QWEST COMMUNICATIONS INTERNATIONAL INC.
$300,000,000
7.25% Senior Notes Due 2008
PURCHASE AGREEMENT
Dated: November 19, 1998
QWEST COMMUNICATIONS INTERNATIONAL INC.
$300,000,000
7.25% SENIOR NOTES DUE 2008
PURCHASE AGREEMENT
New York, New York
November 19, 1998
Salomon Smith Barney Inc.
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Qwest Communications International Inc., a Delaware
corporation (the "Company"), proposes to issue and sell to Salomon Smith Barney
Inc. (the "Initial Purchaser") $300,000,000 aggregate principal amount of its
7.25% Senior Notes Due 2008 (the terms of which are set forth in Exhibit A
hereto, the "Securities"). The Securities are to be issued under an indenture
(the "Indenture") dated as of the Closing Date (as defined herein) between the
Company and Bankers Trust Company, as trustee.
The sale of the Securities to the Initial Purchaser will be
made without registration of the Securities under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. The Initial Purchaser has
advised the Company that it will offer and sell the Securities purchased
hereunder in accordance with Section 4 hereof as soon as it deems advisable.
The holders of the Securities will be entitled to the benefits
of a Registration Rights Agreement dated as of the Closing Date (as defined
herein) between the Company and the Initial Purchaser (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 November 19, 1998 (the "Final
Memorandum"). The Final Memorandum sets forth certain information concerning the
Company and the Securities. The Company hereby confirms that it has authorized
the use of the Final Memorandum, and any amendment or supplement thereto, in
connection with the offer and sale of the Securities by the Initial Purchaser.
Unless stated to the contrary, all references herein to the Final Memorandum are
to the Final Memorandum as of the Execution Time (as defined in Section 6
hereof), including the documents incorporated by reference therein and filed
with the Commission as of the Execution Time, and are not meant to include any
amendment or supplement subsequent to the Execution Time. The terms
"supplement," "amendment" and "amend" as used herein with respect to the Final
Memorandum shall include all documents deemed to be incorporated by reference in
the Final Memorandum that are filed subsequent to the date of the Final
Memorandum with the Commission.
1. Representations and Warranties. The Company represents and warrants to
the Initial Purchaser as set forth below in this Section 1.
(a) The Final Memorandum, at the date hereof, does not, and at
the Closing Date will not (and any amendment or supplement thereto, at
the date thereof and at the Closing Date, will not), contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
however, that the Company makes no representation or warranty as to the
information contained in or omitted from the Final Memorandum, or any
amendment or supplement thereto, in reliance upon and in conformity
with information furnished in writing to the Company by or on behalf of
the Initial Purchaser specifically for inclusion therein.
(b) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing
under the laws of the jurisdiction of its incorporation, has full power
(corporate and other) to own or lease its properties and conduct its
business as described in the Final Memorandum, and is duly qualified to
do business as a foreign corporation and is in good standing under the
laws of each jurisdiction which requires such qualification wherein it
owns or leases material properties or conducts material business,
except where the failure to be qualified has not had and would not
reasonably be expected to have a material adverse effect on the
business, financial condition or results of operations of the Company
and its subsidiaries taken as a whole (a "Material Adverse Effect").
(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) All the outstanding 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, directly
or indirectly, through one or more subsidiaries, free and clear of any
security interest, claim, lien, encumbrance, or adverse interest of any
nature (each, a "Lien"), except for such Liens which, singly or in the
aggregate, has not had and would not reasonably be expected to have a
Material Adverse Effect or as described in or contemplated by the Final
Memorandum.
(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, except as described in or contemplated by the Final
Memorandum. Such financial statements and schedules have been prepared
in accordance with generally accepted accounting principles
consistently applied throughout the periods involved, except as
described in the Final Memorandum. The selected financial data set
forth under the caption "Selected Consolidated Financial Data" in the
Final Memorandum fairly present, on the basis stated in the Final
Memorandum, the information included therein. The pro forma financial
statements and other pro forma financial information included in the
Final Memorandum, or included in documents filed with the Commission
after the Execution Time and prior to the Closing Date and incorporated
by reference into the Final Memorandum, present fairly the information
shown therein, have been prepared in accordance with the Commission's
rules and guidelines with respect to pro forma financial statements,
have been properly compiled on the pro forma bases described therein,
except in each case as described in the Final Memorandum, and the
assumptions used in the preparation thereof are reasonable and the
adjustments used therein are appropriate to give effect to the
transactions or circumstances referred to therein.
