<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON MAY 7, 1999
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
------------------------
BELL ATLANTIC CORPORATION BELL ATLANTIC FINANCIAL SERVICES, INC.
(Exact Name of Registrants as Specified in Their Charters)
<TABLE>
<S> <C>
DELAWARE DELAWARE
(State or other Jurisdiction of (State or other Jurisdiction of
incorporation or organization) incorporation or organization)
23-2259884 51-0272912
(I.R.S. Employer Identification No.) (I.R.S. Employer Identification No.)
1095 AVENUE OF THE AMERICAS 3900 WASHINGTON STREET, 2ND FLOOR
New York, New York 10036 Wilmington, Delaware 19802
(212) 395-2121 (302) 761-4200
</TABLE>
(Address, including zip code, and telephone number including area code, of
Registrants' principal executive offices)
------------------------------
Please address a copy of all communications to
<TABLE>
<S> <C>
P. ALAN BULLINER, ESQ. JANET M. GARRITY
ASSOCIATE GENERAL COUNSEL AND CORPORATE SECRETARY PRESIDENT AND TREASURER
BELL ATLANTIC CORPORATION BELL ATLANTIC FINANCIAL SERVICES, INC.
1095 AVENUE OF AMERICAS 3900 WASHINGTON STREET, 2ND FLOOR
NEW YORK, NEW YORK 10036 WILMINGTON, DELAWARE 19802
</TABLE>
(Name, address, including zip code, and telephone number, including area code,
of agent of service)
------------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: From time
to time after this Registration Statement becomes effective.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462 (b) under the Securities Act, check the following box and
list the Securities Act registration statement number of the earlier effective
registration statement for the same offering / /
If this Form is a post-effective amendment filed pursuant to Rule 462 (c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the effective registration statement for the
same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PRICE PER UNIT (1) OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Senior Exchangeable Notes of
Bell Atlantic Financial
Services, Inc..................................... $2,455,000,000 100% $2,455,000,000 $682,490
Support Agreement between Bell
Atlantic Corporation and Bell
Atlantic Financial Services, Inc.................. $2,455,000,000 (2)
</TABLE>
(1) Estimated solely for the purpose of calculating the registration fee.
(2) Pursuant to Rule 457(n), no fee is payable with respect to the Support
Agreement.
------------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
This Prospectus, dated May 7, 1999, is subject to completion and amendment.
PROSPECTUS
BELL ATLANTIC FINANCIAL SERVICES, INC.
ISSUER
BELL ATLANTIC CORPORATION
SUPPORT PROVIDER
$2,455,000,000
5.75% SENIOR EXCHANGEABLE NOTES DUE 2003
---------------------
At various times, the holders identified in this Prospectus may offer to
sell the 5.75% Senior Exchangeable Notes due 2003 of Bell Atlantic Financial
Services, Inc. at prevailing market prices at the time of sale or at prices
privately negotiated by them. The holders may sell the notes to or through
underwriters, broker-dealers or agents, who may be compensated with discounts,
concessions or commissions.
INFORMATION ABOUT THE NOTES:
- The notes will mature on April 1, 2003, unless the holders exchange the
notes or we redeem the notes before April 1, 2003.
- We will pay interest on the notes on April 1 and October 1 of each year.
We began paying interest on October 1, 1998.
- We have the option to redeem all or a portion of the notes at any time
after April 1, 2001, at the redemption prices set forth on page 19 of this
Prospectus.
- Beginning September 1, 1999, holders may exchange the notes for fully paid
ordinary shares of Telecom Corporation of New Zealand Limited beginning
September 1, 1999 until the notes mature. Holders will receive 178.0369
TCNZ ordinary shares for each U.S. $1,000 principal amount of notes they
exchange. At the April 30, 1999, TCNZ ordinary share closing price of N.Z.
$9.30 and a reported currency exchange rate of U.S. $.5595 for each N.Z.
$1.00, each note has a current exchange value of approximately U.S. $926.
However, we have the right to pay to the holders a cash amount in U.S.
dollars equal to the current market value of the TCNZ shares instead of
delivering TCNZ shares to holders who exchange their notes. Some events
described in this prospectus may change what holders may receive upon
exchange of the notes.
- Bell Atlantic Corporation has agreed to provide us with funds to support
the payment of principal, premium, if any, and interest on the notes. Bell
Atlantic Corporation has also agreed to provide any necessary funds if we
elect to deliver cash to holders who exchange their notes.
- The notes are listed on the Luxembourg Stock Exchange and are quoted on
the Australian Stock Exchange Limited.
YOU SHOULD CAREFULLY CONSIDER THE RISK FACTORS BEGINNING ON PAGE 8 IN THIS
PROSPECTUS BEFORE INVESTING IN THE NOTES.
------------------------
NEITHER THE SEC NOR ANY STATE SECURITIES COMMISSION HAS APPROVED THE NOTES
OR DETERMINED THAT THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION
TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is , 1999.
THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED.
HOLDERS MAY NOT SELL THESE NOTES UNTIL THE REGISTRATION STATEMENT FILED WITH THE
SEC IS EFFECTIVE. THIS PROSPECTUS IS NOT AN OFFER TO BUY THESE NOTES IN ANY
STATE WHERE THE OFFER OR SALE IS NOT PERMITTED.
<PAGE>
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
SEC utilizing a shelf registration process in accordance with the Registration
Rights Agreement dated as of February 26, 1998 by and among our company, Bell
Atlantic Corporation and the managers (the "Registration Rights Agreement").
Under this process, the holders named in the "Selling Holders" section of this
prospectus, or in any supplement to this prospectus, may sell the notes
described in this prospectus from time to time. This prospectus provides you
with a general description of the notes. Each time that additional selling
holders want to offer notes and have provided us with a notice in accordance
with the terms of the Registration Rights Agreement, we will provide a
prospectus supplement that will contain specific information about the terms of
that offering. The prospectus supplement may also add, update or change
information contained in this prospectus. We have the right to suspend the use
of this Prospectus in accordance with the Registration Rights Agreement. You
should read both this and any prospectus supplement together with any additional
information described under the heading "How to Obtain More Information about
Bell Atlantic."
HOW TO OBTAIN INFORMATION ABOUT BELL ATLANTIC
Bell Atlantic Corporation ("Bell Atlantic"), our indirect parent
corporation, files annual, quarterly and current reports and other information
with the SEC. You may read and copy any document Bell Atlantic Corporation files
at the SEC's public reference rooms in Washington, D.C., New York, New York and
Chicago, Illinois. Please call the SEC at 1-800-SEC-0330 for further information
on the public reference rooms. Bell Atlantic's SEC filings are also available to
the public over the Internet at the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information that Bell
Atlantic files with them, which means that we can disclose important information
to you by referring you to those documents. The information incorporated by
reference is considered to be part of this prospectus, and information that Bell
Atlantic files later with the SEC will automatically update and supersede this
information. We incorporate by reference the documents listed below and any
future filings made with the SEC under Sections 13(a), 13(c), 14 or 15(d) of the
Securities Exchange Act of 1934, until all of the notes offered by the holders
have been sold:
- Bell Atlantic's Annual Report on Form 10-K for the year ended December 31,
1998;
- Bell Atlantic's Current Report on Form 8-K filed with the SEC on April 23,
1999;
- Bell Atlantic's Current Report on Form 8-K filed with the SEC on April 28,
1999; and
- The Joint Proxy Statement and Prospectus of Bell Atlantic and GTE
Corporation in respect of the proposed merger of Bell Atlantic and GTE
Corporation dated April 13, 1999.
You may request a copy of Bell Atlantic's Annual Report or any of the above
documents at no cost by writing or telephoning:
Director--Reporting and Consolidation
Bell Atlantic Corporation
1717 Arch Street, 47(th) Floor
Philadelphia, PA 19103
Telephone: (215) 963-6360
You should rely only on the information incorporated by reference or
provided in this prospectus or any prospectus supplement. We have not authorized
anyone else to provide you with different information. The selling holders are
not making any offer of these notes in any state where the offer in not
permitted. You should not assume that the information in this prospectus or any
prospectus supplement is accurate as of any date other than the date on the
front of those documents.
2
<PAGE>
HOW TO OBTAIN INFORMATION ABOUT
TELECOM CORPORATION OF NEW ZEALAND LIMITED
Telecom Corporation of New Zealand ("TCNZ") files an annual and other
reports with the SEC. You may read and copy any document TCNZ files at the SEC's
public reference rooms in Washington, D.C., New York, New York and Chicago,
Illinois. Please call the SEC at 1-800-SEC-0330 for further information on
public reference. TCNZ's SEC filings may also be available to the public over
the Internet at the SEC's web site at http://www.sec.gov.
3
<PAGE>
PROSPECTUS SUMMARY
THIS SUMMARY HIGHLIGHTS SELECTED INFORMATION FROM THIS PROSPECTUS. WE URGE
YOU TO CAREFULLY READ AND REVIEW THE ENTIRE PROSPECTUS AND THE OTHER DOCUMENTS
TO WHICH IT REFERS TO FULLY UNDERSTAND THE TERMS OF THE NOTES AND THE OFFERING.
<TABLE>
<S> <C>
Bell Atlantic Financial
Services, Inc.............. We are a wholly-owned indirect subsidiary of Bell Atlantic,
and we were incorporated in 1983 under the laws of the State
of Delaware. We were established to provide financing to
Bell Atlantic and certain of its subsidiaries and
affiliates. We do not engage in any separate business
activities. Our principal executive offices are located at
3900 Washington Street, 2(nd) Floor, Wilmington, Delaware
19802 (telephone number (302) 761-4200).
Bell Atlantic Corporation.... Bell Atlantic was incorporated in 1983 under the laws of the
State of Delaware and completed a merger with NYNEX
Corporation on August 14, 1997. Bell Atlantic's principal
executive offices are located at 1095 Avenue of the
Americas, New York, New York 10036 (telephone number
212-395-2121).
The Notes.................... $2,455,000,000 principal amount of 5.75% Senior Exchangeable
Notes due 2003. The notes are governed by an indenture among
us, Bell Atlantic and The Chase Manhattan Bank, as trustee
(the "Trustee"), dated as of February 26, 1998 (the
"Indenture").
Support Agreement............ On February 1, 1998, we entered into a Support Agreement
with Bell Atlantic in which Bell Atlantic agreed, among
other things, to
- make sure that we have a positive tangible net worth; and
- provide us with the funds we need to pay principal,
premium, if any, and interest on, the notes, or deliver
cash, if we cannot obtain funds from other sources on
commercially reasonable terms.
If we fail to make any payment on the notes, holders will
have a claim against Bell Atlantic directly for the amount
owed to holders, but holders will not have any recourse to
the stock or assets of any of Bell Atlantic's telephone
subsidiaries, or Bell Atlantic's interest in TCNZ or any
operating telephone company which may at the time be owned
directly or indirectly by Bell Atlantic. The "Description of
the Notes--Support Agreement" section of this Prospectus
beginning on page 12 contains more information about the
Support Agreement.
Ranking...................... The notes are general indebtedness of our company. The notes
rank equal in right of payment with all of our existing and
future senior indebtedness. Bell Atlantic's obligations
under the Support Agreement rank equal with Bell Atlantic's
other unsecured debt, except that holders have no recourse
to the stock or assets of Bell Atlantic's telephone
subsidiaries, or Bell Atlantic's interest in TCNZ or any
operating telephone company which may at the time be owned
directly or indirectly by Bell Atlantic. Bell Atlantic is a
holding company, and therefore, the rights of Bell Atlantic
and, its creditors (including holders) to realize upon the
assets of any
</TABLE>
4
<PAGE>
<TABLE>
<S> <C>
subsidiary of Bell Atlantic are subject to prior claims of
creditors of each such subsidiary, except to the extent that
claims of Bell Atlantic itself as a creditor of a subsidiary
may be recognized. See "Description of the Notes--Support
Agreement."
Maturity Date................ April 1, 2003.
Interest..................... We will pay interest on the notes semi-annually on April 1
and October 1 of each year. We began paying interest on
October 1, 1998.
Denomination................. We issued registered notes in denominations of U.S.$1,000
and integral multiples of U.S. $1,000. We issued bearer
notes in denominations of U.S.$1,000, U.S.$10,000 and
U.S.$100,000.
Exchange Rights.............. At any time after September 1, 1999 and prior to April 1,
2003, and unless the notes are redeemed, holders have the
option to exchange their notes for fully paid TCNZ ordinary
shares. Holders will receive 178.0369 TCNZ ordinary shares
for each $1,000 principal amount of notes they exchange. The
exchange ratio is subject to adjustment as described in this
Prospectus. At the April 30, 1999, TCNZ ordinary share
closing price of N.Z. $9.30 and a reported currency exchange
rate of U.S. $.5595 for each N.Z. $1.00, each note has a
current exchange value of approximately U.S. $926. However,
instead of delivering TCNZ ordinary shares, we may choose to
pay cash equal to the market price in U.S. dollars of such
TCNZ ordinary shares. In connection with any redemption and
at final maturity, we also have the option to pay an amount
based on the daily volume-weighted average price of the TCNZ
ordinary shares. We refer to this amount as the "average
market value amount."
Other Exchange Property...... If certain events affecting the TCNZ ordinary shares occur,
including certain events which result in the conversion of
TCNZ ordinary shares into other assets, we may provide such
assets in lieu of the TCNZ ordinary shares. If events have
occurred that result in holders of the notes having the
right to receive other exchange property, rather than TCNZ
ordinary shares, you should consider statements in this
prospectus relating to TCNZ ordinary shares to refer to such
other exchange property, unless the context indicates
otherwise.
Our Option to Redeem the
Notes...................... We may not redeem the notes before April 1, 2001, unless
certain circumstances involving U.S. taxation or information
reporting requirements occur. On or after April 1, 2001, we
may choose to redeem all or part of the notes for cash, at
the redemption prices set forth in this Prospectus. If we
choose to redeem the notes, we will pay to holders any
accrued and unpaid interest to the date of redemption.
</TABLE>
5
<PAGE>
<TABLE>
<S> <C>
Tax Redemption............... We may redeem all or part of the notes if certain events
involving United States taxation or information reporting
requirements occur:
- at any time before September 1, 1999 at a redemption price
of (i) 100% of the principal amount of the notes plus (ii) a
cash amount equal to the excess, if any, of the market price
as of the date fixed for redemption of the number of TCNZ
ordinary shares deliverable upon the exchange of the notes
if the notes were exchangeable at that time minus 100% of
the principal amount of the notes plus (iii) accrued
interest to the date fixed for redemption; and
- at any time on or after September 1, 1999 at a redemption
price of (i) 100% of the principal amount of the notes, plus
(ii) accrued interest to the date fixed for redemption.
Form of the Notes............ The notes initially were represented by three global notes.
The Rule 144A global note is registered in the name of Cede
& Co., as nominee for the Depository Trust Company ("DTC").
The Regulation S global note is registered in the name of
Chase Nominees Limited and was deposited with the common
depositary for Euroclear and Cedel. The global bearer note
was deposited with the common depositary for, and in respect
of, interests held through Euroclear and Cedel. We will
issue an unrestricted global note, registered in the name of
Cede & Co., which will represent notes sold under this
prospectus. Except as described in this Prospectus,
certificates for individual notes will not be issued in
exchange for interests in the global notes. See "Description
of Notes--Book Entry; Form and Denomination" on page 24 of
this Prospectus.
Liens on Assets.............. Subject to certain exceptions, if at any time we mortgage,
pledge, or otherwise subject any property or assets now
owned or later acquired by us to any lien, we have agreed to
take the following actions. We will secure the outstanding
notes, and any of our other obligations which are then
outstanding and entitled to the benefit of a similar
covenant, equally and ratably with the indebtedness or
obligations secured by the mortgage, pledge, or lien. This
obligation continues for the period that the indebtedness or
obligation is secured. No provisions of the Indenture
prevent any of our affiliates, including Bell Atlantic, from
mortgaging, pledging, or subjecting to any lien any of their
respective property or assets, even if they have acquired
the property or assets from us.
U.S. Federal Income Tax
Considerations............. The notes will be treated as contingent-payment debt
instruments due to their exchangeable nature. Investors
should carefully review the section captioned "Certain
United States Federal Income Tax Considerations" for a
discussion of the U.S. federal income tax consequences of an
investment in the notes.
No Proceeds.................. Although we received proceeds from the initial placement of
the notes in February 1998, neither we nor Bell Atlantic
will receive any proceeds of the sale of the notes by the
selling holders.
</TABLE>
6
<PAGE>
<TABLE>
<S> <C>
Registration Rights.......... This Prospectus is part of a registration statement filed
pursuant to a Registration Rights Agreement relating to the
notes dated as of February 26, 1998 by and among us, Bell
Atlantic and the Managers, for the benefit of the owners of
the notes. We have agreed, together with Bell Atlantic, to
use our best efforts to keep the registration statement
effective until the notes mature, are exchanged or redeemed,
subject to certain permitted exceptions. If we are not in
compliance, or Bell Atlantic is not in compliance, with our
obligations under the Registration Rights Agreement, the
interest rate on the notes may increase. See "Registration
Rights" on page 32. If the interest rate on the notes
increases, we will notify the Luxembourg Stock Exchange and
holders in the manner specified in "Description of the
Notes--Notices" on page 25.
The Registration Rights Agreement does not relate to the
offer of sale of the TCNZ ordinary shares that are
deliverable upon exercise of the notes. Prior to June 1,
1999, Bell Atlantic shall have taken all steps necessary to
disaffiliate from TCNZ. Accordingly, we believe, and Bell
Atlantic believes, that upon exchange of the notes for TCNZ
ordinary shares, holders (other than TCNZ and affiliates of
TCNZ) will receive TCNZ ordinary shares that are not subject
to restrictions on sale under the Securities Act of 1933, as
amended.
TCNZ Ordinary Shares......... The TCNZ ordinary shares are listed on the New Zealand Stock
Exchange ("NZSE") under the symbol "TEL" and the Australian
Stock Exchange ("ASX") under the symbol "TEL." The American
Depositary Receipts of TCNZ are listed on the New York Stock
Exchange ("NYSE") under the symbol "NZT."
</TABLE>
WE URGE YOU TO CAREFULLY REVIEW THE RISK FACTORS BEGINNING ON PAGE 8 FOR A
DISCUSSION OF FACTORS YOU SHOULD CONSIDER BEFORE INVESTING IN THE NOTES.
7
<PAGE>
RISK FACTORS
In addition to the other information, you should carefully consider the
following risk factors and the other information in this Prospectus before
investing in the notes.
RESTRICTIONS IN NEW ZEALAND AND AUSTRALIA ON THE OWNERSHIP AND TRANSFER OF
TCNZ ORDINARY SHARES MAY LIMIT THE AMOUNT OF NOTES THAT CAN BE ACQUIRED BY
INVESTORS
The New Zealand Minister of Finance, on behalf of the New Zealand
Government, holds a special rights convertible preference share in TCNZ, known
as the "Kiwi Share." The Kiwi Share requires that the holder of the Kiwi share
consent to the amendment or removal of, or any act or omission that fails to
comply with, certain provisions of TCNZ's Constitution. These provisions of
TCNZ's Constitution require, among other things:
- each of the Minister of Finance and the TCNZ board of directors (the "TCNZ
Board") to give prior written consent for a person to hold a "relevant
interest" in 10% or more of the total voting shares in TCNZ; and
- the Minister of Finance to give prior written approval for a person who is
not a New Zealand national to hold a "relevant interest" of more than
49.9% of the total voting shares of TCNZ.
The term "relevant interest" includes:
- "beneficial ownership" as that term is defined within the meaning of Rule
13d-3 of the Exchange Act;
- an interest pursuant to any agreement or arrangement under which any of
the foregoing rights arise.
The term "relevant interest" excludes certain limited interests arising from
defined financial, custodial, trading and similar relationships.
If the TCNZ Board (or the holder of the Kiwi Share after consultation with
the TCNZ Board) determines that there are reasonable grounds to believe that any
person has a "relevant interest" in voting shares in excess of the above
limitations, the TCNZ Board (or the holder of the Kiwi Share if the TCNZ Board
fails to act) may, after following certain procedures, prohibit the exercise of
the voting rights relating to the shares (in which case voting rights vest in
the chairman of TCNZ) and may force the sale of the shares. The TCNZ Board may
also refuse to register a transfer of shares if it reasonably believes that the
transfer would breach the restrictions described above. The TCNZ Board and/or
the holder of the Kiwi Share may enforce these provisions of the TCNZ
Constitution against the Depositary or Custodian for the current TCNZ American
Depositary Receipt ("ADR") facility as holders of TCNZ ordinary shares.
We believe that the notes will be deemed to be subject to the Kiwi Share
provisions and therefore, each holder's "relevant interest" represented by the
notes must be aggregated with any other relevant interest of such holder in TCNZ
to determine whether such holder's aggregate relevant interest exceeds the
specified thresholds. The "relevant interest" represented by the notes will be
calculated on the basis of the number of TCNZ ordinary shares deliverable upon
the exchange of the notes or ADRs representing the TCNZ ordinary shares held or
beneficially held by the holder. Accordingly, we believe that any investor must
obtain the approval of the New Zealand Minister of Finance and the TCNZ Board if
an investor wishes to acquire a "relevant interest" in the notes exchangeable
for an amount of TCNZ ordinary shares that is equal to or greater than 10% of
the total voting shares of TCNZ, when combined with his other "relevant
interests" in TCNZ.
New Zealand law also requires a person who obtains a "relevant interest" in
5% or more of the shares of a listed company to provide notification to both the
company and the New Zealand Stock Exchange ("NZSE"). The term "relevant
interest" in this context is defined broadly and includes,
8
<PAGE>
among others, the same circumstances as constitute a "relevant interest" under
the Kiwi Share definition described above. Additionally, the listing rules of
the NSZE require that a person follow specified procedures before the person
acquires interests in more than 20% of TCNZ's voting shares.
Finally, a holder is subject to Australian law and the rules of the
Australian Stock Exchange ("ASX") by virtue of the listing of TCNZ on the ASX.
Under Australian law, any person who becomes entitled to 5% or more of the
shares of a listed company must notify the ASX and the listed company. The term
"entitlement" is defined broadly and includes, among others, the same
circumstances as constitute a "relevant interest" under the Kiwi Share
definition described above.
THE TCNZ ORDINARY SHARES AND ADRS ARE SUBJECT TO FLUCTUATION IN MARKET VALUE
DUE TO A NUMBER OF FACTORS, INCLUDING TCNZ'S OPERATIONS, EXCHANGE RATE
FLUCTUATIONS AND OTHER FACTORS, WHICH MAY ALSO AFFECT THE VALUE OF THE NOTES
Trading prices of TCNZ ordinary shares and ADRs are influenced by TCNZ's
operational results. Trading prices are also influenced by complex interrelated
political, economic, financial and other factors that can affect the capital
markets generally, the local markets on which the TCNZ Ordinary Shares are
traded, the New York Stock Exchange ("NYSE") (on which the ADRs are traded) and
the market segment in which TCNZ participates. It is impossible to predict
whether the prices of TCNZ Ordinary Shares or ADRs will rise or fall. In
addition, fluctuations in the N.Z. dollar/U.S. dollar exchange rate may affect
the U.S. dollar price of the ADRs on the NYSE, the value in U.S. dollars of the
TCNZ ordinary shares which may be delivered if a holder exchanges the notes and
the market value of the notes.
Any market that develops for the notes may influence and be influenced by
the market for the TCNZ ordinary shares or ADRs. For example, the price of the
TCNZ ordinary shares or ADRs may become more volatile. The price may be
depressed by investors' anticipation of the potential distribution into the
market of substantial additional amounts of TCNZ ordinary shares or ADRs at the
maturity of the notes, by possible sales of TCNZ ordinary shares or ADRs by
investors who received the TCNZ securities upon exchange of the notes, and by
hedging or arbitrage trading activity that may develop involving the notes and
the TCNZ ordinary shares or ADRs.
TCNZ HAS NO OBLIGATION WITH RESPECT TO THE NOTES, AND YOU MAY LOOK ONLY TO US
AND, TO THE EXTENT SET FORTH IN THE SUPPORT AGREEMENT, BELL ATLANTIC FOR
PAYMENT AND OTHER OBLIGATIONS
TCNZ was not involved in the initial offering of the notes, is not a party
to the indenture and has no obligation with respect to the notes or any amounts
to be paid to the holders of the notes. Therefore, a holder of notes can look
only to us and to Bell Atlantic, to the extent of Bell Atlantic's obligations
under the Support Agreement, for repayment of the notes. Holders of notes have
no recourse against TCNZ.
IF WE AND BELL ATLANTIC ARE IN DEFAULT OF OUR OBLIGATIONS WITH RESPECT TO THE
NOTES, HOLDERS HAVE NO RECOURSE TO THE TELEPHONE SUBSIDIARIES OF BELL
ATLANTIC OR TO BELL ATLANTIC'S INTEREST IN CERTAIN OTHER OPERATING TELEPHONE
COMPANIES
Under the terms of the Support Agreement, holders have no recourse to or
against the stock or assets of the telephone subsidiaries of Bell Atlantic, or
Bell Atlantic's interest in TCNZ or any other operating telephone company which
may at the time be owned directly or indirectly by Bell Atlantic.
BECAUSE BELL ATLANTIC'S OBLIGATIONS UNDER THE SUPPORT AGREEMENT ARE, IN
EFFECT, SUBORDINATED TO CREDITORS CLAIMS AGAINST BELL ATLANTIC SUBSIDIARIES,
THE ABILITY OF HOLDERS TO ENFORCE BELL ATLANTIC'S OBLIGATIONS THROUGH
RECOURSE TO SUBSIDIARY STOCK OR ASSETS IS SUBJECT TO PRIOR CLAIMS OF THE
SUBSIDIARIES' CREDITORS
Bell Atlantic is a holding company and therefore, the right of Bell Atlantic
and creditors of Bell Atlantic (including the holders), to realize upon the
stock or assets of any subsidiary of Bell Atlantic, is
9
<PAGE>
subject to prior claims of creditors of each subsidiary. This limitation does
not apply to the extent that claims of Bell Atlantic as a creditor of a
subsidiary are recognized.
THE INDENTURE DOES NOT PREVENT US OR BELL ATLANTIC FROM INCURRING ADDITIONAL
DEBT ON TERMS THAT MAY INCREASE THE CREDIT RISKS UNDER THE NOTES
The Indenture pursuant to which the notes were issued does not restrict us,
Bell Atlantic or Bell Atlantic's subsidiaries from incurring additional
indebtedness. Additionally, indebtedness incurred by us or Bell Atlantic may
increase credit risk under the notes.
BECAUSE THERE IS CURRENTLY NO PUBLIC MARKET FOR THE NOTES, A HOLDER MAY NOT
READILY BE ABLE TO RESELL THE NOTES.
There is currently no active trading market for the notes. A trading market
for the notes may never develop.
WE MAY CHOOSE TO DELIVER CASH TO HOLDERS EXERCISING THEIR EXCHANGE RIGHTS, IN
WHICH CASE THE HOLDERS WILL NOT RECEIVE TCNZ ORDINARY SHARES
We have the option under certain circumstances, exercisable in our sole
discretion, to satisfy our obligations if the notes are exchanged by delivering
to holders cash instead of TCNZ ordinary shares which would otherwise be
delivered on the exchange. Although we may deliver TCNZ ordinary shares, we
cannot assure you that we will do so.
BELL ATLANTIC MAY RESELL THE TCNZ ORDINARY SHARES AT ANY TIME AND HOLDERS
HAVE NO RECOURSE AGAINST TCNZ ORDINARY SHARES
Bell Atlantic Holdings, Limited ("BA Holdings"), an indirect subsidiary of
Bell Atlantic, owns 437,080,670 TCNZ ordinary shares. The Indenture does not
restrict the ability of Bell Atlantic or any of its affiliates, including BA
Holdings, to sell, pledge or otherwise convey (or cause the sale, pledge or
conveyance) all or part of the TCNZ ordinary shares held by it. Neither Bell
Atlantic nor BA Holdings nor any of their respective affiliates have pledged or
otherwise held in escrow any TCNZ ordinary shares for exchange at the maturity
of the notes. Additionally, under the Telecommunications Act of 1996, creditors
may not make any claims against any TCNZ ordinary shares owned by Bell Atlantic,
whether such claims arise as a result of the bankruptcy, insolvency or
liquidation of Bell Atlantic, or from any other events.
TO ACHIEVE CERTAIN TAX CONSEQUENCES, TCNZ IS SUBJECT TO CERTAIN CONTINUITY OF
OWNERSHIP RESTRICTIONS UNDER NEW ZEALAND LAW
In general, a portion of the dividends payable by TCNZ are eligible for
imputation tax credits in New Zealand. However, if TCNZ fails to satisfy certain
continuity of ownership requirements, the imputation tax credits will be lost
unless they are attached to dividends paid before the change in continuity of
ownership. The imputation tax credits will be lost if there is greater than a
34% change in continuity at a time between the time the imputation tax credits
are derived and the time they attach to dividends. Exchanges of the notes for
TCNZ ordinary shares count toward the 34% threshold. Because the exchanges of
the notes are treated as "off-market" under New Zealand law, there is a
significant risk that TCNZ will not be able to rely on the exemption treating
all shareholders holding less than 10% of the stock of TCNZ as a single
shareholder for purposes of determining continuity. This, in turn, significantly
increases the risk that the 34% threshold would be breached at some point and
that the imputation tax credits would be lost.
10
<PAGE>
USE OF PROCEEDS
Although we received proceeds from the initial placement of the notes in
February 1998, we will not receive any proceeds from the sale of the notes by
the selling holders. Bell Atlantic also will not receive any proceeds from the
sale of the notes by the selling holders.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
Bell Atlantic for the periods indicated.
<TABLE>
<CAPTION>
TWELVE MONTHS ENDED DECEMBER 31,
- -----------------------------------------------------
<S> <C> <C> <C> <C>
1998 1997 1996 1995 1994
- --------- --------- --------- --------- ---------
4.31 3.69 4.35 3.94 3.33
</TABLE>
For the purpose of this ratio:
- Earnings have been calculated by adding minority interest, loss from
unconsolidated businesses, dividends from unconsolidated businesses,
interest expense (including interest related to lease financing
activities), the portion of rent expense representing interest, and
amortization of capitalized interest to income before provision for income
taxes, extraordinary items, and cumulative effect of changes in accounting
principles, and by deducting therefrom income from unconsolidated
businesses; and
- Fixed charges are comprised of interest expense (including interest
related to lease financing activities), the portion of rent expense
representing interest, capitalized interest, priority distributions, and
preferred stock dividend requirement.
11
<PAGE>
DESCRIPTION OF THE NOTES
The notes were issued under an indenture, dated as of February 26, 1998 (the
"Indenture"), by and among our company, Bell Atlantic and The Chase Manhattan
Bank, as trustee (the "Trustee"). Holders may request a copy of the Indenture
from us or Bell Atlantic. The following summary of the material provisions of
the Indenture does not purport to be complete and is subject to, and is
qualified in its entirety by reference to, the Trust Indenture Act of 1939, as
amended (the "TIA"), and to all of the provisions of the Indenture, including
the definitions of certain terms therein, and those terms made a part of the
Indenture by reference to the TIA as in effect on the date of the Indenture. The
definitions of certain terms used in the following summary are set forth below
under "--Certain Definitions."
GENERAL
We issued $2,455,000,000 aggregate principal amount of the notes. The notes
are general indebtedness of our company, ranking equal with all our existing and
future senior indebtedness. The Indenture does not restrict our ability, or the
ability of Bell Atlantic or its subsidiaries to incur indebtedness.
SUPPORT AGREEMENT
Under a support agreement, dated as of February 1, 1998 (the "Support
Agreement"), Bell Atlantic has agreed to:
- own directly or indirectly all of our voting capital stock issued and
outstanding at any time;
- make sure that we have a positive tangible net worth, as determined in
accordance with generally accepted accounting principles;
- provide us with any funds we need to make any payment of principal,
premium or interest on, or delivery of property upon exchange of, the
notes, if we cannot obtain funds from other sources on commercially
reasonable terms.
We and Bell Atlantic cannot terminate the Support Agreement until all of the
notes have been paid in full, redeemed or exchanged. We and Bell Atlantic cannot
amend the Support Agreement in any way that adversely affects your rights unless
you agree to the amendments in writing and the SEC has approved the change.
If we fail to make any payment of principal, premium or interest, or fail to
deliver the TCNZ ordinary shares or other exchange property, you have the right
to sue Bell Atlantic directly for payment of the amount owed to you. If you
obtain a judgment against Bell Atlantic, you will not have recourse to or
against the stock or assets of the following subsidiaries of Bell Atlantic,
which are referred to in this prospectus as the "telephone subsidiaries":
- Bell Atlantic--Pennsylvania, Inc.;
- Bell Atlantic--New Jersey, Inc.;
- Bell Atlantic--Delaware, Inc.;
- Bell Atlantic--Maryland, Inc.;
- Bell Atlantic--Virginia, Inc.;
- Bell Atlantic--West Virginia, Inc.;
- Bell Atlantic--Washington, D.C., Inc.;
- New York Telephone Company d/b/a Bell Atlantic-New York;
- The New England Telephone and Telegraph Company d/b/a Bell Atlantic-New
England;
- Bell Atlantic Network Services, Inc.;
12
<PAGE>
- or Bell Atlantic's interest in TCNZ, or any other operating telephone
company which may at the time be owned directly or indirectly by Bell
Atlantic.
We refer to the exclusion of this stock or assets from recourse under the
notes as the "asset carve-out." Other than with respect to the asset carve-out,
Bell Atlantic's obligations under the Support Agreement rank equally with Bell
Atlantic's other unsecured debt.
Bell Atlantic is a holding company, and therefore, the right of Bell
Atlantic and the right of creditors of Bell Atlantic (including the holders), to
realize upon the assets of any subsidiary of Bell Atlantic, whether upon
liquidation or reorganization of such subsidiaries, or otherwise, is subject to
prior claims of creditors of each such subsidiary. This limitation does not
apply to the extent that claims of Bell Atlantic as a creditor of a subsidiary
are recognized.
PRINCIPAL, MATURITY AND INTEREST
The notes are limited in aggregate principal amount to $2,455,000,000 and
will mature on April 1, 2003. Unless the notes are previously redeemed or
exchanged, we will pay all notes outstanding on April 1, 2003 in full at their
face amount, together with any accrued but unpaid interest, in United States
dollars. Interest on the notes accrues at a rate of 5.75% per year. We pay
interest twice a year in arrears on April 1 and October 1 (each an "Interest
Payment Date"). We pay interest on notes in registered form to record holders on
the March 15 (for the April 1 Interest Payment Date) and September 15 (for the
October 1 Interest Payment Date) immediately preceding each Interest Payment
Date (each a "Regular Record Date"). We pay interest on notes in bearer form
when the definitive notes or coupons attached to the definitive notes are
surrendered. Interest on the notes accrues from the most recent date on which
interest has been paid. We compute interest on the notes on the basis of a
360-day year comprising twelve 30-day months.
EXCHANGE RIGHTS
GENERAL
On or after September 1, 1999, holders may exchange their notes for TCNZ
ordinary shares or other exchange property at any time or from time to time.
Holders have the right to exchange their notes until the close of business on
April 1, 2003, unless we have previously redeemed the notes at the redemption
prices set forth in this Prospectus. The holders may exchange their notes at the
ratio of 178.0369 TCNZ ordinary shares for each $1,000 principal amount of the
notes, subject to adjustment under the circumstances described below under
"Adjustment Events" and subject also to our right to pay exchanging holders cash
instead of TCNZ ordinary shares under the circumstances described below or under
the circumstances described in "Redemption--Company Election to Pay Average
Market Value Amount." Holders of notes have no rights in respect of the TCNZ
ordinary shares, unless and until the notes are exchanged for TCNZ ordinary
shares.
On or after September 1, 1999 and before the close of business on April 1,
2003, instead of delivering TCNZ ordinary shares in exchange for any notes, we
may choose to make a cash settlement in respect of any note surrendered for
exchange by delivering a notice to the tendering holder not more than five
Trading Days after the note is surrendered for exchange. We may not make this
cash settlement if, in connection with a call for redemption or final maturity,
we have previously elected to pay in cash the Average Market Value Amount upon
any exchange before the applicable Redemption Date or final maturity date. We
will make a cash settlement in an amount for each $1,000 principal amount of
notes exchanged equal to the Market Price, as of the second Trading Day after
delivery of notice to such holder, of the TCNZ ordinary shares (or the number or
amount of each type of other Exchange Property) that would be deliverable upon
exchange of the notes if they were exchanged at that time. If other exchange
property would be deliverable on exchange, we will make a cash settlement based
on the Market Price of such other exchange property. We will pay the cash
settlement amount in
13
<PAGE>
United States dollars as promptly as practicable, but no later than ten business
days, after completion of the five Trading Day period used to determine the
Market Price.
METHOD OF EXCHANGE
Holders must include appropriate notices (including a duly signed and
completed notice of exchange), any unmatured coupons and any payments in respect
of applicable interest or taxes when surrendering their notes for exchange.
Holders may obtain copies of the notice of exchange at the office of the
Principal Paying Agent, any Exchange Agent and the Paying Agent in Luxembourg.
Once a holder gives a notice of exchange, the notice of exchange will be
irrevocable and may not be withdrawn without our written consent. We may reject,
and the Trustee or any Exchange Agent on our behalf, may reject, any incomplete
or incorrect notice of exchange. All costs and expenses incurred or caused by an
incomplete or incorrect notice of exchange will be for the account of the holder
giving the incomplete or incorrect notice of exchange. Unless we have elected
the cash settlement option, as promptly as practicable (but in no event later
than ten business days) after the exchange date, we will deliver or cause to be
delivered at the office of the relevant Exchange Agent or Trustee, the TCNZ
ordinary shares or other exchange property, issuable upon exchange of the
surrendered notes, plus payment in cash in lieu of any fractional security.
We will not make a payment or adjustment for interest accrued or dividends
on any TCNZ ordinary shares on the exchange of any note. If a holder surrenders
a note for exchange after the Regular Record Date for an interest payment and
before the Interest Payment Date, we will pay the interest due on the Interest
Payment Date to the registered holder at the close of business on the Regular
Record Date. However, a holder who surrenders any note for exchange during the
period from the close of business on any Regular Record Date next preceding any
Interest Payment Date to the opening of business on such Interest Payment Date
(other than notes or portions of notes called for redemption on a Redemption
Date within that period) must include, with the notes being exchanged, the
interest payable on that Interest Payment Date on the principal amount of the
notes being surrendered for exchange. We will pay to the holder, upon exchange,
the interest payable on any Interest Payment Date with respect to any note or
portion of a note which has been called for redemption on a Redemption Date that
occurs during the period from the close of business on the related Regular
Record Date to the opening of business on such Interest Payment Date, if the
note is surrendered for exchange during that period. The payment will be equal
to the interest that would have been payable on the portion of the note that is
being called for redemption and is being exchanged if the portion had been
exchanged as of the close of business on the Interest Payment Date. We will pay
the interest payable on any Interest Payment Date on any note or portion of a
note, which we have not called for redemption on a Redemption Date occurring
during the period from the close of business on the Regular Record Date next
preceding the Interest Payment Date to the opening of business on the Interest
Payment Date, which note (or portion thereof) is surrendered for exchange during
that period, to the holder of the note as of the Regular Record Date. In the
event we call the notes for redemption, the exchange rights will terminate at
the close of business on the business day preceding the Redemption Date.
As a result of the foregoing provisions, we will not pay any interest to
holders that surrender their notes for exchange for the period from the most
recent Interest Payment Date next preceding the date of exchange to the date of
exchange, unless the date of exchange is the next Interest Payment Date. We will
not pay interest in these circumstances even if holders surrender their notes
after a notice of redemption has been given; provided, however that we will pay
interest on notes called for redemption on a Redemption Date between a Regular
Record Date and the Interest Payment Date to which it relates, as provided
above. We will make no other payment or adjustment for interest, or for any
dividends in respect of TCNZ ordinary shares upon exchange. Holders of TCNZ
ordinary shares issued to them upon exchange will not be entitled to receive any
dividends payable to holders of TCNZ
14
<PAGE>
ordinary shares as of any record date before the close of business on the
exchange date. Upon exchange by the holders, we will pay them cash instead of
issuing fractional shares.
ADJUSTMENT EVENTS
Holders will receive an exchange ratio per $1,000 principal amount of notes
of 178.0369 multiplied by the aggregate number or amount of each type of
exchange property.
"Exchange Property" means:
- initially one TCNZ ordinary share; and
- subject to the three paragraphs immediately following this definition of
Exchange Property, all property received in respect of the TCNZ ordinary
shares (either directly or as a result of successive applications of this
paragraph) upon an Adjustment Event.
"Adjustment Event" means:
- the distribution of a dividend on Exchange Property in the same type of
Exchange Property;
- the combination of Exchange Property into a smaller number of shares or
other units;
- the subdivision of outstanding shares or other units of Exchange Property;
- the conversion or reclassification of Exchange Property by issuance or
exchange of other securities;
- any consolidation or merger of TCNZ, or any surviving entity or subsequent
surviving entity of TCNZ (a "TCNZ successor"), with or into another entity
(other than a merger or consolidation in which TCNZ is the continuing
corporation and in which the TCNZ ordinary shares outstanding immediately
prior to the merger or consolidation are not exchanged for cash,
securities or other property of TCNZ or another corporation);
- any statutory exchange of securities of TCNZ or any TCNZ successor with
another corporation (other than in connection with a merger or acquisition
and other than a statutory exchange of securities in which TCNZ is the
continuing corporation and in which the TCNZ ordinary shares outstanding
immediately prior to the statutory exchange are not exchanged for cash,
securities or other property of TCNZ or another corporation);
- any liquidation, dissolution or winding up of TCNZ or any TCNZ successor;
- any distribution of cash or other property on Exchange Property of a
particular type (excluding cash dividends and other cash distributions
other than Extraordinary Cash Dividends); or
- any tender or exchange offer for Exchange Property of a particular type.
Notice of an adjustment event will be given to holders in the manner
specified below. See "--Notices."
If there is any tender or exchange offer for Exchange Property of a
particular type, Exchange Property shall include the amount of cash or other
property paid by the offeror in the tender or exchange offer and actually
received by Bell Atlantic (directly or through its subsidiaries), with respect
to such Exchange Property. However, Bell Atlantic (or its subsidiaries) is not
obligated to exchange any Exchange Property for cash, securities or other
property on a voluntary basis. In certain situations, this could be detrimental
to the interests of the holders of the notes. In order to participate in any
voluntary exchange, holders may be required to exchange their notes for Exchange
Property. However, a holder may be unable to participate in a voluntary exchange
if we elect to exercise the Cash Settlement Option with respect to any exchange
of notes by the holder. In addition, holders may not
15
<PAGE>
exchange their notes before September 1, 1999. As a result, holders may not
participate in any voluntary exchange that occurs before September 1, 1999.
With respect to Exchange Property, if cash is received, or deemed to be
received (excluding cash dividends and other distributions other than
Extraordinary Cash Dividends), the amount of cash at any date of determination
of the value of property received shall be increased by an amount per year equal
to the yield on the then-prevailing 3-month U.S. Treasury bill as determined by
the Quotation Agent between the date of receipt or deemed receipt of the
property and the earliest of (1) the exchange date, (2) Redemption Date or (3)
maturity date of the notes with respect to which the determination is to be
made.
If TCNZ or any TCNZ successor distributes rights or warrants to subscribe
for or purchase any of its securities to all holders of a particular type of
Exchange Property, and the expiration date of the rights or warrants precedes
the maturity date or earlier Redemption Date of the notes, then Exchange
Property shall include a cash amount equal to the Market Price as of the Trading
Day immediately before the expiration date of the portion of the rights or
warrants relating to the Exchange Property. In these circumstances Exchange
Property will include such cash amount whether or not Bell Atlantic (directly or
through its subsidiaries) exercises the rights or warrants. However, if Bell
Atlantic (directly or through its subsidiaries) sells, transfers or otherwise
disposes of the rights or warrants for fair market value before the expiration
date, Exchange Property shall include the amount of cash or other property
received in consideration of such sale, transfer or disposition.
Holders must pay any and all brokerage costs incurred upon the subsequent
sale of Exchange Property that is delivered when they exchange their notes.
AVAILABILITY OF ADR
Unless we have elected to exercise the Cash Settlement Option (or to pay the
Average Market Value Amount), we will deliver TCNZ ordinary shares to holders
who exchange their notes. If legally permissible, holders may deposit their TCNZ
ordinary shares at the corporate trust office of the Bank of New York, which is
currently located at 48 Wall Street, New York, NY 10286. The Bank of New York
serves as the depositary (the "ADR Depositary") pursuant to the Deposit
Agreement (the "Deposit Agreement") among TCNZ, the ADR Depositary and the
holders of ADRs or through the facilities of DTC. Holders may request that the
ADR Depositary issue ADRs in exchange for their deposited TCNZ ordinary shares.
We are not obligated, nor is Bell Atlantic obligated, to deliver or cause the
delivery of ADRs upon exchange of notes or otherwise. Additionally, the Deposit
Agreement may be amended or terminated by TCNZ and the ADR Depositary. Moreover,
the ADR Depositary may not be required or legally permitted to issue ADRs upon
any deposit of TCNZ ordinary shares by holders at the time of any exchange.
REDEMPTION
REDEMPTION OF NOTES AT OUR OPTION
Unless we redeem the notes under the circumstances described in "--Tax
Redemption," we may not redeem the notes prior to April 1, 2001. We may redeem
all or part of the notes at our option on or after April 1, 2001. We must give
at least 30 but no more than 60 days' notice of redemption to holders as
described in "Notices" below, unless a shorter notice is satisfactory to the
Trustee. During the period from April 1, 2001 to March 31, 2002, we may redeem
the notes at a price of 102.3% of the principal amount of the notes. After March
31, 2002 and prior to maturity, we may redeem the notes at 101.15% of the
principal amount. Our right to redeem is subject to the right of holders of
record on a Regular Record Date to receive the interest due on an Interest
Payment Date that is on or prior to the Redemption Date.
16
<PAGE>
We must specify the aggregate number or amount of each type of Exchange
Property and cash that would be delivered to a holder upon exchange should the
holder elect to exchange notes before the relevant Redemption Date in a notice
of redemption. We must redeem the notes in multiples of $1,000 principal amount.
Other than in connection with a redemption described under "--Tax
Redemption," if we will redeem less than all of the notes, the Trustee will
select the notes to be redeemed in principal amounts of $1,000 or multiples of
$1,000 by lot, pro rata or by another method the Trustee considers fair and
appropriate. If we select a portion of a holder's notes for partial redemption
and the holder exchanges a portion of the notes prior to redemption, the
exchanged portion will be deemed to be the portion selected for redemption. We
will use this formula solely for purposes of determining the aggregate principal
amount of notes that we will redeem.
Holders must submit their notes to the Trustee for cancellation in
connection with any redemption prior to maturity.
OUR ELECTION TO PAY AVERAGE MARKET VALUE AMOUNT
We may elect to make a cash payment of the Average Market Value Amount to
satisfy our obligations to holders who exchange their notes for TCNZ ordinary
shares. We may make this election in connection with a redemption of the notes
or the final maturity of the notes. If we make this election, holders of notes
will no longer be entitled to receive TCNZ ordinary shares in exchange for the
notes called for redemption.
To make this election in respect of any notes to be redeemed on a Redemption
Date or repaid on the final maturity date, we must give an irrevocable notice of
the election to holders no later than the 35th Trading Day before the Redemption
Date or final maturity date. If we make this election, we must pay the Average
Market Value Amount in respect of all notes to be redeemed or repaid to holders
who elect to exchange their notes for TCNZ ordinary shares on such redemption
date or final maturity date.
TAX REDEMPTION
ALL NOTES
We have the option to redeem all or part of the notes if a tax event occurs
and we provide the holders with a notice of redemption. In these circumstances,
if we redeem the notes before September 1, 1999, we will pay the early tax
redemption price to holders, which is equal to 100% of the principal amount of
the notes plus an amount in cash equal to the excess, if any, of the Market
Price as of the date fixed for redemption of the number of TCNZ Ordinary Shares
(or the number or amount of each type of other Exchange Property) that we would
deliver upon exchange of the notes if the notes could be exchanged at that time
over 100% of the principal amount of the notes. In these circumstances, if we
redeem the notes on or after September 1, 1999, we will pay the tax redemption
price to holders, which is equal to 100% of the principal amount of the notes.
In each case we will pay holders accrued interest to the date fixed for
redemption.
A "tax event" has occurred if we determine that we have or will become
obligated to pay Additional Amounts with respect to the Notes as a result of:
- any change in or amendment to the laws (or any regulations or rulings
promulgated under such laws) of the United States or of any political
subdivision or taxing authority of or in the United States affecting
taxation;
- any change in official position regarding the application or
interpretation of such laws, regulations or rulings, which becomes
effective on or after February 23, 1998; or
17
<PAGE>
- the TCNZ ordinary shares or the ADRs no longer being, or the Exchange
Property not being, actively traded within the meaning of Section
871(h)(4)(C)(v)(I) of the Internal Revenue Code of 1986, as amended (the
"Code").
Before we notify holders of a tax redemption, we will deliver to the Trustee (1)
a certificate stating that we are entitled to effect a tax redemption and
setting forth a statement of facts showing that the conditions precedent to our
right to redeem have occurred (the date on which such certificate is delivered
to the Trustee is the "Redemption Determination Date"), and (2) an opinion of
independent counsel that we are entitled to effect a tax redemption based on the
statement of facts. However, we may not notify holders of a tax redemption more
than 60 days prior to the earliest date on which we would be obligated to pay
Additional Amounts if a payment in respect of the notes were due.
We will notify holders of a redemption not less than 30 nor more than 60
days prior to the date fixed for redemption. We will specify the date and the
applicable redemption price in the notice. We will give notice in accordance
with "Notices" below.
SPECIAL TAX REDEMPTION OF BEARER NOTES
If we determine that any payment made outside the United States by us or any
Paying Agent of principal, premium, if any, or interest (including original
issue discount) due in respect of any bearer note or attached coupon would,
under any present or future laws or regulations of the United States, be subject
to any certification, identification or other information reporting requirement
of any kind that would disclose the nationality, residence or identity of a
beneficial owner of a bearer note or coupon who is a United States alien to us,
any Paying Agent or any governmental authority, we will redeem the bearer notes,
as a whole. We may redeem the notes at the early tax redemption price or the tax
redemption price, as applicable, or, at our option, we may pay the Additional
Amounts if the conditions of the next paragraph are satisfied. We are not
required to redeem the bearer notes if the certification, identification or
other information reporting requirement:
(a) would not be applicable to a payment made by us or any Paying Agent (1)
directly to the beneficial owner or (2) to a custodian, nominee or other
agent of the beneficial owner;
(b) that can be satisfied by the custodian, nominee or other agent
certifying that the beneficial owner is a United States alien; provided
that, in each case referred to in clauses (a)(2) and (b), payment by the
custodian, nominee or agent to the beneficial owner is not otherwise
subject to any such requirement; or
(c) is imposed as a result of presentation of the bearer note or coupon for
payment more than 15 days after the date on which payment becomes due
and payable or on which payment of the bearer note or coupon is duly
provided for, whichever occurs later.
We will make the determination and election described above as soon as
practicable and publish prompt notice (the "Determination Notice") stating (1)
the effective date of the certification, identification or other information
reporting requirements, (2) whether we will redeem the bearer notes or we have
elected to pay Additional Amounts and (3) if applicable, the last date by which
the redemption of the bearer notes must take place. If we redeem the bearer
notes, the redemption will take place on a date we choose by giving notice to
the Trustee at least 60 days before the date fixed for redemption. This date may
not be later than one year after the publication of the determination notice. We
will notify holders of the redemption of the bearer notes no more than 60 and no
less than 30 days before the date fixed for redemption. The redemption notice
will include a statement as to the last date by which the bearer notes to be
redeemed may be exchanged for registered notes. However, we may not redeem the
bearer notes if we agree to pay Additional Amounts or we later determine not
less than 30 days prior to the date fixed for redemption, that subsequent
payments would not be subject to any certification, identification or other
information reporting requirement, in which case we will
18
<PAGE>
publish prompt notice of determination. Any earlier redemption notice shall be
revoked and of no further effect. The right of the holders of bearer notes
called for redemption to exchange their bearer notes for registered notes will
terminate at the close of business of the Principal Paying Agent on the
fifteenth day prior to the date fixed for redemption. At that time, no further
exchanges of bearer notes for registered notes will be permitted. In the event
the bearer notes are called for redemption, the exchange rights of holders whose
notes are subject to such redemption will terminate at the close of business on
the business day before the redemption date.
If and as long as the certification, identification or other information
reporting requirements referred to above would be fully satisfied by payment of
a backup withholding tax or similar charge, we may elect to pay as Additional
Amounts such amounts as are necessary so that every net payment made outside the
United States following the effective date of such requirements by us or any
Paying Agent of principal, premium, if any, or interest due (including original
issue discount) in respect of any bearer note or any attached coupon of which
the beneficial owner is a United States alien (but without any requirement that
the nationality, residence or identity of such beneficial owner be disclosed to
us, any Paying Agent or any governmental authority, with respect to the payment
of Additional Amounts), after deduction or withholding for or on account of such
backup withholding tax or similar charge (other than a backup withholding tax or
similar charge that would not be applicable in the circumstances referred to in
clause (c) of the preceding paragraph), will not be less than the amount
provided for in such bearer note or coupon to be then due and payable.
In the event we elect to pay any Additional Amounts pursuant to this
paragraph, we have the right to redeem the bearer notes as a whole at any time
pursuant to the applicable provisions of the preceding paragraph. The redemption
price of the bearer notes will not be reduced for applicable withholding taxes.
If we elect to pay Additional Amounts pursuant to this paragraph and the
condition specified in the first sentence of this paragraph is no longer
satisfied, then we will redeem the bearer notes as a whole, pursuant to the
applicable provisions of the preceding paragraph.
PAYMENT OF ADDITIONAL AMOUNTS
We will, subject to certain exceptions and limitations, pay additional
amounts (the "Additional Amounts") to the holder of any note or of any coupon
who is a United States alien. We will pay Additional Amounts only as necessary
in order that every net payment of the principal of, premium (if any) and
interest (including original issue discount) on the note and any other amounts
payable on the note, after withholding for or on account of any present or
future tax, assessment or governmental charge imposed upon or as a result of
such payment by the United States (or any political subdivision or taxing
authority thereof or therein), will not be less than the amount provided for in
the note or coupon to be then due and payable.
