized, executed
and delivered by the Company;
(vii) the Registration Agreement has been duly
authorized, executed and delivered by the Company, and
constitutes legal, valid and binding obligations of the
Company enforceable against the Company in accordance with its
terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, fraudulent
conveyance, moratorium or other laws affecting creditors'
rights generally from time to time in effect, and to general
principles of equity), and further such counsel expresses no
opinion as to the enforceability of the indemnification or
contribution provisions contained therein, and the
Registration Agreement conforms as to legal matters in all
material respects to the description thereof contained in the
Final Memorandum;
(viii) no consent, approval, authorization or order
of any court or governmental agency or body (other than such
as may be required under the applicable securities laws of the
various jurisdictions in which the Securities will be offered
or sold, as to which such counsel expresses no opinion, or as
required in connection with the transactions contemplated by
the Registration Agreement) is required in connection with the
due authorization, execution and delivery of this Agreement,
the Registration Agreement or the Indenture or for the
offering, issuance, sale or delivery of the Securities to the
Initial Purchasers or the resale of the Securities by the
Initial Purchasers in accordance with this Agreement;
(ix) the issue and sale of the Securities, the
execution and delivery of this Agreement, the Registration
Agreement, the Indenture and the Securities, the consummation
of the transactions contemplated by this Agreement and the
application of proceeds from the sale of the Securities as
described in the Final Memorandum and the compliance by the
Company with its obligations under this Agreement, the
Registration Agreement, the Indenture or the Securities, will
not conflict with, result in a breach or violation of, or
constitute a default under any applicable law or the charter
or by-laws of the Company or any of the Subsidiaries or the
terms of any indenture or other agreement or instrument known
to such counsel to which the Company or any of the
Subsidiaries is a party or bound or any judgment, order or
decree known to such counsel to be applicable to the Company
or any of the Subsidiaries of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company or any of the Subsidiaries;
(x) assuming the accuracy of the representations and
warranties and compliance with the agreements contained in
this Agreement, no registration of the Securities under the
Securities Act is required, and no qualification of the
Indenture under the Trust Indenture Act of 1939 is necessary,
for the purchase by the Initial Purchasers of the Securities,
or the offer and sale by the Initial Purchasers of the
Securities, in each case, in the manner
1.1-11
contemplated by this Agreement (and not taking into account
the transactions contemplated by the Registration Agreement);
(xi) the Company is not an "investment company"
within the meaning of the Investment Company Act of 1940
without taking account of any exemption arising out of the
number of holders of the Company's securities;
(xii) no legal or governmental proceedings are
pending to which the Company or any of its Subsidiaries is a
party or to which the property of the Company or any of its
Subsidiaries is subject, as would be required to be described
in the Final Memorandum, that are not described in the Final
Memorandum and, to the best of such counsel's knowledge after
due inquiry, no such proceedings have been threatened against
the Company or any of its subsidiaries or with respect to any
of their respective properties; there is no franchise,
contract or other document of a character that would be
required to be described or referred to in the Final
Memorandum, if it were a prospectus filed as part of a
registration statement on Form S-1 under the Securities Act,
that is not described or referred to as would be so required,
and the descriptions thereof or references thereto are correct
in all material respects; and the statements in the Final
Memorandum under the caption "Business -- Legal Proceedings"
present the information that would be called for, if the Final
Memorandum were a prospectus filed as part of a registration
statement on Form S-1 under the Securities Act, with respect
to such legal matters, documents and proceedings and fairly
summarize the matters referred to therein;
(xiii) to the best of such counsel's knowledge, there
are no statutes or regulations that would be required to be
described in the Final Memorandum, if it were a prospectus
filed as part of a registration statement on Form S-1 under
the Securities Act, that are not described as would be so
required; and
(xiv) to the best of such counsel's knowledge, (a)
neither the Company nor any Subsidiary is in violation of its
charter or by-laws and (b) no default by the Company or any
Subsidiary exists in the due performance or observance of any
material obligation, agreement, covenant or condition
contained in any contract or other document that is described
or referred to in the Final Memorandum, except in the case of
(b) only, to the extent that any such default would not have a
material adverse effect on the condition (financial or
otherwise) or operations of the Company on a consolidated
basis;
Such counsel shall also state that they have no reason to
believe that at the Execution Time or at the Closing Date the Final
Memorandum contained an untrue statement of a material fact or omitted
to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made,
not misleading; provided, however, that such counsel expresses no
belief as to the financial statements, including the notes thereto, or
supporting schedules or other financial and accounting data included in
the Final Memorandum.
