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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
February 27, 1998
BELLSOUTH CORPORATION
(Exact name of registrant as specified in its charter)
Georgia 1-8607 58-1533433
(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification
incorporation) No.)
1155 Peachtree Street, N. E., Atlanta, Georgia 30309-3610
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code
(404) 249-2000
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Item 5. Other Events
On March 11, 1998, BellSouth filed a form 8-K containing, among other
things, a section in Item 5 discussing additional sales proceeds
received associated with the sale of ITT World Directories. The
discussion contained quantification of certain pretax and after tax
gains which were expressed in millions, however, no reference to that
format was made in the discussion. This form 8-K is intended to
supercede the form 8-K filed on March 11, 1998, which received a filing
date of March 12, 1998, in its entirety.
ITT World Directories Sales Proceeds
In July 1997, BellSouth sold its 20% interest in ITT World Directories
to ITT Corporation (ITT) and recognized a pretax gain on the sale of
$209 million in the third quarter of 1997. The sale agreement
contained certain provisions which called for additional sales proceeds
to be paid to BellSouth in the event that ITT subsequently sold ITT
World Directories for a price above certain defined limits within two
years from BellSouth's sale of its interest in ITT World Directories to
ITT. As a result of ITT's subsequent sale of ITT World Directories,
BellSouth received additional proceeds and recorded a pretax gain of
$155 million ($96 million after tax) in the first quarter of 1998.
Item 7. Financial Statements and Exhibits
The following are filed as exhibits to the Registrant's Registration
Statements (File nos. 333-45607 and 33-51449):
1-b. Distribution Agreement for Medium Term Notes, Series
C.
4-f. BellSouth Corporation letter dated as of February 27,
1998 regarding the Support Agreement.
23-d. Consent of Mark D. Hallenbeck.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
BELLSOUTH CORPORATION
By: /s/ W. Patrick Shannon
--------------------------------
W. Patrick Shannon
Vice President and Controller
March 13, 1998
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EXHIBIT 1-B
BELLSOUTH CAPITAL FUNDING CORPORATION
$500,000,000
SERIES C
MEDIUM-TERM NOTES
DUE FROM 9 MONTHS TO 40 YEARS FROM DATE OF ISSUE
DISTRIBUTION AGREEMENT
February 27, 1998
Morgan Stanley & Co. Incorporated
1585 Broadway
New York, New York 10036
Goldman, Sachs & Co.
85 Broad Street
New York, New York 10004
Merrill Lynch, Pierce, Fenner & Smith Incorporated
Merrill Lynch World Headquarters
North Tower, World Financial Center
New York, New York 10281-1298
Dear Sirs:
BellSouth Capital Funding Corporation, a Georgia corporation (the
"Company"), and BellSouth Corporation, a Georgia corporation ("BellSouth"),
confirm their agreement with Morgan Stanley & Co. Incorporated ("Morgan"),
Goldman, Sachs & Co. ("Goldman") and Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill") with respect to the issue and sale by the Company of up
to U.S. $500,000,000 (or the equivalent thereof in other currencies or currency
units) aggregate principal amount of the Company's Medium-Term Notes, Series C,
due from 9 months to 40 years from date of issue (the "Notes"). The Notes are to
be issued under an Indenture dated as of August 1, 1992 (the "Indenture") among
the Company, BellSouth and The Bank of New York, as successor to Wachovia Bank
of Georgia, N.A. (the "Trustee"), and have the benefits of a Support Agreement
dated as of October 15, 1987, as amended as of August 1, 1992 (the "Support
Agreement"), between the Company and BellSouth, which contains a limited
guaranty by BellSouth of the debt securities of the Company. The Notes shall be
issued in the currency or currency units and shall have the maturity ranges,
annual interest rates (whether fixed or floating), redemption provisions and
other terms set forth in the Prospectus referred to below as it may be
supplemented from time to time, including any pricing supplement.
Subject to the terms and conditions stated herein and to the
reservation by the Company of the right to sell the Notes directly on its own
behalf, the Company hereby (i) appoints Morgan, Goldman and Merrill
(individually an "Agent" and, collectively, the "Agents") as its exclusive
agents for the purpose of soliciting offers to purchase the Notes from the
Company by others and (ii) agrees that if the Company determines to sell Notes
directly to any of the Agents as principal for
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resale to others, it will enter into a Terms Agreement, as defined below,
relating to such sale in accordance with the provisions of Section 2(b) hereof.
On the basis of the representations and warranties herein contained, but subject
to the terms and conditions herein set forth, each Agent agrees, severally and
not jointly, to use its best efforts to solicit offers to purchase Notes upon
terms acceptable to the Company at such times and in such amounts as the Company
shall from time to time specify. Each Agent shall communicate to the Company,
orally or in writing, each reasonable offer to purchase Notes received by it as
agent. Each Agent is authorized to solicit offers to purchase Notes only in
principal amounts of U.S. $100,000 or any amount in excess thereof which is an
integral multiple of U.S. $1,000 or, if denominated in a currency or currency
unit other than U.S. dollars, then the equivalent, as determined by the noon
buying rate in New York City for cable transfers of the specified currency or
currency unit (the "Specified Currency") as certified for customs purposes by
the Federal Reserve Bank of New York on the Business Day, as defined in the
Indenture, immediately preceding the trade date for such Notes, of U.S. $100,000
(rounded down to an integral multiple of 1,000 units of such Specified
Currency), and any larger amount that is an integral multiple of 1,000 units of
such Specified Currency. The Company shall have the sole right to accept offers
to purchase Notes and may reject any offer in whole or in part. Each Agent shall
have the right to reject any offer to purchase Notes which it considers to be
unacceptable, and any such rejection shall not be deemed a breach of its
agreements contained herein. In acting under this Agreement and in connection
with the sale of any Notes by the Company (other than Notes sold to any Agent
pursuant to a Terms Agreement), each Agent is acting solely as agent of the
Company and does not assume any obligation towards or relationship of agency or
trust with any purchaser of the Notes.