(g) KPMG Peat Marwick LLP, who have certified certain
financial statements of the Company and its consolidated subsidiaries
and delivered their report with respect to the audited consolidated
financial statements and schedules included in the Final Memorandum,
are independent public accountants within the meaning of the Securities
Act and the applicable rules and regulations thereunder. Dollinger
Smith & Co., who have audited certain financial statements of SuperNet,
Inc. included in the Final Memorandum and delivered their report with
respect thereto, are independent public accountants within the meaning
of the Securities Act and the applicable rules and regulations
thereunder. Grant Thornton LLC, who have audited certain financial
statements of Phoenix Network, Inc. included in the Final Memorandum
and delivered their report with respect thereto, are independent public
accountants within the meaning of the Securities Act and the applicable
rules and regulations thereunder. Arthur Andersen LLP, who have audited
certain financial statements of LCI International, Inc. to be included
in the Final Memorandum and delivered their report with respect
thereto, are independent public accountants within the meaning of the
Securities Act and the applicable rules and regulations thereunder.
PriceWaterhouseCoopers LLP, who have audited certain financial
statements of Icon CMT Corp. to be included in the Final Memorandum and
delivered their report with respect thereto, are independent public
accountants within the meaning of the Securities Act and the applicable
rules and regulations thereunder.
(h) This Agreement has been duly authorized, executed, and
delivered by the Company.
(i) The Registration Agreement has been duly authorized by the
Company and, when duly executed and delivered by the Company, will
constitute a legal, valid and binding obligation of the Company
enforceable against the Company in accordance with its terms (subject,
as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect, general
principles of equity and to the enforcement of the indemnification or
contribution provisions contained therein).
(j) The Indenture has been duly authorized by the Company and,
when duly executed and delivered by the Company and the Trustee, will
constitute a valid and binding instrument enforceable against the
Company in accordance with its terms (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency,
moratorium or other laws affecting creditors' rights generally from
time to time in effect, and general principles of equity); the
Securities have been duly and validly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Initial Purchaser pursuant to this
Agreement, will constitute valid and binding obligations of the Company
entitled to the benefits of the Indenture; and the statements set forth
under the heading "Description of the Notes" in the Final Memorandum,
insofar as such statements purport to summarize certain provisions of
the Securities and the Indenture, provide a fair summary of such
provisions.
(k) No legal or governmental proceedings are pending to which
the Company or any of its subsidiaries is a party or to which the
property of the Company or any of its subsidiaries is subject that are
not described in the Final Memorandum, and no such proceedings have
been threatened against the Company or any of its subsidiaries or with
respect to any of their respective properties, except in each case for
such proceedings that would not and would not reasonably be expected
to, singly or in the aggregate, have a Material Adverse Effect.
(l) The issuance, offering and sale of the Securities to the
Initial Purchaser by the Company pursuant to this Agreement, the
performance by the Company of its obligations under this Agreement, the
Registration Agreement, the Indenture and the Securities, the
consummation of the transactions herein and therein and the application
of proceeds from the sale of the Securities as described in the Final
Memorandum do not (i) require the consent, approval, authorization,
registration or qualification of or with any governmental authority,
except such as have been obtained and such as may be required under
state securities or blue sky laws and except as may be required under
the Securities Act and the rules and regulations thereunder with
respect to the Registration Agreement and transactions contemplated
thereunder or (ii) conflict with or result in a breach or violation of
any of the terms and provisions of, or constitute a default under, any
indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or any of their
respective properties are bound, or the charter documents or by-laws of
the Company or any of its subsidiaries, or any statute or any judgment,
decree, order, rule or regulation of any court or other governmental
authority or any arbitrator applicable to the Company or any of its
subsidiaries.
(m) The Company has not (i) taken, directly or indirectly, any
action designed to cause or to result in, or that has constituted or
which might reasonably be expected to constitute, the stabilization or
manipulation of the price of any security of the Company to facilitate
the sale or resale of the Securities or (ii) paid or agreed to pay to
any person any compensation for soliciting another to purchase any debt
securities of the Company since September 1, 1998 (except for the sale
of Securities by the Initial Purchaser under this Agreement).
(n) Since the respective dates as of which information is
given in the Final Memorandum other than as set forth in or
contemplated by the Final Memorandum (exclusive of any amendments or
supplements thereto subsequent to the date of this Agreement) (i) there
has not occurred any material adverse change or any development that
has resulted or would reasonably be expected to result in a material
adverse change in the condition, financial or otherwise, or the
earnings, business, management or operations of the Company and its
subsidiaries, taken as a whole, (ii) there has not been any material
adverse change or any development that has resulted or would reasonably
be expected to result in a material adverse change in the capital stock
or in the long-term debt of the Company or any of its subsidiaries and
(iii) neither the Company nor any of its subsidiaries has incurred any
material liability or obligation, direct or contingent that has had or
would reasonably be expected to have a Material Adverse Effect.
