Exhibit 4-A.3
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT (the "AGREEMENT") is
made and entered into as of August 20, 1999 among U S WEST, Inc., a Delaware
corporation (the "Guarantor"), U S WEST Capital Funding, Inc., a Colorado
corporation (the "COMPANY"), and the Initial Purchasers (as hereinafter
defined).
This Agreement is made pursuant to the Purchase Agreement
dated August 20, 1999 (the "PURCHASE AGREEMENT"), among the Guarantor, the
Company, as issuer of the 6 7/8% Notes due August 15, 2001 (the "Notes"), and
the Initial Purchasers, which provides for, among other things, the sale by
the Company to the Initial Purchasers of the aggregate principal amount of
Notes specified therein. The Notes will be unconditionally guaranteed as to
payment of principal, premium, if any, and interest by the Guarantor (the
"Guarantees", and together with the Notes, the "Securities"). In order to
induce the Initial Purchasers to enter into the Purchase Agreement, the
Guarantor and the Company have agreed to provide to the Initial Purchasers
and their direct and indirect transferees the registration rights set forth
in this Agreement. The execution and delivery of this Agreement is a
condition to the closing under the Purchase Agreement.
In consideration of the foregoing, the parties hereto agree
as follows:
1. DEFINITIONS. As used in this Agreement, the
following capitalized defined terms shall have the following meanings:
"ADVICE" shall have the meaning set forth in the last paragraph of
Section 3 hereof.
"AFFILIATE" has the same meaning as given to that term in Rule 405
under the Securities Act or any successor rule thereunder.
"APPLICABLE PERIOD" shall have the meaning set forth in Section 3(t)
hereof.
"BUSINESS DAY" means any day other than a Saturday, a Sunday, or a
day on which banking institutions in The City of New York are authorized or
required by law or executive order to remain closed.
"CLOSING TIME" shall mean the Closing Time as defined in the
Purchase Agreement.
"COMPANY" shall have the meaning set forth in the preamble to this
Agreement and also includes the Company's successors and permitted assigns.
"DEPOSITARY" shall mean The Depository Trust Company, or any other
depositary appointed by the Company; PROVIDED, HOWEVER, that such depositary
must have an address in the Borough of Manhattan, The City of New York.
"EFFECTIVENESS PERIOD" shall have the meaning set forth in Section
2(b) hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
"EXCHANGE GUARANTEES" shall mean the Guarantor's unconditional
guarantee of principal, premium, if any, and interest of the Exchange Notes
containing terms identical in all material respects to the Guarantees.
"EXCHANGE NOTES" shall mean the 6 7/8% Notes due August 15, 2001
issued by the Company under the Indenture containing terms identical in all
material respects to the Notes (except that (i) interest thereon shall accrue
from the last date on which interest was paid or duly provided for on the
Notes or, if no such interest has been paid, from the date of their original
issue, (ii) they will not contain terms with respect to transfer restrictions
under the Securities Act, (iii) they will not provide for any Special
Interest Premium thereon and (iv) they will be entitled to the benefit of the
Exchange Guarantees) to be offered to Holders of Notes in exchange for Notes
pursuant to the Exchange Offer.
"EXCHANGE OFFER" shall mean the offer by the Company to the Holders
to exchange all of the Registrable Securities for a like amount of Exchange
Notes pursuant to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION" shall mean a registration under the
Securities Act effected pursuant to Section 2(a) hereof.
"EXCHANGE OFFER REGISTRATION STATEMENT" shall mean an exchange offer
registration statement on Form S-4 (or, if applicable, on another appropriate
form), and all amendments and supplements to such registration statement, in
each case including the Prospectus contained therein, all exhibits thereto
and all documents incorporated by reference therein.
"EXCHANGE PERIOD" shall have the meaning set forth in Section 2(a)
hereof.
"GUARANTEES" shall have the meaning set forth in the preamble to
this Agreement.
"HOLDER" shall mean any Initial Purchaser, for so long as it owns
any Registrable Securities, and each of its successors, assigns and direct
and indirect transferees who become registered owners of Registrable
Securities under the Indenture.
"INDENTURE" shall mean the Indenture, dated as of June 29, 1998,
between the Company, as issuer, and The First National Bank of Chicago, as
trustee, as the same may be amended or supplemented from time to time in
accordance with the terms thereof.
"INITIAL PURCHASERS" shall mean J.P. Morgan Securities Inc., Merrill
Lynch & Co., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Banc of
America Securities LLC, Lehman Brothers Inc., Salomon Smith Barney Inc., ABN
AMRO Incorporated, Banc One Capital Markets, Inc., BNY Capital Markets, Inc.,
Commerzbank Capital Markets Corporation, Fleet Securities, Inc., Mellon
Financial Markets, Inc., Norwest Investments Services Inc., Muriel Siebert &
Co., Inc., Utendahl Capital Partners, L.P. and The Williams Capital Group,
L.P.
"INSPECTORS" shall have the meaning set forth in Section 3(n) hereof.
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"ISSUE DATE" shall mean August 25, 1999, the initial date of
delivery of the Notes from the Company to the Initial Purchasers.
"ISSUER" shall mean the Company as defined in the preamble hereto.
"MAJORITY HOLDERS" shall mean the Holders of a majority of the
aggregate principal amount of outstanding Notes and Exchange Notes.
"NOTES" shall have the meaning set forth in the preamble to this
Agreement.
"PARTICIPATING BROKER-DEALER" shall have the meaning set forth in
Section 3(t) hereof.
"PERSON" shall mean an individual, partnership, corporation, trust
or unincorporated organization, limited liability corporation, or a
government or agency or political subdivision thereof.
"PROSPECTUS" shall mean the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including a prospectus
supplement with respect to the terms of the offering of any portion of the
Registrable Securities covered by a Shelf Registration Statement, and by all
other amendments and supplements to a prospectus, including post-effective
amendments, and in each case including all documents incorporated by
reference therein.
"PURCHASE AGREEMENT" shall have the meaning set forth in the
preamble to this Agreement.
"RECORDS" shall have the meaning set forth in Section 3(n) hereof.
"REGISTRABLE SECURITIES" shall mean the Securities; PROVIDED,
HOWEVER, that any Securities shall cease to be Registrable Securities when
any of the following occurs: (i) a Registration Statement with respect to
such Securities for the exchange or resale thereof shall have been declared
effective under the Securities Act and such Securities shall have been
disposed of pursuant to such Registration Statement, (ii) such Securities
shall have been sold to the public pursuant to Rule 144(k) (or any similar
provision then in force, but not Rule 144A) under the Securities Act or are
eligible to be sold without restriction as contemplated by Rule 144(k), (iii)
such Securities shall have ceased to be outstanding or (iv) such Securities
shall have been exchanged for Exchange Notes together with the Exchange
Guarantees upon consummation of the Exchange Offer and are thereafter freely
tradable by the Holder thereof (other than an Affiliate of the Company or the
Guarantor).
"REGISTRATION EXPENSES" shall mean any and all expenses incident to
performance of or compliance by the Company and the Guarantor with this
Agreement, including without limitation: (i) all SEC or National Association
of Securities Dealers, Inc. (the "NASD") registration and filing fees,
including, if applicable, the fees and expenses of any "qualified independent
underwriter" (and its counsel) that is required to be retained by any Holder
of Registrable Securities in accordance with the rules and regulations of the
NASD, (ii) all fees and expenses incurred in connection with compliance with
state securities or blue sky laws (including reasonable fees and
disbursements of one counsel for all underwriters and Holders as
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a group in connection with blue sky qualification of any of the Exchange
Securities or Registrable Securities) and compliance with the rules of the
NASD, (iii) all expenses of any Persons in preparing or assisting in
preparing, word processing, printing and distributing any Registration
Statement, any Prospectus and any amendments or supplements thereto, and in
preparing or assisting in preparing, printing and distributing any
underwriting agreements, securities sales agreements and other documents
relating to the performance of and compliance with this Agreement, (iv) all
rating agency fees, (v) the fees and disbursements of counsel for the Company
and the Guarantor and of the independent certified public accountants of the
Company and the Guarantor and its subsidiaries, including the expenses of any
"cold comfort" letters required by or incident to the performance of and
compliance with this Agreement, (vi) the reasonable fees and expenses of the
Trustee and its counsel and any exchange agent or custodian, and (vii) the
reasonable fees and expenses of any special experts retained by the Company
and the Guarantor in connection with any Registration Statement.