In rendering such opinion, such counsel may rely (A) as to
matters involving the application of laws of any jurisdiction other
than the State of New York, the State of Colorado, the United States or
the
1.1-12
General Corporation Law of the State of Delaware, to the extent such
counsel deems proper and as specified in such opinion, upon the opinion
of other counsel (including internal counsel) of good standing whom
such counsel believes to be reliable and who are satisfactory to
Counsel for the Initial Purchasers and (B) as to matters of fact, to
the extent deemed proper, on certificates of responsible officers of
the Company and public officials.
All references in this Section 6(a) to the Final Memorandum
shall be deemed to include any amendment or supplement thereto at the
Closing Date.
(b) The Company shall have furnished to the Representatives
the opinion of Morrison & Foerster LLP, special federal regulatory
counsel for the Company, dated the Closing Date, to the effect that:
(i) (A) the execution and delivery of this Agreement,
the Registration Agreement and the Indenture by the Company
and the issue and sale of the Securities contemplated hereby
and thereby do not violate (1) the Communications Act of 1934
(the "Communications Act"), (2) the Telecommunications Act of
1996 (the "Telecom Act of 1996") or (3) any rules or
regulations of the Federal Communications Commission (the
"FCC") applicable to the Company or its subsidiaries, and (B)
no authorization of or filing with the FCC is necessary for
the execution and delivery of this Agreement, the Registration
Agreement or the Indenture by the Company and the issue and
sale of the Securities contemplated hereby and thereby in
accordance with the terms hereof and thereof;
(ii) QCC is a nondominant carrier authorized by the
FCC to provide domestic interstate interexchange
telecommunications services as described in such opinion
without any further order, license, permit or other
authorization by the FCC. QCC also has been granted Section
214 authority by the FCC to provide international switched
resale telecommunications services as described in such
opinion. QCC has on file with the FCC tariffs applicable to
its domestic interstate and international services. No other
FCC authority is required, and no other tariffs are required
to be filed under the rules and regulations of the FCC, for
the conduct of QCC's telecommunications business as described
in the Final Memorandum;
(iii) QTI is a microwave carrier authorized by the
FCC and holds the licenses listed in such opinion. No further
FCC authority is required for the conduct of QTI's microwave
telecommunications business as described in the Final
Memorandum, except to the extent that the absence of any such
authority, singly or in the aggregate, would not have a
material adverse effect on the business or operations of the
Company or its subsidiaries taken as a whole;
(iv) FSI Acquisition Corp. is a private carrier not
subject to Title II common carrier regulation under the
Communications Act, as amended by the Telecom Act of 1996;
(v) (A) QCC and QTI in all material respects (1) have
made all reports and filings, and paid all fees, required by
the FCC; and (2) have all certificates, orders, permits,
licenses, authorizations, consents and approvals of and from,
and have made all filings and registrations with, the FCC
necessary to own,
1.1-13
lease, license and use their properties and assets and to
conduct their business in the manner described in the Final
Memorandum; and (B) to the best of such counsel's knowledge,
neither QCC nor QTI has received any notice of proceedings
relating to the revocation or modification of any such
certificates, orders, permits, licenses, authorizations,
consents or approvals, or the qualification or rejection of
any such filing or registration, the effect of which, singly
or in the aggregate, would have a material adverse effect on
the business or operations of the Company and its subsidiaries
taken as a whole as described in the Final Memorandum;
(vi) to the best of such counsel's knowledge, neither
QCC nor QTI is in violation of, or in default under, the
Communications Act, as amended by the Telecom Act of 1996, or
the rules or regulations of the FCC, the effect of which,
singly or in the aggregate, would have a material adverse
effect on the business or operations of the Company and its
subsidiaries taken as a whole as described in the Final
Memorandum;
(vii) (A) no decree or order of the FCC is
outstanding against QCC or QTI and (B) to the best of such
counsel's knowledge, no formal litigation, proceeding, inquiry
or investigation has been commenced or threatened, and no
formal notice of violation or order to show cause has been
issued, against QCC or QTI before or by the FCC (except for
any matters described in such opinion, which, if the subject
of an unfavorable decision, would not have a material adverse
effect on the business or operations of the Company and its
subsidiaries taken as a whole as described in the Final
Memorandum); and
(viii) the statements in the Final Memorandum under
the captions "Risk Factors--Regulation Risks" and
"Regulation," insofar as such statements constitute a summary
of the legal matters, documents or proceedings of the FCC with
respect to the telecommunications regulation referred to
therein, are accurate in all material respects and fairly
summarize all matters referred to therein.