(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 for such Liens which, singly or in the aggregate, have
not had and would not reasonably be expected to have a Material Adverse
Effect or as described in or contemplated by the Final Memorandum, and
any real property and buildings held under lease by the Company or any
such subsidiary are held under valid, subsisting and enforceable
leases, except for such exceptions which, singly or in the aggregate,
have not had and would not reasonably be expected to have a Material
Adverse Effect or 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 except for such
labor disputes which, singly or in the aggregate, have not had and
would not reasonably be expected to have a Material Adverse Effect or
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 and would reasonably be expected to
result in a Material Adverse Effect, except as described in or
contemplated by the Final Memorandum.
(r) The Company and each of its subsidiaries are insured by
insurers of recognized financial responsibility against such losses and
risks and in such amounts as are prudent and customary in the
businesses in which they are engaged; neither the Company nor any such
subsidiary has been refused any insurance coverage sought or applied
for; and neither the Company nor any such subsidiary has any reason to
believe that it will not be able to renew its existing insurance
coverage as and when such coverage expires or to obtain similar
coverage from similar insurers as may be necessary to continue its
business at a cost that would not and would not reasonably be expected
to have a Material Adverse Effect, 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 has all necessary consents, permits,
authorizations, approvals, orders (including exemptive orders),
licenses, franchises and certificates ("Permits") of and from, and has
made all declarations and filings with, all governmental authorities,
self-regulatory organizations and courts and other tribunals, whether
foreign or domestic, to own and use its assets and to conduct its
business in the manner described in the Final Memorandum, except with
respect to such Permits, the failure to hold which, and such filings,
the failure to make which, singly or in the aggregate, have not had
and would not reasonably be expected to have a Material Adverse Effect
or as described in or contemplated by the Final Memorandum. The
Company has fulfilled and performed all of its obligations with
respect to such Permits; and to the knowledge of the Company, no event
has occurred which allows, or after notice or lapse of time would
allow revocation or termination or could result in any other
impairment of the rights of the Company thereunder, except for such
failures of performance, revocations, terminations or impairments
which, singly or in the aggregate, have not had and would not
reasonably be expected to have a Material Adverse Effect or 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 such failures
to file such tax returns or extension requests or such failures to make
payments which, singly or in the aggregate, have not had and would not
reasonably be expected to have a Material Adverse Effect, or except for
such failures to pay such taxes, assessments, fines or penalties which
are currently being contested in good faith or, if paid, would not and
would not reasonably be expected to have a Material Adverse Effect or,
in any case, as described in or contemplated by the Final Memorandum.
(v) Neither the Company nor any of its subsidiaries is in
violation of any foreign, federal, state or local law or regulation
relating to the protection of human health and safety, the environment
or hazardous or toxic substances or wastes, pollutants or contaminants
("Environmental Laws"), any provisions of the Employee Retirement
Income Security Act of 1974, as amended ("ERISA"), or any provisions of
the Foreign Corrupt Practices Act or the rules and regulations
promulgated thereunder, except for such violations which, singly or in
the aggregate, have not had and would not reasonably be expected to
have a Material Adverse Effect. There are no costs or liabilities
associated with Environmental Laws (including, without limitation, any
capital or operating expenditures required for clean-up, closure of
properties or compliance with Environmental Laws or any authorization,
any related constraints on operating activities and any potential
liabilities to third parties) which have had and would reasonably be
expected to, singly or in the aggregate, have a Material Adverse
Effect.
(w) Each certificate signed by any officer of the Company and
delivered to the Initial Purchaser or Counsel for the Initial Purchaser
shall be deemed to be a representation and warranty by the Company (and
not individually by such officer) to the Initial Purchaser as to the
matters covered thereby.
(x) The Company and each of its subsidiaries maintain a system
of internal accounting controls sufficient to provide reasonable
assurance that (i) transactions are executed in accordance with
management's general or specific authorizations; (ii) transactions are
recorded as necessary to permit preparation of financial statements in
conformity with generally accepted accounting principles and to
maintain asset accountability; (iii) access to assets is permitted only
in accordance with management's general or specific authorization; and
(iv) the recorded
accountability for assets is compared with the existing assets at
reasonable and appropriate intervals and appropriate action is taken
with respect to any differences.
(y) No default exists, and no event has occurred which, with
notice or lapse of time or both, would constitute a default in the due
performance and observance of any term, covenant or condition of any
indenture, mortgage, deed of trust, lease or other agreement or
instrument to which the Company or any of its subsidiaries is a party
or by which the Company or any of its subsidiaries or any of their
respective properties is bound or may be affected in any material
adverse respect with regard to the property, business or operations of
the Company and its subsidiaries.
(z) Neither the Company, nor any of its Affiliates (as defined
in Rule 501(b) of Regulation D under the Securities Act ("Regulation
D")), nor any person acting on its or their behalf has, directly or
indirectly, made offers or sales of any security, or solicited offers
to buy any security, under circumstances that would require the
registration of the Securities under the Securities Act.
