EXHIBIT 10.1
COMMON STOCK PURCHASE AGREEMENT
by and between
QWEST COMMUNICATIONS INTERNATIONAL INC.
and
BELLSOUTH ENTERPRISES, INC.
Dated as of April 19, 1999
TABLE OF CONTENTS
PAGE
ARTICLE I
AGREEMENT TO PURCHASE AND SELL COMMON STOCK
1.1 Agreement to Purchase and Sell Common Stock..........................1
ARTICLE II
CLOSING DATE; DELIVERY
2.1 Closing Date.........................................................1
2.2 Delivery.............................................................2
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
3.1 Corporate Existence and Power........................................2
3.2 Authorization; Contravention.........................................3
3.3 SEC Documents........................................................3
3.4 Approvals............................................................4
3.5 Binding Effect.......................................................4
3.6 Financial Information................................................4
3.7 Absence of Certain Changes or Events.................................4
3.8 Litigation...........................................................5
3.9 Capitalization.......................................................5
3.10 Absence of Certain Agreements........................................5
3.11 No Broker............................................................6
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
4.1 Corporate Existence and Power........................................6
4.2 Authorization; Contravention.........................................6
4.3 Approvals............................................................6
4.4 Binding Effect.......................................................6
4.5 Investment...........................................................7
4.6 Disclosure of Information............................................7
4.7 Investment Experience................................................7
4.8 Accredited Investor Status...........................................7
4.9 Restricted Securities................................................7
4.10 Investigation........................................................7
4.11 No Broker............................................................8
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TABLE OF CONTENTS
(CONTINUED)
PAGE
ARTICLE V
CONDITIONS TO OBLIGATION OF THE PURCHASER
5.1 Representations and Warranties.......................................8
5.2 Covenants............................................................8
5.3 HSR Act..............................................................8
5.4 No Order Pending.....................................................8
5.5 No Law Prohibiting or Restricting Sale of the Shares.................8
5.6 Registration Rights Agreement........................................8
5.7 Other Purchase Agreement.............................................8
5.8 Master Agreement.....................................................9
5.9 Opinion of Counsel...................................................9
ARTICLE VI
CONDITIONS TO OBLIGATION OF THE COMPANY
6.1 Representations and Warranties.......................................9
6.2 Covenants............................................................9
6.3 HSR Act..............................................................9
6.4 No Order Pending.....................................................9
6.5 No Law Prohibiting or Restricting the Sale of the Shares.............9
6.6 Registration Rights Agreement........................................9
6.7 Other Purchase Agreement............................................10
6.8 Master Agreement....................................................10
ARTICLE VII
COVENANTS OF THE PURCHASER AND THE COMPANY
7.1 Purchase Restrictions...............................................10
7.2 Sale Restrictions...................................................11
7.3 Other Restrictions..................................................12
7.4 Early Termination...................................................13
7.5 Strategic Sessions; Director........................................14
7.6 Company Actions.....................................................15
ARTICLE VIII
MISCELLANEOUS
8.1 Certain Definitions.................................................15
8.2 Further Assurances..................................................17
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TABLE OF CONTENTS
(CONTINUED)
PAGE
8.3 Governing Law.......................................................18
8.4 Survival; Termination of Covenants..................................19
8.5 Successors and Assigns..............................................19
8.6 Amendments; Etc.....................................................19
8.7 Entire Agreement....................................................19
8.8 Notices.............................................................19
8.9 Fees, Costs and Expenses............................................20
8.10 Termination.........................................................20
8.11 Severability of Provisions..........................................21
8.12 Publicity...........................................................21
8.13 Headings and References.............................................21
8.14 Counterparts; Effectiveness.........................................21
8.15 Exclusive Jurisdiction..............................................21
8.16 Waiver of Jury Trial................................................22
8.17 Non-Recourse........................................................22
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COMMON STOCK PURCHASE AGREEMENT
This COMMON STOCK PURCHASE AGREEMENT (this "AGREEMENT") is made as of
April 19, 1999, by and between BELLSOUTH ENTERPRISES, INC., a Georgia
corporation (the "PURCHASER"), and QWEST COMMUNICATIONS INTERNATIONAL INC., a
Delaware corporation (the "COMPANY").
RECITALS
A. The Company desires to sell to the Purchaser, and the
Purchaser desires to purchase from the Company, 20,350,000 shares of the
Company's Common Stock, $0.01 par value per share (the "COMMON STOCK"), on the
terms and conditions set forth in this Agreement.
B. Concurrently herewith, the Purchaser is entering into the
Common Stock Purchase Agreement dated as of April 19, 1999 (the "OTHER PURCHASE
AGREEMENT"), by and between the Purchaser and Anschutz Company, a Delaware
corporation (the "PRINCIPAL STOCKHOLDER"), for the purchase of 16,650,000 shares
of Common Stock (the "OTHER SHARES") on the terms and conditions set forth in
the Other Purchase Agreement.
C. Concurrently herewith, the Company and the Purchaser are
entering into a Registration Rights Agreement dated as of even date herewith by
and between the Company and the Purchaser (the "REGISTRATION RIGHTS AGREEMENT"),
to provide for the registration under the Securities Act of 1933, as amended
(the "SECURITIES ACT"), of the disposition of the shares of Common Stock
purchased under this Agreement and the Other Purchase Agreement pursuant to the
terms thereof.
AGREEMENT
The parties agree as follows:
ARTICLE I
AGREEMENT TO PURCHASE AND SELL COMMON STOCK
1.1 AGREEMENT TO PURCHASE AND SELL COMMON STOCK. Upon the
terms and subject to the conditions of this Agreement, the Company hereby agrees
to sell to the Purchaser at the Closing (as defined in Section 2.1), and the
Purchaser agrees to purchase from the Company at the Closing, 20,350,000 newly
issued shares (each, a "SHARE" and collectively, the "SHARES") of Common Stock
at $94.50 per Share for an aggregate purchase price of $1,923,075,000.00 (the
"PURCHASE PRICE").
ARTICLE II
CLOSING DATE; DELIVERY
2.1 CLOSING DATE. The Closing of the purchase and sale of
the Shares hereunder (the "CLOSING") shall be held at the offices of the Company
at 10:00 a.m. on the third business day after the satisfaction or waiver of the
conditions set forth in Articles V and VI, or at
such other time and place as the Company and the Purchaser mutually agree, and
shall be held simultaneously with the closing of the Other Purchase Agreement
(the date of the Closing being hereinafter referred to as the "CLOSING DATE").
2.2 DELIVERY. At the Closing, the Company will deliver to
the Purchaser a certificate or certificates representing the Shares against
payment of the aggregate Purchase Price by wire transfer of immediately
available funds to an account designated by the Company. The certificate or
certificates representing the Shares shall be subject to a legend restricting
transfer under the Securities Act and referring to restrictions on transfer
herein, such legend to be substantially as follows:
"The shares represented by this certificate have
been acquired for investment and have not been registered
under the Securities Act of 1933, as amended. Such shares may
not be sold or transferred in the absence of such
registration or an opinion of counsel reasonably satisfactory
to the Company as to the availability of an exemption from
registration.
The shares represented by this certificate are
subject to restrictions on transfer, including any sale,
pledge or other hypothecation, set forth in an agreement
dated as of April 19, 1999, between the Company and BellSouth
Enterprises, Inc., a copy of which agreement may be obtained
at no cost by written request made by the holder of record of
this certificate to the secretary of the Company at the
Company's principal executive offices."
The Company agrees to remove from the Shares (or from the Other Shares,
as the case may be), (1) the legend set forth in the second preceding paragraph
in connection with a transfer pursuant to an effective Registration Statement
(as defined in the Registration Rights Agreement) or upon receipt of an opinion
of counsel in form and substance reasonably satisfactory to the Company that the
Shares are eligible for transfer without registration under the Securities Act
(or, as the case may be, the legend set forth in the corresponding paragraph of
the Other Purchase Agreement in connection with a transfer pursuant to an
effective Registration Statement or upon receipt of an opinion of counsel in
form and substance reasonably satisfactory to the Company and the Seller that
the Other Shares are eligible for transfer without registration under the
Securities Act), and (2) the legend set forth in the immediately preceding
paragraph at such time as the Shares may be transferred in compliance with
Article VII or upon the termination of the covenants of Article VII (or, as the
case may be, the legend set forth in the corresponding paragraph of the Other
Purchase Agreement at such time as the Other Shares may be transferred in
compliance with Article VII hereof or upon the termination of the covenants of
Article VII hereof).
