SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
Current Report Pursuant
to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 13, 1999
NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY
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(Exact Name of Registrant as Specified in Its Charter)
New York
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(State or Other Jurisdiction of Incorporation)
No. 1-1150 No. 04-1664340
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(Commission File Number) I.R.S. Employer Identification
185 Franklin Street, Boston, Massachusetts 02110
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(Address of Principal Executive Offices)
(617) 743-9800
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(Registrant's Telephone Number, Including Area Code)
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Item 7. Financial Statements and Exhibits.
(c) Exhibits:
The exhibits listed in the accompanying Index to Exhibits relate to
the Registration Statement (33-50631) on Form S-3 of New England
Telephone and Telegraph Company (the "Company"), and are filed
herewith for incorporation by reference in such Registration
Statement.
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Index to Exhibits
Exhibit Number
Per Item 601
of Regulation S-K Description of Document
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1 Underwriting Agreement, dated April 13, 1999,
between the Company and Merrill Lynch, Pierce,
Fenner & Smith Incorporated
4-a Certificate, dated as of April 13, 1999,
pursuant to Section 2.02(b) of the Indenture,
dated as of October 1, 1992, between the
Company and State Street Bank and Trust
Company, as successor Trustee
4-b Form of the Company's 5.875% Ten Year Notes due
April 15, 2009.
12 Computation of Ratio of Earnings to Fixed Charges
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY
By /s/ Neil D. Olson
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Neil D. Olson
Assistant Treasurer
Dated: April 15, 1999
EXECUTION COPY
NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY
DEBT SECURITIES
UNDERWRITING AGREEMENT
New York, New York
April 13, 1999
To the Representative
named in Schedule I
hereto of the Underwriters
named in Schedule II hereto
Dear Sirs:
New England Telephone and Telegraph Company, a New York corporation (the
"Company"), may issue and sell from time to time series of its debt securities
registered under the registration statement referred to in Paragraph 1(a) hereof
(collectively, the "Securities" and each individually, a "Security"). The
Company proposes to sell to the underwriters named in Schedule II (the
"Underwriters") to this Underwriting Agreement (this "Agreement"), for whom you
are acting as representative (the "Representative"), a series of Securities, of
the designation, with the terms and in the aggregate principal amount specified
in Schedule I hereto (collectively, the "Underwritten Securities" and each
individually, an "Underwritten Security"). If the firm or firms listed in
Schedule II hereto include only the firm or firms listed in Schedule I hereto,
then the terms "Underwriters" and "Representative" shall each be deemed to refer
to such firm or firms.
1. The Company represents, warrants and agrees that:
(a) A registration statement (No. 33-50631), including a prospectus,
with respect to the Securities have been prepared by the Company in
conformity with the requirements of the Securities Act of 1933, as
amended (the "Act"), and the rules and regulations (the "Rules and
Regulations") of the Securities and Exchange Commission (the
"Commission") thereunder and has become effective. As used in this
Agreement, (i) such registration statement (No. 33-50631), as amended
and supplemented to the date hereof, is referred to as the "Registration
Statement"; (ii) "Preliminary Prospectus" means each prospectus
(including all documents incorporated therein by reference) included in
the Registration Statement, or amendments or supplements thereof, before
it became effective under the Act, including any prospectus filed with
the Commission pursuant to Rule 424(a) of the Rules and Regulations; and
(iii) "Prospectus" means the prospectus included in the Registration
Statement, including any preliminary or final prospectus amendment or
supplement (including in each case all documents incorporated therein by
reference) specifically relating to the Underwritten Securities, as
filed with the
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2
Commission pursuant to paragraph (b) of Rule 424 of the Rules and
Regulations. The Commission has not issued any order preventing or
suspending the use of any Prospectus, and no proceedings for such
purposes have been instituted or are pending or, to the knowledge of the
Company, are contemplated by the Commission, and any request on the part
of the Commission for additional information has been complied with.
(b) The Registration Statement and each Prospectus contain, and (in
the case of any amendment or supplement to any such document, or any
material incorporated by reference in any such document, filed with the
Commission after the date as of which this representation is being made)
will contain at all times during the period specified in Paragraph 7(c)
hereof, all statements which are required by the Act, the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"and,
together with the Act and the Exchange Act, the "Acts"), and the rules
and regulations of the Commission under such Acts; the indenture,
including any amendments and supplements thereto, pursuant to which the
Underwritten Securities will be issued (the "Indenture") will conform
with the requirements of the Trust Indenture Act and the rules and
regulations of the Commission thereunder; and the Registration Statement
and each Prospectus do not, and (in the case of any amendment or
supplement to any such document or any material incorporated by
reference in any such document filed with the Commission after the date
as of which this representation is being made) will not, at any time
during the period specified in Paragraph 7(c) hereof, contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary to make the statements therein not
misleading; provided that the Company makes no representation or
warranty as to information contained in or omitted from the Registration
Statement or any Prospectus in reliance and based upon information
furnished to the Company through the Representative by or on behalf of
any Underwriter or as to any statements in or omissions from the
Statement of Eligibility of the Trustee under the Indenture.
(c) The Company is not in violation of its corporate charter or
by-laws or in default under any agreement, indenture or instrument,
except for such defaults that would not result in a material adverse
change in the condition, financial or otherwise, or in the earnings,
business affairs or business prospects of the Company, whether or not
arising in the ordinary course of business (each, a "Material Adverse
Effect"); and the execution, delivery and performance of this Agreement,
the Indenture, the Underwritten Securities and any Delayed Delivery
Contracts (as defined in Paragraph 3 hereof) and the consummation of the
transactions contemplated herein and in the Prospectus (including the
issuance and sale of the Underwritten Securities and the use of the
proceeds from the sale thereof as described in the Prospectus under the
caption "Use of Proceeds") have been duly authorized by all necessary
corporate action and do not and will not conflict with or constitute a
breach of, or default under, or result in the creation or imposition of
any lien, charge or encumbrance upon any property or assets of the
Company pursuant to, any material agreement, indenture or instrument to
which the Company is a party or by which it is bound or to which any of
its property or assets is subject, nor will such action
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3
result in a material violation of the charter or by-laws of the Company
or any statute, order, rule or regulation of any court or governmental
agency having jurisdiction over the Company or its property; and except
as required by the Act, the Trust Indenture Act, the Exchange Act and
applicable state securities laws and except as set forth in Paragraph
1(m) hereof, no consent, authorization or order of, or filing or
registration with, any court or governmental agency is required for the
execution, delivery and performance of this Agreement, the Delayed
Delivery Contracts and the Indenture or the consummation of the
transactions contemplated hereby and thereby.
(d) Except as described in or contemplated by the Registration
Statement and each Prospectus, there has been no Material Adverse Effect
from the dates as of which information is given in the Registration
Statement and each Prospectus.
(e) PricewaterhouseCoopers LLP, whose report appears in the Company's
most recent Annual Report on Form 10-K which is incorporated by
reference in each Prospectus, are independent accountants as required by
the Act and the Rules and Regulations.
(f) On the Delivery Date (as defined in Paragraph 6 hereof) (i) the
Indenture will have been validly authorized, executed and delivered by
the Company and duly qualified under the Trust Indenture Act and will
constitute the legally binding obligation of the Company, (ii) the
Underwritten Securities will have been validly authorized and executed
and, upon payment therefor as provided in this Agreement, will be
validly issued and outstanding and will constitute legally binding
obligations of the Company entitled to the benefits of the Indenture and
(iii) each Underwritten Security and the Indenture will conform to the
descriptions thereof contained in the Prospectus.
(g) This Agreement has been validly authorized, executed and
delivered by the Company.
(h) The Company has been duly incorporated and is validly existing
and in good standing under the laws of the State of New York; and the
Company is duly qualified to do business and in good standing as a
foreign corporation in each jurisdiction in which its ownership of
property or conduct of its business requires such qualification, except
where the failure to so qualify would not have a Material Adverse
Effect, and has power and authority necessary to own or hold its
properties, to conduct the business in which it is engaged and to enter
into and perform its obligations under this Agreement.
(i) There is no material action, suit or proceeding before any court
or governmental agency or body, domestic or foreign, now pending, or, to
the knowledge of the Company, threatened, against or affecting the
Company, which is required to be disclosed in any Prospectus (other than
as disclosed therein), or which might reasonably be expected to result
in a Material Adverse Effect, or which might reasonably be expected to
materially and adversely affect the properties or assets thereof or the
consummation of
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4
the transactions contemplated in this Agreement or the performance by
the Company of its obligations hereunder.
(j) The financial statements filed as part of the Registration
Statement or included in any Preliminary Prospectus present, or (in the
case of any amendment or supplement to any such document or any material
incorporated by reference in any such document filed with the Commission
after the date as of which this representation is being made) will
present at all times during the period specified in Paragraph 7(c)
hereof, fairly, the financial condition and results of operations of the
Company, at the dates and for the periods indicated, and have been and
(in the case of any amendment or supplement to any such document or any
material incorporated by reference in any such document filed with the
Commission after the date as of which this representation is being made)
will be at all times during the period specified in Paragraph 7(c)
hereof prepared in conformity with generally accepted accounting
principles ("GAAP") applied on a consistent basis throughout the periods
involved. The supporting schedules incorporated by reference in any
Prospectus present fairly in accordance with GAAP the information
required to be stated therein. Any pro forma financial statements and
any related notes thereto incorporated by reference in the Registration
Statement and any Prospectus present fairly the information shown
therein have been prepared in accordance with the Commission's rules and
guidelines with respect to pro forma financial statements and have been
properly compiled on the bases described therein and the assumptions
used in the preparation thereof are reasonable and the adjustments used
therein are appropriate to give effect to the transactions and
circumstances referred to therein.
(k) The documents incorporated by reference into any Preliminary
Prospectus or Prospectus have been, and (in the case of any amendment or
supplement to any such document or any material incorporated by
reference in any such document filed with the Commission after the date
as of which this representation is being made) will be at all times
during the period specified in Paragraph 7(c) hereof, prepared by the
Company in conformity with the applicable requirements of the Act, the
Rules and Regulations and the Exchange Act and the rules and regulations
of the Commission thereunder and such documents have been, or (in the
case of any amendment or supplement to any such document or any material
incorporated by reference in any such document filed with the Commission
after the date as of which this representation is being made) will be at
all times during the period specified in Paragraph 7(c) hereof, timely
filed as required thereby.
(l) There are no contracts or other documents which are required to
be filed as exhibits to the Registration Statement by the Act or by the
Rules and Regulations or which were required to be filed as exhibits to
any document incorporated by reference in any Prospectus by the Exchange
Act or the rules and regulations of the Commission thereunder, which
have not been filed as exhibits to the Registration Statement or to such
document or incorporated therein by reference as permitted by the Rules
and Regulations or the rules and regulations of the Commission under the
Exchange Act as required.