We are not required to make any payment of Additional Amounts to any holder
for or on account of:
- any such tax, assessment or other governmental charge that would not have
been so imposed but for:
(1) the existence of any present or former connection between such holder
(or between a fiduciary, settlor, beneficiary, member or shareholder of
such holder, if such holder is an estate, a trust, a partnership or a
corporation) and the United States and its possessions, including,
without limitation, such holder (or such fiduciary, settlor, beneficiary,
member or shareholder) being or having been a citizen or resident of the
United States or its possessions or being or having been engaged in a
trade or business or present in the United States or its possessions or
having, or having had, a permanent establishment therein or
19
<PAGE>
(2) the presentation by the holder of any such note or coupon for payment on
a date more than 15 days after the date on which such payment became due
and payable or the date on which payment the note is duly provided for,
whichever occurs later;
- any estate, inheritance, gift, sales, transfer or personal property tax or
any similar tax, assessment or governmental charge;
- any tax, assessment or other governmental charge imposed by reason of such
holder's past or present status as a personal holding company or foreign
personal holding company or controlled foreign corporation or passive
foreign investment company with respect to the United States or as a
corporation that accumulates earnings to avoid United States federal
income tax or as a private foundation or other tax-exempt organization;
- any tax, assessment or other governmental charge that is payable otherwise
than by withholding from payments on or in respect of any note;
- any tax, assessment or other governmental charge required to be withheld
by any paying agent from any payment of principal of, or interest on, any
note, if such payment can be made without such withholding by any other
paying agent in a city in western Europe;
- any tax, assessment or other governmental charge that would not have been
imposed but for the failure to comply with certification, information or
other reporting requirements concerning the nationality, residence or
identity of the holder or beneficial owner of such note, if such
compliance is required by statute or by regulation of the United States or
of any political subdivision or taxing authority of or in the United
States or any political subdivision as a precondition to relief or
exemption from such tax, assessment or other governmental charge;
- any tax, assessment or other governmental charge imposed by reason of such
holder's past or present status as the actual or constructive owner of 10%
or more of the total combined voting power of all classes of stock
entitled to vote of the Company or as a direct or indirect subsidiary of
the Company; or
- any combination of the items described above; nor shall additional amounts
be paid with respect to any payment on a note to a United States alien who
is a fiduciary or partnership or other than the sole beneficial owner of
such payment to the extent such payment would be required by the laws of
the United States (or any political subdivision of the United States) to
be included in the income, for tax purposes, of a beneficiary or settlor
with respect to such fiduciary or a member of such partnership or a
beneficial owner who would not have been entitled to the additional
amounts had such beneficiary, settlor, member or beneficial owner been the
holder of the note.
The term "United States alien" means any person who, for United States
federal income tax purposes, is (1) a foreign corporation, (2) a nonresident
alien individual, (3) a nonresident alien fiduciary of a foreign estate or
trust, or (4) a foreign partnership where one or more of the members is a
foreign corporation, a nonresident alien individual or a nonresident alien
fiduciary of a foreign estate or trust.
20
<PAGE>
BOOK ENTRY; FORM AND DENOMINATION
The notes currently are represented by three global notes. Notes offered in
offshore transactions pursuant to Regulation S are represented by (1) the global
bearer note, which represents Regulation S notes held in bearer form, and (2)
the Regulation S global note, which represents Regulation S notes held in
registered form without coupons. A third global note, the Rule 144A global note,
represents notes originally issued in registered form without interest coupons
and sold in the United States in reliance on Rule 144A under the Securities Act.
We will issue an unrestricted global note to represent notes sold under this
prospectus. In the future, we may issue additional unrestricted global notes to
represent additional notes sold under this prospectus.
Any beneficial interest in one of the global notes that is exchanged for an
interest in another global note will no longer be an interest in the initial
global note and will become an interest in the other global note.
REGISTERED NOTES
The Rule 144A global note is registered in the name of Cede & Co., as
nominee for DTC. The Rule 144A global note is deposited on behalf of the
purchasers of the notes represented by the Rule 144A global note with a
custodian for DTC for credit to the respective accounts of the purchasers (or to
such other accounts as they may direct) at DTC. Owners of beneficial interests
in the Rule 144A global note hold their interests pursuant to the procedures and
practices of DTC, and they must exercise any rights in respect of their
interests (including any right to exchange) in accordance with DTC procedures
and practices. These beneficial owners are not holders, and are not entitled to
any rights under any note or the Indenture, with respect to any Rule 144A global
note. We and the Trustee, and any of our agents, may treat DTC as the holder and
owner of any Rule 144A global note. Holders may exchange beneficial interests in
the Rule 144A global note for notes in definitive, registered form without
interest coupons, in the denomination of U.S.$1,000. Exchanges of beneficial
intererests in the Rule 144A global note may occur only in the limited
circumstances described under "Description of the Notes--Definitive Notes" in
this Prospectus. Beneficial interests in the Rule 144A global note may not be
exchanged for bearer notes or interests in bearer notes.
The Regulation S global note is registered in the name of Chase Nominees
Limited and deposited with a common depositary for Euroclear or Cedel.
The unrestricted global note will be registered in the name of Cede & Co.,
as nominee for DTC. The unrestricted global note will be deposited on behalf of
the purchasers of notes under this prospectus with a custodian for DTC for
credit to the respective accounts of the purchasers (or to such other accounts
as they may direct) at DTC. Owners of beneficial interests in the unrestricted
global note will hold their interests pursuant to the procedures and practices
of DTC, and they must exercise any rights in respect of their interests
(including any right to exchange) in accordance with DTC procedures and
practices. These beneficial owners are not holders, and are not entitled to any
rights under any note or the Indenture, with respect to any unrestricted global
note. We and the Trustee, and any of our agents, may treat DTC as the holder and
owner of any unrestricted global note. Holders may exchange beneficial interests
in the unrestricted global note for notes in definitive, registered form without
interest coupons, in the denomination of U.S.$1,000. Beneficial interests in the
unrestricted global note may not be exchanged for bearer notes or interests in
bearer notes.
BEARER NOTES HELD THROUGH EUROCLEAR AND CEDEL
The global bearer note was initially evidenced by a temporary global bearer
note without interest coupons. The temporary global bearer note was deposited
with a common depositary for Cedel and Euroclear for the accounts of the
subscribers of the notes on February 26, 1998 (the "Settlement Date"). On the
Settlement Date, Cedel or Euroclear credited each subscriber with a principal
amount
21
<PAGE>
of notes for which it subscribed and paid. The beneficial owners are entitled to
exchange their interests in the temporary global bearer note after the
expiration of the Restricted Period for (1) an interest in the permanent global
bearer note to be held by a common depositary for Cedel and Euroclear or
definitive notes in bearer form only in authorized denominations of U.S. $1,000,
U.S. $10,000 and U.S. $100,0000 with coupons attached or (2) interests in the
Regulation S global note. A holder must provide an Ownership Certificate to
exchange an interest in a permanent global bearer note for definitive notes in
bearer form. We may not pay principal or interest to any holder of an interest
in the temporary global bearer note until he provides us with an Ownership
Certificate.
An offer or sale is considered to be made to a person within the United
States if the offeror or seller of the note has a United States address for the
offeree or purchaser of the bearer note with respect to the offer or sale.
Bearer notes may not be delivered in the United States. Each bearer note and
coupon carries the following legend: "any United States person who holds this
obligation will be subject to limitations under the United States income tax
laws, including the limitations provided in Sections 165(j) and 1287(a) of the
Internal Revenue Code of 1986, as amended."
DTC PROCEDURES
Upon deposit of the Rule 144A global note or the unrestricted global note,
we expect that, pursuant to procedures established by DTC, DTC or its custodian
will credit on its internal system portions of each note to the respective
accounts of Persons who have accounts with the depositary. Ownership of the
notes is shown on, and the transfer of ownership thereof is effected only
through, records maintained by DTC or its nominee (with respect to interests of
Participants) and the records of Participants (with respect to interests of
persons other than Participants). Ownership of beneficial interests in the Rule
144A global note and the unrestricted global note is limited to Persons who have
accounts with DTC ("Participants") or Persons who hold interests through
Participants. Qualified institutional buyers may hold their interests in the
Rule 144A global note directly through DTC if they are participants in DTC, or
they may hold their interests in the Rule 144A global note indirectly through
organizations which are participants in such system.
DTC or its nominee will be considered the sole owner or holder of the notes
represented by the Rule 144A global note or the unrestricted global note for all
purposes under the Indenture and the notes for as long as DTC or its nominee is
the registered owner or holder of the notes. A beneficial owner of an interest
in the Rule 144A global note or the unrestricted global note will not be able to
transfer that interest except in accordance with the applicable procedures of
DTC and the procedures set forth in the Indenture.
We will make payments of the principal, premium and interest on the Rule
144A global note and the unrestricted global note to DTC or its nominee as the
registered owner. We will not, and the Trustee or any Paying Agent or Exchange
Agent under the Indenture will not, have any responsibility or liability (1) for
any aspect of the records relating to or payments made on account of beneficial
ownership interests in the Rule 144A global note or the unrestricted global note
or (2) for maintaining, supervising or reviewing any records relating to the
beneficial ownership interest.
We expect that DTC or its nominee will credit participants' accounts with
payments in amounts proportionate to their beneficial interests in the principal
amount of the Rule 144A global note or the unrestricted global note as shown on
the records of DTC or its nominee, upon receipt of any payment by us of the
principal, premium and interest on such notes. We also expect that payments by
participants to owners of beneficial interests in the global note held through
participants will be governed by standing instructions and customary practice as
is now the case with securities held for the accounts of customers registered in
the names of nominees for such customers. These payments will be the
responsibility of the participants.
22
<PAGE>
Transfers between participants in DTC will be effected in accordance with
DTC rules. Transfers between participants will be settled in immediately
available funds. If a holder requires physical delivery of a certificated note
for any reason, including to sell notes to Persons in states which require
physical delivery of securities or to pledge the securities, he must transfer
his interest in the Rule 144A global note or the unrestricted global note in
accordance with the normal procedures of DTC and the procedures set forth in the
Indenture.
DTC has advised us that it is: (1) a limited purpose trust company organized
under the laws of the State of New York, (2) a member of the federal reserve
system, (3) a "clearing corporation" within the meaning of the uniform
commercial code and (4) a "clearing agency" registered under the provisions of
Section 17(a) of the Exchange Act. DTC was created to hold securities for its
participants and facilitate the clearance and settlement of securities
transactions between participants through electronic book-entry changes in
accounts of its participants. Therefore, DTC eliminates the need for physical
movement of certificates. Participants in DTC include securities brokers and
dealers, banks, trust companies and clearing corporations and certain other
organizations. Banks, brokers, dealers and trust companies that indirectly or
directly clear through or maintain a direct or indirect custodial relationship
with a participant, either directly or indirectly ("Indirect Participants") have
indirect access to the DTC system.
Although we expect DTC, Euroclear and Cedel to follow these procedures in
order to facilitate transfers of interests in the global notes among their
participants, they are under no obligation to perform these procedures. These
procedures may be discontinued at any time. Neither we nor the Trustee has any
responsibility for the performance by DTC, Euroclear, Cedel or the participants
or indirect participants of their obligations under the rules and procedures
governing their operations.
DEFINITIVE NOTES
Holders of interests in the registered global notes may exchange or transfer
them for definitive registered notes if:
- in the case of Rule 144A global notes or the unrestricted global notes,
DTC notifies us that it is unwilling or unable to continue as depositary
for the Rule 144A global notes or the unrestricted global notes, or DTC
ceases to be a "clearing agency" registered under the Exchange Act, and we
do not appoint a successor depositary within ninety (90) days;
- in the case of Regulation S notes, either Euroclear or Cedel (or any
Alternative Clearing System on behalf of which the Regulation S notes may
be held) is closed for business for a continuous period of 14 days (other
than by reason of holidays, statutory or otherwise) or announces an
intention to permanently cease business or does permanently cease
business; or
- an Event of Default has occurred and is continuing with respect to the
registered notes.
If one of these three events occurs, we will cause the appropriate
definitive registered notes to be delivered.
PAYMENT
We will pay registered notes in U.S. Dollars when surrendered at the
corporate trust office of the Trustee in New York City. Subject to any
applicable laws and regulations, we may make payment at the office of any Paying
Agent, by dollar check drawn on, or by transfer to a dollar account maintained
by the holder with, a bank in New York City. We will pay any installment of
interest on registered notes to the person in whose name the note is registered
in our register at the close of business on the relevant Regular Record Date. At
our option, we may pay this interest with a dollar check drawn on a bank in New
York City and mail the check to the holder at his registered address. If holders
have given wire transfer instructions on or before the applicable Regular Record
Date, we must make all payments with
23
<PAGE>
respect to their notes by wire transfer of immediately available funds to the
accounts they have specified.
We may make any payment on the notes that is due on any day which is not a
Business Day on the next succeeding Business Day. The payment will have the same
force and effect as if we paid it on the due date. No interest shall accrue for
the period from and after the due date.
Holders of bearer notes must present their bearer notes, together with all
unmatured coupons, for payment upon redemption, outside the United States. The
amount of any missing unmatured coupons will be deducted from the amount paid to
them. We will pay each amount deducted when the the related missing coupon is
surrendered, outside the United States. Interest payable on bearer notes on any
Redemption Date that is an Interest Payment Date will be paid to the holders of
the coupons maturing on the interest payment date. Interest payable on
registered notes on any Redemption Date that is an Interest Payment Date will be
paid to holders of record reflected on our Security Register on the immediately
preceding Regular Record Date.
All moneys deposited with the Trustee or any Paying Agent, or then held by
us, in trust for the payment of principal of or interest on any notes which
remain unclaimed at the end of two years after the payment has become due and
payable will be repaid to us. The holder of any such unclaimed note or any
coupon relating to an unclaimed note may then look only to us for payment
without interest after the date payment has become due and payable. A holder
will have such right only until the payment amount must be remitted to the state
under escheat or similar laws. However, all such amounts payable in respect of
bearer notes may be paid only outside the United States within the meaning of
Section 1.163-5(c)(2)(v) of the Treasury Regulations.
TRUSTEE, REGISTRAR, PAYING AGENTS AND EXCHANGE AGENTS
We have appointed the Trustee as (1) registrar acting through its corporate
trust offices in New York City and (2) transfer agent acting through its
corporate trust offices in New York City and London. We reserve the right to
vary or terminate the appointment of the registrar or of any transfer agent or
to appoint additional or other registrars or transfer agents. We also reserve
the right to approve any change in the office through which any registrar or any
transfer agent acts. However, there will at all times be a registrar in New York
City and a transfer agent in a western European city and a paying agent,
transfer agent and exchange agent with an office in Luxembourg for so long as
the notes are listed on the Luxembourg Stock Exchange.
We initially appointed The Chase Manhattan Bank and certain of its affilites
as paying agent and exchange agent, and Chase Manhattan Bank Luxembourg S.A. as
Luxembourg paying and exchange agent. We may at any time terminate the
appointment of any paying agent or exchange agent or appoint additional or other
paying agents and exchange agents. However,until the notes are delivered to the
Trustee for cancellation, or moneys sufficient to pay the principal of and
interest on the notes are made available for payment and either paid or returned
to us, as provided in the Indenture, the Trustee will maintain an office or
agency in New York City for payments with respect to registered notes and for
surrender of notes for exchange (but only in the circumstances described in the
First paragraph under "Payment" and not otherwise, with respect to bearer
notes), and in a western European city and a New Zealand city for payments with
respect to the notes and for the surrender of notes for exchange. Notice of any
termination or appointment and of any change in the office through which any
paying agent or exchange agent will act will be given in accordance with
"Notices" below.
Holders may present notes for exchange at the office of any transfer agent
or at the office of the Registrar. Registered notes may be presented by holders
for registration or transfer (with the form of transfer endorsed thereon duly
executed), at the office of any transfer agent or any office of the Registrar.
Holders will not incur a service charge but will be required to pay any taxes
and other governmental charges with respect to the registration or transfer of
the registered notes as described in
24
<PAGE>
the Indenture. The transfer agent or the registrar, as the case may be, will
effect the registration of transfer or exchange upon being satisfied with the
documents of title and identity of the person making the request. With respect
to registered notes, the transfer agent or registrar will effect the
registration of transfer or exchange upon registration of the transfer in our
security register, and subject to such reasonable regulations as we agree to
with the transfer agents and the registrar. Registered notes may be transferred
in whole or in part in the amount of $1,000 or any multiple of $1,000. If a
holder presents a note, accompanied by a duly executed written instrument of
exchange or transfer in a form approved by us, for exchange or transfer at the
office of the transfer agent and if a holder completes any certification
required by the Indenture, or if a note is partially redeemed, the note shall be
exchanged, transferred or redeemed in part, as the case may be. One or more new
notes will be authenticated and issued in lieu of the original note.
CONCERNING THE TRUSTEE
Bell Atlantic or its affiliates maintain banking relationships in the
ordinary course of business with the Trustee. The Trustee also serves as Trustee
for various debt issues by affiliates of Bell Atlantic. Walter V. Shipley, the
chairman of the board and chief executive officer of the Trustee and the Chase
Manhattan Corporation, the parent of the Trustee, is a director of Bell
Atlantic. John R. Stafford, a director of the Trustee and the Chase Manhattan
Corporation, is a director of Bell Atlantic.
NOTICES
We will give publish notice to holders of the bearer notes in newspapers of
general circulation (in western Europe and New Zealand). We expect to publish
notice in THE WALL STREET JOURNAL, FINANCIAL TIMES, NEW ZEALAND HERALD, The
AUSTRALIAN FINANCIAL REVIEW and the LUXEMBURGER WORT. We will mail notices to
holders of registered notes at the addresses of the holders as they appear in
our Security Register. Notices will be deemed to have been given on the date of
publication or, if published in newspapers listed above on different dates, on
the date of the first publication, or on the date of such mailing, as the case
may be.
So long as global notes are held on behalf of DTC, Euroclear or Cedel or any
other clearing system as we designate (the "Alternative Clearing System), we may
deliver (rather than publishing as required by the Indenture) to DTC, Euroclear
and Cedel Bank or, as the case may be, the Alternative Clearing System, notices
we are required to give to holders. As long as the notes are listed on the
Luxembourg Stock Exchange and the rules of the Luxembourg Stock Exchange
exchange so require, we must also publish notices to all holders of notes in a
leading daily newspaper having general circulation in Luxembourg. This newspaper
is expected to be the LUXEMBURGER WORT.
CERTAIN COVENANTS
LIENS ON ASSETS
We have covenanted in the Indenture that if at any time, we mortgage,
pledge, or otherwise subject any property or assets now owned or hereafter
acquired by us to any lien, except as provided below in this paragraph, we will
secure the outstanding notes, and any of our other obligations which are then
outstanding and entitled to the benefit of a similar covenant, equally and
ratably with the indebtedness or obligations secured by the mortgage, pledge, or
lien, for as long as any the indebtedness or obligations are secured. This
obligation does not apply to the creation, extension, renewal or refunding of
purchase-money mortgages or liens, or other liens to which any property or asset
acquired by us is subject as of the date of its acquisition by us. Further, this
obligation does not apply to the making of any deposit or pledge to secure
public or statutory obligations or with any governmental agency at any time
required by law in order to qualify us to conduct our business or any part of
our business or in order to entitle us to maintain self-insurance or to obtain
the benefit of any
25
<PAGE>
law relating to workers' compensation, unemployment insurance, old age pensions
or other social security, or with any court, board, commission, or governmental
agency as security incident to the proper conduct of any proceeding before it.
Nothing contained in the Indenture prevents any of our affiliates, including
Bell Atlantic, from mortgaging, pledging, or subjecting to any lien any of its
property or assets, whether or not such affiliate acquired the property or
assets from us.
RESTRICTIONS ON MERGERS AND SALES OF ASSETS
We may not, nor may Bell Atlantic, consolidate with or merge into any other
corporation, or convey, transfer or lease its properties and assets
substantially as an entirety to any person. We and Bell Atlantic may not, permit
any person to consolidate with or merge into us or Bell Atlantic or convey,
transfer or lease its properties and assets substantially as an entirety to us
or Bell Atlantic unless:
- the corporation formed by the consolidation or into which our company or
Bell Atlantic is merged or the person to which our properties and assets
or the properties and assets of Bell Atlantic are transferred
substantially as an entirety is a corporation organized and existing under
the laws of the United States, any state thereof or the District of
Columbia and expressly assumes the payment of the principal of, and any
premium and interest on, the notes and the performance of the other
covenants under the Indenture and the Support Agreement, on the part of
our company or Bell Atlantic, as applicable;
- after giving effect to the transaction, no Event of Default as defined
below under "--Events of Default; Notice and Waiver", or event which after
notice or lapse of time or both would become an Event of Default, shall
have occurred and be continuing; and
- if, as a result of the transaction, our properties or assets would become
subject to a Mortgage not permitted by the Indenture without equally and
ratably securing the notes as provided in the Indenture, steps shall have
been taken to secure the notes equally and ratably with (or prior to) all
indebtedness secured thereby pursuant to the Indenture.
MODIFICATION AND WAIVER
We, together with Bell Atlantic and the Trustee, may modify and amend
certain provisions of the Indenture, including any provision of the Support
Agreement and provisions affecting the rights of holders of notes, only with the
consent of the holders of a majority in aggregate principal amount of the notes.
However, we may not make a modification or amendment which may, without the
consent of the holder of each note affected by the modification or amendment:
- change the Stated Maturity date of the principal of, or any installment of
principal or interest on (including Additional Amounts, if any), the
notes;
- reduce the principal amount of, or any premium or interest on (including
additional amounts, if any), or the amount of Exchange Property
deliverable in exchange for, the notes;
- change the coin or currency in which any principal of, or any premium or
interest on (including additional amounts, if any), the notes is payable;
- reduce the above-stated percentage of the notes to the extent the consent
of the holders is necessary to modify or amend the Indenture; or
- modify any provision of the Support Agreement adverse to the holders of
the notes.
We, together with Bell Atlantic and the Trustee, may modify or amend the
Indenture without the consent of the holders of notes to:
- evidence succession to our company, Bell Atlantic or the Trustee;
26
<PAGE>
- add covenants or defaults;
- cure ambiguities;
- change provisions that are effective after the retirement of the notes;
and
- secure the notes.
REPORTS
Whether or not we or Bell Atlantic, or any of our successors, is subject to
the reporting requirements of section 13 or 15(d) of the Exchange Act, Bell
Atlantic shall deliver to the Trustee annual and quarterly consolidated
financial statements substantially equivalent to financial statements that would
have been included in reports filed with the SEC if Bell Atlantic were subject
to the requirements of section 13 or 15(d) of the Exchange Act. Bell Atlantic
shall deliver these financial statements within fifteen (15) days after Bell
Atlantic is or would have been required to file them with the SEC. The financial
statements shall include, with respect to annual information only, a report by
Bell Atlantic's certified independent public accountants as such would be
required in reports to the SEC. Both the annual and quarterly financial
statements shall include a management's discussion and analysis of results of
operations and financial condition as would be so required. In addition, for as
long as any beneficial owner continues to own an interest in the Rule 144A
global note, Bell Atlantic will continue to provide to holders of notes and to
prospective purchasers of the notes the information required by Rule 144A(d)(4).
EVENTS OF DEFAULT; NOTICE AND WAIVER
The following events are defined under the Indenture as "Events of Default":
- default for fifteen (15) 15 days in payment when due of interest or
Additional Amounts on the notes;
- default in payment of the principal amount at maturity or otherwise with
respect to any note when the same becomes due and payable (whether or not
such payment is prohibited by the provisions of the Indenture);
- failure by us to deliver Exchange Property (and/or cash in lieu thereof)
when such Exchange Property (or cash in lieu thereof) is required to be
delivered following exchange of a note and continuance of such default for
ten (10) days;
- failure by us to comply with any of our other agreements in the notes or
the Indenture upon the receipt by us of notice of such default from the
Trustee or from holders of not less than 25% in aggregate principal amount
at maturity of the notes then outstanding and our failure to cure such
default within ninety (90) days after receipt by us of such notice; and
- certain events of bankruptcy, reorganization, or insolvency.
The Indenture provides that, if an Event of Default has occurred and is
continuing, either the Trustee or the holders of not less than 25% in aggregate
principal amount at maturity of the notes then outstanding may declare all the
notes to be immediately due and payable. In the case of certain events of
bankruptcy or insolvency, all outstanding notes will automatically become and be
immediately due and payable without any further action or notice on the part of
the Trustee or any holder. Under certain circumstances, the holders of a
majority in aggregate principal amount at maturity of the outstanding notes may
rescind any such acceleration with respect to the notes and its consequences.
The Trustee shall, within ninety (90) days after the occurrence of any
default, provide all holders of the notes with notice of all defaults of which
the Trustee is aware, unless the defaults have been cured or waived before the
notice is given. However, the Trustee may withhold notice as to any default
27
<PAGE>
other than a payment default, if it determines in good faith that withholding
the notice is in the interests of the holders.
The holders of a majority in aggregate principal amount at maturity of the
outstanding notes may direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee or exercising any trust or
power conferred on the Trustee. However,such direction may not conflict with any
law or the Indenture and is subject to certain other limitations. The Trustee
may refuse to perform any duty or exercise any right or power or extend or risk
its own funds or otherwise incur any financial liability unless it receives
indemnity satisfactory to it against any loss, liability or expense. No holder
of any note has any right to pursue any remedy with respect to the Indenture or
the notes, unless:
- the holder has previously given the Trustee written notice of a continuing
event of default;
- the holders of at least 25% in aggregate principal amount at maturity of
the outstanding notes have made a written request to the Trustee to pursue
the remedy;
- the holder or holders have offered reasonable security or indemnity to the
Trustee against any loss, liability or expense satisfactory to the
Trustee;
- the Trustee has failed to comply with the request within ninety (90) days
after receipt of the notice, request and offer of security or indemnity;
and
- the holders of a majority in aggregate principal amount at maturity of the
outstanding notes have not given the Trustee a direction inconsistent with
the request within ninety (90) days after receipt of the request.
The holders of a majority in aggregate principal amount at maturity of the
outstanding notes may waive any existing default and its consequences, except:
- any default in any payment on the notes;
- any default with respect to the exchange rights of the notes; or
- any default in respect of certain covenants or provisions in the Indenture
which may not be modified without the consent of the holder of each note.
When a default is waived, it is deemed cured and ceases to exist. No waiver
shall extend to any subsequent or other default or impair any consequent right.
We are required to furnish to the Trustee annually a statement as to any
default by us in the performance and observance of our obligations under the
Indenture. In addition, we must file written notice of the occurrence of any
default or Event of Default with the Trustee within ten (10) days of our
becoming aware of such default or Event of Default.
DISCHARGE OF THE INDENTURE
Subject to applicable federal and state laws, we may satisfy and discharge
our obligations under the Indenture by delivering all outstanding notes to the
Trustee for cancellation.
NO PERSONAL LIABILITY OF STOCKHOLDERS, OFFICERS, DIRECTORS AND EMPLOYEES
The Indenture provides that none of our past, present or future
stockholders, employees, officers or directors, and none of the past, present or
future stockholders, employees or directors of any corporation succeeding us
will have any personal liability with respect to our obligations under the
Indenture or the notes by reason of his, her or its status as a stockholder,
employee, officer or director.
GOVERNING LAW
The Indenture, the notes and the coupons are governed by and construed in
accordance with the laws of the State of New York.
28
<PAGE>
CERTAIN DEFINITIONS
Set forth below is a summary of certain of the defined terms used in the
Indenture. Reference is made to the Indenture for the full definition of all
such terms, as well as any other terms used herein for which no definition is
provided.
"Average Market Value" of TCNZ ordinary shares or other Exchange Property on
the date of computation means the arithmetic average of the daily
volume-weighted average price of the TCNZ ordinary shares or other exchange
security, as reported on the NZSE, or if the TCNZ ordinary shares or other
exchange security is not then listed on the NZSE, as reported by the principal
securities exchange or interdealer quotation system on which the TCNZ ordinary
shares or other exchange security is then traded, or in the case of Exchange
Property other than exchange securities, the Market Price of such Exchange
Property, for the 30-Trading Day period ending two Trading Days prior to such
date of computation as computed by the Quotation Agent.
"Average Market Value Amount" per $1,000 principal amount of notes means the
average market value of the TCNZ ordinary shares (or other Exchange Property)
that otherwise would be deliverable upon exchange of such notes were such notes
exchanged at such time as of any redemption date or final maturity date, as the
case may be.
"Cash Settlement Option" means our option to make, in accordance with the
terms of Section 1301 of the Indenture, a cash settlement in respect of any note
surrendered for exchange by delivering notice thereof to the tendering holder
not more than five Trading Days after the note is delivered for exchange in lieu
of delivering TCNZ ordinary shares or other Exchange Property for any notes. The
cash settlement shall be in an amount per $1,000 principal amount of notes
delivered for exchange equal to the Market Price as of the second Trading Day
after delivery of such notice to such holder of the TCNZ ordinary shares (or the
number or amount of each type of other Exchange Property) that would be
deliverable upon exchange of such notes were such notes exchanged at such time.
We may elect the Cash Settlement Option beginning on or after September 1, 1999
and prior to the close of business on April 1, 2003, unless we have previously
elected in connection with a call for redemption or at maturity to pay in cash
the Average Market Value Amount upon any exchange prior to the applicable
Redemption Date or at Maturity (provided that in the case of a redemption in
part, only until such redemption in part is completed).
"Cedel" means Cedel Bank, SOCIETE ANONYME.
"Closing Price" of any Exchange Security means, on any date of
determination, the closing sale price (or, if no closing sale price is reported,
the last reported sale price) of such Exchange Security on the NZSE on any such
date or, if such Exchange Security is not listed for trading on the NZSE on any
such date, as reported in the composite transactions for the principal
securities exchange on which such Exchange Security is listed for trading, or,
if such Exchange Security is not listed for trading on a securities exchange, as
reported in the composite transactions for the principal over-the-counter market
in which such Exchange Security is traded, or, if such price is not available,
the market value of such Exchange Security on such date as determined by an
internationally recognized investment banking firm retained by us for this
purpose, provided that if the Closing Price of any item of Exchange Property as
of any date is reported in N.Z. Dollars or any currency other than U.S. Dollars,
then such Closing Price shall be expressed in the U.S. Dollar equivalent of such
amount, based on the currency exchange rate for such day.
"Currency Exchange Rate" between the N.Z. Dollar and the U.S. Dollar for any
date shall be determined by obtaining the N.Z. Dollar/U.S. Dollar exchange rate
for such day from Reuter's page "NZD="(or, any successor page) at approximately
3:30 p.m., New Zealand time, (the "Reuter's quote"); provided that if no
Reuter's quote is shown for such day, the currency exchange rate between the
N.Z. Dollar and the U.S. Dollar shall be determined by obtaining the N.Z.
Dollar/U.S. Dollar
29
<PAGE>
exchange rate (at which a leading foreign exchange dealer selected by the
Company (a "Reference Dealer") is willing to purchase N.Z. Dollars and sell U.S.
Dollars) for such day from three Reference Dealers at approximately 3:30 p.m.,
New Zealand time, (or if quotes are unavailable from three Reference Dealers,
from two such dealers) and calculating the arithmetic mean of such quotes. The
Currency Exchange Rate between the U.S. Dollar and any currency other than the
N.Z. Dollar shall be determined by obtaining such exchange rate for such day
from the comparable Reuter's page at the close of business in the local market
for the non-U.S. Currency, provided that if no such Reuter's quote is available,
the Currency Exchange Rate shall be determined pursuant to a methodology
comparable to that set forth above.
"DTC" means The Depository Trust Company.
"Euroclear" means Morgan Guaranty Trust Company of New York, Brussels
office, as operator of the Euroclear system, or any successor thereof.
"Exchange Act" means the Securities Exchange Act of 1934, as amended, or any
successor statute.
"Exchange Agent" means The Chase Manhattan Bank Luxembourg S.A.
"Exchange Ratio" means the ratio, subject to adjustment as set forth in the
Indenture, of 178.0369 TCNZ ordinary shares per $1,000 principal amount of
notes.
"Extraordinary Cash Dividend" means, with respect to any Exchange Property
consisting of capital stock, any distribution consisting of cash, excluding any
cash distribution on such stock to the extent that with respect to any
consecutive 365-day period the aggregate cash distribution per share of such
stock having its record date during such period does not exceed the greater of
(x) four multiplied by the amount per share of such capital stock of the next
preceding quarterly dividend to the extent that such dividend did not require an
adjustment pursuant to this provision (as adjusted to reflect subdivisions or
combinations of such stock) and (y) 10 percent of the average of the daily
Closing Prices of such stock for the ten (10) consecutive Trading Days
immediately prior to the record date for payment of such distribution, and
excluding any dividend or distribution in connection with the liquidation,
dissolution or winding up of the issuer of such stock.
"Market Price" means, for any item of Exchange Property as of any date, (a)
if such item of Exchange Property consists of cash, the amount of such cash, (b)
if such item of Exchange Property consists of property other than cash or
Exchange Securities (as defined herein), the fair market value of such property
(as determined by our company which shall be entitled to rely for such purpose
on the advice of an internationally recognized investment banking firm retained
by us for this purpose) and (c) if such item of Exchange Property consists of a
security (an "Exchange Security"), an amount equal to the average Closing Price
per unit of such exchange security on the five Trading Days including and
immediately following such date.
"Mortgage" means any mortgage, lien, pledge, charge, security interest or
encumbrance of any kind, whether or not filed, recorded or otherwise perfected
under applicable law.
"Ownership Certificate" means a signed certificate in writing (or an
electronic certificate described in United States Treasury Regulations Section
1.163-5(c)(2)(i)(D)(3)(ii)) stating that on such date such bearer note (i) is
owned by a person that is not a United States person, (ii) is owned by a United
States person that (a) is a foreign branch of a United States financial
institution (as defined in United States Treasury Regulations Section
1.165-12(c)(1)(v)) (a "financial institution") purchasing for its own account or
for resale, or (b) is acquiring such bearer note through a foreign branch of a
United States financial institution and who holds the bearer note through such
financial institution through such date (and in either case (a) or (b), each
such United States financial institution agrees, on its own behalf or through
its agent, that we may be advised that it will comply with the requirements of
Section 165(j)(3)(A), (B) or (C) of the Code, and the regulations thereunder) or
(iii) is owned by a
30
<PAGE>
United States or foreign financial institution for the purposes of resale during
the restricted period, and in addition if the owner of such bearer note is a
United States or foreign financial institution described in clause (iii) above
(whether or not also described in clause (i) or (ii)), such financial
institution certifies that it has not acquired the bearer note for purposes of
resale directly or indirectly to a United States person or to a person within
the United States or its possessions.
"Paying Agent" means any Person authorized by us to pay the principal of,
and premium, if any, or interest on any notes on our behalf.
"Person" means any individual, corporation, partnership, joint venture,
associate, joint-stock company, trust, unincorporated organization or government
or any agency or political subdivision thereof.
"Principal Paying Agent" means The Chase Manhattan Bank.
"Quotation Agent" means the Trustee and its successors or substitutes.
"Redemption Date" means, when used with respect to any note to be redeemed
pursuant to any provision in the Indenture, the date fixed for such redemption
by or pursuant to the Indenture.
"Registered Securities" means the Rule 144A global note and the Regulation S
global note.
"Registrar" means The Chase Manhattan Bank.
"Restricted Period" means, with respect to the bearer notes, the period
which begins on the earlier of the date on which we receive the proceeds of the
sale of bearer notes and the first date on which the bearer notes are offered to
persons other than the managers, and which ends 40 days after the date on which
we receive the proceeds of the sale of such bearer notes; provided that with
respect to a bearer note held as part of an unsold allotment or subscription,
any offer or sale of such bearer note by us or any manager shall be deemed to be
during the Restricted Period.
"Security Register" means the register in which, subject to such reasonable
regulations as we may prescribe, we provide for the registration of registered
securities and the transfer of registered securities.
"Stated Maturity" means, when used with respect to any note or any
installment of principal thereof or interest thereon, with respect to the
payment of principal, April 1, 2003, and with respect to an installment of
interest shall mean each Interest Payment Date during the period when the note
is outstanding.
"Trading Day" means any day on which the Exchange Security the Closing Price
of which is being determined (a) is not suspended from trading on any national
or regional securities exchange or association or over-the-counter market at the
close of business and (b) has traded at least once on the national or regional
securities exchange or association or over-the-counter market that is the
principal market for the trading of such Exchange Security.
"United States" includes the United States of America, the District of
Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, American Samoa, Wake
Island, and the Northern Mariana Islands.
"United States person" means a citizen or resident of the United States, a
corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof, or an estate or
trust the income of which is subject to United States federal income taxation
regardless of its source.
31
<PAGE>
REGISTRATION RIGHTS
This prospectus is part of a shelf registration statement filed by us and
Bell Atlantic pursuant to the Registration Rights Agreement. We and Bell
Atlantic will use our best efforts to keep the shelf registration statement
effective until the maturity or earlier redemption or exchange of the notes. We
will (1) provide to each holder that has given us notice that such holder
intends to sell notes under this registration statement (each, a "notice
holder") copies of this prospectus and any supplement which is a part of the
shelf registration statement, (2) notify each such notice holder when the shelf
registration statement becomes effective and (3) take certain other actions
intended to generally permit unrestricted resales of the notes. We may suspend
the use of this Prospectus for a period of not more than ninety (90) days
(whether or not consecutive) in any 12-month period under certain circumstances.
A holder of notes that sells his notes pursuant to the shelf registration
statement generally will be required to be named as a selling holder in this
prospectus or a prospectus supplement and must deliver this prospectus and any
applicable prospectus supplement to purchasers. Additionally, he will be subject
to certain of the civil liability provisions under the Securities Act in
connection with the sales and will be bound by the provisions of the
Registration Rights Agreement which are applicable to him, including certain
indemnification obligations. In addition, each holder of the notes will be
required to deliver information to be used in connection with the shelf
registration statement and to provide comments on the shelf registration
statement within the time periods set forth in the Registration Rights Agreement
in order to have their notes included in the shelf registration statement and to
benefit from the provisions regarding liquidated damages set forth in the
following paragraph.
If (1) we do not file the shelf registration statement with the SEC by June
1, 1999, (2) the SEC does not declare the shelf registration statement effective
by September 1, 1999 or (3) the shelf registration statement ceases to be
effective during any period in which it is required to be kept effective (other
than as a result of the effectiveness of a successor registration statement) and
effectiveness is not restored within forty-five (45) days (each such event
referred to in clauses (1), (2) and (3) is a "Registration Default"), we will
pay liquidated damages to each holder of notes that are "restricted" securities
under the Securities Act intended to be eligible for resale under the shelf
registration statement and who has complied with its obligations under the
Registration Rights Agreement. Liquidated damages shall be in the form of an
increase of the interest rate on the notes by one-quarter of one percent per
annum upon the occurrence of a registration default (except that in the case of
a Registration Default discussed in clause (1) above, we will only incur
liquidated damages if the Registration Default has not been cured by July 15,
1999. However, if we have not cured the Registration Default by July 15, 1999,
we must pay liquidated damages retroactive to June 1, 1999 and liquidated
damages will increase and accrue in the manner set forth below), which rate (as
increased) will increase by an additional one-quarter of one percent during each
90-day period that such additional interest continues to accrue under any such
circumstance, with an aggregate maximum increase in the interest rate equal to
one percent (1%) per annum. In the event of such an increase, we have agreed to
notify the Luxembourg Stock Exchange and the Trustee. Once we have cured all
Registration Defaults, the accrual of additional interest will cease and the
interest rate will revert to the original interest rate.
The summary herein of certain provisions of the Registration Rights
Agreement does not purport to be complete and is subject to, and is qualified in
its entirety by reference to, all the provisions of the Registration Rights
Agreement, a copy or copies of which are available upon request to us.
32
<PAGE>
CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS
The following summary discusses certain material United States federal
income tax considerations that apply to the acquisition, ownership, exchange and
disposition of notes in registered form by a United States holder or a United
States alien holder. You are a United States holder for United States federal
income tax purposes if you are:
- an individual citizen or resident of the United States;
- a corporation created or organized in or under the laws of the United
States or any political subdivision of the United States;
- an estate, the income of which is subject to United States federal income
taxation regardless of its source; or
- a trust, if a court within the United States is able to exercise primary
supervision over the administration of the trust and one or more United
States persons have the authority to control all substantial decisions of
the trust.
You are a United States alien holder for United States federal income tax
purposes if you are:
- a nonresident alien individual;
- a foreign corporation; or
- a nonresident alien fiduciary of a foreign estate or trust.
This summary deals only with notes that United States holders and United
States alien holders hold as capital assets. This summary does not consider the
facts and circumstances that may be relevant to particular holders and does not
address the treatment of holders of notes under the laws of any state, local or
foreign taxing jurisdiction.
We do not address in this discussion tax considerations relating to the
acquisition, ownership, exchange or disposition of TCNZ ordinary shares. For
information regarding such tax consequences, you should consult the annual and
other reports filed by TCNZ with the SEC for information regarding United States
and New Zealand tax consequences. See "How To Obtain Information About Telecom
Corporation Of New Zealand Limited" above on how to obtain such information.
The discussion below is based upon the provisions of the United States
Internal Revenue Code of 1986, as amended, which we refer to as the Code, and
regulations, rulings and judicial decisions thereunder as of the date hereof.
Any such authority may be repealed, revoked or modified, perhaps with
retroactive effect, so as to result in federal income tax consequences different
from those discussed below.
WE INTEND THE DISCUSSION SET OUT BELOW AS A SUMMARY OF CERTAIN UNITED STATES
FEDERAL INCOME TAX CONSEQUENCES OF AN INVESTMENT IN THE NOTES. THE DISCUSSION
BELOW DOES NOT ADDRESS THE UNITED STATES FEDERAL INCOME TAX OR NEW ZEALAND TAX
CONSEQUENCES OF THE ACQUISITION, OWNERSHIP OR DISPOSITION OF THE TCNZ ORDINARY
SHARES THAT YOU MAY RECEIVE UPON EXCHANGE OF THE NOTES. YOU ARE URGED TO CONSULT
YOUR OWN TAX ADVISOR AS TO THE TAX CONSEQUENCES OF AN INVESTMENT IN THE NOTES OR
OWNERSHIP OF THE TCNZ ORDINARY SHARES THAT YOU MAY RECEIVE UPON EXCHANGE OF THE
NOTES, INCLUDING THE APPLICATION TO YOUR PARTICULAR SITUATION OF THE TAX
CONSIDERATIONS DISCUSSED BELOW, AND THE APPLICATION OF STATE, LOCAL OR FOREIGN
TAX LAWS.
33
<PAGE>
The discussion under "Tax Consequences to United States Holders" is
applicable to United States holders, and the discussion under "Tax Consequences
to United States Alien Holders" is applicable to United States alien holders.
TAX CONSEQUENCES TO UNITED STATES HOLDERS
ACCRUAL OF INTEREST ON THE NOTES
The notes will be treated as contingent-payment debt instruments that are
subject to the Treasury regulations governing such debt instruments, which we
refer to as the contingent-payment regulations. Under the contingent-payment
regulations, you will be required to accrue interest income on the notes (in
amounts described in the next paragraph), regardless of whether you use the cash
or accrual method of tax accounting. As a result, you will be required to
include the interest accruing on the note in income each year, whether or not
the cash payments on the note are sufficient to pay any tax that results to you.
Under the contingent-payment regulations, for each accrual period before and
including the maturity date of the notes, you will be required to include in
income interest that accrues as original issue discount. The amount that you
will be required to include in ordinary income on a note equals the product of
(a) the adjusted issue price (as defined below) as of the beginning of the
accrual period and (b) the comparable yield (as defined below), adjusted for the
length of the accrual period. This amount is ratably allocated to each day in
the accrual period.
The "adjusted issue price" means the $1,000 issue price of a note, increased
by any interest previously accrued (without regard to any adjustment for
differences between actual and projected payments described below) and decreased
by the amount of any noncontingent payments made on the note in all prior
accrual periods.
The "comparable yield" means the annual yield we would pay, as of the issue
date, on a fixed-rate debt security with no contingent payments but with terms
and conditions otherwise comparable to those of the notes. Amounts treated as
interest under the contingent-payment regulations are treated as original issue
discount for all purposes of the Code. None of the stated interest payments on
the notes will be "qualified stated interest" and, accordingly, all such
payments will be treated as payments of original issue discount or as return of
principal.
We have determined that the comparable yield is 6.00%, compounded
semiannually. Under the contingent-payment regulations, we are required solely
for United States federal income tax purposes to provide a schedule of the
projected amounts of payments,which we refer to as the projected payment
schedule, on the notes. This schedule must produce the comparable yield. Based
on our determination of the comparable yield, the projected payment schedule for
a note, assuming a principal amount of $1,000 or with respect to each integral
multiple thereof, consists of (x) payments of stated interest on all interest
payment dates and (y) payment of a projected amount at maturity of the note,
equal to $1,014.65. The comparable yield and the projected payment schedule
determined by us are fixed as of the issue date of the notes for the entire term
of the notes and generally are binding on the holders of the notes.
THE COMPARABLE YIELD AND THE PROJECTED PAYMENT SCHEDULE ARE NOT PROVIDED FOR
ANY PURPOSE OTHER THAN THE DETERMINATION OF HOLDERS' INTEREST ACCRUALS AND
ADJUSTMENTS THEREOF IN RESPECT OF THE NOTES FOR UNITED STATES FEDERAL INCOME TAX
PURPOSES AND DO NOT CONSTITUTE A REPRESENTATION REGARDING THE ACTUAL AMOUNTS
THAT WILL BE PAID UNDER THE NOTES
If, during any taxable year, the actual amount of the payments made on the
note during a taxable year exceeds the projected amount of payments for that
taxable year, you will be required to include
34
<PAGE>
the difference in income as additional interest for that taxable year. If, at
maturity, the actual payments are less than the projected payments, you will be
required to reduce interest income otherwise taken into account for the taxable
year by the difference. You will be required to treat any excess remaining after
such reduction as an ordinary loss to the extent of the aggregate interest
income from the note included in income by you in prior taxable years. The
actual amount of payments may be different from the projected amount of payments
for reasons such as the payment of liquidated damages under the terms described
in "Registration Rights" or the amount of cash or the then fair market value of
the TCNZ ordinary shares, if any, received on the maturity date of the note,
excluding the stated interest received on such date.
If you purchase a note for an amount that is different from the adjusted
issue price of the note, you will be required to take that difference into
account in determining the interest accruals and adjustments described above.
You must take this difference into account by reasonably allocating the
difference between your purchase price and the adjusted issue price of the note
to daily interest accruals and projected payments over the remaining term of the
note. In general, you must allocate such difference to your remaining interest
accruals to the extent it is attributable to changes in prevailing market
interest rates. However, it must be allocated to the remaining projected
payments to the extent it is attributable to changes in the expected amount of
any remaining contingent payments. On the date a daily portion of interest
accrues or a projected payment is made to which an adjustment is allocable, if
the adjustment is positive, you must treat the amount of the adjustment as
additional interest for the taxable year. If the adjustment is negative, you
must treat the amount of the adjustment as a reduction to interest income
otherwise taken into account for the taxable year, and treat any excess as an
ordinary loss to the extent of the aggregate interest income from the note
included in income by you in prior taxable years.
SALE OR EXCHANGE OF THE NOTES
When you sell or exchange a note before the maturity date, including, for
example, if you exchange a note for TCNZ ordinary shares or we redeem a note
that you own, you will recognize gain or loss equal to the difference between
the amount realized on the sale or exchange and the "adjusted tax basis" of the
note in your hands. Your initial adjusted tax basis of a note that you own
generally will be your original cost basis for the note. Your adjusted tax basis
will be increased by the interest income that you previously included with
respect to the note and decreased by the amount of all prior payments on the
note to you. In addition, you will be required to increase or decrease your
adjusted tax basis in a note by the amount of any positive or negative
adjustments on account of the difference between your purchase price and the
adjusted issue price of a note. In general, any gain that you recognize on the
sale or exchange of a note will be treated as ordinary interest income, and any
loss that you recognize will be treated as ordinary loss to the extent of your
prior interest inclusions, and thereafter generally as capital loss. For these
purposes, the amount that you realize upon a sale or exchange of a note will
include the amount of cash or the then fair market value of the TCNZ ordinary
shares that you receive upon such sale or exchange, and any cash that you
receive in lieu of fractional shares.
The distinction between capital loss and ordinary loss is potentially
significant in several respects. For example, limitations apply to your ability
to offset capital losses against ordinary income.
TAX BASIS AND HOLDING PERIOD OF THE TCNZ ORDINARY SHARES
If you receive TCNZ ordinary shares upon exchange of a Note, you will have
an initial tax basis in such TCNZ ordinary shares equal to the fair market value
of such TCNZ ordinary shares on the date of such exchange. Your holding period
for such TCNZ ordinary shares will begin on the day following the date of
exchange.
35
<PAGE>
BACKUP WITHHOLDING TAX
If you are a noncorporate holder, you may be subject to backup withholding
tax at a rate of 31 percent on payments of principal, premium and interest
(including original issue discount) on, and the proceeds of disposition of, a
note. Backup withholding tax at a 31 percent rate will apply to such payments if
you fail to provide your Taxpayer Identification Number in accordance with
applicable requirements or in certain other cases. You should consult your own
tax advisors regarding your qualification for an exemption from backup
withholding tax and the procedure for obtaining such an exemption if applicable.
The amount of any backup withholding tax from a payment to you will be
allowed as a credit against your United States federal income tax liability and
may entitle you to a refund, provided that you furnish the required information
to the Internal Revenue Service.
TAX CONSEQUENCES TO UNITED STATES ALIEN HOLDERS
WITHHOLDING TAX
Under present United States federal income tax law and subject to the
discussion of backup withholding tax below, payments of principal, premium (if
any) and interest (including original issue discount) on the notes by us or any
paying agent (in its capacity as such) to you, and gain that you realize on the
sale or exchange of a note, will be exempt from United States federal income or
withholding tax (we refer to this exemption from withholding tax as the
portfolio interest exemption), provided that:
- you do not own, actually or constructively, 10 percent or more of the
total combined voting power of all classes of our stock entitled to vote,
are not a controlled foreign corporation related us through stock
ownership and are not a bank receiving interest described in Section
881(c)(3)(A) of the Code;
- the beneficial owner of the note has provided the statement described
below, or such statement has been provided on behalf of such beneficial
owner;
- such payments or gain are not effectively connected with your conduct of a
trade or business in the United States; and
- the TCNZ ordinary shares (or ADRs) or other Exchange Property continue to
be "actively traded" within the meaning of Section 871(h)(4)(C)(v)(I) of
the Code.
Sections 871(h) and 881(c) of the Code require that, in order to obtain the
portfolio interest exemption either:
- the beneficial owner of a note; or
- a securities clearing organization, bank or other financial institution
that holds customers' securities in the ordinary course of its trade or
business (which we refer to as a "Financial Institution") and that holds
the note on behalf of the beneficial owner,
must file a statement with the withholding agent to the effect that the
beneficial owner is not a United States person. Under the law applicable to
stated interest paid on a note on or before December 31, 2000 and to payments on
or before such date of the proceeds from a sale or exchange of a note, the
statement requirement of Sections 871(h) and 881(c) will be satisfied if:
- the beneficial owner of a note certifies on an appropriate form (generally
Internal Revenue Service Form W-8BEN, or, for payments on or before
December 31, 2000, Internal Revenue Service Form W-8), under penalty of
perjury, that it is not a United States person and provides its name and
address; and
36
<PAGE>
- any Financial Institution holding the note on behalf of the beneficial
owner files a statement with the withholding agent to the effect that it
has received such a statement from the beneficial owner (and furnishes the
withholding agent with a copy thereof).
Under the law applicable to stated interest paid on a note after December 31,
2000 and to payments made after such date of the proceeds from a sale or
exchange of a note, you will generally satisfy the statement requirement of
Sections 871(h) and 881(c) if you satisfy the two conditions set forth in the
preceding sentence (except that Internal Revenue Service Form W-8BEN should
generally be used). However, if you are a beneficial owner that is a foreign
estate or trust, or fiduciary thereof, a foreign partnership that has entered
into a withholding agreement with the Internal Revenue Service or you are
holding a note through your United States branch, you will be required to
provide your Taxpayer Identification Number on an appropriate form (generally
Internal Revenue Service Form W-8BEN or W-8IMY, as applicable), in addition to
the items required on the certification under current law.
If:
- you are engaged in a trade or business in the United States; and
- interest income (including gain treated as interest income) on the note is
effectively connected with your conduct of such trade or business,
then you generally will be subject to regular United States federal income tax
on that interest income in the same manner as if you were a United States
holder. In addition, if you are a foreign corporation, then you may be subject
to a branch profits tax equal to 30 percent (or a lower rate provided by an
applicable treaty) of your effectively connected earnings and profits for the
taxable year, subject to certain adjustments. In lieu of the certificate
described above, you will be required to provide to the withholding agent an
appropriate form (generally Internal Revenue Service Form W-8ECI, or, for
payments on or before December 31, 2000, Internal Revenue Service Form 4224),
properly executed, in order to obtain an exemption from withholding tax on
stated interest paid on the notes and payments of proceeds from a sale or
exchange of a note, on which you provide your name, address and Taxpayer
Identification Number and state, under penalty of perjury, that stated interest
paid on and gain on the sale or exchange of a note is effectively connected with
your United States trade or business.
ESTATE TAX
Under Section 2105(b) of the Code, if you are an individual and you hold a
note at the time of your death, such note will not be subject to United States
federal estate tax as a result of your death, provided that:
- you do not own, actually or constructively, 10 percent or more of the
total combined voting power of all classes of our stock entitled to vote;
- at the time of your death, payments with respect to such note would not
have been effectively connected to your conduct of a trade or business in
the United States; and
- at the time of your death, the TCNZ ordinary shares (or ADRs) or other
Exchange Property continue to be "actively traded" within the meaning of
Section 871(h)(4)(C)(v)(I) of the Code.