(c) (A) The Company shall have furnished to the
Representatives the opinion of Goodin, MacBride, Squeri, Schlotz &
Ritchie, LLP, special state regulatory counsel for the Company for the
State of California, dated the Closing Date, to the effect that:
(i) (x) the execution and delivery of this Agreement,
the Registration Agreement and the Indenture by the Company
and the issue and sale of the Securities contemplated hereby
and thereby do not violate (1) any laws administered by,
rules, regulations or published policies of, the California
Public Utilities Commission (the "California PUC") ("PUC
Laws") or any other state laws governing the provision of
telecommunications services in the State of California
("Telecommunications Laws") applicable to the Company or its
subsidiaries, or (2) any decree from any California court
relating to telecommunications matters, and (y) no
authorization of or filing with the California PUC in the
State of California is necessary for the execution and
delivery of this Agreement, the Registration Agreement or the
Indenture by the Company and the issue and sale of the
Securities contemplated hereby and thereby in accordance with
the terms hereof and thereof;
1.1-14
(ii) QCC is certified, registered or otherwise
authorized, or is not required to obtain authority, to provide
intrastate interexchange telecommunications services in the
State of California. QCC has a tariff on file in the State of
California and no further tariffs are required to be filed by
QCC or the Company in the State of California to conduct the
Company's telecommunications business as described in the
Final Memorandum;
(iii) (x) QCC and the Company (1) have made all
reports and filings, and paid all fees, required by the
California PUC in the State of California; and (2) have all
certificates, orders, permits, licenses, authorizations,
consents and approvals of and from, and have made all filings
and registrations with, the California PUC in the State of
California necessary to own, lease, license and use their
properties and assets and to conduct their business in the
manner described in the Final Memorandum; and (y) neither QCC
nor the Company has received any notice of proceedings
relating to the revocation or modification of any such
certificates, orders, permits, licenses, authorizations,
consents or approvals, or the qualification or rejection of
any such filing or registration, the effect of which, singly
or in the aggregate, would have a material adverse effect on
the Company's, and its subsidiaries' taken as a whole,
telecommunications business or operations, as described in the
Final Memorandum;
(iv) neither the Company nor QCC is in violation of,
or in default under any PUC Laws or any Telecommunications
Laws, the effect of which, singly or in the aggregate, would
have a material adverse effect on the Company's, and its
subsidiaries' taken as a whole, telecommunications business or
operations, as described in the Final Memorandum; and
(v) (x) no decree or order of the California PUC in
the State of California is outstanding against the Company or
any of its subsidiaries and (y) no formal litigation,
proceeding, inquiry or investigation has been commenced or
threatened, and no notice of violation or order to show cause
has been issued, against the Company or any of its
subsidiaries before or by the California PUC or any other
regulatory agency in the State of California.