"REGISTRATION STATEMENT" shall mean any registration statement of
the Company and the Guarantor which covers any of the Exchange Securities or
Registrable Securities pursuant to the provisions of this Agreement, and all
amendments and supplements to any such Registration Statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all documents incorporated by reference
therein.
"RULE 144(k) PERIOD" shall mean the period of two years (or such
shorter period as may hereafter be referred to in Rule 144(k) under the
Securities Act (or similar successor rule)) commencing on the Issue Date.
"SEC" shall mean the Securities and Exchange Commission.
"SECURITIES" shall have the meaning set forth in the preamble to
this Agreement.
"SECURITIES ACT" shall mean the Securities Act of 1933, as amended
from time to time.
"SHELF REGISTRATION" shall mean a registration effected pursuant to
Section 2(b) hereof.
"SHELF REGISTRATION EVENT" shall have the meaning set forth in
Section 2(b) hereof.
"SHELF REGISTRATION EVENT DATE" shall have the meaning set forth in
Section 2(b) hereof.
"SHELF REGISTRATION STATEMENT" shall mean a "shelf" registration
statement of the Company pursuant to the provisions of Section 2(b) hereof
which covers all of the Registrable Securities (except Registrable Securities
which the Holders have elected not to include in such Shelf Registration
Statement or the Holders of which have not complied with their obligations
under the penultimate paragraph of Section 3 hereof or under the penultimate
sentence of Section 2(b) hereof) on an appropriate form under Rule 415 under
the Securities Act, or any similar rule that may be adopted by the SEC, and
all amendments and supplements to such registration statement, including
post-effective amendments, in each case including the Prospectus contained
therein, all exhibits thereto and all documents incorporated by reference
therein.
"SPECIAL INTEREST PREMIUM" shall have the meaning set forth in
Section 2(e) hereof.
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"TIA" shall have the meaning set forth in Section 3(k) hereof.
"TRUSTEE" shall mean the trustee under the Indenture.
2. REGISTRATION UNDER THE SECURITIES ACT.
(a) EXCHANGE OFFER. Except as set forth in Section 2(b)
below, the Company and the Guarantor shall, for the benefit of the Holders,
at the Company's cost, use its reasonable best efforts to (i) file with the
SEC within 150 calendar days after the Issue Date an Exchange Offer
Registration Statement on an appropriate form under the Securities Act
relating to the Exchange Offer, (ii) cause such Exchange Offer Registration
Statement to be declared effective under the Securities Act by the SEC not
later than the date which is 180 calendar days after the Issue Date, (iii)
keep such Exchange Offer Registration Statement effective for not less than
30 calendar days (or longer if required by applicable law) after the date
notice of the Exchange Offer is mailed to the Holders and (iv) cause the
Exchange Offer to be consummated within 225 calendar days after the Issue
Date. Promptly after the effectiveness of the Exchange Offer Registration
Statement, the Company shall commence the Exchange Offer, it being the
objective of such Exchange Offer to enable each Holder eligible and electing
to exchange Registrable Securities for a like principal amount of Exchange
Notes together with the Exchange Guarantees (provided that such Holder (i) is
not an Affiliate of the Company or the Guarantor, (ii) is not a broker-dealer
tendering Registrable Securities acquired directly from the Company, (iii)
acquires the Exchange Securities in the ordinary course of such Holder's
business and (iv) has no arrangements or understandings with any Person to
participate in the Exchange Offer for the purpose of distributing the
Exchange Securities) to transfer such Exchange Securities from and after
their receipt without any limitations or restrictions under the Securities
Act and under state securities or blue sky laws.
In connection with the Exchange Offer, the Company and the
Guarantor shall:
(i) mail to each Holder a copy of the Prospectus forming part of the
Exchange Offer Registration Statement, together with an appropriate letter of
transmittal and related documents;
(ii) keep the Exchange Offer open for acceptance for a period of not
less than 30 days after the date notice thereof is mailed to the Holders (or
longer if required by applicable law) (such period referred to herein as the
"EXCHANGE PERIOD");
(iii) utilize the services of the Depositary for the Exchange Offer
with respect to Notes represented by a global certificate;
(iv) permit Holders to withdraw tendered Registrable Securities at
any time prior to the close of business, New York City time, on the last
Business Day of the Exchange Period, by sending to the institution specified
in the notice to Holders, a telegram, telex, facsimile transmission or letter
setting forth the name of such Holder, the principal amount of Registrable
Securities delivered for exchange, and a statement that such Holder is
withdrawing his election to have such Registrable Securities exchanged;
(v) notify each Holder that any Registrable Security not tendered by
such Holder in the Exchange Offer will remain outstanding and continue to
accrue interest but will not retain any
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rights under this Agreement (except in the case of the Initial Purchasers and
Participating Broker-Dealers as provided herein); and
(vi) otherwise comply in all respects with all applicable laws
relating to the Exchange Offer.
As soon as practicable after the close of the Exchange
Offer, the Company and the Guarantor shall:
(i) accept for exchange all Registrable Securities or portions
thereof duly tendered and not validly withdrawn pursuant to the Exchange
Offer in accordance with the terms of the Exchange Offer Registration
Statement and letter of transmittal which is an exhibit thereto;
(ii) deliver, or cause to be delivered, to the Trustee for
cancellation all Registrable Securities or portions thereof so accepted for
exchange by the Company and the Guarantor; and
(iii) issue, and cause the Trustee under the Indenture to promptly
authenticate and deliver to each Holder, Exchange Securities equal in
principal amount to the principal amount of the Notes as are surrendered by
such Holder, and the Guarantor will execute the Exchange Guarantees.
Interest on each Exchange Note issued pursuant to the
Exchange Offer will accrue from the last date on which interest was paid or
duly provided for on the Note surrendered in exchange therefor or, if no
interest has been paid on such Note, from the Issue Date. To the extent not
prohibited by any law or applicable interpretation of the staff of the SEC,
the Company and the Guarantor shall use reasonable best efforts to complete
the Exchange Offer as provided above, and shall comply with the applicable
requirements of the Securities Act, the Exchange Act and other applicable
laws in connection with the Exchange Offer. The Exchange Offer shall not be
subject to any conditions other than the conditions referred to in Section
2(b)(i) and (ii) below and those conditions that are customary in similar
exchange offers. Each Holder of Registrable Securities who wishes to exchange
such Registrable Securities for Exchange Securities in the Exchange Offer
will be required to make certain customary representations in connection
therewith, including, in the case of any Holder, representations that (i) it
is not an Affiliate of the Company or the Guarantor, (ii) it is not a
broker-dealer tendering Registrable Securities acquired directly from the
Company, (iii) the Exchange Securities to be received by it are being
acquired in the ordinary course of its business and (iv) at the time of the
Exchange Offer, it has no arrangements or understandings with any Person to
participate in the distribution (within the meaning of the Securities Act) of
the Exchange Securities. The Company and the Guarantor shall inform the
Initial Purchasers, after consultation with the Trustee, of the names and
addresses of the Holders to whom the Exchange Offer is made, and the Initial
Purchasers shall have the right to contact such Holders in order to
facilitate the tender of Registrable Securities in the Exchange Offer.
Upon consummation of the Exchange Offer in accordance with
this Section 2(a), the provisions of this Agreement shall continue to apply,
MUTATIS MUTANDIS, solely with respect to Exchange Securities held by
Participating Broker-Dealers, and the Company and the Guarantor
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shall have no further obligation to register the Registrable Securities held
by any Holder pursuant to Section 2(b) of this Agreement.