ARTICLE III
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company hereby represents and warrants to the Purchaser as follows:
3.1 CORPORATE EXISTENCE AND POWER. The Company (1) is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Delaware,
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(2) has all necessary corporate power and authority and all material licenses,
authorizations, consents and approvals required to own, lease, license or use
its properties now owned, leased, licensed or used and proposed to be owned,
leased, licensed or used and to carry on its business as now conducted and
proposed to be conducted, (3) is duly qualified as a foreign corporation under
the laws of each jurisdiction in which qualification is required either to own,
lease, license or use its properties now owned, leased, licensed or used or to
carry on its business as now conducted, except where the failure to effect or
obtain such qualification, individually or in the aggregate, would not
reasonably be expected to have a Material Adverse Effect (as defined in Section
8.1) on the Company, and (4) has all necessary corporate power and authority to
execute and deliver this Agreement and to perform its obligations hereunder.
3.2 AUTHORIZATION; CONTRAVENTION.
(a) The execution and delivery by the Company of this
Agreement and the performance by the Company of its obligations under this
Agreement, and the authorization, sale, issuance and delivery of the Shares
hereunder, have been duly authorized by all necessary corporate action and do
not and will not contravene, violate, result in a breach of or constitute a
default under, (1) its certificate of incorporation or bylaws, (2) any
regulation of any Governmental Entity (as defined in Section 8.1) or any
decision, ruling, order or award of any arbitrator by which it or any of its
properties may be bound or affected, or (3) any agreement, indenture or other
instrument to which it is a party or by which it or its properties may be bound
or affected, except in each case referred to in the preceding clauses for
contraventions, violations, breaches or defaults that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on
the Company, or materially impair or restrict the Company's power to perform its
obligations as contemplated under said agreements. Upon their issuance and
delivery pursuant to this Agreement, the Shares will be validly issued, fully
paid and nonassessable and free and clear of any liens. The issuance and sale of
the Shares will not give rise to any preemptive rights, rights of first refusal
or other rights to acquire Common Stock on behalf of any Person (as defined in
Section 8.1).
(b) The Board of Directors of the Company, by resolutions
duly adopted at a meeting duly called and held and not subsequently rescinded or
modified in any way, has duly approved (the "BOARD APPROVAL") for all purposes,
including for purposes of Section 203 of the Delaware General Corporation Law
("DGCL SS.203"), (1) this Agreement; (2) the issuance of the Shares to the
Purchaser, (3) the acquisition by the Purchaser of the Shares and the Other
Shares, (4) if the Purchaser shall acquire the Shares pursuant to this
Agreement, the acquisition by the Purchaser of any additional shares (or
percentage ownership) of Common Stock as and to the extent permitted or
contemplated under Sections 7.1(a) or (b) of this Agreement, and (5) the other
transactions contemplated hereby.
3.3 SEC DOCUMENTS. The Company has filed with the Securities
and Exchange Commission (the "SEC") all reports, schedules, forms, statements
and other documents required by the Securities Act or the Securities Exchange
Act of 1934, as amended (the "EXCHANGE ACT"), to be filed by the Company since
June 27, 1997 (collectively, and in each case including all exhibits and
schedules thereto and documents incorporated by reference therein, the "COMPANY
SEC DOCUMENTS"). As of their respective dates, except to the extent revised or
superseded by a subsequent filing with the SEC on or before the date of this
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Agreement, the Company SEC Documents filed by the Company complied in all
material respects with the requirements of the Securities Act or the Exchange
Act, as the case may be, and none of the Company SEC Documents (including any
and all financial statements included therein) filed by the Company as of such
dates contained any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading. Except as set forth in the Company SEC Documents, neither the
Company nor any of its subsidiaries has any material liabilities or obligations
of any nature (whether accrued, absolute, contingent or otherwise) which would
reasonably be expected to have a Material Adverse Effect on the Company.
3.4 APPROVALS. In reliance on the representations of the
Purchaser contained in Sections 4.5, 4.7, 4.8 and 4.9, no consent, approval or
authorization of or designation, declaration or filing with any Governmental
Entity on the part of the Company is required in connection with the due
execution and delivery of this Agreement, or the offer, sale or issuance of the
Shares (or the sale of the Other Shares pursuant to the Other Purchase
Agreement), except for (a) those required under the Hart-Scott-Rodino Antitrust
Improvements Act of 1976, as amended (the "HSR ACT"), (b) such filings as may be
required to be made with the SEC and the National Association of Securities
Dealers, Inc. (the "NASD"), and (c) such filings as may be required to be made
with certain state agencies.
3.5 BINDING EFFECT. This Agreement constitutes the legally
valid and binding obligation of the Company enforceable against it in accordance
with its terms, except as may be limited by bankruptcy, insolvency,
reorganization, moratorium or other similar laws relating to or affecting
creditors' rights generally and general principles of equity, including, without
limitation, concepts of materiality, reasonableness, good faith and fair dealing
and the possible unavailability of specific performance or injunctive relief,
regardless of whether considered in a proceeding in equity or at law.
3.6 FINANCIAL INFORMATION. The consolidated balance sheet of
the Company and its consolidated subsidiaries as of December 31, 1998, and the
related consolidated statements of operations and stockholders' equity and cash
flows for the fiscal year then ended, reported on by KPMG Peat Marwick LLP, true
and complete copies of which have been delivered to the Purchaser, comply as to
form in all material respects with applicable accounting requirements and the
published rules and regulations of the SEC with respect thereto, have been
prepared in accordance with U.S. generally accepted accounting principles
("GAAP") applied on a consistent basis and fairly present the consolidated
financial position of the Company and its consolidated subsidiaries as of that
date and their consolidated results of operations and cash flows for the year
then ended.
3.7 ABSENCE OF CERTAIN CHANGES OR EVENTS. Except as
disclosed in the Company SEC Documents filed, or as otherwise publicly
disclosed, prior to the date hereof, since December 31, 1998, there has not been
(1) any declaration, setting aside or payment of any dividend or distribution
(whether in cash, stock or property) with respect to any of the Company's
capital stock, (2) any split, combination or reclassification of any of its
capital stock or any issuance or the authorization of any issuance of any other
securities in respect of, in lieu of or in substitution for shares of its
capital stock, (3) any damage, destruction or loss of
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property, whether or not covered by insurance, that has or would reasonably be
expected to have a Material Adverse Effect on the Company, (4) any change in
accounting methods, principles or practices by the Company materially affecting
its assets, liabilities, or business, except insofar as may have been required
by a change in GAAP or (5) any event or state of facts that, individually or in
the aggregate, has had or would reasonably be expected to have a Material
Adverse Effect on the Company.
3.8 LITIGATION.
(a) There is no action, suit or proceeding pending or, to
the Company's knowledge, threatened against the Company or any of its
subsidiaries that (1) impairs (or, if successful, would so impair) in any
material respect the ability of the Company to perform its obligations under
this Agreement and the Registration Rights Agreement (or the ability of the
Principal Stockholder to perform its obligations under the Other Purchase
Agreement), or (2) restricts in any material respect or prohibits (or, if
successful, would so restrict or prohibit) the sale of the Shares to the
Purchaser (or the sale of the Other Shares under the Other Purchase Agreement).
(b) Except as disclosed in the Company SEC Documents filed
with the SEC on or prior to the date hereof, there is no action, suit or
proceeding pending or, to the Company's knowledge, threatened against the
Company or any of its subsidiaries that, individually or in the aggregate, if
determined adversely to any of them, would reasonably be expected to have a
Material Adverse Effect on the Company.
3.9 CAPITALIZATION.
(a) As of the date of this Agreement, the authorized capital
stock of the Company consists of 600,000,000 shares of the Common Stock and
25,000,000 shares of preferred stock, par value $0.01 per share, of the Company
(the "COMPANY PREFERRED STOCK").
(b) As of March 31, 1999, there were (1) 350,735,529 shares
of the Common Stock issued and outstanding, (2) no shares of the Common Stock
held in the treasury of the Company, (3) no shares of the Company Preferred
Stock issued and outstanding, (4) 40,725,059 shares of the Common Stock reserved
for issuance upon exercise of outstanding stock options issued by the Company to
current or former employees and directors of the Company and its subsidiaries,
and (5) 10,163,380 shares of the Common Stock reserved for issuance upon
exercise of authorized but unissued stock options.