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5
(m) The Company has filed a petition or petitions with the New
Hampshire Public Utilities Commission (the "PUC") with respect to the
issue and sale of securities, including the Underwritten Securities. The
PUC has authorized the issue and sale thereof but upon the express
condition that the Company shall have fulfilled certain obligations.
(n) The Company has good and valid title to all or substantially all
of its property, except as otherwise indicated in the Prospectus.
(o) The Company is not, and upon the issuance and sale of the
Underwritten Securities as herein contemplated and the application of
the net proceeds therefrom as described in the Prospectus will not be,
an "investment company" or an entity "controlled" by an "investment
company" as such terms are defined in the Investment Company Act of
1940, as amended (the "1940 Act").
2. Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to sell to
each Underwriter, severally and not jointly, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at the purchase price
and on the other terms set forth in Schedule I hereto, the principal amount of
the Underwritten Securities set forth opposite its name in Schedule II hereto.
3. Any offer to purchase Underwritten Securities by institutional
investors solicited by the Underwriters for delayed delivery shall be made
pursuant to contracts substantially in the form of Exhibit A attached hereto,
with such changes therein as the Company and the Representative may approve
(each, a "Delayed Delivery Contract"). The Company shall have the right, in its
sole discretion, to approve or disapprove each such institutional investor.
Underwritten Securities which are subject to Delayed Delivery Contracts are
herein sometimes called "Delayed Delivery Underwritten Securities", and
Underwritten Securities which are not subject to Delayed Delivery Contracts are
herein sometimes called "Immediate Delivery Underwritten Securities".
Contemporaneously with the purchase on the Delivery Date by the
Underwriters of the Immediate Delivery Underwritten Securities pursuant to this
Agreement, the Company will pay to the Representative, for the account of the
Underwriters, the compensation specified in Schedule I hereto for arranging the
sale of Delayed Delivery Underwritten Securities. The Underwriters shall have no
responsibility with respect to the validity or performance of any Delayed
Delivery Contracts.
For the purposes of determining the principal amount of Immediate
Delivery Underwritten Securities to be purchased by each Underwriter, there
shall be deducted from the principal amount of Underwritten Securities to be
purchased by such Underwriter as set forth in Schedule II hereto that portion of
the aggregate principal amount of Delayed Delivery Underwritten Securities that
the principal amount of
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6
Underwritten Securities to be purchased by such Underwriter as set forth in
Schedule II hereto bears to the aggregate principal amount of Underwritten
Securities set forth in Schedule II to be purchased by all Underwriters (in each
case, as adjusted by the Representative to avoid fractions of the minimum
principal amount in which the Underwritten Securities may be issued), except to
the extent that the Representative determines, in its discretion, that such
deduction shall be otherwise than in such proportion and so advises the Company.
4. The Company shall not be obligated to deliver any Underwritten
Securities except upon payment for all Immediate Delivery Underwritten
Securities to be purchased pursuant to this Agreement as hereinafter provided.
5. If any Underwriter defaults in the performance of its obligations
under this Agreement, the remaining non-defaulting Underwriters, if any, shall
be obligated to purchase the Immediate Delivery Underwritten Securities which
the defaulting Underwriter agreed but failed to purchase in the respective
proportions which the principal amount of Underwritten Securities set forth in
Schedule II hereto to be purchased by each remaining non-defaulting Underwriter
set forth therein bears to the aggregate principal amount of Underwritten
Securities set forth therein to be purchased by all the remaining non-defaulting
Underwriters; provided that the remaining non-defaulting Underwriters shall not
be obligated to purchase any Immediate Delivery Underwritten Securities if the
aggregate principal amount of Immediate Delivery Underwritten Securities which
the defaulting Underwriter or Underwriters agreed but failed to purchase exceeds
9.09% of the total principal amount of Underwritten Securities, and any
remaining non-defaulting Underwriter shall not be obligated to purchase more
than 110% of the principal amount of Underwritten Securities set forth in
Schedule II hereto to be purchased by it. If the foregoing maximum percentages
are exceeded, the remaining non-defaulting Underwriters, or those other
underwriters satisfactory to the Representative who so agree, shall have the
right, but shall not be obligated, to purchase, in such proportion as may be
agreed upon among them, all the Immediate Delivery Underwritten Securities. If
the remaining Underwriters or other underwriters satisfactory to the
Representative do not elect to purchase the Immediate Delivery Underwritten
Securities which the defaulting Underwriter or Underwriters agreed but failed to
purchase, this Agreement shall terminate without liability on the part of any
non-defaulting Underwriter or the Company, except that the Company will continue
to be liable for the payment of expenses as set forth in Paragraph 7(k) hereof.
Nothing contained in this Paragraph 5 shall relieve a defaulting
Underwriter of any liability it may have to the Company for damages caused by
its default. If other underwriters are obligated or agree to purchase the
Immediate Delivery Underwritten Securities of a defaulting or withdrawing
Underwriter, either the Representative or the Company may postpone the Delivery
Date for up to seven full business days in order to effect any changes that in
the opinion of counsel for the Company or counsel for the Underwriters may be
necessary in the Registration Statement, any Prospectus or in any other document
or arrangement.
6. Delivery of and payment for the Immediate Delivery Underwritten
Securities shall be made at such address, date and time as may be specified in
Schedule I hereto. This date and time are sometimes referred to collectively as
the "Delivery Date". On the Delivery Date, the
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7
Company shall deliver the Immediate Delivery Underwritten Securities to The
Depository Trust Company, on behalf of the Representative, for the account of
each Underwriter against payment to the Company by wire transfer of immediately
available funds to a bank account designated by the Company. Time shall be of
the essence, and delivery at the time and place specified pursuant to this
Agreement is a further condition of the obligation of each Underwriter
hereunder. Upon delivery, the Immediate Delivery Underwritten Securities shall
be in registered form and in such denominations as may be set forth on Schedule
I hereto. The certificates representing the Immediate Delivery Underwritten
Securities shall be registered in the name of Cede & Co. and shall be made
available for inspection by the Representative in New York, New York not later
than 2:00 P.M., local time, on the business day prior to the Delivery Date.
7. The Company agrees:
(a) To furnish promptly to the Representative and to counsel for the
Underwriters a conformed copy of the Registration Statement as
originally filed and each amendment or supplement thereto filed prior to
the date hereof or relating to or covering the Underwritten Securities
and a copy of each Prospectus filed with the Commission, including all
documents incorporated therein by reference and all consents and
exhibits filed therewith;
(b) To deliver promptly to the Representative such reasonable number
of the following documents as the Representative may request: (i)
conformed copies of the Registration Statement (excluding exhibits other
than the computation of the ratio of earnings to fixed charges, the
Indenture and this Agreement), (ii) each Prospectus and (iii) any
documents incorporated by reference in the Prospectus;
(c) During such period following the date hereof as, in the opinion
of counsel for the Underwriters, any Prospectus is required by law to be
delivered, to comply with the Act, the Exchange Act, the Trust Indenture
Act and the rules and regulations under each thereof, so as to permit
the completion of the distribution of the Underwritten Securities as
contemplated in this Agreement and in each Prospectus. If at any time
when a prospectus is required by the Act to be delivered in connection
with sales of the Underwritten Securities, any event shall occur or
condition shall exist as a result of which it is necessary, in the
reasonable opinion of counsel for the Underwriters or for the Company,
to amend the Registration Statement or amend or supplement any
Prospectus in order that such Prospectus will not include any untrue
statements of a material fact or omit to state a material fact necessary
in order to make the statements therein not misleading in the light of
the circumstances existing at the time it is delivered to a purchaser,
or if it shall be necessary, in the opinion of such counsel, at any such
time to amend the Registration Statement or amend or supplement any
Prospectus in order to comply with the requirements of the Act or the
Rules and Regulations, the Company shall promptly prepare and file with
the Commission, subject to Paragraph (d) below, such amendment or
supplement as may be necessary to correct such statement or omission or
to make the Registration Statement or any such Prospectus comply with
such
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8
requirements, and the Company shall furnish to the Underwriters such
number of copies of such amendment or supplement as the Underwriters may
reasonably request.
(d) Prior to filing with the Commission during the period referred to
in (c) above (i) any amendment or supplement to the Registration
Statement, (ii) any Prospectus or any amendment or supplement thereto or
(iii) any document incorporated by reference in any of the foregoing or
any amendment or supplement to such incorporated document, to furnish a
copy thereof to the Representative and to counsel for the Underwriters
and not to file any document that shall have been disapproved by the
Representative;
(e) To advise the Representative promptly (i) when any post-effective
amendment to the Registration Statement relating to or covering the
Underwritten Securities becomes effective or any supplement to any
Prospectus shall have been filed, (ii) of any comments from the
Commission or any request or proposed request by the Commission for an
amendment or supplement to the Registration Statement (insofar as the
amendment or supplement relates to or covers the Underwritten
Securities), to any Prospectus, to any document incorporated by
reference in any of the foregoing or for any additional information,
(iii) of the issuance by the Commission of any stop order suspending the
effectiveness of the Registration Statement or any order directed to any
Prospectus or any document incorporated therein by reference or the
initiation or threat of any stop order proceeding or of any challenge to
the accuracy or adequacy of any document incorporated by reference in
any Prospectus, (iv) of receipt by the Company of any notification with
respect to the suspension of the qualification of the Underwritten
Securities for sale in any jurisdiction or the initiation or threat of
any proceeding for that purpose and (v) of the occurrence of any event
which makes untrue any statement of a material fact made in the
Registration Statement (insofar as the Registration Statement relates to
or covers the Underwritten Securities) or any Prospectus or which
requires the making of a change in the Registration Statement or any
Prospectus in order to make any material statement therein not
misleading;
(f) If, during the period referred to in (c) above, the Commission
shall issue a stop order suspending the effectiveness of the
Registration Statement, to make every reasonable effort to obtain the
lifting of that order at the earliest possible time;
(g) As soon as practicable, to make generally available to its
security holders and to deliver to the Representative an earnings
statement, conforming with the requirements of Section 11(a) of the Act,
covering a period of at least twelve months beginning after the latest
of (i) the most recent effective date of the registration statement
relating to part of the Underwritten Securities, (ii) the effective date
of the most recent post-effective amendment to the Registration
Statement that became effective prior to the date of this Agreement and
(iii) the date of the Company's most recent Annual Report on Form 10-K
filed with the Commission prior to the date of this Agreement.