(B) The Company shall have furnished to the Representatives
the opinion of Bickerstaff, Heath Smiley, Pollan, Kever & McDaniel LLP,
special state regulatory counsel for the Company for the State of
Texas, dated the Closing Date, to the effect that:
(i) (x) the execution and delivery of this Agreement,
the Registration Agreement and the Indenture by the Company
and the issue and sale of the Securities do not violate any
telecommunications laws of the State of Texas applicable to
the Company or QCC or, to the best of such counsel's
knowledge, any decree from any court of the State of Texas
relating to the telecommunications operations of the Company
or QCC, and (y) no authorization of or filing with the Public
Utility Commission of Texas (the "Texas PUC") is necessary for
the execution and delivery of this Agreement, the Registration
Agreement or the Indenture by the Company or the issue and
sale of the Securities contemplated hereby and thereby in
accordance with the terms of this Agreement;
(ii) QCC is duly registered with the Texas PUC and
authorized to provide intrastate telecommunications services
1.1-15
in Texas and no further authority is required to be obtained by
QCC or the Company from the Texas PUC to conduct the Company's
telecommunications business as described in the Final
Memorandum. QCC has a registration and price list on file in
Texas and no further tariffs are required to be filed by QCC
or the Company with the Texas PUC to conduct the Company's
telecommunications business as described in the Final
Memorandum;
(iii) (x) QCC and the Company (1) have made all
reports and filings required by the Texas PUC; and (2) have
all certificates, orders, permits, licenses, authorizations,
consents and approvals of and from, and have made all filings
and registrations with, the Texas PUC necessary to own, lease,
license and use their properties and assets and to conduct the
Company's telecommunications business in the manner described
in the Final Memorandum; and (y) neither QCC nor the Company
has received any notice of proceedings from the Texas PUC
relating to the revocation or modification of any such
certificates, orders, permits, licenses, authorizations,
consents or approvals, or the qualification or rejection of
any such filing or registration, the effect of which, singly
or in the aggregate, would have a material adverse effect on
the business or operations of the Company and its subsidiaries
taken as a whole as described in the Final Memorandum;
(iv) neither QCC nor the Company is in violation of,
or in default under the telecommunications laws of the State
of Texas, the effect of which, singly or in the aggregate,
would have a material adverse effect on the business or
operations of the Company and its subsidiaries taken as a
whole as described in the Final Memorandum; and
(v) (x) no decree or order of the Texas PUC is
outstanding against QCC or the Company and (y) no formal
litigation, proceeding, inquiry or investigation has been
commenced or threatened, and no formal notice of violation or
order to show cause has been issued, against QCC or the
Company before or by the Texas PUC.
(d) The Company shall have furnished to the Representatives
the opinion of Joseph Garrity, internal counsel for the Company, dated
the Closing Date, to the effect that:
(i) (A) the execution and delivery of this Agreement,
the Registration Agreement and the Indenture by the Company
and the issuance and sale of the Securities contemplated
hereby and thereby do not violate (1) any state
telecommunications laws or regulations ("State
Telecommunications Laws") applicable to the Company or QCC,
QTI or FSI Acquisition Corp. (together, the "Operating
Subsidiaries") or (2) any decree from any court relating to
the telecommunications operations of the Company or the
Operating Subsidiaries, and (B) no authorization of or filing
with any Public Utilities Commission or other state regulatory
authority ("State Regulatory Agency") is necessary for the
execution and delivery of this Agreement, the Registration
Agreement or the Indenture by the Company and the issuance and
sale of the Securities contemplated hereby and thereby in
accordance with the terms hereof and thereof;
(ii) QCC is certified, registered or otherwise authorized,
or is not required to obtain authority to provide, intrastate
1.1-16
interexchange telecommunications services in the respective
states listed in such opinion. No further authority is
required to be obtained by the Company or any of the Operating
Subsidiaries from any such state to conduct the
telecommunications business as described in the Final
Memorandum. QCC has a tariff or price list on file in each of
the states requiring such a filing as identified in such
opinion. No further tariffs are currently required to be filed
by the Company or any of the Operating Subsidiaries in any
such state to conduct the telecommunications business as
described in the Final Memorandum;
(iii) except to the extent that the following would
not have, singly or in the aggregate, a material adverse
effect on the business or operations of the Company and its
subsidiaries as described in the Final Memorandum: (A) the
Company and QCC (1) have made all reports and filings, and
paid all fees, required by State Regulatory Agencies; and (2)
have all certificates, orders, permits, licenses,
authorizations, consents and approvals of and from, and have
made all filings and registrations with, State Regulatory
Authorities necessary to own, lease, license and use their
properties and assets and to conduct business in the manner
described in the Final Memorandum; and (B) neither the Company
nor QCC has received any notice of proceedings relating to the
revocation or modification of any such certificates, orders,
permits, licenses, authorizations, consents or approvals, or
the qualification or rejection of any such filing or
registration;
(iv) to the best of such counsel's knowledge, neither
the Company nor QCC is in violation of, or in default under,
any State Telecommunications Law, the effect of which, singly
or in the aggregate, would have a material adverse effect on
the business or operations of the Company and its subsidiaries
as described in the Final Memorandum;
(v) (A) no decree or order of any State Regulatory
Agency is outstanding against the Company or any of the
Operating Subsidiaries and (B) no formal litigation,
proceeding, inquiry or investigation has been commenced or, to
such counsel's knowledge, threatened, and no formal notice of
violation or order to show cause has been issued, against the
Company or any of the Operating Subsidiaries before or by any
State Regulatory Agency, the effect of which, singly or in the
aggregate, would have a material adverse effect on the
business or operations of the Company and its subsidiaries as
described in the Final Memorandum; and
(vi) the statements in the Final Memorandum under the
captions "Risk Factors--Regulation Risks" and "Regulation,"
insofar as such statements constitute a summary of the legal
matters, documents or proceedings of the FCC and State
Regulatory Agencies with respect to telecommunications
regulation referred to therein, are accurate in all material
respects and fairly summarize all matters referred to therein,
as of the date of publication of the Final Memorandum.