(c) All outstanding shares of the Common Stock are duly
authorized, validly issued, fully paid and nonassessable, free from any liens
created by the Company with respect to the issuance and delivery thereof and not
subject to preemptive rights.
(d) No Person (other than the Purchaser and the Principal
Stockholder) has the right to cause the Company to register shares of Common
Stock on a registration statement filed pursuant to the Registration Rights
Agreement.
3.10 ABSENCE OF CERTAIN AGREEMENTS. There are no material
discussions between the Company and any Person that, as of the date hereof,
would reasonably be expected
5
to lead to an agreement within 30 days after the date hereof for (1) a
transaction resulting in a Change of Control, (2) a transaction involving the
Company that would include the acquisition of Beneficial Ownership by a Person
of more than 5% of the outstanding Voting Stock (as defined in Section 8.1), or
(3) the acquisition by the Company of any business for an aggregate purchase
price (including assumption of indebtedness) of at least $1,500,000,000.00.
3.11 NO BROKER. The Company has not engaged, consented to or
authorized any broker, finder or intermediary to act on its behalf, directly or
indirectly, as a broker, finder or intermediary in connection with the
transactions contemplated by this Agreement. The Company hereby agrees to
indemnify and hold harmless the Purchaser from and against all fees, commissions
or other payments owing to any party acting on behalf of the Company hereunder.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE PURCHASER
The Purchaser hereby represents and warrants to the Company as follows:
4.1 CORPORATE EXISTENCE AND POWER. The Purchaser (1) is a
corporation duly incorporated, validly existing and in good standing under the
laws of the State of Georgia, (2) has all necessary corporate power and
authority and all material licenses, authorizations, consents and approvals
required to own, lease, license or use its properties now owned, leased,
licensed or used and proposed to be owned, leased, licensed or used and to carry
on its business as now conducted and proposed to be conducted, (3) is duly
qualified as a foreign corporation under the laws of each jurisdiction in which
qualification is required either to own, lease, license or use its properties
now owned, leased, licensed or used or to carry on its business as now
conducted, except where the failure to effect or obtain such qualification,
individually or in the aggregate, would not reasonably be expected to have a
Material Adverse Effect on the Purchaser, and (4) has all necessary corporate
power and authority to execute and deliver this Agreement and to perform its
obligations hereunder.
4.2 AUTHORIZATION; CONTRAVENTION. The execution and delivery
by the Purchaser of this Agreement and the performance by the Purchaser of its
obligations under this Agreement, have been duly authorized by all necessary
corporate action and do not and will not contravene, violate, result in a breach
of or constitute a default under, (1) its articles of incorporation or bylaws,
or (2) any regulation of any Governmental Entity or any decision, ruling, order
or award of any arbitrator by which it or any of its properties may be bound or
affected, except in each case referred to in the preceding clauses for
contraventions, violations, breaches or defaults that, individually or in the
aggregate, would not reasonably be expected to have a Material Adverse Effect on
the Purchaser.
4.3 APPROVALS. No consent, approval or authorization of or
designation, declaration or filing with any Governmental Entity on the part of
the Purchaser is required in connection with the due execution and delivery of
this Agreement, or the acquisition of the Shares by Purchaser, except for (a)
those required under the HSR Act, and (b) such filings as may be required to be
made with the SEC.
4.4 BINDING EFFECT. This Agreement constitutes the legally
valid and binding obligation of the Purchaser enforceable against it in
accordance with its terms, except as may be
6
limited by bankruptcy, insolvency, reorganization, moratorium or other similar
laws relating to or affecting creditors' rights generally and general principles
of equity, including, without limitation, concepts of materiality,
reasonableness, good faith and fair dealing and the possible unavailability of
specific performance or injunctive relief, regardless of whether considered in a
proceeding in equity or at law.
4.5 INVESTMENT. The Purchaser is acquiring the Shares for
investment for its own account, not as a nominee or agent, and not with a view
to, or for resale in connection with, any distribution thereof. The Purchaser
understands that the Shares have not been registered under the Securities Act by
reason of a specific exemption from the registration provisions of the
Securities Act which depends upon, among other things, the bona fide nature of
the investment intent and the accuracy of the Purchaser's representations and
warranties contained herein.
4.6 DISCLOSURE OF INFORMATION. The Purchaser has had full
access to all information it considers necessary or appropriate to make an
informed investment decision with respect to the Shares to be purchased by the
Company under this Agreement. The Purchaser further has had an opportunity to
ask questions and receive answers from the Purchaser regarding the terms and
conditions of the offering of the Shares and to obtain additional information
necessary to verify any information furnished to the Purchaser or to which the
Purchaser had access.
4.7 INVESTMENT EXPERIENCE. The Purchaser understands that
the purchase of the Shares involves substantial risk. The Purchaser has
experience as an investor in securities of companies and acknowledges that it is
able to fend for itself, can bear the economic risk of its investment in the
Shares and has such knowledge and experience in financial or business matters
that it is capable of evaluating the merits and risks of this investment in the
Shares and protecting its own interests in connection with this investment.
4.8 ACCREDITED INVESTOR STATUS. The Purchaser is an
"accredited investor" within the meaning of Regulation D promulgated under the
Securities Act.
4.9 RESTRICTED SECURITIES. The Purchaser understands that
the Shares to be purchased by the Purchaser hereunder are characterized as
"restricted securities" under the Securities Act inasmuch as they are being
acquired from the Company in a transaction not involving a public offering and
that under the Securities Act and applicable regulations thereunder such
securities may be resold without registration under the Securities Act only in
certain limited circumstances. The Purchaser is familiar with Rule 144 of the
Securities Act, as presently in effect, and understands the resale limitations
imposed thereby and by the Securities Act.
4.10 INVESTIGATION. The Purchaser has conducted its own
investigation of the Company and hereby acknowledges that the only
representations and warranties of the Company in connection with the Purchaser's
investment are those expressly made by the Company in Article III of this
Agreement, and the Company hereby acknowledges that such representations and
warranties are unaffected by the Purchaser's investigation of the Company.
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4.11 NO BROKER. The Purchaser hereby agrees to indemnify and
hold harmless the Company from and against all fees, commissions or other
payments owing to any party acting on behalf of the Purchaser hereunder.
ARTICLE V
CONDITIONS TO OBLIGATION OF THE PURCHASER
The Purchaser's obligation to purchase the Shares at the Closing is
subject to the fulfillment on or prior to the Closing Date of the following
conditions:
5.1 REPRESENTATIONS AND WARRANTIES. Each of the
representations and warranties of the Company contained in Article III will be
true and correct on and as of the date hereof and (except to the extent such
representations and warranties speak as of a particular date) true and correct
in all material respects as of the Closing Date with the same effect as though
such representations and warranties had been made on and as of the Closing Date;
PROVIDED, HOWEVER, that for purposes of this Section 5.1 only, the
representations and warranties contained in Sections 3.1, 3.3, 3.6, 3.7, 3.8(b)
and 3.10 shall be deemed to be true and correct on and as of the Closing Date
unless the failure or failures of such representations and warranties to be so
true and correct (without regard to materiality qualifiers contained therein),
individually or in the aggregate, results or would reasonably be expected to
result in a Material Adverse Effect on the Company. The Purchaser shall have
received a certificate signed by an officer of the Company to such effect on the
Closing Date.
5.2 COVENANTS. All covenants, agreements and conditions
contained in this Agreement to be performed by the Company on or prior to the
Closing Date shall have been performed or complied with in all material
respects. The Purchaser shall have received a certificate signed by an officer
of the Company to such effect on the Closing Date.
5.3 HSR ACT. The waiting period (and any extensions thereof)
under the HSR Act applicable to the transactions contemplated hereby shall have
expired or been terminated.
5.4 NO ORDER PENDING. There shall not then be in effect any
order enjoining or restraining the sale and purchase of the Shares.
5.5 NO LAW PROHIBITING OR RESTRICTING SALE OF THE SHARES.
There shall not be in effect any law, rule or regulation prohibiting or
restricting the sale and purchase of the Shares, or requiring any consent or
approval of any Person which shall not have been obtained to sell and purchase
the Shares, with full benefits afforded the Common Stock.
5.6 REGISTRATION RIGHTS AGREEMENT. The Registration Rights
Agreement shall not have been terminated.