BACKUP WITHHOLDING TAX AND INFORMATION REPORTING
Backup withholding tax will not apply to payments made by us or a paying
agent (in its capacity as such) if the certifications required by Sections
871(h) and 881(c) are received, provided that we or such paying agent, as the
case may be, does not have actual knowledge (and, with respect to payments made
after December 31, 2000, does not have reason to know) that the payee is a
United States person.
37
<PAGE>
Payments of proceeds from the sale or exchange of a note generally will not
be subject to backup withholding tax if they are made to or through a foreign
office of a broker. However, if such broker is:
- a United States person;
- a controlled foreign corporation for United States tax purposes;
- a foreign person 50 percent or more of whose gross income is effectively
connected with a United States trade or business for a specified
three-year period; or
- in the case of payments made after December 31, 2000, a foreign
partnership at least 50 percent of the capital or profits interests in
which are owned by United States persons or that has a United States trade
or business,
information reporting will be required unless the broker has in its records
documentary evidence that the beneficial owner is not a United States person and
certain other conditions are met or the beneficial owner otherwise establishes
an exemption. Payments to or through the United States office of a broker will
be subject to backup withholding tax and information reporting unless you
certify, under penalty of perjury, that you are not a United States person or
otherwise establish an exemption.
You should consult your tax advisor regarding the application of information
reporting and backup withholding tax in your particular situation, the
availability of an exemption therefrom, and the procedure for obtaining such an
exemption, if available. You will be allowed as a credit against your United
States federal income tax liability any amounts withheld from a payment to you
under the backup withholding tax rules. In addition, you may be entitled to a
refund, provided that the required information is furnished to the IRS.
SELLING HOLDERS
We originally issued the notes. The notes were sold by the managers in a
transaction exempt from the registration requirements of the Securities Act to
persons reasonably believed by the managers to be "qualified institutional
buyers" (as defined in Rule 144A under the Securities Act) or other
institutional "accredited investors") as defined in Rule 501(a)(1), (2), (3) or
(7) under the Securities Act. Selling holders, including their transferees,
pledgees, donees or successors, may from time to time offer and sell any or all
of their notes pursuant to this prospectus.
The selling holders will be those who provide us with notice and the
requisite information required under the terms of the Registration Rights
Agreement. As of the date of this prospectus, no holders have provided us with
notice and information, and therefore, as of the date of this prospectus, there
are no selling holders.
38
<PAGE>
PLAN OF DISTRIBUTION
The selling holders and their successors, including their transferees,
pledgees, donees or successors, may sell the notes directly to purchasers or
through underwriters, broker-dealers or agents. Selling holders or the
purchasers may compensate underwriters, broker-dealers or agents with discounts,
concessions or commissions. These discounts, concessions or commissions may be
in excess of those customary in the types of transactions involved.
Holders may sell the notes in one or more transactions at fixed prices, at
prevailing Market Prices at the time of sale, at prices related to the
prevailing Market Prices, at varying prices determined at the time of sale, or
at negotiated prices. Holders may effect the sales in transactions (which may
involve crosses or block transactions): (1) on any national securities exchange
or quotation service on which the notes may be listed or quoted at the time of
sale; (2) in the over-the-counter market; (3) in transactions otherwise than on
exchanges or services or in the over-the-counter market; (4) through the writing
of options (whether the options are listed on an options exchange or otherwise;
or (5) through the settlement of short sales. In connection the sale of notes,
selling holders may enter into hedging transactions with broker-dealers or other
financial institutions. Broker-dealers or financial institutions may in turn
engage in short sales of the notes and deliver the securities to close out such
short positions, or loan or pledge the notes to broker-dealers that may in turn
sell these securities.
The aggregate proceeds to the selling holders from the sale of the notes
offered by them under this prospectus will be the purchase price of such notes
less any discounts and commissions. Each of the selling holders may accept and,
together with their agents from time to time, reject, in whole or in part, any
proposed purchase of notes to made directly or through agents. We will not
receive any of the proceeds from this offering.
We do not intend to list the notes for trading on any national securities
exchange or on the Nasdaq National Market. A trading market may not develop for
the notes.
In order to comply with the securities laws of some states, if applicable,
the notes may be sold in such jurisdictions only through registered or licensed
brokers or dealers. In addition, in some states the notes may not be sold unless
they have been registered or qualified for sale or an exemption from
registration or qualification requirements is available and complied with.
The selling holders and any underwriters, broker-dealers or agents that
participate in the sale of the notes may be "underwriters" within the meaning of
Section 2(11) of the Securities Act of 1933. Selling holders who are
"underwriters" with the meaning of Section 2(11) of the Securities Act will be
subject to the prospectus delivery requirements of the Securities Act.
In addition, any securities covered by this prospectus which qualify for
sale pursuant to Rule 144 or Rule 144A of the Securities Act may be sold under
Rule 144 or Rule 144A rather than pursuant to this prospectus. A selling holder
may not sell any notes and may not transfer, devise, or gift such securities by
other means not described in this prospectus.
To the extent required, the specific notes to be sold, the names of the
selling holders, the respective purchases prices and the public offering prices,
the names of any agent, dealer or underwriter, and any applicable commissions or
discounts with respect to a particular offer will be set forth in an
accompanying prospectus supplement or, if appropriate, a post-effective
amendment to the registration statement of which this prospectus is a part.
We have entered into a Registration Rights Agreement for the benefit of the
holders of the notes to register their notes under applicable federal and state
securities laws under certain circumstances and at certain times. The
Registration Rights Agreement provides for the cross-indemnification of the
selling holders, Bell Atlantic and us and each of our directors, officers and
controlling persons against
39
<PAGE>
certain liabilities in connection with the offer and sale of the notes,
including liabilities under the Securities Act.
LEGAL OPINIONS
The validity of the Bell Atlantic Corporation Common Stock to be issued in
connection with the Registration Statement will be passed upon by P. Alan
Bulliner, Esq., Associate General Counsel and Corporate Secretary of Bell
Atlantic Corporation. As of February 28, 1999, Mr. Bulliner owned beneficially
23,350 shares of the Common Stock of Bell Atlantic and held 150,160 options to
purchase shares of the Common Stock of Bell Atlantic. As of such date, he also
had approximately 57 shares credited to his account under the Bell Atlantic
Employee Stock Ownership Plan, approximately 3,968 shares credited to his
account under the Bell Atlantic Savings Plan for Salaried Employees, and
approximately 261 shares credited to his account under the Bell Atlantic Senior
Management Income Deferral Plan.
EXPERTS
The consolidated financial statements and consolidated financial statement
schedule incorporated in this prospectus and in the registration statement by
reference to the Annual Report on Form 10-K of Bell Atlantic Corporation for the
year ended December 31, 1998 have been so incorporated in reliance on the report
(which contains an explanatory paragraph stating that, in 1996, the Company
changed its method of accounting for directory publishing revenues and expenses)
of PricewaterhouseCoopers LLP, independent accountants, given on the authority
of such firm as experts in auditing and accounting.
The consolidated financial statements included in GTE Corporation's Annual
Report on Form 10-K for the year ended December 31, 1998, incorporated in this
prospectus by reference to the Joint Proxy Statement and Prospectus of Bell
Atlantic and GTE Corporation, have been audited by Arthur Andersen LLP,
independent public accountants, as set forth in their report thereon dated
January 28, 1999, and are incorporated herein by reference in reliance upon the
authority of said firm as experts in giving said reports.
40
<PAGE>
------------------------
We have not authorized anyone to give you any information or to make any
representations about the transactions we discuss in this Prospectus other than
those contained herein or in the documents we incorporate herein by reference.
If you are given any information or representations about these matters that is
not discussed or incorporated in this Prospectus, you must not rely on that
information. This Prospectus is not an offer to sell or a solicitation of an
offer to buy securities anywhere or to anyone where or to whom we are not
permitted to offer or sell securities under applicable law. The delivery of this
Prospectus does not, under any circumstances, mean that there has not been a
change in our affairs since the date hereof. It also does not mean that the
information in this Prospectus or in the documents we incorporate herein by
reference is correct after this date.
------------------------
TABLE OF CONTENTS
<TABLE>
<S> <C>
About this Prospectus.................................................................. 2
How to Obtain Information about Bell Atlantic.......................................... 2
How to Obtain Information about Telecom Corporation of New Zealand Limited............. 3
Prospectus Summary..................................................................... 4
Risk Factors........................................................................... 8
Use of Proceeds........................................................................ 11
Ratio of Earnings to Fixed Charges..................................................... 11
Description of the Notes............................................................... 12
Registration Rights.................................................................... 32
Certain United States Federal Income Tax Considerations................................ 33
Selling Holders........................................................................ 38
Plan of Distribution................................................................... 39
Legal Opinions......................................................................... 40
Experts................................................................................ 40
</TABLE>
------------------------
$2,455,000,000
5.75% SENIOR EXCHANGEABLE NOTES DUE 2003
BELL ATLANTIC FINANCIAL SERVICES, INC.
ISSUER
BELL ATLANTIC CORPORATION
SUPPORT PROVIDER
---------------------
PROSPECTUS
---------------------
, 1999
<PAGE>
PART II.
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
<TABLE>
<S> <C>
Securities and Exchange Commission Filing Fee..................... $ 682,490
Printing Fees..................................................... $ 30,000*
Trustee and Exchange Agent Fees................................... $ 30,000*
Accountants' Fees................................................. $ 10,000*
Legal Fees........................................................ $ 100,000*
Miscellaneous Expenses............................................ $ 2,510*
---------
Total......................................................... $ 855,000
---------
---------
</TABLE>
- ------------------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 145 of the Delaware General Corporation Law ("DGCL") permits a
corporation to indemnify any of its directors or officers who was or is a party
or is threatened to be made a party to any third party proceeding by reason of
the fact that such person is or was a director or officer of the corporation,
against expenses (including attorney's fees), judgments, fines and amounts paid
in settlement actually and reasonably incurred by such person in connection with
such action or proceeding, if such person acted in good faith and in a manner
such person reasonably believed to be in or not opposed to the best interests of
the corporation, and, with respect to any criminal action or proceeding, had no
reason to believe that such person's conduct was unlawful. In a derivative
action, I.E., one by or in the right of the corporation, the corporation is
permitted to indemnify directors and officers against expenses (including
attorney's fees) actually and reasonably incurred by them in connection with the
defense or settlement of an action or suit if they acted in good faith and in a
manner that they reasonably believed to be in or not opposed to the best
interests of the corporation, except that no indemnification shall be made if
such person shall have been adjudged liable to the corporation, unless and only
to the extent that the court in which the action or suit was brought shall
determine upon application that the defendant directors or officers are fairly
and reasonably entitled to indemnity for such expenses despite such adjudication
of liability.
Article 7 of the Bell Atlantic Restated Certificate of Incorporation makes
mandatory the indemnification expressly authorized under the DGCL, except that
the Certificate of Incorporation only provides for indemnification in derivative
actions, suits or proceedings initiated by a director or officer if the
initiation of such action, suit or proceeding was authorized by the Board of
Directors.
Pursuant to Section 7.8 of the Amended and Restated Agreement and Plan of
Merger dated as of April 21, 1996 by and between NYNEX Corporation ("NYNEX") and
Bell Atlantic, Bell Atlantic has agreed for a period of six years following the
Effective Time to (a) cause NYNEX to maintain in effect the provisions regarding
indemnification of officers and directors contained in the NYNEX Certificate of
Incorporation and Bylaws and the certificates of incorporation and bylaws of
each of its subsidiaries or in director, officer or employee indemnification
agreements of NYNEX and its subsidiaries, (b) maintain in effect and cause NYNEX
to maintain in effect current policies of directors' and officers' liability
insurance and fiduciary liability insurance with respect to claims arising prior
to the Effective Time, and (c) indemnify, and cause NYNEX to indemnify, the
directors and officers of Bell Atlantic and NYNEX respectively, to the fullest
extent permitted under their respective certificates of incorporation and bylaws
and applicable law. In addition, Bell Atlantic has agreed to unconditionally
II-1
<PAGE>
and irrevocably guarantee for the benefit of such directors, officers and
employees the obligations of NYNEX under its indemnification arrangements.
The Certificate of Incorporation of each of Bell Atlantic and FSI limits the
personal liability of directors to the corporation or its stockholders for
monetary damages for breach of fiduciary duty as a director to the fullest
extent permitted by the Delaware General Corporation Law.
The directors and officers of Bell Atlantic and Bell Atlantic Financial
Services, Inc. (FSI) are insured against certain liabilities, including certain
liabilities arising under the Securities Act, which might be incurred by them in
such capacities and against which they cannot be indemnified by Bell Atlantic.
Any selling noteholder referred to in this Registration Statement will agree
to indemnify the directors and officers of Bell Atlantic and FSI who signed the
Registration Statement and the controlling persons of each of Bell Atlantic and
FSI against certain liabilities which might arise under the Securities Act from
information furnished to Bell Atlantic or FSI by or on behalf of any such
indemnifying party.
ITEM 16. EXHIBITS.
<TABLE>
<CAPTION>
EXHIBIT NUMBER
- -----------------
<C> <S>
4.1 Indenture dated as of February 26, 1998 among FSI, Bell Atlantic and The Chase Manhattan Bank, as
Trustee.
4.2 Form of Supplemental Indenture among FSI, Bell Atlantic and The Chase Manhattan Bank, as Trustee.
4.3 Support Agreement dated as of February 1, 1998 between FSI and Bell Atlantic.
4.4 Registration Right Agreement dated as of February 26, 1998 among, FSI, Bell Atlantic and the
Managers named therein.
5 Opinion of P. Alan Bulliner, Esq., Associate General Counsel and Corporate Secretary of Bell
Atlantic.
12* Computation of Ratio of Earning to Fixed Charges (Exhibit 12 to Form 10-K for the year ended
December 31, 1998, File No. 1-8606).
23.1 Consent of PricewaterhouseCoopers LLP.
23.2 Consent of Arthur Andersen LLP.
23.3 Consent of P. Alan Bulliner (Included in Exhibit 5).
24.1 Powers of Attorney of Bell Atlantic Corporation Directors and Officers.
24.2 Powers of Attorney of Bell Atlantic Financial Services, Inc. Directors and Officers.
25.1 Form T-1 Statement of Eligibility and Qualification of The Chase Manhattan Bank, as Trustee under
the Indenture relating to Bell Atlantic Corporation.
25.2 Form T-1 Statement of Eligibility and Qualification of The Chase Manhattan Bank, as Trustee under
the Indenture relating to Bell Atlantic Financial Services, Inc.
</TABLE>
- ------------------------
* Incorporated by Reference.
II-2
<PAGE>
ITEM 17. UNDERTAKINGS.
(a) The undersigned Registrants hereby undertake:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this Registration Statement:
(i) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933 (the "Act");
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the aggregate,
represent a fundamental change in the information set forth in the
Registration Statement; and
(iii) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or any
material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) of this section
do not apply if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed with or
furnished to the Commission by Bell Atlantic pursuant to Section 13 or Section
15(d) of the Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the Act, each
such post-effective amendment shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of such securities
at that time shall be deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the termination of the
offering.
(b) The undersigned Registrants hereby undertake that, for purposes of
determining any liability under the Act, each filing of Bell Atlantic's annual
report pursuant to Section 13(a) or Section 15(d) of the Exchange Act that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(c) Insofar as indemnification for liabilities arising under the Act may be
permitted to directors, officers and controlling persons of the Registrant
pursuant to the foregoing provisions, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
(d) To file an application for the purpose of determining the eligibility of
the trustee to act under subsection (a) of Section 310 of the Trust Indenture
Act of 1939 in accordance with the rules and regulations prescribed by the
Commission under Section 305(b) (2) of the Trust Indenture Act of 1939.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, Bell
Atlantic Corporation certifies that it has reasonable grounds to believe that it
meets all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in The City of New York, State of New York, on the 7th day of
May, 1999.
BELL ATLANTIC CORPORATION
By /s/ FREDERIC V. SALERNO
-----------------------------------------
(SENIOR EXECUTIVE VICE PRESIDENT AND CHIEF
FINANCIAL OFFICER/STRATEGY AND BUSINESS
DEVELOPMENT)
Pursuant to the requirements of the Securities Act of 1933, as amended, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
<C> <S> <C>
* Director May 7, 1999
- ------------------------------
Lawrence T. Babbio, Jr.
* Director May 7, 1999
- ------------------------------
Richard L. Carrion
* Director May 7, 1999
- ------------------------------
James G. Cullen
* Director May 7, 1999
- ------------------------------
Lodewijk J.R. De Vink
* Director May 7, 1999
- ------------------------------
James H. Gilliam, Jr.
* Director May 7, 1999
- ------------------------------
Stanley P. Goldstein
* Director May 7, 1999
- ------------------------------
Helene L. Kaplan
* Director May 7, 1999
- ------------------------------
Thomas H. Kean
* Director May 7, 1999
- ------------------------------
Elizabeth T. Kennan
* Director May 7, 1999
- ------------------------------
John F. Maypole
* Director May 7, 1999
- ------------------------------
Joseph Neubauer
</TABLE>
II-4
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
<C> <S> <C>
* Director May 7, 1999
- ------------------------------
Thomas H. O'Brien
* Director May 7, 1999
- ------------------------------
Eckhard Pfeiffer
* Director May 7, 1999
- ------------------------------
Hugh B. Price
* Director May 7, 1999
- ------------------------------
Rozanne L. Ridgway
* Director and Senior May 7, 1999
- ------------------------------ Executive Vice President
Frederic V. Salerno and Chief Financial
Officer/Strategy and
Business Development
(principal financial
officer)
* Director, Chairman and May 7, 1999
- ------------------------------ Chief Executive Officer
Ivan G. Seidenberg (principal executive
officer)
* Director May 7, 1999
- ------------------------------
Walter V. Shipley
* Director May 7, 1999
- ------------------------------
John R. Stafford
* Director May 7, 1999
- ------------------------------
Morrison DeS. Webb
* Director May 7, 1999
- ------------------------------
Shirley Young
* Vice President-Comptroller May 7, 1999
- ------------------------------ (principal accounting
Doreen A. Toben officer)
</TABLE>
<TABLE>
<S> <C> <C> <C>
*By: /s/ FREDERIC V. SALERNO
-------------------------
INDIVIDUALLY AND AS
ATTORNEY-IN-FACT
</TABLE>
II-5
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act, Bell Atlantic Financial
Services, Inc. certifies that it has reasonable grounds to believe that it meets
all the requirements for filing on Form S-3 and has duly caused this
Registration Statement or Amendment thereto to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Wilmington, State of
Delaware, on the 7th day of May, 1999.
BELL ATLANTIC FINANCIAL SERVICES, INC.
By /s/ JANET M. GARRITY
-----------------------------------------
(PRESIDENT AND TREASURER)
Pursuant to the requirements of the Securities Act, this Registration
Statement has been signed below by the following persons in the capacities and
on the date indicated.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ------------------------------ --------------------------- -------------------
<C> <S> <C>
* Director
- ------------------------------ May 7, 1999
P. Alan Bulliner
* Director, President and
- ------------------------------ Treasurer (Principal May 7, 1999
Janet M. Garrity Executive Officer)
Chief Financial Officer
* (Principal Financial
- ------------------------------ Officer and Principal May 7, 1999
Robert S. Fitzmire Accounting Officer)
* Director and Chairman
- ------------------------------ May 7, 1999
Ellen C. Wolf
</TABLE>
<TABLE>
<S> <C> <C> <C>
By /s/ JANET M. GARRITY
-------------------------
INDIVIDUALLY AND AS
ATTORNEY-IN-FACT
</TABLE>
II-6
<PAGE>
EXHIBIT INDEX
<TABLE>
<S> <C>
4.1 Indenture
4.2 Form of Supplemental Indenture
4.3 Support Agreement
4.4 Registration Rights Agreement
5 Opinion of P. Alan Bulliner, Esq., Associate General Counsel and Corporate Secretary
of Bell Atlantic Corporation.
23.1 Consent of PricewaterhouseCoopers LLP
23.2 Consent of Arthur Andersen LLP
23.3 Consent of P. Alan Bulliner (Included in Exhibit 5)
24.1 Powers of Attorney of Bell Atlantic Corporation Directors and Officers
24.2 Powers of Attorney of Bell Atlantic Financial Services, Inc. Directors and Officers
25.1 Form T-1 Statement of Eligibility and Qualification relating to Bell Atlantic
Corporation
25.2 Form T-1 Statement of Eligibility and Qualification relating to Bell Atlantic
Financial Services, Inc.
</TABLE>
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
BELL ATLANTIC FINANCIAL SERVICES, INC.
AND
BELL ATLANTIC CORPORATION
AND
THE CHASE MANHATTAN BANK, AS TRUSTEE
-----------------------------
Indenture
Dated as of February 26, 1998
-----------------------------
5.75% Senior Exchangeable Notes due 2003
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
Reconciliation and tie between Trust Indenture Act of 1939 and Indenture,
dated as of February 26, 1998
BELL ATLANTIC FINANCIAL SERVICES, INC.
<TABLE>
<CAPTION>
Trust Indenture Indenture
Act Section Section
- --------------- ----------
<S> <C>
Section 310(a)(1)...............................................................609
(a)(2)...............................................................609
(a)(3)...............................................................Not Applicable
(a)(4)...............................................................Not Applicable
(a)(5)...............................................................609
(b)..................................................................608, 610
(c)..................................................................Not Applicable
Section 311(a)..................................................................613
(b)..................................................................613
(c)..................................................................Not Applicable
Section 312(a)..................................................................701
(b)..................................................................702
(c)..................................................................702
Section 313(a)..................................................................703
(b)..................................................................703
(c)..................................................................703
(d)..................................................................703
Section 314(a)..................................................................704
(b)..................................................................Not Applicable
(c)(1)...............................................................102
(c)(2)...............................................................102
(c)(3)...............................................................Not Applicable
(d)..................................................................Not Applicable
(e)..................................................................102
(f)..................................................................Not Applicable
Section 315(a)..................................................................601(b)
(b)..................................................................602
(c)..................................................................601(a)
(d)(1)...............................................................601(c)(1)
(d)(2)...............................................................601(c)(2)
(d)(3)...............................................................601(c)(3)
(e)..................................................................514
(a)(1)(A)............................................................512
(a)(1)(B)............................................................513
</TABLE>
-i-
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
(a)(2).................................................................Not Applicable
(b)....................................................................508
Section 317(a)(1)..............................................................503
(a)(2).................................................................504
(b)....................................................................1003
Section 318(a).................................................................107
</TABLE>
- -------------------
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
-ii-
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Parties...........................................................................................................1
Recitals Of The Company...........................................................................................1
</TABLE>
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
<TABLE>
<CAPTION>
<S> <C>
SECTION 101. Definitions.............................................................................2
Act.............................................................................................3
Additional Amount...............................................................................3
Adjustment Event................................................................................3
Affiliate.......................................................................................3
Ameritech ......................................................................................3
Asset Carve-Out.................................................................................3
ASX.............................................................................................3
Average Market Value ...........................................................................3
Average Market Value Amount ....................................................................4
Bankruptcy Law .................................................................................4
Bearer Securities ..............................................................................4
Bell Atlantic ..................................................................................4
Board of Directors..............................................................................4
Board Resolution................................................................................4
Business Day....................................................................................4
Capital Stock ..................................................................................4
Cash Settlement Option .........................................................................4
Cedel .......................................................................................4
Closing Price...................................................................................4
Code .......................................................................................5
Commission......................................................................................5
Common Depositary ..............................................................................5
Company .......................................................................................5
Company Request or Company Order................................................................5
Consolidation ..................................................................................5
Corporate Trust Office..........................................................................5
</TABLE>
-iii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Corporation.....................................................................................6
Currency Exchange Rate..........................................................................6
Defaulted Interest..............................................................................6
Default .......................................................................................6
Depositary .....................................................................................6
DTC ............................................................................................6
Euroclear ......................................................................................6
Event of Default................................................................................6
Exchange Act ...................................................................................6
Exchange Agent .................................................................................6
Exchange Property...............................................................................6
Exchange Ratio .................................................................................7
Exchange Security ..............................................................................7
Extraordinary Cash Dividend ....................................................................7
GAAP............................................................................................7
Global Security ................................................................................7
Holder .......................................................................................8
Indenture.......................................................................................8
Interest Payment Date...........................................................................8
Issue Date .....................................................................................8
Managers .......................................................................................8
Market Price ...................................................................................8
Maturity .......................................................................................8
Mortgage .......................................................................................8
Non-U.S. Person ................................................................................8
Non-U.S. Subsidiaries ..........................................................................8
NZSE .......................................................................................8
Officers' Certificate ..........................................................................9
Opinion of Counsel..............................................................................9
Opinion of Independent Counsel .................................................................9
Outstanding.....................................................................................9
Ownership Certificate .........................................................................10
Participant....................................................................................10
Paying Agent...................................................................................10
Person ......................................................................................10
Place of Payment...............................................................................10
Predecessor Security...........................................................................10
Principal Paying Agent ........................................................................10
Prospectus ....................................................................................10
QIB ......................................................................................11
Quotation Agent ...............................................................................11
</TABLE>
-iv-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
Redemption Date................................................................................11
Redemption Price...............................................................................11
Registered Securities .........................................................................11
Registrar .....................................................................................11
Registration Rights Agreement .................................................................11
Regulation S ..................................................................................11
Regulation S Global Security ..................................................................11
Regular Record Date............................................................................11
Responsible Officer............................................................................11
Restricted Period .............................................................................12
Rule 144A .....................................................................................12
Rule 144A Global Security .....................................................................12
SBC Warburg Dillon Read .......................................................................12
Securities ....................................................................................12
Securities Act ................................................................................12
Securities Legend..............................................................................12
Security Register..............................................................................12
Shelf Registration Statement ..................................................................12
Special Record Date............................................................................12
Stated Maturity................................................................................12
Subsidiary.....................................................................................13
TCNZ ......................................................................................13
TCNZ Ordinary Shares...........................................................................13
TCNZ Resale Shelf .............................................................................13
TCNZ Shareholders' Agreement ..................................................................13
TCNZ Successor ................................................................................13
Trading Day ...................................................................................13
Transfer Agent ................................................................................13
Trustee ......................................................................................13
Trust Indenture Act............................................................................13
United States .................................................................................13
United States Alien............................................................................13
United States person ..........................................................................14
Unrestricted Date .............................................................................14
Unrestricted Global Security...................................................................14
Unrestricted Securities........................................................................14
Voting Stock ..................................................................................14
Waiver ......................................................................................14
SECTION 102. Compliance Certificates and Opinions..................................................14
SECTION 103. Form of Documents Delivered to Trustee................................................15
SECTION 104. Acts of Holders.......................................................................16
</TABLE>
-v-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 105. Notices, Etc. to Trustee and the Company..............................................17
SECTION 106. Notice to Holders; Waiver.............................................................17
SECTION 107. Conflict with Trust Indenture Act.....................................................18
SECTION 108. Effect of Headings and Table of Contents.............................................18
SECTION 109. Successors and Assigns................................................................19
SECTION 110. Separability Clause...................................................................19
SECTION 111. Benefits of Indenture.................................................................19
SECTION 112. GOVERNING LAW.........................................................................19
SECTION 113. Legal Holidays........................................................................19
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.......................................................................20
SECTION 202 Restrictive Legends...................................................................21
SECTION 203. Form of Trustee's Certificate of Authentication.......................................24
ARTICLE THREE
THE SECURITIES
SECTION 301. Title and Terms.......................................................................25
SECTION 302. Denominations.........................................................................26
SECTION 303. Execution, Authentication, Delivery and Dating........................................26
SECTION 304. Temporary Securities..................................................................26
SECTION 305. Registration, Registration of Transfer and Exchange...................................27
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities......................................34
SECTION 307. Payment of Interest; Interest Rights Preserved........................................35
SECTION 308. Person Deemed Owners..................................................................37
SECTION 309. Cancellation..........................................................................37
SECTION 310. Computation of Interest...............................................................38
SECTION 311. Adjustment of Interest Rate...........................................................38
</TABLE>
-vi-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. Satisfaction and Discharge of Indenture
SECTION 402. Application of Trust Money
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.....................................................................39
SECTION 502. Acceleration of Maturity; Rescission and Annulment....................................41
SECTION 503. Collection of Indebtedness and Suits for Enforcement
by Trustee...................................................................42
SECTION 504. Trustee May File Proofs of Claim......................................................43
SECTION 505. Trustee May Enforce Claims Without Possession
of Securities................................................................44
SECTION 506. Application of Money Collected........................................................44
SECTION 507. Limitations on Suits..................................................................44
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest.........................................................45
SECTION 509. Restoration of Rights and Remedies....................................................45
SECTION 510. Rights and Remedies Cumulative........................................................45
SECTION 511. Delay or Omission Not Waiver..........................................................46
SECTION 512. Control by Holders....................................................................46
SECTION 513. Waiver of Past Defaults...............................................................46
SECTION 514. Undertaking for Costs.................................................................47
SECTION 515. Waiver of Stay, Extension or Usury Laws...............................................47
SECTION 516. Remedies Subject to Applicable Law....................................................48
ARTICLE SIX
THE TRUSTEE
SECTION 601. Duties of the Trustee.................................................................48
SECTION 602. Notice of Defaults....................................................................49
SECTION 603. Certain Rights of Trustee.............................................................49
</TABLE>
-vii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 604. Trustee Not Responsible for Recitals, Dispositions of
Securities or Applications of Proceeds Thereof...............................51
SECTION 605. Trustee and Agents May Hold Securities; Collections, etc..............................51
SECTION 606. Money Held in Trust...................................................................51
SECTION 607. Compensation and Reimbursement........................................................52
SECTION 608. Conflicting Interests.................................................................52
SECTION 609. Trustee Eligibility...................................................................52
SECTION 610. Resignation and Removal; Appointment of Successor Trustee.............................53
SECTION 611. Acceptance of Appointment by Successor................................................54
SECTION 612. Merger, Conversion, Consolidation or Succession to Business...........................55
SECTION 613. Preferential Collection of Claims Against Company.....................................55
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.............................56
SECTION 702. Disclosure of Names and Addresses of Holders..........................................56
SECTION 703. Reports by Trustee....................................................................56
SECTION 704. Reports by Company and Bell Atlantic..................................................57
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
SECTION 801. Company May Merge, Consolidate, Etc., Only on
Certain Terms................................................................58
SECTION 802. Successor Substituted.................................................................58
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures and Agreement without
Consent of Holders...........................................................59
SECTION 902. Supplemental Indentures with Consent of Holders.......................................60
SECTION 903. Execution of Supplemental Indentures..................................................61
SECTION 904. Effect of Supplemental Indentures.....................................................61
</TABLE>
-viii-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 905. Conformity with Trust Indenture Act...................................................61
SECTION 906. Reference in Securities to Supplemental Indentures....................................61
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest............................................62
SECTION 1002. Trustee, Transfer Agent, Registrar, Quotation Agent, Paying
Agents and Exchange Agents...................................................62
SECTION 1003. Money for Security Payments to Be Held in Trust.......................................63
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Rights of Redemption..................................................................68
SECTION 1102. Applicability of Article..............................................................69
SECTION 1103. Election to Redeem; Notice to Trustee.................................................69
SECTION 1104. Selection by Trustee of Securities to Be Redeemed.....................................69
SECTION 1105. Notice of Redemption..................................................................70
SECTION 1106. Deposit of Redemption Price...........................................................71
SECTION 1107. Securities Payable on Redemption Date.................................................71
SECTION 1108. Securities Redeemed in Part...........................................................71
ARTICLE TWELVE
TAX REDEMPTION
SECTION 1201. Tax Redemption of All Securities......................................................72
SECTION 1202. Tax Redemption of Bearer Securities...................................................73
ARTICLE THIRTEEN
EXCHANGE OF SECURITIES
SECTION 1301. Exchange Rights at the Option of the Holder...........................................75
</TABLE>
-ix-
<PAGE>
<TABLE>
<CAPTION>
Page
----
<S> <C>
SECTION 1302. Method of Exchange....................................................................75
SECTION 1303. Adjustment Events.....................................................................77
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 1401. Exemption from Individual Liability...................................................78
ARTICLE FIFTEEN
HOLDER'S MEETINGS
SECTION 1501. Purposes of Meetings..................................................................78
SECTION 1502. Call of Meetings by Trustee...........................................................79
SECTION 1503. Call of Meetings by Company...........................................................79
SECTION 1504. Call of Meetings by Company or Bell Atlantic..........................................80
SECTION 1505. Qualifications for Voting. ..........................................................80
SECTION 1506. Regulations...........................................................................80
SECTION 1507. Voting................................................................................81
SECTION 1508. No Delay of Rights by Meeting.........................................................81
</TABLE>
<TABLE>
<CAPTION>
<S> <C>
Exhibit A Form of Support Agreement
Exhibit B Rule 144A Global Security
Exhibit C Regulation S Global Security
Exhibit D Temporary Global Bearer Security
Exhibit E Permanent Global Bearer Security
Exhibit F Form of Definitive Bearer Security
Exhibit G Rule 144A Certificate
Exhibit H Regulation S Certificate
Exhibit I Form of Ownership Certificate and Form of Certificate to be Presented
by the Euroclear Operator or Cedel
Exhibit J Form of Transfer Notice
</TABLE>
-x-
<PAGE>
THIS INDENTURE, dated as of February 26, 1998, among BELL
ATLANTIC FINANCIAL SERVICES, INC., a corporation duly organized and existing
under the laws of the State of Delaware (hereinafter sometimes called the
"Company"), BELL ATLANTIC CORPORATION, a corporation duly organized and existing
under the laws of the State of Delaware (hereinafter sometimes called "Bell
Atlantic"), and THE CHASE MANHATTAN BANK, a banking corporation organized under
the laws of the State of New York, as trustee (hereinafter sometimes called the
"Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of
5.75% Senior Exchangeable Notes due 2003 (hereinafter called the "Securities")
of substantially the tenor and amount hereinafter set forth, and to provide
therefor, the Company has duly authorized the execution and delivery of this
Indenture and the Securities;
Upon the effectiveness of the Shelf Registration Statement (as
defined herein), this Indenture will be subject to, and shall be governed by,
the provisions of the Trust Indenture Act (as defined herein) that are required
to be part of and to govern indentures qualified under the Trust Indenture Act;
and
All acts and things necessary have been done to make (i) the
Securities, when duly issued and executed by the Company and authenticated and
delivered hereunder the valid obligations of the Company and (ii) this Indenture
a valid agreement of the Company in accordance with the terms of the Securities
and of this Indenture.
RECITALS OF BELL ATLANTIC
Bell Atlantic has duly authorized the execution and delivery
of this Indenture and the Support Agreement dated as of February 1, 1998 between
the Company and Bell Atlantic (the "Support Agreement"), the form of which is
attached as Exhibit A and made a part hereof, in which Bell Atlantic agrees,
among other things, to (i) cause the Company to have a positive tangible net
worth as determined in accordance with GAAP (as defined herein) and (ii) provide
the Company with funds or other property, if not obtainable by the Company from
other sources on commercially reasonable terms, to assure that the Company will
be able to make payments of principal, premium, if any, and interest on, or
deliver the cash value of Exchange Property when due; PROVIDED, that no Holder
of Securities shall have recourse to the stock or assets of Bell Atlantic -
Pennsylvania, Inc., Bell Atlantic - New Jersey, Inc., Bell Atlantic - Delaware,
Inc., Bell Atlantic - Maryland, Inc., Bell Atlantic - Virginia, Inc., Bell
Atlantic - West Virginia, Inc., Bell Atlantic - Washington, D.C., Inc., New York
Telephone Company, The New England Telephone and Telegraph Company, Bell
Atlantic Network Services, Inc. or Bell Atlantic's interest in Telecom
Corporation of New Zealand Limited (or any other operating telephone company
which may at the time be owned directly or indirectly by Bell Atlantic) (the
"Asset Carve-Out").
<PAGE>
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of
the Securities by the Holders thereof, the Company and Bell Atlantic covenant
and agree with the Trustee for the equal and proportionate benefit of all
Holders of the Securities, as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. DEFINITIONS.
For all purposes of this Indenture, except as otherwise
expressly provided or unless the context otherwise requires:
(a) the terms defined in this Section 101 (except as herein
otherwise expressly provided or unless the context otherwise requires)
for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section
101, and include the plural as well as the singular;
(b) all other terms used in this Indenture which are defined
in the Trust Indenture Act or which are by reference therein defined in
the Securities Act (except as herein otherwise expressly provided or
unless the context otherwise requires), shall have the meanings
assigned to such terms in said Trust Indenture Act and in the
Securities Act as in force at the date of this Indenture;
(c) all references in this Indenture to designated "ARTICLES",
"SECTIONS" and other subdivision are to the designated Articles,
Sections and other subdivisions of this instrument as originally
executed;
(d) the words "herein", "hereof" and "hereunder" and other
words of similar import refer to this Indenture as a whole and not to
any particular Article, Section of other subdivision;
(e) all accounting terms not otherwise defined herein shall
have the meanings given by generally accepted accounting principles in
the United States of America;
(f) all references in this Indenture to "dollar", "U.S. $," or
"$" are to the lawful currency of the United States of America, and all
references to "N.Z. $" are to the lawful currency of New Zealand; and
-2-
<PAGE>
(g) all references to the masculine gender shall include the
feminine gender as appropriate.
"Act", when used with respect to any Holder, has the meaning
specified in Section 104.
"Additional Amount" has the meaning specified in Section 1005.
"Adjustment Event", has the meaning assigned to it in the
definition of Exchange Property.
"Affiliate" of any specified Person means any other Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise,
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Ameritech" means Ameritech Corporation, a Delaware
corporation headquartered in Illinois.
"Asset Carve-Out" has the meaning specified in the Recitals of
Bell Atlantic.
"ASX" means the Australian Stock Exchange Limited.
"Authorized Newspapers" means (a) newspapers customarily
published at least once a day for at least five days in each calendar week and
of general circulation in Western Europe and New Zealand, and (b) if and so long
as the Securities are listed on a Stock Exchange, such other newspaper as such
Stock Exchange may require. Unless otherwise instructed by the Company, such
newspapers are expected to be THE WALL STREET JOURNAL, FINANCIAL TIMES, NEW
ZEALAND HERALD, the AUSTRALIAN FINANCIAL REVIEW and the LUXEMBURGER WORT.
"Average Market Value" of TCNZ Ordinary Shares or other
Exchange Property on the date of computation means the arithmetic average of the
daily volume-weighted average price of the TCNZ Ordinary Shares or other
Exchange Security, as reported on the NZSE, or if the TCNZ Ordinary Shares or
other Exchange Security is not then listed on the NZSE, as reported by the
principal securities exchange or interdealer quotation system on which the TCNZ
Ordinary Shares or other Exchange Security is then traded, or in the case of
Exchange Property other than Exchange Securities, the Market Price of such
Exchange Property, for the 30-Trading Day period ending two Trading Days prior
to such date of computation as computed by the Quotation Agent.
-3-
<PAGE>
"Average Market Value Amount" means, per $1,000 principal
amount of Securities, the Average Market Value of the TCNZ Ordinary Shares (or
other Exchange Property) that otherwise would be deliverable upon exchange of
such principal amount of Securities were such Securities exchanged at such time
as of any Redemption Date or the Maturity of the Securities, as the case may be.
"Bankruptcy Law" means Title 11, United States Bankruptcy Code
of 1978, as amended, or any similar United States Federal or State law relating
to bankruptcy, insolvency, receivership, winding-up, liquidation, reorganization
or relief of debtors or any amendments to, succession in or change in any law.
"Bearer Securities" means interests in a permanent or
temporary Global Bearer Security as well as definitive Global Bearer Securities
and any appurtenant coupons.
"Bell Atlantic" means Bell Atlantic Corporation, a Delaware
corporation headquartered in New York, and, subject to the provisions of Article
Eight, shall include its successors and assigns.
"Board of Directors" means the board of directors of the
Company or Bell Atlantic, as applicable, or any duly authorized committee of
directors and/or officers appointed by such board.
"Board Resolution" means a copy of a resolution certified by
the Secretary or an Assistant Secretary of the Company to have been duly adopted
by the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day", when used with respect to any Place of
Payment, place of exchange, or other place, means each Monday, Tuesday,
Wednesday, Thursday, and Friday which is not a day on which banking institutions
in The City of New York or that Place of Payment, place of exchange or other
place are authorized or obligated by law or executive order to close.
"Capital Stock" of any Person means any and all shares,
interests, participations or other equivalents (however designated) of such
Person's capital stock or other equity interests whether now outstanding or
issued after the date of the Indenture.
"Cash Settlement Option" shall have the meaning assigned to
such term in Section 1301.
"Cedel" means Cedel Bank, SOCIETE ANONYME.
"Closing Price" of any Exchange Security means, on any date of
determination, the closing sale price (or, if no closing sale price is reported,
the last reported sale price) of such
-4-
<PAGE>
Exchange Security on the NZSE on any such date or, if such Exchange Security is
not listed for trading on the NZSE on any such date, as reported in the
composite transactions for the principal securities exchange on which such
Exchange Security is listed for trading, or, if such Exchange Security is not
listed for trading on a securities exchange, as reported in the composite
transactions for the principal over-the-counter market in which such Exchange
Security if traded or, if such price of such Exchange Security is not available,
the market value of such Exchange Security on such date as determined by an
internationally recognized investment banking firm retained for this purpose by
the Company, provided that if the Closing Price of any item of Exchange Property
as of any date is reported in N.Z. dollars or any currency other than U.S.
dollars then such Closing Price shall be expressed in the U.S. dollar equivalent
of such amount, based on the Currency Exchange Rate for such day.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time.
"Commission" means the Securities and Exchange Commission, as
from time to time constituted, created under the Exchange Act, or, if at any
time after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Common Depositary" means The Chase Manhattan Bank, London
Branch, as common depositary for, and in respect of interests in the Securities
held through Morgan Guaranty Trust Company of New York, Brussels office, as
operator of Euroclear and Cedel.
"Company" means Bell Atlantic Financial Services, Inc., a
Delaware corporation, and, subject to the provisions of Article Eight, shall
include its successors and assigns.
"Company Request" or "Company Order" means a written request
or order signed in the name of the Company by its Chairman of the Board, any
Vice Chairman of the Board, its President, any of its Vice Presidents or its
Chief Financial Officer, and by its Treasurer, any of its Assistant Treasurers,
its Controller, its Secretary or any of its Assistant Secretaries, or any
additional Vice President of the Company and delivered to the Trustee.
"Consolidation" means, with respect to any Persons, the
consolidation of the accounts of such Person, and each of its subsidiaries if
and to the extent the accounts of such Person and each of its subsidiaries would
normally be consolidated with those of such Person, all in accordance with GAAP.
The term "Consolidated" shall have a similar meaning.
"Corporate Trust Office" means the principal office of the
Trustee in New York City at which at any particular time its corporate trust
business shall be administered and which, as of the date of this Indenture, is
located at 450 West 33rd Street, 15th Floor, New York, New York 10001.
-5-
<PAGE>
"Corporation" means any corporation, association, company,
partnership or business trust.
"Currency Exchange Rate" between the U.S. Dollar and the N.Z.
Dollar for any date shall be determined by obtaining the N.Z. Dollar/U.S. Dollar
exchange rate for such date from Reuter's Page "NZD=" (or any successor page) at
approximately 3:30 p.m., New Zealand time (the "Reuter's Quote"); provided that
if no Reuter's Quote is shown for such day, the Currency Exchange Rate between
the N.Z. Dollar and the U.S. Dollar shall be determined by obtaining the N.Z.
Dollar/U.S. Dollar exchange rate (at which a leading foreign exchange dealer
selected by the Company (a "Reference Dealer") is willing to purchase N.Z.
Dollars and sell U.S. Dollars) for such day from three Reference Dealers at
approximately 3:30 p.m., New Zealand time (or if quotes are unavailable from
three Reference Dealers, from two such dealers) and calculating the arithmetic
mean of such quotes. The Currency Exchange Rate between the U.S. Dollar and any
currency other than the N.Z. Dollar for any date shall be determined by
obtaining such exchange rate for such day from the comparable Reuter's Page at
the close of business in the local market for the non-U.S. currency, provided
that if no such Reuter's quote is available, the Currency Exchange Rate shall be
determined pursuant to a methodology comparable to that set forth above.
"Defaulted Interest" has the meaning specified in Section 307;
"Default" means any event which is, or after notice or passage
of any time or both would be, an Event of Default.
"Depositary" means DTC, its nominees and successors, or
another Person designated as Depositary by the Company, which must be a clearing
agency registered under the Exchange Act.
"DTC" means The Depository Trust Company.
"Euroclear" means Morgan Guaranty Trust Company of New York,
Brussels office, as operator of the Euroclear system, or any successor thereof.
"Event of Default" has the meaning specified in Section 501.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended, or any successor statute.
"Exchange Agent" means The Chase Manhattan Bank Luxembourg
S.A..
"Exchange Property" means (A) initially one TCNZ Ordinary
Share and (B) subject to Section 1303 hereof, all property received in respect
of such TCNZ Ordinary Share (either directly or as a result of successive
applications of this paragraph) upon the following
-6-
<PAGE>
events: (i) the distribution of a dividend on Exchange Property in the same type
of Exchange Property, (ii) the combination of Exchange Property into a smaller
number of shares or other units, (iii) the subdivision of outstanding shares or
other units of Exchange Property, (iv) the conversion or reclassification of
Exchange Property by issuance or exchange of other securities, (v) any
consolidation or merger of TCNZ, or a TCNZ Successor, with or into another
entity (other than a merger or consolidation in which TCNZ is the continuing
corporation and in which the TCNZ Ordinary Shares outstanding immediately prior
to the merger or consolidation are not exchanged for cash, securities or other
property of TCNZ or another corporation), (vi) any statutory exchange of
securities of TCNZ or any TCNZ Successor with another corporation (other than in
connection with a merger or acquisition and other than a statutory exchange of
securities in which TCNZ is the continuing corporation and in which the TCNZ
Ordinary Shares outstanding immediately prior to the statutory exchange are not
exchanged for cash, securities or other property of TCNZ or another
corporation), (vii) any liquidation, dissolution or winding up of TCNZ or any
TCNZ Successor, (viii) any distribution of cash or other property on Exchange
Property of a particular type (excluding cash dividends and other cash
distributions other then Extraordinary Cash Dividends (as defined below)) or
(ix) any tender or exchange offer for Exchange Property of a particular type.
Each of the foregoing events described in clauses (i) through (ix) is referred
to herein as any "Adjustment Event".
"Exchange Ratio" means the ratio, subject to adjustment as set
forth in this Indenture, of 178.0369 TCNZ Ordinary Shares per $1,000 principal
amount of Securities.
"Exchange Security" has the meaning assigned to such term in
the definition of Market Price in this Section 101.
"Extraordinary Cash Dividend" means, with respect to any
Exchange Property consisting of capital stock, any distribution consisting of
cash, excluding any cash dividend on such stock to the extent that with respect
to any consecutive 365-day period the aggregate cash dividend per share of such
stock having its record date during such period does not exceed the greater of
(x) four multiplied by the amount per share of such capital stock of the next
preceding quarterly dividend to the extent that such dividend did not require an
adjustment pursuant to this provision (as adjusted to reflect subdivisions or
combinations of such stock) and (y) 10 percent of the average of the daily
Closing Prices of such stock for the ten (10) consecutive Trading Days
immediately prior to the record date for payment of such distribution, and
excluding any dividend or distribution in connection with the liquidation,
dissolution or winding up of the issuer of such stock.
"Generally Accepted Accounting Principles" or "GAAP" means
generally accepted accounting principles in the United States, consistently
applied, which are in effect on the date of this Indenture.
"Global Securities" has the meaning assigned to such term in
Section 201; and "Global Security" means any of the Global Securities.
-7-
<PAGE>
"Holder" means either (1) a Person in whose name a Registered
Security is registered in the Security Register or (2) a Person holding a Bearer
Security, as the case may be.
"Indenture" means this instrument as originally executed
(including all exhibits hereto) and as it may from time to time be supplemented
or amended by one or more indentures supplemental hereto entered into pursuant
to the applicable provisions hereof.
"Interest Payment Date" means April 1 or October 1 of each
year, commencing on October 1, 1998.
"Issue Date" means the date on which the Securities are
originally issued under this Indenture.
"Managers" means Swiss Bank Corporation, Credit Suisse First
Boston (Europe) Limited, Merrill Lynch International, Nomura International plc,
Salomon Brothers International Limited and UBS Limited.
"Market Price" means, for any item of Exchange Property as of
any date, (a) if such item of Exchange Property consists of cash, the amount of
such cash, (b) if such item of Exchange Property consists of property other than
cash or Exchange Securities (as defined herein), the fair market value of such
property (as determined by the Company which shall be entitled to rely for such
purpose on the advice of an internationally recognized investment banking firm
retained for this purpose by the Company) and (c) if such item of Exchange
Property consists of a security (an "Exchange Security"), an amount equal to the
average Closing Price per unit of such Exchange Security on the five Trading
Days including and immediately following such date.
"Maturity" means when used with respect to any Security, the
date on which the principal of such Security becomes due and payable as herein
or therein provided, whether at Stated Maturity or the Redemption Date and
whether by declaration of acceleration or otherwise.
"Mortgage" means any mortgage, lien, pledge, charge, security
interest or encumbrance of any kind, whether or not filed, recorded or otherwise
perfected under applicable law.
"Non-U.S. Person" means a Person that is not a "U.S. Person"
as defined in Regulation S.
"Non-U.S. Subsidiaries" means Subsidiaries organized under the
laws of jurisdictions other than any jurisdiction in the United States.
"NZSE" means the New Zealand Stock Exchange.
-8-
<PAGE>
"Officers' Certificate" means, when used with respect to the
Company or Bell Atlantic, as the case may be, a certificate signed by the
Chairman of the Board or any Vice Chairman, the President or any Vice President
or the Chief Financial Officer and by the Treasurer, an Assistant Treasurer, the
Controller, the Secretary or any Assistant Secretary or any additional Vice
President, of the Company or Bell Atlantic, as the case may be, that is
delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, which
counsel is reasonably acceptable to the Trustee and who may be counsel for the
Company or Bell Atlantic, as the case may be, that is delivered to the Trustee.
"Opinion of Independent Counsel" means a written opinion of
counsel, which counsel is reasonably acceptable to the Trustee and who is not an
employee of or consultant to the Company or Bell Atlantic, that is delivered to
the Trustee.
"Outstanding", when used with respect to Securities, means, as
of the date of determination, all Securities theretofore authenticated and
delivered under this Indenture, EXCEPT:
(i) Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) Securities, or portions thereof, to be redeemed and with
respect to which the Company has elected to pay the Average Market
Value Amount, for whose redemption money in the necessary amount has
been theretofore deposited with the Trustee or any Paying Agent (other
than the Company) in trust or set aside and segregated in trust by the
Company (if the Company shall act as its own Paying Agent) for the
Holders of such Securities; provided that notice of such redemption
shall have been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee shall have been made; and
(iii) Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this
Indenture, other than any such Securities in respect of which there
shall have been presented to the Trustee and the Company proof
reasonably satisfactory to each of them that such Securities are held
by a BONA FIDE purchaser in whose hands such Securities are valid
obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, Securities owned
by the Company or any other obligor on the Securities or any Affiliate of the
Company or of such other obligor shall be disregarded and deemed not to be
Outstanding, except that, in determining whether the Trustee shall be protected
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so
-9-
<PAGE>
owned that have been pledged in good faith may be regarded as Outstanding if the
pledgee establishes to the reasonable satisfaction of the Trustee the pledgee's
right so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor on the Securities or any Affiliate of the Company
or of such other obligor.
"Ownership Certificate" means a certificate substantially in
the form of Exhibit I hereto.
"Participant" means any person who has an account with DTC.
"Paying Agent" means any Person authorized by the Company to
pay the principal of, and premium, if any, or interest on any Securities on
behalf of the Company.
"Person" means any individual, corporation, partnership, joint
venture, associate, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment" means, (1) when used with respect to the
Registered Securities, the Corporate Trust Office of the Trustee, the office or
agency of the Company in the Borough of Manhattan, the City and State of New
York, for the payment of the principal of, premium, if any, and interest on the
Registered Securities and such other place or places, if any, where the
principal of, premium, if any, and interest on the Registered Securities are
payable as specified as contemplated by Section 301 and (2) when used with
respect to the Bearer Securities, the paying agencies outside the United States
appointed by the Company, from time to time, for the payment of the principal
of, premium, if any, and interest on the Bearer Securities and such other place
or places, if any, where the principal of, premium, if any, and interest on the
Bearer Securities are payable as specified as contemplated by Section 301.
"Predecessor Security" of any particular Security means every
previous Security evidencing all or a portion of the same debt as that evidenced
by such particular Security; and, for the purposes of this definition, any
Security authenticated and delivered under Section 306 in exchange for or in
lieu of a mutilated, destroyed, lost or stolen Security shall be deemed to
evidence the same debt as the mutilated, destroyed, lost or stolen Security.
"Principal Paying Agent" means The Chase Manhattan Bank.
"Prospectus" means the prospectus included in a Registration
Statement, including any preliminary prospectus, and any such prospectus as
amended or supplemented by any prospectus supplement, including any such
prospectus supplement with respect to the terms of the offering of any portion
of the Securities covered by a Shelf Registration Statement, and by all other
amendments and supplements to a prospectus, including post-effective amendments,
and in each case including all material incorporated by reference therein.
-10-
<PAGE>
"QIB" means a "Qualified Institutional Buyer" within the
meaning of Rule 144A under the Securities Act.
"Quotation Agent" means the Trustee and its successors or
substitutes.
"Redemption Date", when used with respect to any Security to
be redeemed pursuant to any provision in this Indenture, means the date fixed
for such redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any Security to
be redeemed, pursuant to any provision in this Indenture, means the price at
which it is to be redeemed pursuant to this Indenture.
"Registered Securities" means the Rule 144A Global Security
and the Regulation S Global Security.
"Registrar" has the meaning assigned to such term in Section
305(a).
"Registration Rights Agreement" means the Registration Rights
Agreement, dated as of February 26, 1998, among the Company, Bell Atlantic and
the Managers.
"Registration Statement" means any registration statement of
the Company which covers any of the Securities pursuant to the provisions of the
Registration Rights Agreement, and all amendments and supplements to any such
Registration Statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Regulation S" means Regulation S under the Securities Act.