(e) The Representatives shall have received from Counsel for
the Initial Purchasers such opinion or opinions, dated the Closing
Date, with respect to the issuance and sale of the Securities, the
Final Memorandum (as amended or supplemented at the Closing Date) and
other related matters as the Representatives may reasonably require,
and the Company shall have furnished or made available to such counsel
such
1.1-17
documents as they request for the purpose of enabling them to pass upon
such matters.
(f) The Company shall have furnished to the Representatives a
certificate of the Company, signed by (1) the President and Chief
Executive Officer and (2) the Vice President -- Finance, Treasurer and
Chief Financial Officer of the Company, dated the Closing Date, to the
effect that the signers of such certificate have carefully reviewed the
Final Memorandum, any amendment or supplement to the Final Memorandum
and this Agreement and that:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material
respects on and as of the Closing Date with the same effect as
if made on the Closing Date, and the Company has complied with
all the agreements and satisfied all the conditions on its
part to be performed or satisfied hereunder at or prior to the
Closing Date; and
(ii) since the date of the most recent financial
statements included in the Final Memorandum, there has been no
material adverse change in the condition (financial or
otherwise), earnings, business affairs or business prospects
or properties of the Company and its subsidiaries, whether or
not arising from transactions in the ordinary course of
business, except as set forth in or contemplated in the Final
Memorandum (exclusive of any amendment or supplement thereto).
(g) (A) At the Execution Time, KPMG Peat Marwick LLP shall
have furnished to the Representatives a letter dated such date, in form
and substance satisfactory to the Initial Purchasers, containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in the
Final Memorandum and (B) at the Closing Date, KPMG Peat Marwick LLP
shall have furnished to the Representatives a letter dated such date,
in form and substance satisfactory to the Initial Purchasers, to the
effect that they reaffirm the statements made in the letter furnished
pursuant to preceding sentence, except that the specified date referred
to shall be a date not more than three business days prior to the
Closing Date.
(h) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Final Memorandum, there shall
not have been (i) any change or decrease specified in the letters
referred to in paragraph (g) of this Section 6 or (ii) any change, or
any development involving a prospective change, in or affecting the
business or properties of the Company and its subsidiaries the effect
of which, in any case referred to in clause (i) or (ii) above, is, in
the judgment of the Representatives, so material and adverse as to make
it impractical or inadvisable to market the Securities as contemplated
by the Final Memorandum.
(i) Prior to the Closing Date, the Company shall have
furnished to the Representatives such reasonable further information,
certificates and documents as the Representatives may reasonably
request.