5.7 OTHER PURCHASE AGREEMENT. The Purchaser and the
Principal Stockholder shall have consummated the acquisition by the Purchaser of
16,650,000 shares of Common Stock from the Principal Stockholder pursuant to the
terms of the Other Purchase Agreement (unless such acquisition shall not have
been consummated as a result of a breach by the Purchaser thereunder).
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5.8 MASTER AGREEMENT. The Master Agreement dated April 19,
1999, by and between the Company and the Purchaser (the "MASTER AGREEMENT")
shall not have been terminated (or notice of termination provided) in accordance
with the terms thereof.
5.9 OPINION OF COUNSEL. The Purchaser shall have received an
opinion dated as of the Closing Date of O'Melveny & Myers LLP, counsel to the
Company, substantially in the form attached hereto as EXHIBIT A.
ARTICLE VI
CONDITIONS TO OBLIGATION OF THE COMPANY
The Company's obligation to sell and issue the Shares at the Closing is
subject to the fulfillment on or prior to the Closing Date of the following
conditions:
6.1 REPRESENTATIONS AND WARRANTIES. The representations and
warranties of the Purchaser contained in Article IV will be true and correct on
and as of the date hereof and (except to the extent such representations and
warranties speak as of a particular date) true and correct in all material
respects as of the Closing Date with the same effect as though such
representations and warranties had been made on and as of the Closing Date;
PROVIDED, HOWEVER, that for purposes of this Section 6.1 only, such
representations and warranties shall be deemed to be true and correct on and as
of the Closing Date unless the failure or failures of such representations and
warranties to be so true and correct (without regard to materiality qualifiers
contained therein), individually or in the aggregate, results or would
reasonably be expected to result in a Material Adverse Effect on the Purchaser.
The Company shall have received a certificate signed on behalf of the Purchaser
by an officer of the Purchaser to such effect on the Closing Date.
6.2 COVENANTS. All covenants, agreements and conditions
contained in this Agreement to be performed by the Purchaser on or prior to the
Closing Date shall have been performed or complied with in all material
respects. The Company shall have received a certificate signed on behalf of the
Purchaser by an officer of the Purchaser to such effect on the Closing Date.
6.3 HSR ACT. The waiting period (and any extensions thereof)
under the HSR Act applicable to the transactions contemplated hereby shall have
expired or been terminated.
6.4 NO ORDER PENDING. There shall not then be in effect any
order enjoining or restraining the sale and purchase of the Shares.
6.5 NO LAW PROHIBITING OR RESTRICTING THE SALE OF THE
SHARES. There shall not be in effect any law, rule or regulation prohibiting or
restricting the sale and purchase of the Shares, or requiring any consent or
approval of any Person which shall not have been obtained to sell and purchase
the Shares.
6.6 REGISTRATION RIGHTS AGREEMENT. The Registration Rights
Agreement shall not have been terminated.
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6.7 OTHER PURCHASE AGREEMENT. The Purchaser and the
Principal Stockholder shall have consummated the acquisition by the Purchaser of
16,650,000 shares of Common Stock from the Principal Stockholder pursuant to the
terms of the Other Purchase Agreement (unless such acquisition shall not have
been consummated as a result of a breach by the Principal Stockholder
thereunder).
6.8 MASTER AGREEMENT. The Master Agreement shall not have
been terminated (or notice of termination provided) in accordance with the terms
thereof.
ARTICLE VII
COVENANTS OF THE PURCHASER AND THE COMPANY
7.1 PURCHASE RESTRICTIONS.
(a) Other than pursuant to the transactions contemplated by
this Agreement and the Other Purchase Agreement, the Purchaser shall not, and
shall not cause or permit its Affiliates or any Group (as defined in Section
8.1) including the Purchaser or any of its Affiliates to, acquire shares of the
Common Stock, which when combined with shares of the Common Stock then owned by
the Purchaser and its subsidiaries would result in the Purchaser Beneficially
Owning (as defined in Section 8.1) more than 20% of the shares of the Common
Stock then issued and outstanding (the "STANDSTILL CAP"), except pursuant to a
transaction or series of transactions at prices and on terms approved by the
Board of Directors of the Company; PROVIDED, HOWEVER, that (1) if the Company or
the Principal Stockholder sells to any Person or Group shares of Common Stock
such that, as a result of such sale such Person or Group would Beneficially Own
more than 5% of the shares of the Common Stock then issued and outstanding and
such Person or Group is subject to an agreement with the Company or the
Principal Stockholder restricting or prohibiting the acquisition of Beneficial
Ownership of additional shares of Common Stock, the Standstill Cap will be
increased to that maximum percentage of shares of Voting Stock the Beneficial
Ownership of which such other Person or Group is permitted to acquire pursuant
to such agreement (to the extent it exceeds the Standstill Cap), and (2) if the
Company or the Principal Stockholder sells to any Person or Group a number of
shares of Common Stock such that, to the actual knowledge of the Company or the
Principal Stockholder (as applicable) at the time of such sale, as a result of
such sale such Person or Group would Beneficially Own more than 10% of the
shares of the Common Stock then issued and outstanding and such Person or Group
is not subject to an agreement with the Company or the Principal Stockholder (as
applicable) restricting or prohibiting the acquisition of Beneficial Ownership
of additional shares of Common Stock, the Standstill Cap will be terminated;
provided, further, that clause (2) of the foregoing proviso shall not apply with
respect to, and the Standstill Cap shall not terminate upon, issuances or sales
of Common Stock (A) in connection with acquisitions by the Company of all the
outstanding equity securities, or all or substantially all the assets, of a
Person in one or more transactions, or (B) to any Person required under Section
13(f) of the Exchange Act to file a Form 13F with respect to the Company or to a
Person who, as a result of such Transfer, would become a Form 13F Filer (a "FORM
13F FILER").
(b) Nothing in this Section 7.1 shall require the Purchaser
or its subsidiaries to transfer any shares of Common Stock if the aggregate
percentage ownership of the Purchaser and its subsidiaries is increased as a
result of any action taken by the Company or its subsidiaries
10
including, without limitation, by reason of any reclassification,
recapitalization, stock split, reverse stock split, combination or exchange of
shares, redemption, repurchase or cancellation of shares or any other similar
transaction.
(c) Notwithstanding the Board Approval as set forth in
Section 3.2(b), as a matter of contract under this Agreement, and not under the
provisions of DGCL ss.203, the Purchaser hereby agrees that if the Closing
occurs and the Shares are acquired by the Purchaser, pursuant to this Agreement,
the Purchaser will be subject to all of the terms and restrictions set forth in
DGCL ss.203, and will be entitled to all of the rights set forth in DGCL ss.203,
to the extent applicable to the Purchaser by the terms of DGCL ss.203, in each
case as if the terms of DGCL ss.203 were set forth in their entirety in this
Section 7.1(c); PROVIDED, HOWEVER, that for purposes hereof, the term
"interested stockholder" as set forth in DGCL ss.203 shall be deemed to refer to
"20%" in all cases where it in fact refers to "15%." The present and future
stockholders of the Company (or any successor corporation) are hereby expressly
made third-party beneficiaries of the provisions of this Section 7.1(c).
(d) In the event that the Company shall adopt a stockholder
rights plan with provisions that are triggered by the acquisition of Beneficial
Ownership (or any similar concept) of a specified percentage of the Company's
Common Stock (a "TRIGGER PERCENTAGE"), the Company agrees that, for purposes of
determining application of the stockholder rights plan to the Purchaser, the
plan will be deemed to refer to "20%" in all cases where it in fact refers to
any Trigger Percentage that is below 20%.
7.2 SALE RESTRICTIONS.
(a) The Purchaser shall not, and shall not cause or permit
its Affiliates or any Group including the Purchaser or any of its wholly-owned
subsidiaries to directly or indirectly offer, sell, transfer, assign, exchange,
grant an option to purchase, encumber, pledge, hypothecate or otherwise dispose
of the Beneficial Ownership of shares of Common Stock, whether in one or more
transactions (any such act or series of acts, a "TRANSFER"), except in
compliance with all applicable requirements of law and upon the receipt of
necessary approvals of any Governmental Entity.