"Regulation S Global Security" has the meaning assigned to
such term in Section 201.
"Regular Record Date" for the interest payable on any Interest
Payment Date means the March 15th or September 15th, as the case may be (whether
or not a Business Day), immediately preceding such Interest Payment Date.
"Responsible Officer", when used with respect to the Trustee,
means any officer assigned to the Corporate Trust Office of the Trustee,
including the chairman or vice chairman of the board of directors or the
executive committee of the board of directors, the president, any vice
president, the secretary, any assistant secretary, the treasurer, any assistant
treasurer, the cashier, any assistant cashier, any trust officer or assistant
trust officer, the controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the
-11-
<PAGE>
above designated officers or any other officer appointed hereunder to whom any
corporate trust matter is referred because of his or her knowledge of and
familiarity with the particular subject.
"Restricted Period" means, with respect to the Bearer
Securities, the period which begins on the earlier of (i) the date on which the
Company receives the proceeds of the sale of Bearer Securities and (ii) the
first date on which the Bearer Securities are offered to persons other than the
Managers, and which ends 40 days after the date on which the Company receives
the proceeds of the sale of such Bearer Securities; PROVIDED THAT with respect
to a Bearer Security held as part of an unsold allotment or subscription, any
offer or sale of such Bearer Security by the Company or any Manager shall be
deemed to be during the Restricted Period.
"Rule 144A" means Rule 144A under the Securities Act.
"Rule 144A Global Security" has the meaning assigned to such
term in Section 201.
"SBC Warburg Dillon Read" means SBC Warburg Dillon Read, a
division of Swiss Bank Corporation.
"Securities" has the meaning specified in the first recital
paragraph of the Company in this Indenture.
"Securities Act" means the Securities Act of 1933, as amended,
or any successor statute.
"Securities Legend" has the meaning specified in Section 201.
"Security Register" has the meaning specified in Section 305.
"Shelf Registration Statement" means a "shelf" registration
statement of the Company to be filed with the Commission pursuant to Section 2
of the Registration Rights Agreement, which covers all of the Registrable
Securities (as defined in the Registration Rights Agreement) on an appropriate
form under Rule 415 under the Securities Act, or any similar rule that may be
adopted by the Commission, and all amendments and supplements to such
registration statement, including post-effective amendments, in each case
including the Prospectus contained therein, all exhibits thereto and all
material incorporated by reference therein.
"Special Record Date" for the payment of any Defaulted
Interest means a date fixed by the Trustee pursuant to Section 307.
"Stated Maturity" when used with respect to any Security or
any installment of principal thereof or interest thereon, means with respect to
the payment of principal, April 1,
-12-
<PAGE>
2003, and with respect to an installment of interest shall mean each Interest
Payment Date during the period the Security is Outstanding.
"Subsidiary" means any Person, a majority of the equity
ownership or the Voting Stock of which is at the time owned, directly or
indirectly, by the Company or by one or more other Subsidiaries, or by the
Company and one or more other Subsidiaries.
"TCNZ" means Telecom Corporation of New Zealand Limited, a New
Zealand corporation headquartered in New Zealand.
"TCNZ Ordinary Shares" means fully paid ordinary shares of
TCNZ.
"TCNZ Resale Shelf" has the meaning specified in Section 1007.
"TCNZ Shareholders' Agreement" means the 1991 Shareholders'
Agreement between Bell Atlantic and Ameritech, as shareholders of TCNZ.
"TCNZ Successor" means any surviving entity or subsequent
surviving entity of TCNZ.
"Trading Day" means any day on which the Exchange Security,
the Closing Price of which is being determined, (A) is not suspended from
trading on any national or regional securities exchange or association or
over-the-counter market at the close of business and (B) has traded at least
once on the national or regional securities exchange or association or
over-the-counter market that is the principal market for the trading of such
Exchange Security.
"Transfer Agent" means The Chase Manhattan Bank.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this Indenture, until a successor Trustee shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter
"Trustee" shall mean such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939,
as amended, or any successor statute.
"United States" means the United States of America, the
District of Columbia, Puerto Rico, the U.S. Virgin Islands, Guam, American
Samoa, Wake Island, and the Northern Mariana Islands.
"United States Alien" means any person who, for United Stated
federal income tax purposes, is a foreign corporation, a nonresident alien
individual, a nonresident alien fiduciary of a foreign estate or trust, or a
foreign partnership one or more of the members of
-13-
<PAGE>
which is a foreign corporation, a nonresident alien individual or a nonresident
alien fiduciary of a foreign estate or trust.
"United States person" means a citizen or resident of the
United States, a corporation, partnership or other entity created or organized
in or under the laws of the United States or any political subdivision thereof,
or an estate or trust the income of which is subject to United States federal
income taxation regardless of its source.
"Unrestricted Date" means, with respect to any Security, the
41st day after the later of the commencement of the offering thereof and the
closing date therefor.
"Unrestricted Global Security" has the meaning specified in
Section 201.
"Unrestricted Securities" has the meaning specified in Section
201.
"Voting Stock" means Capital Stock of the class or classes
pursuant to which the holders thereof have the general voting power under
ordinary circumstances to elect at least a majority of the board of directors,
managers or trustees of a corporation (irrespective of whether or not at the
time Capital Stock of any class or classes shall have or might have voting power
by reasons of the happening of any contingency).
"Waiver" means the waiver agreement between Bell Atlantic and
Ameritech dated as of February 6, 1998, pursuant to which the TCNZ Shareholders'
Agreement will terminate on the earlier of (i) the sale of Ameritech of 85% of
the TCNZ Ordinary Shares held by it or its affiliates as of February 6, 1998 or
(2) the sale by Bell Atlantic of 85% of the Securities governed by this
Indenture.
SECTION 102. COMPLIANCE CERTIFICATES AND OPINIONS.
Upon any application or request by the Company to the Trustee
to take any action under any provision of this Indenture, the Company and each
other obligor shall furnish to the Trustee (i) an Officers' Certificate in a
form reasonably acceptable to the Trustee stating that all conditions precedent,
if any, provided for in this Indenture (including any covenant compliance which
constitutes a condition precedent) relating to the proposed action have been
complied with and (ii) an Opinion of Counsel in a form reasonably acceptable to
the Trustee stating that in the opinion of such counsel all such conditions
precedent, if any, have been complied with, except that in the case of any such
application or request as to which the furnishing of any Officers' Certificates
and/or Opinions of Counsel is specifically required by any provision of this
Indenture, relating to such particular application or request, no additional
certificate or opinion need be furnished.
Every Officers' Certificate or Opinion of Counsel with respect
to compliance with a condition or covenant provided for in this Indenture shall
include:
-14-
<PAGE>
(a) a statement that each Person signing such certificate or
opinion has read such condition or covenant and the definitions herein
relating thereto;
(b) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or opinions
contained in such certificate or opinion are based;
(c) a statement that, in the opinion of each such Person, he
has made such examination or investigation as is necessary to enable
such Person to express an informed opinion as to whether or not such
covenant or condition has been complied with; and
(d) a statement as to whether, in the opinion of each such
Person, such condition or covenant has been complied with.
SECTION 103. FORM OF DOCUMENTS DELIVERED TO TRUSTEE.
In any case where several matters are required to be certified
by, or covered by an opinion of, any specified Person, it is not necessary that
all such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to such matters, and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company or
other obligor on the Securities may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or representations by, counsel,
unless such officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the matters
upon which his certificate or opinion is based is or are erroneous. Any
certificate or opinion of such an officer or of counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company or other obligor on
the Securities with respect to such factual matters and which contains a
statement to the effect that the information with respect to such factual
matters is in the possession of the Company or other obligor on the Securities,
unless such officer or counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations with respect to
such matters is or are erroneous. Opinions of Counsel required to be delivered
to the Trustee may have qualifications customary for opinions of the type
required, and counsel delivering such Opinions of Counsel may rely on
certificates of the Company or government or other officials customarily for
opinions of the type required, including certificates certifying as to matters
of fact, including that various financial covenants have been complied with.
Any certificate or opinion of an officer of the Company or
other obligor on the Securities may be based, insofar as it relates to
accounting matters, upon a certificate or opinion of, or representations by, an
accountant or firm of accountants in the employ of the Company,
-15-
<PAGE>
unless such officer knows, or in the exercise of reasonable care should know,
that the certificate or opinion or representations with respect to the
accounting matters upon which his certificate or opinion may be based is or are
erroneous. Any certificate or opinion of any independent firm of public
accountants filed with the Trustee shall contain a statement that such firm is
independent with respect to the Company.
Where any Person is required to make, give or execute two or
more applications, requests, consents, certificates, statements, opinions or
other instruments under this Indenture, they may, but need not, be consolidated
and form one instrument.
SECTION 104. ACTS OF HOLDERS.
(a) Any request, demand, authorization, direction, notice,
consent, waiver or other action provided by this Indenture to be
given or taken by Holders may be embodied in and evidenced by one
or more instruments of substantially similar tenor signed by such
Holders in person or by an agent duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall
become effective when such instrument or instruments are delivered
to the Trustee and, where it is hereby expressly required, to the
Company. Such instrument or instruments (and the action embodied
therein and evidenced thereby) are herein sometimes referred to as
the "Act" of the Holders signing such instrument or instruments.
Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of
this Indenture and conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.
(b) The ownership of Registered Securities shall be
conclusively proved by the Security Register.
(c) Any request, demand, authorization, direction, notice,
consent, waiver or any other Act of the Holder of any Security
shall bind every future Holder of the same Security or the Holder
of every Security issued upon the transfer thereof or in exchange
thereof, or in lieu thereof in respect of anything done, suffered
or omitted to be done by the Trustee, any Paying Agent, any
Exchange Agent or the Company or any other obligor on the
Securities in reliance thereon, whether or not notation of such
action is made upon such Security.
(d) The fact and date of the execution by any Person of any
such instrument or writing may be proved by the affidavit of a
witness of such execution or by a certificate of a notary public or
other officer authorized by law to take acknowledgments of deeds,
certifying that the individual signing such instrument or writing
acknowledged to him the execution thereof. Where such execution is
by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the
execution of any such instrument or writing, or the authority of
the Person executing the same, may also be proved in any manner
which the Trustee deems sufficient.
-16-
<PAGE>
SECTION 105. NOTICES, ETC. TO TRUSTEE AND THE COMPANY.
Any request, demand, authorization, direction, notice,
consent, waiver or Act of Holders or other document provided or permitted by
this Indenture to be made upon, given or furnished to, or filed with:
(a) the Trustee by any Holder or by the Company or by any
other obligor on the Securities shall be sufficient for every purpose
hereunder if made, given, furnished or filed, in writing, by
first-class mail postage prepaid (return receipt requested) or
delivered in person or by recognized overnight courier to or with the
Trustee at its Corporate Trust Office, Attention: Corporate Trust
Administration or at any other address furnished in writing prior
thereto to the Holders, the Company or any other obligor on the
Securities by the Trustee; or
(b) the Company shall be sufficient for every purpose
hereunder (unless otherwise herein expressly provided) if in writing
and mailed, first-class postage prepaid or delivered by recognized
overnight courier, to the Company, to the attention of its corporate
secretary, addressed to it at 1095 Avenue of the Americas, New York,
New York, 10036 or at any other address previously furnished in writing
to the Trustee by the Company.
SECTION 106. NOTICE TO HOLDERS; WAIVER.
Where this Indenture provides for notice to Holders of any
event, (1) such notice shall be sufficiently given (unless otherwise herein
expressly provided) to Holders of Registered Securities if in writing and
mailed, first class postage prepaid, to each Holder affected by such event, at
his address as it appears in the Security Register, not later than the latest
date, and not earlier than the earliest date, prescribed for the giving of such
notice, and published in the Authorized Newspapers on a Business Day not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice; and (2) such notice shall be sufficiently given (unless
otherwise herein expressly provided) to Holders of Bearer Securities if
published in the Authorized Newspapers on a Business Day, not later than the
latest date and not earlier than the earliest date prescribed for the giving of
such notice, the first such publication to be not earlier than the earliest
date, and the second such publication to be not later than the latest date,
prescribed herein for the giving of such notice.
In any case where notice to Holders of Registered Securities
is given by mail, neither the failure to mail such notice, nor any defect in any
notice so mailed, to any particular Holder of a Registered Security shall affect
the sufficiency of such notice with respect to other Holders of Registered
Securities or the sufficiency of any notice to Holders of Bearer Securities
given as provided herein. Any notice mailed in the manner prescribed by this
Indenture shall be deemed to have been given whether or not received by any
particular Holder. In case by reason of the suspension of regular mail service
or by reason of any other cause it shall be impracticable
-17-
<PAGE>
to give such notice to Holders of Registered Securities by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
In case by reason of the suspension of any Authorized
Newspaper or Authorized Newspapers or by reason of any other cause it shall be
impracticable to publish any notice to Holders of Bearer Securities as provided
above, then such notification to Holders of Bearer Securities as shall be made
with the approval of the Trustee shall constitute sufficient notice to such
Holders for every purpose hereunder. Neither the failure to give notice by
publication to Holders of Bearer Securities as provided above, nor any defect in
any notice so published, shall affect the sufficiency of any notice to Holders
of Registered Securities given as provided herein.
Additionally, so long as Global Securities are held on behalf
of DTC, Euroclear, Cedel or any other clearing system as shall have been
designated by the Company (the "Alternative Clearing System"), all notices with
respect to such Global Securities shall be delivered to DTC, Euroclear, and
Cedel or, as the case may be, the Alternative Clearing Systems, and DTC,
Euroclear and Cedel or, as the case may be, the Alternative Clearing System,
will communicate such notices to their respective participants in accordance
with its standard procedures.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
SECTION 107. CONFLICT WITH TRUST INDENTURE ACT.
If any provision hereof limits, qualifies or conflicts with
any provision of the Trust Indenture Act or another provision which is required
or deemed to be included in this Indenture by any of the provisions of the Trust
Indenture Act, the provision or requirement of the Trust Indenture Act shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, such provision
of the Trust Indenture Act shall be deemed to apply to this Indenture as so
modified or to be excluded, as the case may be.
SECTION 108. EFFECT OF HEADINGS AND TABLE OF CONTENTS.
The Article and Section headings herein and the Table of
Contents are for convenience only and shall not affect the construction hereof.
-18-
<PAGE>
SECTION 109. SUCCESSORS AND ASSIGNS.
All covenants and agreements in this Indenture by the Company, Bell
Atlantic and any other obligor on the Securities shall bind their successors and
assigns, whether so expressed or not.
SECTION 110. SEPARABILITY CLAUSE.
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
SECTION 111. BENEFITS OF INDENTURE.
Nothing in this Indenture or in the Securities, expressed or implied,
shall give to any Person, other than the parties hereto and their successors and
assigns hereunder, any Paying Agent, any Exchange Agent and the Holders, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
SECTION 112. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAWS PRINCIPLES THEREOF).
SECTION 113. LEGAL HOLIDAYS.
In any case where any Interest Payment Date, Redemption Date,
Maturity or Stated Maturity of any Security shall not be a Business Day, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest or principal or premium, if any, need not be made on such
date, but may be made on the next succeeding Business Day with the same force
and effect as if made on such Interest Payment Date or Redemption Date, or at
Maturity or the Stated Maturity, and no interest shall accrue with respect to
such payment for the period from and after such Interest Payment Date,
Redemption Date, Maturity or Stated Maturity, as the case may be, to the next
Business Day.
SECTION 114. EXHIBITS.
All Exhibits attached hereto are by this reference made a part with
the same effect as if herein set forth in full.
-19-
<PAGE>
SECTION 115. COUNTERPARTS.
This Indenture may be executed in any number of counterparts, each of
which shall be an original; but such counterparts shall together constitute but
one and the same instrument.
ARTICLE TWO
SECURITY FORMS
SECTION 201. FORMS GENERALLY.
The Securities initially will be represented by three Global
Securities. Securities offered in off-shore transactions pursuant to Regulation
S of the Securities Act will be represented by two Global Securities: one
representing Regulation S Global Securities held in bearer form and the other
representing Regulation S Global Securities held in registered form without
coupons. A third Global Security will represent Securities issued in registered
form without interest coupons in the United States in reliance on Rule 144A.
The Securities sold within the United States to U.S. Persons that are
QIBs will be issued in the form of five permanent global Securities
(collectively, the "Rule 144A Global Security"), substantially in the form of
Exhibit B hereto, registered in the name of Cede & Co., as nominee for DTC and
deposited with the Trustee, as custodian for the Depositary.
The Securities offered and sold in off-shore transactions in reliance
on Regulation S under the Securities Act and held in registered form without
coupons will be represented by a single permanent global Security (the
"Regulation S Global Security"), substantially in the form of Exhibit C hereto,
and will be registered in the name of a nominee for, and will be deposited with
the Common Depositary for Euroclear or Cedel.
The Securities offered and sold in off-shore transactions in reliance
on Regulation S under the Securities Act and held in bearer form (the "Global
Bearer Security") will be evidenced initially by a single temporary Global
Bearer Security without interest coupons substantially in the form of Exhibit D
hereto, which will be deposited with the Common Depositary for Cedel and
Euroclear for the accounts of the subscribers of the Regulation S Securities on
the date of payment for and delivery of the Bearer Securities (the "Settlement
Date"). After the expiration of the Restricted Period, the temporary Global
Bearer Security will be exchangeable for (i) an interest in a permanent Global
Bearer Security, without coupons, held by the Common Depositary, substantially
in the form of Exhibit E hereto or (ii) interests in the Regulation S Global
Security, provided that any exchange referred to in the foregoing clause (i)
will be made only upon receipt of Ownership Certificates. Upon 30 days' notice
of request from the applicable Holder, interests in the permanent Global Bearer
Security will be exchangeable for definitive Securities in bearer form with
coupons attached (but only in authorized denominations
-20-
<PAGE>
of U.S. $1,000, U.S. $10,000 and U.S. $100,000) in substantially the form of
Exhibit F hereto. Any exchange referred to in the preceding sentence will be
made only upon receipt of Ownership Certificates.
On or after September 1, 1999, Securities in registered form sold
pursuant to an effective registration statement or otherwise not subject to
resale restrictions under the Securities Act (if available) ("Unrestricted
Securities") shall be evidenced by one or more global certificates
(collectively, the "Unrestricted Global Security") to be registered in the name
of Cede & Co., as nominee for DTC and deposited with the Trustee, as custodian
for the Depositary.
The Regulation S Global Security, the Rule 144A Global Security, the
Global Bearer Security and the Unrestricted Global Security are sometimes
collectively herein referred to as the "Global Securities." Any Security may
have such appropriate insertions, omissions, substitutions and other variations
as are required or permitted by this Indenture and may have imprinted or
otherwise reproduced thereon such legend or legends, not inconsistent with the
provisions of this Indenture, as may be required to comply with any law or with
any rules or regulations pursuant thereto, or with any rules of any securities
exchange or to conform to general usage, all as may be determined by the
officers executing such Securities, as evidenced by their execution of such
Securities. The Securities shall be numbered, lettered, or otherwise
distinguished in such manner or in accordance with such plan as the officers of
the Company executing the same may determine as evidenced by the execution and
authentication thereof.
The definitive Securities shall be printed, lithographed or engraved
on steel engraved borders or may be produced by any other manner, all as
determined by the officers executing such Securities, as evidenced by their
execution of such Securities.
SECTION 202 RESTRICTIVE LEGENDS.
The form of the face of any Security authenticated and delivered
hereunder shall be substantially as follows: (i) each Rule 144A Global Security
and each definitive Rule 144A Security shall bear the legends set forth below
(the "Securities Legend") on the face thereof and (ii) each Regulation S Global
Security shall bear the Securities Legend on the face thereof until at least 41
days after the Issue Date.
"THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED
STATES SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A UNITED STATES PERSON AND IS
ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN OFFSHORE
-21-
<PAGE>
TRANSACTION; (2) ACKNOWLEDGES THAT, UNLESS BELL ATLANTIC CORPORATION SHALL HAVE
CEASED TO BE AN "AFFILIATE" (AS SUCH TERM IS DEFINED UNDER RULE 144 UNDER THE
SECURITIES ACT) OF TELECOM CORPORATION OF NEW ZEALAND LIMITED ("TCNZ") ON OR
PRIOR TO JUNE 1, 1999 (AND SHALL NOT HAVE THEREAFTER BECOME AN AFFILIATE OF
TCNZ), ANY EXCHANGE OF THE SECURITIES REPRESENTED HEREBY FOR ORDINARY SHARES OF
TCNZ SHALL BE MADE ONLY: (A) TO A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION
COMPLYING WITH RULE 144A UNDER THE SECURITIES ACT; (B) PURSUANT TO A
REGISTRATION STATEMENT DECLARED EFFECTIVE UNDER THE SECURITIES ACT TO A HOLDER
WHO ACQUIRED THE SECURITIES REPRESENTED HEREBY EITHER (X) PRIOR TO SEPTEMBER 1,
1998 AND HAS HELD THE SECURITIES REPRESENTED HEREBY CONTINUOUSLY SINCE SUCH DATE
OF ACQUISITION OR (Y) PURSUANT TO A REGISTRATION STATEMENT OR REGISTRATION
STATEMENTS, DECLARED EFFECTIVE UNDER THE SECURITIES ACT, REGISTERING THE RESALE
OF THE SECURITIES REPRESENTED HEREBY AND ANY OFFER OF ORDINARY SHARES OF TCNZ
ARISING UPON RESALE OF THE SECURITIES REPRESENTED HEREBY (OR IN A TRANSFER FROM
A HOLDER WHO ACQUIRED THE SECURITIES REPRESENTED HEREBY IN THE MANNER SET FORTH
IN THIS CLAUSE (Y) OR FROM ANY TRANSFEREE OR SUBSEQUENT TRANSFEREES OF SUCH
HOLDER); OR (C) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN RELIANCE ON
REGULATION S (OR ANY SUCCESSOR PROVISION) UNDER THE SECURITIES ACT, AS SUCH
REGULATION MAY BE IN EFFECT AND APPLICABLE AS OF THE TIME OF SUCH EXCHANGE; (3)
AGREES THAT IT WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIODS APPLICABLE
TO SALES OF THE SECURITIES EVIDENCED HEREBY OR THE SECURITIES DELIVERABLE UPON
EXCHANGE OF SUCH SECURITIES UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY
SUCCESSOR PROVISION), RESELL OR OTHERWISE TRANSFER THE SECURITIES EVIDENCED
HEREBY OR THE SECURITIES DELIVERABLE UPON EXCHANGE OF SUCH SECURITIES EXCEPT (A)
TO THE ISSUER OF SUCH SECURITY OR SECURITIES OR ANY SUBSIDIARY THEREOF, (B)
INSIDE THE UNITED STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH
RULE 144A UNDER THE SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN COMPLIANCE
WITH REGULATION S UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM
REGISTRATION PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E)
PURSUANT TO A REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE
SECURITIES ACT (AND THAT CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER)
OR (F) PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT, AND (4) AGREES THAT IT WILL DELIVER TO EACH
PERSON TO WHOM THE SECURITIES EVIDENCED HEREBY ARE TRANSFERRED A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF
THE SECURITIES EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD
-22-
<PAGE>
APPLICABLE TO SALES OF THE SECURITIES EVIDENCED HEREBY UNDER RULE 144(K) UNDER
THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE
APPROPRIATE BOX SET FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH
TRANSFER AND SUBMIT THIS CERTIFICATE TO THE CHASE MANHATTAN BANK, AS TRANSFER
AGENT (OR ANY SUCCESSOR TRANSFER AGENT, AS APPLICABLE), TOGETHER WITH SUCH
CERTIFICATIONS, LEGAL OPINIONS AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY
REASONABLY REQUIRE TO CONFIRM THAT THE PROPOSED TRANSFER IS BEING MADE PURSUANT
TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO THE REGISTRATION
REQUIREMENTS OF THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE
TRANSFER OF THE SECURITIES EVIDENCED HEREBY PURSUANT TO THE CLAUSE 3(E) ABOVE.
AS USED HEREIN THE TERMS "OFF-SHORE TRANSACTION," "UNITED STATES" AND "UNITED
STATES PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT."
Each Rule 144A Global Security shall also bear the following legend of the face
thereof:
"THIS SECURITY IS A RULE 144A GLOBAL SECURITY WITHIN THE MEANING OF THE
INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY
OR A NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF
CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS
OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTIONS 305 AND 306 OF THE
INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY SUCH
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."
If required by applicable law, the company may require that any securities bear
an appropriate legend to the effect that the securities deliverable upon
exchange thereof are subject to restrictions on transfer under applicable
securities laws.
-23-
<PAGE>
Each Regulation S Global Security shall also bear the following legend on the
face thereof:
UNLESS THIS REGULATION S GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE COMMON DEPOSITARY TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL SECURITY ISSUED IS
REGISTERED IN THE NAME OF THE COMMON DEPOSITARY OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE COMMON DEPOSITARY (AND ANY PAYMENT HEREON
IS MADE TO THE COMMON DEPOSITARY OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE COMMON DEPOSITARY) ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, THE COMMON DEPOSITARY, HAS AN INTEREST HEREIN.
TRANSFERS OF THIS REGULATION S GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF THE COMMON DEPOSITARY OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE, AND TRANSFERS OF PORTIONS OF THIS
REGULATION S GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO IN THE TERMS AND
CONDITIONS ATTACHED HERETO.
SECTION 203. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION.
The Trustee's certificate of authentication shall be in substantially
the following form:
"This is one of the Securities referred to in the within-mentioned
Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
------------------------------
Authorized Officer"
-24-
<PAGE>
ARTICLE THREE
THE SECURITIES
SECTION 301. TITLE AND TERMS.
The aggregate principal amount of Securities which may be
authenticated and delivered under this Indenture is limited to $2,455,000,000 in
principal amount of Securities, except Securities authenticated and delivered
upon registration of transfer of, or in exchange, for or in lieu of, other
Securities pursuant to Section 303, 304, 305, 306, 307, 308, 906 or 1108.
The Securities shall be known and designated as the 5.75% Senior
Exchangeable Notes due 2003 of the Company. The final Maturity of the Securities
shall be April 1, 2003, and the Securities shall each bear interest at the rate
of 5.75% per annum, payable semiannually on April 1 and October 1 of each year,
commencing October 1, 1998, until the principal thereof is paid or duly provided
for.
The principal of, premium, if any, and interest on, the Registered
Securities will be payable in U.S. dollars, against surrender thereof at the
Corporate Trust Office of the Trustee in New York City or, subject to any
applicable laws and regulations, at the office of any Paying Agent by dollar
check drawn on, or by transfer to a dollar account maintained by the Holder with
a bank in New York City.
Any payment on the Securities due on any day which is not a Business
Day need not be made on such day, but may be made on the next succeeding
Business Day with the same force and effect as if made on such due date, and no
interest shall accrue for the period from and after such date.
Bearer Securities must be presented for payment upon redemption,
outside the United States, together with all unmatured coupons, failing which
the amount of any missing unmatured coupons will be deducted from the sum due
for payment. Each amount so deducted will be paid in the manner mentioned above
against surrender of the related missing coupon, outside the United States.
Interest payable on Bearer Securities on any Redemption Date that is an Interest
Payment Date will be paid to the Holders of the coupons maturing on such
Interest Payment Date. Interest payable on Registered Securities on any
Redemption Date that is an Interest Payment Date will be paid to Holders of
record reflected on the Company's Security Register on the immediately preceding
Regular Record Date.
The Securities shall be redeemable as provided in Article XI, Article
XII and in the Securities.
-25-
<PAGE>
SECTION 302. DENOMINATIONS.
The Securities shall be issuable in denominations of U.S. $1,000 and
integral multiples thereof, with respect to Registered Securities; and U.S.
$1,000, U.S. $10,000 and U.S. $100,000, with respect to Bearer Securities.
SECTION 303. EXECUTION, AUTHENTICATION, DELIVERY AND DATING.
The Securities shall be executed on behalf of the Company by its
Chairman of the Board of Directors, any of its Vice Chairmen of the Board of
Directors, its President or any of its Vice Presidents, under its corporate seal
reproduced thereon, and attested by its Secretary or one of its Assistant
Secretaries. The signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile signature of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities executed by the Company to
the Trustee for authentication, together with a Company Order for the
authentication and delivery of such Securities, and the Trustee in accordance
with the Company Order shall authenticate and make available for delivery such
Securities as provided in this Indenture and not otherwise.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for in Section
203 executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder and is entitled to the
benefits of this Indenture.
SECTION 304. TEMPORARY SECURITIES.
Pending the preparation of definitive Securities, the Company may
execute, and upon Company Order the Trustee shall authenticate and deliver,
temporary Securities which are printed, lithographed, typewritten, mimeographed
or otherwise produced, in any authorized denomination, substantially of the
tenor of the definitive Securities in lieu of which they are issued and with
such appropriate insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as evidenced by their
execution of such Securities.
-26-
<PAGE>
If temporary Securities are issued, the Company will cause definitive
Securities to be prepared without unreasonable delay. After the preparation of
definitive Securities the temporary Securities shall be exchangeable for
definitive Securities upon surrender of the temporary Securities at the office
or agency of the Company in a Place of Payment, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities the
Company shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of definitive Securities of authorized
denominations. Until so exchanged, the temporary Securities shall in all
respects be entitled to the same benefits under this Indenture as definitive
Securities.
SECTION 305. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE.
(a) The Company hereby appoints the Trustee as registrar (the
"Registrar") for the Securities. The Trustee shall keep, so long as it is the
Registrar, at the Corporate Trust Office of the Trustee, or such other office as
the Trustee may designate, a register (the register maintained in such office
and in any other office or agency of the Company in any other Place of Payment
being herein sometimes collectively referred to as the "Security Register") in
which, subject to such reasonable regulations as it may prescribe, the Company
shall provide for the registration of Registered Securities and of transfer of
Registered Securities. The Company may change the Registrar or appoint one or
more co-Registrars without notice.
Upon surrender for registration of transfer or exchange of any
Security at the office or agency in a Place of Payment, the Company shall
execute, and the Trustee shall authenticate and deliver, the name of the
designated transferee or transferees, one or more new Securities, of any
authorized denominations and of like tenor and aggregate principal amount.
All Securities issued upon any registration of transfer or exchange
of Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrender upon such registration of transfer of exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar duly executed, by the Holder
thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration of transfer or exchange of Securities.
The Company shall not be required (i) to issue, register the transfer
of or exchange (other than an exchange pursuant to Article Thirteen) Securities
during a period
-27-
<PAGE>
beginning at the opening of business 15 days before the day of any selection of
Securities to be called for redemption, or (ii) to register the transfer of or
exchange (other than an exchange pursuant to Article Thirteen) any Security
selected for redemption in whole or in part, except the unredeemed portion of
any Security being redeemed in part.
Payments of the principal of, or premium, if any, and interest on the
Rule 144A Global Security will be made to DTC or its nominee, as the case may
be, as the registered owner thereof. None of the Company, the Trustee, any agent
of the Trustee or any Paying Agent or Exchange Agent will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in the Rule 144A
Global Security or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
(b) Subject to Sections 305(f) and 305(g), so long as any Rule 144A
Global Security or Regulation S Global Security remains Outstanding, transfers
or exchanges of beneficial interests in any of such Global Securities, may be
made only in accordance with the following provisions of this Section 305(b) and
the provisions of the applicable Global Security:
(i) If the proposed transfer occurs prior to the Unrestricted
Date, and the proposed transferor holds:
(A) an interest in the Rule 144A Global Security, and the
proposed transferor:
(1) delivers (or is deemed to have delivered) a Rule
144A Certificate substantially in the form of Exhibit G
hereto (a "Rule 144A Certificate"), and the proposed
transferee is or is acting through a member of, or
participant in, the Depositary (a "Depositary Agent
Member") and requests that the proposed transferee receive
a beneficial interest in the Rule 144A Global Security,
then the transfer shall be effected in accordance with the
procedures of the Depositary therefor and the transferee
shall receive a beneficial interest in the Rule 144A Global
Security;
(2) delivers (or is deemed to have delivered) a
Regulation S Certificate substantially in the form of
Exhibit H hereto (a "Regulation S Certificate"), and the
proposed transferee is or is acting through a member of, or
participant in, Euroclear or Cedel (an "Offshore Agent
Member") and requests that the proposed transferee receive
a beneficial interest in the Regulation S Global Security,
then the Registrar shall (w) register such transfer in the
name of such transferee and record the date thereof in its
books and records, (x) record a decrease in the principal
amount of
-28-
<PAGE>
the Rule 144A Global Security in an amount equal to the
beneficial interest therein being transferred, (y) record
an increase in the principal amount of the Regulation S
Global Security equal to the amount of such decrease in the
principal amount of the Rule 144A Global Security and (z)
notify the Depositary and the Common Depositary in
accordance with the procedures thereof that such transfer
has been approved.
(B) an interest in the Regulation S Global Security and the
proposed transferee or transferor, as applicable:
(1) delivers (or is deemed to have delivered) a Rule
144A Certificate and the proposed transferee is or is
acting through a Depositary Agent Member and requests that
the proposed transferee receive a beneficial interest in
the Rule 144A Global Security, then the Registrar shall (w)
register such transfer in the name of such transferee and
record the date thereof in its books and records, (x)
record a decrease in the principal amount of the Regulation
S Global Security in an amount equal to the beneficial
interest therein being transferred, (y) record an increase
in the principal amount of the Rule 144A Global Security
equal to the amount of such decrease in the principal
amount of the Regulation S Global Security and (z) notify
the Depositary and the Common Depositary in accordance with
the procedures thereof that such transfer has been
approved;
(2) delivers (or is deemed to have delivered) a
Regulation S Certificate and the proposed transferee is or
is acting through an Offshore Agent Member and requests
that the proposed transferee receive a beneficial interest
in the Regulation S Global Security, then the transfer
shall be effected in accordance with the procedures of the
Common Depositary therefor and the transferee shall receive
a beneficial interest in the Regulation S Global Security.
(ii) If the proposed transfer occurs on or after the
Unrestricted Date, and the proposed transferor holds:
(A) (1) an interest in the Rule 144A Global Security, then,
except as set forth in Section 305(b)(ii)(A)(2), the
procedures set forth in Section 305(b)(i)(A) shall apply.
-29-
<PAGE>
(2) an interest in the Rule 144A Global Security and if
the proposed transfer occurs on or after September 1, 1999,
and the proposed transferee or transferor delivers such
certifications, legal opinions or other information as the
Company may reasonably require to confirm that the proposed
transfer is being made in a transaction registered under
the Securities Act or pursuant to Rule 144 thereunder, and
the proposed transferee is or is acting through a
Depositary Agent Member and requests that the proposed
transferee receive a beneficial interest in the
Unrestricted Global Security, then the transfer shall be
effected in accordance with the procedures of the
Depositary therefor and the transferor shall receive a
beneficial interest in the Unrestricted Global Security.
(B) an interest in the Regulation S Global Security or the
Global Bearer Security and the proposed transferor:
(1) delivers (or is deemed to have delivered) a Rule
144A Certificate and the proposed transferee is or is
acting through a Depositary Agent Member and requests that
the proposed transferee receive a beneficial interest in
the Rule 144A Global Security, then the Registrar shall (w)
register such transfer in the name of such transferee and
record the date thereof in its books and records, (x)
record a decrease in the principal amount of the Regulation
S Global Security or the Global Bearer Security, as
applicable, in an amount equal to the beneficial interest
therein being transferred, (y) record an increase in the
principal amount of the Rule 144A Global Security equal to
the amount of such decrease in the principal amount of the
Regulation S Global Security or the Global Bearer Security,
as applicable, and (z) notify the Depositary and the Common
Depositary in accordance with the procedures thereof that
such transfer has been approved;
(2) either (x) delivers (or is deemed to have
delivered) a Regulation S Certificate and the proposed
transferee is or is acting through an Offshore Agent Member
and requests that the proposed transferee receive a
beneficial interest in the Regulation S Global Security or
(y) does not make a request covered by Section
305(b)(ii)(B)(1), Section 305(b)(ii)(B)(2)(x), or Section
305(b)(ii)(B)(3), then the transfer shall be effected in
accordance with the procedures of the Common Depositary
therefor; or
-30-
<PAGE>
(3) delivers such certifications, legal opinions or
other information as the Company may reasonably require to
confirm that the proposed transfer is being made in a
transaction registered under the Securities Act or pursuant
to Rule 144 thereunder, and the proposed transferee is or
is acting through a Depositary Agent Member and requests
that the proposed transferee receive a beneficial interest
in the Unrestricted Global Security, then the Registrar
shall (w) register such transfer in the name of such
transferee and record the date thereof in its books and
records, (x) record a decrease in the principal amount of
the Regulation S Global Security or the Global Bearer
Security, as the case may be, in an amount equal to the
beneficial interest therein being transferred, (y) record
an increase in the principal amount of the Unrestricted
Global Security equal to the amount of such decrease and
(z) notify the Depositary and the Common Depositary in
accordance with the procedures thereof that such transfer
has been approved.
(iii) A beneficial interest in a Rule 144A Global Security or in
a Regulation S Global Security or an Unrestricted Global Security may not, under
any circumstances, be exchanged for Bearer Securities or interests therein.
(iv) Notwithstanding anything in this Indenture to the contrary,
the Trustee shall have no obligation or liability to monitor any transfers of
interests within the Rule 144A Global Security or the Regulation S Global
Security.
(c) An exchange of beneficial interests in any Global Security for
definitive Securities shall only take place in the circumstances set out in this
Indenture and on the face of the relevant Global Security.
(d) Upon acceptance for transfer of a beneficial interest in a Global
Security for a beneficial interest in another Global Security as provided
herein, the Trustee shall (or shall request the Depositary to) endorse on the
Schedules affixed to each of such Global Securities (or on continuations of such
schedules affixed to each of Global Securities and made parts thereof)
appropriate notations evidencing the date of such transfer and (x) in the case
of the Global Security from which such transfer is made, a decrease in the
principal amount of such Global Security equal to the principal amount being
transferred and (y) in the case of the Global Security into which such transfer
is made, an increase in the principal amount of such Global Security equal to
the principal amount being transferred.
(e) The following provisions shall apply to the placement of the
Securities Legend or any definitive Security issued in exchange for or upon
transfer of another definitive Security or of a beneficial interest in any
Global Security and to the removal of the Securities
-31-
<PAGE>
Legend from any definitive Security bearing such legend.
(i) Unless determined otherwise by the Company in accordance with
applicable law, a definitive Security issued upon transfer of or exchange for a
beneficial interest in a Global Security or, if such transfer occurs prior to
the Unrestricted Date a Regulation S Global Security, shall bear the Securities
Legend.
(ii) Unless determined otherwise by the Company in accordance
with applicable law, a definitive Security issued upon transfer of or exchange
for a beneficial interest in a Regulation S Global Security on or after the
Unrestricted Date shall not bear the Securities Legend.
(iii) Upon the transfer, exchange or replacement of a definitive
Security, bearing the Securities Legend, or upon specific request of a holder of
a definitive Security, bearing the Securities Legend, for removal of the
Securities Legend therefrom, the Trustee shall deliver an unlegended definitive
Security or unlegended definitive Securities if there is provided to the Company
evidence reasonable satisfactory to the Company (which may include an opinion of
counsel) that neither the Securities Legend nor the restrictions or transfer set
forth therein are required to ensure compliance with the Securities Act.
(iv) Upon the transfer, exchange or replacement of the unlegended
definitive Security for a definitive Security, the Trustee shall deliver an
unlegended definitive Security or Securities or a definitive Security or
Securities bearing such legend, as the Holder may request.
(f) Subject to Sections 305(b) and 305(g), so long as any Bearer
Security remains Outstanding and is held by or on behalf of the Common
Depositary, transfers or exchanges of beneficial interests in any such Bearer
Security, may be made only in accordance with this Section 305(f) and the
provisions of the applicable Bearer Security and in accordance with the rules of
the Common Depositary, Euroclear and Cedel. These restrictions are in addition
to the restrictions imposed by Regulation S described elsewhere in this
Indenture.
(i) Bearer Securities may not be offered or sold, directly or
indirectly, in connection with their original issuance or during the Restricted
Period, in the United States, or for the account of any United States person,
other than to certain persons described in United States Treasury Regulations
Section 1.163-5(c) (2) (i) (D) (1) (iii) (B) and (C). Bearer Securities may not
be delivered in the United States.
(ii) After the expiration of the Restricted Period, a beneficial
interest in the temporary Global Bearer Security may be transferred to a
transferee that takes delivery in the form of, or exchanged for, (a) a
beneficial interest in a permanent Global Bearer Security to be held by the
Common Depositary or (b) a beneficial interest in the Regulation S Global
Security in accordance with Section 305(b). Transfers pursuant to clause (a) of
this subsection (ii) shall
-32-
<PAGE>
be made only upon the receipt of Ownership Certificates, substantially in the
form of Exhibit I hereto.
(iii) The beneficial owner of a Security represented by a
permanent Global Bearer Security may, upon 30 days' written notice to the Paying
Agent, given by the beneficial owner through either Euroclear or Cedel or other
relevant clearing system, exchange such owner's interest in such permanent
Global Bearer Security for a definitive Bearer Security or Securities, which
will be serially numbered, with coupons attached, of any authorized
denominations. Transfers pursuant to this subsection (iii) shall be made only
upon the receipt of Ownership Certificates. Upon receipt by the Paying Agent of
an initial request to exchange an interest in a permanent Global Bearer Security
for a definitive Bearer Security or Securities, all other interests in such
permanent Global Bearer Security shall be exchanged for definitive Bearer
Securities. Interests in a permanent Global Bearer Security will also be
exchanged by the Company in whole, but not in part, for definitive Bearer
Securities, which will be serially numbered, with coupons, attached of any
authorized denominations if any Security represented by such permanent Global
Bearer Security is accelerated following an Event of Default or either Euroclear
or Cedel or any other relevant clearing system is closed for business for a
continuous period of fourteen days (other than by reason of public holidays) or
has announced an intention to cease business permanently or in fact does so. The
Common Depositary for Euroclear and Cedel will instruct the Paying Agent
regarding the aggregate principal amount and denominations of definitive Bearer
Securities that must be authenticated and delivered to each of Euroclear and
Cedel. Such exchanges shall occur at no expense to the beneficial owner as soon
as practicable after the receipt of the initial request for definitive Bearer
Securities of a notice of such acceleration or clearing system closure. No
Bearer Security will be delivered in the United States.
(g) Subject to the restrictions on transfer and exchange set forth in
this Section 305 and to any additional restrictions on transfer or exchange
specified in the definitive Securities, the Holder of any definitive Security
may transfer or exchange the same in whole or in part (in a principal amount
equal to the minimum authorized denomination or any authorized greater amount)
by surrendering such definitive Security at the Corporate Trust Officer or at
the office of any transfer agent together with an executed instrument of
assignment and transfer substantially in the form of Exhibit J to this Indenture
in the case of transfer and a written request for exchange in the case of
exchange. The holder of a beneficial interest in a Global Security may, subject
to the rules and procedures of the Depositary, the Common Depositary, Euroclear
or Cedel, as the case may be, cause the Depositary or the Common Depositary (or
their respective nominees) to notify the Trustee in writing of a request for
transfer or exchange of such beneficial interest for a definitive Security or
Securities. Following a proper request for transfer or exchange, the Trustee
shall, within five Business Days of such request if made at such Corporate Trust
Office, or within ten Business Days if made at the office of a transfer agent
(other than the Trustee), authenticate and deliver at such Corporate Trust
Office or at the office of such transfer agent, as the case may be, to the
transferee (in the case of transfer) or holder (in the case of exchange) or send
by first class mail (at the risk of the transferee in the case of
-33-
<PAGE>
transfer or holder in the case of exchange), to such address as the transferee
or holder, as applicable, may request, a definitive Security or Securities, as
the case may require, for a like aggregate principal amount and in such
authorized denomination or denominations as may be requested. The presentation
for transfer or exchange of any definitive Security shall not be valid unless
made at the Corporate Trust Office or at the office of a transfer agent by the
Holder in person, or by a duly authorized attorney-in-fact. A definitive
Security, may not, under any circumstances, be exchanged for a Bearer Security.
(h) Transfer, registration and exchange shall be permitted as
provided in this Section 305 without any charge to the Holder except for the
expenses of delivery (if any) not made by regular mail and the payment of a sum
sufficient to cover any stamp duty, tax or governmental charge or insurance
charge that may be imposed in relation thereto. Registration of the transfer of
a Security by the Trustee shall be deemed to be the acknowledgment of such
transfer on behalf of the Company.
(i) Interests in the Registered Securities will be exchangeable or
transferable, as the case may be, for definitive Registered Securities if (i) in
the case of 144A Securities, DTC notifies the Company that it is unwilling or
unable to continue as depositary for such Global Securities, or DTC ceases to be
a "Clearing Agency" registered under the Exchange Act, and a successor
depositary is not appointed by the Company within 90 days, (ii) in the case of
Regulation S Securities, either Euroclear or Cedel (or any Alternative Clearing
System (as defined herein) on behalf of which the Regulation S Securities may be
held) is closed for business for a continuous period of 14 days (other than by
reason of holidays, statutory or otherwise) or announces an intention to
permanently cease business or does in fact do so; or (iii) an Event of Default
(as defined herein) has occurred and is continuing with respect to such
Securities. Upon the occurrence of any of the events described in the preceding
sentence, the Company will cause the appropriate definitive Registered
Securities to be delivered.
SECTION 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES.
(a) The Company shall execute and deliver to the Trustee definitive
Securities in such amounts and at such times as to enable the Trustee to fulfill
its responsibilities under the Indenture and the Securities.
(b) The Trustee is hereby authorized, in accordance with any terms
and conditions set forth in the Securities, and (i) if any mutilated or defaced
Security is surrendered to the Trustee or (ii) upon provision of evidence
satisfactory to the Trustee and to the Company that any Security was destroyed,
stolen or lost, together with such indemnity as the Trustee and the Company may
require, to authenticate and deliver from time to time such Securities in
exchange for or in lieu of such Securities that become mutilated, defaced,
destroyed, stolen or lost. Each Security delivered in exchange for or in lieu of
any other Security shall carry all the rights to interest (including rights to
accrued and unpaid interest and Additional Amounts (defined in Section 1005))
that were carried by such other Security.
-34-
<PAGE>
(c) All Securities surrendered for payment or exchange shall be
delivered to the Trustee. The Trustee shall cancel and destroy all such
Securities surrendered for payment or exchange, in accordance with its security
destruction policy, and shall deliver a certificate of destruction to the
Company.
(d) Upon the issuance of any substitute Security, the Holder of such
Security, if so requested by the Company, will pay a sum sufficient to cover any
stamp duty, tax or other governmental charge that may be imposed in relation
thereto and any other expense (including the fees and expenses of the Trustee)
connected with the preparation and issuance of the substitute Security.
(e) All Securities issued upon any transfer or exchange of Securities
shall be valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such transfer or exchange.
(f) The provisions of this Section are exclusive and shall preclude
(to the extent lawful) all other rights and remedies with respect to the
replacement or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED.
(a) Interest on any Registered Security which is payable, and is
punctually paid or duly provided for, on any Interest Payment Date shall be paid
to the Person in whose name that Security is registered in the Security Register
at the close of business on the relevant Regular Record Date for such interest.
At the option of the Company, payment of interest on any Security may be made by
a dollar check drawn by a bank in New York City mailed to the address of the
Holder at such Holder's address in the Security Register, provided that all
payments with respect to the Securities, the Holders of which have given wire
transfer instructions not later than the applicable Regular Record Date, to the
Paying Agent, will be required to be made by wire transfer of immediately
available funds to the accounts specified by the Holders.
(b) In order to provide for the payment of principal of and interest
on the Bearer Securities on the due date therefor (a "Payment Date"), the
Company will pay to the Luxembourg Paying Agent at the offices thereof at 5 Rue
Plaetis, L-2338, Luxembourg, or such other offices outside the United States, as
the Principal Paying Agent shall direct the Company, in writing, in such coin or
currency of the United States as at the time of payment shall be legal tender
for the payment of public and private debts an amount in cash that shall be
sufficient to pay the interest (including Additional Amounts, if any) or
principal or both, as the case may be, becoming due on such Payment Date. The
Principal Paying Agent shall apply such amounts to the payment due, and pending
such application, such amounts shall be held in trust by the Principal Paying
Agent for the benefit of the persons entitled thereto.
-35-
<PAGE>
(c) Principal of, premium, if any, and interest on the Bearer
Securities and coupons will be payable in U.S. dollars against surrender of such
Bearer Securities or coupons, as the case may be, subject to any applicable laws
and regulations, at the option of the Holder, at such paying agencies outside
the United States, as the Company may appoint from time to time and at which, at
the option of the Company, such payment will be made by U.S. dollar check drawn
on a bank in New York City or by transfer to a dollar account maintained by the
payee with a bank located outside the United States. No payment with respect to
any Bearer Security or coupon will be made at the Corporate Trust Office of the
Trustee or any other paying agency maintained by the Company in the United
States. Notwithstanding the foregoing, if payment at all paying agencies outside
the United States is illegal or effectively precluded by exchange controls or
similar restrictions, payments with respect to Bearer Securities or coupons that
are paid in U.S. Dollars may be made at an office or agency of the Corporate
Trust Office of the Trustee in New York City.
(d) The Company may at any time terminate the appointment of any
paying agent and appoint additional or other paying agents; provided that until
the Bearer Securities have been delivered to the Principal Paying Agent for
cancellation, or moneys sufficient to pay all the Bearer Securities and coupons
have been made available for payment and either paid or returned to the Company
as provided herein, the Company will maintain a paying agent in Europe. So long
as the Securities are listed on the Luxembourg Stock Exchange and the Luxembourg
Stock Exchange so requires, there will be a paying agent in Luxembourg. Notice
of any such termination or appointment and of any change in the office through
which any paying agent will act will be promptly given once in the manner
described in Sections 105 and 106 hereof.
(e) Any interest on any Registered Security which is payable, but is
not punctually paid or duly provide for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of his having been such Holder,
and such Defaulted Interest shall be paid by the Company, at its election in
each case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Registered Securities are registered at
the close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company shall notify the Trustee in writing of the amount of Defaulted
Interest proposed to be paid on each Registered Security and the date of
the proposed payment, and at the same time the Company shall deposit with
the Trustee an amount of money equal to the aggregate amount proposed to
be paid in respect of such Defaulted Interest of shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in trust for the
benefit of the Person entitled to such Defaulted Interest as in this
clause provided. Thereupon the Trustee shall fix a Special Record Date for
the payment of such Defaulted Interest which shall be not more than 15
days and not less then 10 days after the receipt
-36-
<PAGE>
by the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be mailed, first class, postage prepaid, to each Holder of Securities of
such series at his address as it appears in the Security Register, not
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to
the Person in whose name the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to the
following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may
be listed, and upon such notice as may be required by such exchange, if,
after notice given by the Company to the Trustee of the proposed payment
pursuant to this Clause, such manner of payment shall be deemed
practicable by the Trustee.
Subject to the foregoing provisions of the Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. PERSON DEEMED OWNERS.
Prior to due presentment of a Registered Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name such Registered Security is registered as the
owner of such Registered Security for the purpose of receiving payment of
principal of, premium, if any, and (subject to Section 307) interest on such
Security and for all other purpose whatsoever, whether or not such Registered
Security be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary. The Company,
the Trustee and any agent of the Company or the Trustee may treat the Holder of
a Bearer Security as the owner of such Bearer Security for the purpose of
receiving payment of principal of, premium, if any, and (subject to Section 307)
interest on such Security and for all other purposes whatsoever.
SECTION 309. CANCELLATION.
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly canceled by the Trustee. The
Company may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall
-37-
<PAGE>
be promptly canceled by the Trustee. No Securities shall be authenticated in
lieu of or in exchange for any Securities canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Securities held by
the Trustee shall be destroyed and certification of their destruction delivered
to the Company unless, by a Company Order, the Company shall direct that
canceled Securities to return to it.
SECTION 310. COMPUTATION OF INTEREST.
Interest on the Securities shall be computed on the basis of a
360-day year of twelve 30-day months.
SECTION 311. ADJUSTMENT OF INTEREST RATE.
The Company shall have the right to adjust the interest rate payable
on the Securities, either voluntarily or pursuant to the provisions of the
Registration Rights Agreement upon thirty days' notice provided to Holders in
accordance with Section 106 of this Indenture; provided that in no event shall
the Securities bear interest at a rate less than 5.75% per annum plus any
Liquidated Damages Amount (as such term is defined in the Registration Rights
Agreement) as shall be in effect from time to time in accordance with the
Registration Rights Agreement. In the case of an adjustment to the interest
rate, the Company shall promptly notify the Luxembourg Stock Exchange in writing
of such adjustment.
ARTICLE FOUR
SATISFACTION AND DISCHARGE
SECTION 401. SATISFACTION AND DISCHARGE OF INDENTURE.
Subject to applicable federal and state laws, this Indenture shall be
discharged and shall cease to be of further effect (except as to surviving
rights of registration of transfer or exchange or Securities as expressly
provided for herein) as to all Outstanding Securities hereunder, and the
Trustee, upon Company Request and at the expense of the Company, shall execute
proper instruments acknowledging satisfaction and discharge of this Indenture
when:
(a) All the Securities and interest coupons theretofore authenticated
and delivered (other than (i) Securities which have been destroyed, lost
or stolen and which have been replaced or paid as provided in Section 306
and (ii) Securities for whose payment money has theretofore been deposited
in trust with the Trustee or any Paying Agent or segregated and held in
trust by the Company and thereafter repaid to the Company or discharged
from such trust, as provided in Section 1003), have been delivered to the
Trustee for cancellation;
-38-
<PAGE>
(b) The Company has paid or delivered or caused to be paid or
delivered all other sums or property payable or deliverable hereunder by
the Company; and
(c) The Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the
obligations of the Company to the Trustee under Section 607 and, if money shall
have been deposited with the Trustee pursuant to subclauses (b) of clause (1) of
this Section, the obligations of the Trustee under Section 402 and the last
paragraph of Section 1003 shall survive.
SECTION 402. APPLICATION OF TRUST MONEY.