1. Representations and Warranties. The Company and BellSouth
represent and warrant to and agree with each Agent as follows:
(a) The Company and BellSouth meet the requirement for use of Form
S-3 under the Securities Act of 1933, as amended (the "Securities
Act"), and have filed with the Securities and Exchange Commission (the
"Commission") registration statements on such Form (Registration Nos.
33-51449 and 333-45607), and such registration statements have become
effective, for the registration under the Securities Act of debt
securities, including the Notes and the obligations of BellSouth under
the Support Agreement. Such registration statements, including the
exhibits thereto, as amended at the date of the sale of any Notes, are
collectively hereinafter called the "Registration Statement". The
Indenture has been qualified under the Trust Indenture Act of 1939, as
amended (the "Trust Indenture Act"), and the Company has duly
authorized the issuance of the Notes. BellSouth has duly authorized the
execution and delivery of the Support Agreement with regard to the
issuance of the Notes. The Registration Statement, as amended at the
date of this Agreement, meets the requirements set forth in Rule
415(a)(1)(x) under the Securities Act and complies in all other
material respects with said Rule. The Company and BellSouth propose to
file with the Commission from time to time, pursuant to its Rule 424
under the Securities Act, supplements to the prospectus included in the
Registration Statement relating to the Notes which will describe
certain terms of the Notes and prior to any such filing will advise
each Agent of all further information (financial and other) with
respect to the Company and BellSouth to be set forth therein. Such
prospectus in the form in which it appears in the Registration
Statement, which prospectus is dated February 27, 1998, or as later
filed pursuant to Rule 424, is called the "Basic Prospectus". The
Term "Prospectus" means the Basic Prospectus together with the
prospectus supplement last filed pursuant to Rule 424 dated February
27, 1998 and any other prospectus supplement or supplements
specifically relating to any Notes sold pursuant to this Agreement (the
"Prospectus Supplement"), as
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filed with, or included for filing to, the Commission pursuant to Rule
424 under the Securities Act. Any reference herein to the Registration
Statement, Basic Prospectus and Prospectus shall be deemed to refer to
and include the documents incorporated by reference therein pursuant to
Item 12 of Form S-3 which were filed under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), other than any documents
filed on Form 11-K.
(b)(i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied
or will comply when so filed in all material respects with such Act and
the rules and regulations thereunder, (ii) each part of the
Registration Statement (including the documents incorporated by
reference therein), filed with the Commission pursuant to the
Securities Act, when such part became effective, did not contain any
untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements
therein not misleading, (iii) the Registration Statement and the
Prospectus comply and, as amended or supplemented, if applicable, will
comply in all material respects with the Securities Act and the
applicable rules and regulations thereunder and (iv) the Registration
Statement and the Prospectus at the date of the Prospectus Supplement
do not contain and, as further amended or supplemented, if applicable,
as of their respective dates, will not contain any untrue statement of
a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not misleading,
except that the representations and warranties set forth in this
Section 1(b) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information
furnished to the Company or BellSouth in writing by any Agent expressly
for use therein or to any statements in or omissions from the Statement
of Eligibility and Qualification of the Trustee under the Indenture.
2. Solicitations as Agent; Purchases as Principal.
(a) Solicitations as Agent. On the basis of the representations
and warranties herein contained, but subject to the terms and
conditions herein set forth, each Agent will use its best efforts to
solicit offers to purchase the Notes upon the terms and conditions set
forth in the Prospectus as then amended or supplemented. The Company
reserves the right, in its sole discretion, to instruct the Agents to
suspend at any time, for any period of time or permanently, the
solicitation of offers to purchase the Notes. Upon receipt of at least
one business day's prior notice from the Company, the Agents will
forthwith suspend solicitations of offers to purchase Notes from the
Company until such time as the Company has advised the Agents that such
solicitation may be resumed. During the period of time that this
Agreement is suspended, the Company shall not be required to deliver
any opinions or letters in accordance with Sections 3(i) and (j);
provided, however, that the Agents shall not be required to resume
soliciting offers to purchase Notes until the Company has delivered
such opinions or letters as requested by the Agents if any of the
events described in Section 3(i) and (j) have occurred during the
period of suspension. Unless otherwise agreed between the Company and
the Agents, the Company agrees to pay each Agent, as consideration for
soliciting the sale of any Notes, a commission in the form of a
discount from the principal amount of such Note sold by the Company
hereunder as set forth in Schedule A attached hereto.