(b) SHELF REGISTRATION. If (i) because of any change in law
or in currently prevailing interpretations thereof by the staff of the SEC,
the Company or the Guarantor is not permitted to effect the Exchange Offer as
contemplated by Section 2(a) hereof, (ii) the Exchange Offer is not
consummated within 225 days after the Issue Date or (iii) upon the request of
any Initial Purchaser with respect to any Registrable Securities held by it,
if such Initial Purchaser is not permitted, in the reasonable opinion of
Brown & Wood LLP, pursuant to applicable law or applicable interpretations of
the staff of the SEC, to participate in the Exchange Offer and thereby
receive securities that are freely tradeable without restriction under the
Securities Act and applicable blue sky or state securities laws (other than
due solely to the status of such Initial Purchaser as an Affiliate of the
Company or the Guarantor or as a Participating Broker-Dealer)(any of the
events specified in (i), (ii) or (iii) being a "SHELF REGISTRATION EVENT",
and the date of occurrence thereof, the "SHELF REGISTRATION EVENT DATE"),
then in addition to or in lieu of conducting the Exchange Offer contemplated
by Section 2(a), as the case may be, the Company and the Guarantor shall
promptly notify the Holders in writing thereof and shall, at its cost, file
as promptly as practicable after such Shelf Registration Event Date and, in
any event, within 90 days after such Shelf Registration Event Date, a Shelf
Registration Statement providing for the sale by the Holders of all of the
Registrable Securities (other than Registrable Securities owned by Holders
who have elected not to include such Registrable Securities in such Shelf
Registration Statement or who have not complied with their obligations under
the penultimate paragraph of Section 3 hereof or under the penultimate
sentence of this Section 2(b), and shall use its reasonable best efforts to
cause such Shelf Registration Statement to be declared effective by the SEC
as soon as practicable. No Holder of Registrable Securities shall be entitled
to include any of its Registrable Securities in any Shelf Registration
pursuant to this Agreement unless and until such Holder agrees in writing to
be bound by all of the provisions of this Agreement applicable to such Holder
and furnishes to the Company and the Guarantor in writing, within 15 days
after receipt of a request therefor, such information as the Company and the
Guarantor may, after conferring with counsel with regard to information
relating to Holders that would be required by the SEC to be included in such
Shelf Registration Statement or Prospectus included therein, reasonably
request for inclusion in any Shelf Registration Statement or Prospectus
included therein. Each Holder as to which any Shelf Registration is being
effected agrees to furnish to the Company and the Guarantor all information
with respect to such Holder necessary to make the information previously
furnished to the Company and the Guarantor by such Holder not materially
misleading.
The Company and the Guarantor agree to use their reasonable
best efforts to keep the Shelf Registration Statement continuously effective
and the Prospectus usable for resales for the earlier of: (a) the Rule 144(k)
Period or (b) such time as all of the securities covered by the Shelf
Registration Statement have been sold pursuant to the Shelf Registration
Statement or cease to be Registrable Securities (the "EFFECTIVENESS PERIOD").
The Company and the Guarantor shall not permit any securities other than (i)
the Company's and the Guarantor 's issued and outstanding securities
currently possessing incidental registration rights and (ii) Registrable
Securities, to be included in the Shelf Registration. The Company and the
Guarantor will, in the event a Shelf Registration Statement is declared
effective, provide to each Holder of Registrable Securities covered thereby a
reasonable number of copies of the Prospectus which is a part of the
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Shelf Registration Statement, notify each such Holder when the Shelf
Registration has become effective and take any other action required to
permit unrestricted resales of the Registrable Securities. The Company and
the Guarantor further agree, if necessary, to supplement or amend the Shelf
Registration Statement, if required by the rules, regulations or instructions
applicable to the registration form used by the Company and the Guarantor for
such Shelf Registration Statement or by the Securities Act or by any other
rules and regulations thereunder for shelf registrations, and the Company and
the Guarantor agree to furnish to the Holders of Registrable Securities
covered by such Shelf Registration Statement copies of any such supplement or
amendment promptly after its being used or filed with the SEC.
(c) EXPENSES. The Company and the Guarantor shall pay all
Registration Expenses in connection with any Registration Statement filed
pursuant to Section 2(a) and/or 2(b) hereof and will reimburse the Initial
Purchasers for the reasonable fees and disbursements of Brown & Wood LLP
incurred in connection with the Exchange Offer. Except as provided herein,
each Holder shall pay all expenses of its counsel, underwriting discounts and
commissions and transfer taxes, if any, relating to the sale or disposition
of such Holder's Registrable Securities pursuant to the Shelf Registration
Statement.
(d) EFFECTIVE REGISTRATION STATEMENT. An Exchange Offer
Registration Statement pursuant to Section 2(a) hereof or a Shelf
Registration Statement pursuant to Section 2(b) hereof will not be deemed to
have become effective unless it has been declared effective by the SEC;
PROVIDED, HOWEVER, that if, after it has been declared effective, the
offering of Registrable Securities pursuant to such Exchange Offer
Registration Statement or Shelf Registration Statement is interfered with by
any stop order, injunction or other order or requirement of the SEC or any
other governmental agency or court, such Exchange Offer Registration
Statement or Shelf Registration Statement will be deemed not to have been
effective during the period of such interference, until the offering of
Registrable Securities pursuant to such Registration Statement may legally
resume. The Company and the Guarantor will be deemed not to have used their
reasonable best efforts to cause the Exchange Offer Registration Statement or
the Shelf Registration Statement, as the case may be, to become, or to
remain, effective during the requisite period if they voluntarily take any
action that would result in any such Registration Statement not being
declared effective or that would result in the Holders of Registrable
Securities covered thereby not being able to exchange or offer and sell such
Registrable Securities during that period, unless such action is required by
applicable law.
(e) SPECIAL INTEREST PREMIUM. In the event that:
(i) the Exchange Offer Registration Statement is
not filed with the SEC on or prior to the 150th day after the Issue Date,
then, commencing on the 151st day after the Issue Date, a special interest
premium (the "Special Interest Premium") shall accrue on the principal amount
of the Notes at a rate of 0.25% per annum;
(ii) the Exchange Offer Registration Statement is
not declared effective by the SEC on or prior to the 180th day after the
Issue Date, then, commencing on the 181st day after the Issue Date, a Special
Interest Premium shall accrue on the principal amount of the Notes at a rate
of 0.25% per annum;
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(iii) (A) the Company has not exchanged Exchange
Notes for all Notes validly tendered,or the Guarantor has not executed the
Exchange Guarantees in respect of the Exchange Notes, in accordance with the
terms of the Exchange Offer on or prior to the 225th day after the Issue Date
or (B) if the Shelf Registration Statement is required to be filed pursuant
to Section 2(b) but is not declared effective by the SEC on or prior to the
225th day after the Issue Date, then, commencing on the 226th day after the
Issue Date, a Special Interest Premium shall accrue on the principal amount
of the Notes at the rate of 0.25% per annum; or
(iv) the Shelf Registration Statement has been
declared effective and such ShelfRegistration Statement ceases to be
effective or the Prospectus ceases to be usable for resales (A) at any time
prior to the expiration of the Effectiveness Period or (B) if related to
corporate developments, public filings or similar events or to correct a
material misstatement or omission in the Prospectus, for more than 60 days
(whether or not consecutive) in any twelve-month period, then a Special
Interest Premium shall accrue on the principal amount of the Notes at a rate
of 0.25% per annum commencing on the day (in the case of (A) above), or the
61st day after (in the case of (B) above), such Shelf Registration Statement
ceases to be effective or the Prospectus ceases to be usable for resales;
PROVIDED, HOWEVER, that the aggregate amount of the Special Interest Premium
in respect of the Notes may not exceed 0.25% per annum; PROVIDED, FURTHER,
HOWEVER, that (1) upon the filing of the Exchange Offer Registration
Statement (in the case of clause (i) above), (2) upon the effectiveness of
the Exchange Offer Registration Statement (in the case of clause (ii) above),
(3) upon the exchange of Exchange Notes for all Notes validly tendered and
execution of the Exchange Guarantees (in the case of clause (iii)(A) above)
or upon the effectiveness of the Shelf Registration Statement (in the case of
clause (iii) (B) above) or (4) the earlier of (y) such time as the Shelf
Registration Statement which had ceased to remain effective or the Prospectus
which had ceased to be usable for resales again becomes effective and usable
for resales and (z) the expiration of the Effectiveness Period (in the case
of clause (iv) above), the Special Interest Premium on the principal amount
of the Notes as a result of such clause (or the relevant subclause thereof)
shall cease to accrue;
PROVIDED, FURTHER, HOWEVER, that if the Exchange Offer Registration Statement
is not declared effective by the SEC on or prior to the 225th day after the
Issue Date and the Company and the Guarantor shall request Holders to provide
the information required by the SEC for inclusion in the Shelf Registration
Statement, the Notes owned by Holders who do not provide such information
when required pursuant to Section 2(b) will not be entitled to any Special
Interest Premium for any day after the 225th day after the Issue Date.