(aa) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation
D) in connection with any offer or sale of the Securities in the United
States.
(bb) The Securities satisfy the eligibility requirements
of Rule 144A(d)(3) under the Securities Act.
(cc) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf has engaged in any directed
selling efforts with respect to the Securities, and each of them has
complied with the offering restrictions requirement of Regulation S
("Regulation S") under the Securities Act. Terms used in this paragraph
have the meanings given to them by Regulation S.
(dd) The Company as of the Execution Time expects to be and as
of the Closing Date will have been advised by the National Association
of Securities Dealers, Inc. PORTAL Market that the Securities have been
designated "PORTAL-eligible securities" in accordance with the rules
and regulations of the National Association of Securities Dealers, Inc.
(ee) The Company is not, and upon the issuance and sale of the
Securities as herein contemplated and the application of the net
proceeds therefrom as described in the Final Memorandum will not be, an
"investment company" within the meaning of the Investment Company Act
of 1940, as amended (the "Investment Company Act"), without taking
account of any exemption arising out of the number of holders of the
Company's securities.
(ff) The Company will conduct its operations in a manner that
will not subject it to registration as an investment company under the
Investment Company Act.
(gg) The information provided by the Company pursuant to
Section 5(h) hereof will not, at the date thereof, contain any untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading.
(hh) There is no franchise, contract or other document of a
character that would be required to be described or referred to in the
Final Memorandum, if it were a prospectus filed as part of a
registration statement on Form S-1 under the Securities Act, that is
not described or referred to as would be so required, and the
description thereof or references thereto are correct in all material
respects.
(ii) Subject to compliance by the Initial Purchaser with the
representations and warranties set forth in Section 4, it is not
necessary in connection with the offer, sale and delivery of the
Securities to the Initial Purchaser and the resale to each subsequent
purchaser in the manner contemplated by this Agreement and the Final
Memorandum to register the Securities under the Securities Act or to
qualify the Indenture under the Trust Indenture Act of 1939, as
amended.
(jj) The documents incorporated or deemed to be incorporated
by reference in the Final Memorandum at the time they were or hereafter
are filed with the Commission, when read together with the other
information in the Final Memorandum, complied and will comply in all
material respects with the requirements of the Securities Act, the
Securities and Exchange Act of 1934, as amend (the "Exchange Act") and
the rule and regulations of the Commission under the Securities Act and
the Exchange Act and, at the Execution Time and at the Closing Date,
did not and will not contain an untrue statement of a material fact or
omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading.
2. Purchase and Sale. Subject to the terms and conditions and
in reliance upon the representations and warranties herein set forth, the
Company agrees to sell to the Initial Purchaser, and the Initial Purchaser
agrees to purchase from the Company, at a purchase price of 99.250% of the
aggregate principal amount thereof, plus accrued interest, if any, from November
27, 1998 to the Closing Date, $300,000,000 aggregate principal amount of
Securities.
3. Delivery and Payment. Delivery of and payment for the
Securities shall be made at 10:00 AM, New York City time, on November 27, 1998,
or such later date (not later than December 4, 1998) as the Initial Purchaser
shall designate, which date and time may be postponed by agreement between the
Initial Purchaser and the Company (such date and time of delivery and payment
for the Securities being herein called the "Closing Date"). Delivery of the
Securities shall be made to the Initial Purchaser against payment by the Initial
Purchaser of the purchase price thereof to or upon the order of the Company by
wire transfer of federal funds or other immediately available funds or such
other manner of payment as may be agreed by the Company and the Initial
Purchaser. Delivery of the Securities shall be made at such location as the
Initial Purchaser shall reasonably designate at least one business day in
advance of the Closing Date and payment for the Securities shall be made at the
office of Shearman & Sterling ("Counsel for the Initial Purchaser"), 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.
The Company agrees to have the Securities available for
inspection, checking and packaging by the Initial Purchaser in New York, New
York, not later than 1:00 PM on the business day prior to the Closing Date.
4. Offering of Securities. The Initial Purchaser represents and warrants to
and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell,
any Securities except (i) to those it reasonably believes to be
qualified institutional buyers (as defined in Rule 144A under the
Securities Act) and that, in connection with each such sale, it has
taken or will take reasonable steps to ensure that the purchaser of
such Securities is aware that such sale is being made in reliance on
Rule 144A, or (ii) in accordance with the restrictions set forth in
Exhibit B hereto.
(b) Neither it nor any person acting on its behalf has made or
will make offers or sales of the Securities by means of any form of
general solicitation or general advertising (within the meaning of
Regulation D) in the United States.