(b) Purchases as Principal. Each sale of Notes to an Agent, as
principal, shall be made in accordance with the terms of this Agreement
and a separate agreement which will
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provide for the sale of such Notes to, and the purchase and re-offering
thereof by, such Agent. Each such separate agreement is herein referred
to as a "Terms Agreement". Each Terms Agreement will take the form of
either (i) a written agreement between the Agent and the Company, which
may be substantially in the form of Exhibit A hereto, or (ii) an oral
agreement between the Agent and the Company promptly confirmed in
writing by the Agent to the Company. An Agent's commitment to purchase
Notes pursuant to any Terms Agreement shall be deemed to have been made
on the basis of the representations and warranties of the Company and
BellSouth herein contained and shall be subject to the terms and
conditions herein set forth. Each Terms Agreement shall specify the
principal amount of any Notes to be purchased by such Agent pursuant
thereto, the maturity date thereof, the price to be paid to the Company
for such Notes, the currency or currency unit in which such Notes shall
be denominated, in which interest, if any, is to be paid and in which
the redemption price, if any, is to be paid, the rate at which
interest, if any, will be paid on the Notes, whether such rate of
interest, if any, will be fixed or floating, the time and place of
delivery of and payment for such Notes (the "Settlement Date") and any
other terms of the Notes. Such Terms Agreement shall also specify any
requirements for officers' certificates, opinions of counsel and
letters from the independent certified public accountants of the
Company or BellSouth pursuant to Section 4 hereof and may also contain
additional provisions relating to defaults by underwriters and other
provisions relating to termination as may be agreed at the time between
the Company and the applicable Agent.
(c) Procedures. Each Agent and the Company agree to perform the
respective duties and obligations specifically provided to be performed
in the Medium-Term Note Administrative Procedures (attached hereto as
Schedule B) (the "Procedures"), as amended from time to time. The
Procedures may be amended only by written agreement of the Company and
the Agents.
(d) Delivery. The documents required to be delivered by Section 4
of this Agreement shall be delivered on the date hereof, or at such
other time as the Agents and the Company may agree upon in writing (the
"Commencement Date").
3. Agreements. The Company and BellSouth agree with the Agents that:
(a) Prior to the termination of the offering of the Notes pursuant
to this Agreement, neither BellSouth nor the Company will file any
amendment of the Registration Statement or any Prospectus Supplement
relating to the Notes unless a copy thereof has previously been
furnished to each Agent for their review and neither BellSouth nor the
Company will file any such proposed amendment or supplement to which
any Agent shall reasonably object; provided, however, that the
foregoing requirement shall not apply to any of BellSouth's periodic
filings with the Commission required to be filed pursuant to Section
13(a), 13(c), 14 or 15(d) of the Exchange Act, copies of which filings
(other than any documents filed on Form 11-K) BellSouth will cause to
be delivered to each Agent promptly after filing with the Commission.
Subject to the foregoing sentence, the Company will promptly cause each
Prospectus Supplement to be filed with the Commission pursuant to Rule
424. The Company or BellSouth will promptly advise each Agent (i) of
the filing of any amendment or supplement to the Basic Prospectus, (ii)
of the filing and effectiveness of any amendment to the Registration
Statement, (iii) of any request by the Commission for any amendment of
the Registration Statement or any amendment of or supplement to the
Basic Prospectus or for any additional information, (iv) of the
issuance by the Commission
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of any stop order suspending the effectiveness of the Registration
Statement or the institution or threatening of any proceeding for that
purpose and (v) of the receipt by the Company or BellSouth of any
notification with respect to the suspension of the qualification of the
Notes for sale in any jurisdiction or the initiation or threatening of
any proceeding for such sale in any jurisdiction or the initiation or
the threatening of any proceeding for such purpose. The Company and
BellSouth will use their best efforts to prevent the issuance of any
such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Securities Act, any event occurs or
condition exists as a result of which the Registration Statement or the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if, in the
opinion of the Company or BellSouth, it is necessary at any time to
amend or supplement the Registration Statement or the Basic Prospectus,
as then amended or supplemented, to comply with the Securities Act, the
Company promptly will notify each Agent to suspend solicitation of
offers to purchase Notes and, if so notified by the Company, each Agent
shall forthwith suspend such solicitation and cease using the
Prospectus as then amended or supplemented; and if the Company or
BellSouth shall decide to amend or supplement the Registration
Statement or Prospectus as then amended or supplemented, to so advise
each Agent promptly by telephone (with confirmation in writing) and to
prepare and cause to be filed promptly with the Commission an amendment
or supplement to the Registration Statement or Prospectus as then
amended or supplemented which will include a description of such facts
or events and/or will correct such statement or omission or effect such
compliance and will supply such amended or supplemented Prospectus to
each Agent in such quantities as each Agent may reasonably request;
and, if such amendment or supplement, and any documents, certificates
and opinions furnished to each Agent pursuant to paragraph (f) below in
connection with the preparation or filing of such amendment or
supplement, are satisfactory in all respects to each Agent, upon the
filing of such amendment or supplement with the Commission or
effectiveness of an amendment to the Registration Statement each Agent
will resume the solicitation of offers to purchase Notes hereunder.
(c) The Company and BellSouth will make generally available to the
securityholders and to each Agent, as soon as practicable, an earnings
statement of BellSouth covering a twelve-month period beginning after
the date of the sale of any Notes hereunder which shall satisfy the
provisions of Section 11(a) of the Securities Act and the applicable
rules and regulations thereunder.
