EXHIBIT 1.1
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QWEST COMMUNICATIONS INTERNATIONAL INC.
$250,000,000 10 7/8% Senior Notes Due 2007
PURCHASE AGREEMENT
Dated: March 25, 1997
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QWEST COMMUNICATIONS INTERNATIONAL INC.
$250,000,000 10 7/8% SENIOR NOTES DUE 2007
PURCHASE AGREEMENT
New York, New York
March 25, 1997
Salomon Brothers Inc
Donaldson, Lufkin & Jenrette Securities Corporation
Goldman, Sachs & Co.
As Representatives of the Initial Purchasers
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Ladies and Gentlemen:
Qwest Communications International Inc., a Delaware corporation (the
"Company"), proposes to issue and sell to the parties named in Schedule I hereto
(the "Initial Purchasers"), for whom you are acting as representatives (the
"Representatives"), $250,000,000 aggregate principal amount of its 10 7/8%
Senior Notes Due 2007 (the "Securities"). The Securities are to be issued under
an indenture (the "Indenture") dated as of March 31, 1997 between the Company
and Bankers Trust Company, as trustee. If you are the only Initial Purchasers,
all references herein to the Representatives shall be deemed to be to the
Initial Purchasers.
The sale of the Securities to the Initial Purchasers will be made
without registration of the Securities under the Securities Act of 1933, as
amended (the "Securities Act"), in reliance upon exemptions from the
registration requirements of the Securities Act. You have advised the Company
that the Initial Purchasers will offer and sell the Securities purchased by them
hereunder in accordance with Section 4 hereof as soon as you deem advisable.
The holders of the Securities will be entitled to the benefits of a
Registration Agreement dated as of March 31, 1997 between the Company and
Salomon Brothers Inc (the "Registration Agreement"), pursuant to which the
Company will file a registration statement with the Securities and Exchange
Commission (the "Commission") registering the Securities or New Securities
(referred to in the Registration Agreement) under the Securities Act.
In connection with the sale of the Securities, the Company has
prepared a preliminary offering memorandum, dated March 7, 1997 (the
"Preliminary Memorandum") and a final offering memorandum, dated March 25, 1997
(the "Final Memorandum"). Each of the Preliminary Memorandum and 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
Preliminary Memorandum and the Final Memorandum, and any amendment or supplement
thereto, in connection with the offer and sale of the Securities by the Initial
Purchasers. Unless stated to the contrary, all references herein to the Final
Memorandum are to the Final Memorandum at the Execution Time (as defined in
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Section 6 hereof) and are not meant to include any amendment or supplement
subsequent to the Execution Time.
1. Representations and Warranties. The Company represents and
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warrants to each Initial Purchaser as set forth below in this Section 1.
(a) The Preliminary Memorandum, at the date thereof, did 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. The Final Memorandum, at the
date hereof, does not, and at the Closing Date (as defined below) will not
(and any amendment or supplement thereto, at the date thereof and at the
Closing Date, will not), contain any untrue statement of a material fact or
omit to state any material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company makes no representation or
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warranty as to the information contained in or omitted from the Preliminary
Memorandum or the Final Memorandum, or any amendment or supplement thereto,
in reliance upon and in conformity with information furnished in writing to
the Company by or on behalf of the Initial Purchasers through the
Representatives specifically for inclusion therein.
(b) Each of the Company and its subsidiaries has been duly
incorporated, is validly existing as a corporation in good standing under
the laws of the jurisdiction of its incorporation, has full power
(corporate and other) to own or lease its properties and conduct its
business as described in the Final Memorandum, and is duly qualified to do
business as a foreign corporation and is in good standing under the laws of
each jurisdiction which requires such qualification wherein it owns or
leases material properties or conducts material business, except where the
failure to be qualified would not have a material adverse effect on the
Company or any of its subsidiaries.
(c) The Company has full power (corporate and other) to enter into and
to perform its obligations under this Agreement, the Indenture, the
Registration Agreement and the Securities.
(d) The issued shares of capital stock of each of the Company's
subsidiaries have been duly authorized and validly issued, are fully paid
and nonassessable and, except as otherwise set forth in the Final
Memorandum, are owned beneficially by the Company free and clear of any
security interests, liens, encumbrances, equities or claims.
(e) The Company has an authorized, issued and outstanding
capitalization as set forth in the Final Memorandum. All of the issued
shares of capital stock of the Company have been duly authorized and
validly issued and are fully paid and nonassessable.
(f) The consolidated financial statements and schedules of the Company
and its consolidated subsidiaries included in the Final Memorandum fairly
present the financial position of the Company and its consolidated
subsidiaries and the results of operations and changes in financial
condition as of the dates and for the periods therein specified. Such
financial statements and schedules have been prepared in accordance with
generally accepted accounting principles consistently applied throughout
the periods involved (except as otherwise noted therein). The selected
financial data set forth under the caption "Selected Consolidated
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Financial Data" in the Final Memorandum fairly present, on the basis stated
in the Final Memorandum, the information included therein.
(g) KPMG Peat Marwick LLP, who have certified certain financial
statements of the Company and its consolidated subsidiaries and delivered
their report with respect to the audited consolidated financial statements
and schedules included in the Final Memorandum, are independent public
accountants within the meaning of the Securities Act and the applicable
rules and regulations thereunder.
(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
legal, valid and binding obligation of the Company enforceable against the
Company in accordance with its terms (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency, moratorium
or other laws affecting creditors' rights generally from time to time in
effect, general principles of equity and to the enforcement of the
indemnification or contribution provisions contained therein).
(j) The Indenture has been duly authorized by the Company and, when
duly executed and delivered by the Company and the Trustee, will constitute
a valid and binding instrument enforceable against the Company in
accordance with its terms (subject, as to the enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other laws
affecting creditors' rights generally from time to time in effect, and
general principles of equity); the Securities have been duly and validly
authorized and, when executed and authenticated in accordance with the
provisions of the Indenture and delivered to and paid for by the Initial
Purchasers pursuant to this Agreement, will constitute valid and binding
obligations of the Company entitled to the benefits of the Indenture; and
the statements set forth under the heading "Description of the Notes" in
the Final Memorandum, insofar as such statements purport to summarize
certain provisions of the Securities and the Indenture, provide a fair
summary of such provisions.
(k) No legal or governmental proceedings are pending to which the
Company or any of its subsidiaries is a party or to which the property of
the Company or any of its subsidiaries is subject that are not described in
the Final Memorandum, and no such proceedings have been threatened against
the Company or any of its subsidiaries or with respect to any of their
respective properties, except in each case for such proceedings that, if
the subject of an unfavorable decision, ruling or finding, would not,
singly or in the aggregate, result in a material adverse change in the
condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and its subsidiaries.
(l) The issuance, offering and sale of the Securities to the Initial
Purchasers by the Company pursuant to this Agreement, the performance by
the Company of its obligations under this Agreement, the Registration
Agreement, the Indenture and the Securities, the consummation of the
transactions herein and therein and the application of proceeds from the
sale of the Securities as described in the Final Memorandum do not (i)
require the consent, approval, authorization, registration or qualification
of or with any governmental authority, except such as have been obtained
and such as may be required under state securities or blue
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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 securities of the
Company (except for the sale of Securities by the Initial Purchasers under
this Agreement).