Subject to the provisions of the last paragraph of Section 1003, all
money deposited with the Trustee pursuant to Section 401 shall be held in trust
and applied by it, in accordance with the provisions of the Securities and this
Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money has been deposited with the
Trustee; but such money need not be segregated from other funds except to the
extent required by law.
ARTICLE FIVE
REMEDIES
SECTION 501. EVENTS OF DEFAULT.
"Event of Default", wherever used herein with respect to the
Securities, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
(a) there shall be a default in the payment of any interest or
Additional Amounts (as defined in Section 1005 hereof) upon any Security
when it becomes due and payable, and continuance of such default for a
period of 15 days; or
(b) there shall be a default in the payment of the principal of (or
premium, if any, on) any Security at its Maturity (upon acceleration,
optional or mandatory redemption, required repurchase or otherwise),
whether or not such payment is prohibited by the provisions of this
Indenture; or
-39-
<PAGE>
(c) there shall be a failure by the Company to deliver Exchange
Property (and/or cash in lieu thereof) when such Exchange Property (or
cash in lieu thereof) is required to be delivered following the exchange
of a Security, and continuance of such failure for a period of 10 days; or
(d) there shall be a default in the performance, or breach, of any
covenant or agreement of the Company under this Indenture or the
Securities (other than a default in the performance, or breach, of a
covenant or agreement which is specifically dealt with in clauses (a), (b)
or (c) of this Section 501) and such default or breach shall continue for
a period of 90 days after written notice has been given, by certified
mail, to the Company by the Trustee or by the Holders of at least 25% in
aggregate principal amount at Maturity of the Outstanding Securities,
which notice shall specify that it is a "notice of default" and shall
demand that such a default be remedied; or
(e) there shall have been the entry by a court of competent
jurisdiction of (i) a decree or order for relief in respect of the Company
or Bell Atlantic in an involuntary case or proceeding under any applicable
Bankruptcy Law or (ii) a decree or order adjudging the Company or Bell
Atlantic bankrupt or insolvent, or seeking reorganization, arrangement,
adjustment or composition of or in respect of the Company or Bell Atlantic
under any applicable federal or state law, or appointing a custodian,
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or Bell Atlantic or of any substantial part of
their respective properties, or ordering the winding up or liquidation of
their respective affairs, and any such decree or order for relief shall
continue to be in effect, or any such other decree or order shall be
unstayed and in effect, for a period of 60 consecutive days;
(f) (1) the Company or Bell Atlantic shall have commenced a voluntary
case or proceeding under any applicable Bankruptcy Law or any other case
or proceeding to be adjudicated bankrupt or insolvent, (2) the Company or
Bell Atlantic shall have consented to the entry of a decree or order for
relief in respect of the Company or in an involuntary case or proceeding
under any applicable Bankruptcy Law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, (3) the Company or
Bell Atlantic shall have filed a petition or answer or consent seeking
reorganization or relief under any applicable federal or state law, (4)
the Company or Bell Atlantic shall have (A) consented to the filing of
such petition or the appointment of, or taking possession by, a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official
of the Company or Bell Atlantic or of any substantial part of their
respective properties, (B) made an assignment for the benefit of creditors
or (C) admitted in writing its inability to pay its debts generally as
they become due, or (5) the Company or Bell Atlantic shall have taken any
corporate action in furtherance of any such actions in this paragraph (f)
and any actions taken pursuant to subsections (1) through (5) of this
Section (f) shall remain in effect and undismissed for 60 days; or
-40-
<PAGE>
(g) the Support Agreement ceases to be in full force and effect or is
declared null and void or Bell Atlantic denies that it has any further
liability under the Support Agreement and gives written notice to such
effect (other than by reason of the termination of the Indenture or the
release of the Support Agreement in accordance with the Indenture).
SECTION 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT.
If an Event of Default (other than a Event of Default specified in
Sections 501(e) and (f) with respect to the Company or Bell Atlantic) shall
occur and be continuing with respect to this Indenture, the Trustee or the
Holders of not less than 25% in aggregate principal amount at Maturity of the
Outstanding Securities may, and the Trustee at the request of such Holders
shall, declare all unpaid principal of, premium, if any, and accrued interest on
all Securities to be due and payable, by a notice in writing to the Company (and
to the Trustee if given by the Holders of the Securities) and upon any such
declaration, such principal, premium, if any, and interest shall become due and
payable immediately. If an Event of Default specified Sections 501(e) or (f)
occurs with respect to the Company and is continuing, then all the Securities
shall IPSO FACTO become and be due and payable immediately in an amount equal to
the principal amount of the Securities, together with accrued and unpaid
interest, if any, to the date the Securities become due and payable, without any
declaration or other act on the part of the Trustee or any Holder.
After such declaration of acceleration with respect to the
Securities, but before a judgment or decree for payment of the money due has
been obtained by the Trustee as hereinafter in this Article provided, the
Holders of a majority aggregate in principal amount at Maturity of the
Outstanding Securities, by written notice to the Company and the Trustee, may
rescind and annul such declaration and its consequences if:
(a) the Company has paid or deposited with the Trustee a sum
sufficient to pay:
(i) all overdue interest on all Outstanding Securities,
(ii) the principal of and premium and Additional Amounts, if any,
on any Outstanding Securities which have become due otherwise than by
such declaration of acceleration and interest thereon at the rate
borne by the Securities, in the event that the Outstanding Securities
are exchanged for Exchange Property, the value of the Exchange
Property or the cash value thereof,
(iii) to the extent that payment of such interest is lawful,
interest upon overdue interest and overdue principal, together with
Additional Amounts, if any, at the rate borne by the Securities, and
-41-
<PAGE>
(iv) all sums paid or advanced by the Trustee under this
Indenture and the reasonable compensation, expenses, disbursements
and advances of the Trustee, its agents and counsel;
and
(b) all Events of Default other than the non-payment of principal of
the Securities which have become due solely by such declaration of
acceleration, have been cured or waived as provided in Section 513.
No such rescission shall affect any subsequent Default or impair any
right consequent thereon.
SECTION 503. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY TRUSTEE.
The Company covenants that if:
(1) Default is made in the payment of any interest on any Security
when such interest becomes due and payable and such Default continues for
a period of 30 days; or
(2) Default is made in the payment or delivery of the principal of,
or Additional Amounts, if any, or premium, if any, on, any Security at the
Maturity thereof, or in the delivery of Exchange Property or the payment
of the cash value thereof,
the Company will, upon demand of the Trustee, pay or deliver to it, as the case
may be, for the benefit of the Holders of Securities, the whole amount then due
and payable on such Securities for principal of, or Additional Amounts, if any,
and premium, if any, and Exchange Property deliverable with respect to
Securities surrendered for exchange (or the cash value thereof), and interest
upon the overdue principal and premium, if any, or the cash value of Exchange
Property, to the extent that payment of such interest shall be legally
enforceable, upon overdue installments of interest, at the rate borne by the
Securities; and, in addition thereto, such further amount as shall be sufficient
to cover the costs and expenses of collection, including the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agents
and counsel.
If the Company fails to pay such amounts or deliver such Exchange
Property forthwith upon such demand, the Trustee, in its own name and as trustee
of an express trust, may institute a judicial proceeding for the collection of
the sums so due and unpaid and may prosecute such proceeding to judgment or
final decree and may enforce the same against the Company or any other obliger
on the Securities and collect the moneys adjudged or decreed to be payable in
the manner provided by law out of the property of the Company or any other
obligor on the Securities situated.
-42-
<PAGE>
If an Event of Default occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and the rights of the
Holders under this Indenture by such appropriate judicial proceedings as the
Trustee shall deem most effectual to protect and enforce any such rights,
subject however to Section 512. No recovery of any such judgment upon any
property of the Company shall affect or impair any rights, powers or remedies of
the Trustee or the Holders.
SECTION 504. TRUSTEE MAY FILE PROOFS OF CLAIM.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor on the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration or
otherwise and irrespective of whether the Trustee shall have made any demand on
the Company for the payment of overdue principal or interest) shall be entitled
and empowered by intervention in such proceeding or otherwise,
(a) to file and prove a claim for the whole amount of principal, and
premium, if any, and interest owing and unpaid in respect of the
Securities and to file such other papers or documents as may be necessary
or advisable in order to have the claims of the Trustee (including any
claim for the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel) and of the Holders
allowed in such judicial proceeding, and
(b) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof, or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
-43-
<PAGE>
SECTION 505. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without possession of
any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name and as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 506. APPLICATION OF MONEY COLLECTED.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal or premium, if
any or interest, upon presentation of the Securities and the notation thereon of
the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
607;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest on, and the value of
Exchange Property to be delivered in respect of, the Securities in respect
of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal, and premium, if
any, and interest, respectively; and
THIRD: The balance, if any, to the Person or Persons entitled
thereto.
SECTION 507. LIMITATIONS ON SUITS.
No Holder of any Securities shall have any right to institute any
remedy or proceeding, judicial or otherwise, with respect to this Indenture or
the Securities, or for the appointment of a receiver or trustee, or for any
other remedy hereunder, unless:
(1) such Holder shall have previously given written notice to the
Trustee of a continuing Event of Default;
(2) the Holders of not less than 25% in aggregate principal amount at
Maturity of the Outstanding Securities shall have made written request to
the Trustee to pursue such remedy or institute proceedings in respect of
such Event of Default in its own name as Trustee hereunder;
-44-
<PAGE>
(3) such Holder or Holders shall have offered to the Trustee
reasonable security or indemnity satisfactory to the Trustee against the
costs, expenses, losses and liabilities to be incurred in compliance with
such request;
(4) the Trustee for 90 days after its receipt of such notice, request
and offer (and if requested, provision) of security or indemnity shall
have failed to institute any such proceeding; and
(5) no direction inconsistent with such written request shall have
been given to the Trustee during such 90-day period by the Holders of a
majority in principal amount of the Outstanding Securities;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other
Holders, or to obtain or to seek to obtain priority or preference over any other
of such Holders or to enforce any right under this Indenture, except in the
manner herein provided and for the equal and ratable benefit of all such
Holders.
SECTION 508. UNCONDITIONAL RIGHT OF HOLDERS TO RECEIVE PRINCIPAL, PREMIUM AND
INTEREST.
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive from the Company payment of the principal of, premium, if any, and
(subject to Section 307) interest on such Security on the Stated Maturity or
Maturities expressed in such Security (or, in the case of redemption or
repurchase, on the Redemption Date or the purchase date) and to institute suit
for the enforcement of any such payment, and such rights shall not be impaired
without the consent of such Holder.
SECTION 509. RESTORATION OF RIGHTS AND REMEDIES.
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, any other obligor on the
Securities, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder, and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
SECTION 510. RIGHTS AND REMEDIES CUMULATIVE.
Except as otherwise provided with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities in the last paragraph
of Section 306, no right or
-45-
<PAGE>
remedy herein conferred upon or reserved to the Trustee or to the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 511. DELAY OR OMISSION NOT WAIVER.
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 512. CONTROL BY HOLDERS.
The Holders of not less than a majority in aggregate principal amount
at Maturity of the Outstanding Securities shall have the right to direct the
time, method and place of conducting any proceeding for exercising any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, PROVIDED that:
(a) such direction shall not be in conflict with any rule of law or
with this Indenture;
(b) subject to the provisions of Section 315 of the Trust Indenture
Act, the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction; and
(c) the Trustee may refuse to perform any duty or to exercise any
right or power or to extend or risk its own funds or otherwise incur any
financial liability unless it receives indemnity reasonably satisfactory
to it against any loss, liability or expense which it may incur.
SECTION 513. WAIVER OF PAST DEFAULTS.
The Holders of not less than a majority in principal amount at
Maturity of the Outstanding Securities may on behalf of the Holders of all
Outstanding Securities waive any past Default hereunder and its consequences,
except any Default:
(a) in any payment of the principal of, premium, if any, or interest
on any Security, or
-46-
<PAGE>
(b) with respect to the exchange rights of the Securities, or
(c) in respect of a covenant or provision hereof which under this
Indenture cannot be modified or amended without the consent of the Holder
of each Outstanding Security affected by such modification or amendment.
Upon any such waiver, such Default shall cease to exist, and any
Event of Default arising therefrom shall be deemed to have been cured, for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
SECTION 514. UNDERTAKING FOR COSTS.
All parties to this Indenture agree, and each Holder of any Security
by his acceptance thereof shall be deemed to have agreed, that any court may in
its discretion require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorney's fees,
against any party litigant in such suit, having due regard to the merits and
good faith of the claims or defenses made by such party litigant, but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount at Maturity of the Outstanding
Securities, or to any suit instituted by any Holder for the enforcement of the
payment of the principal of, premium, if any, or interest on, any Security on or
after the respective Stated Maturities expressed in such Security (or, in the
case of redemption, on or after the Redemption Date).
SECTION 515. WAIVER OF STAY, EXTENSION OR USURY LAWS.
Each of the Company and any other obligor on the Securities covenants
(to the extent that it may lawfully do so) that it will not at any time insist
upon, or plead, or in any manner whatsoever claim or take the benefit or
advantage of, any stay or extension law or any usury or other law wherever
enacted, now or any time hereafter in force, which would prohibit or forgive the
Company from paying all or any portion of the principal of, premium, if any, or
interest on the Securities contemplated herein or in the Securities or which may
affect the covenants or the performance of this Indenture; and each of the
Company and any other obligor on the Securities (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such
law, and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
-47-
<PAGE>
SECTION 516. REMEDIES SUBJECT TO APPLICABLE LAW.
All rights, remedies and powers provided by this Article V may be
exercised only to the extent that the exercise thereof does not violate any
applicable provision of law in the premises, and all the provisions of this
Indenture are intended to be subject to all applicable mandatory provisions of
law which may be controlling in the premises and to be limited to the extent
necessary so that they will not render this Indenture invalid, unenforceable or
not entitled to be recorded, registered or filed under the provisions of any
applicable law.
ARTICLE SIX
THE TRUSTEE
SECTION 601. DUTIES OF THE TRUSTEE.
Subject to the provisions of Trust Indenture Act Section 315(a)
through 315(d):
(a) if a Default or an Event of Default has occurred and is
continuing, the Trustee shall exercise such of the rights and powers
vested in it by this Indenture and use the same degree of care and skill
in its exercise thereof as a prudent person would exercise or use under
the circumstances in the conduct of his own affairs;
(b) except during the continuance of a Default or an Event of
Default:
(1) the Trustee need perform only those duties as are
specifically set forth in this Indenture and no covenants or
obligations shall be implied in this Indenture that are adverse to
the Trustee; and
(2) in the absence of bad faith or willful misconduct on its
part, the Trustee may exclusively rely, as to the truth of the
statements and the correctness of the opinions expressed therein,
upon certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture. However, the Trustee shall
examine the certificates and opinions to determine whether or not
they conform to the requirements of this Indenture;
(c) the Trustee may not be relieved from liability for its own
negligent action, its own negligent failure to act, or its own willful
misconduct, except that:
(1) this subsection (c) does not limit the effect of
Subsection (b) of this Section 601;
-48-
<PAGE>
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a Responsible Officer, unless it shall be
proved that the Trustee was negligent in ascertaining the pertinent
facts; and
(3) the Trustee shall not be liable with respect to any
action it takes or omits in good faith, in accordance with the
direction of the Holders of a majority in principal amount of the
Outstanding Securities relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee, under this
Indenture;
(d) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any
of its rights or powers if it shall have reasonable grounds for believing
that repayment of such funds or adequate indemnity against such risk or
liability is not reasonably assured to it.
(e) whether or not therein expressly so provided, every provision of
this Indenture that in any way relates to the Trustee is subject to
Subsections (a), (b), (c) and (d) of this Section 601; and
(f) the Trustee shall not be liable for interest on any money or
assets received by it except as the Trustee may agree with the Company.
Assets held in trust by the Trustee need not be segregated from other
assets except to the extent required by law.
SECTION 602. NOTICE OF DEFAULTS.
Within 90 days after a Responsible Officer of the Trustee receives
notice or becomes aware of the occurrence of any Default, the Trustee shall
provide all Holders and any other Persons entitled to receive reports pursuant
to Section 313(c) of the Trust Indenture Act, notice of such Default hereunder
known to the Trustee (such notice to be provided pursuant to Sections 105 and
106), unless such Default shall have been cured or waived before the giving of
such notice; PROVIDED, HOWEVER, that except in the case of a Default in the
payment of the principal of or premium, if any, or interest on any Security, the
Trustee shall be protected in withholding such notice if and so long as a trust
committee of or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interest of the Holders.
SECTION 603. CERTAIN RIGHTS OF TRUSTEE.
Subject to the provisions of Section 601 hereof and Sections 315(a)
through 315(d) of the Trust Indenture Act:
-49-
<PAGE>
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of indebtedness or other
paper or document believed by it to be genuine and to have been signed
or presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein
shall be sufficiently evidenced by a Company Request or Company Order
and any resolution of the Board of Directors may be sufficiently
evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the
Trustee shall deem it desirable that a matter be proved or established
prior to taking, suffering or omitting any action hereunder, the
Trustee (unless other evidence be herein specifically prescribed) may,
in the absence of bad faith on its part, rely upon an Officers'
Certificate;
(d) the Trustee may consult with counsel of its selection and
any advice of such counsel or any Opinion of Counsel shall be full and
complete authorization and protection in respect of any action taken,
suffered or omitted by it hereunder in good faith and in reliance
thereon in accordance with such advice or Opinion of Counsel;
(e) the Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the request
or direction of any of the Holders pursuant to this Indenture, unless
such Holders shall have offered to the Trustee security or indemnity
satisfactory to the Trustee against the costs, expenses and liabilities
which might be incurred therein or thereby in compliance with such
request or direction;
(f) the Trustee shall not be liable for any action taken or
omitted by it in good faith and believed by it to be authorized or
within the discretion, rights or powers conferred upon it by this
Indenture other than any liabilities arising out of the negligence, bad
faith or willful misconduct of the Trustee;
(g) the Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, approval, appraisal, bond, debenture, note, coupon
security or other paper or document, unless requested in writing to do
so by the Holders of not less than a majority in aggregate principal
amount of the Securities then Outstanding; PROVIDED that, if the
payment within a reasonable time to the Trustee of the costs, expenses
or liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably assured
to the Trustee by the security afforded to it by the terms of this
Indenture, the Trustee may require reasonable indemnity against such
expenses or liabilities as a condition to the proceeding; the
reasonable expense of every such investigation so requested by the
Holders of not less than 25% in aggregate principal amount at Maturity
of the Outstanding Securities shall be
-50-
<PAGE>
paid by the Company or, if paid by the Trustee or any predecessor
Trustee, shall be repaid by the Company upon demand; PROVIDED, FURTHER,
the Trustee in its discretion may make such further inquiry or
investigation into such facts or matters as it may deem fit, and, if
the Trustee shall determine to make such further inquiry or
investigation, it shall be entitled to examine the books, records and
premises of the Company, personally or by agent or attorney; and
(h) the Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by or
through agents or attorneys and the Trustee shall not be responsible
for any misconduct or negligence on the part of any agent or attorney
appointed with due care by it hereunder.
SECTION 604. TRUSTEE NOT RESPONSIBLE FOR RECITALS, DISPOSITIONS OF
SECURITIES OR APPLICATIONS OF PROCEEDS THEREOF.
The recitals contained herein and in the Securities, except
the Trustee's certificate of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or of the Securities, except that the Trustee represents that it is
duly authorized to execute and deliver this Indenture, authenticate the
Securities and perform its obligations hereunder and that the statements made by
it in any Statement of Eligibility and Qualification on Form T-1 supplied to the
Company are true and accurate subject to the qualifications set forth herein.
The Trustee shall not be accountable for the use or application by the Company
of Securities or the proceeds thereof nor shall the Trustee be responsible for
any statement in any registration statement for the Securities under the
Securities Act or responsible for the determination as to which beneficial
owners are entitled to receive notices hereunder.
SECTION 605. TRUSTEE AND AGENTS MAY HOLD SECURITIES; COLLECTIONS, ETC.
The Trustee, any Paying Agent, any Registrar or any other
agent of the Company, in its individual or any other capacity, may become the
owner of pledgee of Securities and, subject to Sections 608 and 613 hereof and
Sections 310 and 311 of the Trust Indenture Act, may otherwise deal with the
Company and receive, collect, hold and retain collections from the Company with
the same rights it would have if it were not Trustee, Paying Agent, Registrar or
such other agent.
SECTION 606. MONEY HELD IN TRUST.
All moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. The Trustee shall be under no liability
to the Company for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
-51-
<PAGE>
SECTION 607. COMPENSATION AND REIMBURSEMENT.
The Company covenants and agrees to pay to the Trustee from
time to time, and the Trustee shall be entitled to, such compensation as the
parties shall agree in writing from time to time for all services rendered by it
hereunder (which compensation shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) and the Company
covenants and agrees to pay or reimburse the Trustee and each predecessor
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by or on behalf of the Trustee in accordance with any of the
provisions of this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel and all agents and other persons not
regularly in its employ) except any such expense, disbursement or advance as may
arise from its negligence, bad faith or willful misconduct on its part, arising
out of or in connection with the acceptance or administration of this Indenture
or the trusts hereunder and its duties hereunder, including enforcement of this
Section 607 and also including any liability in connection with the expense of
defending itself against or investing any claim or liability in connection with
the exercise or performance of any of its powers or duties hereunder. The
obligations of the Company under this Section 607 to compensate and indemnify
the Trustee and each predecessor Trustee and to pay or reimburse the Trustee and
each predecessor Trustee for reasonable expenses, disbursements and advances
shall constitute an additional obligation hereunder and shall survive the
satisfaction and discharge of this Indenture and the resignation or removal of
the Trustee and each predecessor Trustee.
SECTION 608. CONFLICTING INTERESTS.
The Trustee shall comply with the provisions of Section 310(b)
of the Trust Indenture Act.
SECTION 609. TRUSTEE ELIGIBILITY.
There shall at all times be a Trustee hereunder which shall be
eligible to act as trustee under Section 310(a)(5) of the Trust Indenture Act
and which shall have a combined capital and surplus of at least $100,000,000, to
the extent there is an institution eligible and willing to serve. If the Trustee
does not have a Corporate Trust Office in The City of New York, the Trustee may
appoint an agent in The City of New York reasonably acceptable to the Company to
conduct any activities which the Trustee may be required under this Indenture to
conduct in The City of New York. If such Trustee publishes reports of condition
at least annually, pursuant to law or to the requirements of federal, state,
territorial or District of Columbia supervising or examining authority, then for
the purposes of this Section 609, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section
609, the Trustee shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
-52-
<PAGE>
SECTION 610. RESIGNATION AND REMOVAL; APPOINTMENT OF SUCCESSOR TRUSTEE.
(a) No resignation or removal of the Trustee and no
appointment of a successor Trustee pursuant to this Article shall become
effective until the acceptance of appointment by the successor Trustee in
accordance with the applicable requirements of Section 611.
(b) The Trustee, or any trustee or trustees hereafter
appointed, may at any time resign by giving written notice thereof to the
Company. Upon receiving such notice or resignation, the Company shall promptly
appoint a successor trustee by written instrument executed by authority of the
Board of Directors of the Company, a copy of which shall be delivered to the
resigning Trustee and a copy to the successor trustee. If an instrument of
acceptance by a successor trustee shall not have been delivered to the Trustee
within 30 days after the giving of such notice of resignations, the resigning
Trustee may, or any Holder who has been a bona fide Holder of a Security for at
least six months may, on behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper, appoint and prescribe a successor trustee.
(c) The Trustee may be removed at any time for any cause or
for no cause by an Act of the Holders of not less than a majority in aggregate
principal amount at Maturity of the Outstanding Securities, delivered to the
Trustee and to the Company.
(d) If at any time:
(1) The Trustee shall fail to comply with the
provisions of Section 310(b) of the Trust Indenture Act after
written request therefor by the Company or by any Holder who
has been a bona fide Holder of a Security for at least six
months, or
(2) the Trustee shall cease to be eligible under
Section 609 and shall fail to resign after written request
therefor by the Company or by any Holder who has been a bona
fide Holder of a Security for a least six months, or
(3) the Trustee shall become incapable of acting or
shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed or any
public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by a Board Resolution may remove the
Trustee, or (ii) subject to Section 514, the Holder of any Security who has been
a bona fide Holder of a Security for at least six months may, on behalf of
himself and all others similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee and the appointment of a successor
-53-
<PAGE>
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, remove the Trustee and appoint a successor trustee.
(e) If the Trustee shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of Trustee for
any cause, the Company, by a Board Resolution, shall promptly appoint a
successor trustee and shall comply with the applicable requirements of Section
611. If, within one year after such resignation, removal or incapability, or the
occurrence of such vacancy, the Company has not appointed a successor trustee, a
successor Trustee shall be appointed by the Act of the Holders of a majority in
principal amount of the Outstanding Securities delivered to the Company and the
retiring Trustee. Such successor Trustee so appointed shall, forthwith upon its
acceptance of such appointment in accordance with the applicable requirements of
Section 611, become the successor Trustee and supersede the successor Trustee
appointed by the Company. If no successor Trustee with respect to the Securities
of any series shall have been so appointed by the Company or the Holders of the
Securities and accepted appointment in the manner hereinafter provided, the
Trustee or the Holder of any such Security who has been a bona fide Holder for
at least six months may, subject to Section 514, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
appointment of a successor trustee.
(f) The Company shall give notice of each resignation and each
removal of the Trustee and each appointment of a successor trustee by mailing
written notice of such event by first-class mail, postage prepaid, to the
Holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor trustee
and the address of its Corporate Trust Office or agent hereunder.
SECTION 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) Every successor trustee appointed hereunder shall execute,
acknowledge and deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or removal of the
retiring Trustee shall become effective and such successor trustee, without any
further act, deed or conveyance, shall become vested with all the rights,
powers, trusts and duties of the retiring Trustee as if originally named as
Trustee hereunder; but, nevertheless, on the written request of the Company or
the successor trustee, upon payment of its charges pursuant to Section 607 then
unpaid, such retiring Trustee shall pay over to the successor trustee all moneys
at the time held by it hereunder and shall execute and deliver an instrument
transferring to such successor trustee all such rights, powers, duties and
obligations. Upon request of any such successor trustee, the Company shall
execute any and all instruments for more fully and certainly vesting in and
confirming to such successor trustee all such rights, powers, duties and
obligations.
No successor trustee shall accept its appointment unless at
the time of such acceptance such successor trustee shall be qualified and
eligible under this Article.
-54-
<PAGE>
Upon acceptance of appointment by any successor trustee as
provided in this Section 611, the Company shall give notice thereof to the
Holders of the Securities, by mailing such notice to such Holders at their
addresses as they appear on the Security Register. If the acceptance of
appointment is substantially contemporaneous with the appointment, then the
notice called for by the preceding sentence may be combined with the notice
called for by Section 610. If the Company fails to give such notice within 10
days after acceptance of appointment by the successor trustee, the successor
trustee shall cause such notice to be given at the expense of the Company.
SECTION 612. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any Corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any Corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding to all or substantially all of the
corporate trust business of the Trustee (including the trust created by this
Indenture) shall be the successor of the Trustee hereunder, PROVIDED that such
Corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities. In case
at that time any of the Securities shall not have been authenticated, any
successor Trustee may authenticate such Securities either in the name of any
predecessor hereunder or in the name of the successor Trustee. In all such cases
such certificates shall have the full force and effect which this Indenture
provides the certificate of authentication of the Trustee shall have; PROVIDED,
HOWEVER, that the right to adopt the certificate of authentication of any
predecessor Trustee or to authenticate Securities in the name of any predecessor
Trustee shall apply only to its successor or successors by merger, conversion or
consolidation.
SECTION 613. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY.
If and when the Trustee shall be or become a creditor of the
Company (or other obligor on the Securities), the Trustee shall be subject to
the provisions of the Trust Indenture Act regarding the collection of claims
against the Company (or any such obligor). A Trustee who has resigned or been
removed shall be subject to Section 311(a) of the Trust Indenture Act to the
extent indicated therein.
-55-
<PAGE>
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF HOLDERS.
The Company will furnish or cause to be furnished to the
Trustee:
(a) semi-annually, not more than 15 days after each Regular
Record Date, a list, in such form as the Trustee may reasonably
require, of the names and addresses of the Holders of Registered
Securities as of such Regular Record Date; and
(b) at such other times as the Trustee may reasonably request
in writing, within 30 days after the receipt by the Company of any such
request, a list of similar form and content to that in Subsection (a)
hereof, as of a date not more than 15 days prior to the time such list
is furnished;
PROVIDED, HOWEVER, that if and so long as the Trustee shall be the Registrar, no
such list need be furnished.
SECTION 702. DISCLOSURE OF NAMES AND ADDRESSES OF HOLDERS.
Holders may communicate pursuant to Section 312(b) of the
Trust Indenture Act with other Holders with respect to their rights under this
Indenture or the Securities, and the Trustee shall comply with Section 312(b) of
the Trust Indenture Act. The Company, the Trustee, the Registrar and any other
Person shall have the protection of Section 312(c) of the Trust Indenture Act.
Further, every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any agent of either of them shall be held accountable by reason of the
disclosure of any information as to the names and addresses of the Holders in
accordance with Section 312 of the Trust Indenture Act, regardless of the source
from which such information was derived, and that the Trustee shall not be held
accountable by reason of such mailing any material pursuant to a request made
under Section 312(b) of the Trust Indenture Act.
SECTION 703. REPORTS BY TRUSTEE.
(a) Within 60 days after May 15 of each year commencing with
the first May 15 after the issuance of Securities, the Trustee, if so required
under the Trust Indenture Act shall transmit by mail to all Holders in the
manner and to the extent provided in Section 313(c) of the Trust Indenture Act,
a brief report dated as of such May 15 in accordance with and with respect to
the matters required by Section 313(a) of the Trust Indenture Act. The Trustee
shall also transmit by mail to the Holders, in the manner and to the extent
provided in Section 313(c)
-56-
<PAGE>
of the Trust Indenture Act, a brief report in accordance with and with respect
to the matters required by Sections 313(a) and 313(b)(2) of the Trust Indenture
Act.
(b) A copy of each report transmitted to Holders pursuant to
Section 703(a) shall, a the time of such transmission, be mailed to the Company
and filed with each stock exchange, if any, upon which the Securities are listed
and also with the Commission. The Company will notify the Trustee promptly if
the Securities are listed on any stock exchange.
SECTION 704. REPORTS BY COMPANY AND BELL ATLANTIC.
(a) Whether or not the Company or Bell Atlantic, or any
successors thereof, is subject to the reporting requirements of Section 13 or
15(d) of the Exchange Act, Bell Atlantic shall file with the Trustee, within 15
days after it is or would have been required to file the same with the
Commission, annual and quarterly consolidated financial statements substantially
equivalent to financial statements that would have been included in reports
filed with the Commission if Bell Atlantic were subject to the requirements of
Section 13 or 15(d) of the Exchange Act, including, with respect to annual
information only, a report thereon by Bell Atlantic's certified independent
public accountants as such would be required in such reports to the Commission
and, in each case, together with a management's discussion and analysis of
results of operations and financial condition as such would be so required.
(b) For so long as the Securities are Registrable Securities,
the Company will continue to provide to the Holders of the Securities and to
prospective purchases of the Securities the information required by Rule
144A(d)(4) of the Securities Act.
(c) The Company shall file with the Trustee and the
Commission, in accordance with rules and regulations prescribed from time to
time by the Commission, such additional information, documents and reports with
respect to compliance by the Company with the conditions and covenants of this
Indenture as may be required from time to time by such rules and regulations
(including such information, documents and reports referred to in Section 314(a)
of the Trust Indenture Act).
(d) The Company shall, within 15 days after the filing thereof
with the Trustee, transmit by mail to all Holders in the manner and to the
extent provided in Section 313(c) of the Trust Indenture Act, such summaries of
any information, documents and reports required to be filed by the Company
pursuant to subsections (b) and (c) of this Section as is required and not
prohibited by rules and regulations prescribed from time to time by the
Commission.
(e) Each of the Company and Bell Atlantic will make available
for inspection by the Trustee or any registered company auditor, defined by the
Australian Corporations Law, appointed by the Trustee its complete accounting or
other records.
-57-
<PAGE>
(f) Each of the Company and Bell Atlantic will provide the
Trustee with such information as required by the Trustee with respect to all
matters relating to its accounting or other records.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER
SECTION 801. COMPANY MAY MERGE, CONSOLIDATE, ETC., ONLY ON CERTAIN TERMS.
Neither the Company nor Bell Atlantic shall consolidate with
or merge into any other Corporation, or convey, transfer or lease its properties
and assets substantially as an entirety to any person, and neither the Company
nor Bell Atlantic shall permit any Person to consolidate with or merge into the
Company or Bell Atlantic or convey, transfer or lease its properties and assets
substantially as an entirety to the Company or Bell Atlantic, unless:
(a) the Corporation formed by such consolidation or into which
the Company or Bell Atlantic is merged or the Person to which the properties and
assets of the Company or Bell Atlantic are transferred substantially as an
entirety shall be a corporation organized and existing under the laws of the
United States, any State thereof or the District of Columbia and shall expressly
assume the payment of the principal of, and premium, if any, and interest on,
and the delivery of Exchange Property, or the cash value thereof, as the case
may be, due with respect to the Securities and the performance of the other
covenants under the Indenture and the Support Agreement, on the part of the
Company or Bell Atlantic, as applicable;
(b) after giving effect to such transaction, no Default or
Event of Default shall have occurred and be continuing and
(c) if, as a result of such transaction, properties or assets
of the Company would become subject to a Mortgage not permitted by Section 1006
of this Indenture without equally and ratably securing the Securities as
provided therein, steps shall have been taken to secure the Securities equally
and ratably with (or prior to) all indebtedness secured thereby pursuant to
Section 1006 of this Indenture.
SECTION 802. SUCCESSOR SUBSTITUTED.
Upon any consolidation or merger, or any conveyance, transfer
or lease of all or substantially all of the properties and assets of the Company
in accordance with Section 801, the successor Person formed by such
consolidation or merger or the successor Person to which such conveyance,
transfer or lease is made shall succeed to, and be substituted for, and may
exercise every right and power of, the Company under this Indenture, with the
same effect as if such successor has been named as the Company herein. When a
successor assumes all the obligations
-58-
<PAGE>
of its predecessor under this Indenture or the Securities, the predecessor shall
be released from such assumed obligations and covenants under the Indenture and
the Securities, as the case may be; PROVIDED that in the case of a transfer by
lease, the predecessor shall not be released from the payment of principal and
interest on the Securities.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. SUPPLEMENTAL INDENTURES AND AGREEMENT WITHOUT CONSENT OF
HOLDERS.
Without the consent of any Holders, the Company, Bell Atlantic
and the Trustee, at any time and from time to time, may enter into one or more
indentures supplemental hereto, in form satisfactory to the Trustee, for any of
the following purposes:
(a) to evidence the succession of another Person to the
Company or any obligor on the Securities and the assumption by any such
successor of the covenants of the Company or obligor herein and in the
Securities in accordance with Article VIII; or
(b) to add to the covenants of the Company or any other
obligor on the Securities for the benefit of the Holders, or to
surrender any right or power herein conferred upon the Company or any
other obligor on the Securities, as applicable, or in the Securities;
or
(c) to add any additional Events of Default;
(d) to cure any ambiguity, or to correct or supplement any
provision herein or any supplemental indenture or the Securities which
may be defective or inconsistent with any other provision herein or in
the Securities or to make any other provisions with respect to matters
or questions arising under this Indenture or the Securities; provided
that, in each case, such provisions shall not adversely affect the
interest of the Holders;
(e) to comply with the requirements of the Commission in order
to effect to maintain the qualification of this Indenture under the
Trust Indenture Act, as contemplated by Section 905 or otherwise;
(f) to evidence and provide the acceptance of the appointment
of a successor trustee hereunder;
(g) to secure the Securities pursuant to the requirements of
Section 1006 or otherwise; or
-59-
<PAGE>
(h) to change or eliminate any of the provisions of this
Indenture, PROVIDED that any such change or elimination shall become
effective only when there are no Securities Outstanding which are
entitled to the benefit of such provision.
SECTION 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS.
Except as permitted by Section 901, with the consent of the
Holders of at least a majority in aggregate principal amount at Maturity of the
Outstanding Securities, by Act of said Holders delivered to the Company, Bell
Atlantic and the Trustee, the Company and Bell Atlantic, when authorized by a
Board Resolution, and the Trustee may (i) enter into an indenture or indentures
supplemental heretofore the purpose of adding any provisions to or changing in
any manner or eliminating any of the provisions of this Indenture of the
Securities (including, but not limited to, for the purpose of modifying in any
manner the rights of the Holders under this Indenture or the Securities) or (ii)
waive compliance with any provision in this Indenture or the Securities (other
waivers of past Defaults covered by Section 513 and waivers of covenants which
are covered by Section 1019); PROVIDED, HOWEVER, that no such supplemental
indenture, agreement or installment or instrument shall, without the consent of
the Holder of each Outstanding Security affected thereby:
(a) change the Stated Maturity of the principal of, or any
installment of interest on (including Additional Amounts, if any), any
Security, or reduce the principal amount thereof or the rate of
interest thereon (including Additional Amounts, if any), or the amount
of Exchange Property deliverable in exchange for the Securities, or any
premium payable upon the redemption thereof, or change or the coin or
currency in which any Security or any premium or the interest thereon
(including Additional Amounts, if any), is payable, or impair the right
to institute suit for the enforcement of any such payment on or after
the Stated Maturity thereof (or, in the case of redemption, on or after
the Redemption Date), or
(b) reduce the percentage of the principal amount of the
Outstanding Securities, the consent of whose Holders is required for
any such supplemental indenture, or the consent of whose Holders is
required for any waiver of compliance with certain provisions of this
Indenture or certain defaults hereunder and their consequences provided
for in this Indenture, or
(c) modify any of the provisions of this Section, Section 513
or Section 1005, except to increase the percentage of Outstanding
Securities requires for such actions or to provide that certain other
provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby, or
(d) modify any provision of the Support Agreement adverse to
the Holders of the Securities.
-60-
<PAGE>
Upon the written request of the Company and Bell Atlantic
accompanied by a copy of the Board Resolution authorizing the execution of any
such supplemental indenture, and upon the filing with the Trustee of evidence of
the consent of Holders as aforesaid, the Trustee shall join with the Company and
Bell Atlantic in the execution of such supplemental indenture.
It shall not be necessary for any Act of Holders under this
Section to approve the particular form of any proposed supplemental indenture,
but it shall be sufficient if such Act shall approve the substance thereof.
SECTION 903. EXECUTION OF SUPPLEMENTAL INDENTURES.
In executing, or accepting the additional trusts created by,
any supplemental indenture, agreement, instrument or waiver permitted by this
Article IV or the modifications thereby of the trusts created by this Indenture,
the Trustee shall be entitled to receive, and (subject to Sections 315(a)
through 315(b) of the Trust Indenture Act and Section 602 hereof) shall be fully
protected in relying upon, an Opinion of Counsel and an Officer's Certificate
stating that the execution of such supplemental indenture, agreement or
instrument is authorized or permitted by this Indenture. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture, agreement
or instrument which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 904. EFFECT OF SUPPLEMENTAL INDENTURES.
Upon the execution of any supplemental indenture under this
Article, this Indenture shall be modified in accordance therewith, and such
supplemental indenture shall form a part of this Indenture for all purposes; and
every Holder of Securities theretofore or thereafter authenticated or delivered
hereunder shall be bound thereby.
SECTION 905. CONFORMITY WITH TRUST INDENTURE ACT.
Every supplemental indenture executed pursuant to this Article
IX shall conform to the requirements of the Trust Indenture Act as then in
effect.
SECTION 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article IX may, and shall if
required by the Trustee, bear a notation in form approved by the Trustee as to
any matter provided for in such supplemental indenture. If the Company shall so
determine, new Securities so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee in exchange for Outstanding Securities.
-61-
<PAGE>
SECTION 907. NOTICE OF SUPPLEMENTAL INDENTURES.
Promptly after the execution by the Company and the Trustee of
any supplemental indenture pursuant to the provisions of Section 902, the
Company shall give notice thereof to the Holders of each Outstanding Security
affected, in the manner provided for in Section 106, setting forth in general
terms the substance of such supplemental indenture. Any failure of the Company
to mail such notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
ARTICLE TEN
COVENANTS
SECTION 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST.
The Company shall duly and punctually pay the principal of,
premium, if any, and interest on, and deliver Exchange Property, or the cash
value thereof, as the case may be, due with respect to the Securities in
accordance with the terms of the Securities and this Indenture.
SECTION 1002. TRUSTEE, TRANSFER AGENT, REGISTRAR, QUOTATION AGENT, PAYING
AGENTS AND EXCHANGE AGENTS.
(a) The Trustee, acting through its Corporate Trust Offices in
New York City, shall initially act as Registrar, and the Trustee, acting through
its Corporate Trust Offices in New York City and London, shall initially act as
Transfer Agent and Quotation Agent. The Company reserves the right to vary or
terminate the appointment of the Registrar or of any Transfer Agent or the
Quotation Agent or to appoint additional or other registrars or transfer agents
or quotation agents or to approve any change in the office through which any
Registrar or any Transfer Agent or any Quotation Agent acts, provided that there
will at all times be a Registrar in New York City and a Transfer Agent in a
Western European city and a Paying Agent, Transfer Agent and Exchange Agent
having an office in Luxembourg for so long as the Securities are listed on the
Luxembourg Stock Exchange. The Company hereby appoints The Chase Manhattan Bank
as Principal Paying and Exchange Agent, Transfer Agent and Registrar. The
Company hereby appoints The Chase Manhattan Bank Luxembourg S.A. as Luxembourg
Paying and Exchange Agent, Transfer Agent and Registrar.
(b) Securities may be presented for exchange at the office of
any Transfer Agent or at the office of the Registrar and Registered Securities
may be presented for registration or transfer (with the form of transfer
endorsed thereon duly executed), at the office of any Transfer Agent or any
office of the Registrar, without service charge but upon payment of any taxes
and other governmental charges as described in the Indenture. Any registration
of transfer or exchange will be effected upon the Transfer Agent or the
Registrar, as the case may be, being
-62-
<PAGE>
satisfied with the documents of title and identity of the person making the
request and, with respect to the Registered Securities, upon registration of
such transfer in the Security Register, and subject to such reasonable
regulations as the Company may from time to time agree with the Transfer Agents
and the Registrar. Registered Securities may be transferred in whole or in part
in the amount of $1,000 or any integral multiple thereof. Upon presentation for
exchange or transfer of any Security at the office of the Transfer Agent
accompanied by a duly executed written instrument of exchange or transfer in a
form approved by the Company, and upon completion of any certification required
by the terms of this Indenture, or upon the partial redemption of any Security,
such Security shall be exchanged, transferred or redeemed in part, as the case
may be, and one or more new Securities shall be authenticated and issued in lieu
thereof.
(c) The Trustee and certain of its affiliates shall initially
act as Paying Agents and Exchange Agents. The Company may at any time terminate
the appointment of any Paying Agent or Exchange Agent or appoint additional or
other Paying Agents and Exchange Agents, provided that until the Securities have
been delivered to the Trustee for cancellation, or money sufficient to pay the
principal of and interest on the Securities have been made available for payment
and either paid or returned to the Company as provided in the Indenture, it will
maintain an office or agency in New York City for payments with respect to
Registered Securities and for surrender of Securities for exchange, and in a
Western European city and a New Zealand city for payment with respect to the
Securities and for the surrender of Securities for exchange. Notice of any such
termination or appointment and of any change in the office through which any
Paying Agent or Exchange Agent will act will be given in accordance with
Subsection (d) below.
(d) Notice to holders of Securities will be given in
accordance with Section 105.
SECTION 1003. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST.
If the Company or any of its Affiliates, shall at any time act
as its own Paying Agent, it will, on or before each due date of the principal of
(premium, if any) or interest on any of the Securities, segregate and hold in
trust for the benefit of the Persons entitled thereto a sum sufficient to pay
the principal, premium, if any, or interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as herein provided, and
will promptly notify the Trustee of its action or failure to so act.
If the Company or any of its Affiliates is not acting as
Paying Agent, the Company will, on or before each due date of the principal of,
premium, if any, or interest on any of the Securities, deposit with a Paying
Agent a sum in same day funds sufficient to pay the principal, premium, if any,
or interest so becoming due, such sum to be held in trust for the benefit of the
Persons entitled to such principal, premium, if any, or interest, and (unless
such Paying Agent is the Trustee) the Company will promptly notify the Trustee
of such action or any failure so to act.
-63-
<PAGE>
If the Company is not acting as Paying Agent, the Company will
cause each Paying Agent other than the Trustee to execute and deliver to the
Trustee an instrument in which such Paying Agent shall agree with the Trustee,
subject to the provisions of this Section, that such Paying Agent will:
(a) hold all sums held by it for the payment of the principal
of, premium, if any, or interest on the Securities in trust for the
benefit of the Persons entitled thereto until such sums shall be paid
to such Persons or otherwise disposed of as herein provided;
(b) give the Trustee notice of any Default by the Company (or
any other obligor upon the Securities) in the making of any payment of
principal, premium, if any, or interest on, or delivery of any Exchange
Property with respect to, the Securities;
(c) at any time during the continuance of any such Default,
upon the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such Paying Agent; and
(d) acknowledge, accept and agree to comply in all aspects
with the provisions of this Indenture relating to the duties, rights
and disabilities of such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture or for any other purpose, pay, or
by a Company Order direct any Paying Agent to pay, to the Trustee all sums held
in trust by the Company or such Paying Agent, such sums to be held by the
Trustee upon the same trusts as those upon which such sums were held by the
Company or such Paying Agent; and, upon such payment by any Paying Agent to the
Trustee, such Paying Agent shall be released from all further liability with
respect to such money.
Any money deposited with the Trustee or any Paying Agent, or
then held by the Company, in trust for the payment of the principal of, and
premium, if any, or interest on any Security and remaining unclaimed for two
years after such principal, and premium, if any, or interest has become due and
payable shall promptly be paid to the Company on Company Request, or (if then
held by the Company) shall be discharged from such trust; and the Holder of such
Security shall thereafter, as an unsecured general creditor, look only to the
Company for payment thereof, without interest and until such amount must be
remitted to the state under escheat or similar laws, and all liability of the
Trustee or such Paying Agent with respect to such trust money, and all liability
of the Company as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER,
that (i) the Trustee or such Paying Agent, before being required to make any
such repayment, may at the expense of the Company cause to be published once, in
a newspaper published in the English language, customarily published on each
business day and of general circulation in the Borough of Manhattan, the City
and State of New York, or mailed to each such Holder, notice that such money
remains unclaimed and that, after a date specified therein, which shall not be
less than 30 days from the date of such publication or mailing, any unclaimed
-64-
<PAGE>
balance of such money then remaining will be repaid to the Company, and (ii) all
such amounts payable in respect of Bearer Securities shall be payable only
outside the United States within the meaning of Section 1.163-5(c)(2)(v) of the
Treasury Regulations.
SECTION 1004. CORPORATE EXISTENCE.
(a) Subject to Article VIII, each of the Company and Bell
Atlantic shall do or cause to be done all things necessary to preserve and keep
in full force and effect its corporate existence and related rights and
franchise (charter and statutory); PROVIDED, HOWEVER, that the Company shall not
be required to preserve any such right or franchise if the Board of Directors of
each of the Company and Bell Atlantic shall determine that the preservation
thereof is no longer necessary or desirable in the conduct of the business of
the Company of Bell Atlantic.
(b) Each of the Company and Bell Atlantic shall strive to
carry on and conduct its business in a proper and efficient manner.
SECTION 1005. PAYMENT OF ADDITIONAL AMOUNTS.
The Company shall, subject to certain exceptions and
limitations set forth below, pay such additional amounts (the "Additional
Amounts") to the Holder of any Security or of any coupon appertaining thereto
who is a United States Alien as may be necessary in order that every net payment
of the principal of, premium, if any, and interest (including original issue
discount) on such Security and any other amounts payable on such Security, after
withholding for or on account of any present or future tax, assessment or
governmental charge imposed upon or as a result of such payment by the United
States (or any political subdivision or taxing authority thereof or therein),
will not be less than the amount provided for in such Security or coupon to be
then due and payable.
The Company shall not, however, be required to make any
payment of Additional Amounts to any such Holder for or on account of:
(a) any such tax assessment or other governmental charge that
would not have been so imposed but for:
(i) the existence of any present or former connection
between such Holder (or between a fiduciary, settlor,
beneficiary, member or shareholder of such Holder, if such
Holder is an estate, a trust, a partnership or a corporation)
and the United States and its possessions, including, without
limitation, such Holder (or such fiduciary, settlor,
beneficiary, member or shareholder) being or having been a
citizen or resident thereof or being or having been engaged in
a trade or business or presence therein or having, or having
had, a permanent establishment therein or;
-65-
<PAGE>
(ii) the presentation by the Holder of any such
Security or coupon for payment on a date more than 15 days
after the date on which such payment became due and payable or
the date on which payment thereof is duly provided for,
whichever occurs later;
(b) any estate, inheritance, gift, sales, transfer or personal
property tax or similar tax, assessment or governmental charge;
(c) any tax, assessment or other governmental charge imposed
by reason of such Holder's past or present status as a personal holding
company or foreign personal holding company or controlled foreign
corporation or passive foreign investment company with respect to the
United States or as a corporation that accumulates earnings to avoid
United States federal income tax or as a private foundation or other
tax-exempt organization;
(d) any tax, assessment or other governmental charge that is
payable otherwise than by withholding from payments on or in respect of
any Security;
(e) any tax, assessment or other governmental charge required
to be withheld by any Paying Agent from any payment of principal of, or
interest on, any Security, if such payment can be made without such
withholding by any other Paying Agent in a city in Western Europe;
(f) any tax, assessment or other governmental charge that
would not have been imposed but for the failure to comply with
certification, information or other reporting requirements concerning
the nationality, residence or identity of the Holder or beneficial
owner of such Security, if such compliance is required by statute or by
regulation of the United States or of any political subdivision or
taxing authority thereof or therein as a precondition to relief or
exemption from such tax, assessment or other governmental charge;
(g) any tax, assessment or other governmental charge imposed
by reason of such Holder's past or present status as the actual or
constructive owner of 10% or more of the total combined voting power of
all classes of stock entitled to vote of the Company or as a direct or
indirect subsidiary of the Company; or
(h) any combination of (a), (b), (c), (d), (e), (f) or (g);
nor shall Additional Amounts be paid with respect to any payment on a Security
to a United States Alien who is a fiduciary or partnership or other than the
sole beneficial owner of such payment to the extent such payment would be
required by the laws of the United States (or any political subdivision thereof)
to be included in the income, for tax purposes, of a beneficiary or settlor with
respect to such fiduciary or a member of such partnership or a beneficial owner
who
-66-
<PAGE>
would not have been entitled to the Additional Amounts had such beneficiary,
settlor, member or beneficial owner been the Holder of the Security.
SECTION 1006. LIENS ON ASSETS.
If at any time the Company mortgages, pledges or otherwise
subjects to any Mortgage the whole or any part of any property or assets now
owned or hereafter acquired by it, except as hereinafter provided in this
Section 1006, the Company will secure the Outstanding Securities, and any other
obligations of the Company which may then be outstanding and entitled to the
benefit of a covenant similar in effect to this covenant, equally and ratably
with the indebtedness or obligations secured by such Mortgage, pledge or lien,
for as long as any such indebtedness or obligation is so secured. The foregoing
covenant does not apply to the creation, extension, renewal or refunding of
purchase-money Mortgages or liens or other Mortgages to which any property or
asset acquired by the Company is subject as of the date of its acquisition by
the Company, or to the making of any deposit or pledge to secure public or
statutory obligations or with any governmental agency at any time required by
law in order to qualify the Company to conduct its business or any part thereof
or in order to entitle it to maintain self-insurance or to obtain the benefit of
any law relating to workers' compensation, unemployment insurance, old age
pensions or other social security, or with any court, board, commission or
governmental agency as security incident to the proper conduct of any proceeding
before it. Nothing contained in this Indenture prevents an Affiliate of the
Company, including without limitation Bell Atlantic, from mortgaging, pledging
or subjecting to any lien or Mortgage any property or assets, whether or not
acquired by such Affiliate from the Company.
SECTION 1007. DISAFFILIATION OF BELL ATLANTIC FROM TCNZ.
(a) Not later than June 1, 1999, Bell Atlantic will take such
actions as are sufficient to cause Bell Atlantic to cease to be an affiliate of
TCNZ (as such term is defined in Rule 144 under the Securities Act) and will
obtain an Opinion of Counsel experienced in such matters to such effect; unless
on or prior to such date TCNZ shall have (i) entered into a registration rights
agreement (the "TCNZ Registration Rights Agreement") with the Company and Bell
Atlantic, in customary form and, subject to paragraph (b) of this Section 1007,
with reasonable terms as determined by an internationally recognized investment
bank to be selected by Bell Atlantic and SBC Warburg Dillon Read, or any
successor thereto, requiring TCNZ to use its best efforts to cause to become
effective by such date a U.S. "shelf" registration statement for an offering to
be made on a continuous or delayed basis pursuant to Rule 415 under the
Securities Act (a "TCNZ Resale Shelf") with respect to (a) to the extent
permissible under applicable law, any offer, arising on resale of the
Securities, of the TCNZ Ordinary Shares deliverable upon exchange of the
Securities arising upon resale of the Securities, (b) if permissible, the
delivery, upon exchange of the Securities, of TCNZ Ordinary Shares to certain
exchanging holders of Securities, and (c) if necessary, the resale of TCNZ
Ordinary Shares received upon exchange of Securities, and (ii) caused the TCNZ
Resale Shelf to be declared effective on or prior to such date.
-67-
<PAGE>
(b) The TCNZ Registration Rights Agreement shall provide that
TCNZ will not be permitted to suspend the use of any Prospectus that is part of
the TCNZ Resale Shelf for any period in excess of 90 days (whether or not
consecutive) in any 12-month period.
SECTION 1008. STATEMENT BY OFFICER AS TO DEFAULT.