(j) At the Closing Date, the Company's $250,000,000 Series B
107/8% Senior Notes Due 2007 (the "Series B Notes") shall be rated at
least B+ by Standard & Poor's Corporation and B2 by Moody's Investors
Service Inc. and since the date of this Agreement there shall not have
occurred a downgrading in the rating assigned to the Series B Notes by
any "nationally recognized statistical rating agency", as that term is
1.1-18
defined by the Commission for purposes of Rule 436(g)(2) under the
Securities Act, and no such organization shall have publicly announced
that it has its rating of the Series B Notes under surveillance or
review.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Representatives and Counsel for the
Initial Purchasers, this Agreement and all obligations of the Initial Purchasers
hereunder may be cancelled at, or at any time prior to, the Closing Date by the
Representatives. Notice of such cancellation shall be given to the Company in
writing, by facsimile or by telephone confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Counsel for the Initial Purchasers, at 599
Lexington Avenue, New York, New York, or such other place as the Representatives
and the Company shall mutually agree, on the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Initial Purchasers in payment for the Securities on the
Closing Date, the Company will reimburse the Initial Purchasers severally upon
demand for all reasonable out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless each Initial Purchaser, the directors, officers,
employees and agents of each Initial Purchaser and each person who controls any
Initial Purchaser within the meaning of either the Securities Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the Final
Memorandum or any information provided by the Company to any holder or
prospective purchaser of Securities pursuant to Section 5(h), or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made in
the Final Memorandum, or in any amendment thereof or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any of the Initial Purchasers through the
Representatives specifically for inclusion therein. This indemnity agreement
will be in addition to any liability which the Company may otherwise have.
1.1-19
(b) Each Initial Purchaser severally agrees to indemnify and
hold harmless the Company, its directors, its officers, and each person who
controls the Company within the meaning of either the Securities Act or the
Exchange Act, to the same extent as the foregoing indemnity from the Company to
each Initial Purchaser, but only with reference to written information relating
to such Initial Purchaser furnished to the Company by or on behalf of such
Initial Purchaser through the Representatives specifically for inclusion in the
Final Memorandum (or in any amendment or supplement thereto). This indemnity
agreement will be in addition to any liability which any Initial Purchaser may
otherwise have. The Company acknowledges that the statements set forth in the
last paragraph of the cover page and under the heading "Plan of Distribution" in
the Final Memorandum constitute the only information furnished in writing by or
on behalf of the Initial Purchasers for inclusion in the Final Memorandum (or in
any amendment or supplement thereto).
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve the indemnifying party from liability under paragraph (a) or
(b) above unless and to the extent the indemnifying party did not otherwise
learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Initial Purchasers agree
1.1-20
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Initial Purchasers may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company and by
the Initial Purchasers from the offering of the Securities; provided, however,
that in no case shall any Initial Purchaser (except as may be provided in any
agreement among the Initial Purchasers relating to the offering of the
Securities) be responsible for any amount in excess of the purchase discount or
commission applicable to the Securities purchased by such Initial Purchaser
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Initial Purchasers shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and of the Initial
Purchasers in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits received
by the Company shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses), and benefits received by the Initial
Purchasers shall be deemed to be equal to the total purchase discounts and
commissions received by the Initial Purchasers from the Company in connection
with the purchase of the Securities hereunder. Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Company or the Initial Purchasers. The
Company and the Initial Purchasers agree that it would not be just and equitable
if contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person who controls an Initial Purchaser within the meaning of either the
Securities Act or the Exchange Act and each director, officer, employee and
agent of an Initial Purchaser shall have the same rights to contribution as such
Initial Purchaser, and each person who controls the Company within the meaning
of either the Securities Act or the Exchange Act and each officer and director
of the Company shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions of this paragraph
(d).
9. Default by an Initial Purchaser. If any one or more Initial
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Initial Purchasers) the Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase; provided,
however, that in the event that the aggregate principal amount of Securities
which the defaulting Initial Purchaser or Initial Purchasers agreed but failed
to purchase shall exceed 10% of the aggregate principal amount of Securities set
forth in Schedule I hereto, the remaining Initial Purchasers shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the Securities, and if such non-defaulting Initial Purchasers do not purchase
all the Securities, this Agreement will terminate without liability to any
non-defaulting Initial Purchaser or the Company. In the event of a default by
any Initial Purchaser as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding seven days, as the Representatives
shall determine in order that the required changes in the Final Memorandum or in
any other
1.1-21
documents or arrangements may be effected. Nothing contained in this Agreement
shall relieve any defaulting Initial Purchaser of its liability, if any, to the
Company or any non-defaulting Initial Purchaser for damages occasioned by its
default hereunder.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Representatives, by notice given
to the Company prior to delivery of and payment for the Securities, if prior to
such time (i) trading in the Company's Common Stock shall have been suspended by
the Commission or the Nasdaq Stock Market's National Market ("Nasdaq") or
trading in securities generally on the New York Stock Exchange or Nasdaq shall
have been suspended or limited or minimum prices shall have been established on
the New York Stock Exchange or Nasdaq, (ii) a banking moratorium shall have been
declared either by federal or New York state authorities or (iii) there shall
have occurred any outbreak or escalation of hostilities, declaration by the
United States of a national emergency or war or other calamity or crisis the
effect of which on financial markets is such as to make it, in the judgment of
the Representatives, impracticable or inadvisable to proceed with the offering
or delivery of the Securities as contemplated by the Final Memorandum.