(n) Subsequent to the respective dates as of which information is
given in the Final Memorandum, (i) the Company and its subsidiaries have
not incurred any material liability or obligation, direct or contingent,
nor entered into any material transaction whether or not in the ordinary
course of business; (ii) the Company has not purchased any of its
outstanding capital stock, nor declared, paid or otherwise made any
dividend or distribution of any kind on its capital stock; (iii) there has
not been any material change in the capital stock, short-term debt or long-
term debt of the Company and its consolidated subsidiaries, except in each
case as described in or contemplated by the Final Memorandum; and (iv)
there has not been any material adverse change in the condition (financial
or otherwise), earnings, business affairs or business prospects of the
Company and its consolidated subsidiaries whether or not arising in the
ordinary course of business.
(o) The Company and each of its subsidiaries own or hold all items of
property owned or held by each of them free and clear of any security
interests, liens, encumbrances, equities, claims and other defects, except
such as do not materially and adversely affect the value of such property
and do not interfere with the use made or proposed to be made of such
property by the Company or such subsidiary, and any real property and
buildings held under lease by the Company or any such subsidiary are held
under valid, subsisting and enforceable leases, with such exceptions as are
not material and do not interfere with the use made or proposed to be made
of such property and buildings by the Company or such subsidiary, in each
case except as described in or contemplated by the Final Memorandum.
(p) No labor dispute with the employees of the Company or any of its
subsidiaries exists or is threatened or imminent that could result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Final
Memorandum.
(q) The Company and its subsidiaries own or possess all material
patents, patent applications, trademarks, service marks, trade names,
licenses, copyrights and proprietary or other confidential information
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currently employed by them in connection with their respective businesses,
and neither the Company nor any such subsidiary has received any notice of
infringement of or conflict with asserted rights of any third party with
respect to any of the foregoing which, singly or in the aggregate, if the
subject of an unfavorable decision, ruling or finding, would result in a
material adverse change in the condition (financial or otherwise), business
prospects, net worth or results of operations of the Company and its
subsidiaries, except as described in or contemplated by the Final
Memorandum.
(r) The Company and each of its subsidiaries are insured by insurers
of recognized financial responsibility against such losses and risks and in
such amounts as are prudent and customary in the businesses in which they
are engaged; neither the Company nor any such subsidiary has been refused
any insurance coverage sought or applied for; and neither the Company nor
any such subsidiary has any reason to believe that it will not be able to
renew its existing insurance coverage as and when such coverage expires or
to obtain similar coverage from similar insurers as may be necessary to
continue its business at a cost that would not materially and adversely
affect the condition (financial or otherwise), business prospects, net
worth or results of operations of the Company and its subsidiaries, except
as described in or contemplated by the Final Memorandum.
(s) No subsidiary of the Company is currently prohibited, directly or
indirectly, from paying any dividends to the Company, from making any other
distribution on such subsidiary's capital stock, from repaying to the
Company any loans or advances to such subsidiary from the Company or from
transferring any of such subsidiary's property or assets to the Company or
any other subsidiary of the Company, except as described in or contemplated
by the Final Memorandum.
(t) The Company and its subsidiaries possess all certificates,
authorizations and permits issued by the appropriate federal, state or
foreign regulatory authorities necessary to conduct their respective
businesses, and neither the Company nor any such subsidiary has received
any notice of proceedings relating to the revocation or modification of any
such certificate, authorization or permit which, singly or in the
aggregate, if the subject of an unfavorable decision, ruling or finding,
would result in a material adverse change in the condition (financial or
otherwise), business prospects, net worth or results of operations of the
Company and its subsidiaries, except as described in or contemplated by the
Final Memorandum.
(u) The Company has filed all foreign, federal, state and local tax
returns that are required to be filed or has requested extensions thereof
and has paid all taxes required to be paid by it and any other assessment,
fine or penalty levied against it, to the extent that any of the foregoing
is due and payable, except for any such tax, assessment, fine or penalty
that is currently being contested in good faith or as described in or
contemplated by the Final Memorandum.
(v) Neither the Company nor any of its subsidiaries is in violation of
any federal or state law or regulation relating to occupational safety and
health or to the storage, handling or transportation of hazardous or toxic
materials and the Company and its subsidiaries have received all permits,
licenses or other approvals required of them under applicable federal and
state occupational safety and health and environmental laws and regulations
to conduct their
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respective businesses, and the Company and each such subsidiary is in
compliance with all terms and conditions of any such permit, license or
approval, except any such violation of law or regulation, failure to
receive required permits, licenses or other approvals or failure to comply
with the terms and conditions of such permits, licenses or approvals which
would not, singly or in the aggregate, result in a material adverse change
in the condition (financial or otherwise), business prospects, net worth or
results of operations of the Company and its subsidiaries, except as
described in or contemplated by the Final Memorandum.
(w) Each certificate signed by any officer of the Company and
delivered to the Representatives or Counsel for the Initial Purchasers
shall be deemed to be a representation and warranty by the Company (and not
individually by such officer) to the Initial Purchasers as to the matters
covered thereby.
(x) The Company and each of its subsidiaries maintain a system of
internal accounting controls sufficient to provide reasonable assurance
that (i) transactions are executed in accordance with management's general
or specific authorizations; (ii) transactions are recorded as necessary to
permit preparation of financial statements in conformity with generally
accepted accounting principles and to maintain asset accountability; (iii)
access to assets is permitted only in accordance with management's general
or specific authorization; and (iv) the recorded accountability for assets
is compared with the existing assets at reasonable and appropriate
intervals and appropriate action is taken with respect to any differences.
(y) No default exists, and no event has occurred which, with notice or
lapse of time or both, would constitute a default in the due performance
and observance of any term, covenant or condition of any indenture,
mortgage, deed of trust, lease or other agreement or instrument to which
the Company or any of its subsidiaries is a party or by which the Company
or any of its subsidiaries or any of their respective properties is bound
or may be affected in any material adverse respect with regard to property,
business or operations of the Company and its subsidiaries.
(z) Neither the Company, nor any of its Affiliates (as defined in Rule
501(b) of Regulation D under the Securities Act ("Regulation D")), nor any
person acting on its or their behalf has, directly or indirectly, made
offers or sales of any security, or solicited offers to buy any security,
under circumstances that would require the registration of the Securities
under the Securities Act.
(aa) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf has engaged in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities in the United States.
(bb) The Securities satisfy the eligibility requirements of Rule
144A(d)(3) under the Securities Act.
(cc) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf has engaged in any directed selling efforts
with respect to the Securities, and each of them has complied with the
offering restrictions requirement of Regulation S ("Regulation S") under
the Securities Act. Terms used in this paragraph have the meanings given
to them by Regulation S.
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(dd) The Company has 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 are no contracts or documents of a character that would be
required to be described in the Final Memorandum, if it were a prospectus
filed as part of a registration statement on Form S-1 under the Securities
Act, that are not described as would be so required.
(ii) Subject to compliance by the Initial Purchaser with the
representations and warranties set forth in Section 4, it is not necessary
in connection with the offer, sale and delivery of the Securities to the
Initial Purchasers and the resale to each subsequent purchaser in the
manner contemplated by this Agreement and the Final Memorandum to register
the Securities under the Securities Act or to qualify the Indenture under
the Trust Indenture Act of 1939, as amended.