(a) The Company will deliver to the Trustee, on or before a
date not more than 120 days after the end of each fiscal year of the Company
ending after the date hereof, a written statement signed by an executive officer
of the Company, who shall be the principal executive officer, principal
financial officer or principal accounting officer of the Company, as to
compliance with this Indenture, including whether or not, after a review of the
activities of the Company during such year and of the Company's performance
under this Indenture, to the best knowledge, based on such review, of the
signers thereof, the Company has fulfilled all of its respective obligations and
is in compliance with all conditions and covenants under this Indenture
throughout such year and, if there has been a Default, specifying each Default
and the nature and status thereof and any actions being taken by the Company
with respect thereto.
(b) When any Default or Event of Default has occurred and is
continuing, the Company shall deliver to the Trustee by registered or certified
mail or facsimile transmission a written notice specifying such Default or Event
of Default, the status thereof and what actions the Company is taking or
proposes to take with respect thereto, within 10 Business Days of becoming aware
of its occurrence.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. RIGHTS OF REDEMPTION.
The Securities are subject to redemption (other than a
redemption described in Article Twelve) at any time on or after April 1, 2001,
at the option of the Company, in whole or in part, upon not less than 30 nor
more than 60 days' notice of redemption given as described in Sections 105, 106
and 1105 to Holders of Securities during the period from April 1, 2001 to March
31, 2002 at a Redemption Price equal to 102.3% of the principal amount thereof
and thereafter and prior to the Maturity Date at 101.15%, (subject to the rights
of Holders of record on relevant Regular Record Dates, and Holders of Bearer
Securities upon presentation of coupons appertaining thereto, to receive
interest due on relevant Interest Payment Dates).
The Company may elect, in connection with a redemption of the
Securities or the Maturity of the Securities, to satisfy its obligations to
Holders who elect to exchange their Securities for TCNZ Ordinary Shares by cash
payment of the Average Market Value Amount. If
-68-
<PAGE>
the Company makes such an election, Holders of Securities will no longer be
entitled to receive TCNZ Ordinary Shares in exchange for the Securities called
for redemption.
The Company may make such an election, in respect of any
Securities to be redeemed on a Redemption Date or repaid at Stated Maturity, by
giving an irrevocable notice thereof to the Holders not later than the 35th
Trading Day prior to such Redemption Date or Stated Maturity, in which case the
Company will be obligated to pay the Average Market Value Amount in respect of
all Securities to be redeemed or repaid on such Redemption Date or Stated
Maturity to Holders who elect to exchange their Securities for TCNZ Ordinary
Shares.
SECTION 1102. APPLICABILITY OF ARTICLE.
Redemption of Securities at the election of the Company or
otherwise, as permitted or required by any provision of this Indenture, shall be
made in accordance with such provision and this Article XI.
SECTION 1103. ELECTION TO REDEEM; NOTICE TO TRUSTEE.
The election of the Company to redeem any Securities pursuant
to Section 1101 shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company, the Company shall, at least 60 days
prior to the Redemption Date fixed by the Company (unless a shorter notice shall
be satisfactory to the Trustee), notify the Trustee of such Redemption Date and
of the principal amount of Securities to be redeemed.
SECTION 1104. SELECTION BY TRUSTEE OF SECURITIES TO BE REDEEMED.
If less than all the Securities are to be redeemed (other than
a redemption described in Article XII), the particular Securities to be redeemed
shall be selected by the Trustee, from the Outstanding Securities, either by
lot, pro rata or by such method as the Trustee shall deem fair and appropriate.
The amounts to be redeemed shall be equal to $1,000 principal amount at maturity
or any integral multiple thereof. If a portion of a Holder's Securities is
selected for partial redemption and such Holder exchanges a portion of such
Securities prior to such redemption, such exchanged portion shall be deemed,
solely for purposes of determining the aggregate principal amount at maturity of
Securities to be redeemed by the Company, to be of the portion selected for
redemption.
The Trustee shall promptly notify the Company and the
Registrar in writing of the Securities selected for redemption and, in the case
of any Securities selected for partial redemption, the principal amount thereof
to be redeemed.
For all purposes of this Indenture, unless the context
otherwise requires, all provisions relating to the redemption of Securities
shall relate, in the case of any Securities redeemed or to be redeemed only in
part, to the portion of the principal amount of such Security
-69-
<PAGE>
which has been or is to be redeemed.
SECTION 1105. NOTICE OF REDEMPTION.
All notices of redemption (given in accordance with Sections
105 and 106) shall state:
(a) the Redemption Date;
(b) the Redemption Price, including the aggregate number or
amount of each type of Exchange Property and cash to be delivered to a
Holder upon exchange should such Holder elect to exchange Securities
prior to the relevant Redemption Date;
(c) if less than all the Outstanding Securities are to be
redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Securities to be redeemed;
(d) in the case of a Security to be redeemed in part, the
principal amount of such Security to be redeemed and that after the
Redemption Date upon surrender of such Security, new Security or
Securities in the aggregate principal amount equal to the unredeemed
portion will be issued;
(e) that Securities called for redemption must be surrendered
to the Paying Agent to collect the Redemption Price;
(f) that on the Redemption Date the Redemption Price will
become due and payable upon each such Security, or portion thereof, to
be redeemed and that interest thereon will cease to accrue on and after
said date;
(g) the names and addresses of the Paying Agent and the
offices or agencies referred to in Section 1002 where such Securities
are to be surrendered for payment of the Redemption Price;
(h) the CUSIP number, if any, relating to such Securities; and
(i) the procedures that a Holder must follow to surrender the
Securities to be redeemed.
The notice, if given in the manner herein provided, shall be
conclusively presumed to have been given, whether or not the Holder receives
such notice. In any case, failure to give such notice or any defect in the
notice to the Holder of any Security designated for redemption as a whole or in
part shall not affect the validity of the proceedings for the redemption of any
other Security. Any such redemption must be in integral multiples of $1,000
-70-
<PAGE>
principal amount at Maturity.
SECTION 1106. DEPOSIT OF REDEMPTION PRICE.
On or prior to any Redemption Date, the Company shall deposit
with the Trustee or with a Paying Agent (or, if the Company is acting as its own
Paying Agent, segregate and hold in trust as provided in Section 1003) an amount
of money sufficient to pay the Redemption Price of and (except if the Redemption
Date shall be an Interest Payment Date), accrued interest on, all the Securities
which are to be redeemed on that date. The Paying Agent shall promptly mail or
deliver to Holders of Securities so redeemed payment in an amount equal to the
Redemption Price of the Securities purchased from each such Holder. All money,
if any, earned on funds held in trust by the Trustee or any Paying Agent shall
be remitted to the Company.
SECTION 1107. SECURITIES PAYABLE ON REDEMPTION DATE.
Notice of redemption having been given as aforesaid, the
Securities so to be redeemed shall, on the Redemption Date, become due and
payable at the Redemption Price therein specified, and from and after such date
(unless the Company shall default in the payment of the Redemption Price and
accrued interest) such Securities shall cease to bear interest. Holders will be
required to surrender the Securities to be redeemed to the Paying Agent at the
address specified in the notice of redemption at least one Business Day prior to
the Redemption Date. Upon surrender of any such Security for redemption in
accordance with said notice, such Security shall be paid by the Company at the
Redemption Price together with accrued interest to the Redemption Date;
PROVIDED, HOWEVER, that installments of interest hereunder shall be subject to
the terms and the provisions of Section 307.
If any Security called for redemption shall not be so paid
upon surrender thereof for redemption, the principal and premium, if any, shall,
until paid, bear interest from the Redemption Date at the rate borne by the
Securities.
SECTION 1108. SECURITIES REDEEMED IN PART.
Any Security which is to be redeemed or purchased only in part
shall be surrendered to the Paying Agent at the office or agency maintained for
such purpose pursuant to Section 1002 (with, if the Company, the Registrar or
the Trustee so requires, due endorsement by, or a written instrument of transfer
in form satisfactory to the Company, the Registrar or the Trustee, as the case
may be, duly executed by the Holder thereof or such Holder's attorney duly
authorized in writing), and the Company shall execute, and the Trustee shall
authenticate and deliver to the Holder of such Security without service charge,
a new Security or Securities, of any authorized denomination as requested by
such Holder in aggregate principal amount equal to, and in exchange for, the
unredeemed portion of the principal of the Security so surrendered that is not
redeemed or purchased.
-71-
<PAGE>
ARTICLE TWELVE
TAX REDEMPTION
SECTION 1201. TAX REDEMPTION OF ALL SECURITIES.
The Securities may be redeemed in whole, or in part, at the
option of the Company upon giving notice of redemption as described below, upon
the occurrence of a Tax Event (as defined below):
(a) at any time prior to September 1, 1999 at a redemption
price (the "Early Tax Redemption Price") equal to 100% of the principal amount
thereof plus an amount in cash equal to the excess, if any, of the Market Price
as of the date fixed for redemption of the number of TCNZ Ordinary Shares (or
the number or amount of each type of other Exchange Property) that would be
deliverable upon exchange of such Securities were such Securities exchangeable
at such time over 100% of the principal amount thereof; and
(b) at any time on or after September 1, 1999 at a redemption
price (the "Tax Redemption Price") equal to 100% of the principal amount of such
Securities, in each case together with accrued interest to the date fixed for
redemption.
A "Tax Event" shall be deemed to have occurred if the Company
determines that, as a result of any change in or amendment to the laws (or any
regulations, rulings or notices promulgated thereunder) of the United States or
of any political subdivision or taxing authority thereof or therein affecting
taxation, or any change in official position regarding the application or
interpretation of such laws, regulations or rulings, which change or amendment
becomes effective on or after the date of the Offering Memorandum, or as a
result of the TCNZ Ordinary Shares or the ADRs no longer being, or the Exchange
Property not being, actively traded within the meaning of Section
871(h)(4)(C)(v)(I) of the Code, in connection with the issuance of such
Securities the Company has or will become obligated to pay Additional Amounts
with respect to such Securities as described in Section 1005.
Prior to the giving of any notice of redemption pursuant to
this Section, the Company shall deliver to the Trustee (i) a certificate stating
that the Company is entitled to effect such redemption and setting forth a
statement of facts showing that the conditions precedent to the right of the
Company to so redeem have occurred (the date on which such certificate is
delivered to the Trustee is the "Redemption Determination Date"), and (ii) an
Opinion of Independent Counsel to such effect based on such statement of facts;
provided that no such notice of redemption shall be given earlier than 60 days
prior to the earliest date on which the Company would be obligated to pay such
Additional Amounts if a payment in respect of such Securities were then due.
-72-
<PAGE>
Notice of tax redemption pursuant to this Section will be
given not less than 30 nor more than 60 days prior to the date fixed for
redemption, which date and the applicable Redemption Price will be specified in
the notice. Such notice will be given pursuant to Section 105 and 106.
If any date fixed for redemption is a date prior to the
expiration of the Restricted Period, definitive Bearer Securities will be
issuable on and after such Redemption Date as if such Redemption Date had
occurred on the date of expiration of the Restricted Period, subject to receipt
of Ownership Certificates, delivery of which is a condition to delivery of
definitive Bearer Securities.
SECTION 1202. TAX REDEMPTION OF BEARER SECURITIES.
(a) If the Company shall determine that any payment made
outside the United States by the Company or any Paying Agent of principal,
premium, if any, or interest (including original issue discount) due in respect
of any Bearer Security or coupon appurtenant thereto would, under any present or
future laws or regulations of the United States, be subject to any
certification, identification or other information reporting requirement of any
kind, the effect of which is the disclosure to the Company, any Paying Agent or
any governmental authority of the nationality, residence or identity of a
beneficial owner of such Bearer Security or coupon who is a United States Alien
(other than such a requirement (a) that would not be applicable to a payment
made by the company or any Paying Agent (i) directly to the beneficial owner or
(ii) to a custodian, nominee or other agent of the beneficial owner, (b) that
can be satisfied by such custodian, nominee or other agent certifying to the
effect that such beneficial owner is a United States Alien; provided that in
each case referred to in clauses (a)(ii) and (b) payment by such custodian,
nominee or agent to such beneficial owner is not otherwise subject to any such
requirement, or (c) is imposed as a result of presentation of such Bearer
Security or coupon for payment more than 15 days after the date on which such
payment becomes due and payable or on which payment thereof is duly provided
for, whichever occurs later), the Company shall redeem the Bearer Securities, as
a whole, at a Redemption Price equal to the Early Tax Redemption Price or the
Tax Redemption Price, as applicable, or, at the election of the Company if the
conditions of Subsection 1202(b) are satisfied, pay the additional amounts
specified in such Subsection. The Company shall make such determination and
election as soon as practicable and publish prompt notice thereof (the
"Determination Notice") stating the effective date of such certification,
identification or other information reporting requirements, whether the Company
will redeem the Bearer Securities or has elected to pay the additional amounts
specified in Subsection 1202(b), and (if applicable) the last date by which the
redemption of the Bearer Securities must take place, as provided in the next
sentence. If the Company redeems the Bearer Securities, such redemption shall
take place on such date, not later than one year after the publication of the
Determination Notice, as the Company shall elect by notice to the Trustee at
least 60 days prior to the date fixed for redemption. Notice of such tax
redemption of the Bearer Securities will be given to the Holders of the Bearer
Securities not more than 60 nor less than 30 days prior to the date fixed for
redemption. Such redemption notice shall include a statement as
-73-
<PAGE>
to the last date by which the Bearer Securities to be redeemed may be exchanged
for Registered Securities. Notwithstanding the foregoing, the Company shall not
so redeem the Bearer Securities if the Company agrees to pay the additional
amounts specified in Subsection 1202(b) or shall subsequently determine, not
less than 30 days prior to the date fixed for redemption, that subsequent
payments would not be subject to any such certification, identification or other
information reporting requirement, in which case the Company shall publish
prompt notice of such determination and any earlier redemption notice shall be
revoked and of no further effect. The right of the holders of Bearer Securities
called for redemption pursuant to this Subsection 1202(a) to exchange Bearer
Securities for Registered Securities will terminate at the close of business of
the Principal Paying Agent on the fifteenth day prior to the date fixed for
redemption, and no further exchanges of Bearer Securities for Registered
Securities shall be permitted. In the event the Securities are called for
redemption pursuant to this Subsection 1202(a), the exchange rights of holders
whose Securities are subject to such redemption shall terminate at the close of
business on the Business Day preceding the Redemption Date.
(b) If and so long as the certification, identification or
other information reporting requirements referred to in Subsection 1202(a) would
be fully satisfied by payment of a backup withholding tax or similar charge, the
Company may elect to pay as additional amounts such amounts as may be necessary
so that every net payment made outside the United States following the effective
date of such requirements by the Company or any Paying Agent of principal,
premium, if any, or interest due (including original issue discount) in respect
of any Bearer Security or any coupon appurtenant thereto of which the beneficial
owner is a United States Alien (but without any requirement that the
nationality, residence or identify of such beneficial owner be disclosed to the
Company, any Paying Agent or any governmental authority, with respect to the
payment of such additional amounts), after deduction or withholding for or on
account of such backup withholding tax or similar charge (other than a backup
withholding tax or similar charge that would not be applicable in the
circumstances referred to in the third parenthetical clause of the first
sentence of Subsection 1202(a)) will not be less than the amount provided for in
such Bearer Security or coupon to be then due and payable. In the event the
Company elects to pay any additional amounts pursuant to this Subsection
1202(b), the Company shall have the right to redeem the Bearer Securities as a
whole at any time pursuant to the applicable provisions of Subsection 1202(a)
and the Redemption Price of such Bearer Securities will not be reduced for
applicable withholding taxes. If the Company elects to pay additional amounts
pursuant to this Subsection 1202(b) and the condition specified in the first
sentence of this Subsection 1202(b) should no longer be satisfied, then the
Company will redeem the Bearer Securities as a whole, pursuant to the applicable
provisions of Subsection 1202(a).
(c) In the event the Bearer Securities are called for
redemption pursuant to the provisions of this Article Twelve, no additional
Bearer Securities will be issued by the Company.
-74-
<PAGE>
ARTICLE THIRTEEN
EXCHANGE OF SECURITIES
SECTION 1301. EXCHANGE RIGHTS AT THE OPTION OF THE HOLDER.
At the option of the Holder, the Securities are exchangeable
for TCNZ Ordinary Shares or other Exchange Property (as defined herein) at any
time or from time to time on or after September 1, 1999 and prior to the close
of business on April 1, 2003, unless previously redeemed at the Redemption
Prices set forth herein, at the Exchange Ratio, subject to adjustment under the
circumstances described in Section 1303 and subject to the Company's right to
pay exchanging Holders cash in lieu of Exchange Property under the circumstances
described below or in Section 1101. Holders of Securities have no rights in
respect of the TCNZ Ordinary Shares or other Exchange Property, as the case may
be, unless and until the Securities are exchanged for TCNZ Ordinary Shares or
other Exchange Property.
In lieu of delivering TCNZ Ordinary Shares or other Exchange
Property in exchange for any Securities, beginning on or after September 1, 1999
and prior to the close of business on April 1, 2003, unless the Company shall
have previously elected in connection with a call for redemption or at maturity
to pay in cash the Average Market Value Amount upon any exchange prior to the
applicable Redemption Date or at Maturity (provided that in the case of a
redemption in part, only until such redemption in part is completed), the
Company may elect to make a cash settlement (the "Cash Settlement Option") in
respect of any Security surrendered for exchange by delivering notice thereof to
the tendering Holder not more than five Trading Days after such Security is
surrendered for exchange. Such cash settlement shall be in an amount per $1,000
principal amount of Securities delivered for exchange equal to the Market Price
as of the second Trading Day after delivery of such notice to such Holder of the
TCNZ Ordinary Shares (or the number or amount of each type of other Exchange
Property) that would be deliverable upon exchange of such Securities were such
Securities exchanged at such time. The Company will pay such cash settlement
amount in United States dollars as promptly as practicable (but in no event
later than the tenth business day); after completion of the five Trading Day
period used to determine such Market Price.
SECTION 1302. METHOD OF EXCHANGE.
Securities may be surrendered for exchange, subject to any
applicable laws and regulations, at the office of any Exchange Agent located
outside the United States. In addition, Rule 144A Securities may be surrendered
for exchange at the Corporate Trust Office of the Trustee in New York City.
Securities surrendered for exchange must be accompanied by appropriate notices
(including a duly signed and completed notice of exchange, copies of which may
be obtained at the office of the Principal Paying Agent, any Exchange Agent and
the Paying Agent in Luxembourg), any unmatured coupons and any payments in
respect of interest or taxes as applicable. Unless Bell Atlantic shall have
disaffiliated from TCNZ on or prior to June 1,
-75-
<PAGE>
1999 (and shall not thereafter have become an affiliate of TCNZ), each notice of
exchange must include either (i) a representation by or on behalf of the
beneficial owner of the Securities covered thereby, substantially in the form of
Exhibit H hereto, to the effect that the person exchanging the Securities is a
non-U.S. person acquiring the Exchange Property to be delivered on exchange of
such Securities in an offshore transaction exempt from registration under the
Securities Act pursuant to Regulation S thereunder or (ii) a written opinion of
counsel to the effect that the Securities and the Exchange Property delivered
upon exercise thereof have been registered under the Securities Act or are
exempt from registration thereunder.
A notice of exchange once given shall be irrevocable and may
not be withdrawn without the consent in writing of the Company. The Company, the
Trustee or the Exchange Agent on its behalf, may reject any incomplete or
incorrect notice of exchange. All costs and expenses incurred or caused by an
incomplete or incorrect notice of exchange shall be for the account of the
relevant Holder of Securities. Unless the Company has elected the Cash
Settlement Option, as promptly as practicable (but in no event later than the
tenth business day) after the exchange date, the Company shall deliver or cause
to be delivered at the office of such Exchange Agent or Trustee, as the case may
be, TCNZ Ordinary Shares or other Exchange Property, as the case may be,
issuable upon exchange, together with payment in cash in lieu of any fractional
security.
No payment or adjustment will be made on exchange of any
Security for interest accrued thereon or dividends on any TCNZ Ordinary Shares;
provided that, subject to the next sentence, if a Security is surrendered for
exchange after the Regular Record Date for any interest payment and before the
Interest Payment Date, then notwithstanding such exchange, the interest falling
due on such Interest Payment Date will be paid to the person in whose name the
Security is registered at the close of business on such Regular Record Date. Any
Security surrendered for exchange during the period from the close of business
on any Regular Record Date next preceding any Interest Payment Date to the
opening of business on such Interest Payment Date (except Securities or portions
thereof called for redemption on a Redemption Date within such period) must be
accompanied by payment of an amount equal to the interest payable on such
Interest Payment Date on the principal amount of such Securities being
surrendered for exchange. The interest payable on any Interest Payment Date with
respect to any Security which has been called for redemption on a Redemption
Date, occurring during that period from the close of business on the Regular
Record Date next preceding such Interest Payment Date to the opening of business
on such Interest Payment Date, which Security is surrendered for exchange during
such period, shall be paid upon exchange to the Holder in an amount equal to the
interest that would have been payable on the portion of such Security that is
being called for redemption and is being exchanged if such portion had been
exchanged as of the close of business on such Interest Payment Date. The
interest so payable on any Interest Payment Date in respect of any Security (or
portion thereof, as the case may be), which has not been called for redemption
on a Redemption Date occurring during the period from the close of business on
the Regular Record Date next preceding such Interest Payment Date to the opening
of business on such Interest Payment Date, which Security (or portion thereof,
as the case may be) is surrendered for
-76-
<PAGE>
exchange during such period, shall be paid to the Holder of such Security as of
such Regular Record Date. In the event the Securities are called for redemption,
the exchange rights will terminate at the close of business on the Business Day
preceding the Redemption Date.
As a result of the foregoing provisions, Holders that
surrender Securities for exchange on a date that is not an Interest Payment Date
will not receive any interest for the period from the Interest Payment Date next
preceding the date of exchange to the date of exchange or for any later period,
even if the Securities are surrendered after a notice of redemption has been
given (except for the payment of interest on Securities called for redemption on
a Redemption Date between a Regular Record Date and the Interest Payment Date to
which it relates, as provided above). No other payment or adjustment for
interest, or for any dividends in respect to TCNZ Ordinary Shares, will be made
upon exchange. Holders of TCNZ Ordinary Shares issued upon exchange will not be
entitled to receive any dividends payable to holders of TCNZ Ordinary Shares as
of any record date before the close of business on the exchange date. No
fractional shares will be issued upon exchange, but the Company will pay cash in
lieu thereof.
SECTION 1303. ADJUSTMENT EVENTS.
The Exchange Ratio per $1,000 principal amount of Securities
will be 178.0369 multiplied by the aggregate number or amount of each type of
Exchange Property.
Notice of an Adjustment Event will be given to Holders in the
manner specified in Sections 105 and 106.
In the case of any tender or exchange offer for Exchange
Property of a particular type, Exchange Property shall be deemed to include the
amount of cash or other property paid by the offeror in the tender or exchange
offer and actually received by Bell Atlantic (directly or through its
subsidiaries), with respect to such Exchange Property in an amount determined on
the basis of the amount of such cash or other property; provided that, Bell
Atlantic (or its subsidiaries) shall not be obligated to exchange, on a
voluntary basis, any Exchange Property for cash, securities or other property.
If cash is received, or deemed received, from time to time in
respect of any Exchange Property (excluding cash dividends and other
distributions other than Extraordinary Cash Dividends), the amount of such cash
at any date of determination of the value of property received shall be
increased by an amount per annum equal to the yield on the then-prevailing 3-
month U.S. treasury bill as determined by the Quotation Agent on such cash
between the date of receipt or deemed receipt of such property and the earliest
of the exchange date, Redemption Date or date of Maturity with respect to which
such determination is to be made.
If TCNZ or any TCNZ Successor distributes to all holders of a
particular type of Exchange Property rights or warrants to subscribe for or
purchase any of its securities and the
-77-
<PAGE>
expiration date of such rights and warrants precedes the maturity date or
earlier Redemption Date of the Securities, then Exchange Property shall be
deemed to include an amount in cash equal to the Market Price as of the Trading
Day immediately preceding such expiration date of the portion of such rights or
warrants relating to the Exchange Property, whether or not Bell Atlantic
(directly or through its subsidiaries) exercises such rights or warrants;
PROVIDED, that if Bell Atlantic (directly or through its subsidiaries) sells,
transfers or otherwise disposes of such rights or warrants for fair market value
prior to such expiration date, Exchange Property shall instead be deemed to
include the amount of cash or other property received in consideration of such
sale, transfer or disposition.
Holders of Securities will be responsible for the payment of
any and all brokerage costs upon the subsequent sale of Exchange Property
deliverable upon exchange of such Securities.
ARTICLE FOURTEEN
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 1401. EXEMPTION FROM INDIVIDUAL LIABILITY.
No recourse under or upon any obligation, covenant or
agreement of this Indenture, or of any Security, or for any claim based thereon
or otherwise in respect thereof, and no recourse under or upon any obligation,
covenant or agreement of the Company or Bell Atlantic in this Indenture or in
any supplemental indenture, or in the Support Agreement or in any Security, or
because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, officer or director, as such, past,
present or future, of the Company or Bell Atlantic or of any successor
corporation, either directly or through the Company or Bell Atlantic or any
successor corporation, whether by virtue of any constitution, statute or rule of
law, or by the enforcement of any assessment or penalty or otherwise; it being
expressly understood that all such liability is hereby expressly waived and
released as a condition of, and as a consideration for, the execution of this
Indenture and the issuance of the Securities.
ARTICLE FIFTEEN
HOLDER'S MEETINGS
SECTION 1501. PURPOSES OF MEETINGS.
A meeting of Holders of Securities may be called at any time
and from time to time pursuant to the provisions of this Article Fifteen for any
of the following purposes:
-78-
<PAGE>
(a) to give any notice to the Company, to Bell Atlantic
or to the Trustee, or to give any directions to the
Trustee, or to consent to the waiving of any Default
hereunder and its consequences, or to take any other
action authorized to be taken by Holders pursuant to
any of the provisions of Article 104;
(b) to remove the Trustee and nominate a successor
Trustee pursuant to the provisions of Article 610;
(c) to consent to the execution of an indenture or
indentures supplemental hereto pursuant to the
provisions of Section 902;
(d) to take any other action authorized to be taken by or
on behalf of the Holders of any specified aggregate
principal amount of Securities under any other
provision of this Indenture or the Support Agreement
or under applicable law;
(e) to consider the accounts and balance sheet that were
presented to the last preceding annual general
meeting of the Company; or
(f) to give the Trustee direction in relation to the
exercise by the Trustee of its powers.
SECTION 1502. CALL OF MEETINGS BY TRUSTEE.
The Trustee may at any time call a meeting of Holders of
Securities to take any action specified in Sections 1501(a) through (d) to be
held at such time and at such place in the Borough of Manhattan, the City of New
York, as the Trustee shall determine. Notice of every meeting of Holders of
Securities, setting forth the time and place of such meeting and in general
terms the action proposed to be taken at such meeting, shall be given as
provided in Section 106. Such notice shall be given not less than 20 nor more
than 90 days prior to the data fixed for the meeting. Notice to Holders of
Bearer Securities shall be provided in accordance with Section 106.
SECTION 1503. CALL OF MEETINGS BY COMPANY.
The Company must, on the delivery to its registered office in
Australia of an application by the Holders of not less than 10% in aggregate
principal amount at Maturity of the Outstanding Securities, call a meeting of
Holders of Securities to take any actions specified in Sections 1501 (e) or (f)
to be held at such time and at such place in the Borough of Manhattan, the City
of New York, as the Company shall determine and may call such meeting by giving
notice thereof as provided in Section 106. Such meeting shall be presided over
by a person
-79-
<PAGE>
nominated by the Trustee or, if the Trustee does not nominate a person to
preside at the meeting, by a person appointed for that purpose by the Holders of
Securities present at the meeting.
SECTION 1504. CALL OF MEETINGS BY COMPANY OR BELL ATLANTIC.
In case at any time the Company or Bell Atlantic, pursuant to
a Board Resolution, shall have requested the Trustee to call a meeting of
Holders of Securities, by written request setting forth in reasonable detail the
action proposed to be taken at the meeting, and the Trustee shall not have
mailed the notice of such meeting within 20 days after receipt of such request,
then the Company or Bell Atlantic may determine the time and the place in the
Borough of Manhattan, the City of New York for such meeting and may call such
meeting to take any action authorized in Section 1501, by giving notice thereof
as provided in Section 106.
SECTION 1505. QUALIFICATIONS FOR VOTING.
To be entitled to vote at any meeting of Holders, a Person
shall (a) be a Holder of one or more Securities with respect to which such
meeting is being held or (b) be a Person appointed by an instrument in writing
as proxy by such a Holder. The only Persons who shall be entitled to be present
or to speak at any meeting of Holders shall be the Persons entitled to vote at
such meeting and their counsel and any representative of the Trustee and its
counsel and any representatives of the Company and Bell Atlantic and their
counsel.
SECTION 1506. REGULATIONS.
Notwithstanding any other provisions of this Indenture, the
Trustee may make such reasonable regulations as it may deem advisable for any
meeting of Holders, in regard to proof of the holding of Securities and of the
appointment of proxies, and in regard to the appointment and duties of
inspectors of votes, the submission and examination of proxies, certificates and
other evidence of the right to vote, and such other matters concerning the
conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a
temporary chairman of the meeting, unless the meeting shall have been called by
the Company or Bell Atlantic or as provided in Section 1504, in which case the
Company or Bell Atlantic, as the case may be, shall in like manner appoint a
temporary chairman. A permanent chairman and a permanent secretary of the
meeting shall be selected by a majority vote of the meeting.
Subject to the provision of Section 1507, at any meeting each
Holder or proxy shall be entitled to one vote for each $1,000 principal amount
of Securities held or represented by such Holder; PROVIDED, HOWEVER, that no
vote shall be cast or counted at any meeting in respect of any Security
challenged as not Outstanding and ruled by the chairman of the meeting to be not
Outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Securities held by the chairman or instruments in writing as
aforesaid duly designating him as the
-80-
<PAGE>
Person to vote on behalf of other Holders. At any meeting of Holders with
respect to which such meeting is being held the presence of Persons holding or
representing Securities with respect to which such meeting is being held in an
aggregate principal amount sufficient to take action on the business for the
transaction of which such meeting was called shall constitute a quorum, but if
less than a quorum is present, the Persons holding or representing a majority in
aggregate principal amount of such Securities represented at the meeting may
adjourn such meeting with the same effect, for all intents and purposes as
though a quorum had been present. Any meeting of Holders duly called pursuant to
the provisions of Section 1502 or 1503 may be adjourned from time to time by a
majority of those present, whether or not constituting a quorum, and the meeting
may be held as so adjourned without further notice.
SECTION 1507. VOTING.
The vote upon any resolution submitted to any meeting of
Holders of Securities with respect to which such meeting is being held shall be
by written ballots on which shall be subscribed the signatures of such Holders
or of their representatives by proxy and the serial number or numbers of the
Securities held or represented by them. The permanent chairman of the meeting
shall appoint two inspectors of votes who shall count all votes cast at the
meeting for or against any resolution and who shall make and file with the
secretary of the meeting their verified written reports in duplicate of all
votes cast at the meeting. A record in duplicate of the proceedings of each
meeting of Holders shall be prepared by the secretary of the meeting and there
shall be prepared by the secretary of the meeting and there shall be attached to
said record the original reports of the inspectors of votes on any vote by
ballot taken thereat and affidavits by one or more Persons having knowledge of
the facts setting forth a copy of the notice of the meeting and showing that
said notice was given as provided in Sections 106 and 1502. The record shall
show the serial numbers of the Securities voting in favor of or against any
resolution. The record shall be signed and verified by the affidavits of the
permanent chairman and secretary of the meeting and one of the duplicates shall
be delivered to the Company and the other to the Trustee to be preserved by the
Trustee.
Any record so signed and verified shall be conclusive evidence
of the matters therein stated.
SECTION 1508. NO DELAY OF RIGHTS BY MEETING.
Nothing contained in this Article Fifteen shall be deemed or
construed to authorize or permit, by reason of any call of a meeting of Holders
or any rights expressly or impliedly conferred hereunder to make such call, any
hindrance or delay in the exercise of any right or rights conferred upon or
reserved to the Trustee or to the Holders under any of the provisions of this
Indenture, or of the Securities or of the Support Agreement.
-81-
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate seals to be
hereunto affixed and attested, all as of the day and year first above written.
[SEAL] BELL ATLANTIC FINANCIAL SERVICES, INC.
ATTEST:
By: /S/ JANET M. GARRITY
----------------------------------
Name: Janet M. Garrity
Title: President and Treasurer
By: /S/ R.E. DOMBROWSKI, JR.
--------------------------
Title: Assistant Secretary
[SEAL] BELL ATLANTIC CORPORATION
ATTEST:
By: /S/ ELLEN C. WOLF
----------------------------------
Name: Ellen C. Wolf
Title: Vice President - Treasurer
By: /S/ ROBERT W. ERB
--------------------------
Title: Assistant Secretary
[SEAL] THE CHASE MANHATTAN BANK
ATTEST:
By: /S/ SHEIK WILTSHIRE
----------------------------------
Name: Sheik Wiltshire
Title: Second Vice President
By: /S/ GEMMEL RICHARDS
--------------------------
Title: Trust Officer
-82-
<PAGE>
STATE OF DELAWARE )
) SS.:
COUNTY OF NEW CASTLE )
On the 26th day of February, 1998, before me personally came
Janet M. Garrity, to me known, who, being by me duly sworn, did depose and say
that she resides at 1511 Dorchester Road, Havertown, Pennsylvania, that she is
the President and Treasurer of BELL ATLANTIC FINANCIAL SERVICES, INC., one of
the corporations described in and which executed the foregoing instrument; that
she knows the seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that she signed her name thereto by like
authority.
[SEAL] /S/ PHYLLIS A. ADAMS
------------------------
Notary Public
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 26th day of February, 1998, before me personally came
Ellen C. Wolf, to me known, who, being by me duly sworn, did depose and say that
he/she resides at Voorhees, New Jersey, that he/she is the Treasurer of BELL
ATLANTIC CORPORATION, one of the corporations described in and which executed
the foregoing instrument; that he/she knows the seal of said corporation; that
the seal affixed to said instrument is such corporate seal; that it was so
affixed by authority of the Board of Directors of said corporation, and that he
signed his name thereto by like authority.
[SEAL] /S/ ROBERT ERB
------------------------
Notary Public
<PAGE>
STATE OF NEW YORK )
) SS.:
COUNTY OF NEW YORK )
On the 26th day of February, 1998, before me personally came
Sheik Wiltshire, to me known, who, being by me duly sworn, did depose and say
that he/she resides at 450 West 33rd Street, that he/she is a Second Vice
President of THE CHASE MANHATTAN BANK, one of the corporations described in and
which executed the foregoing instrument; that he/she knows the seal of said
corporation; that the seal affixed to said instrument is such corporate seal;
that it was so affixed by authority of the Board of Directors of said
corporation, and that he signed his name thereto by like authority.
[SEAL] /S/ ANNABELLE DELUCA
---------------------
Notary Public
<PAGE>
EXHIBIT A
-85-
<PAGE>
EXHIBIT A
SUPPORT AGREEMENT
BETWEEN
BELL ATLANTIC CORPORATION
AND
BELL ATLANTIC FINANCIAL SERVICES, INC.
This Agreement, made and entered into as of February 1, 1998, by and
between Bell Atlantic Corporation, a Delaware corporation ("Parent"), and Bell
Atlantic Financial Services, Inc., a Delaware corporation ("Subsidiary").
WITNESSETH
WHEREAS, Parent is directly or indirectly the owner of 100% of the
outstanding common stock of Subsidiary; and
WHEREAS, Subsidiary intends to issue $2,500,000,000 aggregate principal
amount of Senior Exchangeable Notes due 2003 (the "Debt"), thereby incurring
indebtedness to parties other than Parent and its affiliates; and
WHEREAS, Parent and Subsidiary desire to take certain actions to
enhance and maintain the financial condition of Subsidiary as hereinafter set
forth in order to facilitate the issuance of such Debt;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows
1. STOCK OWNERSHIP. During the term of this Agreement, Parent will own
directly or indirectly all of the voting capital stock of Subsidiary now or
hereafter issued and outstanding.
2. NET WORTH. During the term of this Agreement, Parent shall cause
Subsidiary to maintain at all times a positive tangible net worth, as determined
in accordance with generally accepted accounting principles.
3. LIQUIDITY PROVISION. If, during the term of this Agreement,
Subsidiary requires funds to make timely payment of interest, principal or
premium, if any, on any Debt or to acquire and deliver property on exchange of
the Debt, and such funds are not obtainable by Subsidiary from other sources on
commercially reasonable terms, Parent shall provide to Subsidiary, at its
request, such funds either as equity or as a loan, at Parent's option, to assure
that the Subsidiary will be able to pay such principal, interest and premium, if
any, or acquire and deliver such
A-1
<PAGE>
property on exchange, when due. If such funds are advanced to Subsidiary as a
loan, such loan shall be on such terms and conditions, including maturity and
rate of interest, as Parent and Subsidiary shall agree. Notwithstanding the
foregoing, any such loan shall be subordinated in all respects to any and all
Debt, whether or not such Debt is outstanding at the time of such loan.
4. WAIVERS. Parent hereby waives any failure or delay on the part of
Subsidiary in asserting or enforcing any of its right or in making any claims or
demands hereunder.
5. RIGHTS OF LENDERS. Except as may be provided in that certain
Indenture, dated as of February 26, 1998, among Parent, Subsidiary, and The
Chase Manhattan Bank, as Trustee (the "Indenture"), any Lender (defined below)
shall have the right to proceed directly against Parent without first proceeding
against Subsidiary to enforce Subsidiary's rights under paragraph 1, 2 and 3 of
this Agreement or to obtain payment of any defaulted, interest, principal or
premium owed to such Lender, or, in the case of a default in an obligation to
deliver property, the cash value of such property. However, in no event may any
Lender, on default by Parent or Subsidiary under the terms of the Indenture, or
upon failure to comply with this Agreement by Parent or Subsidiary, have
recourse to or against the stock or assets of Bell Atlantic - Delaware, Inc.,
Bell Atlantic - New Jersey, Inc., Bell Atlantic - Washington, D.C., Inc., Bell
Atlantic - Maryland, Inc., Bell Atlantic - Virginia, Inc., Bell Atlantic - West
Virginia, Inc., New England Telephone and Telegraph Company, New York Telephone
Company or Telecom Corporation of New Zealand Limited (or any other operating
telephone company which may at the time be owned directly or indirectly by
Parent). The Term "Lender," as used in this Agreement, shall mean any Person,
firm or corporation to which Subsidiary is indebted for the Debt or which is
acting as trustee or authorized representative with respect to the Debt on
behalf of such person, firm or corporation.
6. TERMINATION; AMENDMENT. This Agreement may be modified or amended in
a manner that adversely affects the right of the holders of Debt only if all
Lenders consent in advance and in writing to such modification or amendment. No
modification or amendment to this Agreement relating to the provisions set forth
in paragraphs 1, 2, 3 and 5 or this sentence shall be made unless Subsidiary
applies to the Securities and Exchange Commission for an amended order relating
to such modification or amendment, and the Commission grants such amended order.
This Agreement may be terminated by either Parent or Subsidiary by notice to the
other party, provided that such termination shall be effective only after the
91st day after all outstanding Debt issued by the Subsidiary is paid in full.
7. NOTICES. Any notice, instruction, request, consent, demand or other
communication required or contemplated by this Agreement to be in writing, shall
be given or made or communicated by United States first class mail, addressed as
follows
A-2
<PAGE>
If to Parent: Bell Atlantic Corporation
1095 Avenue of the Americas
New York, New York 10036
Attention: Vice President - Treasurer
If to Subsidiary: Bell Atlantic Financial Services, Inc.
3900 Washington Street, 2nd Floor
Wilmington, DE 19802
Attention: President and Treasurer
8. SUCCESSORS. The covenants, representations, warranties and
agreements herein set forth shall be mutually binding upon, and inure to the
mutual benefit of, Parent and its successors, Subsidiary and its successors and
Lenders from time to time.
9. GOVERNING LAW; COUNTERPARTS. This Agreement shall be governed by the
laws of the Commonwealth of Pennsylvania. This instrument may be executed in
counterparts and the executed counterparts shall together constitute one
instrument.
A-3
<PAGE>
IN WITNESS WHEREOF, the parties have set their hands and affixed their
corporate seals as of the day and year first above written.
ATTEST: BELL ATLANTIC CORPORATION
By: /S/JANE F. LUDLOW By: /S/ELLEN C. WOLF
------------------------------- ------------------------------------
Jane F. Ludlow Ellen C. Wolf
Assistant Secretary Vice President - Treasurer
(SEAL)
ATTEST: BELL ATLANTIC FINANCIAL SERVICES, INC.
By: /S/BRENDA K. STANTON By: /S/JANET M. GARRITY
------------------------------- ------------------------------------
Brenda K. Stanton Janet M. Garrity
Assistant Secretary President and Treasurer
(SEAL)
A-4
<PAGE>
EXHIBIT B
<PAGE>
EXHIBIT B
[FORM OF RULE 144A GLOBAL SECURITY]
THIS SECURITY IS A RULE 144A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE
HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A
NOMINEE OF A DEPOSITARY OR A SUCCESSOR DEPOSITARY. TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, TO NOMINEES OF
CEDE & CO. OR TO A SUCCESSOR THEREOF OR SUCH SUCCESSOR'S NOMINEE AND TRANSFERS
OF PORTIONS OF THIS GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS MADE IN
ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN SECTIONS 305 AND 306 OF THE
INDENTURE.
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE COMPANY OR ITS
AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT AND ANY SUCH
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 ANY 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.
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A UNITED STATES PERSON AND IS
ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION; (2)
ACKNOWLEDGES THAT, UNLESS BELL ATLANTIC CORPORATION SHALL HAVE CEASED TO BE AN
"AFFILIATE" (AS SUCH TERM IS DEFINED UNDER RULE 144 UNDER THE SECURITIES ACT) OF
TELECOM CORPORATION OF NEW ZEALAND LIMITED ("TCNZ") ON OR PRIOR TO JUNE 1, 1999
(AND SHALL NOT HAVE THEREAFTER BECOME AN AFFILIATE OF TCNZ), ANY EXCHANGE OF THE
SECURITIES REPRESENTED HEREBY FOR ORDINARY SHARES OF TCNZ SHALL BE MADE ONLY:
(A) TO A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION COMPLYING WITH RULE 144A
UNDER THE SECURITIES ACT; (B) PURSUANT TO A REGISTRATION STATEMENT DECLARED
EFFECTIVE UNDER THE SECURITIES ACT TO A HOLDER WHO ACQUIRED THE SECURITIES
REPRESENTED HEREBY EITHER (X) PRIOR TO SEPTEMBER 1, 1998 AND HAS HELD THE
SECURITIES REPRESENTED HEREBY CONTINUOUSLY SINCE SUCH DATE OF ACQUISITION OR (Y)
PURSUANT TO A REGISTRATION STATEMENT OR REGISTRATION STATEMENTS, DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, REGISTERING THE RESALE OF THE SECURITIES
REPRESENTED HEREBY AND ANY OFFER OF ORDINARY SHARES OF TCNZ ARISING UPON RESALE
OF THE SECURITIES REPRESENTED HEREBY (OR IN A TRANSFER FROM A HOLDER WHO
ACQUIRED THE SECURITIES REPRESENTED HEREBY IN THE MANNER SET FORTH IN THIS
CLAUSE (Y) OR FROM ANY TRANSFEREE OR SUBSEQUENT TRANSFEREES OF SUCH HOLDER); OR
(C) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN RELIANCE ON REGULATION S
(OR ANY SUCCESSOR PROVISION) UNDER THE SECURITIES ACT, AS SUCH REGULATION MAY BE
IN EFFECT AND APPLICABLE AS OF THE TIME OF SUCH EXCHANGE; (3) AGREES THAT IT
WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIODS APPLICABLE TO SALES OF THE
SECURITIES EVIDENCED HEREBY OR THE SECURITIES DELIVERABLE UPON EXCHANGE OF SUCH
SECURITIES UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), RESELL OR OTHERWISE TRANSFER THE SECURITIES EVIDENCED HEREBY OR THE
SECURITIES DELIVERABLE UPON EXCHANGE OF SUCH SECURITIES EXCEPT (A) TO THE ISSUER
OF SUCH SECURITY OR SECURITIES OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT
(AND THAT CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER) OR (F)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THE SECURITIES EVIDENCED HEREBY ARE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE SECURITIES
EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THE SECURITIES EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES
ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO THE CHASE MANHATTAN BANK, AS TRANSFER AGENT (OR ANY
SUCCESSOR TRANSFER AGENT, AS APPLICABLE), TOGETHER
B-1
<PAGE>
WITH SUCH CERTIFICATIONS, LEGAL OPINIONS AND OTHER INFORMATION AS SUCH TRANSFER
AGENT MAY REASONABLY REQUIRE TO CONFIRM THAT THE PROPOSED TRANSFER IS BEING MADE
PURSUANT TO AN EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO THE
REGISTRATION REQUIREMENTS OF, THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED
UPON THE TRANSFER OF THE SECURITIES EVIDENCED HEREBY PURSUANT TO CLAUSE 3(E)
ABOVE. AS USED HEREIN THE TERMS "OFF-SHORE TRANSACTION," "UNITED STATES" AND
"UNITED STATES PERSON" HAVE THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE
SECURITIES ACT.
THE RIGHTS ATTACHING TO THIS RULE 144A GLOBAL SECURITY (AS DEFINED IN THE
INDENTURE), AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR
PHYSICAL SECURITIES, ARE SPECIFIED IN THE INDENTURE.
THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY UPON SATISFACTION OF THE
CONDITIONS SPECIFIED IN THE INDENTURE.
BELL ATLANTIC FINANCIAL SERVICES, INC.
------------------------------
5.75% SENIOR EXCHANGEABLE NOTES DUE 2003
CUSIP NO.________
No._____
Bell Atlantic Financial Services, Inc., a Delaware corporation (herein
called the "Company," which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to Cede & Co. or its registered assigns, the principal sum set forth on the
table attached as Schedule A hereto on April 1, 2003, at the office or agency of
the Company referred to below, and to pay interest thereon from February 26,
1998, or from the most recent Interest Payment Date to which interest has been
paid or duly provided for, semiannually on April 1 and October 1 of each year,
commencing October 1, 1998 at the rate of 5.75% per annum, in United States
dollars, until the principal hereof is paid or duly provided for. Interest shall
be computed on the basis of a 360-day year comprised of twelve 30-day months.
The Holder of this Security is entitled to the benefits of the
Registration Rights Agreement (the "Registration Rights Agreement") among the
Company, Bell Atlantic and the Managers, dated as of February 26, 1998.
The Holder of this Security is entitled to the benefits of the Support
Agreement dated as of February 1, 1998, between the Company and Bell Atlantic,
pursuant to which Bell Atlantic has agreed to support the Company's obligations
as to payment of principal, premium, if any, interest and the cash value of
Exchange Property.
B-2
<PAGE>
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or any Predecessor Security) is registered
at the close of business on the Regular Record Date for such interest, which
shall be the March 15 or September 15 (whether or not a Business Day), as the
case may be, next preceding such Interest Payment Date.
Payments of the principal of, or premium, if any, and interest on this
Security will be made to DTC or its nominee, as the case may be, as the
registered owner thereof. None of the Company, the Trustee or any Paying Agent
or Exchange Agent under the Indenture will have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests in this Security or for maintaining, supervising
or reviewing any records relating to such beneficial ownership interest.
The Company expects that DTC or its nominee, upon receipt of any
payment of the principal of or premium and interest on this Security, will
credit Participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of this Security as
shown on the records of DTC or its nominee. The Company also expects that
payments by Participants to owners of beneficial interests in this Security held
through such Participants will be governed by standing instructions and
customary practice as is now the case with securities held for the accounts of
customers registered in the names of nominees for such customers. Such payments
will be the responsibility of such Participants.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature of an authorized
signer, this Security shall not be entitled to any benefit under the Indenture,
or be valid or obligatory for any purpose.
B-3
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers and its
corporate seal to be affixed or reproduced hereon.
BELL ATLANTIC FINANCIAL SERVICES, INC.
By:
----------------------------------
Name:
Title:
Attest:
- ------------------------------
Secretary
B-4
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 5.75% Senior Exchangeable Notes due 2003 referred to
in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
-----------------------
Authorized Signer
Dated:
B-5
<PAGE>
BELL ATLANTIC FINANCIAL SERVICES, INC.
5.75% Senior Exchangeable Notes due 2003
This Security is one of a duly authorized issue of Securities of the
Company designated as its 5.75% Senior Exchangeable Notes due 2003 (herein
called the "Securities"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate principal amount to $2,455,000,000, issued under
and subject to the terms of an indenture (herein called the "Indenture") dated
as of February 26, 1998, among the Company, Bell Atlantic Corporation and The
Chase Manhattan Bank, as trustee (herein called the "Trustee," which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Trustee and the Holders of the Securities, and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. The terms and conditions of the Indenture are incorporated herein by
reference and shall be binding on the Company and the Holder hereof as if fully
set forth herein. Unless the context otherwise requires, the capitalized terms
used herein shall have the meanings specified in the Indenture.
The Securities are subject to redemption (other than a redemption
described in Article Twelve) in accordance with Article Eleven of the Indenture
at any time on or after April 1, 2001, at the option of the Company, in whole or
in part, upon not less than 30 not more than 60 days' notice of redemption given
as described in Section 1105 of the Indenture to Holders of Securities during
the period from April 1, 2001 to March 31, 2002 at a Redemption Price equal to
102.3% of the principal amount thereof and thereafter and prior to the Maturity
Date at 101.15%, (subject to the rights of Holders of record on relevant Regular
Record Dates to receive interest due on relevant Interest Payment Dates). The
Company may elect, in connection with a redemption of the Securities or the
Stated Maturity of the Securities, to satisfy its obligations to Holders who
elect to exchange their Securities for TCNZ Ordinary Shares by cash payment of
the Average Market Value Amount. If the Company makes such an election, Holders
of Securities will no longer be entitled to receive TCNZ Ordinary Shares in
exchange for their Securities until, in the case of a redemption in part, the
Redemption Date. If less than all of the Securities are to be redeemed, the
Trustee shall select the Securities or portions thereof to be redeemed by lot,
pro rata, or by any other method the Trustee shall deem fair and reasonable.
The Securities may be redeemed in whole, or in part, at the option of
the Company in accordance with Article Twelve of the Indenture upon giving
notice of redemption as described below, upon the occurrence of a Tax Event (as
defined in the Indenture).
In the case of any redemption or repurchase of Securities in accordance
with the Indenture, interest installments whose Stated Maturity is on or prior
to the Redemption Date will be payable to Holders of such Securities of record
as of the close of business on the relevant Regular Record Date referred to on
the face hereof. Securities (or portions thereof) for whose
B-6
<PAGE>
redemption and payment provision is made in accordance with the Indenture shall
cease to bear interest from and after the Redemption Date.
The Securities will be exchangeable at the option of the Holder for
TCNZ Ordinary Shares at any time on or after September 1, 1999 and prior to
maturity, unless previously redeemed at the redemption prices set forth in the
Indenture, at an Exchange Ratio of 178.0369 TCNZ Ordinary Shares per U.S. $1,000
principal amount of Securities, subject to adjustment in certain events and
subject to the Company's right to pay cash in an amount in U.S. Dollars equal to
the Market Price (or under certain circumstances, the Average Market Value
Amount (as defined in the Indenture)) of the TCNZ Ordinary Shares for which such
Securities are exchangeable in lieu of delivery of such TCNZ Ordinary Shares.
In the event of redemption or repurchase of this Security in accordance
with the Indenture in part only, a new Security or Securities for the unredeemed
portion hereof shall be issued in the name of the Holder hereof upon the
cancellation hereof.
If an Event of Default shall occur and be continuing, the principal
amount of all the Securities may be declared due and payable in the manner and
with the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders) as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture and the Securities at
any time by the Company and the Trustee with the consent of the Holders of a
specified percentage in aggregate principal amount of the Securities at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and the
Securities and certain past Defaults under the Indenture and their consequences.
Any such consent or waiver by or on behalf of the Holder of this Security shall
be conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer thereof or
in exchange here for or in lieu hereof whether or not notation of such consent
or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company or any
other obligor on the Securities (in the event such other obligor is obligated to
make payments in respect of the Securities), which is absolute and
unconditional, to pay the principal of, premium, if any, and interest on, this
Security at the times, place, and rate, and in the coin or currency, herein
prescribed.
If this Security is in certificated form, then as provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
this Security is registrable on the Security Register of the Company, upon
surrender of this Security for registration of transfer at the office
B-7
<PAGE>
or agency of the Company maintained for such purpose in The City of New York or
at such other office or agency of the Company as may be maintained for such
purpose, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar duly executed by, the Holder
hereof or its attorney duly authorized in writing, and thereupon one or more new
Securities, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
This Security is a Rule 144A Global Security, and as such, is
exchangeable for a Security in certificated form as provided in the Indenture
and in accordance with the rules and procedures of the Trustee and the
Depositary. In addition, certificated securities shall be transferred to all
beneficial holders in exchange for their beneficial interests in a Global
Security if (x) the Depositary notifies the Company that it is unwilling or
unable to continue as depositary for a Global Security or the Depositary ceases
to be a "Clearing Agency" registered under the Exchange Act, and a successor
depositary is not appointed by the Company within 90 days or (y) there shall
occurred and be continuing an Event of Default. Upon any issuance, the Trustee
is required to register such certificated Securities in the name of, and cause
the same to be delivered to, such Person or Persons (or the nominee of any
thereof). All such certificated Securities would be required to include the
Securities Legend.
Securities in certificated form are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
the Securities are exchangeable for a like aggregate principal amount of
Securities of a differing authorized denomination, as requested by the Holder
surrendering the same.
At any time when the Company is not subject to Section 13 or 15(d) of
the Exchange Act, upon the written request of a Holder of a Security, the
Company will promptly furnish or cause to be furnished such information as is
specified pursuant to Rule 144A(d)(4) upon the Securities Act (or any successor
provision thereto) to such Holder or to a prospective purchaser of such Security
who such Holder informs the Company is reasonably believed to be a "Qualified
Institutional Buyer" within the meaning of Rule 144A under the Securities Act,
as the case may be, in order to permit compliance by such Holder with Rule 144A
under the Securities Act.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security is overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
B-8
<PAGE>
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THEREOF).