Any Special Interest Premium due pursuant to Section 2(e)(i), (ii),
(iii) or (iv) above will be payable in cash on the next succeeding February
15 or August 15, as the case may be, to Holders on the relevant record dates
for the payment of interest pursuant to the Indenture.
(f) SPECIFIC ENFORCEMENT. Without limiting the remedies
available to the Holders, the Company and the Guarantor acknowledge that any
failure by the Company and the Guarantor to comply with its respective
obligations under Section 2(a) and Section 2(b) hereof may result in material
irreparable injury to the Holders for which there is no adequate remedy at
law, that it would not be possible to measure damages for such injuries
precisely and that, in the event of
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any such failure, any Holder may obtain such relief as may be required to
specifically enforce the Company's and the Guarantor's obligations under
Section 2(a) and Section 2(b) hereof.
3. REGISTRATION PROCEDURES. In connection with the
obligations of the Company and the Guarantor with respect to the Registration
Statements pursuant to Sections 2(a) and 2(b) hereof, the Company and the
Guarantor shall use their reasonable best efforts to:
(a) prepare and file with the SEC a Registration Statement or
Registration Statements as prescribed by Sections 2(a) and
2(b) hereof within the relevant time period specified in
Section 2 hereof on the appropriate form under the Securities
Act, which form shall (i) be selected by the Company and the
Guarantor, (ii) in the case of a Shelf Registration, be
available for the sale of the Registrable Securities by the
selling Holders thereof and, in the case of an Exchange Offer,
be available for the exchange of Registrable Securities, and
(iii) comply as to form in all material respects with the
requirements of the applicable form and include all financial
statements required by the SEC to be filed therewith; the
Company and the Guarantor shall use their reasonable best
efforts to cause such Registration Statement to become
effective and remain effective (and, in the case of a Shelf
Registration Statement, the Prospectus to be usable for
resales) in accordance with Section 2 hereof; PROVIDED,
HOWEVER, that if (1) such filing is pursuant to Section 2(b),
or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2(a) is
required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange
Securities, before filing any Registration Statement or
Prospectus or any amendments or supplements thereto, the
Company shall furnish to and afford the Holders of the
Registrable Securities and each such Participating
Broker-Dealer, as the case may be, covered by such
Registration Statement, their counsel and the managing
underwriters, if any, a reasonable opportunity to review
copies of all such documents (including copies of any
documents to be incorporated by reference therein and all
exhibits thereto) proposed to be filed; and the Company and
the Guarantor shall not file any Registration Statement or
Prospectus or any amendments or supplements thereto in respect
of which the Holders must be afforded an opportunity to review
prior to the filing of such document if the Majority Holders
of the Registrable Securities, depending solely upon which
Holders must be afforded the opportunity of such review, or
such Participating Broker-Dealer, as the case may be, their
counsel or the managing underwriters, if any, shall reasonably
object in a timely manner;
(b) prepare and file with the SEC such amendments and
post-effective amendments to each Registration Statement as
may be necessary to keep such Registration Statement effective
for the Effectiveness Period or the Applicable Period, as the
case may be, and cause each Prospectus to be supplemented, if
so determined by the Company and the Guarantor or requested by
the SEC, by any required prospectus supplement and as so
supplemented to be filed pursuant to Rule 424 (or any similar
provision then in force) under the Securities Act, and comply
with the provisions of the Securities Act, the Exchange Act
and the rules and regulations promulgated thereunder
applicable to it with respect to the
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disposition of all securities covered by each Registration
Statement during the Effectiveness Period or the Applicable
Period, as the case may be, in accordance with the intended
method or methods of distribution by the selling Holders
thereof described in this Agreement (including sales by any
Participating Broker-Dealer);
(c) in the case of a Shelf Registration, (i) notify each
Holder of Registrable Securities included in the Shelf
Registration Statement, at least three Business Days prior to
filing, that a Shelf Registration Statement with respect to
the Registrable Securities is being filed and advising such
Holder that the distribution of Registrable Securities will be
made in accordance with the method selected by the Majority
Holders of the Registrable Securities, (ii) furnish to each
Holder of Registrable Securities included in the Shelf
Registration Statement and to each underwriter of an
underwritten offering of Registrable Securities, if any,
without charge, as many copies of each Prospectus, including
each preliminary prospectus, and any amendment or supplement
thereto, and such other documents as such Holder or
underwriter may reasonably request, in order to facilitate the
public sale or other disposition of the Registrable Securities
and (iii) consent to the use of the Prospectus or any
amendment or supplement thereto by each of the selling Holders
of Registrable Securities included in the Shelf Registration
Statement in connection with the offering and sale of the
Registrable Securities covered by the Prospectus or any
amendment or supplement thereto;
(d) in the case of a Shelf Registration, register or qualify
the Registrable Securities under all applicable state
securities or "blue sky" laws of such jurisdictions by the
time the applicable Registration Statement is declared
effective by the SEC as any Holder of Registrable Securities
covered by a Registration Statement and each underwriter of an
underwritten offering of Registrable Securities shall
reasonably request in writing in advance of such date of
effectiveness, and do any and all other acts and things which
may be reasonably necessary or advisable to enable such Holder
and underwriter to consummate the disposition in each such
jurisdiction of such Registrable Securities owned by such
Holder; PROVIDED, HOWEVER, that the Company and the Guarantor
shall not be required to (i) qualify as a foreign corporation
or as a dealer in securities in any jurisdiction where it
would not otherwise be required to qualify but for this
Section 3(d), (ii) file any general consent to service of
process in any jurisdiction where it would not otherwise be
subject to such service of process or (iii) subject itself to
taxation in any such jurisdiction if it is not then so
subject;
(e) (1) in the case of a Shelf Registration or (2) if
Participating Broker-Dealers from whom the Company and the
Guarantor have received prior written notice that they will be
utilizing the Prospectus contained in the Exchange Offer
Registration Statement as provided in Section 3(t) hereof, are
seeking to sell Exchange Securities and are required to
deliver Prospectuses, promptly notify each Holder of
Registrable Securities, or such Participating Broker-Dealers,
as the case may be, their counsel and the managing
underwriters, if any, and promptly confirm such notice in
writing (i) when a Registration Statement has become
11
effective and when any post-effective amendments thereto
become effective, (ii) of any request by the SEC or any state
securities authority for amendments and supplements to a
Registration Statement or Prospectus or for additional
information after the Registration Statement has become
effective, (iii) of the issuance by the SEC or any state
securities authority of any stop order suspending the
effectiveness of a Registration Statement or the qualification
of the Registrable Securities or the Exchange Securities to be
offered or sold by any Participating Broker-Dealer in any
jurisdiction described in Section 3(d) hereof or the
initiation of any proceedings for that purpose, (iv) in the
case of a Shelf Registration, if, between the effective date
of a Registration Statement and the closing of any sale of
Registrable Securities covered thereby, the representations
and warranties of the Company contained in any purchase
agreement, securities sales agreement or other similar
agreement cease to be true and correct in all material
respects, (v) of the happening of any event or the failure of
any event to occur or the discovery of any facts, during the
Effectiveness Period, which makes any statement made in such
Registration Statement or the related Prospectus untrue in any
material respect or which causes such Registration Statement
or Prospectus to omit 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, as
well as any other corporate developments, public filings with
the SEC or similar events causing such Registration Statement
not to be effective or the Prospectus not to be useable for
resales and (vi) of the reasonable determination of the
Company and the Guarantor that a post-effective amendment to
the Registration Statement would be appropriate;
(f) obtain the withdrawal of any order suspending the
effectiveness of a Registration Statement at the earliest
possible moment;
(g) in the case of a Shelf Registration, furnish to each
Holder of Registrable Securities included within the coverage
of such Shelf Registration Statement, without charge, at least
one conformed copy of each Registration Statement relating to
such Shelf Registration and any post-effective amendment
thereto (without documents incorporated therein by reference
or exhibits thereto, unless requested);
(h) in the case of a Shelf Registration, cooperate with the
selling Holders of Registrable Securities to facilitate the