2. Purchase and Sale. Subject to the terms and conditions and in
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reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Initial Purchaser, and each Initial Purchaser agrees,
severally and not jointly, to purchase from the Company, at a purchase price of
97.250% of the aggregate principal amount thereof, plus accrued interest, if
any, from March 31, 1997 to the Closing Date, the aggregate principal amount of
Securities set forth opposite such Initial Purchaser's name in Schedule I
hereto.
3. Delivery and Payment. Delivery of and payment for the Securities
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shall be made at 10:00 AM, New York City time, on March 31, 1997, or such later
date (not later than April 7, 1997) as the Representatives shall designate,
which date and time may be postponed by agreement between the Representatives
and the Company or as provided in Section 9 hereof (such date and time of
delivery and payment for the Securities being herein called the "Closing Date").
Delivery of the Securities shall be made to the Representatives for the
respective accounts of the Initial Purchasers against payment by the Initial
Purchasers through the Representatives of the purchase price thereof to or upon
the order of the Company by wire transfer of federal funds or other immediately
available funds or such other manner of payment as may be agreed by the Company
and the Representatives. Delivery of the Securities shall be made at such
location as the Representatives shall reasonably designate at least one business
day in advance of the Closing Date
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and payment for the Securities shall be made at the office of Shearman &
Sterling ("Counsel for the Initial Purchasers"), 599 Lexington Avenue, New York,
New York. Certificates for the Securities shall be registered in such names and
in such denominations as the Representatives may request not less than three
full business days in advance of the Closing Date.
The Company agrees to have the Securities available for inspection,
checking and packaging by the Representatives in New York, New York, not later
than 1:00 PM on the business day prior to the Closing Date.
4. Offering of Securities. Each Initial Purchaser, severally and
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not jointly, represents and warrants to and agrees with the Company that:
(a) It has not offered or sold, and will not offer or sell, any
Securities except (i) to those it reasonably believes to be qualified
institutional buyers (as defined in Rule 144A under the Securities Act) and
that, in connection with each such sale, it has taken or will take
reasonable steps to ensure that the purchaser of such Securities is aware
that such sale is being made in reliance on Rule 144A, (ii) to other
institutional "accredited investors" (as defined in Rule 501(a)(1), (2),
(3) or (7) of Regulation D) who provide to it and to the Company a letter
in the form of Exhibit A hereto or (iii) 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 each Initial Purchaser that:
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(a) The Company will furnish to each Initial Purchaser and to Counsel
for the Initial Purchasers, without charge, during the period referred to
in paragraph (c) below, as many copies of the Final Memorandum and any
amendments and supplements thereto as it may reasonably request. The
Company will pay the expenses of printing or other production of all
documents relating to the offering.
(b) The Company will not amend or supplement the Final Memorandum
without the prior written consent of the Representatives as contemplated by
paragraph (c) below.
(c) If at any time prior to the completion of the sale of the
Securities by the Initial Purchasers (as determined by the
Representatives), any event occurs as a result of which the Final
Memorandum, as then amended or supplemented, would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if it should be necessary to amend
or supplement the Final Memorandum to comply with applicable law, the
Company will promptly notify the Representatives of the same and, subject
to the requirements of paragraph (b) of this Section 5, will prepare and
provide as promptly as practicable to the Representatives pursuant to
paragraph (a) of this Section 5 an amendment or supplement which will
correct such statement or omission or effect such compliance.
(d) The Company will arrange for the qualification of the Securities
for sale by the Initial Purchasers under the laws of such
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jurisdictions as the Initial Purchasers may reasonably designate and will
maintain such qualifications in effect so long as required for the sale of
the Securities. The Company will promptly advise the Representatives of the
receipt by the Company of any notification with respect to the suspension
of the qualification of the Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose.
(e) The Company will not, and will not permit any of its Affiliates
to, resell any Securities that have been acquired by any of them.
(f) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf will, directly or indirectly, make offers or
sales of any security, or solicit offers to buy any security, under
circumstances that would require the registration of the Securities under
the Securities Act.
(g) Neither the Company, nor any of its Affiliates, nor any person
acting on its or their behalf will engage in any form of general
solicitation or general advertising (within the meaning of Regulation D) in
connection with any offer or sale of the Securities in the United States.
(h) So long as any of the Securities are "restricted securities"
within the meaning of Rule 144(a)(3) under the Securities Act, the Company
will, unless it becomes subject to and complies with Section 13 or 15(d) of
the Securities Exchange Act of 1934, as amended (the "Exchange Act"),
provide to each holder of such restricted securities and to each
prospective purchaser (as designated by such holder) of such restricted
securities, upon the request of such holder or prospective purchaser, any
information required to be provided by Rule 144A(d)(4) under the Securities
Act. This covenant is intended to be for the benefit of the holders, and
the prospective purchasers designated by such holders, from time to time of
such restricted securities.
(i) Neither the Company nor any of its Affiliates nor any person
acting on its or their behalf will engage in any directed selling efforts
with respect to the Securities, and each of them will comply with the
offering restrictions requirement of Regulation S. Terms used in this
paragraph have the meanings given to them by Regulation S.
(j) The Company will cooperate with the Representatives and use its
best efforts to permit the Securities to be eligible for clearance and
settlement through The Depository Trust Company.
(k) The Company will not, until 180 days following the Closing Date,
without the prior written consent of the Representatives, offer, sell or
contract to sell, or otherwise dispose of, directly or indirectly, or
announce the offering of, any debt securities issued or guaranteed by the
Company (other than the Securities or as otherwise contemplated by the
Registration Agreement).
(l) In connection with any disposition of Securities pursuant to a
transaction made in compliance with paragraph 6 of Exhibit A, the Company
will reissue certificates evidencing such Securities without the legend
referred to in paragraph 5 of Exhibit A (provided, in the case of a
transaction made in compliance with paragraph 6(f) of Exhibit A, that the
legal opinion referred to therein so permits).