(d) The Company and BellSouth will furnish to each Agent, without
charge, two copies of the Registration Statement including exhibits and
materials, if any, incorporated by reference therein and, during the
period mentioned in Section 3(b) above, as many copies of the
Prospectus, any documents incorporated by reference therein and any
supplements and amendments thereto as each Agent may reasonably
request. The terms "supplement" and "amendment" or "amend" as used in
this Agreement shall include all documents filed by the Company or
BellSouth with the Commission subsequent to the date of the Basic
Prospectus pursuant to the Exchange Act which are incorporated by
reference in the Prospectus (other than any documents filed on Form
11-K).
(e) The Company and BellSouth will use their best efforts to
qualify the Notes or to
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assist in the qualification of the Notes by or on behalf of each Agent
for the offer and sale under applicable securities or Blue Sky laws of
such jurisdictions as each Agent shall reasonably request and to pay
all expenses (including fees and disbursements of counsel) in
connection with such qualification and in connection with the
determination of the eligibility of the Notes for investment under the
laws of such jurisdictions as each Agent may designate; provided,
however, that the Company or BellSouth shall not be obligated to file
any general consent to service of process or to qualify as a foreign
corporation in any jurisdiction in which it is not so qualified.
(f) The Company and BellSouth will pay all expenses incident to
the performance of their obligations under this Agreement, including:
(i) the preparation and filing of the Registration Statement and all
amendments thereto, (ii) the preparation, issuance and delivery of the
Notes, (iii) the fees and disbursements of the Company's and
BellSouth's accountants and of the Trustee, (iv) the qualification of
the Notes under the securities laws in accordance with the provisions
of Section 3(e), including filing fees and the reasonable fees and
disbursements of the Agents' counsel in connection therewith and in
connection with the preparation of any Blue Sky Memorandum and any
Legal Investment Memorandum, (v) the printing and delivery to the
Agents in quantities as herein above stated of copies of the
Registration Statement and all amendments thereto, and of the Basic
Prospectus and any amendments or supplements thereto, (vi) the printing
and delivery to each Agent of copies of the Indenture and any Blue Sky
Memorandum and any Legal Investment Memorandum, (vii) any fees charged
by rating agencies for the rating of the Notes, (viii) any advertising
expenses incurred with the approval of the Company or BellSouth, (ix)
any reasonable out-of-pocket expenses incurred with the approval of the
Company or BellSouth and (x) the fees and expenses, if any, incurred
with respect to any filing with the National Association of Securities
Dealers, Inc.
The Company shall also reimburse each Agent promptly upon receipt
of an invoice from such Agent for the reasonable fees of counsel for
such Agent incurred in connection with the offering and sale of the
Notes (including the reasonable fees and expenses of special counsel in
any state in the event it should become necessary to obtain opinions of
such counsel as to usury or other matters of local law in order to
obtain or maintain the qualifications referred to in Section 3(e)
hereof).
(g) Each acceptance by the Company of an offer for the purchase of
Notes, and each sale of Notes to an Agent pursuant to a Terms
Agreement, shall be deemed to be an affirmation to such Agent that the
representations and warranties of the Company and BellSouth contained
in this Agreement and in any certificate theretofore delivered to such
Agent pursuant hereto are true and correct in all material respects at
the time of such acceptance or sale, as the case may be, and an
undertaking that such representations and warranties will be true and
correct in all material respects at the time of delivery to the
purchaser or his agent, or to such Agent, of the Notes relating to such
acceptance or sale, as the case may be, as though made at and as of
each such time (and it is understood that such representations and
warranties shall relate to the Registration Statement and the Basic
Prospectus as amended and supplemented to each such time).
(h) Each time the Registration Statement or the Basic Prospectus
is amended or supplemented (other than by an amendment or supplement
providing solely for a change in the interest rates (excluding any
change in the formula by which such interest rate may be determined) or
maturities offered on the Notes or for a change deemed immaterial in
the
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reasonable opinion of each Agent) or, if so indicated in the applicable
Terms Agreement, each time the Company sells Notes to an Agent pursuant
to a Terms Agreement, the Company will deliver or cause to be delivered
forthwith to each Agent (or, in the case of a sale of Notes pursuant to
a Terms Agreement to the applicable Agent) a certificate of the Company
signed by the President, any Vice President or the Treasurer of the
Company and of BellSouth, dated the date of the effectiveness of such
amendment or filing or supplement or sale, as the case may be, in form
reasonably satisfactory to such Agent or Agents, as the case may be, to
the effect that the statements of the Company and BellSouth contained
in the certificate referred to in Section 4(c) that was last furnished
to such Agent or Agents, as the case may be (either pursuant to Section
4(c) or pursuant to this Section 3(h)), are true and correct as though
made at and as of such time (except that such statements shall be
deemed to relate to the Registration Statement and the Prospectus as
amended and supplemented to such time), or, in lieu of such
certificate, a certificate of the same tenor as the certificate
referred to in Section 4(c) relating to the Registration Statement and
the Prospectus as amended and supplemented to the time of delivery of
such certificates.