5. Agreements. The Company agrees with the Initial Purchaser that:
(a) The Company will furnish to the Initial Purchaser and to
Counsel for the Initial Purchaser, without charge, during the period
referred to in paragraph (c) below, as many copies of the Final
Memorandum and any amendments and supplements thereto as it may
reasonably request. The Company will pay the expenses of printing or
other production of all documents relating to the offering.
(b) The Company will not amend or supplement the Final
Memorandum without the prior written consent of the Initial Purchaser
as contemplated by paragraph (c) below.
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchaser, any event occurs as a result of
which the Final Memorandum, as then amended or supplemented, would
include any untrue statement of a material fact or omit to state any
material fact necessary to make the statements therein, in the light of
the circumstances under which they were made, not misleading, or if it
should be necessary to amend or supplement the Final Memorandum to
comply with applicable law, the Company will promptly notify the
Initial Purchaser of the same and, subject to the requirements of
paragraph (b) of this Section 5, will prepare and provide as promptly
as practicable to the Initial Purchaser pursuant to paragraph (a) of
this Section 5 an amendment or supplement which will correct such
statement or omission or effect such compliance.
(d) The Company will arrange for the qualification of the
Securities for sale by the Initial Purchaser under the laws of such
jurisdictions as the Initial Purchaser may reasonably designate and
will maintain such qualifications in effect so long as required for the
sale of the Securities. The Company will promptly advise the Initial
Purchaser of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Securities for
sale in any jurisdiction or the initiation or threatening of any
proceeding for such purpose.
(e) The Company will not, and will not permit any of its
Affiliates to, resell any Securities that have been acquired by any of
them.
(f) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will, directly or indirectly, make
offers or sales of any security, or solicit offers to buy any security,
under circumstances that would require the registration of the
Securities under the Securities Act.
(g) Neither the Company, nor any of its Affiliates, nor any
person acting on its or their behalf will engage in any form of general
solicitation or general advertising (within the meaning of Regulation
D) in connection with any offer or sale of the Securities in the United
States.
(h) So long as any of the Securities are "restricted
securities" within the meaning of Rule 144(a)(3) under the Securities
Act, the Company will, unless it becomes subject to and complies with
Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), provide to each holder of such restricted
securities and to each prospective purchaser (as designated by such
holder) of such restricted securities, upon the request of such holder
or prospective purchaser, any information required to be provided by
Rule 144A(d)(4) under the Securities Act. This covenant is intended to
be for the benefit of the holders, and the prospective purchasers
designated by such holders, from time to time of such restricted
securities.
(i) Neither the Company nor any of its Affiliates nor any
person acting on its or their behalf will engage in any directed
selling efforts with respect to the Securities, and each of them will
comply with the offering restrictions requirement of Regulation S.
Terms used in this paragraph have the meanings given to them by
Regulation S.
(j) The Company will cooperate with the Initial Purchaser and
use its best efforts to permit the Securities to be eligible for
clearance and settlement through The Depository Trust Company.
(k) The Company will not, until 180 days following the Closing
Date, without the prior written consent of the Initial Purchaser,
offer, sell or contract to sell, or otherwise dispose of, directly or
indirectly, or announce the offering of, any debt securities issued or
guaranteed by the Company (other than the Securities or as otherwise
contemplated by the Registration Agreement).
(l) The Company will use the net proceeds received by it from
the sale of the Securities in the manner specified in the Final
Memorandum under "Use of Proceeds."
6. Conditions to the Obligations of the Initial Purchaser. The
obligations of the Initial Purchaser to purchase the Securities shall be subject
to the accuracy of the representations and warranties on the part of the Company
contained herein at the date and time that this Agreement is executed and
delivered by the parties hereto (the "Execution Time") and the Closing Date, to
the accuracy of the statements of the Company made in any certificates pursuant
to the provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) The Company shall have furnished to the Initial Purchaser
the opinion of Holme Roberts & Owen LLP, counsel for the Company, dated
the Closing Date, in the form set forth in Exhibit C hereto.
(b) The Company shall have furnished to the Initial Purchaser
the opinion of Morrison & Foerster LLP, special federal regulatory
counsel for the Company, dated the Closing Date, in the form set forth
in Exhibit D hereto.
(c) The Company shall have furnished to the Initial Purchaser
the opinions of Kelley Drye & Warren LLP, special regulatory counsel
for the Company, dated the Closing Date, in form set forth in Exhibit E
hereto.
(d) The Company shall have furnished to the Initial Purchaser
the opinions of Joseph Garity and Lee Weiner, internal counsel for the
Company, dated the Closing Date, in the forms set forth in Exhibit F
hereto.
(e) The Initial Purchaser shall have received from Counsel for
the Initial Purchaser such opinion or opinions, dated the Closing Date,
with respect to the issuance and sale of the Securities, the Final
Memorandum (as amended or supplemented at the Closing Date) and other
related matters as the Initial Purchaser may reasonably require, and
the Company shall have furnished or made available to such counsel such
documents as they request for the purpose of enabling them to pass upon
such matters.