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6. Conditions to the Obligations of the Initial Purchasers. The
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obligations of the Initial Purchasers to purchase the Securities shall be
subject to the accuracy of the representations and warranties on the part of the
Company contained herein at the date and time that this Agreement is executed
and delivered by the parties hereto (the "Execution Time") and the Closing Date,
to the accuracy of the statements of the Company made in any certificates
pursuant to the provisions hereof, to the performance by the Company of its
obligations hereunder and to the following additional conditions:
(a) The Company shall have furnished to the Representatives the
opinion of Holme Roberts & Owen LLP, counsel for the Company, dated the
Closing Date, to the effect that:
(i) each of the Company, Qwest Corporation ("QC"), Qwest
Communications Corporation ("QCC") and Qwest Transmission Inc. ("QTI")
(collectively, the "Subsidiaries" and individually, a "Subsidiary")
has been duly incorporated and is validly existing as a corporation in
good standing under the laws of the jurisdiction in which it is
organized, with full corporate power and authority to own its
properties and conduct its business as described in the Final
Memorandum, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction that requires such qualification in which it owns or
leases material properties or conducts material business, except for
such jurisdictions where the failure to so qualify or to be in good
standing would not, singly or in the aggregate, have a material
adverse effect on the Company and the Subsidiaries, and the Company
has full corporate power and authority to enter into and perform its
obligations under this Agreement, the Registration Agreement, the
Indenture and the Securities;
(ii) all of the outstanding shares of capital stock of the
Company and each of the Subsidiaries have been duly and validly
authorized and issued and are fully paid and nonassessable, and,
except as otherwise set forth in the Final Memorandum, all outstanding
shares of capital stock of the Subsidiaries are owned by the Company
either directly or through a wholly owned Subsidiary, free and clear
of (to the best of such counsel's knowledge after due inquiry) any
security interests and any other claims, liens or encumbrances;
(iii) the Company's authorized equity capitalization is as set
forth in the Final Memorandum;
(iv) the Indenture has been duly authorized, executed and
delivered and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms (subject,
as to the enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, fraudulent conveyance, moratorium or other
laws affecting creditors' rights generally from time to time in
effect, and to general equitable
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principles); the Securities have been duly and validly authorized and,
when executed and authenticated in accordance with the provisions of
the Indenture and delivered to and paid for by the Initial Purchasers
pursuant to this Agreement, will constitute legal, valid and binding
obligations of the Company (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency,
fraudulent conveyance, moratorium or other laws affecting creditors'
rights generally from time to time in effect, and to general equitable
principles) entitled to the benefits of the Indenture; and the
Securities and the Indenture conform as to legal matters in all
material respects to the descriptions thereof set forth under the
heading "Description of the Notes" in the Final Memorandum;
(v) the information contained in the Final Memorandum under the
headings "Description of Certain Indebtedness," "Certain United States
Federal Income Taxes" and "Certain Transactions" fairly summarizes in
all material respects the matters therein described and to the extent
that such statements purport to describe certain provisions of U.S.
federal laws, rules or regulations, have been reviewed by such counsel
and are correct as to legal matters in all material respects;
(vi) this Agreement has been duly authorized, executed and
delivered by the Company:
(vii) the Registration Agreement has been duly authorized,
executed and delivered by the Company, and constitutes legal, valid
and binding obligations of the Company enforceable against the Company
in accordance with its terms (subject, as to the enforcement of
remedies, to applicable bankruptcy, reorganization, insolvency,
fraudulent conveyance, moratorium or other laws affecting creditors'
rights generally from time to time in effect, and to general
principles of equity), and further such counsel expresses no opinion
as to the enforceability of the indemnification or contribution
provisions contained therein, and the Registration Agreement conforms
as to legal matters in all material respects to the description
thereof contained in the Final Memorandum;
(viii) no consent, approval, authorization or order of any court
or governmental agency or body (other than such as may be required
under the applicable securities laws of the various jurisdictions in
which the Securities will be offered or sold, as to which such counsel
expresses no opinion, or as required in connection with the
transactions contemplated by the Registration Agreement) is required
in connection with the due authorization, execution and delivery of
this Agreement, the Registration Agreement or the Indenture or for the
offering, issuance, sale or delivery of the Securities to the Initial
Purchasers or the resale of the Securities by the Initial Purchasers
in accordance with this Agreement;
(ix) the issue and sale of the Securities, the execution and
delivery of this Agreement, the Registration Agreement, the Indenture
and the Securities, the consummation of the transactions contemplated
by this Agreement and the application of proceeds from the sale of the
Securities as described in the Final Memorandum and the compliance by
the Company with its obligations under this Agreement, the
Registration Agreement, the Indenture or the Securities, will not
conflict with, result in a breach or violation of, or constitute a
default under any applicable law or the charter or bylaws of the
Company or any of the Subsidiaries or the terms of any indenture or
other agreement or instrument known to such counsel to which the
Company or any of the Subsidiaries is a party or bound or any
judgment, order or decree known to such counsel to be applicable to
the Company or any of the Subsidiaries of any court, regulatory body,
administrative agency, governmental body or
12
arbitrator having jurisdiction over the Company or any of the
Subsidiaries;
(x) assuming the accuracy of the representations and warranties
and compliance with the agreements contained in this Agreement, no
registration of the Securities under the Securities Act is required,
and no qualification of the Indenture under the Trust Indenture Act of
1939 is necessary, for the purchase by the Initial Purchasers of the
Securities, or the offer and sale by the Initial Purchasers of the
Securities, in each case, in the manner contemplated by this Agreement
(and not taking into account the transactions contemplated by the
Registration Agreement);
(xi) the Company is not an "investment company" within the
meaning of the Investment Company Act of 1940 without taking account
of any exemption arising out of the number of holders of the Company's
securities;
(xii) no legal or governmental proceedings are pending to which
the Company or any of its Subsidiaries is a party or to which the
property of the Company or any of its Subsidiaries is subject, as
would be required to be described in the Final Memorandum, that are
not described in the Final Memorandum and, to the best of such
counsel's knowledge after due inquiry, no such proceedings have been
threatened against the Company or any of its subsidiaries or with
respect to any of their respective properties.
Such counsel shall also state that they have no reason to believe that
at the Execution Time or at the Closing Date the Final Memorandum contained
an untrue statement of a material fact or omitted to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading; provided,
--------
however, that such counsel expresses no belief as to the financial
-------
statements, including the notes thereto, or supporting schedules or other
financial and accounting data included in the Final Memorandum.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the State
of New York, the State of Colorado, the federal laws of the United States
or the corporate law of the State of Delaware, to the extent they deem
proper and specified in such opinion, upon the opinion of other counsel
(including in-house counsel) of good standing whom they believe to be
reliable and who are satisfactory to Counsel for the Initial Purchasers and
(B) as to matters of fact, to the extent they deem proper, on certificates
of responsible officers of the Company and public officials.
All references in this Section 6(a) to the Final Memorandum shall be
deemed to include any amendment or supplement thereto at the Closing Date.