(b) Until the earlier of (x) the second anniversary of the
Closing Date, and (y) 60 days after termination of the Master Agreement (other
than by reason of breach thereof by the Purchaser), but in no event earlier than
fourteen months after the Closing Date (such date, the "SALE RESTRICTION
TERMINATION DATE"), the Purchaser shall not, and shall not cause or permit its
subsidiaries or any Group including the Purchaser or any of its subsidiaries to,
directly or indirectly Transfer any shares of Common Stock, other than in one or
more of the following transactions: (1) a Transfer pursuant to a tender offer or
exchange offer subject to Section 14 of the Exchange Act (or any successor
provision) (an "OFFER") for outstanding shares of Common Stock that the Company
has not, within 10 days of the commencement thereof (or such longer period as
may then be permitted under applicable law for the Company's initial
recommendation with respect to such Offer), publicly recommended that such Offer
not be accepted; and (2) any other Transfer which has been approved by the Board
of Directors of the Company.
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(c) From and after the Sale Restriction Termination Date,
the Purchaser shall not, and shall not cause or permit its subsidiaries or any
Group including the Purchaser or any of its subsidiaries to directly or
indirectly Transfer any shares of Common Stock to any Person that, to the actual
knowledge of the Purchaser, would result in such Person Beneficially Owning more
than 5% of the shares of Common Stock then issued and outstanding, except (1)
pursuant to a transaction or series of transactions at prices and on terms
approved by the Board of Directors of the Company, (2) pursuant to an
underwritten offering, or (3) to a Form 13F Filer.
(d) From and after the Sale Restriction Termination Date,
the Purchaser shall not, and shall not cause or permit its Affiliates or any
Group including the Purchaser or any of its Affiliates to directly or indirectly
Transfer (1) more than 9,250,000 shares of Common Stock in the aggregate in any
calendar quarter, or (2) in any event, more than 4,625,000 shares of Common
Stock in the aggregate in any calendar month, in each case, except (A) pursuant
to a transaction or series of transactions at prices and on terms approved by
the Board of Directors of the Company, or (B) if such Transfer is pursuant to an
underwritten public offering, the Purchaser, such Affiliate or such Group may
Transfer 18,500,000 shares, in the aggregate, less any Shares otherwise
Transferred in any calendar quarter in which the underwritten public offering
occurs.
(e) Subject to Section 7.2(a), nothing in this Agreement
(including, without limitation, Section 7.2(d)) shall prevent or restrict the
Purchaser and its Affiliates from Transferring any Shares (1) to and among each
other, provided that any such transferee shall agree in writing to be bound
hereby, or (2) to the Principal Stockholder or its Affiliates.
7.3 OTHER RESTRICTIONS.
(a) Neither the Purchaser nor any of its subsidiaries shall,
without the approval of the Board of Directors of the Company, (1) make any
public comment or proposal with respect to any Acquisition Proposal involving
the Company, (2) become a member of a Group (other than a Group comprised solely
of the Purchaser and its subsidiaries) with respect to the Common Stock or other
equity securities of the Company, (3) solicit proxies or initiate, propose or
become a participant in a solicitation (as such terms are defined in Regulation
14A under the Exchange Act) with respect to the Company in opposition to any
matter which has been recommended by the Board of Directors of the Company or in
favor of any matter which has not been approved by the Board of Directors of the
Company, (4) enter into any discussions, negotiations, arrangements or
understandings with any third party with respect to any of the foregoing, or (5)
disclose to any third party any intention, plan or arrangement inconsistent with
the foregoing. Notwithstanding the foregoing, the Purchaser or its Affiliates
may make an Acquisition Proposal (as defined in Section 8.1) to the Board of
Directors of the Company which is subject to approval by the Board of Directors
of the Company and which does not require the Company to make a public
announcement. Other than as set forth in the immediately preceding sentence,
neither the Purchaser nor its Affiliates shall, without approval of the Board of
Directors, take any actions with respect to any Acquisition Proposal (including
any Acquisition Proposal made by the Purchaser or its Affiliates) that would
require the Company to make a public announcement.
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(b) Notwithstanding anything in this Agreement to the
contrary, (1) if the Company or the Principal Stockholder sells to any Person or
Group (other than the Principal Stockholder or its Affiliates) shares of Common
Stock such that, as a result of such sale such Person or Group would
Beneficially own more than 5% of the shares of the Common Stock then issued and
outstanding, and such Person or Group is subject to an agreement with the
Company restricting or prohibiting the actions of such Person or Group in
respect of matters similar to those addressed in Section 7.3(a), the provisions
of Section 7.3(a) (and those of Section 8.4 relating thereto) will be revised to
be the same as the corresponding provisions of such Person's or Group's
standstill provision to the extent that such revisions would cause the
Purchaser's standstill provisions to be less restrictive to the Purchaser, and
(2) if the Company or the Principal Stockholder sells to any Person or Group
(other than the Principal Stockholder or its Affiliates) shares of Common Stock
such that, as a result of such sale such Person or Group would Beneficially own
10% or more of the shares of the Common Stock then issued and outstanding, and
such Person or Group is not subject to an agreement with the Company restricting
or prohibiting the actions of such Person or Group in respect of matters similar
to those addressed in Section 7.3(a), the provisions of Section 7.3(a) (and
those of Section 8.4 relating thereto) will terminate.
(c) The Company shall provide the Purchaser with written
notice of the occurrence of any of the events set forth in the first proviso of
Section 7.1(a), or in Section 7.3(b).
7.4 EARLY TERMINATION. Notwithstanding anything in this
Agreement to the contrary, the obligations that the Purchaser and its Affiliates
and representatives have under Sections 7.1 (other than Section 7.1(c)), 7.2
(other than Section 7.2(d)) and 7.3 will terminate upon, without further action
by any Person the earliest to occur of (1) the public announcement by or on
behalf of any Person or Group (other than the Purchaser and its Affiliates) of
the commencement of an Offer to acquire Beneficial Ownership of outstanding
shares of Common Stock such that after such acquisition such Person or Group
would Beneficially Own more than 30% of the outstanding shares of Voting Stock,
but only if (A) the Company has not, within 10 days after announcement of such
Offer (or such longer period as may then be permitted under applicable law for
the Company's initial recommendation with respect to such Offer), publicly
recommended that such Offer not be accepted, or (B) all of the material
conditions to such Offer relating to the elimination or satisfaction of the
material defensive provisions established by the Company, including any rights
plan or similar defensive provision of the Company, have been satisfied or
waived; (2) the receipt by the Company of an Acquisition Proposal from any
Person or Group (other than the Purchaser and its Affiliates), but only if the
Company has not, within 10 days after receipt of such Acquisition Proposal,
rejected such Acquisition Proposal; (3) the public announcement by or on behalf
of any Person or Group (other than the Purchaser and its Affiliates) of the
commencement of a bona fide proxy or consent solicitation subject to Section 14
of the Exchange Act (or any successor provision) to elect or remove a majority
of the directors of the Company which is not, within 10 days after the
announcement of such proxy or consent solicitation (or such longer period as may
then be permitted under applicable law for the Company's initial recommendation
with respect to such Offer if such a period is specified) publicly opposed by
the Company's Board of Directors and which would, if successful, result in a
change in the composition of a majority of the Board of Directors of the
Company; (4) the occurrence of a Change of Control (as defined in Section 8.1)
of the Company; (5) the
13
acceptance or approval by the Company of an Acquisition Proposal or
recommendation by the Company that an Offer be accepted; (6) the public
announcement by the Company that it is "for sale"; (7) the execution of a
definitive agreement with any Person or Group (other than the Principal
Stockholder or its Affiliates) to acquire shares of Common Stock such that, as a
result of such acquisition such Person or Group would Beneficially Own more than
30% of the shares of the Common Stock then issued and outstanding, and (8) the
execution of a definitive agreement with any Person or Group (other than the
Principal Stockholder or its Affiliates) to acquire shares of Common Stock such
that, as a result of such acquisition such Person or Group would Beneficially
Own more than 20% of the shares of Common Stock of the Company and at such time
the Principal Stockholder and its Affiliates Beneficially Own less than 20% of
the shares of Common Stock of the Company. The Company shall provide the
Purchaser with prompt written notice of the occurrence of any of the events set
forth in (i) Section 7.4(1)(B), (ii) the receipt by the Company of an
Acquisition Proposal from any Person or Group (such notice to be provided within
10 days after receipt thereof, but without disclosing the terms thereof or the
identity of such Person or Group), (iii) Section 7.4(4), (iv) Section 7.4(5), or
(v) Section 7.4(6).