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9
(h) So long as any of the Underwritten Securities are outstanding, to
furnish to the Representative copies of all reports and financial
statements furnished by the Company to each securities exchange on which
securities issued by the Company may be listed pursuant to requirements
of or agreements with such exchange or to the Commission pursuant to the
Exchange Act or any rule or regulation of the Commission thereunder;
(i) To endeavor to qualify the Underwritten Securities for offer and
sale under the securities laws of such jurisdictions as the
Representative may reasonably request and to maintain such
qualifications in effect for as long as may be required for the
distribution of the Underwritten Securities; provided, however, that the
Company shall not be obligated to file any general consent to service of
process or to qualify as a foreign corporation or as a dealer in
securities in any jurisdiction in which it is not so qualified or to
subject itself to taxation in respect of doing business in any
jurisdiction in which it is not otherwise so subject;
(j) To use its best efforts to obtain the listing of the Underwritten
Securities on the securities exchange, if any, set forth on Schedule I
(the "Stock Exchange") on or prior to the Delivery Date and to cause
such listing to be continued so long as any amount of the Securities
remains outstanding; to furnish from time to time any and all documents,
instruments, information and undertakings that may be necessary in order
to effect such listing; and to maintain the same until none of the
Underwritten Securities is outstanding or until such time as payment of
principal of and premium, if any, and interest on all the Underwritten
Securities has been duly provided for, whichever is earlier; provided
that if the Company can no longer reasonably maintain such listing, the
Company shall use its best efforts to obtain and maintain the quotation
for, or listing of, the Underwritten Securities on such other securities
exchange or exchanges as the Company may, with the approval of the
Representative, determine;
(k) To pay the costs incident to the authorization, issuance, sale
and delivery of the Underwritten Securities and any taxes payable in
that connection; the costs incident to the preparation, printing and
filing under the Act of the Registration Statement and any amendments,
supplements and exhibits thereto; the costs incident to the preparation,
printing and filing of any document and any amendments and exhibits
thereto required to be filed by the Company under the Exchange Act; the
costs of distributing the Registration Statement as originally filed and
each amendment and post-effective amendment thereof (including
exhibits), any Preliminary Prospectus, each Prospectus and any documents
incorporated by reference in any of the foregoing documents; the costs
of printing this Agreement and the Delayed Delivery Contracts, if any;
the fees and disbursements of the Company's counsel, accountants and
other advisors; the fees and expenses of the Trustee, including the fees
and disbursements of counsel for the Trustee in connection with the
Indenture and the Underwritten Securities, to the extent the Trustee or
its counsel, as the case may be, requires reimbursement thereof; the
costs of any filings with the National Association of Securities
Dealers, Inc.; fees paid to rating agencies in connection with the
rating of the Securities, including the Underwritten
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10
Securities; the fees and expenses of qualifying the Underwritten
Securities under the securities laws of the several jurisdictions as
provided in this Paragraph and of preparing and printing a Blue Sky
Memorandum (including fees of counsel to the Underwriters); the cost of
listing the Underwritten Securities on the Stock Exchange; and all other
costs and expenses incident to the performance of the Company's
obligations under this Agreement; provided that, except as provided in
this Paragraph and in Paragraph 11 hereof, the Underwriters shall pay
their own costs and expenses, including the fees and expenses of their
counsel, any transfer taxes on the Underwritten Securities which they
may sell and the expenses of advertising any offering of the
Underwritten Securities made by the Underwriters;
(l) Until the termination of the offering of the Underwritten
Securities, to timely file all documents and any amendments to
previously filed documents required to be filed by the Company pursuant
to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act; and
(m) During the period beginning on the date hereof and continuing to
the Delivery Date, without the consent of the Representative, not to
offer, sell, contract to sell or otherwise dispose of any debt
securities of the Company with maturities longer than one year, other
than the Underwritten Securities to the Underwriters.
8. (a) The Company agrees to indemnify and hold harmless each
Underwriter and each person, if any, who controls any Underwriter within the
meaning of Section 15 of the Act or Section 20 of the Exchange Act as follows:
(i) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, arising out of any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement (or any amendment thereto) or the omission or alleged omission
therefrom of a material fact required to be stated therein or necessary
to make the statements therein not misleading or arising out of any
untrue statement or alleged untrue statement of a material fact
contained in any Preliminary Prospectus or Prospectus (or any amendment
or supplement thereto) or the omission or alleged omission therefrom of
a material fact necessary in order to make the statements therein, in
the light of the circumstances under which they were made, not
misleading;
(ii) against any and all loss, liability, claim, damage and expense
whatsoever, as incurred, to the extent of the aggregate amount paid in
settlement of any litigation or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or of any claim
whatsoever based upon any such untrue statement or omission or any such
alleged untrue statement or omission; provided that (subject to
Paragraph 8(d) below) any such settlement is effected with the written
consent of the Company; and
(iii) against any and all expense whatsoever, as incurred (including
the fees and disbursements of outside counsel chosen by the
Representative), reasonably incurred in investigating, preparing or
defending against any litigation or any investigation or
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11
proceeding by any governmental agency or body, commenced or threatened,
or any claim whatsoever based upon any such untrue statement or omission
or any such alleged untrue statement or omission to the extent that any
such expense is not paid under (i) or (ii) above;
provided, however, that this indemnity agreement shall not apply to any loss,
liability, claim, damage or expense to the extent arising out of any untrue
statement or omission or alleged untrue statement or omission made in reliance
upon and in conformity with written information furnished to the Company by any
Underwriter through the Representative expressly for use in the Registration
Statement (or any amendment thereto) or any Preliminary Prospectus or Prospectus
(or any amendment or supplement thereto).
(b) Each Underwriter severally agrees to indemnify and hold harmless the
Company, its directors, each of its officers who signed the Registration
Statement and each person, if any, who controls the Company within the meaning
of Section 15 of the Act or Section 20 of the Exchange Act against any and all
loss, liability, claim, damage and expense described in the indemnity contained
in subsection (a) of this Paragraph 8, as incurred, but only with respect to
untrue statements or omissions, or alleged untrue statements or omissions, made
in the Registration Statement (or any amendment thereto) or any Preliminary
Prospectus or Prospectus (or any amendment or supplement thereto) in reliance
upon and in conformity with written information furnished to the Company by such
Underwriter through the Representative expressly for use in the Registration
Statement (or any amendment thereto) or such Preliminary Prospectus or
Prospectus (or any amendment or supplement thereto).
(c) Each indemnified party shall give notice as promptly as reasonably
practicable to each indemnifying party of any action commenced against it in
respect of which indemnity may be sought hereunder, but failure to so notify an
indemnifying party shall not relieve such indemnifying party from any liability
hereunder to the extent it is not materially prejudiced as a result thereof and
in any event shall not relieve it from any liability which it may have otherwise
than on account of this indemnity agreement. In the case of parties indemnified
pursuant to Paragraph 8(a) above, counsel to the indemnified parties shall be
selected by the Representative, and, in the case of parties indemnified pursuant
to Paragraph 8(b) above, counsel to the indemnified parties shall be selected by
the Company. An indemnifying party may participate at its own expense in the
defense of any such action; provided, however, that counsel to the indemnifying
party shall not (except with the consent of the indemnified party) also be
counsel to the indemnified party. In no event shall the indemnifying parties be
liable for fees and expenses of more than one counsel (in addition to any local
counsel) separate from their own counsel for all indemnified parties in
connection with any one action or separate but similar or related actions in the
same jurisdiction arising out of the same general allegations or circumstances.
No indemnifying party shall, without the prior written consent of the
indemnified parties, settle or compromise or consent to the entry of any
judgment with respect to any litigation, or any investigation or proceeding by
any governmental agency or body, commenced or threatened, or any claim
whatsoever in respect of which indemnification or contribution could be sought
under this Paragraph 8 (whether or not the indemnified parties are actual or
potential parties thereto),
<PAGE>
12
unless such settlement, compromise or consent (i) includes an unconditional
release of each indemnified party from all liability arising out of such
litigation, investigation, proceeding or claim and (ii) does not include a
statement as to or an admission of fault, culpability or a failure to act by or
on behalf of any indemnified party.
(d) If at any time an indemnified party shall have requested an
indemnifying party to reimburse the indemnified party for fees and expenses of
counsel, such indemnifying party agrees that it shall be liable for any
settlement of the nature contemplated by Section 8(a)(ii) effected without its
written consent if (i) such settlement is entered into more than 45 days after
receipt by such indemnifying party of the aforesaid request, (ii) such
indemnifying party shall have received notice of the terms of such settlement at
least 30 days prior to such settlement being entered into and (iii) such
indemnifying party shall not have reimbursed such indemnified party in
accordance with such request prior to the date of such settlement.
(e) If the indemnification provided for in this Paragraph 8 is for any
reason unavailable to or insufficient to hold harmless an indemnified party in
respect of any losses, liabilities, claims, damages or expenses referred to
therein, then each indemnifying party shall contribute to the aggregate amount
of such losses, liabilities, claims, damages and expenses incurred by such
indemnified party, as incurred, (i) in such proportion as is appropriate to
reflect the relative benefits received by the Company on the one hand and the
Underwriters on the other hand from the offering of the Underwritten Securities
pursuant to this Agreement or (ii) if the allocation provided by clause (i) is
not permitted by applicable law, in such proportion as is appropriate to reflect
not only the relative benefits referred to in clause (i) above but also the
relative fault of the Company on the one hand and of the Underwriters on the
other hand in connection with the statements or omissions which resulted in such
losses, liabilities, claims, damages or expenses as well as any other relevant
equitable considerations.
The relative benefits received by the Company on the one hand and the
Underwriters on the other hand in connection with the offering of the
Underwritten Securities pursuant to this Agreement shall be deemed to be in the
same respective proportions as the total net proceeds from the offering of the
Underwritten Securities pursuant to this Agreement (before deducting expenses)
received by the Company and the total underwriting discount received by the
Underwriters bear to the aggregate initial offering price of the Underwritten
Securities.
The relative fault of the Company on the one hand and the Underwriters
on the other hand shall be determined by reference to, among other things,
whether any such untrue or alleged untrue statement of a material fact or
omission or alleged omission to state a material fact relates to information
supplied by the Company or by the Underwriters and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent such
statement or omission.
The Company and the Underwriters agree that it would not be just and
equitable if contribution pursuant to this Paragraph 8(e) were determined by pro
rata allocation (even if the Underwriters were treated as one entity for such
purpose) or by any other method of allocation
<PAGE>
13
which does not take account of the equitable considerations referred to above in
this Paragraph 8(e). The aggregate amount of losses, liabilities, claims,
damages and expenses incurred by an indemnified party and referred to above in
this Paragraph 8(e) shall be deemed to include any legal or other expenses
reasonably incurred by such indemnified party in investigating, preparing or
defending against any litigation, or any investigation or proceeding by any
governmental agency or body, commenced or threatened, or any claim whatsoever
based upon any such untrue or alleged untrue statement or omission or alleged
omission.
Notwithstanding the provisions of this Paragraph 8(e), no Underwriter
shall be required to contribute any amount in excess of the amount by which the
total price at which the Underwritten Securities underwritten by it and
distributed to the public were offered to the public exceeds the amount of any
damages which such Underwriter has otherwise been required to pay by reason of
any such untrue or alleged untrue statement or omission or alleged omission.
No person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation.
For purposes of this Paragraph 8(e), each person, if any, who controls
an Underwriter within the meaning of Section 15 of the Act or Section 20 of the
Exchange Act shall have the same rights to contribution as such Underwriter, and
each director of the Company, each officer of the Company who signed the
Registration Statement, and each person, if any, who controls the Company within
the meaning of Section 15 of the Act or Section 20 of the Exchange Act shall
have the same rights to contribution as the Company. The Underwriters'
respective obligations to contribute pursuant to this Paragraph 8(e) are several
in proportion to the principal amount of Underwritten Securities set forth
opposite their respective names in Schedule II hereto and not joint.