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Initial Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchasers or the Company
or any of the officers, directors or controlling persons referred to in Section
8 hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Representatives, will be
mailed, delivered or telecopied and confirmed to them, care of Salomon Brothers
Inc, at Seven World Trade Center, New York, New York 10048, attention: Legal
Department; or, if sent to the Company, will be mailed, delivered or telecopied
and confirmed to it at 555 Seventeenth Street, Suite 1000, Denver, Colorado
80202, attention: Joseph T. Garrity, Esq.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and, except as expressly set forth in Section 5(h) hereof, no other person will
have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and
construed in accordance with the laws of the State of New York.
15. Business Day. For purposes of this Agreement, "business
day" means each Monday, Tuesday, Wednesday, Thursday and Friday that is not a
day on which banking institutions in The City of New York, New York are
authorized or obligated by law, executive order or regulation to close.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
1.1-22
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this Agreement and your acceptance shall represent a binding agreement
between the Company and the Initial Purchasers.
Very truly yours,
QWEST COMMUNICATIONS INTERNATIONAL
INC.
By /s/
Name:
Title:
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
Salomon Brothers Inc
Donaldson, Lufkin & Jenrette Securities Corporation
Merrill Lynch, Pierce, Fenner & Smith Incorporated
By: SALOMON BROTHERS INC
By /s/
Name:
Title:
For themselves and the other
Initial Purchasers named in
Schedule I to the foregoing Agreement
1.1-23
SCHEDULE I
Principal Amount
at Maturity of
Securities to
Initial Purchasers be Purchased
Salomon Brothers Inc........................................ $222,356,000
Donaldson, Lufkin & Jenrette Securities Corporation......... $166,767,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated................................... $166,767,000
Total............................. $555,890,000
============
1.1-24
EXHIBIT A
Non-Distribution Letter for U.S. Purchasers
_________, 1997
Salomon Brothers Inc
Donaldson, Lufkin & Jenrette Securities Corporation
Merrill Lynch, Pierce, Fenner & Smith Incorporated
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Qwest Communications International Inc.
Suite 1000
555 Seventeenth Street
Denver, Colorado 80202
Re: Purchase of $555,890,000 principal amount at maturity of 9.47% Senior
Discount Notes Due 2007 (the "Securities"), of Qwest Communications
International Inc. (the "Company")
Ladies and Gentlemen:
In connection with our purchase of the Securities we confirm
that:
1. We understand that the Securities are not being and will
not be registered under the Securities Act of 1933, as amended (the "Securities
Act"), and are being sold to us in a transaction that is exempt from the
registration requirements of the Securities Act.
2. We acknowledge that (a) neither the Company, nor the
Initial Purchasers (as defined in the Offering Memorandum dated October 9, 1997
relating to the Securities (the "Final Memorandum")) nor any person acting on
behalf of the Company or the Initial Purchasers has made any representation to
us with respect to the Company or the offer or sale of any Securities and (b)
any information we desire concerning the Company and the Securities or any other
matter relevant to our decision to purchase the Securities (including a copy of
the Final Memorandum) is or has been made available to us.
3. We have such knowledge and experience in financial and
business matters as to be capable of evaluating the merits and risks of an
investment in the Securities, and we are (or any account for which we are
purchasing under paragraph 4 below is) an institutional "accredited investor"
(within the meaning of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the
Securities Act) able to bear the economic risk of investment in the Securities.
4. We are acquiring the Securities for our own account (or for
accounts as to which we exercise sole investment discretion and have authority
to make, and do make, the statements contained in this letter) and not with a
view to any distribution of the Securities, subject, nevertheless, to the
understanding that the disposition of our property will at all times be and
remain within our control.