7.5 STRATEGIC SESSIONS; DIRECTOR.
(a) Prior to the Regulatory Relief Date (as defined in
Section 8.1), the Purchaser shall be entitled to designate, at its option, a
representative (the "PURCHASER REPRESENTATIVE") to meet (telephonically or
otherwise) periodically, but not less frequently than once every three months,
with the Chairman of the Board, Chief Executive Officer or President of the
Company (the "COMPANY REPRESENTATIVE"). The Company shall make the sole
determination as to the identity of the Company Representative and shall give
the Purchaser 15 days notice of who the Company Representative shall be, and the
Purchaser Representative will be an executive of equivalent or higher seniority
of BellSouth Corporation. The Company Representative shall also provide to
Purchaser Representative of all materials delivered to the Company's Board of
Directors (other than those he deems to be inappropriate), and promptly (but in
any event within 3 business days) following any meeting of the Company's Board
of Directors, shall discuss with the Purchaser Representative the general
matters covered in such meeting of the Board of Directors, in each case, subject
to the proviso in the next sentence. At such meeting between the Company
Representative and the Purchaser Representative, the Company Representative will
disclose to the Purchaser Representative in all material respects the substance
of any discussions relating to the strategic plans of the Company that took
place among the Company's Board of Directors at any regular or special meeting
since the date of the last meeting between the Purchaser Representative and the
Company Representative; PROVIDED, HOWEVER, that (1) the Purchaser shall agree to
keep strictly confidential any information relating to the Company that the
Purchaser Representative shall obtain in connection with the foregoing, and
shall (A) not disclose such information, in whole or in part, to any Person
other than the Chairman of the Board, Chief Executive Officer, President,
Executive Vice Presidents, Vice President of Corporate Development or General
Counsel of BellSouth Corporation (the "KEY OFFICIALS") for any reason
whatsoever, and (B) inform the Purchaser Representative and the Key Officials of
the confidential nature of such information and of applicable securities laws
and other laws in connection therewith (or, subject to Section 7.5(c), at any
time thereafter, in the case of the resignation or removal of the Purchaser
Director); and (2) the Company Representative shall not be obligated to disclose
to the Purchaser Representative (A) sensitive competitive information of the
Company or (B) any other information if doing so could, in the
14
judgment of the Company Representative, violate any obligation or duty (whether
contractual, statutory, fiduciary or otherwise) to which the Company or its
officers, directors or employees were then subject (including, without
limitation, obligations of confidentiality) or otherwise subject the Company or
any of such Persons to any liability or otherwise materially and adversely
affect the interests of the Company.
(b) After the Regulatory Relief Date (or, subject to Section
7.5(c), at any time thereafter, in the case of the resignation or removal of the
Purchaser Director), the Purchaser shall be entitled to designate, at its
option, one individual who shall be reasonably satisfactory to the Company at
time of initial designation (the "PURCHASER DIRECTOR"). Promptly following such
designation, the Board of Directors of the Company will take all action
necessary to elect the Purchaser Director as a member of the Board of Directors
of the Company, and thereafter the Company shall continue to nominate the
Purchaser Director, solicit proxies and otherwise encourage his re-election, in
each case to the extent it takes such action with respect to the other
directors, to serve until such time as provided in Section 7.5(c). The Purchaser
Director shall not be entitled to receive (A) sensitive competitive information
of the Company or (B) any other information if doing so could, in the judgment
of the Chairman or Chief Executive Officer of the Company, violate any
obligation or duty (whether contractual, statutory, fiduciary or otherwise) to
which the Company or its officers, directors or employees were then subject
(including, without limitation, obligations of confidentiality) or otherwise
subject the Company or any of such Persons to any liability or otherwise
materially and adversely affect the interests of the Company.
(c) Notwithstanding anything in this Agreement to the
contrary, the obligations that the Company and its Affiliates and
representatives have under this Section 7.5 will terminate, without further
action by any Person, upon the earliest to occur of (1) termination of the
Master Agreement, and (2) the Transfer by the Purchaser of more than 9,250,000
shares of Common Stock. At such time, or if earlier requested to do so by the
Chairman of the Board of Directors of the Company, the Purchaser Director, if
any, shall promptly resign his position as a member of the Company's Board of
Directors.
7.6 COMPANY ACTIONS. The Company shall not repurchase Shares
of Common Stock, reorganize its capital structure or take other similar action
such that, as a result of such action, the Purchaser shall Beneficially Own more
than 10% of the Shares of Common Stock then issued and outstanding.
ARTICLE VIII
MISCELLANEOUS
8.1 CERTAIN DEFINITIONS. As used in this Agreement:
(a) The term "ACQUISITION PROPOSAL" shall mean a bona fide
written proposal received by the Company from any Person or Group that
contemplates a transaction which, if effected, would constitute a Change of
Control of the Company.
(b) The term "AFFILIATE" shall have the meaning given such
term in Rule 12b-2 under the Exchange Act.
15
(c) The terms "BENEFICIAL OWNERSHIP" and "BENEFICIAL OWNER"
shall have the meanings given such terms in Section 13(d)(3) of the Exchange Act
and the rules and regulations promulgated thereunder.
(d) The term "CHANGE OF CONTROL" shall mean (1) an
acquisition of, or the entering into of a definitive agreement with the Company
to acquire, Voting Stock by a Person or Group (other than the Principal
Stockholder or its Affiliates) in a purchase or transaction or series of
purchases or transactions if immediately thereafter such Person or Group has, or
would have, Beneficial Ownership of more than 50% of the combined voting power
of the Company's then outstanding Voting Stock; (2) the execution of an
agreement providing for a tender offer, merger, consolidation or reorganization,
or series of such related transactions involving the Company, unless both (x)
the stockholders of the Company, immediately after such transaction or
transactions shall Beneficially Own at least 50% of the Voting Stock of the
Company (or, if the Company shall not be the surviving company in such merger,
consolidation or reorganization, such surviving company), and (y) the Company is
not subject to an agreement that contemplates that individuals who are then
directors of the Company (or individuals designated by the Company at or before
the closing of such transaction) shall constitute less than a majority of the
directors of the Company (or such surviving company, as the case may be) after
the closing of such transaction; (3) a change or changes in the membership of
the Company's Board of Directors which represent a change of a majority or more
of such membership during any twelve month period (unless such change or changes
in membership are caused by the actions of the then existing Board of Directors
and do not occur within twelve months of the commencement, threat or proposal of
an Election Contest (as such term is defined in Rule 14a-11 of Regulation 14A
under the Exchange Act), tender offer or other transaction which would
constitute a Change of Control under (1) or (2) of this Section 8.1(b)); (4) a
sale of all or substantially all of the Company's assets; or (5) an Insolvency
Proceeding (as defined in Section 8.1).
(e) The term "GOVERNMENTAL ENTITY" shall mean any agency,
bureau, commission, court, department, official, political subdivision, tribunal
or other instrumentality of any government, whether federal, state, county or
local, domestic or foreign.
(f) The term "GROUP" shall have the meaning given such term
in Section 13(d)(3) of the Exchange Act and the rules and regulations
promulgated thereunder.
(g) The term "INSOLVENCY PROCEEDING" shall mean (1) an
assignment for the benefit of creditors, (2) the filing by the Company of a
petition to have the Company adjudged insolvent, bankrupt or seeking a
reorganization or liquidation under any law relating to bankruptcy, insolvency
or receivership, (3) an appointment of a receiver or trustee for all or
substantially all of the assets of the Company unless appointed without the
Company's consent, in which case if after 60 days such appointment has not been
vacated or stayed, (4) a public admission in writing of the Company's inability
to pay its debts as they come due, or (5) the adoption of a plan of liquidation
or dissolution by the Board of Directors of the Company.
(h) The term "MATERIAL ADVERSE EFFECT" shall mean, with
respect to any Person, a material adverse effect on the business, properties,
operations, or condition (financial or otherwise) of such Person (and its
subsidiaries), taken as a whole.
16
(i) The term "PERSON" shall mean any person, individual,
corporation, partnership, trust or other non-governmental entity or any
governmental agency, court, authority or other body (whether foreign, federal,
state, local or otherwise).