(f) The indemnity agreements contained in this Paragraph and the
representations, warranties and agreements of the Company in Paragraph 1 and
Paragraph 7 hereof shall survive the delivery of the Underwritten Securities and
shall remain in full force and effect, regardless of any termination or
cancellation of this Agreement or any investigation made by or on behalf of any
indemnified party.
9 (a) The Representative may terminate this Agreement, by notice to the
Company, at any time at or prior to the delivery of and payment for the
Immediate Delivery Underwritten Securities, (i) if there has been, since the
time of execution of this Agreement or since the respective dates as of which
information is given in the Prospectus, any material adverse change in the
condition, financial or otherwise, or in the earnings, business affairs or
business prospects of the Company, whether or not arising in the ordinary course
of business, the effect of which is such as to make it, in the judgment of the
Representative, impracticable to market the Underwritten Securities or to
enforce contracts for the sale of the Underwritten Securities, or (ii) if there
has occurred any material adverse change in the financial markets in the United
States, any outbreak of hostilities or escalation thereof or other calamity or
crisis or any change
<PAGE>
14
or development involving a prospective change in national or international
political, financial or economic conditions, in each case the effect of which is
such as to make it, in the judgment of the Representative, impracticable to
market the Underwritten Securities or to enforce contracts for the sale of the
Underwritten Securities, or (iii) if trading in any securities of the Company or
Bell Atlantic Corporation has been suspended or materially limited by the
Commission, or if trading generally on the American Stock Exchange or the New
York Stock Exchange or in the Nasdaq National Market has been suspended or
materially limited, or minimum or maximum prices for trading have been fixed, or
maximum ranges for prices have been required, by any of said exchanges or by
such system or by order of the Commission, the National Association of
Securities Dealers, Inc. or any other governmental authority, or (iv) if a
banking moratorium has been declared by either Federal or New York authorities.
(b) If this Agreement is terminated pursuant to this Paragraph 9, such
termination shall be without liability of any party hereto to any other party
hereto except as provided in Paragraph 11 hereof, and provided that Paragraphs 1
and 8 shall survive such termination and remain in full force and effect.
10 The respective obligations of the Underwriters under the Agreement
with respect to the Underwritten Securities are subject to the accuracy, on the
date hereof and on the Delivery Date, of the representations and warranties of
the Company contained herein, to performance by the Company of its obligations
hereunder and to each of the following additional terms and conditions
applicable to the Underwritten Securities.
(a) At or before the Delivery Date, no stop order suspending the
effectiveness of the Registration Statement nor any order directed to
any document incorporated by reference in any Prospectus shall have been
issued and prior to that time no stop order proceeding shall have been
initiated or threatened by the Commission and no challenge shall have
been made to the accuracy or adequacy of any document incorporated by
reference in any Prospectus; any request of the Commission for inclusion
of additional information in the Registration Statement or any
Prospectus or otherwise shall have been complied with; and after the
date hereof the Company shall not have filed with the Commission any
amendment or supplement to the Registration Statement or any Prospectus
(or any document incorporated by reference therein) that shall have been
disapproved by the Representative.
(b) No Underwriter shall have discovered and disclosed to the Company
on or prior to the Delivery Date that the Registration Statement or any
Prospectus contains an untrue statement of a fact which, in the opinion
of counsel for the Underwriters, is material or omits to state a fact
which, in the opinion of such counsel, is material and is required to be
stated therein or is necessary to make the statements therein not
misleading.
(c) All corporate proceedings and other legal matters incident to the
authorization, form and validity of this Agreement, the Underwritten
Securities, the Indenture and the
<PAGE>
15
form of the Registration Statement, each Prospectus (other than
financial statements and other financial data) and all other legal
matters relating to this Agreement and the transactions contemplated
hereby shall be satisfactory in all respects to Simpson Thacher &
Bartlett, counsel for the Underwriters, and the Company shall have
furnished to such counsel all documents and information that such
counsel may reasonably request to enable it to pass upon such matters.
(d) The Counsel of Bell Atlantic Corporation shall have furnished to
the Representative her opinion addressed to the Underwriters and dated
the Delivery Date, as Counsel of Bell Atlantic Corporation, to the
effect that:
(i) The Company has been duly incorporated and is
validly existing and in good standing under the laws of the State of
New York;
(ii) The Company is duly qualified to do business and is
in good standing as a foreign corporation in all jurisdictions in
which its ownership of property or the conduct of its business
requires such qualification (except where the failure to so qualify
would not have a Material Adverse Effect) and has all power and
authority necessary to own its properties and conduct the business in
which it is engaged as described in the Prospectus;
(iii) The Indenture has been duly authorized, executed and
delivered by the Company and duly qualified under the Trust Indenture
Act and, assuming due authentication, execution and delivery by the
Trustee, constitutes a valid and legally binding instrument of the
Company enforceable in accordance with its terms;
(iv) The Immediate Delivery Underwritten Securities have
been duly authorized, executed and issued by the Company and,
assuming due authentication thereof by the Trustee and upon payment
and delivery in accordance with this Agreement, will constitute valid
and legally binding obligations of the Company enforceable in
accordance with their terms and entitled to the benefits of the
Indenture;
(v) The Delayed Delivery Underwritten Securities, if
any, have been duly authorized and, when duly executed and issued by
the Company and, assuming due authentication thereof by the Trustee
and upon payment and delivery by the respective purchasers thereof in
accordance with the terms of the related Delayed Delivery Contracts,
will constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms and entitled to the
benefits of the Indenture;
<PAGE>
16
(vi) The Delayed Delivery Contracts, if any, have been
duly authorized, executed and delivered by the Company and, assuming
due authorization, execution and delivery by the purchasers
thereunder, are valid and legally binding obligations of the parties
thereto;
(vii) The statements made in each Prospectus under the
caption "Description of Securities" (or a comparable caption),
insofar as they purport to constitute summaries of the documents
referred to therein, constitute accurate summaries of the terms of
such documents in all material respects;
(viii) The Registration Statement is effective under the
Act and, to the knowledge of such counsel, no stop order suspending
its effectiveness has been issued and no proceeding for that purpose
is pending or threatened by the Commission;
(ix) No order issued by the Commission directed to any
document incorporated by reference in any Prospectus has been issued
and, to the knowledge of such counsel, no challenge has been made by
the Commission to the accuracy or adequacy of any such document;
(x) Such counsel does not know of any litigation or any
governmental proceeding pending or threatened against the Company
which would affect the subject matter of this Agreement or is
required to be disclosed in any Prospectus (including the documents
incorporated by reference therein) which is not disclosed and
correctly summarized therein;
(xi) To the best of such counsel's knowledge, the Company
is not in violation of its corporate charter or by-laws or in default
under any material agreement, indenture or instrument;
(xii) This Agreement has been duly authorized, executed
and delivered by the Company;
(xiii) The execution, delivery and performance of this
Agreement and the Delayed Delivery Contracts, if any, and compliance
by the Company with the provisions of the Underwritten Securities and
the Indenture will not conflict with, or result in the creation or
imposition of any lien, charge or encumbrance upon any of the assets
of the Company pursuant to the terms of, or constitute a default
under, any agreement, indenture or instrument known to such counsel,
or result in a violation of the corporate charter or by-laws of the
Company or, to the best of such counsel's knowledge, any statute,
order, rule or regulation of any court or governmental agency having
jurisdiction over the Company or its property;
<PAGE>
17
(xiv) All legally required proceedings in connection with
the authorization, issue and validity of the Underwritten Securities
and the sale of the Underwritten Securities by the Company in
accordance with this Agreement have been taken, and all legally
required orders, consents or other authorizations or approvals of the
PUC and of any other public boards or bodies have been obtained; and
(xv) The Company is not an "investment company" or an
entity "controlled" by an "investment company," as such terms are
defined in the 1940 Act.
In giving such opinion, such counsel may rely on the opinion of local
regulatory counsel satisfactory to counsel for the Underwriters as to matters of
Maine, Massachusetts, New Hampshire, Rhode Island and Vermont state laws. In
giving such opinion, such counsel need not express any opinion regarding any
order, consent or other authorization or approval which may be legally required
pursuant to any state securities law.
Such counsel may state that the opinions set forth in paragraphs (iii),
(iv), (v) and (vi) above are subject to the effects of bankruptcy, insolvency,
fraudulent conveyance, reorganization, moratorium and other similar laws
relating to or affecting creditors' rights generally, general equitable
principles (whether considered in a proceeding in equity or at law) and an
implied covenant of good faith and fair dealing.
Such opinion shall also state that the Registration Statement and each
Prospectus as of their respective effective and issue dates complied as to form
in all material respects with the requirements of the Act and the Trust
Indenture Act and the rules and regulations of the Commission under said Acts
(except that no opinion need be expressed as to the financial statements and
other financial data contained herein), and each document incorporated by
reference in each Prospectus as filed under the Exchange Act complied when so
filed as to form in all material respects with the applicable requirements of
the Exchange Act and the rules and regulations of the Commission thereunder
(except that no opinion need be expressed as to the financial statements and
other financial data contained therein).
Such opinion shall also contain a statement that such counsel has no
reason to believe that (i) the Registration Statement, on the date it became
effective (or, with respect to the Registration Statement, if the Company has
filed an Annual Report on Form 10-K since its effective date, the date of the
Company's most recent Annual Report on Form 10-K), contained an 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 not misleading or
(ii) the Prospectus, as of its date and as of the Delivery Date, contains an
untrue statement of a material fact or omits to state a material fact necessary
in order to make the statements therein, in light of the circumstances under
which they were made, not misleading.
(e) At the Delivery Date, there shall not have been, since the date
hereof or since the respective dates as of which information is given in the
Prospectus, any material adverse change
<PAGE>
18
in the condition, financial or otherwise, or in the earnings, business affairs
or business prospects of the Company, whether or not arising in the ordinary
course of business, and the Representative shall have received a certificate of
the Chairman of the Board, the President, the Chief Financial Officer or a Vice
President of the Company and the Treasurer or an Assistant Treasurer of the
Company, dated the Delivery Date, to the effect that (i) there has been no such
material adverse change, (ii) the representations and warranties in Paragraph 1
hereof are true and correct with the same force and effect as though expressly
made at and as of the Delivery Date, (iii) the Company has complied with all
agreements and satisfied all conditions on its part to be performed or satisfied
at or prior to the Delivery Date and (iv) no stop order suspending the
effectiveness of the Registration Statement has been issued and no proceedings
for that purpose have been instituted or are pending or are contemplated by the
Commission.