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5. We understand that (a) the Securities will be in registered
form only and that any certificates delivered to us in respect of the Securities
will bear a legend substantially to the following effect:
"These Securities have not been registered under the
Securities Act of 1933. Further offers or sales of these
Securities are subject to certain restrictions, as set forth
in the Offering Memorandum dated October __, 1997 relating to
these Securities."
and (b) the Company has agreed to reissue such certificates without the
foregoing legend only in the event of a disposition of the Securities in
accordance with the provisions of paragraph 6 below (provided, in the case of a
disposition of the Securities in accordance with paragraph 6(f) below, that the
legal opinion referred to in such paragraph so permits), or at our request at
such time as we would be permitted to dispose of them in accordance with
paragraph 6(a) below.
6. We agree that in the event that at some future time we wish
to dispose of any of the Securities, we will not do so unless such disposition
is made in accordance with any applicable securities laws of any state of the
United States and:
(a) the Securities are sold in compliance with Rule 144(k) under
the Securities Act; or
(b) the Securities are sold in compliance with Rule 144A under
the Securities Act; or
(c) the Securities are sold in compliance with Rule 904 of
Regulation S under the Securities Act; or
(d) the Securities are sold pursuant to an effective
registration statement under the Securities Act; or
(e) the Securities are sold to the Company or an affiliate (as
defined in Rule 501(b) of Regulation D) of the Company; or
(f) the Securities are disposed of in any other transaction
that does not require registration under the Securities Act, and we
theretofore have furnished to the Company or its designee an opinion of
counsel experienced in securities law matters to such effect or such
other documentation as the Company or its designee may reasonably
request.
Very truly yours,
By
(Authorized Officer)
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EXHIBIT A
Selling Restrictions for Offers and
Sales outside the United States
(1) (a) The Securities have not been and will not be
registered under the Securities Act and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the Securities Act or pursuant to an
exemption from the registration requirements of the Securities Act. Each Initial
Purchaser represents and agrees that, except as otherwise permitted by Section
4(a)(i) or (ii) of the Agreement to which this is an exhibit, it has offered and
sold the Securities, and will offer and sell the Securities, (i) as part of
their distribution at any time and (ii) otherwise until 40 days after the later
of the commencement of the offering and the Closing Date, only in accordance
with Rule 903 of Regulation S under the Securities Act. Accordingly, each
Initial Purchaser represents and agrees that neither it, nor any of its
affiliates nor any person acting on its or their behalf has engaged or will
engage in any directed selling efforts with respect to the Securities, and that
it and they have complied and will comply with the offering restrictions
requirement of Regulation S. Each Initial Purchaser agrees that, at or prior to
the confirmation of sale of Securities (other than a sale of Securities pursuant
to Section 4(a)(i) or (ii) of the Agreement to which this is an exhibit), it
shall have sent to each distributor, dealer or person receiving a selling
concession, fee or other remuneration that purchases Securities from it during
the restricted period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been
registered under the U.S. Securities Act of 1933 (the
"Securities Act") and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S.
persons (i) as part of their distribution at any time or (ii)
otherwise until 40 days after the later of the commencement of
the offering and October 15, 1997, except in either case in
accordance with Regulation S or Rule 144A under the Securities
Act. Terms used above have the meanings given to them by
Regulation S."
(b) Each Initial Purchaser also represents and agrees that it
has not entered and will not enter into any contractual arrangement with any
distributor with respect to the distribution of the Securities, except with its
affiliates or with the prior written consent of the Company.
(c) Terms used in this section have the meanings given to them
by Regulation S.
(2) Each Initial Purchaser represents, warrants and agrees
that (i) it has not offered or sold, and will not offer or sell, any Securities
to persons in the United Kingdom, except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their business or in circumstances which
have not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulation 1995
(the "Regulations"), (ii) it has complied and will comply with all applicable
provisions of the Financial Services Act 1986 of the United Kingdom and the
Regulations with respect to anything done by it in relation to the Securities
in, from or otherwise involving the United Kingdom, and (iii) it has only issued
or passed on, and will only issue or pass on, to any person in the United
Kingdom any document received by it in connection with the issue of the
Securities if that person is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order
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1995 or is a person to whom the document may otherwise lawfully be issued or
passed on.
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