(j) The term "REGULATORY RELIEF DATE" shall mean the date on
which the Purchaser and the Company mutually agree that the Purchaser and/or one
or more of its Affiliates have obtained all necessary federal and state
regulatory approvals to provide originating landline, interLATA long-distance
service (and currently prohibited terminating services) in five states
(including either Florida or Georgia) pursuant to the Communications Act of
1934, as amended by the Telecommunications Act of 1996.
(k) The term "VOTING STOCK" shall mean (1) the Common Stock
and any other securities issued by the Company having the ordinary power to vote
in the election of directors of the Company (other than securities having such
power only upon the happening of a contingency), and (2) the common stock and
any other securities issued by any successor to the Company pursuant to a
merger, consolidation or reorganization having the ordinary power to vote in the
election of directors of such successor company (other than securities having
such power only upon the happening of a contingency).
(l) As used herein, any references to specified numbers (but
not percentages) of Shares or of Common Stock shall be deemed to be references
to such number of Shares or of Common Stock as may be adjusted in the event of
any change in the capital stock of the Company by reason of stock dividends,
split-ups, reverse split-ups, mergers, recapitalizations, subdivisions,
conversions, exchanges of shares or the like occurring after the date of this
Agreement.
8.2 FURTHER ASSURANCES.
(a) Each of the Company and the Purchaser shall use its
commercially reasonable efforts to take all actions required under any law, rule
or regulation to ensure that the conditions to the Closing set forth herein are
satisfied on or before the Closing Date.
(b) In furtherance and not in limitation of the foregoing,
each of the Company and the Purchaser hereby agrees to make an appropriate
filing of a Notification and Report Form pursuant to the HSR Act with respect to
the transactions contemplated hereby and by the Other Purchase Agreement as
promptly as practicable after the date hereof (but in no event later than five
business days after the date hereof) or (y) if later, five business days after
the receipt by the Purchaser of all information from the Company reasonably
necessary for the Purchaser's preparation of such filing) and to supply as
promptly as practicable any additional information and documentary material that
may be requested pursuant to the HSR Act and to use commercially reasonably
efforts to cause the expiration or early termination of the applicable waiting
periods under the HSR Act as soon as practicable. Nothing in this Section 8.2
shall require any of the Company and its Affiliates or the Purchaser and its
Affiliates to sell or otherwise dispose of, or permit the sale or other
disposition of, any assets, whether as a condition to obtaining any approval
from a Governmental Entity or any other Person for any other reason. In addition
to any other remedies available to the Company, if the Notification and Report
Form is not filed within the period specified in the first sentence of this
Section 8.2(b) for any reason
17
other than a delay by the Company, the Company may, within 5 business days after
the date of such filing and by written notice to the Purchaser, extend the
Termination Date (as defined in Section 8.10) for such number of days beyond the
period specified above that the filing was delayed.
(c) Each of the Company and the Purchaser shall, in
connection with the efforts referenced in Section 8.2(a), use commercially
reasonable efforts to obtain all requisite approvals and authorizations for the
sale and purchase of the Shares under the HSR Act or any other law, rule,
regulation, order or decree (collectively, the "LAWS"). In furtherance and not
in limitation of the foregoing, each of the Company and the Purchaser shall (1)
cooperate in all respects with each other in connection with any filing or
submission and in connection with any investigation or other inquiry, including
any proceeding initiated by a private party, (2) promptly inform the other party
of any communication received by such party from, or given by such party to any
Governmental Entity and of any material communication received or given in
connection with any proceeding by a private party, in each case regarding any of
the transactions contemplated hereby, and (3) permit the other party to review
any communication given by it to, and consult with each other in advance of any
meeting or conference with, any Governmental Entity or, in connection with any
proceeding by a private party, with any other Person, and to the extent
permitted by the Governmental Entity or other Person, give the other party the
opportunity to attend and participate in such meetings and conferences.
(d) In furtherance and not in limitation of the covenants of
the parties contained in Sections 8.2(a), (b) and (c), if any administrative or
judicial action or proceeding, including any proceeding by a private party, is
instituted (or threatened to be instituted) challenging the purchase of the
Shares contemplated by this Agreement as violative of any Law, each of the
Company and the Purchaser shall cooperate in all respects with each other and
use commercially reasonable efforts to contest and resist any such action or
proceeding and to have vacated, lifted, reversed or overturned any decree,
judgment, injunction or other order, whether temporary, preliminary or
permanent, that is in effect and that prohibits, prevents or restricts
consummation of the transactions contemplated by this Agreement. Notwithstanding
the foregoing or any other provision of this Agreement, nothing in this Section
8.2 shall limit a party's right to terminate this Agreement pursuant to Section
8.10, so long as such party has complied with this Section 8.2.
(e) If any objections are asserted with respect to the
transactions contemplated hereby under any Law or if any suit is instituted by
any Governmental Entity or any private party challenging the purchase of the
Shares contemplated hereby as violative of any Law, each of the Company and the
Purchaser shall use commercially reasonable efforts to resolve any such
objections or challenge as such Governmental Entity or private party may have to
such transactions under such Law so as to permit consummation of the
transactions contemplated by this Agreement.
8.3 GOVERNING LAW. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York, without regard
to principles of conflicts of law.
18
8.4 SURVIVAL; TERMINATION OF COVENANTS. The representations
and warranties in Articles III and IV of this Agreement shall survive until 30
days following the filing by the Company with the SEC of its first annual report
on Form 10-K after the date hereof, except for the representations and
warranties in Sections 3.5, 3.9 and 3.11, and in Sections 4.4 through 4.11
hereof, which shall continue to survive. The covenants and agreements of the
Purchaser under (a) Sections 7.1 (other than in 7.1(c)) and 7.3 hereof shall
terminate on the second anniversary of the Closing Date, and (b) Section 7.2
hereof that by their terms survive the Sale Restriction Termination Date shall
terminate on the fifth anniversary of the Closing Date, in each case subject to
earlier termination thereof as set forth in Section 7.4. The covenants and
agreements of the Company in Section 7.6 shall terminate on the earlier of the
fifth anniversary of the date hereof and the date on which the Purchaser shall
have Transferred all the Shares.
8.5 SUCCESSORS AND ASSIGNS. This Agreement shall be binding
upon and shall inure to the benefit of the parties hereto and their respective
successors and permitted assigns. Neither party may assign this Agreement or any
of its rights or obligations hereunder to any Person without the prior written
consent of the other party; provided that the Purchaser may assign its rights
and obligations hereunder to any of BellSouth Corporation and its direct or
indirect, wholly-owned subsidiaries.
8.6 AMENDMENTS; ETC. No amendment, modification,
termination, or waiver of any provision of this Agreement, and no consent to any
departure by a party to this Agreement from any provision of this Agreement,
shall be effective unless it shall be in writing and signed and delivered by the
other party to this Agreement, and then it shall be effective only in the
specific instance and for the specific purpose for which it is given.
8.7 ENTIRE AGREEMENT. This Agreement and the Registration
Rights Agreement embody the entire agreement and understanding of the parties
and supersede all prior agreements or understandings with respect to the subject
matter thereof.
8.8 NOTICES. All notices, requests and other communications
to any party under this Agreement shall be in writing. Communications may be
made by telecopy or similar writing. Each communication shall be given to the
party at its address set forth below or at any other address as the party may
specify for this purpose by notice to the other party. Each communication shall
be effective (1) if given by telecopy, when the telecopy is transmitted to the
proper address and the receipt of the transmission is confirmed, (2) if given by
mail, 72 hours after the communication is deposited in the mails properly
addressed with first class postage prepaid or (3) if given by any other means,
when delivered to the proper address and a written acknowledgement of delivery
is received.
(a) If to the Company, to:
Qwest Communications International Inc.
700 Qwest Tower
555 Seventeenth Street
Denver, Colorado 80202
Facsimile Number: (303) 992-1798
Attention: Chief Financial Officer
19
with a copy addressed as set forth above but to the attention
of General Counsel, Facsimile Number: (303) 992-1044
and with an additional copy to:
Steven L. Grossman
O'Melveny & Myers LLP
1999 Avenue of the Stars, Suite 700
Los Angeles, California 90067
Facsimile Number: (310) 246-6779
(b) If to the Purchaser, to:
BellSouth Enterprises, Inc.