timely preparation and delivery of certificates representing
Registrable Securities to be sold and not bearing any
restrictive legends (except any customary legend borne by
securities held through The Depository Trust Company or any
similar depository) and in such denominations (consistent with
the provisions of the Indenture and the officers' certificate
establishing the forms and the terms of the Notes pursuant to
the Indenture) and registered in such names as the selling
Holders or the underwriters may reasonably request at least
two Business Days prior to the closing of any sale of
Registrable Securities pursuant to such Shelf Registration
Statement;
12
(i) in the case of a Shelf Registration or an Exchange Offer
Registration, promptly after the occurrence of any event
specified in Section 3(e)(ii), 3(e)(iii), 3(e)(v) (subject to
a 60-day grace period within any twelve-month period) or
3(e)(vi) hereof, prepare a supplement or post-effective
amendment to such Registration Statement or the related
Prospectus or any document incorporated therein by reference
or file any other required document so that, as thereafter
delivered to the purchasers of the Registrable Securities,
such Prospectus will not include any untrue statement of a
material fact or omit to state a material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading; and the Company
shall notify each Holder to suspend use of the Prospectus as
promptly as practicable after the occurrence of such an event,
and each Holder hereby agrees to suspend use of the Prospectus
until the Company and the Guarantor have amended or
supplemented the Prospectus to correct such misstatement or
omission;
(j) obtain a CUSIP number for the Exchange Securities or the
Registrable Securities, as the case may be, not later than the
effective date of a Registration Statement, and provide the
Trustee with certificates for the Exchange Securities or the
Registrable Securities, as the case may be, in a form eligible
for deposit with the Depositary;
(k) cause the Indenture to be qualified under the Trust
Indenture Act of 1939, as amended (the "TIA"), in connection
with the registration of the Exchange Securities or
Registrable Securities, as the case may be, and effect such
changes to such documents as may be required for them to be so
qualified in accordance with the terms of the TIA and execute,
and cause the Trustee to execute, all documents as may be
required to effect such changes, and all other forms and
documents required to be filed with the SEC to enable such
documents to be so qualified in a timely manner;
(l) in the case of a Shelf Registration, enter into such
agreements (including underwriting agreements) as are
customary in underwritten offerings and take all such other
appropriate actions in connection therewith as are reasonably
requested by the Holders of at least 25% in aggregate
principal amount of the Registrable Securities in order to
expedite or facilitate the registration or the disposition of
the Registrable Securities;
(m) in the case of a Shelf Registration, whether or not an
underwriting agreement is entered into and whether or not the
registration is an underwritten registration, if requested by
(x) an Initial Purchaser, in the case where such Initial
Purchaser holds Notes acquired by it as part of its initial
placement and Holders of at least 25% in aggregate principal
amount of the Registrable Securities covered thereby: (i) make
such representations and warranties to Holders of such
Registrable Securities and the underwriters (if any), with
respect to the business of the Company, the Guarantor, the
subsidiaries of the Guarantor, and if applicable, Quest
Communications International Inc. as then conducted and the
Registration Statement, Prospectus and documents, if any,
incorporated or deemed to be
13
incorporated by reference therein, in each case, as are
customarily made by issuers to underwriters in underwritten
offerings, and confirm the same if and when requested;
(ii) obtain opinions of counsel to the Company and the
Guarantor and updates thereof (which may be in the form of
a reliance letter) in form and substance reasonably
satisfactory to the managing underwriters (if any) and the
Holders of a majority in amount of the Registrable Securities
being sold, addressed to each selling Holder and the
underwriters (if any) covering the matters customarily
covered in opinions requested in underwritten offerings and
such other matters as may be reasonably requested by such
underwriters (it being agreed that the matters to be covered
by such opinion may be subject to customary qualifications and
exceptions); (iii) obtain "cold comfort" letters and updates
thereof in form and substance reasonably satisfactory to the
managing underwriters from the independent certified public
accountants of the Company, the Guarantor, and the
subsidiaries of the Guarantor (and, if necessary, any other
independent certified public accountants of any business
acquired or to be acquired by the Guarantor for which
financial statements and financial data are, or are required
to be, included in the Registration Statement), addressed to
each of the underwriters, such letters to be in customary form
and covering matters of the type customarily covered in "cold
comfort" letters in connection with underwritten offerings and
such other matters as reasonably requested by such
underwriters in accordance with Statement on Auditing
Standards No. 72; and (iv) if an underwriting agreement is
entered into, the same shall contain indemnification
provisions and procedures no less favorable than those set
forth in Section 4 hereof (or such other provisions and
procedures acceptable to Holders of a majority in aggregate
principal amount of Registrable Securities covered by such
Registration Statement and the managing underwriters)
customary for such agreements with respect to all parties to
be indemnified pursuant to said Section (including, without
limitation, such underwriters and selling Holders); and in the
case of an underwritten registration, the above requirements
shall be satisfied at each closing under the related
underwriting agreement or as and to the extent required
thereunder;
(n) if (1) a Shelf Registration is filed pursuant to Section
2(b) or (2) a Prospectus contained in an Exchange Offer
Registration Statement filed pursuant to Section 2(a) is
required to be delivered under the Securities Act by any
Participating Broker-Dealer who seeks to sell Exchange
Securities during the Applicable Period, make reasonably
available for inspection by any selling Holder of Registrable
Securities or Participating Broker-Dealer, as applicable, who
certifies to the Company and the Guarantor that it has a
current intention to sell Registrable Securities pursuant to
the Shelf Registration, any underwriter participating in any
such disposition of Registrable Securities, if any, and any
attorney, accountant or other agent retained by any such
selling Holder, Participating Broker-Dealer, as the case may
be, or underwriter (collectively, the "INSPECTORS"), at the
offices where normally kept, during the Company's and the
Guarantor's normal business hours, all financial and other
records, pertinent organizational and operational documents
and properties of the Company, the Guarantor and the
Guarantor's subsidiaries (collectively, the "RECORDS") as
shall
14
be reasonably necessary to enable them to conduct due
diligence activities, and cause the officers, trustees and
employees of the Company, the Guarantor and the Guarantor's
subsidiaries to supply all relevant information in each case
reasonably requested by any such Inspector in connection with
such Registration Statement; records and information which the
Company and the Guarantor determine, in good faith, to be
confidential and any Records and information which it notifies
the Inspectors are confidential shall not be disclosed to any
Inspector except where (i) the disclosure of such Records or
information is necessary to avoid or correct a material
misstatement or omission in such Registration Statement, (ii)
the release of such Records or information is ordered pursuant
to a subpoena or other order from a court of competent
jurisdiction or is necessary in connection with any action,
suit or proceeding or (iii) such Records or information
previously has been made generally available to the public;
each selling Holder of such Registrable Securities and each
such Participating Broker-Dealer will be required to agree in
writing that Records and information obtained by it as a
result of such inspections shall be deemed confidential and
shall not be used by it as the basis for any market
transactions in the securities of the Company and the
Guarantor unless and until such is made generally available to
the public through no fault of an Inspector or a selling
Holder; and each selling Holder of such Registrable Securities
and each such Participating Broker-Dealer will be required to
further agree in writing that it will, upon learning that
disclosure of such Records or information is sought in a court
of competent jurisdiction, or in connection with any action,
suit or proceeding, give notice to the Company and the
Guarantor and allow the Company and the Guarantor at their
expense to undertake appropriate action to prevent disclosure
of the Records and information deemed confidential;
(o) comply with all applicable rules and regulations of the
SEC so long as any provision of this Agreement shall be
applicable and make generally available to its securityholders
earning statements satisfying the provisions of Section 11(a)
of the Securities Act and Rule 158 thereunder (or any similar
rule promulgated under the Securities Act) no later than 45
days after the end of any 12-month period (or 60 days after
the end of any 12-month period if such period is a fiscal
year) (i) commencing at the end of any fiscal quarter in which
Registrable Securities are sold to underwriters in a firm
commitment or best efforts underwritten offering and (ii) if
not sold to underwriters in such an offering, commencing on