(i) Each time the Registration Statement or the Basic Prospectus
is amended or supplemented, or, if so indicated in the applicable Terms
Agreement, the Company sells Notes to an Agent pursuant to a Terms
Agreement, the Company shall furnish or cause to be furnished forthwith
to each Agent (or, in the case of a sale of Notes pursuant to a Terms
Agreement to the applicable Agent) a written opinion (or opinions) of
counsel of the Company and BellSouth, who may be an employee of
BellSouth; provided, however, that such opinion (or opinions) need not
be furnished with respect to an amendment or supplement (i) providing
solely for a change in the interest rates offered on the Notes (other
than a change in the formula by which such interest rate may be
determined) or for a change deemed immaterial in the reasonable opinion
of such Agent or Agents, as the case may be, or (ii) setting forth or
incorporating by reference financial statements or other information as
of and for a fiscal quarter, unless, in the case of clause (ii) above,
in the reasonable judgment of such Agent or Agents, as the case may be,
such financial statements or other information are of such a nature
that an opinion (or opinions) of counsel should be furnished; provided,
further, that such counsel need not provide an opinion regarding the
content or form of such financial statements or schedules or the
accuracy or validity of other numerical data included in the
Registration Statement and the Prospectus. Any such opinion (or
opinions) shall be dated the date of such amendment or supplement, in
form satisfactory to the Agent or Agents, as the case may be, to which
such opinion (or opinions) will be delivered, and shall be of the same
tenor as the opinion (or opinions) referred to in Section 4(b)(i) but
modified to relate to the Registration Statement and the Prospectus as
amended and supplemented to the time of delivery of such opinion (or
opinions). In lieu of an opinion, counsel last furnishing such an
opinion to such Agent or Agents, as the case may be, may furnish to
such Agent or Agents a letter to the effect that such Agent or Agents
may rely on such last opinion to the same extent as though it were
dated the date of such letter authorizing reliance on such last opinion
(except that statements in such last opinion will be deemed to relate
to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such letter authorizing
reliance.)
(j) Each time that the Registration Statement or the Basic
Prospectus is amended or supplemented to set forth amended or
supplemental financial information or such amended or supplemental
information is incorporated by reference in the Registration Statement
or the Basic Prospectus or, if so indicated in the applicable Terms
Agreement, each time the Company sells Notes to an Agent pursuant to a
Terms Agreement, BellSouth shall cause its
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independent certified public accountants forthwith to furnish each
Agent (or in the case of a sale of Notes pursuant to a Terms Agreement,
to the applicable Agent) with a letter, dated the date of the
effectiveness of such amendment or the date of filing of such
supplement, or the date of such sale, as the case may be, in a form
reasonably satisfactory to each Agent (or in the case of a sale of
Notes pursuant to a Terms Agreement, to the applicable Agent), of the
same tenor as the letter referred to in Section 4(d), with regard to
the amended or supplemental financial information included or
incorporated by reference in the Registration Statement and the
Prospectus, as amended or supplemented to the date of such letter.
(k) Between the date of any Terms Agreement and the Settlement
Date with respect to such Terms Agreement, the Company will not,
without the applicable Agent's prior consent, offer, sell, contract to
sell or otherwise dispose of any debt securities of the Company
substantially similar to the Notes (other than (i) the Securities that
are to be sold pursuant to such Terms Agreement, (ii) debt securities
issued for consideration other than cash and (iii) commercial paper in
the ordinary course of business), except as may otherwise be provided
in any such Terms Agreement.
(l) The Company will not issue any Notes except as have been duly
authorized by all necessary corporate action on the part of the
Company.
4. Conditions of the Obligations of the Agents. The obligations
of the Agents to solicit offers to purchase the Notes as agents of the Company
and to purchase Notes as principals pursuant to any Terms Agreement will be
subject to the accuracy of the representations and warranties on the part of the
Company and BellSouth herein, to the accuracy of the statements of the Company's
and BellSouth's officers made in each certificate furnished pursuant to the
provisions hereof, to the performance and observance by the Company and
BellSouth of all covenants and agreements herein contained on its part to be
performed and observed and to the following additional conditions precedent:
(a) At the Commencement Date and at each Settlement Date with
respect to any applicable Terms Agreement, no stop order suspending the
effectiveness of the Registration Statement shall be in effect and no
proceedings for that purpose shall have been instituted or threatened
by the Commission, and there shall have been no material adverse change
and no development which, in the reasonable judgment of the Agents,
involves a substantial likelihood of a prospective material adverse
change in the condition of BellSouth and its subsidiaries, taken as a
whole, from that set forth in the Registration Statement or the
Prospectus, as amended or supplemented to such date.
(b) At the Commencement Date, each Agent shall have received, and
at each Settlement Date with respect to any applicable Terms Agreement,
if called for by such Terms Agreement, the applicable Agent shall have
received:
(i) The opinion (or opinions), dated as of such date, of
counsel for the Company and BellSouth, who may be an employee of
BellSouth, to the effect that:
(A) Each of the Company and BellSouth has been duly
incorporated and is validly existing as a corporation in good
standing under the laws of the State of Georgia.
(B) This Agreement (and, if the opinion is being given
pursuant to Section 3(i)
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on account of the Company having entered into a Terms
Agreement, the applicable Terms Agreement) has been duly
authorized, executed and delivered by the Company and
BellSouth.
(C) The Indenture has been duly authorized, executed and
delivered by the Company and BellSouth and is a valid and
binding agreement of the Company and of BellSouth enforceable
against them in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws of general
application, and except that the enforceability of the
obligations of the Company and BellSouth is subject to general
principles of equity (regardless of whether such
enforceability is considered in a proceeding of equity or at
law); the Indenture has been duly qualified under the Trust
Indenture Act of 1939, as amended.