(f) Simpson Thacher & Bartlett shall have furnished to the
Representative its opinion, addressed to the Underwriters and dated the Delivery
Date, to the effect that, subject to the qualifications and limitations stated
therein and in the Prospectus, the statements set forth in the Prospectus under
the caption "Certain United States Federal Income Tax Considerations," insofar
as they purport to constitute summaries of matters of United States Federal tax
law and regulations or legal conclusions with respect thereto, constitute
accurate summaries of the matters described therein in all material respects.
(g) If Underwritten Securities in bearer form are being delivered by the
Company on the Delivery Date in a jurisdiction other than the United States, the
Company shall have furnished to the Representative such legal opinion or
opinions as the Representative may reasonably request addressed to the
Underwriters and dated the Delivery Date, with respect to matters relating to
the offering, sale and delivery of the Underwritten Securities in such
jurisdiction.
(h) The Company shall have furnished to the Representative (i) a letter
of PricewaterhouseCoopers LLP, addressed to the Underwriters and dated the date
hereof of the type described in the American Institute of Certified Public
Accountants' Statement on Auditing Standards No. 72 and covering such specified
financial statement items as counsel for the Underwriters may reasonably have
requested and (ii) a letter of PricewaterhouseCoopers LLP, addressed to the
Underwriters and dated the Delivery Date, stating, as of the date of such letter
(or, with respect to matters involving changes or developments since the
respective dates as of which specified financial information is given in the
Prospectus, as of a date not more than three days prior to the date of such
letter), the conclusions and findings of such firm with respect to the financial
information and other matters covered by its letter referred to in subclause (i)
above, confirming in all material respects the conclusions and findings set
forth in such prior letter.
(i) Simpson Thacher & Bartlett shall have furnished to the
Representative its opinion addressed to the Underwriters and dated the Delivery
Date, as counsel for the Underwriters, covering the matters set forth in
Paragraph 10(d), except clauses (ii), (viii), (ix), (x), (xi) and (xiii)
thereof.
<PAGE>
19
(j) The PUC shall have granted authorization, and on the Delivery Date
such authorization shall be in full force and effect, permitting the issuance
and sale of the Underwritten Securities upon the terms and conditions hereunder
set forth or contemplated and containing no provision unacceptable to the
Underwriters.
(k) The Underwritten Securities shall have been accepted for listing on
the Stock Exchange (if any), subject to official notice of issuance.
(l) At the Delivery Date, the Underwritten Securities shall be rated at
least "Aa2" by Moody's Investor's Service Inc., "AA" by Standard & Poor's
Ratings Group, a division of McGraw-Hill, Inc., and "AA" by Duff & Phelps Credit
Rating Co., and the Company shall have delivered to the Representative a letter
dated the Delivery Date from each such rating agency or other evidence
satisfactory to the Representative, confirming that the Underwritten Securities
have such ratings; and since the date of this Agreement, there shall not have
occurred a downgrading in the rating assigned to the Underwritten Securities or
any of the Company's other debt securities by any such rating agency, and, after
the date hereof, no such rating agency shall have publicly announced that it has
withdrawn or has put under surveillance or review with negative implications,
including putting on what is commonly termed a "watch list," its rating of the
Underwritten Securities or any of the Company's other debt securities.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance satisfactory to counsel
for the Underwriters.
11 If the Company shall fail to tender the Immediate Delivery
Underwritten Securities for delivery to the Underwriters for any reason
permitted under this Agreement, or if the Underwriters shall decline to purchase
the Immediate Delivery Underwritten Securities for any reason permitted under
this Agreement (other than pursuant to Paragraph 5 hereof), the Company shall
reimburse the Underwriters for reasonable fees and expenses of their counsel and
for such other out-of-pocket expenses as shall have been incurred by them in
connection with this Agreement and the proposed purchase of Immediate Delivery
Underwritten Securities and the solicitation of any purchases of the Delayed
Delivery Underwritten Securities, and upon demand the Company shall pay the full
amount thereof to the Representative. If this Agreement is terminated pursuant
to Paragraph 5 hereof by reason of the default of one or more Underwriters, the
Company shall not be obligated to reimburse any defaulting Underwriter on
account of those expenses.
12 The Company shall be entitled to act and rely upon any request,
consent, notice or agreement by, or on behalf of, the Representative. Any notice
by the Company to the Underwriters shall be sufficient if given in writing or by
telegraph addressed to the Representative at its address set forth in Schedule I
hereto, and any notice by the Underwriters to the Company shall be sufficient if
given in writing or by telegraph addressed to the Company at 185 Franklin
Street, Boston, Massachusetts 02110, Attention of the Treasurer.
<PAGE>
20
13 This Agreement shall be binding upon the Underwriters, the Company
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (a) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Act and (b) the indemnity agreement of the Underwriters contained in
Paragraph 8 hereof shall be deemed to be for the benefit of directors of the
Company, officers of the Company who have signed the Registration Statement and
any person controlling the Company. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Paragraph, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
14 For purposes of this Agreement, "business day" means any day on which
the New York Stock Exchange, Inc. is open for trading.
15 This Agreement shall be governed by and construed in accordance with
the laws of the State of New York.
<PAGE>
21
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 shall represent a binding agreement among the Company and the
several Underwriters.
Very truly yours,
NEW ENGLAND TELEPHONE AND
TELEGRAPH COMPANY
By /s/ Ellen C. Wolf
--------------------------------
Title: Treasurer
The foregoing Agreement is hereby confirmed and accepted as of the date first
above written.
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By /s/ Francisco Rey
-------------------------
Vice President
Authorized Signatory
For itself and as Representative of the other Underwriters named in Schedule II
to the foregoing Agreement.
<PAGE>
SCHEDULE I
Underwriting Agreement,
dated April 13, 1999.
Registration Statement
No. 33-50631.
Representative and Address: Merrill Lynch, Pierce, Fenner & Smith
Incorporated
North Tower
World Financial Center
New York, New York 10281-1209.
Underwritten Securities
Designation: Ten Year 5.875% Notes due April 15, 2009.
Principal amount: $200,000,000.
Indenture: Indenture, dated as of October 1, 1992,
between New England Telephone and Telegraph
Company and State Street Bank and Trust
Company, as successor Trustee.
Date of Maturity: April 15, 2009.
Interest Rate: 5.875% per annum to April 15, 2009, payable
semiannually on April 15 and October 15 of
each year, commencing October 15, 1999, to
holders of record at the close of business
on April 1 or October 1 prior to the payment
date.
Purchase Price: 98.585% of the principal amount thereof.
Redemption Provisions: As set forth in the Prospectus under the
caption headed "Certain Terms of the Notes".
Authorized Denominations: $1,000 and integral multiples thereof.
Stock Exchange Listing: None.
Delivery Date, Time and Location: April 19, 1999 at 10 a.m. at the offices of
Simpson Thacher & Bartlett, 425
Lexington Avenue, New York, NY
10017.
<PAGE>
SCHEDULE II
- --------------------------------------------------------------------------------
Principal
Name of Underwriter Amount of
Underwritten
Securities
Merrill Lynch, Pierce, Fenner & Smith Incorporated....... $140,000,000
The Williams Capital Group, L.P.......................... $ 30,000,000
Utendahl Capital Partners, L.P........................... $ 30,000,000
------------
Total.................................................. $200,000,000
============
<PAGE>
EXHIBIT A
$
NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY
DEBT SECURITIES
DELAYED DELIVERY CONTRACT
[DATE]
NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY
185 Franklin Street
Boston, Massachusetts 02110
Dear Sirs:
The undersigned hereby agrees to purchase from New England Telephone and
Telegraph Company, a New York corporation (the "Company"), and the Company
hereby agrees to sell to the undersigned,
$
principal amount of the Company's above-captioned securities (the "Securities"),
offered by the Company's prospectus dated , 199 , as supplemented by the
prospectus supplement dated , 199 (collectively, the "Prospectus"), receipt
of a copy of which is hereby acknowledged, at a purchase price of % of the
principal amount thereof plus accrued interest from , 199 to the Delivery Date
(as defined in the next paragraph) and on the further terms and conditions set
forth in this Contract.
Payment for and delivery of the Securities to be purchased by the
undersigned shall be made on , 199 , herein called the "Delivery Date".
At 10:00 A.M., New York City time, on the Delivery Date, the Securities
to be purchased by the undersigned hereunder will be delivered by the Company to
the undersigned, and the undersigned will accept delivery of such Securities and
will make payment to the Company of the purchase price therefor, at the office
of . Payment will be certified or official bank check payable in next-day
funds settled through the New York Clearing House to or upon the order of the
Company. The Securities will be delivered in such authorized forms and
denominations and registered in such names as the undersigned may designate by
written or telegraphic communication addressed to the Company not less than two
full business days prior to the Delivery Date, or, if the undersigned fails to
make a timely designation in the foregoing manner, in the form of one definitive
fully registered certificate representing the Securities in the above principal
amount, registered in the name of the undersigned.
This Contract will terminate and be of no further force and effect after
, 199 , unless (i) on or before such date it shall have been executed and
delivered by both parties hereto
<PAGE>
3
or (ii) the Company shall have sold to the Underwriters named in the Prospectus
the Immediate Delivery Underwritten Securities (as defined in the Underwriting
Agreement referred to in the Prospectus) and the Company shall have mailed or
delivered to the undersigned at its address set forth below a notice to that
effect, stating the date of the occurrence thereof, accompanied by copies of the
opinion of counsel for the Company delivered to such Underwriters pursuant to
Paragraph 10(d) of the Underwriting Agreement.
The obligation of the undersigned to accept delivery and make payment
for the Securities on the Delivery Date will be subject to the condition that
the Securities shall not, on the Delivery Date, be an investment prohibited by
the laws of the jurisdiction to which the undersigned is subject, the
undersigned hereby representing that such an investment is not so prohibited on
the date hereof. This Contract will inure to the benefit of and be binding upon
the parties hereto and their respective successors but will not be assignable by
either party hereto without the written consent of the other.
It is understood that acceptance of any Delayed Delivery Contract (as
defined in said Underwriting Agreement) is in the Company's sole discretion and,
without limiting the foregoing, need not be on a first-come, first-served basis.
If this Contract is acceptable to the Company, it is requested that the Company
sign the form of acceptance below and mail or deliver one of the counterparts
hereof to the undersigned at its address set forth below. This will become a
binding contract between the Company and the undersigned when such counterpart
is so mailed or delivered.
Very truly yours,
By
--------------------------
----------------------------
Title
----------------------------
Address
Accepted as of , 19 .
NEW ENGLAND TELEPHONE AND TELEGRAPH
COMPANY
By
----------------------------------
Title
Officers' Certificate Pursuant to Section
2.02(b) of the Indenture Identified Below
The undersigned, Edwin F. Hall, Controller and Chief Financial Officer, and
Ellen C. Wolf, Treasurer, respectively, of New England Telephone and Telegraph
Company (the "Company"), acting pursuant to authorizations contained in Board
Resolutions, copies of which are delivered herewith, duly adopted on March 16,
1993 and September 21, 1993, by the Board of Directors of the Company, do hereby
authorize, adopt and approve the following terms for a series (the "Series") of
the Company's debt securities to be issued under an Indenture, dated as of
October 1, 1992 (the "Indenture"), from the Company to State Street Bank and
Trust Company, as successor Trustee (the "Trustee"), pursuant to the
Registration Statement on Form S-3 (No. 33-50631) under the Securities Act of
1933, as amended. (As used herein, the term "Prospectus" shall mean the
Prospectus dated December 8, 1997, as supplemented by the Prospectus Supplement
dated April 13, 1999, filed with the Securities and Exchange Commission with
respect to the Series.)