the first day of the first fiscal quarter of the Company and
the Guarantor after the effective date of a Registration
Statement, which statements shall cover said 12-month periods,
provided that the obligations under this paragraph (o) shall
be satisfied by the timely filing of quarterly and annual
reports on Forms 10-Q and 10-K under the Exchange Act;
(p) upon consummation of an Exchange Offer, if requested by
the Trustee, obtain an opinion of counsel to the Company and
the Guarantor addressed to the Trustee for the benefit of all
Holders of Registrable Securities participating in the
Exchange Offer, substantially to the effect that (i) the
Company has duly authorized, executed and delivered the
Exchange Notes and the Exchange Notes constitutes a legal,
valid and binding obligation of the Company, enforceable
15
against the Company, in accordance with its terms (with
customary exceptions) and (ii) the Guarantor has duly
authorized, executed and delivered the Exchange Guarantees and
the Exchange Guarantees constitute a legal, valid and binding
obligation of the Guarantor, enforceable against the
Guarantor, in accordance with its terms (with customary
exceptions);
(q) if an Exchange Offer is to be consummated, upon delivery
of the Registrable Securities by Holders to the Company and
the Guarantor (or to such other Person as directed by the
Company and the Guarantor), in exchange for the Exchange
Securities, the Company shall mark, or cause to be marked, on
such Notes delivered by such Holders that such Notes are being
cancelled in exchange for the Exchange Securities; it being
understood that in no event shall such Notes be marked as paid
or otherwise satisfied;
(r) cooperate with each seller of Registrable Securities
covered by any Registration Statement and each underwriter, if
any, participating in the disposition of such Registrable
Securities and their respective counsel in connection with any
filings required to be made with the NASD;
(s) take all other steps necessary to effect the registration
of the Registrable Securities covered by a Registration
Statement contemplated hereby;
(t) (A) in the case of the Exchange Offer Registration
Statement (i) include in the Exchange Offer Registration
Statement a section entitled "Plan of Distribution," which
section shall be reasonably acceptable to the Initial
Purchasers or another representative of the Participating
Broker-Dealers, and which shall contain a summary statement of
the positions taken or policies made by the staff of the SEC
with respect to the potential "underwriter" status of any
broker-dealer that holds Registrable Securities acquired for
its own account as a result of market-making activities or
other trading activities (a "PARTICIPATING BROKER-DEALER") and
that will be the beneficial owner (as defined in Rule 13d-3
under the Exchange Act) of Exchange Securities to be received
by such broker-dealer in the Exchange Offer, whether such
positions or policies have been publicly disseminated by the
staff of the SEC or such positions or policies, in the
reasonable judgment of the Initial Purchasers or such other
representative, represent the prevailing views of the staff of
the SEC, including a statement that any such broker-dealer who
receives Exchange Securities for Registrable Securities
pursuant to the Exchange Offer may be deemed a statutory
underwriter and must deliver a prospectus meeting the
requirements of the Securities Act in connection with any
resale of such Exchange Securities, (ii) furnish to each
Participating Broker-Dealer who has delivered to the Company
and the Guarantor the notice referred to in Section 3(e),
without charge, as many copies of each Prospectus included in
the Exchange Offer Registration Statement, including any
preliminary Prospectus, and any amendment or supplement
thereto, as such Participating Broker-Dealer may reasonably
request (the Company and the Guarantor hereby consent to the
use of the Prospectus forming part of the Exchange Offer
Registration Statement or any amendment or supplement thereto
by any Person subject to the prospectus
16
delivery requirements of the Securities Act, including all
Participating Broker-Dealers, in connection with the sale or
transfer of the Exchange Securities covered by the Prospectus
or any amendment or supplement thereto), (iii) use its
reasonable best efforts to keep the Exchange Offer
Registration Statement effective and to amend and supplement
the Prospectus contained therein in order to permit such
Prospectus to be lawfully delivered by all Persons subject to
the prospectus delivery requirements of the Securities Act
for such period of time as such Persons must comply with such
requirements under the Securities Act and applicable rules and
regulations in order to resell the Exchange Securities;
PROVIDED, HOWEVER, that such period shall not be required to
exceed 225 days (or such longer period if extended pursuant to
the last sentence of Section 3 hereof) (the "APPLICABLE
PERIOD"), and (iv) include in the transmittal letter or
similar documentation to be executed by an exchange offeree
in order to participate in the Exchange Offer (x) the
following provision:
"If the exchange offeree is a broker-dealer holding
Registrable Securities acquired for its own account as a
result of market-making activities or other trading
activities, it will deliver a prospectus meeting the
requirements of the Securities Act in connection with any
resale of Exchange Securities received in respect of such
Registrable Securities pursuant to the Exchange Offer";
and (y) a statement to the effect that by a broker-dealer
making the acknowledgment described in clause (x) and by
delivering a Prospectus in connection with the exchange of
Registrable Securities, the broker-dealer will not be deemed
to admit that it is an underwriter within the meaning of the
Securities Act; and
(B) in the case of any Exchange Offer Registration Statement,
the Company and the Guarantor agree to deliver to the Initial
Purchasers or to another representative of the Participating
Broker-Dealers, if reasonably requested by an Initial
Purchaser or such other representative of Participating
Broker-Dealers, on behalf of the Participating Broker-Dealers
upon consummation of the Exchange Offer (i) an opinion of
counsel in form and substance reasonably satisfactory to such
Initial Purchaser or such other representative of the
Participating Broker-Dealers, covering the matters customarily
covered in opinions requested in connection with Exchange
Offer Registration Statements and such other matters as may be
reasonably requested (it being agreed that the matters to be
covered by such opinion may be subject to customary
qualifications and exceptions), (ii) an officers' certificate
substantially similar to that specified in Section 6(d) and
(e) of the Purchase Agreement and such additional
certifications as are customarily delivered in a public
offering of debt securities and (iii) upon the effectiveness
of the Exchange Offer Registration Statement, comfort letters,
in each case, in customary form if permitted by Statement on
Auditing Standards No. 72.
17
The Company and the Guarantor may require each seller of
Registrable Securities as to which any registration is being effected to
furnish to the Company and the Guarantor such information regarding such
seller as may be required by the staff of the SEC to be included in a
Registration Statement. The Company and the Guarantor may exclude from such
registration the Registrable Securities of any seller who unreasonably fails
to furnish such information within a reasonable time after receiving such
request. The Company and the Guarantor shall have no obligation to register
under the Securities Act the Registrable Securities of a seller who so fails
to furnish such information.
In the case of a Shelf Registration Statement, or if
Participating Broker-Dealers who have notified the Company and the Guarantor
that they will be utilizing the Prospectus contained in the Exchange Offer
Registration Statement as provided in this Section 3(t) hereof are seeking to
sell Exchange Securities and are required to deliver Prospectuses, each
Holder agrees that, upon receipt of any notice from the Company and the
Guarantor of the occurrence of any event specified in Section 3(e)(ii),
3(e)(iii), 3(e)(v) or 3(e)(vi) hereof, such Holder will forthwith discontinue
disposition of Registrable Securities pursuant to a Registration Statement
until such Holder's receipt of the copies of the supplemented or amended
Prospectus contemplated by Section 3(i) hereof or until it is advised in
writing (the "ADVICE") by the Company and the Guarantor that the use of the
applicable Prospectus may be resumed, and, if so directed by the Company and
the Guarantor, such Holder will deliver to the Company and the Guarantor (at
the Company's and the Guarantor's expense) all copies in such Holder's
possession, other than permanent file copies then in such Holder's
possession, of the Prospectus covering such Registrable Securities or
Exchange Securities, as the case may be, current at the time of receipt of
such notice. If the Company and the Guarantor shall give any such notice to
suspend the disposition of Registrable Securities or Exchangeable Securities,
as the case may be, pursuant to a Registration Statement, the Company and the
Guarantor shall use its reasonable best efforts to file and have declared
effective (if an amendment) as soon as practicable after the resolution of
the related matters an amendment or supplement to the Registration Statement
and shall extend the period during which such Registration Statement is
required to be maintained effective and the Prospectus usable for resales
pursuant to this Agreement by the number of days in the period from and
including the date of the giving of such notice to and including the date
when the Company and the Guarantor shall have made available to the Holders
(x) copies of the supplemented or amended Prospectus necessary to resume such
dispositions or (y) the Advice.