(D) The Notes, when authorized, executed and authenticated
in accordance with the Indenture and delivered to and paid for
by the purchasers thereof, will be valid and binding
obligations of the Company enforceable against it in
accordance with their terms, except as the enforceability
thereof may be limited by bankruptcy, insolvency,
reorganization or other similar laws of general application,
and except that the enforceability of the obligations of the
Company is subject to general principles of equity (regardless
of whether such enforceability is considered in a proceeding
of equity or at law), except that, in the case of floating
rate Notes, no opinion need be expressed with respect to the
validity or enforceability thereof in the event that the rate
of interest provided for therein, or imputed with respect
thereto, exceeds the maximum rate from time to time
permissible under applicable usury laws; the Notes will be
entitled to the benefits of the Indenture.
(E) The Support Agreement has been duly authorized,
executed and delivered by the Company and BellSouth and is a
valid and binding agreement of the Company and BellSouth
enforceable in accordance with its terms, except as the
enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws of general
application, and except that the enforceability of the
obligations of the Company and BellSouth is subject to general
principles of equity (regardless of whether such
enforceability is considered in a proceeding of equity or at
law).
(F) The performance of this Agreement will not contravene
any provision of applicable federal law or law of the State of
Georgia or the articles of incorporation or by-laws of the
Company or BellSouth or, to the knowledge of such counsel, any
agreement or other instrument binding upon the Company or
BellSouth, and no consent, approval or authorization of any
governmental body is required for the performance of this
Agreement, except that the offer and sale of the Notes in
certain jurisdictions may be subject to the Blue Sky or
securities laws of such jurisdictions.
(G) The statements in the Prospectus under the captions
"Description of Securities", "Description of Notes", "Support
Agreement", and "Plan of Distribution", and the statements in
BellSouth's Form 10-K Report under "Item 3---Legal
Proceedings", insofar as such statements constitute summaries
of the documents and matters referred to therein, fairly
present the information called for with respect to such
documents and matters.
9
<PAGE> 10
(H)(1) Each document filed pursuant to the Exchange Act
(except as to financial statements or schedules included
therein, and except as to the accuracy or validity of other
numerical data included in the Registration Statement and the
Prospectus, as to which such counsel need not express any
conclusion) and incorporated by reference in the Prospectus
complied when so filed as to form in all material respects
with the Exchange Act and the applicable rules and regulations
thereunder; and (2) the Registration Statement and Prospectus,
as amended or supplemented, if applicable (except as to
financial statements or schedules included therein, and except
as to the accuracy or validity of other numerical data
included in the Registration Statement and the Prospectus, as
to which such counsel need not express any conclusion), comply
as to form in all material respects with the Securities Act
and the applicable rules and regulations thereunder.
(I) Nothing has come to the attention of such counsel to
cause him to believe that (1) (except as to financial
statements or schedules included therein, and except as to the
accuracy or validity of other numerical data included in the
Registration Statement and the Prospectus, as to which such
counsel need not express any conclusion) each part of the
Registration Statement (including the documents incorporated
by reference therein) filed with the Commission pursuant to
the Securities Act, when such part became effective, contained
any untrue statement of a material fact or omitted to state a
material fact required to be stated therein or necessary to
make the statements therein not misleading; or (2) (except as
to financial statements or schedules included therein, and
except as to the accuracy or validity of other numerical data
included in the Registration Statement and the Prospectus, as
to which such counsel need not express any conclusion) either
the Registration Statement or the Prospectus, as amended or
supplemented, if applicable, as of the date of this opinion,
contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading.
(J) The discussion set forth under the heading "Taxation"
in the Prospectus Supplement is an accurate summary of the
principal United States Federal income tax consequences of the
ownership of the Notes.
With respect to the matters set forth in (I) above, such
counsel may state that its conclusion is based upon its
participation in the preparation of the Registration Statement
and the Prospectus and any amendments and supplements thereto
and upon review and discussion of the contents thereof, but,
except for the statements in the Prospectus referred to in
clause (G) above and in "Item 3 -- Legal Proceedings" of
BellSouth's latest annual report on Form 10-K incorporated by
reference into the Prospectus, is without independent check or
verification except as otherwise specified.
(ii) The opinion dated as of such date, of Davis Polk &
Wardwell, counsel to the Agents, covering the matters in (B), (C), (D),
(G), (H)(2) and (I) above, provided that with respect to (H)(2) and (I)
above, such counsel may state that their conclusion is based upon their
participation in the preparation of the Registration Statement and the
Prospectus and any amendments or supplements thereto (other than
documents incorporated by reference), and review and discussion of the
contents thereof (including documents incorporated by
10
<PAGE> 11
reference) but is without independent check or verification except as
specified.
(c) On the Commencement Date, the Company shall have furnished to
each Agent and at each Settlement Date with respect to any Terms
Agreement, the Company shall have furnished to the applicable Agent, a
certificate signed by the President, any Vice President or the
Treasurer of the Company and BellSouth dated as of the Commencement
Date or such Settlement Date, to the effect that the signers of such
certificate have examined the Registration Statement, the Basic
Prospectus, any Prospectus Supplement and this Agreement and that:
(i) the representations and warranties of the Company and
BellSouth in this Agreement are true and correct in all
material respects on and as of the date of such certificate,
and the Company and BellSouth have complied with all the
agreements and satisfied all the conditions on their part to
be performed or satisfied at or prior to the date of such
certificate;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for
that purpose have been instituted or, to the Company's or
BellSouth's knowledge, threatened by the Commission; and
(iii) Since the date of the most recent financial
statements included or incorporated by reference in the
Prospectus, as amended or supplemented, there has been no
material adverse change and no development which, in the
reasonable judgment of the signer of such certificate,
involves a substantial likelihood of a prospective material
adverse change in the condition of BellSouth and its
subsidiaries, taken as a whole, from that set forth in the
Registration Statement and the Prospectus, as amended or
supplemented to such date.