(1) Title of Securities of the Series: Ten Year 5.875% Notes due
April 15, 2009
(2) Limit, if any, on the aggregate
principal amount of Securities
of the Series: $200,000,000
(3) Date or dates, or manner of
determining the same,
on which the principal
of Securities of the Series
is payable: April 15, 2009
(4) With respect to interest
on Securities of the Series:
(a) The rate or method of
calculation: 5.875% per annum
(b) The date from which
such interest shall accrue: April 19, 1999
(c) The dates on which interest
shall be payable or the manner
of determining the same: Semiannually, April 15 and
October 15, commencing
October 15, 1999
<PAGE>
(d) Record dates for interest payable
on any interest payment date: To holders of record at
the close of business on
April 1 and October 1
prior to the interest
payment date.
(5) Place or places where
Securities of the Series
shall be payable: At the office or agency of
the Company in New York,
New York. At its option,
the Company may pay interest
by check mailed to the
holder's address as it
appears on the register.
(6) With respect to redemption,
in whole or in part, of Securities of the
Series at the option of the Company:
(a) The period or periods within which
such redemptions may be made: Redeemable at any time at
the redemption prices
(b) The applicable redemption calculated as set forth in
price or prices: the attached form of the
Securities of the Series.
(c) The terms and conditions of
such redemptions:
(7) With respect to the mandatory
redemption or purchase of
Securities of the Series:
(a) Any provision for a sinking or
analogous fund or for redemption
or purchase at the option of a
Holder: Not Applicable
(b) The period or periods within
which such redemptions or
purchases must be made: Not Applicable
(c) The applicable redemption or
purchase price or prices: Not Applicable
<PAGE>
(d) The terms and conditions of
such redemptions or purchases: Not Applicable
(8) Denominations in which Securities of
the Series are issuable, if other than
$1,000 and any integral multiples
thereof: Not Applicable
(9) If other than the principal amount
thereof, the portion of the principal
amount of Securities of the Series
payable on declaration of acceleration: Not Applicable
(10) (a) Whether Securities of the Series are
issuable as Registered Securities,
Unregistered Securities (with or without
interest coupons), or any combination
thereof: Registered Securities
(b) Whether, and the terms upon which,
Unregistered Securities of the Series
may be exchanged for Registered
Securities of the same Series and vice
versa: Not Applicable
(11) Any provisions for payment of additional
amounts for taxes and for redemption,
in the event the Company must comply
with the reporting requirements or must
pay additional amounts in respect of any
Securities of the Series: Not Applicable
(12) With respect to the issuance
of any Global Securities of the Series: To be issued wholly in
permanent global form for
deposit with The
Depository Trust Company,
as Depository.
<PAGE>
(13) Any other covenants and terms of
Securities of the Series, including any
additional restrictive covenants not
described above and any terms required
by United States laws or regulations: None
(14) Issue price to public of Securities of the
Series: 99.235%
(15) Underwriter's commission or discount as
a percentage of the principal amount of
Securities of the Series to be issued: 0.65%
(16) Agency fees as a percentage of the
principal amount of Securities of the
Series to be issued: Not Applicable
Annexed hereto is the form of the Securities of the Series.
The capitalized terms used in this Certificate (unless otherwise defined
herein) have the meanings as defined in the Indenture.
IN WITNESS WHEREOF, I have executed this Certificate on behalf of the
Company.
NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY
/s/ Edwin F. Hall
-------------------------------------------
Edwin F. Hall
Controller and Chief Financial Officer
/s/ Ellen C. Wolf
------------------------------------------
Ellen C. Wolf
Treasurer
Dated: As of April 13, 1999
<PAGE>
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY
Ten Year 5.875% Notes due April 15, 1999
No. 001 $200,000,000 Cusip: 644 239 BL8
NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY, a New York
corporation (hereinafter called the "Company"), for value received, hereby
promises to pay to CEDE & CO. or registered assigns, the principal sum of
200,000,000 DOLLARS on April 19, 2009, at the office or agency of the Company in
the Borough of Manhattan, The City of New York, State of New York, in such coin
or currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, and to pay interest,
semiannually on April 15 and October 15 of each year, beginning on October 15,
1999, unless such April 15 or October 15 is a Legal Holiday (as defined in the
Indenture), in which case on the next succeeding day that is not a Legal Holiday
(each, an "Interest Payment Date"), on said principal sum at the rate per annum
specified in the title of this Note, at such office or agency, in like coin or
currency, from April 15 or October 15, as the case may be, to which interest on
the Notes has been paid preceding the date hereof (unless the date hereof is an
April 15 or October 15 to which interest has been paid, in which case from the
date hereof, or unless the date hereof is prior to the first payment of
interest, in which case from April 19, 1999) until payment of said principal sum
has been made or duly provided for. Notwithstanding the foregoing, unless this
Note shall be authenticated at a time when there is an existing default in the
payment of interest on the Notes, if the date hereof is after April 1 and before
the next following April 15 or is after October 1 and before the next following
October 15, this Note shall bear interest from such April 15 or June 15;
provided, however, that if the Company shall default in the payment of interest
when due on such April 15 or October 15, then this Note shall bear interest from
the next preceding date to which interest has been paid. The interest so payable
on any April 15 or October 15 shall be paid to the person in whose name this
Note shall be registered at the close of business on the April 1 or October 1,
as applicable (whether or not a Legal Holiday),
<PAGE>
immediately preceding the related Interest Payment Date (each, a "Regular Record
Date"). For purposes of this Note, "Legal Holiday" means any day other than a
Saturday, a Sunday or a day on which banking institutions are not required to be
open.
If and to the extent the Company shall default in the payment of the
interest due on any interest payment date, such defaulted interest shall be paid
to the person in whose name this Note is registered at the close of business on
a record date established for such payment by notice by or on behalf of the
Company to the holders of the Notes mailed by first-class mail not less than 15
days prior to such record date to their last address as they shall appear upon
the Note register, such record date to be not less than five days preceding the
date of payment of such defaulted interest. The Company may pay interest by
check mailed to the holder's address as it appears on the Note register.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been executed by the Trustee
under the Indenture referred to on the reverse hereof.
<PAGE>
IN WITNESS WHEREOF, New England Telephone and Telegraph Company has
caused this Note to be signed by its duly authorized officers and has caused its
corporate seal to be affixed hereunto.
NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY
(SEAL) By
Title: Chairman of the Board,
President and Chief Executive
Officer
By
Title: Assistant Secretary
Dated: April 19, 1999
--------------------
<PAGE>
Certificate of Authentication
This is one of the Debt Securities of the series designated therein and
described in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE
By
Authorized Signatory
<PAGE>
NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY
Ten Year 5.875% Notes due April 15, 2009
1. Indenture. (a) This Note is one of the duly authorized issue of debt
securities of the Company (herein referred to as the "Debt Securities") of the
series hereinafter specified, all issued or to be issued under and pursuant to
an indenture dated as of October 1, 1992 (herein referred to as the
"Indenture"), duly executed and delivered by the Company to State Street Bank
and Trust Company, as successor Trustee (herein referred to as the "Trustee"),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations, duties
and immunities thereunder of the Trustee, the Company and the holders (the words
"holders", "holder", "Securityholders" or "Securityholder" meaning the
registered holders or registered holder) of the Debt Securities.
(b) The Debt Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest, if any, at different rates, may be
subject to different redemption provisions, if any, may be subject to different
sinking funds, if any, may be subject to additional covenants and Events of
Default and may otherwise vary as provided in the Indenture. This Note is one of
the series designated as the Ten Year 5.875% Notes due April 19, 2009 of the
Company and such series is limited in aggregate principal amount to
$200,000,000. References herein to "Notes" shall mean the Notes of said series.
(c) All capitalized terms used in this Note which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
3. Optional Redemption. The Notes will be redeemable, as a whole or in
part, at the option of the Company at any time or from time to time on at least
30 days' but not more than 90 days' prior notice mailed to the registered
address of each holder. The redemption prices will be equal to the greater of
(i) 100% of the principal amount of the Notes to be redeemed or (ii) the sum of
the present values of the Remaining Scheduled Payments (as defined below)
discounted on a semiannual basis (assuming a 360-day year consisting of twelve
30-day months) at a rate equal to the sum of the Treasury Rate and 15 basis
points. In the case of each of clause (i) and (ii), accrued interest will be
payable to the redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate
per annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes that would be utilized, at the time of selection
and in accordance with customary financial practice,
<PAGE>
in pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Notes. "Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Company.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the Reference Treasury Dealer Quotations for such redemption
date after excluding the highest and lowest of such Reference Treasury Dealer
Quotations or (ii) if the Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such quotations. "Reference
Treasury Dealer Quotations" means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Trustee, of
the bid and asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing to the Trustee
by such Reference Treasury Dealer at 3:30 p.m., New York City time, on the third
business day preceding such redemption date.
"Reference Treasury Dealer" means each of Merrill Lynch, Pierce, Fenner
& Smith Incorporated and two other primary U.S. Government securities dealers
appointed by the Trustee (each, a "Primary Treasury Dealer"). If any of the
foregoing shall cease to be a Primary Treasury Dealer, the Company shall
substitute another nationally recognized investment banking firm that is a
Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to each Note to be
redeemed, the remaining scheduled payments of principal of and interest on such
Note that would be due after the related redemption date but for such
redemption. If such redemption date is not an interest payment date with respect
to such Note, the amount of the next succeeding scheduled interest payment on
such Note will be reduced by the amount of interest accrued on such Note to such
redemption date.
On and after the redemption date, interest will cease to accrue on the
Notes or any portion of the Notes called for redemption (unless the Company
defaults in the payment of the redemption price and accrued interest). On or
before the redemption date, the Company will deposit with the paying agent (or
the Trustee) money sufficient to pay the redemption price of and accrued
interest on the Notes to be redeemed on such date. If less than all of the Notes
are to be redeemed, the Notes to be redeemed shall be selected by the Trustee by
such method as the Trustee shall deem fair and appropriate.
2. Maintenance of Book-Entry System. (a) If DTC notifies the Company
that it is unwilling or unable to continue as the Depository for this Global
Note or if at any time DTC ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, and, in each case, the Company does
not appoint a successor clearing system within 90 days after receiving such
notice from DTC or on becoming aware that DTC is no longer so registered, the
Company will issue or cause to be issued individual certificates in registered
form on registration of or transfer of, or in exchange for, book-entry interests
in the Notes represented by this Global Note upon delivery of this Global Note
for cancellation. In addition, if the Company determines not to have the Notes
represented by a Global Note, which the Company may do, the Company will issue
or cause to be
<PAGE>
issued individual certificates in registered form in exchange for book-entry
interests in the Notes represented by this Global Note upon delivery of this
Global Note for cancellation.