(b) The Company shall have furnished to the Representatives the
opinion of Morrison & Foerster LLP, special federal regulatory counsel for
the Company, dated the Closing Date, to the effect that:
(i) (A) the execution and delivery of this Agreement, the
Registration Agreement and the Indenture by the Company and the issue
and sale of the Securities contemplated hereby and thereby do not
violate (1) the Communications Act, (2) the Telecom Act of 1996 or (3)
any rules or regulations of the FCC applicable to the Company or its
subsidiaries, and (B) no authorization of or filing with the
13
FCC is necessary for the execution and delivery of this Agreement, the
Registration Agreement or the Indenture by the Company and the issue
and sale of the Securities contemplated hereby and thereby in
accordance with the terms hereof and thereof;
(ii) QCC is a nondominant carrier authorized by the FCC to
provide domestic interstate interexchange telecommunications services
as described in such opinion without any further order, license,
permit or other authorization by the FCC. QCC also has been granted
Section 214 authority by the FCC to provide international switched
resale telecommunications services as described in such opinion. QCC
has on file with the FCC tariffs applicable to its domestic interstate
and international services. No other FCC authority is required, and no
other tariffs are required to be filed under the rules and regulations
of the FCC, for the conduct of QCC's telecommunications business as
described in the Final Memorandum;
(iii) QTI is a microwave carrier authorized by the FCC and holds
the licenses listed in such opinion. In addition, the licenses listed
in such opinion were held by Qwest Communications, Inc., control of
which was transferred by order of the FCC from MCI Communications
Corporation to Southern Pacific Telecommunications Corporation, QCC's
predecessor, on December 27, 1994. Qwest Communications, Inc.'s name
was subsequently changed to QTI on April 6, 1995. The FCC Files do
not reflect any other licensee name for the licenses listed in such
opinion. No further FCC authority is required for the conduct of
QTI's microwave telecommunications business as described in the Final
Memorandum, except to the extent that the absence of any such
authority, singly or in the aggregate, would not have a material
adverse effect on the business or operations of the Company or its
subsidiaries taken as a whole;
(iv) FSI Acquisition Corp. is a private carrier not subject to
Title II common carrier regulation under the Communications Act, as
amended by the Telecom Act of 1996;
(v) (A) QCC and QTI in all material respects (1) have made all
reports and filings, and paid all fees, required by the FCC; and (2)
have all certificates, orders, permits, licenses, authorizations,
consents and approvals of and from, and have made all filings and
registrations with, the FCC necessary to own, lease, license and use
their properties and assets and to conduct their business in the
manner described in the Final Memorandum; and (B) to the best of such
counsel's knowledge, neither QCC nor QTI has received any notice of
proceedings relating to the revocation or modification of any such
certificates, orders, permits, licenses, authorizations, consents or
approvals, or the qualification or rejection of any such filing or
registration, the effect of which, singly or in the aggregate, would
have a material adverse effect on the business or operations of the
Company and its subsidiaries taken as a whole as described in the
Final Memorandum;
(vi) to the best of such counsel's knowledge, neither QCC nor QTI
is in violation of, or in default under, the Communications Act, as
amended by the Telecom Act of 1996, or the rules or regulations of the
FCC, the effect of which, singly or in the aggregate, would have a
material adverse effect on the business or operations of the
14
Company and its subsidiaries taken as a whole as described in the
Final Memorandum;
(vii) (A) no decree or order of the FCC is outstanding against
QCC or QTI and (B) to the best of such counsel's knowledge, no formal
litigation, proceeding, inquiry or investigation has been commenced or
threatened, and no formal notice of violation or order to show cause
has been issued, against QCC or QTI before or by the FCC; and
(viii) the statements in the Final Memorandum under the captions
"Risk Factors--Regulation Risks" and "Regulation," insofar as such
statements constitute a summary of the legal matters, documents or
proceedings of the FCC with respect to the telecommunications
regulation referred to therein, are accurate in all material respects
and fairly summarize all matters referred to therein.
(c) (A) The Company shall have furnished to the Representatives the
opinion of Goodin, MacBride, Squeri, Schlotz & Ritchie, LLP, special state
regulatory counsel for the Company for the State of California, dated the
Closing Date, to the effect that:
(i) (x) the execution and delivery of this Agreement, the
Registration Agreement and the Indenture by the Company and the issue
and sale of the Securities contemplated hereby and thereby do not
violate (1) any laws administered by, rules, regulations or published
policies of the California Public Utilities Commission (the
"California PUC") ("PUC Laws") or any other state laws governing the
provision of telecommunications services in the State of California
("Telecommunications Laws") applicable to the Company or its
subsidiaries, or (2) any decree from any California court relating to
telecommunications matters, and (y) no authorization of or filing with
the California PUC in the State of California is necessary for the
execution and delivery of this Agreement, the Registration Agreement
or the Indenture by the Company and the issue and sale of the
Securities contemplated hereby and thereby in accordance with the
terms hereof and thereof;
(ii) QCC is certified, registered or otherwise authorized, or is
not required to obtain authority, to provide intrastate interexchange
telecommunications services in the State of California. QCC has a
tariff on file in the State of California and no further tariffs are
required to be filed by QCC or the Company in the State of California
to conduct the Company's telecommunications business as described in
the Final Memorandum;
(iii) (x) QCC and the Company (1) have made all reports and
filings, and paid all fees, required by the California PUC in the
State of California; and (2) have all certificates, orders, permits,
licenses, authorizations, consents and approvals of and from, and have
made all filings and registrations with, the California PUC in the
State of California necessary to own, lease, license and use their
properties and assets and to conduct their business in the manner
described in the Final Memorandum; and (y) neither QCC nor the Company
has received any notice of proceedings relating to the revocation or
modification of any such certificates, orders, permits, licenses,
authorizations, consents or approvals, or the qualification or
rejection of any such filing or registration, the
15
effect of which, singly or in the aggregate, would have a material
adverse effect on the Company's, and its subsidiaries' taken as a
whole, telecommunications business or operations, as described in the
Final Memorandum;
(iv) neither the Company nor QCC is in violation of, or in
default under any PUC Laws or any Telecommunications Laws, the effect
of which, singly or in the aggregate, would have a material adverse
effect on the Company's, and its subsidiaries' taken as a whole,
telecommunications business or operations, as described in the Final
Memorandum; and
(v) (x) no decree or order of the California PUC in the State of
California is outstanding against the Company or any of its
subsidiaries and (y) no formal litigation, proceeding, inquiry or
investigation has been commenced or threatened, and no notice of
violation or order to show cause has been issued, against the Company
or any of its subsidiaries before or by the California PUC or any
other regulatory agency in the State of California.
(B) The Company shall have furnished to the Representatives the
opinion of Bickerstaff, Heath Smiley, Pollan, Kever & McDaniel LLP, special
state regulatory counsel for the Company for the State of Texas, dated the
Closing Date, to the effect that:
(i) (x) the execution and delivery of this Agreement, the
Registration Agreement and the Indenture by the Company and the issue
and sale of the Securities do not violate any telecommunications laws
of the State of Texas applicable to the Company or QCC or, to the best
of such counsel's knowledge, any decree from any court of the State of
Texas relating to the telecommunications operations of the Company or
QCC, and (y) no authorization of or filing with the Public Utility
Commission of Texas (the "Texas PUC") is necessary for the execution
and delivery of this Agreement, the Registration Agreement or the
Indenture by the Company or the issue and sale of the Securities
contemplated hereby and thereby in accordance with the terms of this
Agreement;
(ii) QCC is duly registered with the Texas PUC and authorized to
provide intrastate telecommunications services in Texas and no further
authority is required to be obtained by QCC or the Company from the
Texas PUC to conduct the Company's telecommunications business as
described in the Final Memorandum. QCC has a registration and price
list on file in Texas and no further tariffs are required to be filed
by QCC or the Company with the Texas PUC to conduct the Company's
telecommunications business as described in the Final Memorandum;
(iii) (x) QCC and the Company (1) have made all reports and
filings required by the Texas PUC; and (2) have all certificates,
orders, permits, licenses, authorizations, consents and approvals of
and from, and have made all filings and registrations with, the Texas
PUC necessary to own, lease, license and use their properties and
assets and to conduct the Company's telecommunications business in the
manner described in the Final Memorandum; and (y) neither QCC nor the
Company has received any notice of proceedings from the Texas PUC
relating to the revocation or modification of any such certificates,
orders, permits, licenses, authorizations, consents or approvals, or
the qualification or rejection of any such filing or
16
registration, the effect of which, singly or in the aggregate, would
have a material adverse effect on the business or operations of the
Company and its subsidiaries taken as a whole as described in the
Final Memorandum;
(iv) neither QCC nor the Company is in violation of, or in
default under the telecommunications laws of the State of Texas, the
effect of which, singly or in the aggregate, would have a material
adverse effect on the business or operations of the Company and its
subsidiaries taken as a whole as described in the Final Memorandum;
and
(v) (x) no decree or order of the Texas PUC is outstanding
against QCC or the Company and (y) no formal litigation, proceeding,
inquiry or investigation has been commenced or threatened, and no
formal notice of violation or order to show cause has been issued,
against QCC or the Company before or by the Texas PUC.