(d) On the Commencement Date, BellSouth's independent certified
public accountants shall have furnished to each Agent, and at each
Settlement Date with respect to any Terms Agreement, if called for by
such Terms Agreement, BellSouth's independent certified public
accountants shall have furnished to the applicable Agent, a letter or
letters, dated as of the Commencement Date or such Settlement Date, in
form and substance satisfactory to such Agent or Agents, as the case
may be, confirming that they are independent accountants within the
meaning of the Securities Act and the Exchange Act and the respective
applicable published rules and regulations thereunder, and containing
statements and information of the type ordinarily included in
accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in or
incorporated by reference into the Registration Statement and the
Prospectus.
In the event that, at the Commencement Date, any of the conditions
specified in (a), (b)(i), (c) or (d) in this Section 4 shall not have been
fulfilled, this Agreement may be terminated by the Agents, by delivering written
notice of termination to the Company. Any such termination shall be without
liability of any party to any other party.
5. Indemnification and Contribution.
(a) The Company and BellSouth agree to indemnify and hold harmless
each Agent and each person, if any, who controls such Agent within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses,
11
<PAGE> 12
claims, damages or liabilities (including the reasonable fees and
expenses of counsel in connection with any governmental or regulatory
investigation or proceeding) caused by any untrue statement or alleged
untrue statement of a material fact contained in the Registration
Statement as originally filed or in any amendment thereof or the
Prospectus (if used within the period set forth in paragraph (b) of
Section 3 hereof and as amended or supplemented if the Company or
BellSouth shall have furnished any amendments or supplements thereto),
or caused by any omission or alleged omission to state therein a
material fact required to be stated therein or necessary to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; provided, however, that the Company and
BellSouth will not be liable in any such case to the extent that any
such loss, claim, damage or liability is caused by any such untrue
statement or alleged untrue statement or omission or alleged omission
made therein based upon information furnished in writing to the Company
or BellSouth by an Agent specifically for use in connection with the
preparation thereof, or caused by any statement in or omission from the
Statement of Eligibility and Qualification of the Trustee under the
Indenture.
(b) Each Agent agrees, severally and not jointly, to indemnify and
hold harmless the Company, BellSouth, their directors, their officers
who sign the Registration Statement and any person controlling the
Company or BellSouth to the same extent as the foregoing indemnity from
the Company and BellSouth to the Agents, but only with reference to
information relating to such Agent furnished in writing by such Agent
expressly for use in the Registration Statement or the Prospectus.
(c) 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 paragraph (a) or (b)
above, such person (the "indemnified party") shall promptly notify the
person against whom such indemnity may be sought (the "indemnifying
party") in writing, but the omission so to notify such indemnifying
party of any such action shall not relieve such indemnifying party from
any liability which it or they may have to the indemnified party
otherwise than on account of this agreement. In case such notice of any
such action shall be so given, such indemnifying party shall be
entitled to participate at its own expense in the defense of such
action, or, if it so elects, to assume the defense of such action, and
in the latter event such defense shall be conducted by counsel chosen
by such indemnifying party and satisfactory to the indemnified party
who shall be defendant in such action, and such defendant shall bear
the fees and expenses of any additional counsel retained by them; but
if the indemnifying party shall not elect to assume the defense of such
action, such indemnifying party will reimburse such indemnified party
for the reasonable fees and expenses of any counsel retained by them.
In the event that the parties to any such action (including impleaded
parties) include either the Company or BellSouth and any Agent and
either (i) the indemnifying party and indemnified party mutually agree
or (ii) representation of both the indemnifying party and the
indemnified party by the same counsel is inappropriate under applicable
standards of professional conduct due to actual or potential differing
interests between them, then the indemnifying party shall not have the
right to assume the defense of such action on behalf of such
indemnified party and will reimburse such indemnified party for the
reasonable fees and expenses of any counsel retained by them, it being
understood that the indemnifying party shall not, in connection with
any one action or separate but similar or related actions in the same
jurisdiction arising out of the same general allegations or
circumstances, be liable for the reasonable fees and expenses of more
than one separate firm of attorneys (in addition to local counsel) for
all such indemnified parties, which firm shall be designated in writing
by the Agent who is a party to
12
<PAGE> 13
the proceedings or, if more than one Agent is party to the proceedings,
by mutual agreement of the agents in the case of an action in which one
or more of the Agents or controlling persons are indemnified parties
and by the Company or BellSouth in the case of an action in which the
Company, BellSouth or any of their respective directors, officers or
controlling persons are indemnified parties. It is also understood that
the fees and expenses referred to in the immediately preceding sentence
shall be reimbursed as they are incurred. The indemnifying party shall
not be liable under this agreement with respect to any settlement made
by any indemnified party or parties without prior written consent by
the indemnifying party or parties to such settlement, but if settled
with such consent or if there is 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 judgment or
settlement. Any indemnifying party shall, prior to agreeing to 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, make their best
effort to obtain the unconditional release of such indemnified party
from all liability or claims rising out of the subject matter of such
proceeding.