(f) The Company shall have furnished to the Initial Purchaser
a certificate of the Company, signed by (1) the President and Chief
Executive Officer and (2) the Executive 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;
(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);
and
(iii) the agreement of merger dated as of September
13, 1998 between the Company and Icon CMT Corp is in full
force and effect and subsequent to the dates as of which
information is given in the registration statement on Form S-4
filed with the Commission on September 30, 1998, there has
been no material adverse change in the condition (financial or
otherwise), earnings, business, management or operations of
Icon CMT Corp.
(g) (i) At the Closing Date, KPMG Peat Marwick LLP shall have
furnished to the Initial Purchaser a letter dated such date,
in form and substance satisfactory to the Initial Purchaser,
containing statements and information of the type ordinarily
included in accountants' "comfort letters" to underwriters
with respect to the financial statements and certain financial
information of the Company contained in the Final Memorandum;
(ii) At the Closing Date, Grant Thornton LLP shall
have furnished to the Initial Purchaser a letter dated such
date, in form and substance satisfactory to the Initial
Purchaser, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and
certain financial information of Phoenix Network, Inc.
contained in the Final Memorandum;
(iii) At the Closing Date, Arthur Andersen LLP shall
have furnished to the Initial Purchaser a letter dated such
date, in form and substance satisfactory to the Initial
Purchaser, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and
certain financial information of LCI International, Inc.
contained in the Final Memorandum;
(iv) At the Closing Date, PriceWaterhouseCoopers LLP
shall have furnished to the Initial Purchaser a letter dated
such date, in form and substance satisfactory to the Initial
Purchaser, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and
certain financial information of Icon CMT Corp. contained in
the Final Memorandum; and
(v) At the Closing Date, Dollinger, Smith & Co. shall
have furnished to the Initial Purchaser a letter dated such
date, in form and substance satisfactory to the Initial
Purchaser, containing statements and information of the type
ordinarily included in accountants' "comfort letters" to
underwriters with respect to the financial statements and
certain financial information of SuperNet, Inc. contained in
the Final Memorandum
(h) Subsequent to the Execution Time or, if earlier, the dates
as of which information is given in the Final Memorandum, there shall
not have been (i) any change or decrease specified in the letters
referred to in paragraph (g) of this Section 6 or (ii) any change, or
any development involving a prospective change, in or affecting the
business or properties of the Company and its subsidiaries the effect
of which, in any case referred to in clause (i) or (ii) above, is, in
the judgment of the Initial Purchaser, so material and adverse as to
make it impractical or inadvisable to market the Securities as
contemplated by the Final Memorandum.
(i) Prior to the Closing Date, the Company shall have
furnished to the Initial Purchaser such reasonable further information,
certificates and documents as the Initial Purchaser may reasonably
request.
(j) At the Closing Date, the Securities shall be rated at
least BB+ by Standard & Poor's Corporation with a positive outlook and
Ba1 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 Securities by any "nationally recognized statistical
rating agency", as that term is defined by the Commission for purposes
of Rule 436(g)(2) under the Securities Act, and no such organization
shall have publicly announced that it has its rating of the Securities
under surveillance or review.
(k) The information in the Final Memorandum shall not be
materially inconsistent with the information in the documents
incorporated by reference therein on file with the Commission at the
Execution Time.
If any of the conditions specified in this Section 6 shall not
have been fulfilled in all material respects when and as provided in this
Agreement, or if any of the opinions and certificates mentioned above or
elsewhere in this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Initial Purchaser and Counsel for the
Initial Purchaser, this Agreement and all obligations of the Initial Purchaser
hereunder may be cancelled at, or at any time prior to, the Closing Date by the
Initial Purchaser. Notice of such cancellation shall be given to the Company in
writing, by facsimile or by telephone confirmed in writing.
The documents required to be delivered by this Section 6 shall
be delivered at the office of Counsel for the Initial Purchaser, at 599
Lexington Avenue, New York, New York, or such other place as the Initial
Purchaser and the Company shall mutually agree, on the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities
provided for herein is not consummated because any condition to the obligations
of the Initial Purchaser set forth in Section 6 hereof is not satisfied, because
of any termination pursuant to Section 10 hereof or because of any refusal,
inability or failure on the part of the Company to perform any agreement herein
or comply with any provision hereof other than by reason of a default by the
Initial Purchaser in payment for the Securities on the Closing Date, the Company
will reimburse the Initial Purchaser upon demand for all reasonable
out-of-pocket expenses (including reasonable fees and disbursements of counsel)
that shall have been incurred by it in connection with the proposed purchase and
sale of the Securities.