(d) The Company shall have furnished to the Representatives the
opinion of Joseph Garrity, in-house counsel for the Company, dated the
Closing Date, to the effect that:
(i) (A) the execution and delivery of this Agreement, the
Registration Agreement and the Indenture by the Company and the
issuance and sale of the Securities contemplated hereby and thereby do
not violate (1) any state telecommunications laws or regulations
("State Telecommunications Laws") applicable to the Company or QCC,
QTI or FSI Acquisition Corp. (together, the "Operating Subsidiaries")
or (2) any decree from any court relating to the telecommunications
operations of the Company or the Operating Subsidiaries, and (B) no
authorization of or filing with any Public Utilities Commission or
other state regulatory authority ("State Regulatory Agency") is
necessary for the execution and delivery of this Agreement, the
Registration Agreement or the Indenture by the Company and the
issuance and sale of the Securities contemplated hereby and thereby in
accordance with the terms hereof and thereof;
(ii) QCC is certified, registered or otherwise authorized, or is
not required to obtain authority to provide, intrastate interexchange
telecommunications services in the respective states listed in such
opinion. No further authority is required to be obtained by the
Company or any of the Operating Subsidiaries from any such state to
conduct the telecommunications business as described in the Final
Memorandum. QCC has a tariff or price list on file in each of the
states requiring such a filing as identified in such opinion. No
further tariffs are currently required to be filed by the Company or
any of the Operating Subsidiaries in any such state to conduct the
telecommunications business as described in the Final Memorandum;
(iii) except to the extent that the following would not have,
singly or in the aggregate, a material adverse effect on the business
or operations of the Company and its subsidiaries as described in the
Final Memorandum: (A) the Company and QCC (1) have made all reports
and filings, and paid all fees, required by State Regulatory Agencies;
and (2) have all certificates, orders, permits, licenses,
authorizations, consents and approvals of and from, and have made all
filings and registrations with, State Regulatory Authorities necessary
to own, lease, license and use their
17
properties and assets and to conduct business in the manner described
in the Final Memorandum; and (B) neither the Company nor QCC has
received any notice of proceedings relating to the revocation or
modification of any such certificates, orders, permits, licenses,
authorizations, consents or approvals, or the qualification or
rejection of any such filing or registration;
(iv) to the best of such counsel's knowledge, neither the Company
nor QCC is in violation of, or in default under any State
Telecommunications Law, the effect of which, singly or in the
aggregate, would have a material adverse effect on the business or
operations of the Company and its subsidiaries as described in the
Final Memorandum;
(v) (A) no decree or order of any State Regulatory Agency is
outstanding against the Company or any of the Operating Subsidiaries
and (B) no formal litigation, proceeding, inquiry or investigation has
been commenced or, to such counsel's knowledge, threatened, and no
formal notice of violation or order to show cause has been issued,
against the Company or any of the Operating Subsidiaries before or by
any State Regulatory Agency, the effect of which, singly or in the
aggregate, would have a material adverse effect on the business or
operations of the Company and its subsidiaries as described in the
Final Memorandum; and
(vi) the statements in the Final Memorandum under the captions
"Risk Factors--Regulation Risks" and "Regulation," insofar as such
statements constitute a summary of the legal matters, documents or
proceedings of the FCC and State Regulatory Agencies with respect to
telecommunications regulation referred to therein, are accurate in all
material respects and fairly summarize all matters referred to
therein, as of the date of publication of the Final Memorandum.
(e) The Representatives shall have received from Counsel for the
Initial Purchasers such opinion or opinions, dated the Closing Date, with
respect to the issuance and sale of the Securities, the Final Memorandum
(as amended or supplemented at the Closing Date) and other related matters
as the Representatives may reasonably require, and the Company shall have
furnished or made available to such counsel such documents as they request
for the purpose of enabling them to pass upon such matters.
(f) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the Company,
dated the Closing Date, to the effect that the signers of such certificate
have carefully reviewed the Final Memorandum, any amendment or supplement
to the Final Memorandum and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date,
and the Company has complied with all the agreements and satisfied all
the conditions on its part to be performed or satisfied hereunder at
or prior to the Closing Date; and
(ii) since the date of the most recent financial statements
included in the Final Memorandum, there has been no material adverse
change in the condition (financial or other), earnings, business or
18
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 by the Final Memorandum (exclusive of any
amendment or supplement thereto).
(g) (A) At the Execution Time, KPMG Peat Marwick LLP shall have
furnished to the Representatives a letter dated such date, in form and
substance satisfactory to the Initial Purchasers, containing statements and
information of the type ordinarily included in accountants' "comfort
letters" to underwriters with respect to the financial statements and
certain financial information contained in the Final Memorandum and (B) at
the Closing Date, KPMG Peat Marwick LLP shall have furnished to the
Representatives a letter dated such date, in form and substance
satisfactory to the Initial Purchasers, to the effect that they reaffirm
the statements made in the letter furnished pursuant to preceding sentence,
except that the specified date referred to shall be a date not more than
three business day prior to the Closing Date.
(h) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Final Memorandum, there shall not have
been (i) any change or decrease specified in the letters referred to in
paragraph (g) of this Section 6 or (ii) any change, or any development
involving a prospective change, in or affecting the business or properties
of the Company and its subsidiaries the effect of which, in any case
referred to in clause (i) or (ii) above, is, in the judgment of the
Representatives, so material and adverse as to make it impractical or
inadvisable to market the Securities as contemplated by the Final
Memorandum.
(i) Prior to the Closing Date, the Company shall have furnished to the
Representatives such reasonable further information, certificates and
documents as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and Counsel for the Initial Purchasers,
this Agreement and all obligations of the Initial Purchasers hereunder may be
cancelled at, or at any time prior to, the Closing Date by the Representatives.
Notice of such cancellation shall be given to the Company in writing or by
telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 6 will be
delivered at the office of Counsel for the Initial Purchasers, at 599 Lexington
Avenue, New York, New York, on the Closing Date.
7. Reimbursement of Expenses. If the sale of the Securities
-------------------------
provided for herein is not consummated because any condition to the obligations
of the Initial Purchasers set forth in Section 6 hereof is not satisfied,
because of any termination pursuant to Section 10 hereof or because of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason of a
default by any of the Initial Purchasers in payment for the Securities on the
Closing Date, the Company will reimburse the Initial Purchasers severally upon
demand for all reasonable out-of-pocket expenses (including reasonable fees and
disbursements of counsel) that shall have been incurred by them in connection
with the proposed purchase and sale of the Securities.