4. INDEMNIFICATION AND CONTRIBUTION. (a) In connection with
any Registration Statement, the Company and the Guarantor shall indemnify and
hold harmless the Initial Purchasers, each Holder, each underwriter who
participates in an offering of the Registrable Securities, each Participating
Broker-Dealer, each Person, if any, who controls any of such parties within
the meaning of Section 15 of the Securities Act or Section 20 of the Exchange
Act and each of their respective directors, officers, employees and agents,
as follows:
(i) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, arising out of any untrue
statement or alleged untrue statement of a material fact
contained in any Registration Statement (or any amendment or
supplement thereto), covering Registrable Securities or
Exchange Securities, as applicable, or the omission or alleged
omission therefrom of a material fact
18
required to be stated therein, in the light of the
circumstances under which they were made, not misleading;
(ii) against any and all loss, liability, claim, damage and
expense whatsoever, as incurred, to the extent of the
aggregate amount paid in settlement of any litigation, or any
investigation or proceeding by any governmental agency or
body, commenced or threatened, or of any claim whatsoever
based upon any such untrue statement or omission, or any such
alleged untrue statement or omission; provided that (subject
to Section 4(d) hereof) any such settlement is effected with
the prior written consent of the Company and the Guarantor;
and
(iii) against any and all expenses whatsoever, as incurred
(including the reasonable fees and disbursements of counsel
chosen by such Holder, such Participating Broker-Dealer, or
any underwriter (except to the extent otherwise expressly
provided in Section 4(c) hereof)), reasonably incurred in
investigating, preparing or defending against any litigation,
or any investigation or proceeding by any governmental agency
or body, commenced or threatened, or any claim whatsoever
based upon any such untrue statement or omission, or any such
alleged untrue statement or omission, to the extent that any
such expense is not paid under subparagraph (i) or (ii) of
this Section 4(a);
PROVIDED, HOWEVER, that this indemnity does not apply to any loss, liability,
claim, damage or expense to the extent arising out of an untrue statement or
omission or alleged untrue statement or omission made in reliance upon and in
conformity with written information furnished in writing to the Company and the
Guarantor by the Initial Purchasers or such Holder, underwriter or Participating
Broker-Dealer for use in a Registration Statement (or any amendment thereto) or
any Prospectus (or any amendment or supplement thereto).
(b) Each of the Initial Purchasers and each Holder,
underwriter or Participating Broken-Dealer agrees, severally and not jointly,
to indemnify and hold harmless the Company and each Person, if any, who
controls the Company and the Guarantor within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act against any and all
loss, liability, claim, damage and expense whatsoever described in the
indemnity contained in Section 4(a) hereof, as incurred, but only with
respect to untrue statements or omissions, or alleged untrue statements or
omissions, made in a Registration Statement (or any amendment thereto) or any
Prospectus (or any amendment or supplement thereto) in reliance upon and in
conformity with written information furnished to the Company and the
Guarantor by such Holder expressly for use in such Registration Statement (or
any amendment thereto), or any such Prospectus (or any amendment or
supplement thereto); PROVIDED, HOWEVER, that in the case of a Shelf
Registration Statement, no such Holder shall be liable for any claims
hereunder in excess of the amount of net proceeds received by such Holder
from the sale of Registrable Securities pursuant to such Shelf Registration
Statement.
(c) Each indemnified party shall give notice as promptly as
reasonably practicable to each indemnifying party of any action commenced
against it in respect of which indemnity may be sought hereunder, but failure
to so notify an indemnifying party shall not relieve such indemnifying party
from any liability which it may have under this Section 4 to the
19
extent that it is not materially prejudiced by such failure as a result
thereof, and in any event shall not relieve it from liability which it may
have otherwise on account of this indemnity agreement. In the case of parties
indemnified pursuant to Section 4(a) or (b) above, counsel to the indemnified
parties shall be selected by such parties. An indemnifying party may
participate at its own expense in the defense of such action; provided,
however, that counsel to the indemnifying party shall not (except with the
consent of the indemnified party) also be counsel to the indemnified party.
In no event shall the indemnifying parties be liable for the fees and
expenses of more than one counsel (in addition to local counsel), separate
from their own counsel, for all indemnified parties in connection with any
one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or circumstances. No
indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding
by any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be
sought under this Section 4 (whether or not the indemnified parties are
actual or potential parties thereto), unless such settlement, compromise or
consent (i) includes an unconditional written release of each indemnified
party from all liability arising out of such litigation, investigation,
proceeding or claim and (ii) does not include a statement as to or an
admission of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(d) If at any time an indemnified party shall have validly
requested an indemnifying party to reimburse the indemnified party for fees
and expenses of counsel, such indemnifying party agrees that it shall be
liable for any settlement of the nature contemplated by Section 4(a)(ii)
effected without its written consent if (i) such settlement is entered into
more than 45 days after receipt by such indemnifying party of the aforesaid
request, (ii) such indemnifying party shall have received notice of the terms
of such settlement at least 30 days prior to such settlement being entered
into and (iii) such indemnifying party shall not have reimbursed such
indemnified party in accordance with such request prior to the date of such
settlement.
(e) In order to provide for just and equitable contribution
in circumstances under which any of the indemnity provisions set forth in
this Section 4 is for any reason held to be unenforceable by an indemnified
party although applicable in accordance with its terms, the Company, the
Guarantor and the Holders shall contribute to the aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement incurred by the Company, the Guarantor and the Holders,
as incurred; PROVIDED, HOWEVER, that 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 that was not guilty of such
fraudulent misrepresentation. As between the Company and the Guarantor and
the Holders, such parties shall contribute to such aggregate losses,
liabilities, claims, damages and expenses of the nature contemplated by such
indemnity agreement in such proportion as shall be appropriate to reflect the
relative fault of the Company and the Guarantor, on the one hand, and the
Holders, on the other hand, with respect to the statements or omissions which
resulted in such loss, liability, claim, damage or expense, or action in
respect thereof, as well as any other relevant equitable considerations. The
relative fault of the Company and the Guarantor, on the one hand, and of the
Holders, on the other hand, shall be determined by reference to, among other
things, whether the untrue or alleged untrue statement of a material fact or
the omission or alleged omission to state
20
a material fact relates to information supplied by the Company and the
Guarantor, on the one hand, or by or on behalf of the Holders, on the other,
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission. The Company,
the Guarantor and the Holders agree that it would not be just and equitable
if contribution pursuant to this Section 4 were to be determined by pro rata
allocation or by any other method of allocation that does not take into
account the relevant equitable considerations. For purposes of this Section
4, each Affiliate of a Holder, and each director, officer and employee and
Person, if any, who controls a Holder or such Affiliate within the meaning of
Section 15 of the Securities Act or Section 20 of the Exchange Act shall have
the same rights to contribution as such Holder and each Person, if any, who
controls the Company and the Guarantor within the meaning of Section 15 of
the Securities Act or Section 20 of the Exchange Act shall have the same
rights to contribution as the Company and the Guarantor.
5. PARTICIPATION IN AN UNDERWRITTEN REGISTRATION. No Holder
may participate in an underwritten registration hereunder unless such Holder
(a) agrees to sell such Holder's Registrable Securities on the basis provided
in the underwriting arrangement approved by the Persons entitled hereunder to
approve such arrangements and (b) completes and executes all reasonable
questionnaires, powers of attorney, indemnities, underwriting agreements,
lock-up letters and other documents reasonably required under the terms of
such underwriting arrangements.