B-9
<PAGE>
SCHEDULE A
Aggregate principal amount of any Securities issued or cancelled in exchange for
a portion or portions hereof, any portion or portions hereof exchanged for an
interest or interests in another Global Security and any portion or portions of
another Global Security exchanged for a portion or portions hereof:
- -------------------------------------------------------------------------------
Principal Amount Remaining Principal
Issued, Cancelled or Amount of this
Date Exchanged Global Security Notation Made by
- -------------------------------------------------------------------------------
B-10
<PAGE>
APPENDIX I
FORM OF TRANSFER NOTICE
FOR VALUE RECEIVED, the undersigned registered holder hereby sell(s),
assigns(s) and transfer(s) unto
Insert Taxpayer Identification No.
- ----------------------------------
- --------------------------------------------------------------------------
- --------------------------------------------------------------------------
(Please print or typewrite name and address including zip code of assignee)
- --------------------------------------------------------------------------
the within Security and all rights thereunder, hereby irrevocably constituting
and appointing
- --------------------------------------------------------------------------
attorney to transfer such Security on the books of the Company with full power
of substitution in the premises.
In connection with any transfer of this Security occurring prior to the
date which is the earlier of the date of an effective Registration Statement or
February 26, 2001, the undersigned confirms that without utilizing any general
solicitation or general advertising that:
Check One
[ ] (a) this Security is being transferred in compliance with
the exemption from registration under the Securities Act of
1933, as amended, provided by Rule 144A thereunder.
OR
[ ] (b) this Security is being transferred other than in
accordance with (a) above and documents are being furnished
which comply with the conditions of transfer set forth in this
Security and the Indenture.
If none of the foregoing boxes is checked, the Trustee or other Registrar shall
not be obligated to register this Security in the name of any Person other than
the Holder hereof unless and until conditions to any such transfer of
registration and in Section 307 of the Indenture shall have been satisfied.
Dated:
------------------------------ -----------------------------------
NOTICE: The signature to this
assignment must correspond with the
name as written upon the face of the
within-mentioned instrument in every
particular, without alteration or
any change whatsoever.
Signature Guarantee:
--------------------
Signatures must be guaranteed by an "eligible guarantor institution" meeting the
requirements of the Registrar, which requirements include membership or
participation in the Security Transfer Agent Medallion Program ("STAMP") or such
other "signature guarantee program" as may be determined by the Registrar in
addition to, or in substitution for, STAMP, all in accordance with the Exchange
Act.
TO BE COMPLETED BY PURCHASER IF (a) ABOVE IS CHECKED.
The undersigned represents and warrants that it is purchasing this
Security for its own account or an account with respect to which it exercises
sole investment discretion and that it and any such account is a "qualified
institutional buyer" within the meaning of Rule 144A under the Securities Act of
1933, as amended, and is aware that the sale to it is being made in reliance on
Rule 144A and acknowledges that it has received such information regarding the
Company as the undersigned has requested pursuant to Rule 144A or has determined
not to request such information and that it is aware that the transferor is
relying upon the undersigned's foregoing representations in order to claim the
exemption from registration provided by RULE 144-A
Date:
----------------- -----------------------------------------
NOTICE: To be executed by an authorized signatory
<PAGE>
EXHIBIT C
<PAGE>
[FORM OF REGULATION S GLOBAL SECURITY]
UNLESS THIS REGULATION S GLOBAL SECURITY IS PRESENTED BY AN AUTHORIZED
REPRESENTATIVE OF THE COMMON DEPOSITARY TO THE COMPANY OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY GLOBAL SECURITY ISSUED IS
REGISTERED IN THE NAME OF THE COMMON DEPOSITARY OR SUCH OTHER NAME AS REQUESTED
BY AN AUTHORIZED REPRESENTATIVE OF THE COMMON DEPOSITARY (AND ANY PAYMENT HEREON
IS MADE TO THE COMMON DEPOSITARY OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF THE COMMON DEPOSITARY) ANY TRANSFER, PLEDGE OR
OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL SINCE
THE REGISTERED OWNER HEREOF, THE COMMON DEPOSITARY, HAS AN INTEREST HEREIN.
TRANSFERS OF THIS REGULATION S GLOBAL SECURITY SHALL BE LIMITED TO TRANSFERS IN
WHOLE, BUT NOT IN PART, TO NOMINEES OF THE COMMON DEPOSITARY OR TO A SUCCESSOR
THEREOF OR SUCH SUCCESSOR'S NOMINEE, AND TRANSFERS OF PORTIONS OF THIS
REGULATION S GLOBAL NOTE SHALL BE LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH
THE RESTRICTIONS SET FORTH IN THE INDENTURE REFERRED TO IN THE TERMS AND
CONDITIONS ATTACHED HERETO.
THE SECURITIES EVIDENCED HEREBY HAVE NOT BEEN REGISTERED UNDER THE UNITED STATES
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT"), OR ANY STATE
SECURITIES LAWS, AND, ACCORDINGLY, MAY NOT BE OFFERED OR SOLD WITHIN THE UNITED
STATES OR TO, OR FOR THE ACCOUNT OR BENEFIT OF, UNITED STATES PERSONS EXCEPT AS
SET FORTH IN THE FOLLOWING SENTENCE. BY ITS ACQUISITION HEREOF, THE HOLDER (1)
REPRESENTS THAT (A) IT IS A "QUALIFIED INSTITUTIONAL BUYER" (AS DEFINED IN RULE
144A UNDER THE SECURITIES ACT) OR (B) IT IS NOT A UNITED STATES PERSON AND IS
ACQUIRING THE SECURITY EVIDENCED HEREBY IN AN OFFSHORE TRANSACTION; (2)
ACKNOWLEDGES THAT, UNLESS BELL ATLANTIC CORPORATION SHALL HAVE CEASED TO BE AN
"AFFILIATE" (AS SUCH TERM IS DEFINED UNDER RULE 144 UNDER THE SECURITIES ACT) OF
TELECOM CORPORATION OF NEW ZEALAND LIMITED ("TCNZ") ON OR PRIOR TO JUNE 1, 1999
(AND SHALL NOT HAVE THEREAFTER BECOME AN AFFILIATE OF TCNZ), ANY EXCHANGE OF THE
SECURITIES REPRESENTED HEREBY FOR ORDINARY SHARES OF TCNZ SHALL BE MADE ONLY:
(A) TO A QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION COMPLYING WITH RULE 144A
UNDER THE SECURITIES ACT; (B) PURSUANT TO A REGISTRATION STATEMENT DECLARED
EFFECTIVE UNDER THE SECURITIES ACT TO A HOLDER WHO ACQUIRED THE SECURITIES
REPRESENTED HEREBY EITHER (X) PRIOR TO SEPTEMBER 1, 1998 AND HAS HELD THE
SECURITIES REPRESENTED HEREBY CONTINUOUSLY SINCE SUCH DATE OF ACQUISITION OR (Y)
PURSUANT TO A REGISTRATION STATEMENT OR REGISTRATION STATEMENTS, DECLARED
EFFECTIVE UNDER THE SECURITIES ACT, REGISTERING THE RESALE OF THE SECURITIES
REPRESENTED HEREBY AND ANY OFFER OF ORDINARY SHARES OF TCNZ ARISING UPON RESALE
OF THE SECURITIES REPRESENTED HEREBY (OR IN A TRANSFER FROM A HOLDER WHO
ACQUIRED THE SECURITIES REPRESENTED HEREBY IN THE MANNER SET FORTH IN THIS
CLAUSE (Y) OR FROM ANY TRANSFEREE OR SUBSEQUENT TRANSFEREES OF SUCH HOLDER); OR
(C) OUTSIDE THE UNITED STATES TO A NON-U.S. PERSON IN RELIANCE ON REGULATION S
(OR ANY SUCCESSOR PROVISION) UNDER THE SECURITIES ACT, AS SUCH REGULATION MAY BE
IN EFFECT AND APPLICABLE AS OF THE TIME OF SUCH EXCHANGE; (3) AGREES THAT IT
WILL NOT, PRIOR TO EXPIRATION OF THE HOLDING PERIODS APPLICABLE TO SALES OF THE
SECURITIES EVIDENCED HEREBY OR THE SECURITIES DELIVERABLE UPON EXCHANGE OF SUCH
SECURITIES UNDER RULE 144(K) UNDER THE SECURITIES ACT (OR ANY SUCCESSOR
PROVISION), RESELL OR OTHERWISE TRANSFER THE SECURITIES EVIDENCED HEREBY OR THE
SECURITIES DELIVERABLE UPON EXCHANGE OF SUCH SECURITIES EXCEPT (A) TO THE ISSUER
OF SUCH SECURITY OR SECURITIES OR ANY SUBSIDIARY THEREOF, (B) INSIDE THE UNITED
STATES TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE
SECURITIES ACT, (C) OUTSIDE THE UNITED STATES IN COMPLIANCE WITH REGULATION S
UNDER THE SECURITIES ACT, (D) PURSUANT TO THE EXEMPTION FROM REGISTRATION
PROVIDED BY RULE 144 UNDER THE SECURITIES ACT (IF AVAILABLE), (E) PURSUANT TO A
REGISTRATION STATEMENT THAT HAS BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT
(AND THAT CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER) OR (F)
PURSUANT TO ANOTHER AVAILABLE EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF
THE SECURITIES ACT, AND (4) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM
THE SECURITIES EVIDENCED HEREBY ARE TRANSFERRED A NOTICE SUBSTANTIALLY TO THE
EFFECT OF THIS LEGEND. IN CONNECTION WITH ANY TRANSFER OF THE SECURITIES
EVIDENCED HEREBY PRIOR TO THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THE SECURITIES EVIDENCED HEREBY UNDER RULE 144(K) UNDER THE SECURITIES
ACT (OR ANY SUCCESSOR PROVISION), THE HOLDER MUST CHECK THE APPROPRIATE BOX SET
FORTH ON THE REVERSE HEREOF RELATING TO THE MANNER OF SUCH TRANSFER AND SUBMIT
THIS CERTIFICATE TO THE CHASE MANHATTAN BANK, AS TRANSFER AGENT (OR ANY
SUCCESSOR TRANSFER AGENT, AS APPLICABLE), TOGETHER WITH SUCH CERTIFICATIONS,
LEGAL OPINIONS AND OTHER INFORMATION AS SUCH TRANSFER AGENT MAY REASONABLY
REQUIRE TO CONFIRM THAT THE PROPOSED TRANSFER IS BEING MADE PURSUANT TO AN
EXEMPTION FROM, OR IN A TRANSACTION NOT SUBJECT TO THE REGISTRATION REQUIREMENTS
OF, THE SECURITIES ACT. THIS LEGEND WILL BE REMOVED UPON THE TRANSFER OF THE
SECURITIES EVIDENCED HEREBY PURSUANT TO CLAUSE 3(E) ABOVE. AS USED HEREIN THE
TERMS "OFF-SHORE TRANSACTION," "UNITED STATES" AND "UNITED STATES PERSON" HAVE
THE MEANINGS GIVEN TO THEM BY REGULATION S UNDER THE SECURITIES ACT.
C-1
<PAGE>
THE RIGHTS ATTACHING TO THIS REGULATION S GLOBAL SECURITY (AS DEFINED IN THE
INDENTURE), AND THE CONDITIONS AND PROCEDURES GOVERNING ITS EXCHANGE FOR
PHYSICAL SECURITIES, ARE SPECIFIED IN THE INDENTURE.
THE FOREGOING LEGEND MAY BE REMOVED FROM THIS SECURITY OR SATISFACTION OF THE
CONDITIONS SPECIFIED IN THE INDENTURE.
BELL ATLANTIC FINANCIAL SERVICES, INC.
--------------------------
5.75% SENIOR EXCHANGEABLE NOTES DUE 2003
COMMON CODE NO.
----
ISIN NO.
----
No.
Bell Atlantic Financial Services, Inc., a Delaware corporation (herein
called the "Company," which term includes any successor Person under the
Indenture hereinafter referred to), for value received, hereby promises to pay
to or its registered assigns, the principal sum set forth on the table attached
as Schedule A hereto on April 1, 2003, at the office or agency of the Company
referred to below, and to pay interest thereof from February 26, 1998 or from
the most recent Interest Payment Date to which interest has been paid or duly
provided for, semiannually on April 1 and October 1 of each year, commencing
October 1, 1998 at the rate of 5.75% per annum, in United Stated dollars, until
the principal hereof is paid or duly provided for. Interest shall be computed on
the basis of a 360-day year comprised of twelve 30-day months.
The Holder of this Security is entitled to the benefits of the
Registration Rights Agreement (the "Registration Rights Agreement") among the
Company, Bell Atlantic and the Managers, dated as of February 26, 1998.
The Holder of this Security is entitled to the benefits of the Support
Agreement dated as of February 1, 1998, between the Company and Bell Atlantic,
pursuant to which Bell Atlantic has agreed to support the Company's obligations
as to payment of principal, premium, if any, interest and the cash value of
Exchange Property.
The interest so payable, and punctually paid or duly provided for, on
any Interest Payment Date will, as provided in such Indenture, be paid to the
Person in whose name this Security (or any Predecessor Security) is registered
at the close of business on the Regular
C-2
<PAGE>
Record Date for such interest, which shall be the March 15 or September 15
(whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date.
Payment of the principal of, premium, if any, and interest on, this
Security, and exchange or transfer of the Security, will be made at the
Corporate Trust Office of the Trustee in New York City or subject to any
applicable laws and regulations, at the office of any Paying Agent, by dollar
check drawn on, or by transfer to a dollar account maintained by the Holder with
a bank in New York City; PROVIDED, HOWEVER, that payments of interest may be
made at the option of the Company by a dollar check drawn on a bank in New York
City mailed to the address of the Person entitled thereto as such address shall
appear on the Security Register, provided that all payments with respect to
Securities, the Holders of which have given wire transfer instructions not later
than the applicable Regular Record Date, to the Paying Agent, will be required
to be made by wire transfer of immediately available funds to the accounts
specified by such Holders.
Reference is hereby made to the further provisions of this Security set
forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been duly executed
by the Trustee referred to on the reverse hereof or by the authenticating agent
appointed as provided in the Indenture by manual signature of an authorized
signer, this Security shall not be entitled to any benefit under the Indenture,
or be valid or obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed by the manual or facsimile signature of its authorized officers and its
corporate seal to be affixed or reproduced hereon.
BELL ATLANTIC FINANCIAL SERVICES, INC.
By:
---------------------------------
Name:
Title:
Attest:
- -----------------------------------
Secretary
C-3
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the 5.75% Senior Exchangeable Notes due 2003 referred to
in the within-mentioned Indenture.
THE CHASE MANHATTAN BANK,
as Trustee
By:
-----------------------
Authorized Signer
Dated:
C-4
<PAGE>
BELL ATLANTIC FINANCIAL SERVICES, INC.
5.75% Senior Exchangeable Notes due 2003
This Security is one of a duly authorized issue of Securities of the
Company designated as its 5.75% Senior Exchangeable Notes due 2003 (herein
called the "Securities"), limited (except as otherwise provided in the Indenture
referred to below) in aggregate principal amount to $2,455,000,000, issued under
and subject to the terms of an indenture (herein called the "Indenture") dated
as of February 26, 1998, among the Company, Bell Atlantic Corporation and The
Chase Manhattan Bank, as trustee (herein called the "Trustee," which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties, obligations and immunities
thereunder of the Company, the Trustee and the Holders of the Securities, and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. The terms and conditions of the Indenture are incorporated herein by
reference and shall be binding on the Company and the Holder hereof as if fully
set forth herein. Unless the context otherwise requires, the capitalized terms
used herein shall have the meanings specified in the Indenture.
The Securities are subject to redemption (other than a redemption
described in Article Twelve) in accordance with Article Eleven of the Indenture
at any time on or after April 1, 2001, at the option of the Company, in whole or
in part, upon not less than 30 not more than 60 days' notice of redemption given
as described in Section 1105 of the Indenture to Holders of Securities during
the period from April 1, 2001 to March 31, 2002 at a Redemption Price equal to
102.3% of the principal amount thereof and thereafter and prior to the Maturity
Date at 101.15%, (subject to the rights of Holders of record on relevant Regular
Record Dates to receive interest due on relevant Interest Payment Dates). The
Company may elect, in connection with a redemption of the Securities or the
Stated Maturity of the Securities, to satisfy its obligations to Holders who
elect to exchange their Securities for TCNZ Ordinary Shares by cash payment of
the Average Market Value Amount. If the Company makes such an election, Holders
of Securities will no longer be entitled to receive TCNZ Ordinary Shares in
exchange for their Securities until, in the case of a redemption in part, the
Redemption Date. If less than all of the Securities are to be redeemed, the
Trustee shall select the Securities or portions thereof to be redeemed by lot,
pro rata, or by any other method the Trustee shall deem fair and reasonable.
The Securities may be redeemed in whole, or in part, at the option of
the Company in accordance with Article Twelve of the Indenture upon giving
notice of redemption as described below, upon the occurrence of a Tax Event (as
defined in the Indenture).
In the case of any redemption or repurchase of Securities in accordance
with the Indenture, interest installments whose Stated Maturity is on or prior
to the Redemption Date will be payable to Holders of such Securities of record
as of the close of business on the relevant Regular Record Date referred to on
the face hereof. Securities (or portions thereof) for whose
C-5
<PAGE>
redemption and payment provision is made in accordance with the Indenture shall
cease to bear interest from and after the Redemption Date.
In the event of redemption or repurchase of this Security in accordance
with the Indenture in part only, a new Security or Securities for the unredeemed
portion hereof shall be issued in the name of the Holder hereof upon the
cancellation hereof.
The Securities will be exchangeable at the option of the Holder for
TCNZ Ordinary Shares at any time on or after September 1, 1999 and prior to
maturity, unless previously redeemed at the redemption prices set forth in the
Indenture, at an Exchange Ratio of 178.0369 TCNZ Ordinary Shares per U.S. $1,000
principal amount of Securities, subject to adjustment in certain events and
subject to the Company's right to pay cash in an amount in U.S. Dollars equal to
the Market Price (or under certain circumstances, the Average Market Value
Amount (as defined in the Indenture)) of the TCNZ Ordinary Shares for which such
Securities are exchangeable in lieu of delivery of such TCNZ Ordinary Shares.
If an Event of Default shall occur and be continuing, the principal
amount of all the Securities may be declared due and payable in the manner and
with the effect provided in the Indenture.
The Indenture permits, with certain exceptions (including certain
amendments permitted without the consent of any Holders) as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders under the Indenture and the Securities at
any time by the Company and the Trustee with the consent of the Holders of a
specified percentage in aggregate principal amount of the Securities at the time
Outstanding. The Indenture also contains provisions permitting the Holders of
specified percentages in aggregate principal amount of the Securities at the
time Outstanding, on behalf of the Holders of all the Securities, to waive
compliance by the Company with certain provisions of the Indenture and the
Securities and certain past Defaults under the Indenture and their consequences.
Any such consent or waiver by or on behalf of the Holder of this Security shall
be conclusive and binding upon such Holder and upon all future Holders of this
Security and of any Security issued upon the registration of transfer thereof or
in exchange here for or in lieu hereof whether or not notation of such consent
or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company or any
other obligor on the Securities (in the event such other obligor is obligated to
make payments in respect of the Securities), which is absolute and
unconditional, to pay the principal of, premium, if any, and interest on, this
Security at the times, place, and rate, and in the coin or currency, herein
prescribed.
If this Security is in certificated form, then as provided in the
Indenture and subject to certain limitations therein set forth, the transfer of
this Security is registrable on the Security Register of the Company, upon
surrender of this Security for registration of transfer at the office
C-6
<PAGE>
or agency of the Company maintained for such purpose in The City of New York or
at such other office or agency of the Company as may be maintained for such
purpose, duly endorsed by, or accompanied by a written instrument of transfer in
form satisfactory to the Company and the Registrar duly executed by, the Holder
hereof or its attorney duly authorized in writing, and thereupon one or more new
Securities, of authorized denominations and for the same aggregate principal
amount, will be issued to the designated transferee or transferees.
This Security is a Regulation S Global Security, and, as such, it is
exchangeable for a Security in certificated form as provided in the Indenture
and in accordance with the rules and procedures of the Trustee and the
Depositary. In addition, certificated securities shall be transferred to all
beneficial holders in exchange for their beneficial interests in a Global
Security if (x) either Euroclear or Cedel (or any Alternative Clearing System on
behalf of which this Security may be held) is closed for business for a
continuous period of 14 days (other than by reason of holidays, statutory or
otherwise) or announces an intention to permanently cease business or does, in
fact, do so or (y) there shall occurred and be continuing an Event of Default.
Upon any issuance, the Trustee is required to register such certificated
Securities in the name of, and cause the same to be delivered to, such Person or
Persons (or the nominee of any thereof). All such certificated Securities would
be required to include the Securities Legend.
Securities in certificated form are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
the Securities are exchangeable for a like aggregate principal amount of
Securities of a differing authorized denomination, as requested by the Holder
surrendering the same.
At any time when the Company is not subject to Section 13 or 15(d) of
the Exchange Act, upon the written request of a Holder of a Security, the
Company will promptly furnish or cause to be furnished such information as is
specified pursuant to Rule 144A(d)(4) under the Securities Act (or any successor
provision thereto) to such Holder or to a prospective purchaser of such Security
who such Holder informs the Company is reasonably believed to be a "Qualified
Institutional Buyer" within the meaning of Rule 144A under the Securities Act,
as the case may be, in order to permit compliance by such Holder with Rule 144A
under the Securities Act.
No service charge shall be made for any registration of transfer or
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of transfer,
the Company, the Trustee and any agent of the Company or the Trustee may treat
the Person in whose name this Security is registered as the owner hereof for all
purposes, whether or not this Security is overdue, and neither the Company, the
Trustee nor any such agent shall be affected by notice to the contrary.
C-7
<PAGE>
THIS SECURITY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO CONFLICTS OF LAWS PRINCIPLES
THEREOF).
C-8
<PAGE>
SCHEDULE A
Aggregate principal amount of any Securities issued or cancelled in exchange for
a portion or portions hereof, any portion or portions hereof exchanged for an
interest or interests in another Global Security and any portion or portions of
another Global Security exchanged for a portion or portions hereof:
- -------------------------------------------------------------------------------
Principal Amount Remaining Principal
Issued, Cancelled or Amount of this
Date Exchanged Global Security Notation Made by
- -------------------------------------------------------------------------------
C-9
<PAGE>
Exhibit 4.2
BELL ATLANTIC FINANCIAL SERVICES, INC.
BELL ATLANTIC CORPORATION
-------------------------------------------------
$2,455,000,000
5.75% SENIOR EXCHANGEABLE NOTES DUE 2003
-------------------------------------------------
FIRST SUPPLEMENTAL INDENTURE
Dated as of May ____, 1999
amending and supplementing the
Indenture dated as of February 26, 1998
----------------------------------------
THE CHASE MANHATTAN BANK
as Trustee
----------------------------------------
<PAGE>
THIS FIRST SUPPLEMENTAL INDENTURE (this "First Supplemental
Indenture"), dated as of May ____, 1999, among BELL ATLANTIC FINANCIAL SERVICES,
INC., a corporation duly organized and existing under the laws of the State of
Delaware (hereinafter sometimes called the "Company"), BELL ATLANTIC
CORPORATION, a corporation duly organized and existing under the laws of the
State of Delaware (hereinafter sometimes called "Bell Atlantic"), and THE CHASE
MANHATTAN BANK, a banking corporation organized under the laws of the State of
New York, as Trustee (the "Trustee").
WHEREAS, there has heretofore been executed and delivered to the
Trustee an Indenture dated as of February 26, 1998 (the "Original Indenture"),
regarding the Company's 5.75% Senior Exchangeable Notes due 2003 (the
"Securities");
WHEREAS, the Company and Bell Atlantic desire to enter into this First
Supplemental Indenture to, among other things, add certain covenants with
respect to the disaffiliation of Bell Atlantic from Telecom Corporation of New
Zealand ("TCNZ"); and
WHEREAS, pursuant to Section 901 of the Original Indenture, the parties
hereto are authorized to execute and deliver this First Supplemental Indenture
to amend the Original Indenture, without the consent of any Holder.
NOW THEREFORE, in consideration of the foregoing and the mutual
premises and covenants contained herein and for other good and valuable
consideration, the parties hereto agree as follows.
ARTICLE I
DEFINITIONS; AMENDMENTS TO ORIGINAL INDENTURE
SECTION 1.01 DEFINITIONS.
Capitalized terms used but not defined in this First Supplemental
Indenture shall have the respective meanings specified therefor set forth in the
Original Indenture.
SECTION 1.02 AMENDMENTS TO ORIGINAL INDENTURE.
(a) The following defined term is added to Section 101 of the
Indenture, immediately after the defined term "Exchange Agent" therein:
"`Exchange Obligor' has the meaning assigned to such term
in Section 1301."
(b) The following defined term is added to Section 101 of the
Indenture,
2
<PAGE>
immediately after the defined term "Exchange Ratio" therein:
"`Exchange Right' has the meaning assigned to such term
in Section 1301."
(c) Article Ten of the Original Indenture is amended to
include the following new Sections 1009 and 1010:
"SECTION 1009. VOTING OF TCNZ SHARES.
Bell Atlantic and its Affiliates irrevocably agree that
for the period beginning on June 1, 1999 and ending on the 180th day following
the date on which the last Security is redeemed, exchanged or otherwise ceases
to be outstanding, they shall vote all TCNZ voting securities held from time to
time by them, on all matters submitted for vote by poll of the security holders
of TCNZ in the same proportion as the securities voted by all other security
holders of TCNZ; provided that Bell Atlantic and its Affiliates shall retain the
right to vote 1,000 of the TCNZ voting securities held from time to time by them
in any manner they choose.
SECTION 1010. RESIGNATION OF TCNZ DIRECTORS.
Not later than June 1, 1999, Bell Atlantic and its
Affiliates shall cause the resignation of those directors of TCNZ that were
nominated by Bell Atlantic."
(d) Section 1301 of the Original Indenture shall be amended
and restated so as to read in its entirety as follows:
"SECTION 1301. EXCHANGE RIGHTS AT THE OPTION OF THE
HOLDER.
At the option of the Holder, the Securities are exchangeable
for TCNZ Ordinary Shares or other Exchange Property (as defined herein) at any
time or from time to time on or after September 1, 1999 and prior to the close
of business on April 1, 2003, unless previously redeemed at the Redemption
Prices set forth herein, at the Exchange Ratio (an "Exchange Right"), subject to
adjustment under the circumstances described in Section 1303 and subject to the
Company's right to pay exchanging Holders cash in lieu of Exchange Property
under the circumstances described below or in Section 1101. Holders of
Securities have no rights in respect of the TCNZ Ordinary Shares or other
Exchange Property, as the case may be, unless and until the Securities are
exchanged for TCNZ Ordinary Shares or other Exchange Property.
In lieu of delivering TCNZ Ordinary Shares or other Exchange
Property in exchange for any Securities, beginning on or after September 1, 1999
and prior to the close of business on April 1, 2003, unless the Company shall
have previously elected in connection with a call for redemption or at maturity
to pay in cash the Average Market Value Amount upon any exchange prior to the
applicable Redemption Date or at Maturity (provided that in the case of a
3
<PAGE>
redemption in part, only until such redemption in part is completed), the
Company may elect to make a cash settlement (the "Cash Settlement Option") in
respect of any Security surrendered for exchange by delivering notice thereof to
the tendering Holder not more than five Trading Days after such Security is
surrendered for exchange. Such cash settlement shall be in an amount per $1,000
principal amount of Securities delivered for exchange equal to the Market Price
as of the second Trading Day after delivery of such notice to such Holder of the
TCNZ Ordinary Shares (or the number or amount of each type of other Exchange
Property) that would be deliverable upon exchange of such Securities were such
Securities exchanged at such time. The Company will pay such cash settlement
amount in United States dollars as promptly as practicable (but in no event
later than the tenth business day) after completion of the five Trading Day
period used to determine such Market Price.
Upon a notice of exchange from any Holder of the Securities,
unless the Company has elected either (i) the Cash Settlement Option or (ii) to
pay in cash the Average Market Value Amount to satisfy the obligation to such
Holder who elects to exchange its Securities in connection with a call for
redemption of the Securities or at Maturity of the Securities as provided in
Section 1101, Bell Atlantic will assume, or, to the extent legally permissible,
cause to be assumed by another entity whose obligations will be fully guaranteed
by Bell Atlantic (together with Bell Atlantic, an "Exchange Obligor"), all of
the obligations of the Company under such Security and under this Indenture with
respect to such Security and the Company shall be relieved of all obligations
under such Security and under this Indenture with respect to such Security.
Thereafter, in accordance with the procedures set forth in Section 1302, Bell
Atlantic shall deliver or cause to be delivered at the office of the relevant
Exchange Agent or Trustee as the case may be, the TCNZ Ordinary Shares or other
Exchange Property, as the case may be, deliverable upon exchange, together with
payment in cash in lieu of any fractional security.
Any delivery of TCNZ Ordinary Shares or other Exchange
Property by the Exchange Obligor shall discharge in full the liability of the
Exchange Obligor to redeem the Securities so surrendered (at 100% of the face
amount) upon exercise of an Exchange Right and accordingly, the discharge of the
obligation to redeem the Securities so surrendered shall be the consideration
for such delivery."
4
<PAGE>
ARTICLE II
MISCELLANEOUS
SECTION 2.01. INSTRUMENTS TO BE READ TOGETHER.
This First Supplemental Indenture is an indenture supplemental to the
Original Indenture; and, as such, the Original Indenture and this First
Supplemental Indenture shall henceforth be read together.
SECTION 2.02. CONFIRMATION.
The Original Indenture, as amended and supplemented by this First
Supplemental Indenture, is in all respects confirmed and preserved.
SECTION 2.03. HEADINGS.
The headings of the Articles and Sections of this First Supplemental
Indenture have been inserted for convenience of reference only, and are not to
be considered a part hereof and shall in no way modify or restrict any of the
terms and provisions hereof.
SECTION 2.04. GOVERNING LAW.
THIS INDENTURE AND THE SECURITIES SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK (WITHOUT GIVING EFFECT TO
THE CONFLICT OF LAWS PRINCIPLES THEREOF).
SECTION 2.05. COUNTERPARTS.
This First Supplemental Indenture may be executed in any number of
counterparts notwithstanding that all parties named herein may not be
signatories to the same counterpart, each of which so executed shall be deemed
to be an original, but all such counterparts shall together constitute but one
and the same instrument.
SECTION 2.06. EFFECTIVENESS.
The provisions of this First Supplemental Indenture will take effect
immediately upon its execution and delivery by the Trustee.
SECTION 2.07. ACCEPTANCE BY TRUSTEE.
The Trustee accepts the amendments to the Original Indenture effected
by this First
5
<PAGE>
Supplemental Indenture and agrees to execute the trusts created by the Original
Indenture as hereby amended, but only upon the terms and conditions set forth in
the Original Indenture. Without limiting the generality of the foregoing, the
Trustee assumes no responsibility for the correctness of the recitals contained
herein, which shall be taken as the statements of the Company and Bell Atlantic
and except as provided in the Original Indenture, the Trustee shall not be
responsible or accountable in any manner whatsoever for or with respect to the
validity or execution or sufficiency of this First Supplemental Indenture and
the Trustee makes no representation with respect thereto.
SECTION 2.08. TRUST INDENTURE ACT CONTROLS.
If any provision of this First Supplemental Indenture limits, qualifies
or conflicts with another provision that is required to be included in this
First Supplemental Indenture by the Trust Indenture Act, the required provision
shall control. This First Supplemental Indenture conforms to the requirements of
the Trust Indenture Act.
6
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this First
Supplemental Indenture to be duly executed, all as of the date first written
above.
BELL ATLANTIC FINANCIAL SERVICES, INC.
By:
---------------------------------
Name: Janet M. Garrity
Title: President and Treasurer
BELL ATLANTIC CORPORATION
By:
---------------------------------
Name: Ellen C. Wolf
Title: Treasurer
THE CHASE MANHATTAN BANK
By:
---------------------------------
Name:
Title:
7
<PAGE>
Exhibit 4.3
SUPPORT AGREEMENT
BETWEEN
BELL ATLANTIC CORPORATION
AND
BELL ATLANTIC FINANCIAL SERVICES, INC.
This Agreement, made and entered into as of February 1, 1998, by and
between Bell Atlantic Corporation, a Delaware corporation ("Parent"), and Bell
Atlantic Financial Services, Inc., a Delaware corporation ("Subsidiary").
WITNESSETH
WHEREAS, Parent is directly or indirectly the owner of 100% of the
outstanding common stock of Subsidiary; and
WHEREAS, Subsidiary intends to issue $2,500,000,000 aggregate principal
amount of Senior Unsecured Exchangeable Notes due 2003 (the "Debt"), thereby
incurring indebtedness to parties other than Parent and its affiliates; and
WHEREAS, Parent and Subsidiary desire to take certain actions to
enhance and maintain the financial condition of Subsidiary as hereinafter set
forth in order to facilitate the issuance of such Debt;
NOW, THEREFORE, in consideration of the mutual promises herein
contained, the parties hereto agree as follows
1. STOCK OWNERSHIP. During the term of this Agreement, Parent will own
directly or indirectly all of the voting capital stock of Subsidiary now or
hereafter issued and outstanding.
2. NET WORTH. During the term of this Agreement, Parent shall cause
Subsidiary to maintain at all times a positive tangible net worth, as determined
in accordance with generally accepted accounting principles.
3. LIQUIDITY PROVISION. If, during the term of this Agreement,
Subsidiary requires funds to make timely payment of interest, principal or
premium, if any, on any Debt or to acquire and deliver property on exchange of
the Debt, and such funds are not obtainable by Subsidiary from other sources on
commercially reasonable terms, Parent shall provide to Subsidiary, at its
request, such funds either as equity or as a loan, at Parent's option, to assure
that the Subsidiary will be able to pay such principal, interest and premium, if
any, or acquire and deliver such property on exchange, when due. If such funds
are advanced to Subsidiary as a loan, such loan shall be on such terms and
conditions, including maturity and rate of interest, as Parent and Subsidiary
shall agree. Notwithstanding the foregoing, any such loan shall be subordinated
in all respects to any and all Debt, whether or not such Debt is outstanding at
the time of such loan.
<PAGE>
4. WAIVERS. Parent hereby waives any failure or delay on the part of
Subsidiary in asserting or enforcing any of its right or in making any claims or
demands hereunder.
5. RIGHTS OF LENDERS. Except as may be provided in that certain
Indenture, dated as of February 26, 1998, among Parent, Subsidiary, and The
Chase Manhattan Bank, as Trustee (the "Indenture"), any Lender (defined below)
shall have the right to proceed directly against Parent without first proceeding
against Subsidiary to enforce Subsidiary's rights under paragraphs 1, 2 and 3 of
this Agreement or to obtain payment of any defaulted, interest, principal or
premium owed to such Lender, or, in the case of a default in an obligation to
deliver property, the cash value of such property. However, in no event may any
Lender, on default by Parent or Subsidiary under the terms of the Indenture, or
upon failure to comply with this Agreement by Parent or Subsidiary, hvae
recourse to or against the stock or assets of Bell Atlantic Network Services,
Inc., Bell Atlantic - Pennsylvania, Inc., Bell Atlantic - Delaware, Inc., Bell
Atlantic New Jersey, Inc., Bell Atlantic - Washington, D.C., Inc., Bell Atlantic
- - Maryland, Inc., Bell Atlantic - Virginia, Inc., Bell Atlantic - West Virginia,
Inc., New England Telephone and Telegraph Company, New York Telephone Company or
Telecom Corporation of New Zealand Limited (or any other operating telephone
company which may at the time be owned directly or indirectly by Parent). The
Term "Lender", as used in this Agreement, shall mean any Person, firm or
corporation to which Subsidiary is indebted for the Debt on which is acting as
trustee or authorized representative with respect to the Debt on behalf of such
person, firm or corporation.
6. TERMINATION; AMENDMENT. This Agreement may be modified or amended in
a manner that adversely affects the rights of the holders of Debt only if all
Lenders consent in advance and in writing to such modification or amendment. No
modification or amendment to this Agreement relating to the provisions set forth
in paragraphs 1,2,3 and 5 of this sentence shall be made unless Subsidiary
applies to the Securities and Exchange Commission for an amended order relating
to such modification or amendment, and the Commission grants such amended order.
This Agreement may be terminated by either the Parent or the Subsidiary by
notice to the other party, provided that such termination shall be effective
only after the 91st day after all outstanding Debt issued by the Subsidiary is
paid in full.
7. NOTICES. Any notice, instruction, request, consent, demand or other
communication required or contemplated by this Agreement to be in writing, shall
be given or made or communicated by United States first class mail, addressed as
follows:
If to Parent: Bell Atlantic Corporation
1095 Avenue of the Americas
New York, New York 10036
Attention: Vice President - Treasurer
<PAGE>
If to Subsidiary: Bell Atlantic Financial Services, Inc.
3900 Washington Street, 2nd Floor
Wilmington, Delaware 19802
Attention: President and Treasurer
8. SUCCESSORS. The covenants, representations, warranties and
agreements herein set forth shall be mutually binding upon, and inure to the
mutual benefit of, Parent and its successors, Subsidiary and its successors and
Lenders from time to time.
9. GOVERNING LAW; COUNTERPARTS. This Agreement shall be governed by the
laws of the Commonwealth of Pennsylvania. This instrument may be executed in
counterparts and the executed counterparts shall together constitute one
instrument.
<PAGE>
IN WITNESS WHEREOF, the parties have set their hands and affixed their
corporate seals as of the day and year first above written.
ATTEST: BELL ATLANTIC CORPORATION
By: /s/ Jane F. Ludlow By: /s/ Ellen C. Wolf
------------------------ ----------------------------------
Jane F. Ludlow Ellen C. Wolf
Assistant Secretary Vice President - Treasurer
ATTEST: BELL ATLANTIC FINANCIAL SERVICES, INC.
By: /s/ Brenda K. Stanton By: /s/ Janet M. Garrity
------------------------ ----------------------------------
Brenda K. Stanton Janet M. Garrity
Assistant Secretary President and Treasurer
<PAGE>
Exhibit 4.4
REGISTRATION RIGHTS AGREEMENT
THIS REGISTRATION RIGHTS AGREEMENT is made and entered into as of
February 26, 1998 by and among Bell Atlantic Corporation, a Delaware corporation
("BELL ATLANTIC"), Bell Atlantic Financial Services, Inc. ("FSI"), a Delaware
corporation and wholly-owned subsidiary of Bell Atlantic, and the Managers named
in the Purchase Agreement as defined below (the "MANAGERS") pursuant to the
Purchase Agreement, dated as of February 12, 1998 (the "PURCHASE AGREEMENT"),
among Bell Atlantic, FSI and the Managers. In order to induce the Managers to
enter into the Purchase Agreement, Bell Atlantic and FSI have agreed to provide
the registration rights set forth in this Agreement. The execution of this
Agreement is a condition to the closing under the Purchase Agreement.
Bell Atlantic and FSI agree with the Managers, (i) for their benefit as
Managers and (ii) for the benefit of the beneficial owners, including the
Managers, (each a "HOLDER") from time to time of the Notes (as defined herein),
as follows:
SECTION 1. DEFINITIONS. Capitalized terms used herein without
definition shall have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following terms shall have the
following meanings:
AFFILIATE: With respect to any specified person, an "affiliate," as
defined in Rule 144, of such person.
AMENDMENT EFFECTIVENESS DEADLINE DATE: See Section 2(d) hereof.
BUSINESS DAY: Each Monday, Tuesday, Wednesday, Thursday and Friday that
is not a day on which banking institutions in The City of New York or
Wilmington, Delaware are authorized or obligated by law or executive order to
close.
DAMAGES ACCRUAL PERIOD: See Section 2(e) hereof
DAMAGES PAYMENT DATE: Each Interest Payment Date (as defined in the
Indenture).
DEFERRAL NOTICE: See Section 3(i) hereof
DEFERRAL PERIOD: See Section 3(i) hereof
EFFECTIVENESS PERIOD: The period commencing with the date hereof and
ending on the earliest of (i) the redemption or exchange into Ordinary Shares or
other Exchange Property (as defined in the Indenture) or other retirement and
cancellation pursuant to the Indenture of all Notes, (ii) the first date on
which there are no longer any Registrable Securities and (iii) April 1, 2003.
<PAGE>
EVENT: See Section 2(e) hereof.
EVENT TERMINATION DATE: See Section 2(e) hereof.
EVENT DATE: See Section 2(e) hereof.
EXCHANGE ACT: The Securities Exchange Act of 1934, as amended, and the
rules and regulations of the SEC promulgated thereunder.
FILING DEADLINE DATE: See Section 2(a) hereof.
HOLDER: See the second paragraph of this Agreement.
INDENTURE: The Indenture dated as of the date hereof among Bell
Atlantic, FSI and, The Chase Manhattan Bank as trustee, pursuant to which the
Notes are being issued, as amended from time to time.
INITIAL SHELF REGISTRATION STATEMENT: See Section 2(a) hereof.
LIQUIDATED DAMAGES AMOUNT: See Section 2(e) hereof.
LOSSES: See Section 6 hereof.
MATERIAL EVENT: See Section 3(i) hereof.
NOTES: The FSI 5.75% Senior Exchangeable Notes due 2003 Exchangeable
for Ordinary Shares of Telecom Corporation of New Zealand Limited ("TCNZ"), to
be purchased by the Managers pursuant to the Purchase Agreement.
NOTICE: See Section 2(d) hereof
NOTICE HOLDER: On any date, any Holder that has delivered Notice to
Bell Atlantic on or prior to such date.
ORDINARY SHARES: The ordinary shares of TCNZ, and any other shares of
TCNZ as may constitute "Ordinary Shares" for purposes of the Indenture,
including the Underlying Ordinary Shares.
PROSPECTUS: The prospectus included in any Registration Statement
(including, without limitation, a prospectus that discloses information
previously omitted from a prospectus filed as part of an effective registration
statement in reliance upon Rule 430A promulgated under the Securities Act), as
amended or supplemented by any amendment or prospectus supplement,
-2-
<PAGE>
including post-effective amendments, and all material incorporated by reference
or explicitly deemed to be incorporated by reference in such Prospectus.
PURCHASE AGREEMENT: See the first paragraph of this Agreement.
RECORD HOLDER: (i) With respect to any Damages Payment Date relating to
any Note as to which any Liquidated Damages Amount has accrued, the Registered
Holder of such Note on the record date with respect to the interest payment date
under the Indenture, as the case may be, on which such Damages Payment Date
shall occur.
REGISTERED HOLDER: The holder of a Note that is registered as such on
the books of The Depository Trust Company ("DTC"), Morgan Guaranty Trust Company
of New York, Brussels office, as operator of the Euroclear System ("EUROCLEAR")
or Cedel Bank, societe anonyme ("CEDEL").
REGISTRABLE SECURITIES: Each Note until (A) the earliest of (i) its
effective registration under the Securities Act and resale in accordance with
the Registration Statement covering it, (ii) expiration of the holding period
that would be applicable thereto under Rule 144(k) were it not held by an
Affiliate of Bell Atlantic or FSI or (iii) its sale to the public pursuant to
Rule 144 and (B) as a result of the event or circumstance described in any of
the foregoing clauses (i) through (iii), the legends with respect to transfer
restrictions required under the Indenture are removed or removable in accordance
with the terms of the Indenture, as the case may be.
REGISTRATION EXPENSES: See Section 5 hereof.
REGISTRATION STATEMENT: Any registration statement of Bell Atlantic and
FSI that covers the Registrable Securities pursuant to the provisions of this
Agreement, including the Prospectus, amendments and supplements to such
registration statement, including post-effective amendments, all exhibits, and
all material incorporated by reference or explicitly deemed to be incorporated
by reference in such registration statement.
RESTRICTED SECURITIES: As this term is defined in Rule 144.
REGULATION S: Regulation S under the Securities Act, as such Rule may
be amended from time to time, or any similar rule or regulation hereafter
adopted by the SEC.
RULE 144: Rule 144 under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
RULE 144A: Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or any similar rule or regulation hereafter adopted
by the SEC.
SEC: The U.S. Securities and Exchange Commission.
-3-
<PAGE>
SECURITIES ACT: The Securities Act of 1933, as amended, and the rules
and regulations promulgated by the SEC thereunder.
SHELF REGISTRATION STATEMENT: See Section 2(a) hereof.
SUBSEQUENT SHELF REGISTRATION STATEMENT: See Section 2(b) hereof.
TRUSTEE: The Chase Manhattan Bank (or any successor entity), the
Trustee under the Indenture.
UNDERLYING ORDINARY SHARES: The Ordinary Shares for which the Notes
are exchangeable.
SECTION 2. SHELF REGISTRATION. (a) Bell Atlantic and FSI shall prepare
and file with the SEC, by June 1, 1999 (the "FILING DEADLINE DATE") a
Registration Statement for an offering to be made on a delayed or continuous
basis pursuant to Rule 415 of the Securities Act (a "SHELF REGISTRATION
STATEMENT") registering the resale from time to time by Holders thereof of all
of the Registrable Securities (the "INITIAL SHELF REGISTRATION STATEMENT"). The
Initial Shelf Registration Statement shall be on Form S-3 or another appropriate
form permitting registration of such Registrable Securities for resale by such
Holders in accordance with the methods of distribution elected by the Holders
and set forth in the Initial Shelf Registration Statement. Bell Atlantic and FSI
shall use their best efforts to cause the Initial Shelf Registration Statement
to become effective under the Securities Act as promptly as is practicable but
in any event by September 1, 1999 (the "EFFECTIVENESS DEADLINE DATE") and to
keep the Initial Shelf Registration Statement (or any Subsequent Shelf
Registration Statement) continuously effective under the Securities Act until
the expiration of the Effectiveness Period. At the time the Initial Shelf
Registration Statement becomes effective, each Holder that became a Notice
Holder on or prior to the date ten Business Days prior to such time of
effectiveness shall be named as a selling securityholder in the Initial Shelf
Registration Statement and the related Prospectus in such a manner as to permit
such Holder to deliver such Prospectus to purchasers of Registrable Securities
in accordance with applicable law.
(b) If (i) the Shelf Registration Statement is not filed with
the SEC or is not declared effective by the SEC by the Effectiveness Deadline
Date or (ii) at any time during which the Shelf Registration Statement is
required to be kept effective, it shall cease to be effective (other than as a
result of the effectiveness of a successor registration statement), Bell
Atlantic and FSI shall use their best efforts to obtain the prompt withdrawal of
any order suspending the effectiveness thereof, and in any event shall within
forty-five (45) days of such cessation of effectiveness amend the Shelf
Registration Statement in a manner reasonably expected to obtain the withdrawal
of the order suspending the effectiveness thereof, or file an additional Shelf
Registration Statement covering all of the securities that as of the date of
such filing are Registrable Securities (a "SUBSEQUENT SHELF REGISTRATION
STATEMENT"). If a Subsequent Shelf Registration Statement is filed, Bell
Atlantic and FSI shall use their best efforts
-4-
<PAGE>
to cause the Subsequent Shelf Registration Statement to become effective within
forty-five (45) days of such cessation of effectiveness and to keep such
Registration Statement (or subsequent Subsequent Shelf Registration Statement)
continuously effective until the end of the Effectiveness Period.
(c) Bell Atlantic and FSI shall supplement and amend the Shelf
Registration Statement if required by the rules, regulations or instructions
applicable to the registration form used by Bell Atlantic and FSI for such Shelf
Registration Statement, if required by the Securities Act or, to the extent to
which Bell Atlantic and FSI do not reasonably object, as reasonably requested by
the Managers or by the Trustee on behalf of the Registered Holders.
(d) Each Holder of Registrable Securities agrees that if such
Holder wishes to sell Registrable Securities pursuant to a Shelf Registration
Statement and related Prospectus, it will do so only in accordance with this
Section 2(d) and Section 3(i) hereof. Each Holder of Registrable Securities
wishing to sell Registrable Securities pursuant to a Shelf Registration and
related Prospectus agrees to give written notice ("NOTICE") to Bell Atlantic and
FSI at least eight (8) Business Days prior to any intended distribution of
Registrable Securities under the Shelf Registration Statement which notice shall
specify the date on which such Holder intends to begin such distribution and any
information with respect to such Holder and the intended distribution of
Registrable Securities by such Holder required to amend or supplement the
Registration Statement with respect to such intended distribution of Registrable
Securities by such Holder. From and after the date the Initial Shelf
Registration Statement becomes effective, Bell Atlantic and FSI shall (i) if
required by applicable law, file, as promptly as is reasonably practicable after
the date Notice is delivered, and in any event within ten (10) Business Days
after such date, with the SEC a post-effective amendment to the Shelf
Registration Statement or prepare and, if required by applicable law, file, as
promptly as is reasonably practicable after Notice is delivered, and in any
event within two (2) Business Days of the date distribution begins or such other
period as may be required by applicable law, a supplement to the related
Prospectus or a supplement or amendment to any document incorporated therein by
reference or file any other required document so that the Holder delivering such
Notice is named as a selling securityholder in the Shelf Registration Statement
and the related Prospectus in such a manner as to permit such Holder to deliver
such Prospectus to purchasers of the Registrable Securities in accordance with
applicable law and, if Bell Atlantic and FSI shall file a post-effective
amendment to the Shelf Registration Statement, use their best efforts to cause
such post-effective amendment to become effective under the Securities Act as
promptly as is reasonably practicable, but in any event by the date (the
"AMENDMENT EFFECTIVENESS DEADLINE DATE") forty-five (45) days after the date
such post-effective amendment is required by this clause to be filed; (ii)
provide such Holder copies of any documents filed pursuant to Section 2(d)(i);
and (iii) notify such Holder as promptly as reasonably practicable after the
effectiveness under the Securities Act of any post-effective amendment filed
pursuant to Section 2(d)(i); provided, that if such Notice is delivered during a
Deferral Period, Bell Atlantic and FSI shall so inform the Holder delivering
such Notice and shall take the actions set forth in clauses (i), (ii) and (iii)
above upon expiration of the Deferral Period in accordance with Section 3(i).
Bell Atlantic and FSI shall be under no
-5-
<PAGE>
obligation to name any Holder that is not a Notice Holder as a selling
securityholder in any Registration Statement or related Prospectus.
(e) The parties hereto agree that the Holders of Registrable
Securities will suffer damages, and that it would not be feasible to ascertain
the extent of such damages with precision, if (i) the Initial Shelf Registration
Statement has not been filed on or prior to the Filing Deadline Date, (ii) the
Initial Shelf Registration Statement has not become effective under the
Securities Act on or prior to the Effectiveness Deadline Date, (iii) either of
Bell Atlantic or FSI have failed to perform their obligations set forth in
Section 2(d) within the time period required other than as a result of a failure
of the Holders to meet their obligations under Section 2(d) and/or Section 4,
(iv) any post-effective amendment to the Shelf Registration Statement filed
pursuant to Section 2(d)(i) has not become effective under the Securities Act on
or prior to the Amendment Effectiveness Deadline Date or (v) the aggregate
duration of Deferral Periods in any period exceeds the number of days permitted
in respect of such period pursuant to Section 3(i) hereof (each of the events of
a type described in any of the foregoing clauses (i) through (v) are
individually referred to herein as an "EVENT," and the Filing Deadline Date in
the case of clause (i), the Effectiveness Deadline Date in the case of clause
(ii), the date by which Bell Atlantic and FSI are required to perform their
obligations set forth in Section 2(d) in the case of clause (iii), the Amendment
Effectiveness Deadline Date in the case of clause (iv) and the date on which the
aggregate duration of Deferral Periods in any period exceeds the number of days
permitted by Section 3(i) hereof in the case of clause (v) being referred to
herein as an "EVENT DATE"). Events shall be deemed to continue until the "EVENT
TERMINATION DATE," which shall be the following dates with respect to the
respective types of Events: the date the Initial Registration Statement is filed
in the case of an Event of the type described in clause (i), the date the
Initial Registration Statement becomes effective under the Securities Act in the
case of an Event of the type described in clause (ii), the date Bell Atlantic
and FSI perform their obligations set forth in Section 2(d) in the case of an
Event of the type described in clause (iii), the date the relevant
post-effective amendment to the Shelf Registration Statement becomes effective
under the Securities Act in the case of an Event of the type described in clause
(iv) and termination of the Deferral Period that caused the limit on the
aggregate duration of Deferral Periods in a period set forth in Section 3(i) to
be exceeded in the case of the commencement of an Event of the type described in
clause (v).
Accordingly, commencing on (and including) any Event Date and ending on
(but excluding) the next date on which there are no Events that have occurred
and are continuing (a "DAMAGES ACCRUAL PERIOD"), Bell Atlantic and FSI jointly
and severally agree to pay, as liquidated damages and not as a penalty, an
amount (the "LIQUIDATED DAMAGES AMOUNT"), payable on the Damages Payment Dates,
prior to the redemption or exchange thereof, to Record Holders (as set forth in
the succeeding paragraph) of the Notes accruing, for each portion of such
Damages Accrual Period beginning on and including a Damages Payment Date (or, in
respect of the first such portion, the Event Date) (except that with respect to
the Event described in clause (i) above, the Company will have forty-five days
to cure, and provided that in the event the Company does not cure by day forty
five, the Liquidated Damages Amount will be payable
-6-
<PAGE>
retroactive to the Event Date, but will otherwise increase and accrue as set
forth below) and ending on but excluding the next subsequent Damages Payment
Date, in the form of an increase of .25% on the interest rate on the Notes each
90 day period that such additional interest continues to accrue; PROVIDED that
such additional interest shall at no time exceed 1% per annum; PROVIDED FURTHER,
that in the case of a Damages Accrual Period that is in effect solely as a
result of an Event of the type described in clause (iii) or (iv) of the
preceding paragraph, such Liquidated Damages Amount shall be paid only to the
Holders (as set forth in the succeeding paragraph) that have delivered Notice
that caused Bell Atlantic and FSI to incur the obligations set forth in Section
2(d) the non-performance of which is the basis of such Event. Notwithstanding
the foregoing, no Liquidated Damages Amounts shall accrue as to any Registrable
Security from and after the earlier of (x) the date such security is no longer a
Registrable Security and (y) expiration of the Effectiveness Period. The rate of
accrual of the Liquidated Damages Amount with respect to any period shall not
exceed the rate provided for in this paragraph notwithstanding the occurrence of
multiple concurrent Events.