19
8. Indemnification and Contribution. (a) The Company agrees to
--------------------------------
indemnify and hold harmless each Initial Purchaser, the directors, officers,
employees and agents of each Initial Purchaser and each person who controls any
Initial Purchaser within the meaning of either the Securities Act or the
Exchange Act against any and all losses, claims, damages or liabilities, joint
or several, to which they or any of them may become subject under the Securities
Act, the Exchange Act or other federal or state statutory law or regulation, at
common law or otherwise, insofar as such losses, claims, damages or liabilities
(or actions in respect thereof) arise out of or are based upon any untrue
statement or alleged untrue statement of a material fact contained in the
Preliminary Memorandum, 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 Preliminary Memorandum or the Final Memorandum, or in any amendment thereof
or supplement thereto, in reliance upon and in conformity with written
information furnished to the Company by or on behalf of any of the Initial
Purchasers through the Representatives specifically for inclusion therein. This
indemnity agreement will be in addition to any liability which the Company may
otherwise have.
(b) Each Initial Purchaser severally agrees to indemnify and hold
harmless the Company, its directors, its officers, and each person who controls
the Company within the meaning of either the Securities Act or the Exchange Act,
to the same extent as the foregoing indemnity from the Company to each Initial
Purchaser, but only with reference to written information relating to such
Initial Purchaser furnished to the Company by or on behalf of such Initial
Purchaser through the Representatives specifically for inclusion in the
Preliminary Memorandum or the Final Memorandum (or in any amendment or
supplement thereto). This indemnity agreement will be in addition to any
liability which any Initial Purchaser may otherwise have. The Company
acknowledges that the statements set forth in the last paragraph of the cover
page and under the heading "Plan of Distribution" in the Preliminary Memorandum
and the Final Memorandum constitute the only information furnished in writing by
or on behalf of the Initial Purchasers for inclusion in the Preliminary
Memorandum or 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 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
20
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be satisfactory to
-------- -------
the indemnified party. Notwithstanding the indemnifying party's election to
appoint counsel to represent the indemnified party in an action, the indemnified
party shall have the right to employ separate counsel (including local counsel),
and the indemnifying party shall bear the reasonable fees, costs and expenses of
such separate counsel if (i) the use of counsel chosen by the indemnifying party
to represent the indemnified party would present such counsel with a conflict of
interest, (ii) the actual or potential defendants in, or targets of, any such
action include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which are different
from or additional to those available to the indemnifying party, (iii) the
indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. An indemnifying party will not, without the prior
written consent of the indemnified parties, settle or compromise or consent to
the entry of any judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which indemnification or contribution
may be sought hereunder (whether or not the indemnified parties are actual or
potential parties to such claim or action) unless such settlement, compromise or
consent includes an unconditional release of each indemnified party from all
liability arising out of such claim, action, suit or proceeding.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Initial Purchasers agree
to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Initial Purchasers may be subject in such proportion as
is appropriate to reflect the relative benefits received by the Company and by
the Initial Purchasers from the offering of the Securities; provided, however,
-------- -------
that in no case shall any Initial Purchaser (except as may be provided in any
agreement among the Initial Purchasers relating to the offering of the
Securities) be responsible for any amount in excess of the purchase discount or
commission applicable to the Securities purchased by such Initial Purchaser
hereunder. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the Company and the Initial Purchasers shall
contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of the Company and of the Initial
Purchasers in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits
received by the Company shall be deemed to be equal to the total net proceeds
from the offering (before deducting expenses), and benefits received by the
Initial Purchasers shall be deemed to be equal to the total purchase discounts
and commissions received by the Initial Purchasers from the Company in
connection with the purchase of the Securities hereunder. Relative fault shall
be determined by reference to whether any alleged untrue statement or omission
relates to information provided by the Company or the Initial Purchasers. The
Company and the Initial Purchasers agree that it would not be just and equitable
if contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person
guilty of fraudulent misrepresentation (within the meaning of Section 11(f) of
the Securities Act) shall be entitled to contribution from any person who was
21
not guilty of such fraudulent misrepresentation. For purposes of this Section
8, each person who controls an Initial Purchaser within the meaning of either
the Securities Act or the Exchange Act and each director, officer, employee and
agent of an Initial Purchaser shall have the same rights to contribution as such
Initial Purchaser, and each person who controls the Company within the meaning
of either the Securities Act or the Exchange Act and each officer and director
of the Company shall have the same rights to contribution as the Company,
subject in each case to the applicable terms and conditions of this paragraph
(d).
9. Default by an Initial Purchaser. If any one or more Initial
-------------------------------
Purchasers shall fail to purchase and pay for any of the Securities agreed to be
purchased by such Initial Purchaser hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Initial Purchasers shall be obligated severally to take
up and pay for (in the respective proportions which the principal amount of
Securities set forth opposite their names in Schedule I hereto bears to the
aggregate principal amount of Securities set forth opposite the names of all the
remaining Initial Purchasers) the Securities which the defaulting Initial
Purchaser or Initial Purchasers agreed but failed to purchase; provided,
--------
however, that in the event that the aggregate principal amount of Securities
- -------
which the defaulting Initial Purchaser or Initial Purchasers agreed but failed
to purchase shall exceed 10% of the aggregate principal amount of Securities set
forth in Schedule I hereto, the remaining Initial Purchasers shall have the
right to purchase all, but shall not be under any obligation to purchase any, of
the Securities, and if such non-defaulting Initial Purchasers do not purchase
all the Securities, this Agreement will terminate without liability to any non-
defaulting Initial Purchaser or the Company. In the event of a default by any
Initial Purchaser as set forth in this Section 9, the Closing Date shall be
postponed for such period, not exceeding seven days, as the Representatives
shall determine in order that the required changes in the Final Memorandum or in
any other documents or arrangements may be effected. Nothing contained in this
Agreement shall relieve any defaulting Initial Purchaser of its liability, if
any, to the Company or any non-defaulting Initial Purchaser for damages
occasioned by its default hereunder.
10. Termination. This Agreement shall be subject to termination in
-----------
the absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if prior to such time (i)
trading in securities generally on the New York Stock Exchange shall have been
suspended or limited or minimum prices shall have been established on such
Exchange, (ii) a banking moratorium shall have been declared either by federal
or New York State authorities or (iii) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which on financial
markets is such as to make it, in the judgment of the Representatives,
impracticable or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Final Memorandum.
11. Representation and Indemnities to Survive. The respective
-----------------------------------------
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Initial Purchasers set forth in or made
pursuant to this Agreement will remain in full force and effect, regardless of
any investigation made by or on behalf of the Initial Purchasers or the Company
or any of the officers, directors or controlling persons referred to in Section
8 hereof, and will survive delivery of and payment for the Securities. The
provisions of Sections 7 and 8 hereof shall survive the termination or
cancellation of this Agreement.
23
12. Notices. All communications hereunder will be in writing and
-------
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telegraphed and confirmed to them, care of Salomon Brothers Inc, at
Seven World Trade Center, New York, New York 10048; or, if sent to the Company,
will be mailed, delivered or telegraphed and confirmed to it at Suite 1000, 555
Seventeenth Street, Denver, Colorado 80202, attention: Robert S. Woodruff,
Executive Vice President.
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 the Initial Purchasers.
Very truly yours,
QWEST COMMUNICATIONS INTERNATIONAL INC.