8. Indemnification and Contribution. (a) The Company agrees to
indemnify and hold harmless the Initial Purchaser, the directors, officers,
employees and agents of the Initial Purchaser and each person who controls the
Initial Purchaser within the meaning of either the Securities Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the Final
Memorandum or any information provided by the Company to any holder or
prospective purchaser of Securities pursuant to Section 5(h), or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, and agrees to
reimburse each such indemnified party, as incurred, for any legal or other
expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; provided, however,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made in
the Final Memorandum, or in any amendment thereof or supplement thereto, in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of the Initial Purchaser specifically for inclusion
therein. This indemnity agreement will be in addition to any liability which the
Company may otherwise have.
(b) The Initial Purchaser agrees to indemnify and hold
harmless the Company, its directors, its officers, and each person who controls
the Company within the meaning of either the Securities Act or the Exchange Act,
to the same extent as the foregoing indemnity from the Company to the Initial
Purchaser, but only with reference to written information relating to the
Initial Purchaser furnished to the Company by or on behalf of the Initial
Purchaser specifically for inclusion in the Final Memorandum (or in any
amendment or supplement thereto). This indemnity agreement will be in addition
to any liability which the Initial Purchaser may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page and under the heading "Plan of Distribution" in the Final Memorandum
constitute the only information furnished in writing by or on behalf of the
Initial Purchaser for inclusion in the Final Memorandum (or in any amendment or
supplement thereto).
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve the indemnifying party from liability under paragraph (a) or
(b) above unless and to the extent the indemnifying party did not otherwise
learn of such action and such failure results in the forfeiture by the
indemnifying party of substantial rights and defenses and (ii) will not, in any
event, relieve the indemnifying party from any obligations to any indemnified
party other than the indemnification obligation provided in paragraph (a) or (b)
above. The indemnifying party shall be entitled to appoint counsel of the
indemnifying party's choice at the indemnifying party's expense to represent the
indemnified party in any action for which indemnification is sought (in which
case the indemnifying party shall not thereafter be responsible for the fees and
expenses of any separate counsel retained by the indemnified party or parties
except as set forth below); provided, however, that such counsel shall be
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest, (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party, (iii) the indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the indemnified party within
a reasonable time after notice of the institution of such action or (iv) the
indemnifying party shall authorize the indemnified party to employ separate
counsel at the expense of the indemnifying party. An indemnifying party will
not, without the prior written consent of the indemnified parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not the
indemnified parties are actual or potential parties to such claim or action)
unless such settlement, compromise or consent includes an unconditional release
of each indemnified party from all liability arising out of such claim, action,
suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a)
or (b) of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Initial Purchaser agree to
contribute to the aggregate losses, claims, damages and liabilities (including
legal or other expenses reasonably incurred in connection with investigating or
defending same) (collectively "Losses") to which the Company and the Initial
Purchaser may be subject in such proportion as is appropriate to reflect the
relative benefits received by the Company and by the Initial Purchaser from the
offering of the Securities; provided, however, that in no case shall the Initial
Purchaser be responsible for any amount in excess of the purchase discount or
commission applicable to the Securities purchased by the Initial Purchaser
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Initial Purchaser shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and of the Initial
Purchaser in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits received
by the Company shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses), and benefits received by the Initial
Purchaser shall be deemed to be equal to the total purchase discounts and
commissions received by the Initial Purchaser from the Company in connection
with the purchase of the Securities hereunder. Relative fault shall be
determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Company or the Initial Purchaser. The
Company and the Initial Purchaser agree that it would not be just and equitable
if contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the
Securities Act) shall be entitled to contribution from any person who was not
guilty of such fraudulent misrepresentation. For purposes of this Section 8,
each person who controls the Initial Purchaser within the meaning of either the
Securities Act or the Exchange Act and each director, officer, employee and
agent of the Initial Purchaser shall have the same rights to contribution as the
Initial Purchaser, and each person who controls the Company within the meaning
of either the Securities Act or the Exchange Act and each officer and director
of the Company shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions of this paragraph
(d).
9. Intentionally Omitted.
10. Termination. This Agreement shall be subject to
termination in the absolute discretion of the Initial Purchaser, by notice given
to the Company prior to delivery of and payment for the Securities, if prior to
such time (i) trading in the Company's Common Stock shall have been suspended by
the Commission or the Nasdaq Stock Market's National Market ("Nasdaq") or
trading in securities generally on the New York Stock Exchange or Nasdaq shall
have been suspended or limited or minimum prices shall have been established on
the New York Stock Exchange or Nasdaq, (ii) a banking moratorium shall have been
declared either by federal or New York state authorities or (iii) there shall
have occurred any outbreak or escalation of hostilities, declaration by the
United States of a national emergency or war or other calamity or crisis the
effect of which on financial markets is such as to make it, in the judgment of
the Initial Purchaser, impracticable or inadvisable to proceed with the offering
or delivery of the Securities as contemplated by the Final Memorandum.
11. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Initial Purchaser set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchaser or the Company
or any of the officers, directors or controlling persons referred to in Section
8 hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
12. Notices. All communications hereunder will be in writing
and effective only on receipt, and, if sent to the Initial Purchaser, will be
mailed, delivered or telecopied and confirmed to them, care of Salomon Brothers
Inc, at Seven World Trade Center, New York, New York 10048, attention: Legal
Department; or, if sent to the Company, will be mailed, delivered or telecopied
and confirmed to it at 555 Seventeenth Street, Suite 1000, Denver, Colorado
80202, attention: Drake Tempest, Esq.
13. Successors. This Agreement will inure to the benefit of
and be binding upon the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8 hereof,
and, except as expressly set forth in Section 5(h) hereof, no other person will
have any right or obligation hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
15. Business Day. For purposes of this Agreement, "business day" means each
Monday, Tuesday, Wednesday, Thursday and Friday that is not a day on which
banking institutions in The City of New York, New York are authorized or
obligated by law, executive order or regulation to close.
16. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original, but all such
counterparts will together constitute one and the same instrument.
If the foregoing is in accordance with your understanding of
our agreement, please sign and return to us the enclosed duplicate hereof,
whereupon this Agreement and your acceptance shall represent a binding agreement
between the Company and you.
Date: November 19, 1998 Very truly yours,
QWEST COMMUNICATIONS
INTERNATIONAL INC.
By /s/ Robert S. Woodruff
Name: Robert S. Woodruff
Title:Chief Financial Officer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
SALOMON SMITH BARNEY INC.
By /s/
Name:
Title:
A-1
EXHIBIT A
Term Sheet
B-1
EXHIBIT B
Selling Restrictions for Offers and
Sales outside the United States
(1) (a) The Securities have not been and will not be
registered under the Securities Act and may not be offered or sold within the
United States or to, or for the account or benefit of, U.S. persons except in
accordance with Regulation S under the Securities Act or pursuant to an
exemption from the registration requirements of the Securities Act. The Initial
Purchaser represents and agrees that, except as otherwise permitted by Section
4(a)(i) of the Agreement to which this is an exhibit, it has offered and sold
the Securities, and will offer and sell the Securities, (i) as part of its
distribution at any time and (ii) otherwise until 40 days after the later of the
commencement of the offering and the Closing Date, only in accordance with Rule
903 of Regulation S under the Securities Act. Accordingly, the Initial Purchaser
represents and agrees that neither it, nor any of its affiliates nor any person
acting on its behalf has engaged or will engage in any directed selling efforts
with respect to the Securities, and that it has complied and will comply with
the offering restrictions requirement of Regulation S. The Initial Purchaser
agrees that, at or prior to the confirmation of sale of Securities (other than a
sale of Securities pursuant to Section 4(a)(i) of the Agreement to which this is
an exhibit), it shall have sent to each distributor, dealer or person receiving
a selling concession, fee or other remuneration that purchases Securities from
it during the restricted period a confirmation or notice to substantially the
following effect:
"The Securities covered hereby have not been registered under
the U.S. Securities Act of 1933 (the "Securities Act") and may
not be offered or sold within the United States or to, or for
the account or benefit of, U.S. persons (i) as part of their
distribution at any time or (ii) otherwise until 40 days after
the later of the commencement of the offering and November 27,
1998, except in either case in accordance with Regulation S or
Rule 144A under the Securities Act. Terms used above have the
meanings given to them by Regulation S."
(b) The Initial Purchaser also represents and agrees that it
has not entered and will not enter into any contractual arrangement with any
distributor with respect to the distribution of the Securities, except with its
affiliates or with the prior written consent of the Company.
(c) Terms used in this section have the meanings given to them
by Regulation S.
(2) The Initial Purchaser represents, warrants and agrees that
(i) it has not offered or sold, and will not offer or sell, any Securities to
persons in the United Kingdom, except to persons whose ordinary activities
involve them in acquiring, holding, managing or disposing of investments (as
principal or agent) for the purposes of their business or in circumstances which
have not resulted and will not result in an offer to the public in the United
Kingdom within the meaning of the Public Offers of Securities Regulation 1995
(the "Regulations"), (ii) it has complied and will comply with all applicable
provisions of the Financial Services Act 1986 of the United Kingdom and the
Regulations with respect to anything done by it in relation to the Securities
in, from or otherwise involving the United Kingdom, and (iii) it has only issued
or passed on, and will only issue or pass on, to any person in the United
Kingdom any
document received by it in connection with the issue of the Securities if that
person is of a kind described in Article 11(3) of the Financial Services Act
1986 (Investment Advertisements) (Exemptions) Order 1995 or is a person to whom
the document may otherwise lawfully be issued or passed on.