6. SELECTION OF UNDERWRITERS. The Holders of Registrable
Securities covered by the Shelf Registration Statement who desire to do so
may sell the Securities covered by such Shelf Registration in an underwritten
offering, subject to the provisions of Section 3(l) hereof. In any such
underwritten offering, the underwriter or underwriters and manager or
managers that will administer the offering will be selected by the Holders of
a majority in aggregate principal amount of the Registrable Securities
included in such offering; PROVIDED, HOWEVER, that such underwriters and
managers must be reasonably satisfactory to the Company and the Guarantor.
7. MISCELLANEOUS.
(a) RULE 144 AND RULE 144A. For so long as the Company and
the Guarantor are subject to the reporting requirements of Section 13 or 15
of the Exchange Act and any Registrable Securities remain outstanding, the
Company and the Guarantor will file the reports required to be filed by it
under the Securities Act and Section 13(a) or 15(d) of the Exchange Act and
the rules and regulations adopted by the SEC thereunder; PROVIDED, HOWEVER,
that if the Company and the Guarantor ceases to be so required to file such
reports, it will, upon the request of any Holder of Registrable Securities,
(a) make publicly available such information as is necessary to permit sales
of its securities pursuant to Rule 144 under the Securities Act, (b) deliver
such information to a prospective purchaser as is necessary to permit sales
of its securities pursuant to Rule 144A under the Securities Act, and (c)
take such further action that is reasonable in the circumstances, in each
case, to the extent required from time to time to enable such Holder to sell
its Registrable Securities without registration under the Securities Act
within the limitation of the exemptions provided by (i) Rule 144 under the
Securities Act, as such rule may be amended from time to time, (ii) Rule 144A
under the Securities Act, as such rule may be amended from time to time, or
(iii) any similar rules or regulations hereafter adopted by the SEC.
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Upon the request of any Holder of Registrable Securities, the Company and the
Guarantor will deliver to such Holder a written statement as to whether it
has complied with such requirements.
(b) NO INCONSISTENT AGREEMENTS. The Company and the
Guarantor have not entered into, nor will the Company or the Guarantor on or
after the date of this Agreement enter into, any agreement which is
inconsistent with the rights granted to the Holders of Registrable Securities
in this Agreement or otherwise conflicts with the provisions hereof. The
rights granted to the Holders hereunder do not in any way conflict with and
are not inconsistent with the rights granted to the holders of the Company's
and the Guarantor's other issued and outstanding securities under any such
agreements.
(c) AMENDMENTS AND WAIVERS. The provisions of this
Agreement, including the provisions of this sentence, may not be amended,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company and the Guarantor has
obtained the written consent of Holders of a majority in aggregate principal
amount of the outstanding Registrable Notes or a majority in aggregate
principal amount of the outstanding Registrable Debentures affected by such
amendment, modification, supplement, waiver or departure; PROVIDED that no
amendment, modification or supplement or waiver or consent to the departure
with respect to the provisions of Section 4 hereof shall be effective as
against any Holder of Registrable Securities unless consented to in writing
by such Holder of Registrable Securities. Notwithstanding the foregoing
sentence, (i) this Agreement may be amended, without the consent of any
Holder of Registrable Securities, by written agreement signed by the Company,
the Guarantor and the Initial Purchasers, to cure any ambiguity, correct or
supplement any provision of this Agreement that may be inconsistent with any
other provision of this Agreement or to make any other provisions with
respect to matters or questions arising under this Agreement which shall not
be inconsistent with other provisions of this Agreement, (ii) this Agreement
may be amended, modified or supplemented, and waivers and consents to
departures from the provisions hereof may be given, by written agreement
signed by the Company, the Guarantor and the Initial Purchasers to the extent
that any such amendment, modification, supplement, waiver or consent is, in
their reasonable judgment, necessary or appropriate to comply with applicable
law (including any interpretation of the Staff of the SEC) or any change
therein and (iii) to the extent any provision of this Agreement relates to an
Initial Purchaser, such provision may be amended, modified or supplemented,
and waivers or consents to departures from such provisions may be given, by
written agreement signed by such Initial Purchaser, the Guarantor and the
Company.
(d) NOTICES. All notices and other communications provided
for or permitted hereunder shall be made in writing by hand-delivery,
registered first-class mail, telex, telecopier, or any courier guaranteeing
overnight delivery (i) if to a Holder, at the most current address given by
such Holder to the Company and the Guarantor by means of a notice given in
accordance with the provisions of this Section 7(d), which address initially
is, with respect to each Initial Purchaser, the address set forth in the
Purchase Agreement; and (ii) if to the Company or the Guarantor, initially at
the Company's and Guarantor's address set forth in the Purchase Agreement and
thereafter at such other address, notice of which is given in accordance with
the provisions of this Section 7(d).
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All such notices and communications shall be deemed to have
been duly given: at the time delivered by hand, if personally delivered; five
Business Days after being deposited in the mail, postage prepaid, if mailed;
when answered back, if telexed; when receipt is acknowledged, if telecopied;
and on the next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.
Copies of all such notices, demands, or other
communications shall be concurrently delivered by the Person giving the same
to the Trustee, at the address specified in the Indenture.
(e) SUCCESSORS AND ASSIGNS. This Agreement shall inure to
the benefit of and be binding upon the successors, assigns and transferees of
the Initial Purchasers, including, without limitation and without the need
for an express assignment, subsequent Holders; PROVIDED, HOWEVER, that
nothing herein shall be deemed to permit any assignment, transfer or other
disposition of Registrable Securities in violation of the terms of the
Purchase Agreement or the Indenture. If any transferee of any Holder shall
acquire Registrable Securities in any manner, whether by operation of law or
otherwise, such Registrable Securities shall be held subject to all of the
terms of this Agreement, and by taking and holding such Registrable
Securities, such Person shall be conclusively deemed to have agreed to be
bound by and to perform all of the terms and provisions of this Agreement and
such Person shall be entitled to receive the benefits hereof.
(f) THIRD PARTY BENEFICIARIES. Each Holder and any
Participating Broker-Dealer shall be third party beneficiaries of the
agreements made hereunder among the Initial Purchasers, the Guarantor and the
Company, and the Initial Purchasers shall have the right to enforce such
agreements directly to the extent it deems such enforcement necessary or
advisable to protect its rights or the rights of Holders hereunder.
(g) COUNTERPARTS. This Agreement may be executed in any
number of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and all of
which taken together shall constitute one and the same agreement.
(h) HEADINGS. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect the
meaning hereof.
(i) GOVERNING LAW. THIS AGREEMENT SHALL BE DEEMED TO HAVE
BEEN MADE IN THE STATE OF NEW YORK. THE VALIDITY AND INTERPRETATION OF THIS
AGREEMENT, AND THE TERMS AND CONDITIONS SET FORTH HEREIN, SHALL BE GOVERNED
BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK WITHOUT
GIVING EFFECT TO ANY PROVISIONS RELATING TO CONFLICTS OF LAWS.
(j) SEVERABILITY. In the event that any one or more of the
provisions contained herein, or the application thereof in any circumstance,
is held invalid, illegal or unenforceable, the validity, legality and
enforceability of any such provision in every other respect and of the
remaining provisions contained herein shall not be affected or impaired
thereby.
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(k) SECURITIES HELD BY THE COMPANY OR ITS AFFILIATES.
Whenever the consent or approval of Holders of a specified percentage of
Registrable Securities is required hereunder, Registrable Securities held by
the Company, the Guarantor or their Affiliates shall not be counted in
determining whether such consent or approval was given by the Holders of such
required percentage.
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IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
U S WEST, INC.
By: /s/ Sean P. Foley
--------------------------
Name: Sean P. Foley
Title: Treasurer
U S WEST CAPITAL FUNDING, INC.
By: /s/ Sean P. Foley
--------------------------
Name: Sean P. Foley
Title: Treasurer
Confirmed and accepted as of
the date first above written:
J.P. MORGAN SECURITIES INC.
MERRILL LYNCH & CO.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: J.P. MORGAN SECURITIES INC.
For itself and as Representative of the
several Initial Purchasers
By: /s/ John E. Simmons
-----------------------------------
Authorized Signatory
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