By /s/
----
Name: Joseph P. Nacchio
Title: President
The foregoing Agreement is hereby
confirmed and accepted as of the
date first above written.
Salomon Brothers Inc
Donaldson, Lufkin & Jenrette Securities Corporation
Goldman, Sachs & Co.
By: SALOMON BROTHERS INC
By /s/
----
Name: D. Scott Miller
Title: Director
For themselves and the other
Initial Purchasers named in
Schedule I to the foregoing Agreement
SCHEDULE I
Principal Amount
of Securities to
Initial Purchasers be Purchased
- ------------------ ------------
Salomon Brothers Inc................................. $ 137,500,000
Donaldson, Lufkin & Jenrette Securities Corporation.. $ 62,500,000
Goldman, Sachs & Co.................................. $ 50,000,000
Total................................. $ 250,000,000
EXHIBIT A
Non-Distribution Letter for U.S. Purchasers
-------------------------------------------
_________, 1997
Salomon Brothers Inc
Donaldson, Lufkin & Jenrette Securities Corporation
Goldman, Sachs & Co.
c/o Salomon Brothers Inc
Seven World Trade Center
New York, New York 10048
Qwest Communications International Inc.
Suite 1000
555 Seventeenth Street
Denver, Colorado 80202
Re: Purchase of $250,000,000 principal amount of 10 7/8% Senior Notes Due 2007
(the "Securities"), of Qwest Communications International Inc. (the
"Company")
Ladies and Gentlemen:
In connection with our purchase of the Securities we confirm that:
1. We understand that the Securities are not being and will not be
registered under the Securities Act of 1933, as amended (the "Securities Act"),
and are being sold to us in a transaction that is exempt from the registration
requirements of the Securities Act.
2. We acknowledge that (a) neither the Company, nor the Initial
Purchasers (as defined in the Offering Memorandum dated March 25, 1997 relating
to the Securities (the "Final Memorandum")) nor any person acting on behalf of
the Company or the Initial Purchasers has made any representation to us with
respect to the Company or the offer or sale of any Securities and (b) any
information we desire concerning the Company and the Securities or any other
matter relevant to our decision to purchase the Securities (including a copy of
the Final Memorandum) is or has been made available to us.
3. We have such knowledge and experience in financial and business
matters as to be capable of evaluating the merits and risks of an investment in
the Securities, and we are (or any account for which we are purchasing under
paragraph 4 below is) an institutional "accredited investor" (within the meaning
of Rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act)
able to bear the economic risk of investment in the Securities.
4. We are acquiring the Securities for our own account (or for
accounts as to which we exercise sole investment discretion and have authority
to make, and do make, the statements contained in this letter) and not with a
view to any distribution of the Securities, subject, nevertheless, to the
understanding that the disposition of our property will at all times be and
remain within our control.
A-2
5. We understand that (a) the Securities will be in registered form
only and that any certificates delivered to us in respect of the Securities will
bear a legend substantially to the following effect:
"These Securities have not been registered under the Securities Act of
1933. Further offers or sales of these Securities are subject to
certain restrictions, as set forth in the Offering Memorandum dated
March 25, 1997 relating to these Securities."
and (b) the Company has agreed to reissue such certificates without the
foregoing legend only in the event of a disposition of the Securities in
accordance with the provisions of paragraph 6 below (provided, in the case of a
disposition of the Securities in accordance with paragraph 6(f) below, that the
legal opinion referred to in such paragraph so permits), or at our request at
such time as we would be permitted to dispose of them in accordance with
paragraph 6(a) below.
6. We agree that in the event that at some future time we wish to
dispose of any of the Securities, we will not do so unless such disposition is
made in accordance with any applicable securities laws of any state of the
United States and:
(a) the Securities are sold in compliance with Rule 144(k) under the
Securities Act; or
(b) the Securities are sold in compliance with Rule 144A under the
Securities Act; or
(c) the Securities are sold in compliance with Rule 904 of Regulation
S under the Securities Act; or
(d) the Securities are sold pursuant to an effective registration
statement under the Securities Act; or
(e) the Securities are sold to the Company or an affiliate (as defined
in Rule 501(b) of Regulation D) of the Company; or
(f) the Securities are disposed of in any other transaction that does
not require registration under the Securities Act, and we theretofore have
furnished to the Company or its designee an opinion of counsel experienced
in securities law matters to such effect or such other documentation as the
Company or its designee may reasonably request.
Very truly yours,
By
(Authorized Officer)
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. Each Initial Purchaser
represents and agrees that, except as otherwise permitted by Section 4(a)(i) or
(ii) of the Agreement to which this is an exhibit, it has offered and sold the
Securities, and will offer and sell the Securities, (i) as part of their
distribution at any time and (ii) otherwise until 40 days after the later of the
commencement of the offering and the Closing Date, only in accordance with Rule
903 of Regulation S under the Securities Act. Accordingly, each Initial
Purchaser represents and agrees that neither it, nor any of its affiliates nor
any person acting on its or their behalf has engaged or will engage in any
directed selling efforts with respect to the Securities, and that it and they
have complied and will comply with the offering restrictions requirement of
Regulation S. Each Initial Purchaser agrees that, at or prior to the
confirmation of sale of Securities (other than a sale of Securities pursuant to
Section 4(a)(i) or (ii) of the Agreement to which this is an exhibit), it shall
have sent to each distributor, dealer or person receiving a selling concession,
fee or other remuneration that purchases Securities from it during the
restricted period a confirmation or notice to substantially the following
effect:
"The Securities covered hereby have not been registered under the
U.S. Securities Act of 1933 (the "Securities Act") and may not be
offered or sold within the United States or to, or for the account or
benefit of, U.S. persons (i) as part of their distribution at any time
or (ii) otherwise until 40 days after the later of the commencement of
the offering and March 31, 1997, except in either case in accordance
with Regulation S or Rule 144A under the Securities Act. Terms used
above have the meanings given to them by Regulation S."
(b) Each Initial Purchaser also represents and agrees that it has not
entered and will not enter into any contractual arrangement with any distributor
with respect to the distribution of the Securities, except with its affiliates
or with the prior written consent of the Company.
(c) Terms used in this section have the meanings given to them by
Regulation S.
(2) Each Initial Purchaser represents, warrants and agrees that (i) it
has not offered or sold, and will not offer or sell, any Securities to persons
in the United Kingdom, except to persons whose ordinary activities involve them
in acquiring, holding, managing or disposing of investments (as principal or
agent) for the purposes of their business or in circumstances which have not
resulted and will not result in an offer to the public in the United Kingdom
within the meaning of the Public Offers of Securities Regulation 1995 (the
"Regulations"), (ii) it has complied and will comply with all applicable
provisions of the Financial Services Act 1986 of the United Kingdom and the
Regulations with respect to anything done by it in relation to the Securities
in, from or otherwise involving the United Kingdom, and (iii) it has only issued
or passed on, and will only issue or pass on, to any person in the United
Kingdom any document received by it in connection with the issue of the
Securities if that person is of a kind described in Article 11(3) of the
Financial Services Act 1986 (Investment Advertisements) (Exemptions) Order 1995
or is a person to whom the document may otherwise lawfully be issued or passed
on.