Bell Atlantic and FSI shall pay on each Damages Payment Date that
portion of the Liquidated Damages Amount payable pursuant to this Section 2(e)
in respect of any Damages Accrual Period that has accrued from and including the
next preceding Damages Payment Date during such Damages Accrual Period (or, in
respect of the first such portion, the Event Date with respect to such Damages
Accrual Period) to but excluding such Damages Payment Date on any Note to the
Record Holders thereof; PROVIDED, that any Liquidated Damages Amount accrued
with respect to any Note or portion thereof called for redemption on a
redemption date or exchanged for Underlying Ordinary Shares on a date prior to
the Damages Payment Date, shall, in any such event, be paid instead to the
holder who submitted such Note or portion thereof for redemption or exchange on
the applicable redemption date or exchange date, as the case may be, on such
date (or promptly following such date, in the case of an exchange); PROVIDED
FURTHER, THAT, in the case of an Event of the type described in clause (iii) or
(iv) of the first paragraph of this Section 2(e), such Liquidated Damages Amount
shall be paid only to the Holders entitled thereto pursuant to such first
paragraph by check mailed to the address set forth in the Notice delivered by
such Holder; and PROVIDED FURTHER that, notwithstanding anything to the contrary
contained herein, in no event shall any Holder be entitled to any Liquidated
Damages Amount with respect to a Note for any Damages Accrual Period when such
Holder would not be entitled to interest on such Note during such Damage Accrual
Period. The Trustee shall be entitled, on behalf of Registered Holders of Notes,
to seek any available remedy for the enforcement of this Agreement, including
for the payment of such Liquidated Damages Amount. Notwithstanding the
foregoing, the parties agree that the sole damages payable for a violation of
the terms of this Agreement with respect to which liquidated damages are
expressly provided shall be such liquidated damages. Nothing shall preclude a
Notice Holder or Holder of Registrable Securities from pursuing or obtaining
specific performance or other equitable relief with respect to this Agreement.
All of Bell Atlantic's and FSI's obligations set forth in this Section
2(e) that are outstanding with respect to any Registrable Security at the time
such security ceases to be a
-7-
<PAGE>
Registrable Security shall survive until such time as all such obligations with
respect to such security have been satisfied in full (notwithstanding
termination of this Agreement pursuant to Section 8(k)).
The parties hereto agree that the liquidated damages provided for in
this Section 2(e) constitute a reasonable estimate of the damages that may be
incurred by Holders of Registrable Securities by reason of the failure of the
Shelf Registration Statement to be filed or declared effective or available
(absolutely or as a practical matter) for effecting resales of Registrable
Securities in accordance with the provisions hereof
SECTION 3. REGISTRATION PROCEDURES. In connection with the registration
obligations of Bell Atlantic and FSI under Section 2 hereof, Bell Atlantic and
FSI shall:
(a) Before filing any Registration Statement or Prospectus or any
amendments or supplements thereto with the SEC, furnish to the Managers copies
of all such documents proposed to be filed and use their best efforts to reflect
in each such document when so filed with the SEC such comments as the Managers
reasonably shall propose within two (2) Business Days of the delivery of such
copies to the Managers.
(b) Prepare and file with the SEC such amendments and post-effective
amendments to each Registration Statement as may be necessary to keep such
Registration Statement continuously effective for the applicable period
specified in Section 2; except during a Deferral Period, cause the related
Prospectus to be supplemented by any required Prospectus supplement, and as so
supplemented to be filed pursuant to Rule 424 (or any similar provisions then in
force) under the Securities Act; and, except during a Deferral Period, use its
best efforts to comply with the provisions of the Securities Act applicable to
it with respect to the disposition of all securities covered by, such
Registration Statement during the applicable period in accordance with the
intended methods of disposition by the sellers thereof set forth in such
Registration Statement as so amended or such Prospectus as so supplemented;
PROVIDED that during a Deferral Period Bell Atlantic and FSI will continue to
comply with the provisions of the Rule 424 or any other filing or delivery
requirement under the Securities Act with respect to any dispositions of
Registrable Securities pursuant to the Registration Statement that occurred
prior to such Deferral Period.
(c) As promptly as reasonably practicable give notice to the Notice
Holders and the Managers (i) when any Prospectus, Prospectus supplement
Registration Statement or post-effective amendment to a Registration Statement
has been filed with the SEC and, with respect to a Registration Statement. or
any post-effective amendment, when the same has become effective, (ii) of any
request, following the effectiveness of the Initial Shelf Registration Statement
under the Securities Act, by the SEC or any other federal or state governmental
authority for amendments or supplements to any Registration Statement or related
Prospectus, (iii) of the issuance by the SEC or any other federal or state
governmental authority of any stop order suspending the effectiveness of any
Registration Statement or the initiation or threatening of any proceedings for
that purpose, (iv) of the receipt by Bell Atlantic or FSI of any notification
with
-8-
<PAGE>
respect to the suspension of the qualification or exemption from qualification
of any of the Registrable Securities for sale in any jurisdiction or the
initiation or threatening of any proceeding for such purpose, (v) of the
occurrence of (but not the nature of or details concerning) a Material Event and
(vi) of the determination by Bell Atlantic or FSI that a post-effective
amendment to a Registration Statement would be appropriate, which notice may, at
the discretion of Bell Atlantic or FSI (or as required pursuant to Section
3(i)), state that it constitutes a Deferral Notice, in which event the
provisions of Section 3(i) shall apply. Notwithstanding the foregoing, such
notice requirement will not apply during a Deferral Period with respect to
clauses (i), (ii), (v) and (vi) above.
(d) Use their reasonable best efforts, except during a Deferral Period,
to obtain the withdrawal of any order suspending the effectiveness of a
Registration Statement or the lifting of any suspension of the qualification (or
exemption from qualification) of any of the Registrable Securities for sale in
any jurisdiction in which they have been qualified for sale, in either case as
promptly as reasonably practicable.
(e) If reasonably requested by the Manager or any Notice Holder, as
promptly as reasonably practicable, except during a Deferral Period, incorporate
in a Prospectus supplement or post-effective amendment to a Registration
Statement such information as the Managers or such Notice Holder shall, on the
basis of an opinion of nationally recognized counsel experienced in such
matters, determine to be required to be included therein by applicable law and
make any required filings of such Prospectus supplement or such post-effective
amendment; PROVIDED, that Bell Atlantic and FSI shall not be required to take
any actions under this Section 3(e) that are not, in the reasonable opinion of
counsel for Bell Atlantic or FSI, as the case may be, in compliance with
applicable law.
(f) As promptly as reasonably practicable furnish to each Notice Holder
and each Manager, without charge, at least one (1) conformed copy of the
Registration Statement and any amendment thereto, including financial statements
but excluding schedules, all documents incorporated or deemed to be incorporated
therein by reference and all exhibits (unless reasonably requested in writing by
such Notice Holder or the Managers, as the case may be).
(g) Except during a Deferral Period, deliver to each Notice Holder in
connection with any sale of Registrable Securities pursuant to a Registration
Statement, without charge, as many copies of the Prospectus or Prospectuses
relating to such Registrable Securities (including each preliminary prospectus)
and any amendment or supplement thereto as such Notice Holder may reasonably
request; and Bell Atlantic and FSI hereby consent to the use of such Prospectus
or each amendment or supplement-thereto by each Notice Holder in connection with
any offering and sale of the Registrable Securities covered by such Prospectus
or any amendment or supplement thereto in the manner set forth therein.
(h) As promptly as reasonably practicable register or qualify or
cooperate with the Notice Holders in connection with the registration or
qualification (or exemption from such
-9-
<PAGE>
registration or qualification) of such Registrable Securities for offer and sale
under the securities or Blue Sky laws of such jurisdictions within the United
States as any Notice Holder reasonably requests in writing (which request may be
included in the Notice); keep each such registration or qualification (or
exemption therefrom) effective during the Effectiveness Period in connection
with such Notice Holder's offer and sale of Registrable Securities pursuant to
such registration or qualification (or exemption therefrom) and do any and all
other acts or things reasonably necessary or advisable to enable the disposition
in such jurisdictions of such Registrable Securities in the manner set forth in
the relevant Registration Statement and the related Prospectus; PROVIDED, that
neither Bell Atlantic nor FSI will be required to (i) qualify as a foreign
corporation or as a dealer in securities in any jurisdiction where it would not
otherwise be required to qualify but for this Agreement or (ii) take any action
that would subject it to general service of process in suits or to taxation in
any such jurisdiction where it is not then so subject.
(i) Upon (A) the issuance by the SEC of a stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation of
proceedings with respect to the Shelf Registration Statement under Section 8(d)
or 8(e) of the Securities Act, (B) subject to the next sentence, the occurrence
of any event or the existence of any fact (a "MATERIAL EVENT") as a result of
which any Registration Statement shall 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, or any Prospectus
shall 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, in the light of the circumstances under which they were made, not
misleading, or (C) the occurrence or existence of any pending corporate
development that, in the sole and absolute discretion of Bell Atlantic makes it
appropriate to suspend the availability of the Shelf Registration Statement and
the related Prospectus, (i) as promptly as reasonably practicable prepare and
file, if necessary pursuant to applicable law, a post-effective prepare and
file, if necessary pursuant to applicable law, a post-effective amendment to
such Registration Statement or a supplement to the related Prospectus or any
document incorporated therein by reference or file any other required document
that would be incorporated by reference into such Registration Statement and
Prospectus so that such Registration Statement does not 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, and
such Prospectus does not 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, in the light of the circumstances under which they were
made, not misleading, as thereafter delivered to the purchasers of the
Registrable Securities being sold thereunder, and, in the case of a
post-effective amendment to a Registration Statement, subject to the next
sentence, use their best efforts to cause it to become effective as promptly as
is reasonably practicable, and (ii) give notice to the Notice Holders that the
availability of the Shelf Registration Statement is suspended (a "DEFERRAL
NOTICE") and, upon receipt of any Deferral Notice, each Notice Holder shall not
sell any Registrable Securities pursuant to the Registration Statement until
such Notice Holder's receipt of copies of the supplemented or amended Prospectus
provided for in clause (i) above, or until it is advised in writing by Bell
Atlantic that the Prospectus may be used, and has received copies of any
-10-
<PAGE>
additional or supplemental filings that are incorporated or deemed incorporated
by reference in such Prospectus. Bell Atlantic and FSI will use their best
efforts to ensure that the use of the Prospectus may be resumed (x) in the case
of clause (A) above, as promptly as is reasonably practicable except during a
Deferral Period resulting from clause (y) or (z) of this sentence, (y) in the
case of clause (B) above, as soon as, in the sole judgment of Bell Atlantic
public disclosure of such Material Event would not be prejudicial to or contrary
to the interests of Bell Atlantic or FSI or, if necessary to avoid unreasonable
burden or expense, as soon as practicable thereafter and (z) in the case of
clause (C) above, as soon as, in the sole and absolute discretion of Bell
Atlantic such suspension is no longer appropriate. Bell Atlantic and FSI shall
be entitled to exercise their right under this Section 3(i) to suspend the
availability of the Shelf Registration Statement or any Prospectus, without
incurring any obligation to pay liquidated damages pursuant to Section 3(e), for
a period, (the "DEFERRAL PERIOD") not to exceed 90 days (whether or not
consecutive) in any twelve (12) month period.
(j) Upon not less than ten (10) Business Days prior written notice
describing with reasonable particularity the requested information, if requested
in connection with a disposition of Registrable Securities pursuant to a
Registration Statement, make reasonably available for inspection (but not
copying) during normal business hours by the Notice Holders of such Registrable
Securities and any broker-dealers, attorneys and accountants retained by such
Notice Holders, all relevant material financial and other records, pertinent
corporate documents and properties of Bell Atlantic and its subsidiaries
(including FSI)(with the determination of what is relevant and material to be
determined in Bell Atlantic's reasonable discretion), and cause the executive
officers, directors and designated employees of Bell Atlantic and its
subsidiaries (including FSI) to make reasonably available for inspection all
relevant material information, as determined in Bell Atlantic's reasonable
discretion, reasonably requested by such Notice Holders or any such
broker-dealers, attorneys or accountants in connection with such disposition, in
each case, solely to the extent disclosure of such records or information is
customary for similar "due diligence" examinations; PROVIDED, that any
information that is designated by Bell Atlantic, in good faith, as confidential
at the time of delivery of such information shall be kept strictly confidential
by such Notice Holders and any such broker-dealer, attorney or accountant and
not used for any purpose other than the completion of a "due diligence"
examination and shall not be disclosed to any other person or to any individual
within an organization other than those directly involved with the proposed
disposition, unless such disclosure is made in connection with a court
proceeding or is required by law, or such information becomes available to the
public generally or through a third party without an accompanying obligation of
confidentiality, and each person or organization involved in such examination
shall enter into a confidentiality agreement to such effect; and PROVIDED
FURTHER, that the foregoing inspection and information gathering shall, to the
greatest extent possible, be coordinated on behalf of the Notice Holders and the
other parties entitled thereto by the counsel referred to in Section 5.
(k) Comply with all applicable rules and regulations of the SEC and
make generally available to its securityholders earning statements (which need
not be audited) satisfying the provisions of Section I I (a) of the Securities
Act and Rule 158 thereunder (or any similar rule
-11-
<PAGE>
promulgated under the, Securities Act) no later than 45 days after the end of
any 12-month period (or 90 days after the end of any 12-month period if such
period is a fiscal year) commencing on the first day of the first fiscal quarter
of Bell Atlantic after the effective date of a Registration Statement, which
statements shall cover said 12-month periods.
(l) Unless all Registrable Securities shall be held in book-entry form,
cooperate with each Notice Holder to facilitate the timely preparation and
delivery of certificates representing Registrable Securities to be sold pursuant
to a Registration Statement, which certificates shall not bear any restrictive
legends (unless such legends are necessary in the reasonable opinion of counsel
to Bell Atlantic or FSI to comply with applicable law). and cause such
Registrable Securities to be in such denominations and registered in such names
as such Notice Holder may request.
(m) Provide a CUSIP number for all Registrable Securities not later
than the effective date of the Initial Shelf Registration Statement and provide
the Trustee with printed certificates for the Registrable Securities that are in
a form eligible for deposit with DTC, Euroclear and Cedel.
(n) Provide such information as may be required for any filings made
with the National Association of Securities Dealers, Inc. (other than
information relating to underwriters or similar persons or selling
Stockholders).
(o) Upon (i) the filing of the Initial Registration Statement and (ii)
the effectiveness of the Initial Registration Statement, announce the same, in
each case by release to Reuters Economic Services and Bloomberg Business News.
SECTION 4. HOLDER'S OBLIGATIONS. Each Holder agrees, by acquisition of
the Registrable Securities, that no Holder of Registrable Securities shall be
entitled to sell any of such Registrable Securities pursuant to a Registration
Statement or to receive a Prospectus relating thereto, unless such Holder has
furnished Bell Atlantic and FSI with notice as required pursuant to Section 2(d)
hereof (including the information required to be included in such Notice) and
the information set forth in the next sentence. Each Notice Holder agrees
promptly to furnish to Bell Atlantic and FSI all information required to be
disclosed in order to make the information previously furnished to Bell Atlantic
and FSI by such Notice Holder not misleading and any other information regarding
such Notice Holder and the distribution of such Registrable Securities as Bell
Atlantic and FSI may from time to time reasonably request. Any sale of any
Registrable Securities by any Holder shall constitute a representation and
warranty by such Holder that the information relating to such Holder and its
plan of distribution is as set forth in the Prospectus delivered by such Holder
in connection with such disposition, that such Prospectus does not as of the
time of such sale contain any untrue statement of a material fact relating to or
provided by such Holder or its plan of distribution and that such Prospectus
does not as of the time of such sale omit to state any material fact relating to
or provided by such
-12-
<PAGE>
Holder or its plan of distribution necessary to make the statements in such
Prospectus, in the light of the circumstances under which they were made, not
misleading.
SECTION 5. REGISTRATION EXPENSES. Bell Atlantic shall bear all fees and
expenses incurred in connection with the performance by Bell Atlantic and FSI of
their obligations under Sections 2 and 3 whether or not any of the Registration
Statements become effective. Such fees and expenses shall include, without
limitation, (i) all registration and filing fees (including, without limitation,
fees and expenses (x) with respect to filings required to be made with the
National Association of Securities Dealers, Inc. and (y) of compliance with
federal and state securities or Blue Sky laws (including, without limitation,
reasonable fees and disbursements of the counsel specified in the next sentence
in connection with Blue Sky qualifications of the Registrable Securities under
the laws of such jurisdictions as the Notice Holders of a majority of the
Registrable Securities being sold pursuant to a Registration Statement may
designate), (ii) printing expenses (including, without limitation, expenses of
printing certificates for Registrable Securities in a form eligible for deposit
with DTC, Euroclear and Cedel), (iii) duplication expenses relating to copies of
any Registration Statement or Prospectus delivered to any Holders hereunder,
(iv) fees and disbursements of counsel for Bell Atlantic and FSI in connection
with the Shelf Registration Statement, (v) reasonable fees and disbursements of
the Trustee and its counsel and (vi) Securities Act liability insurance obtained
by Bell Atlantic in its sole discretion. In addition, Bell Atlantic shall bear
or reimburse the Notice Holders for the reasonable fees and disbursements of one
firm of legal counsel for the Holders, which shall be a nationally recognized
law firm experienced in securities law matters designated by the Managers, with
the written consent of Bell Atlantic (which shall not be unreasonably withheld).
In addition, Bell Atlantic shall pay the internal expenses of Bell Atlantic and
FSI (including, without limitation, all salaries and expenses of officers and
employees performing legal or accounting duties), the expense of any annual
audit, the fees and expenses incurred in connection with the listing of the
Registrable Securities on any securities exchange on which similar securities of
Bell Atlantic are then listed and the fees and expenses of any person, including
special experts, retained by Bell Atlantic or FSI. Notwithstanding the
provisions of this Section 5, each seller of Registrable Securities shall pay
all registration expenses to the extent Bell Atlantic or Bell FSI is prohibited
by applicable Blue Sky laws from paying for or on behalf of such seller of
Registrable Securities.
SECTION 6. INDEMNIFICATION.
(a) INDEMNIFICATION BY BELL ATLANTIC AND FSI. Bell Atlantic and FSI
shall indemnify and hold harmless each Notice Holder and each person, if any,
who controls any Notice Holder (within the meaning of either Section 15 of the
Securities Act or Section 20 of the Exchange Act) from and against all losses,
liabilities, claims, damages and expenses (including, without limitation, any
legal or other expenses reasonably incurred in connection with defending or
investigating any such action or claim) (collectively, "LOSSES"), arising out of
or based upon any untrue statement or alleged untrue statement of a material
fact contained in any Registration Statement or Prospectus or in any amendment
or supplement thereto or in any preliminary prospectus, or arising out of or
based upon any omission or alleged omission to state therein a
-13-
<PAGE>
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as such Losses arise out of or are based
upon the information relating to any Holder furnished to Bell Atlantic and FSI
in writing by such Holder expressly for use therein; PROVIDED, that the
indemnification contained in this paragraph shall not inure to the benefit of
any Holder of Registrable Securities (or to the benefit of any person
controlling such Holder) on account of any such Losses arising out of or based
upon an untrue statement or alleged untrue statement or omission or alleged
omission made in any preliminary prospectus if either (A) (i) such Holder failed
to send or deliver a copy of the Prospectus with or prior to the delivery of
written confirmation of the sale by such Holder to the person asserting the
claim from which such Losses arise and (ii) the Prospectus would have corrected
such untrue statement or alleged untrue statement or such omission or alleged
omission, or (B) (x) such untrue statement or alleged untrue statement, omission
or alleged omission is corrected in an amendment or supplement to the Prospectus
and (y) having previously been furnished by or on behalf of Bell Atlantic and
FSI with copies of the Prospectus as so amended or supplemented, such Holder
thereafter fails to deliver such Prospectus as so amended or supplemented, with
or prior to the delivery of written confirmation of the sale of a Registrable
Security to the person asserting the claim from which such Losses arise.
(b) INDEMNIFICATION BY HOLDER OF REGISTRABLE SECURITIES. Each Holder
agrees severally and not jointly to indemnify and hold harmless Bell Atlantic
and FSI and their respective directors and officers, and each person, if any,
who controls Bell Atlantic or FSI (within the meaning of either Section 15 of
the Securities Act or Section 20 of the Exchange Act), from and against all
losses arising out of or based upon any untrue statement or alleged untrue
statement of a material fact contained in any Registration Statement or
Prospectus or in any amendment or supplement thereto or in any preliminary
prospectus, or arising out of or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or necessary to make
the statements therein not misleading, to the extent, but only to the extent,
that such untrue statement or omission is contained in any information relating
to such Holder so furnished in writing by such Holder to Bell Atlantic and FSI
expressly for use in such Registration Statement or Prospectus. In no event
shall the liability of any selling Holder of Registrable Securities hereunder be
greater in amount than the dollar amount of the proceeds received by such Holder
upon the sale of the Registrable Securities pursuant to the Shelf Registration
Statement giving rise to such indemnification obligation.
(c) CONDUCT OF INDEMNIFICATION PROCEEDINGS. In case any proceeding
(including any governmental investigation) shall be instituted involving any
person in respect of which indemnity may be sought pursuant to either of the two
preceding paragraphs, such person (the "INDEMNIFIED PARTY") shall promptly
notify the person against whom such indemnity may be sought (the "INDEMNIFYING
PARTY") in writing and the indemnifying party, upon request of the indemnified
party, shall retain counsel reasonably satisfactory to the indemnified party to
represent the indemnified party and any others the indemnifying party may
designate in such proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but
-14-
<PAGE>
the fees and expenses of such counsel shall be at the expense of such
indemnified party unless (i) the indemnifying party and the indemnified party
shall have mutually agreed to the retention of such counsel or (ii) t he named
parties to any such proceeding (including any impleaded parties) include both
the indemnifying party and the indemnified party and representation of both
parties by the same counsel would be inappropriate due to actual or potential
differing interests between them. It is understood that the indemnifying party
shall not, in respect of the legal expenses of any indemnified party in
connection with any proceeding or related proceedings in the same jurisdiction,
be liable for the fees and expenses of more than one separate firm (in addition
to any local counsel) for all indemnified parties, and that all such fees and
expenses shall be reimbursed as they are incurred. Such separate firm shall be
designated in writing by, in the case of parties indemnified pursuant to Section
6(a), the Holders of a majority of principal amount of Notes covered by the
Shelf Registration Statement held by Holders that are indemnified parties
pursuant to Section 6(a) and, in the case of parties indemnified pursuant to
Section 6(b), Bell Atlantic and FSI. The indemnifying party shall not be liable
for any settlement of any proceeding effected without its written consent, but
if settled with such consent or if there be a final judgment for the plaintiff,
the indemnifying party agrees to indemnify the indemnified party from and
against any loss or liability by reason of such settlement or judgment.
Notwithstanding the foregoing sentence, if at any time an indemnified party
shall have requested an indemnifying party to reimburse the indemnified party
for fees and expenses of counsel as contemplated by the second and third
sentences of this paragraph, the indemnifying party agrees that it shall be
liable for any settlement of any proceeding effected without its written consent
if (i) such settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid request and (ii) such indemnifying party
shall not have reimbursed the indemnified party in accordance with such request
prior to the date of such settlement. No indemnifying party shall, without the
prior written consent of the indemnified party, effect any settlement of any
pending or threatened proceeding in respect of which any indemnified party is or
could have been a party and indemnity could have been sought hereunder by such
indemnified party, unless such settlement includes an unconditional release of
such indemnified party from all liability on claims that are the subject matter
of such proceeding.
(d) CONTRIBUTION. To the extent that the indemnification provided for
in this Section 6 is unavailable to an indemnified party under Section 6(a) or
6(b) hereof in respect of any Losses or is insufficient to hold such indemnified
party harmless, then each applicable indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by such
indemnified party as a result of such Losses (i) in such proportion as is
appropriate to reflect the relative benefits received by the indemnifying party
or parties on the one hand and the indemnified party or parties on the other
hand or (ii) if the allocation provided by clause (i) above 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 indemnifying party or parties on the one hand and of the indemnified party
or parties on the other hand in connection with the statements or omissions that
resulted in such Losses, as well as any other relevant equitable considerations.
Benefits received by Bell Atlantic and FSI shall be deemed to be equal to the
total net proceeds from the initial placement pursuant to the Purchase
-15-
<PAGE>
Agreement (before deducting expenses) of the Registrable Securities to which
such Losses relate. Benefits received by any Holder shall be deemed to be equal
to the value of receiving Registrable Securities that are registered under the
Securities Act. The relative fault of the Holders on the one hand and Bell
Atlantic and FSI on the other hand shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Holders or by Bell Atlantic or FSI and the parties'
relative intent, knowledge, access to information and opportunity to correct or
prevent such statement or omission. The Holders' respective obligations to
contribute pursuant to this paragraph are several in proportion to the
respective number of Registrable Securities they have sold pursuant to a
Registration Statement, and not joint.
The parties hereto agree that it would not be just and equitable if
contribution pursuant to this Section 6(d) were determined by PRO RATA
allocation or by any other method or allocation that does not take into account
the equitable considerations referred to in the immediately preceding paragraph.
The amount paid or payable by an indemnified party as a result of the Losses
referred to in the immediately preceding paragraph shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding this Section 6(d), an
indemnifying party that is a selling Holder of Registrable Securities shall not
be required to contribute any amount in excess of the amount by which the total
price at which the Registrable Securities sold by such indemnifying party and
distributed to the public were offered to the public exceeds the amount of any
damages that such indemnifying party has otherwise been required to pay by
reason of such untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the meaning
of Section I I (o of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation.
(e) The indemnity, contribution and expense reimbursement obligations
of the parties hereunder shall be in addition to any liability any indemnifying
party may otherwise have hereunder, under the Purchase Agreement or otherwise.
(f) The indemnity and contribution provisions contained in this Section
6 shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement, (ii) any investigation made by or on behalf of
any Holder or any person controlling any Holder, or Bell Atlantic or FSI, or
Bell Atlantic's or FSI's officers or directors or any person controlling Bell
Atlantic or FSI and (iii) the sale of any Registrable Securities by any -Holder.
SECTION 7. INFORMATION REQUIREMENTS. (a) Bell Atlantic and FSI covenant
that, if at any time before the end of the Effectiveness Period, Bell Atlantic
is not subject to the reporting requirements of the Exchange Act, they will
cooperate with any Holder of Registrable Securities and take such further
reasonable action as any Holder of Registrable Securities may reasonably request
(including, without limitation, making such reasonable representations as any
such Holder may reasonably request), all to the extent required from time to
time to enable such
-16-
<PAGE>
Holder to sell Registrable Securities without registration under the Securities
Act within the limitation of the exemptions provided by Rule- 144, Rule 144A and
Regulation S under the Securities Act and customarily taken in connection with
sales pursuant to such exemptions. Upon the request of any Holder of Registrable
Securities, each of Bell Atlantic and FSI shall deliver to such Holder a written
statement as to whether it has complied with such filing requirements, unless
such a statement has been included in Bell Atlantic's or FSI's most recent
report required to be filed and filed pursuant to Section 13 or Section 15(d) of
Exchange Act. Notwithstanding the foregoing, nothing in this Section 7 shall be
deemed to require Bell Atlantic or FSI to register any of its securities under
any section of the Exchange Act.
SECTION 8. MISCELLANEOUS.
(a) NO CONFLICTING AGREEMENTS. Neither Bell Atlantic nor FSI has, as of
the date hereof, nor shall, on or after the date of this Agreement, enter into
any agreement with respect to its securities that conflicts with the rights
granted to the Holders of Registrable Securities in this Agreement. Each of Bell
Atlantic and FSI represents and warrants that the rights granted to the Holders
of Registrable Securities hereunder do not in any way conflict with the rights
granted to the Holders of Bell Atlantic's or FSI's securities under any other
agreements.
(b) AMENDMENTS AND WAIVERS. The provisions of this Agreement, including
the provisions of this sentence, may not be amended, modified or supplemented,
and waivers or consents to departures from the provisions hereof may not be
given, unless Bell Atlantic and FSI have obtained the written consent of Holders
of a majority in principal amount of the Notes. Notwithstanding the foregoing, a
waiver or consent to depart from the provisions hereof with respect to a matter
that relates exclusively to the rights of Holders of Registrable Securities
whose securities are being sold pursuant to a Registration Statement and that
does not directly or indirectly affect the rights of other Holders of
Registrable Securities may be given by Holders of at least a majority of the
Registrable Securities being sold by such Holders pursuant to such Registration
Statement; PROVIDED, that the provisions of this sentence may not be amended,
modified, or supplemented except in accordance with the provisions of the
immediately preceding sentence.
(c) NOTICES. All notices and other communications provided for or
permitted hereunder shall be made in writing by hand delivery, by telecopier, by
courier guaranteeing overnight delivery or by first-class mail, return receipt
requested, and shall be deemed given (i) when made, if made by hand delivery,
(ii) upon confirmation, if made by telecopier, (iii) one (1) Business Day after
being deposited with such courier, if made by overnight courier or (iv) on the
date indicated on the notice of receipt, if made by first-class mail, to the
parties as follows:
(x) if to a Holder of Registrable Securities, at the most
current address given by such Holder to Bell Atlantic and FSI
in notice or any amendment thereto;
-17-
<PAGE>
(y) if to Bell Atlantic or FSI, to:
Bell Atlantic Corporation
1095 Avenue of the Americas
New York, N.Y. 10036
Attention: Treasurer
Telecopy No.: 212-597-2589
with a copy to the Vice President,
Assistant General Counsel and Secretary at such address
and
(z) if to the Managers, to:
SBC Warburg Dillon Read, Inc.
535 Madison Avenue
New York, NY 10022
Attention: Syndicate Department
or to such other address as such person may have furnished to the other persons
identified in this Section 8(c) in writing in accordance herewith.
(d) APPROVAL OF HOLDERS. Whenever the consent or approval of Holders of
a specified percentage of Registrable Securities is required hereunder,
Registrable Securities held by Bell Atlantic, FSI or their respective affiliates
(as such term is defined in Rule 405 under the Securities Act) (other than the
Managers or subsequent Holders-of Registrable Securities if such subsequent
Holders are deemed to be such affiliates solely by reason of their holdings of
such Registrable Securities) shall not be counted in determining whether such
consent or approval was given by the Holders of such required percentage.
(e) SUCCESSORS AND ASSIGNS. Any person who purchases any Registrable
Securities from the Managers shall be deemed, for purposes of this Agreement, to
be an assignee of the Managers. This Agreement shall inure to the benefit of and
be binding upon the successors and assigns of each of the parties and shall
inure to the benefit of and be binding upon each Holder of any Registrable
Securities.
(f) COUNTERPARTS. This Agreement may be executed in any number of
counterparts and by the parties hereto in separate counterpart, each of which
when so executed shall be deemed to be original and all of which taken together
shall constitute one and the same agreement.
-18-
<PAGE>
(g) HEADINGS. The headings in this Agreement are for convenience of
reference only and shall not limit or otherwise affect the meaning hereof.
(h) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK, WITHOUT REGARD TO CONFLICTS
OF LAWS PRINCIPLES THEREOF.
(i) SEVERABILITY. If any term, provision, covenant or restriction of
this Agreement is held to be invalid, illegal, void or unenforceable, the
remainder of the terms, provisions, covenants and restrictions set forth herein
shall remain in full force and effect and shall in no way be affected, impaired
or invalidated thereby, and the parties hereto shall use their best efforts to
find and employ an alternative means to achieve the same or substantially the
same result as that contemplated by such term, provision, covenant or
restriction, it being intended that all of the rights and privileges of the
parties shall be enforceable to the fullest extent permitted by law.
(j) ENTIRE AGREEMENT. This Agreement is intended by the parties as a
final expression of their agreement and is intended to be a complete and
exclusive statement of the agreement and understanding of the parties hereto in
respect of the subject matter contained herein and the registration rights
granted by Bell Atlantic and FSI with respect to the Registrable Securities.
Except as provided in the Purchase Agreement, there are no restrictions,
promises, warranties or undertakings, other than those set forth or referred to
herein, with respect to the registration rights granted by Bell Atlantic and FSI
with respect to the Registrable Securities. This Agreement supersedes all prior
agreements and undertakings among the parties with respect to such registration
rights. No party hereto shall have any rights, duties or obligations other than
those specifically set forth in this Agreement.
(k) TERMINATION. This Agreement and the obligations of the parties
hereunder shall terminate upon the end of the Effectiveness Period, except for
any liabilities or obligations under Sections 4, 5 or 6 hereof and the
obligations to make payments of and provide for liquidated damages under Section
2(e) hereof to the extent such damages accrue prior to the end of the
Effectiveness Period, each of which shall remain in effect in accordance with
their terms.
-19-
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
BELL ATLANTIC CORPORATION
By: /s/ Ellen C. Wolf
-----------------------------
Name: Ellen C. Wolf
Title: Vice President - Treasurer
BELL ATLANTIC FINANCIAL
SERVICES, INC.
By: /s/ Janet M. Garrity
-----------------------------
Name: Janet M. Garrity
Title: President and Treasurer
-20-
<PAGE>
Accepted as of the date first above written:
SWISS BANK CORPORATION, LONDON BRANCH
(on behalf of the Managers and for the benefit of the Holders)
By:
Name:
Title:
By:
------------------------------
Name:
Title:
<PAGE>
May 7, 1999
Bell Atlantic Corporation
1095 Avenue of the Americas
New York, New York 10036
Bell Atlantic Financial Services, Inc.
3900 Washington Street, 2nd Floor
Wilmington, Delaware 19802
Re: Bell Atlantic Financial Services, Inc. and
Bell Atlantic Corporation Registration Statement
On Form S-3 Under the Securities Act of 1933
-------------------------------------------------
Ladies and Gentlemen:
Reference is made to the Registration Statement on Form S-3 (the
"Registration Statement") which Bell Atlantic Financial Services, Inc., a
Delaware corporation ("FSI"), and Bell Atlantic Corporation, a Delaware
corporation ("Bell Atlantic"), are filing with the Securities and Exchange
Commission under the Securities Act of 1933, as amended, registering (1)
$2,455,000,000 aggregate principal amount of 5.75% Senior Exchangeable Notes of
FSI (the "Notes") issued under an Indenture dated as of February 26, 1998 among
FSI, Bell Atlantic and The Chase Manhattan Bank, as Trustee (the "Indenture")
and (2) the related support obligations of Bell Atlantic under a Support
Agreement dated as of February 1, 1998 between Bell Atlantic and FSI (the
"Support Agreement"). The Notes will be sold from time to time by certain
holders thereof named in the Registration Statement.
I or members of my staff have reviewed the Registration Statement, the
Certificate of Incorporation and Bylaws of each of FSI and Bell Atlantic,
resolutions adopted by the Board of Directors of each of FSI and Bell Atlantic,
and such other documents and records as I have deemed appropriate for the
purpose of giving this opinion.
Based upon the foregoing, I am of the opinion that:
1. The Notes are legally issued and binding obligations of FSI,
entitled to the benefits of the Indenture.
<PAGE>
2. The Support Agreement is a valid and binding Agreement of each of
FSI and Bell Atlantic.
I hereby consent to the filing of this Opinion with the Securities and
Exchange Commission in connection with the Registration Statement and to being
named under the heading "Legal Opinions" in the Registration Statement.
Very truly yours,
P. Alan Bulliner
Associate General Counsel
and Corporate Secretary
<PAGE>
EXHIBIT 23.1
CONSENT OF INDEPENDENT ACCOUNTANTS
We hereby consent to the incorporation by reference in this Registration
Statement on Form S-3 of our report dated February 9, 1999 relating to the
consolidated financial statements and consolidated financial statement schedule,
which appears in Bell Atlantic Corporation's Annual Report on Form 10-K for the
year ended December 31, 1998. We also consent to the reference to us under the
heading "Experts" in such Registration Statement.
/s/ PriceWaterhouseCoopers LLP
New York, New York
May 7, 1999
<PAGE>
EXHIBIT 23.2
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the incorporation by
reference in this registration statement on Form S-3 of our report, dated
January 28, 1999, included in GTE Corporation's Form 10-K for the year ended
December 31, 1998 and to all references to our Firm included in this
registration statement.
/s/ ARTHUR ANDERSEN LLP
Dallas, Texas
May 7, 1999
<PAGE>
Exhibit 24.1
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben, Frederic V. Salerno and Ivan G. Seidenberg as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ Lawrence T. Babbio, Jr.
-----------------------------
Lawrence T. Babbio, Jr.
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben, Frederic V. Salerno and Ivan G. Seidenberg as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ Richard L. Carrion
------------------------
Richard L. Carrion
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben, Frederic V. Salerno and Ivan G. Seidenberg as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ James G. Cullen
---------------------
James G. Cullen
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben, Frederic V. Salerno and Ivan G. Seidenberg as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ Lodewijk J.r. De Vink
---------------------------
Lodewijk J.R. de Vink
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben, Frederic V. Salerno and Ivan G. Seidenberg as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ James H. Gilliam, Jr.
---------------------------
James H. Gilliam, Jr.
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben, Frederic V. Salerno and Ivan G. Seidenberg as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ Stanley P. Goldstein
--------------------------
Stanley P. Goldstein
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben, Frederic V. Salerno and Ivan G. Seidenberg as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ Helene L. Kaplan
----------------------
Helene L. Kaplan
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben, Frederic V. Salerno and Ivan G. Seidenberg as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ Thomas H. Kean
--------------------
Thomas H. Kean
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben, Frederic V. Salerno and Ivan G. Seidenberg as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ Elizabeth T. Kennan
-------------------------
Elizabeth T. Kennan
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben, Frederic V. Salerno and Ivan G. Seidenberg as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ John F. Maypole
---------------------
John F. Maypole
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben, Frederic V. Salerno and Ivan G. Seidenberg as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ Joseph Neubauer
---------------------
Joseph Neubauer
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben, Frederic V. Salerno and Ivan G. Seidenberg as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ Eckhard Pfeiffer
----------------------
Eckhard Pfeiffer
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben, Frederic V. Salerno and Ivan G. Seidenberg as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ Hugh B. Price
-------------------
Hugh B. Price
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben, Frederic V. Salerno and Ivan G. Seidenberg as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ Rozanne L. Ridgway
------------------------
Rozanne L. Ridgway
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben and Ivan G. Seidenberg as attorney for the undersigned for the purpose
of executing and filing such registration statement and any amendment or
amendments or other necessary documents, hereby giving to each said attorney
full authority to perform all acts necessary thereto as fully as the undersigned
could do if personally present, and hereby ratifying all that said attorney may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ Frederic V. Salerno
-------------------------
Frederic V. Salerno
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben and Frederic V. Salerno as attorney for the undersigned for the purpose
of executing and filing such registration statement and any amendment or
amendments or other necessary documents, hereby giving to each said attorney
full authority to perform all acts necessary thereto as fully as the undersigned
could do if personally present, and hereby ratifying all that said attorney may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ Ivan G. Seidenberg
------------------------
Ivan G. Seidenberg
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben, Frederic V. Salerno and Ivan G. Seidenberg as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ Walter V. Shipley
-----------------------
Walter V. Shipley
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben, Frederic V. Salerno and Ivan G. Seidenberg as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ Thomas H. O'Brien
-----------------------
Thomas H. O'Brien
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben, Frederic V. Salerno and Ivan G. Seidenberg as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ John R. Stafford
----------------------
John R. Stafford
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben, Frederic V. Salerno and Ivan G. Seidenberg as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ Morrison DeS. Webb
------------------------
Morrison DeS. Webb
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC CORPORATION, a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of 5.75% Senior Exchangeable Notes due 2003 of Bell
Atlantic Financial Services, Inc. and the related support obligations of Bell
Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Doreen
A. Toben, Frederic V. Salerno and Ivan G. Seidenberg as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of
Attorney this 23rd day of March, 1999.
/s/ Shirley Young
-------------------
Shirley Young
<PAGE>
Exhibit 24.2
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC FINANCIAL SERVICES, INC., a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of its 5.75% Senior Exchangeable Notes due 2003 and
the related support obligations of Bell Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of Janet M.
Garrity and Robert S. Fitzmire as attorney for the undersigned for the purpose
of executing and filing such registration statement and any amendment or
amendments or other necessary documents, hereby giving to each said attorney
full authority to perform all acts necessary thereto as fully as the undersigned
could do if personally present, and hereby ratifying all that said attorney may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 5th day of May, 1999.
/s/ P. Alan Bulliner
-------------------------
P. Alan Bulliner
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC FINANCIAL SERVICES, INC., a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of its 5.75% Senior Exchangeable Notes due 2003 and
the related support obligations of Bell Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of P. Alan
Bulliner and Robert S. Fitzmire as attorney for the undersigned for the purpose
of executing and filing such registration statement and any amendment or
amendments or other necessary documents, hereby giving to each said attorney
full authority to perform all acts necessary thereto as fully as the undersigned
could do if personally present, and hereby ratifying all that said attorney may
lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 5th day of May, 1999.
/s/ Janet M. Garrity
-------------------------
Janet M. Garrity
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC FINANCIAL SERVICES, INC., a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of its 5.75% Senior Exchangeable Notes due 2003 and
the related support obligations of Bell Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of P. Alan
Bulliner and Janet M. Garrity as attorney for the undersigned for the purpose of
executing and filing such registration statement and any amendment or amendments
or other necessary documents, hereby giving to each said attorney full authority
to perform all acts necessary thereto as fully as the undersigned could do if
personally present, and hereby ratifying all that said attorney may lawfully do
or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 5th day of May, 1999.
/s/ Robert S. Fitzmire
-------------------------
Robert S. Fitzmire
<PAGE>
POWER OF ATTORNEY
WHEREAS, BELL ATLANTIC FINANCIAL SERVICES, INC., a Delaware corporation
(hereinafter referred to as the "Company"), proposes to file with the Securities
and Exchange Commission under the provisions of the Securities Act of 1933, as
amended, a registration statement on Form S-3 relating to $2,455,000,000
aggregate principal amount of its 5.75% Senior Exchangeable Notes due 2003 and
the related support obligations of Bell Atlantic Corporation.
NOW, THEREFORE, the undersigned hereby appoints each of P. Alan
Bulliner, Janet M. Garrity and Robert S. Fitzmire as attorney for the
undersigned for the purpose of executing and filing such registration statement
and any amendment or amendments or other necessary documents, hereby giving to
each said attorney full authority to perform all acts necessary thereto as fully
as the undersigned could do if personally present, and hereby ratifying all that
said attorney may lawfully do or cause to be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned has executed this Power of Attorney
this 5th day of May, 1999.
/s/ Ellen C. Wolf
-------------------------
Ellen C. Wolf
<PAGE>
Exhibit 25.1
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
--------------------------------------------
BELL ATLANTIC CORPORATION
(Exact name of obligor as specified in its charter)
DELAWARE 23-2259884
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
1095 AVENUE OF THE AMERICAS
NEW YORK, NEW YORK 10036
(Address of principal executive offices) (Zip Code)
--------
5.75% SENIOR EXCHANGEABLE NOTES DUE 2003
(Title of the indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE>
- 2 -
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee,
The Chase Manhattan Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 13th day of April, 1999.
THE CHASE MANHATTAN BANK
By
Gemmel Richards
Assistant Vice President
<PAGE>
- 3 -
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee,
The Chase Manhattan Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 13th day of April, 1999.
THE CHASE MANHATTAN BANK
By /s/ Gemmel Richards
-------------------------------
/s/ Gemmel Richards
Assistant Vice President
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 1998, in
accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Millions
<S> <C>
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin .............................................................. $ 13,915
Interest-bearing balances ...................................................... 7,805
Securities:
Held to maturity securities ......................................................... 1,429
Available for sale securities ....................................................... 56,327
Federal funds sold and securities purchased under
agreements to resell ........................................................... 21,733
Loans and lease financing receivables:
Loans and leases, net of unearned income ....................................... $131,095
Less: Allowance for loan and lease losses ...................................... 2,711
Less: Allocated transfer risk reserve .......................................... 0
--------
Loans and leases, net of unearned income,
allowance, and reserve ......................................................... 128,384
Trading Assets ...................................................................... 48,949
Premises and fixed assets (including capitalized
leases) ........................................................................ 3,095
Other real estate owned ............................................................. 239
Investments in unconsolidated subsidiaries and
associated companies ........................................................... 199
Customers' liability to this bank on acceptances
outstanding .................................................................... 1,209
Intangible assets ................................................................... 2,081
Other assets ........................................................................ 11,352
--------
TOTAL ASSETS ........................................................................ $296,717
--------
--------
- 4 -
<PAGE>
LIABILITIES
Deposits
In domestic offices ............................................................ $105,879
Noninterest-bearing .................................. $ 39,175
Interest-bearing ..................................... 66,704
In foreign offices, Edge and Agreement,
subsidiaries and IBF's ......................................................... 79,294
Noninterest-bearing ....................................... $ 4,082
Interest-bearing ..................................... 75,212
Federal funds purchased and securities sold under agree-
ments to repurchase ................................................................. 32,546
Demand notes issued to the U.S. Treasury ............................................ 629
Trading liabilities ................................................................. 36,807
Otherborrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less .................................. 4,478
With a remaining maturity of
more than one year ..................................................................
through three years ..................................................... 213
With a remaining maturity of more than three years ........................... 115
Bank's liability on acceptances executed and outstanding ............................ 1,209
Subordinated notes and debentures ................................................... 5,408
Other liabilities ................................................................... 10,855
TOTAL LIABILITIES ................................................................... 277,433
-------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ....................................... 0
Common stock ........................................................................ 1,211
Surplus (exclude all surplus related to preferred stock) ........................... 11,016
Undivided profits and capital reserves .............................................. 6,762
Net unrealized holding gains (losses)
on available-for-sale securities .................................................... 279
Cumulative foreign currency translation adjustments ................................. 16
TOTAL EQUITY CAPITAL ................................................................ 19,284
--------
TOTAL LIABILITIES AND EQUITY CAPITAL ................................................ $296,717
--------
--------
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the above-named bank, do hereby
declare that this Report of Condition has been prepared in conformance with the
instructions issued by the appropriate Federal regulatory authority and is true
to the best of my knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us, and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the appropriate Federal regulatory authority and is true and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
- 5 -
<PAGE>
-------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
-------------------------
FORM T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF
A CORPORATION DESIGNATED TO ACT AS TRUSTEE
-------------------------------------------
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY OF
A TRUSTEE PURSUANT TO SECTION 305(b)(2) ________
----------------------------------------
THE CHASE MANHATTAN BANK
(Exact name of trustee as specified in its charter)
NEW YORK 13-4994650
(State of incorporation (I.R.S. employer
if not a national bank) identification No.)
270 PARK AVENUE
NEW YORK, NEW YORK 10017
(Address of principal executive offices) (Zip Code)
William H. McDavid
General Counsel
270 Park Avenue
New York, New York 10017
Tel: (212) 270-2611
(Name, address and telephone number of agent for service)
--------------------------------------------
BELL ATLANTIC FINANCIAL SERVICES, INC.
(Exact name of obligor as specified in its charter)
DELAWARE 51-0272912
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification No.)
3900 WASHINGTON STREET, 2ND FLOOR
WILMINGTON, DELAWARE 19802
(Address of principal executive offices) (Zip Code)
5.75% SENIOR EXCHANGEABLE NOTES DUE 2003
(Title of the indenture securities)
<PAGE>
GENERAL
Item 1. General Information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising authority to
which it is subject.
New York State Banking Department, State House, Albany, New York
12110.
Board of Governors of the Federal Reserve System, Washington,
D.C., 20551
Federal Reserve Bank of New York, District No. 2, 33 Liberty
Street, New York, N.Y.
Federal Deposit Insurance Corporation, Washington, D.C., 20429.
(b) Whether it is authorized to exercise corporate trust powers.
Yes.
Item 2. Affiliations with the Obligor.
If the obligor is an affiliate of the trustee, describe each such
affiliation.
None.
<PAGE>
- 2 -
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee,
The Chase Manhattan Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 13th day of April, 1999.
THE CHASE MANHATTAN BANK
By
Gemmel Richards
Assistant Vice President
<PAGE>
- 3 -
Item 16. List of Exhibits
List below all exhibits filed as a part of this Statement of
Eligibility.
1. A copy of the Articles of Association of the Trustee as now in
effect, including the Organization Certificate and the Certificates of Amendment
dated February 17, 1969, August 31, 1977, December 31, 1980, September 9, 1982,
February 28, 1985, December 2, 1991 and July 10, 1996 (see Exhibit 1 to Form T-1
filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
2. A copy of the Certificate of Authority of the Trustee to Commence
Business (see Exhibit 2 to Form T-1 filed in connection with Registration
Statement No. 33-50010, which is incorporated by reference. On July 14, 1996, in
connection with the merger of Chemical Bank and The Chase Manhattan Bank
(National Association), Chemical Bank, the surviving corporation, was renamed
The Chase Manhattan Bank).
3. None, authorization to exercise corporate trust powers being
contained in the documents identified above as Exhibits 1 and 2.
4. A copy of the existing By-Laws of the Trustee (see Exhibit 4 to
Form T-1 filed in connection with Registration Statement No. 333-06249, which is
incorporated by reference).
5. Not applicable.
6. The consent of the Trustee required by Section 321(b) of the Act
(see Exhibit 6 to Form T-1 filed in connection with Registration Statement No.
33-50010, which is incorporated by reference. On July 14, 1996, in connection
with the merger of Chemical Bank and The Chase Manhattan Bank (National
Association), Chemical Bank, the surviving corporation, was renamed The Chase
Manhattan Bank).
7. A copy of the latest report of condition of the Trustee, published
pursuant to law or the requirements of its supervising or examining authority.
8. Not applicable.
9. Not applicable.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939 the Trustee,
The Chase Manhattan Bank, a corporation organized and existing under the laws of
the State of New York, has duly caused this statement of eligibility to be
signed on its behalf by the undersigned, thereunto duly authorized, all in the
City of New York and State of New York, on the 13th day of April, 1999.
THE CHASE MANHATTAN BANK
By /s/ Gemmel Richards
--------------------------------------
/s/ Gemmel Richards
Assistant Vice President
- 3 -
<PAGE>
Exhibit 7 to Form T-1
Bank Call Notice
RESERVE DISTRICT NO. 2
CONSOLIDATED REPORT OF CONDITION OF
The Chase Manhattan Bank
of 270 Park Avenue, New York, New York 10017
and Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System,
at the close of business December 31, 1998,
in accordance with a call made by the Federal Reserve
Bank of this District pursuant to the provisions of
the Federal Reserve Act.
<TABLE>
<CAPTION>
DOLLAR AMOUNTS
ASSETS IN MILLIONS
<S> <C>
Cash and balances due from depository institutions:
Noninterest-bearing balances and
currency and coin .................................................. $ 13,915
Interest-bearing balances .......................................... 7,805
Securities:
Held to maturity securities ............................................. 1,429
Available for sale securities ........................................... 56,327
Federal funds sold and securities purchased under
agreements to resell ............................................... 21,733
Loans and lease financing receivables:
Loans and leases, net of unearned income ........... $131,095
Less: Allowance for loan and lease losses .......... 2,711
Less: Allocated transfer risk reserve .............. 0
--------
Loans and leases, net of unearned income,
allowance, and reserve ............................................. 128,384
Trading Assets .......................................................... 48,949
Premises and fixed assets (including capitalized
leases) ............................................................ 3,095
Other real estate owned ................................................. 239
Investments in unconsolidated subsidiaries and
associated companies ............................................... 199
Customers' liability to this bank on acceptances
outstanding ........................................................ 1,209
Intangible assets ....................................................... 2,081
Other assets ............................................................ 11,352
--------
TOTAL ASSETS ............................................................ $296,717
--------
--------
</TABLE>
- 4 -
<PAGE>
<TABLE>
<CAPTION>
LIABILITIES
<S> <C>
Deposits
In domestic offices ................................................ $105,879
Noninterest-bearing ................................................ $ 39,175
Interest-bearing ................................................... 66,704
In foreign offices, Edge and Agreement,
subsidiaries and IBF's ............................................. 79,294
Noninterest-bearing ..................................................... $ 4,082
Interest-bearing ................................................... 75,212
Federal funds purchased and securities sold under agree-
ments to repurchase ..................................................... 32,546
Demand notes issued to the U.S. Treasury ................................ 629
Trading liabilities ..................................................... 36,807
Otherborrowed money (includes mortgage indebtedness and obligations under
capitalized leases):
With a remaining maturity of one year or less ...................... 4,478
With a remaining maturity of more than one year ........................
through three years ......................................... 213
With a remaining maturity of more than three years ............... 115
Bank's liability on acceptances executed and outstanding ................ 1,209
Subordinated notes and debentures ....................................... 5,408
Other liabilities ....................................................... 10,855
TOTAL LIABILITIES ....................................................... 277,433
--------
EQUITY CAPITAL
Perpetual preferred stock and related surplus ........................... 0
Common stock ............................................................ 1,211
Surplus (exclude all surplus related to preferred stock) ............... 11,016
Undivided profits and capital reserves .................................. 6,762
Net unrealized holding gains (losses)
on available-for-sale securities ........................................ 279
Cumulative foreign currency translation adjustments ..................... 16
TOTAL EQUITY CAPITAL .................................................... 19,284
--------
TOTAL LIABILITIES AND EQUITY CAPITAL .................................... $296,717
--------
--------
</TABLE>
I, Joseph L. Sclafani, E.V.P. & Controller of the
above-named bank, do hereby declare that this Report
of Condition has been prepared in conformance with
the instructions issued by the appropriate Federal
regulatory authority and is true to the best of my
knowledge and belief.
JOSEPH L. SCLAFANI
We, the undersigned directors, attest to the
correctness of this Report of Condition and declare
that it has been examined by us, and to the best of
our knowledge and belief has been prepared in
conformance with the instructions issued by the
appropriate Federal regulatory authority and is true
and correct.
WALTER V. SHIPLEY )
THOMAS G. LABRECQUE ) DIRECTORS
WILLIAM B. HARRISON, JR.)
-5-