(b) The Company hereby agrees with the Trustee and the holders of Notes
that at all times, notwithstanding any provision to the contrary set forth in
the Indenture, (i) it will use its best efforts to maintain the Notes in
book-entry form with DTC or any successor thereto and to appoint a successor
depository to the extent necessary to maintain the Notes in book-entry form and
(ii) it will waive any discretionary right that it otherwise may have under the
Indenture to cause the Notes to be issued in certificated form.
3. Effect of Event of Default. In the event that an Event of Default
shall have occurred and be continuing, the principal hereof may be declared, and
upon such declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture.
4. Amendments and Waivers. The Indenture contains provisions permitting
the Company and the Trustee, with the written consent of the holders of a
majority in principal amount of the outstanding Debt Securities of each series
affected by a supplemental indenture (with each series voting as a class), to
enter into a supplemental indenture to add any provisions to or to change or
eliminate any provisions of the Indenture or of any supplemental indenture or to
modify, in each case in any manner not covered by provisions in the Indenture
relating to amendments and waivers without the consent of holders, the rights of
the Securityholders of each such series. The holders of a majority in principal
amount of the outstanding Debt Securities of each series affected by such waiver
(with each series voting as a class), by notice to the Trustee, may waive
compliance by the Company with any provision of the Indenture, any supplemental
indenture or the Debt Securities of any such series except a default in the
payment of the principal of or interest on any Debt Security. However, without
the consent of each Securityholder affected, an amendment or waiver may not: (1)
reduce the amount of Debt Securities whose holders must consent to an amendment
or waiver; (2) change the rate of or change the time for payment of interest on
any Debt Security; (3) change the principal of or change the fixed maturity of
any Debt Security; (4) waive a default in the payment of the principal of or
interest on any Debt Security; (5) make any Debt Security payable in money other
than that stated in the Debt Security; or (6) make any change in the provisions
of the Indenture (a) with respect to the right of the holders of a majority in
principal amount of any series of Debt Securities by notice to the Trustee to
waive an existing default with respect to that series and its consequences
except a default in the payment of the principal of or interest on any Debt
Security; (b) with respect to the right of any holder of a Debt Security to
receive payment of principal and interest on the Debt Security, on or after the
respective due dates expressed in the Debt Security, the right of any holder of
a coupon to receive payment of interest due as provided in such coupon, or to
bring suit for the enforcement of any such payment on or after such respective
dates; and (c) contained in this sentence.
5. Denominations, Transfer and Exchange. (a) The Notes are issuable in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof.
<PAGE>
(b) Where certificated Notes are presented to the registrar with a
request to register their transfer or to exchange them for an equal principal
amount of Notes of other authorized denominations, the registrar shall register
the transfer or make the exchange if its requirements for such transactions are
met. The Company will not make any charge for any registration of transfer or
exchange but may require the payment by the party requesting such registration
of transfer or exchange of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
(c) Ownership of Notes shall be provided by the register for the Notes
kept by the registrar. The Company, the Trustee and any agent of the Company may
treat the person in whose name a Note is registered as the absolute owner
thereof for all purposes.
6. No Liability of Certain Persons. No director, officer, employee or
shareholder, as such, of the Company shall have any liability for any
obligations of the Company under this Note or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
holder by accepting this Note waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Note.
7. Governing Law. The laws of the State of New York shall govern the
Indenture and this Note.
<PAGE>
- --------------------------------------------------------------------------------
THE FOLLOWING ABBREVIATIONS SHALL BE CONSTRUED AS THOUGH THE WORDS SET FORTH
BELOW OPPOSITE EACH ABBREVIATION WERE WRITTEN OUT IN FULL WHERE SUCH
ABBREVIATION APPEARS:
<TABLE>
<S> <C> <C>
TEN COM--as tenants in common (Name) CUST (Name) UNIF--(Name) as Custodian
TEN ENT--as tenants by the entirety GIFT MIN ACT (state) for (Name) Under the (State)
JT TEN --as joint tenants with Uniform Gifts to Minors Act
right of survivorship
and not as tenants in common
ADDITIONAL ABBREVIATIONS MAY ALSO BE USED THOUGH NOT IN THE ABOVE LIST.
- --------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT TAXPAYER
IDENTIFICATION NUMBER OF ASSIGNEE
- -----------------------------------------
- -----------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE
OF ASSIGNEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
the within Note of New England Telephone and Telegraph Company and all rights
thereunder and hereby irrevocably constitutes and appoints_____________________
attorney to transfer said Note on the books of the Company, with full power of
substitution in the premises
Dated: ___________________________________
Signature
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE
NAME AS WRITTEN UPON THE FACE OF THE WITHIN INSTRUMENT IN
EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY
CHANGE WHATEVER. THE SIGNATURE(S) SHOULD BE GUARANTEED BY A
COMMERCIAL BANK OR TRUST COMPANY, A MEMBER ORGANIZATION OF A
NATIONAL STOCK EXCHANGE OR BY SUCH OTHER ENTITY WHOSE
SIGNATURE IS ON FILE WITH AND ACCEPTABLE TO THE TRANSFER
AGENT.
</TABLE>
Unless this certificate is presented by an authorized
representative of The Depository Trust Company, a New York corporation ("DTC"),
to the issuer or its agent for registration of transfer, exchange or payment,
and any certificate issued is registered in the name of Cede & Co. or in such
other name as is requested by an authorized representative of DTC (and any
payment is made to Cede & Co. or to such other entity as is requested by an
authorized representative of DTC), ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR
VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL inasmuch as the registered
owner hereof, Cede & Co., has an interest herein.
NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY
Ten Year 5.875% Notes due April 15, 1999
No. 001 $200,000,000 Cusip: 644 239 BL8
NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY, a New York
corporation (hereinafter called the "Company"), for value received, hereby
promises to pay to CEDE & CO. or registered assigns, the principal sum of
200,000,000 DOLLARS on April 19, 2009, at the office or agency of the Company in
the Borough of Manhattan, The City of New York, State of New York, in such coin
or currency of the United States of America as at the time of payment shall be
legal tender for the payment of public and private debts, and to pay interest,
semiannually on April 15 and October 15 of each year, beginning on October 15,
1999, unless such April 15 or October 15 is a Legal Holiday (as defined in the
Indenture), in which case on the next succeeding day that is not a Legal Holiday
(each, an "Interest Payment Date"), on said principal sum at the rate per annum
specified in the title of this Note, at such office or agency, in like coin or
currency, from April 15 or October 15, as the case may be, to which interest on
the Notes has been paid preceding the date hereof (unless the date hereof is an
April 15 or October 15 to which interest has been paid, in which case from the
date hereof, or unless the date hereof is prior to the first payment of
interest, in which case from April 19, 1999) until payment of said principal sum
has been made or duly provided for. Notwithstanding the foregoing, unless this
Note shall be authenticated at a time when there is an existing default in the
payment of interest on the Notes, if the date hereof is after April 1 and before
the next following April 15 or is after October 1 and before the next following
October 15, this Note shall bear interest from such April 15 or June 15;
provided, however, that if the Company shall default in the payment of interest
when due on such April 15 or October 15, then this Note shall bear interest from
the next preceding date to which interest has been paid. The interest so payable
on any April 15 or October 15 shall be paid to the person in whose name this
Note shall be registered at the close of business on the April 1 or October 1,
as applicable (whether or not a Legal Holiday),
<PAGE>
immediately preceding the related Interest Payment Date (each, a "Regular Record
Date"). For purposes of this Note, "Legal Holiday" means any day other than a
Saturday, a Sunday or a day on which banking institutions are not required to be
open.
If and to the extent the Company shall default in the payment of the
interest due on any interest payment date, such defaulted interest shall be paid
to the person in whose name this Note is registered at the close of business on
a record date established for such payment by notice by or on behalf of the
Company to the holders of the Notes mailed by first-class mail not less than 15
days prior to such record date to their last address as they shall appear upon
the Note register, such record date to be not less than five days preceding the
date of payment of such defaulted interest. The Company may pay interest by
check mailed to the holder's address as it appears on the Note register.
Reference is hereby made to the further provisions of this Note set
forth on the reverse hereof and such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been executed by the Trustee
under the Indenture referred to on the reverse hereof.
<PAGE>
IN WITNESS WHEREOF, New England Telephone and Telegraph Company has
caused this Note to be signed by its duly authorized officers and has caused its
corporate seal to be affixed hereunto.
NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY
(SEAL) By
Title: Chairman of the Board,
President and Chief Executive
Officer
By
Title: Assistant Secretary
Dated: April 19, 1999
--------------------
<PAGE>
Certificate of Authentication
This is one of the Debt Securities of the series designated therein and
described in the within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
AS TRUSTEE
By
Authorized Signatory
<PAGE>
NEW ENGLAND TELEPHONE AND TELEGRAPH COMPANY
Ten Year 5.875% Notes due April 15, 2009
1. Indenture. (a) This Note is one of the duly authorized issue of debt
securities of the Company (herein referred to as the "Debt Securities") of the
series hereinafter specified, all issued or to be issued under and pursuant to
an indenture dated as of October 1, 1992 (herein referred to as the
"Indenture"), duly executed and delivered by the Company to State Street Bank
and Trust Company, as successor Trustee (herein referred to as the "Trustee"),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations, duties
and immunities thereunder of the Trustee, the Company and the holders (the words
"holders", "holder", "Securityholders" or "Securityholder" meaning the
registered holders or registered holder) of the Debt Securities.
(b) The Debt Securities may be issued in one or more series, which
different series may be issued in various aggregate principal amounts, may
mature at different times, may bear interest, if any, at different rates, may be
subject to different redemption provisions, if any, may be subject to different
sinking funds, if any, may be subject to additional covenants and Events of
Default and may otherwise vary as provided in the Indenture. This Note is one of
the series designated as the Ten Year 5.875% Notes due April 19, 2009 of the
Company and such series is limited in aggregate principal amount to
$200,000,000. References herein to "Notes" shall mean the Notes of said series.
(c) All capitalized terms used in this Note which are defined in the
Indenture and not otherwise defined herein shall have the meanings assigned to
them in the Indenture.
3. Optional Redemption. The Notes will be redeemable, as a whole or in
part, at the option of the Company at any time or from time to time on at least
30 days' but not more than 90 days' prior notice mailed to the registered
address of each holder. The redemption prices will be equal to the greater of
(i) 100% of the principal amount of the Notes to be redeemed or (ii) the sum of
the present values of the Remaining Scheduled Payments (as defined below)
discounted on a semiannual basis (assuming a 360-day year consisting of twelve
30-day months) at a rate equal to the sum of the Treasury Rate and 15 basis
points. In the case of each of clause (i) and (ii), accrued interest will be
payable to the redemption date.