1155 Peachtree Street, N.E.
Suite 2000
Atlanta, Georgia 30309-3610
Facsimile Number: (404) 249-2658
Attention: Keith O. Cowan
and with additional copies to:
BellSouth Corporation
1155 Peachtree Street, N.E.
Atlanta, Georgia 30309-3610
Facsimile Number: (404) 249-2629
Attention: E. John Whelchel
Fried, Frank, Harris, Shriver & Jacobson
One New York Plaza
New York, New York 10004
Facsimile Number: (212) 859-4000
Attention: Gail L. Weinstein
8.9 FEES, COSTS AND EXPENSES. All fees, costs and expenses
(including attorneys' fees and expenses) incurred by either party hereto in
connection with the preparation, negotiation and execution of this Agreement and
the consummation of the transactions contemplated hereby, shall be the sole and
exclusive responsibility of such party; PROVIDED, HOWEVER, that the Purchaser
shall pay the filing fee for the Notification and Report Form pursuant to the
HSR Act.
8.10 TERMINATION.
(a) This Agreement may be terminated at any time prior to
the Closing Date:
(1) by mutual written consent of the Company and the
Purchaser;
20
(2) by either the Company or the Purchaser if the other
materially breaches this Agreement and such breach remains
uncured for 30 days after receipt by the breaching party of
written notice thereof;
(3) by either the Company or the Purchaser if the
Closing Date shall not have occurred on or before the date
that is 120 days after the date of this Agreement (the
"TERMINATION DATE"), unless prior to the Termination Date any
party reasonably determines that it is substantially unlikely
that the conditions to such party's obligations will be
fulfilled by the Termination Date and delivers to the other
party a notice to such effect, in which case this Agreement
will terminate within ten days after receipt of such notice by
the other party. The right to terminate this Agreement under
this Section 8.10(a)(3) shall be not available to any party
whose failure to fulfill any obligation under this Agreement
has been the cause of, or resulted in, the failure of any
condition to be satisfied.
(b) In the event of termination of this Agreement by either
the Company or the Purchaser as provided in this Section 8.10, this Agreement
shall forthwith become null and void and there shall be no liability or
obligation on the part of the Company or the Purchaser except with respect to
Sections 3.11, 4.11 and 8.9 and this Section 8.10(b); PROVIDED, HOWEVER, that in
the case of termination as provided in Section 8.10(a)(2), the breaching party
shall not be absolved from any liability with respect to breach of this
Agreement.
8.11 SEVERABILITY OF PROVISIONS. Any provision of this
Agreement that is prohibited or unenforceable in any jurisdiction shall, as to
that jurisdiction, be ineffective to the extent of the prohibition or
unenforceability without invalidating the remaining provisions of this Agreement
or affecting the validity or enforceability of the provision in any other
jurisdiction.
8.12 PUBLICITY. The Company and the Purchaser shall agree on
the form and content of the initial public announcement which shall be made
concerning this Agreement and the transactions contemplated hereby, and neither
the Company nor the Purchaser shall make such public announcement without the
consent of the other, except as required by law.
8.13 HEADINGS AND REFERENCES. Section headings in this
Agreement are included for the convenience of reference only and do not
constitute a part of this Agreement for any other purpose. References to
parties, express beneficiaries and sections in this Agreement are references to
the parties to or the express beneficiaries and sections of this Agreement, as
the case may be, unless the context shall require otherwise.
8.14 COUNTERPARTS; EFFECTIVENESS. This Agreement may be
signed in any number of counterparts, each of which shall be an original, with
the same effect as if all signatures were on the same instrument.
8.15 EXCLUSIVE JURISDICTION. Each party (1) agrees that any
action, complaint, counterclaim, investigation, petition, suit or other
proceeding, whether civil or criminal, in law or in equity, or before any
arbitrator, court or Governmental Entity (each, an "ACTION"), with respect to
this Agreement or any transaction contemplated by this Agreement shall be
brought exclusively in the courts of the State of New York or of the United
States of America for the
21
Southern District of New York, in each case sitting in the Borough of Manhattan,
State of New York, (2) accepts for itself and in respect of its property,
generally and unconditionally, the jurisdiction of those courts and (3)
irrevocably waives any objection, including, without limitation, any objection
to the laying of venue or based on the grounds of FORUM NON CONVENIENS, which it
may now or hereafter have to the bringing of any legal action in those
jurisdictions; PROVIDED, HOWEVER, that any party may assert in an Action in any
other jurisdiction or venue each mandatory defense, third-party claim or similar
claim that, if not so asserted in such Action, may thereafter not be asserted by
such party in an original Action in the courts referred to in clause (1) above.
8.16 WAIVER OF JURY TRIAL. Each party waives any right to a
trial by jury in any Action to enforce or defend any right under this Agreement
or any amendment, instrument, document or agreement delivered, or which in the
future may be delivered, in connection with this Agreement and agrees that any
Action shall be tried before a court and not before a jury.
8.17 NON-RECOURSE. No recourse under this Agreement shall be
had against any "controlling person" (within the meaning of Section 20 of the
Exchange Act) of any party or the stockholders, directors, officers, employees,
agents and Affiliates of such party or such controlling persons, whether by the
enforcement of any assessment or by any legal or equitable proceeding, or by
virtue of any Regulation, it being expressly agreed and acknowledged that no
personal liability whatsoever shall attach to, be imposed on or otherwise be
incurred by such controlling person, stockholder, director, officer, employee,
agent or Affiliate, as such, for any obligations of such party under this
Agreement or for any claim based on, in respect of or by reason of such
obligations or their creation; PROVIDED, HOWEVER, that nothing contained in this
Section 8.17 shall be deemed to be a waiver by the Company or any such
controlling person, stockholder, director, officer, employee, agent or Affiliate
of the Company of their respective liabilities under applicable federal or state
securities laws, rules or regulations.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
22
IN WITNESS WHEREOF, the parties have executed and delivered this
Agreement as of the date first written above.
BELLSOUTH ENTERPRISES, INC.
By: /s/ Keith O. Cowan
--------------------------------
Name: Keith O. Cowan
Title: Authorized Signatory
QWEST COMMUNICATIONS INTERNATIONAL INC.
By: /s/ Drake S. Tempest
--------------------------------
Drake S. Tempest
Executive Vice President and
General Counsel
S-1
EXHIBIT A
Form of Opinion of Counsel to the Company
April ___, 1999
[VOLCANO]
Attention:
Ladies and Gentlemen:
We have acted as counsel to Qwest Communications International Inc., a
Delaware corporation (the "Company"), in connection with the Common Stock
Purchase Agreement dated as of April ___, 1999, by and between [Volcano], a
__________ corporation ("[Volcano]") and the Company (the "Purchase Agreement").
We are providing this opinion to you at the request of the Company pursuant to
Section 5.9 of the Purchase Agreement.
In our capacity as such counsel, we have examined originals or copies
of those corporate and other records and documents we considered appropriate.
As to relevant factual matters, we have relied upon, among other
things, the Company's factual representations in an Officer's Certificate dated
April ___, 1999, a copy of which has been delivered to you. In addition, we have
obtained and relied upon those certificates of public officials we considered
appropriate.
We have assumed the genuineness of all signatures, the authenticity of
all documents submitted to us as originals and the conformity with originals of
all documents submitted to us as copies.
On the basis of such examination, our reliance upon the assumptions in
this opinion and our consideration of those questions of law we considered
relevant, and subject to the limitations and qualifications in this opinion, we
are of the opinion that the Shares have been duly authorized by all necessary
corporate action on the part of the Company and, upon payment for and delivery
of the Shares in accordance with the Purchase Agreement and the countersigning
of the certificate or certificates representing the Shares by a duly authorized
signatory of the registrar for the Common Stock, the Shares will be validly
issued, fully paid and non-assessable.
The law covered by this opinion is limited to the present Delaware
General Corporation Law. We express no opinion as to the laws of any other
jurisdiction and no opinion regarding the statutes, administrative decisions,
rules, regulations or requirements of any county, municipality, subdivision or
local authority of any jurisdiction.
This opinion is furnished by us as counsel for the Company and may be
relied upon by you only in connection with the consummation of the transactions
contemplated by the Purchase Agreement. It may not be used or relied upon by you
for any other purpose or by any other
2
person, nor may copies be delivered to any other person, without in each
instance our prior written consent. This opinion is expressly limited to the
matters set forth above and we render no opinion, whether by implication or
otherwise, as to any other matters. We assume no obligation to update or
supplement this opinion to reflect any facts or circumstances which may
hereafter come to our attention, or any changes in laws which may hereafter
occur.
Respectfully submitted,