"Treasury Rate" means, with respect to any redemption date, the rate
per annum equal to the semiannual equivalent yield to maturity of the Comparable
Treasury Issue, assuming a price for the Comparable Treasury Issue (expressed as
a percentage of its principal amount) equal to the Comparable Treasury Price for
such redemption date.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term of the Notes that would be utilized, at the time of selection
and in accordance with customary financial practice,
<PAGE>
in pricing new issues of corporate debt securities of comparable maturity to the
remaining term of the Notes. "Independent Investment Banker" means one of the
Reference Treasury Dealers appointed by the Company.
"Comparable Treasury Price" means, with respect to any redemption date,
(i) the average of the Reference Treasury Dealer Quotations for such redemption
date after excluding the highest and lowest of such Reference Treasury Dealer
Quotations or (ii) if the Trustee obtains fewer than three such Reference
Treasury Dealer Quotations, the average of all such quotations. "Reference
Treasury Dealer Quotations" means, with respect to each Reference Treasury
Dealer and any redemption date, the average, as determined by the Trustee, of
the bid and asked prices for the Comparable Treasury Issue (expressed in each
case as a percentage of its principal amount) quoted in writing to the Trustee
by such Reference Treasury Dealer at 3:30 p.m., New York City time, on the third
business day preceding such redemption date.
"Reference Treasury Dealer" means each of Merrill Lynch, Pierce, Fenner
& Smith Incorporated and two other primary U.S. Government securities dealers
appointed by the Trustee (each, a "Primary Treasury Dealer"). If any of the
foregoing shall cease to be a Primary Treasury Dealer, the Company shall
substitute another nationally recognized investment banking firm that is a
Primary Treasury Dealer.
"Remaining Scheduled Payments" means, with respect to each Note to be
redeemed, the remaining scheduled payments of principal of and interest on such
Note that would be due after the related redemption date but for such
redemption. If such redemption date is not an interest payment date with respect
to such Note, the amount of the next succeeding scheduled interest payment on
such Note will be reduced by the amount of interest accrued on such Note to such
redemption date.
On and after the redemption date, interest will cease to accrue on the
Notes or any portion of the Notes called for redemption (unless the Company
defaults in the payment of the redemption price and accrued interest). On or
before the redemption date, the Company will deposit with the paying agent (or
the Trustee) money sufficient to pay the redemption price of and accrued
interest on the Notes to be redeemed on such date. If less than all of the Notes
are to be redeemed, the Notes to be redeemed shall be selected by the Trustee by
such method as the Trustee shall deem fair and appropriate.
2. Maintenance of Book-Entry System. (a) If DTC notifies the Company
that it is unwilling or unable to continue as the Depository for this Global
Note or if at any time DTC ceases to be a clearing agency registered under the
Securities Exchange Act of 1934, as amended, and, in each case, the Company does
not appoint a successor clearing system within 90 days after receiving such
notice from DTC or on becoming aware that DTC is no longer so registered, the
Company will issue or cause to be issued individual certificates in registered
form on registration of or transfer of, or in exchange for, book-entry interests
in the Notes represented by this Global Note upon delivery of this Global Note
for cancellation. In addition, if the Company determines not to have the Notes
represented by a Global Note, which the Company may do, the Company will issue
or cause to be
<PAGE>
issued individual certificates in registered form in exchange for book-entry
interests in the Notes represented by this Global Note upon delivery of this
Global Note for cancellation.
(b) The Company hereby agrees with the Trustee and the holders of Notes
that at all times, notwithstanding any provision to the contrary set forth in
the Indenture, (i) it will use its best efforts to maintain the Notes in
book-entry form with DTC or any successor thereto and to appoint a successor
depository to the extent necessary to maintain the Notes in book-entry form and
(ii) it will waive any discretionary right that it otherwise may have under the
Indenture to cause the Notes to be issued in certificated form.
3. Effect of Event of Default. In the event that an Event of Default
shall have occurred and be continuing, the principal hereof may be declared, and
upon such declaration shall become, due and payable, in the manner, with the
effect and subject to the conditions provided in the Indenture.
4. Amendments and Waivers. The Indenture contains provisions permitting
the Company and the Trustee, with the written consent of the holders of a
majority in principal amount of the outstanding Debt Securities of each series
affected by a supplemental indenture (with each series voting as a class), to
enter into a supplemental indenture to add any provisions to or to change or
eliminate any provisions of the Indenture or of any supplemental indenture or to
modify, in each case in any manner not covered by provisions in the Indenture
relating to amendments and waivers without the consent of holders, the rights of
the Securityholders of each such series. The holders of a majority in principal
amount of the outstanding Debt Securities of each series affected by such waiver
(with each series voting as a class), by notice to the Trustee, may waive
compliance by the Company with any provision of the Indenture, any supplemental
indenture or the Debt Securities of any such series except a default in the
payment of the principal of or interest on any Debt Security. However, without
the consent of each Securityholder affected, an amendment or waiver may not: (1)
reduce the amount of Debt Securities whose holders must consent to an amendment
or waiver; (2) change the rate of or change the time for payment of interest on
any Debt Security; (3) change the principal of or change the fixed maturity of
any Debt Security; (4) waive a default in the payment of the principal of or
interest on any Debt Security; (5) make any Debt Security payable in money other
than that stated in the Debt Security; or (6) make any change in the provisions
of the Indenture (a) with respect to the right of the holders of a majority in
principal amount of any series of Debt Securities by notice to the Trustee to
waive an existing default with respect to that series and its consequences
except a default in the payment of the principal of or interest on any Debt
Security; (b) with respect to the right of any holder of a Debt Security to
receive payment of principal and interest on the Debt Security, on or after the
respective due dates expressed in the Debt Security, the right of any holder of
a coupon to receive payment of interest due as provided in such coupon, or to
bring suit for the enforcement of any such payment on or after such respective
dates; and (c) contained in this sentence.
5. Denominations, Transfer and Exchange. (a) The Notes are issuable in
registered form without coupons in denominations of $1,000 and any integral
multiple thereof.
<PAGE>
(b) Where certificated Notes are presented to the registrar with a
request to register their transfer or to exchange them for an equal principal
amount of Notes of other authorized denominations, the registrar shall register
the transfer or make the exchange if its requirements for such transactions are
met. The Company will not make any charge for any registration of transfer or
exchange but may require the payment by the party requesting such registration
of transfer or exchange of a sum sufficient to cover any tax or other
governmental charge payable in connection therewith.
(c) Ownership of Notes shall be provided by the register for the Notes
kept by the registrar. The Company, the Trustee and any agent of the Company may
treat the person in whose name a Note is registered as the absolute owner
thereof for all purposes.
6. No Liability of Certain Persons. No director, officer, employee or
shareholder, as such, of the Company shall have any liability for any
obligations of the Company under this Note or the Indenture or for any claim
based on, in respect of or by reason of such obligations or their creation. Each
holder by accepting this Note waives and releases all such liability. The waiver
and release are part of the consideration for the issue of the Note.
7. Governing Law. The laws of the State of New York shall govern the
Indenture and this Note.
<PAGE>
- --------------------------------------------------------------------------------
THE FOLLOWING ABBREVIATIONS SHALL BE CONSTRUED AS THOUGH THE WORDS SET FORTH
BELOW OPPOSITE EACH ABBREVIATION WERE WRITTEN OUT IN FULL WHERE SUCH
ABBREVIATION APPEARS:
<TABLE>
<S> <C> <C>
TEN COM--as tenants in common (Name) CUST (Name) UNIF--(Name) as Custodian
TEN ENT--as tenants by the entirety GIFT MIN ACT (state) for (Name) Under the (State)
JT TEN --as joint tenants with Uniform Gifts to Minors Act
right of survivorship
and not as tenants in common
ADDITIONAL ABBREVIATIONS MAY ALSO BE USED THOUGH NOT IN THE ABOVE LIST.
- --------------------------------------------------------------------------------
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
PLEASE INSERT TAXPAYER
IDENTIFICATION NUMBER OF ASSIGNEE
- -----------------------------------------
- -----------------------------------------
- --------------------------------------------------------------------------------
PLEASE PRINT OR TYPEWRITE NAME AND ADDRESS INCLUDING POSTAL ZIP CODE
OF ASSIGNEE
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
the within Note of New England Telephone and Telegraph Company and all rights
thereunder and hereby irrevocably constitutes and appoints_____________________
attorney to transfer said Note on the books of the Company, with full power of
substitution in the premises
Dated: ___________________________________
Signature
NOTICE: THE SIGNATURE(S) TO THIS ASSIGNMENT MUST CORRESPOND WITH THE
NAME AS WRITTEN UPON THE FACE OF THE WITHIN INSTRUMENT IN
EVERY PARTICULAR, WITHOUT ALTERATION OR ENLARGEMENT OR ANY
CHANGE WHATEVER. THE SIGNATURE(S) SHOULD BE GUARANTEED BY A
COMMERCIAL BANK OR TRUST COMPANY, A MEMBER ORGANIZATION OF A
NATIONAL STOCK EXCHANGE OR BY SUCH OTHER ENTITY WHOSE
SIGNATURE IS ON FILE WITH AND ACCEPTABLE TO THE TRANSFER
AGENT.
</TABLE>
EXHIBIT 12
New England Telephone and Telegraph Company
Computation of Ratio of Earnings to Fixed Charges
(Dollars in Millions)
<TABLE>
<CAPTION>
Years Ended December 31,
1998 1997 1996* 1995* 1994*
<S> <C> <C> <C> <C> <C>
Income before provision for income taxes,
extraordinary item, and cumulative effect of
change in accounting principle $1,027.7 $ 898.1 $1,082.3 $ 837.4 $ 761.3
Equity in income of affiliate (15.7) (18.0) (9.2) (11.1) (11.5)
Dividends received from equity affiliate 21.4 8.3 10.3 8.3 13.3
Interest expense 153.7 138.9 142.1 153.9 163.0
Portion of rent expense representing interest 28.0 28.3 27.9 28.4 28.7
Amortization of capitalized interest 2.2 1.3 0.4 -- --
-------- ------- -------- -------- --------
Income, as adjusted $1,217.3 $1,056.9 $1,253.8 $1,016.9 $ 954.8
======== ======== ======== ======== ========
Fixed charges:
Interest expense $ 153.7 $ 138.9 $ 142.1 $ 153.9 $ 163.0
Portion of rent expense representing interest 28.0 28.3 27.9 28.4 28.7
Capitalized interest 13.8 13.0 12.5 -- --
-------- ------- -------- -------- --------
Fixed charges $ 195.5 $ 180.2 $ 182.5 $ 182.3 $ 191.7
======== ======== ======== ======== ========
Ratio of Earnings to Fixed Charges 6.23 5.87 6.87 5.58 4.98
======== ======== ======== ======== ========
</TABLE>
*Restated as required by revision of Item 503(d) of Regulation S-K.