(d) If the indemnification provided for in this Section 5 is
unavailable to an indemnified party under paragraph (a) or (b) hereof
or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each 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,
claims, damages or liabilities in such proportion as is appropriate to
reflect primarily the relative benefits received by the Company and
BellSouth on the one hand and the Agent or Agents, as the case may be,
on the other from the offering of the Notes and also to reflect where
appropriate the relative fault of the Company or BellSouth on the one
hand and the Agent or Agents, as the case may be, on the other in
connection with the statements or omissions which resulted in such
losses, claims, damages or liabilities, as well as any other relevant
equitable considerations. The relative benefits received by the Company
or BellSouth on the one hand and the Agent or Agents, as the case may
be, on the other in connection with the offering of the Notes shall be
deemed to be in the same proportion as the total net proceeds from the
offering of such Notes (before deducting expenses) received by the
Company bear to the total commissions received by the Agent or Agents,
as the case may be. The relative fault of the Company or BellSouth on
the one hand and of the Agent or Agents, as the case may be, on the
other 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 Company, by BellSouth or by the Agent or
Agents, as the case may be, and the parties' relative intent,
knowledge, access to information and opportunity to correct or prevent
such statement or omission.
(e) The Company, BellSouth and the Agents agree that it would not
be just and equitable if contribution pursuant to this Section 5 were
determined by pro rata allocation or by any other method of allocation
which does not take account of the considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and
liabilities referred to in paragraph (d) above 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 the provisions of this Section 5, no Agent shall be
required to contribute any amount in excess of the amount by which the
total price at which the Notes offered and sold to the public through
such
13
<PAGE> 14
Agent exceeds the amount of any damages which such Agent 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 11(f) of
the Securities Act) shall be entitled to contribution from any person
who was not guilty of such fraudulent misrepresentation. The remedies
provided for in this Section 5 are not exclusive and shall not limit
any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Section 5
shall remain operative and in full force and effect regardless of (i) any
termination of this Agreement or of any Terms Agreement hereunder, (ii) any
investigation made by any Agent or on its behalf or any person controlling any
Agent or by or on behalf of the Company, its directors or officers or any person
controlling the Company and (iii) acceptance of and payment for any of the
Notes.
6. Position of the Agents. In soliciting offers to purchase the Notes,
each Agent is acting solely as agent for the Company, and not as principal. Each
Agent shall make reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Notes has been solicited
by such Agent and accepted by the Company, but such Agent shall not have any
liability to the Company in the event any such purchase is not consummated for
any reason.
7. Termination. This Agreement may be terminated at any time either by
the Company or by BellSouth as to any Agent or by any Agent insofar as this
Agreement relates to such Agent, upon the giving of written notice of such
termination to such Agent, the Company or BellSouth, as the case may be. Any
Terms Agreement may be terminated, immediately upon notice to the Company or
BellSouth, at any time prior to the Settlement Date relating to a Terms
Agreement (i) if there has been, since the respective dates as of which
information is given in the Registration Statement, as amended, any material
adverse change in the condition of the Company or BellSouth and its
subsidiaries, taken as a whole, or (ii) if there has occurred any outbreak or
escalation of hostilities or other calamity or crisis the effect of which on the
financial markets of the United States is such as to make it, in the judgment of
the applicable Agent, impracticable to market the Notes, or (iii) if trading
generally on the New York Stock Exchange has been suspended or materially
limited or if a general moratorium on commercial banking activities has been
declared by either Federal or New York State authorities. In the event of
termination of this Agreement or any Terms Agreement, no party shall have any
liability to the other parties hereto, except as provided in the last sentence
of Section 2(a), Section 3(f), Section 5 and Section 8; provided that, if at the
time of termination an offer to purchase any of the Notes has been accepted by
the Company but the time of delivery to the purchaser or its agent of the Note
or Notes relating thereto has not occurred, the Company's and BellSouth's
obligations provided in Section 3(g) through 3(k) shall not be terminated.
8. Representations and Indemnities to Survive. The respective
agreements, representations, warranties, indemnities and other statements of the
Company and BellSouth or their officers and the Agents set forth in or made
pursuant to this Agreement or any Terms Agreement will remain in full force and
effect, regardless of any investigation made by or on behalf of the Agents or
the Company or BellSouth or any of the officers, directors or controlling
persons referred to in Section 5 hereof, and will survive delivery of and
payment for the Notes. The provisions of Sections 3(f), 5 and 6 hereof shall
survive the termination or cancellation of this Agreement or the Terms
Agreement.
14
<PAGE> 15
9. Notices. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Agents, will be mailed, delivered
or telegraphed and confirmed as set forth on Schedule A or, if sent to the
Company or BellSouth, will be mailed, delivered or telegraphed and confirmed to
it at 1155 Peachtree St., N.E. Atlanta, GA 30309-3610, Attention: Mark E.
Droege.
10. Successors. This Agreement and any Terms Agreement will inure to
the benefit of and be binding upon the parties hereto and their respective
successors and the officers and directors and controlling persons referred to in
Section 5 hereof, and no other person will have any right or obligation
hereunder.
11. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
12. Amended and Restated Agreement. This Agreement amends and restates
the Distribution Agreement dated December 1, 1993 among the Company, BellSouth,
Morgan, Goldman and Merrill relating to the Company's Series C Medium-Term
Notes.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and the acceptance of the Agent shall represent a binding agreement
between the Company and the Agents.
Very truly yours,
BELLSOUTH CAPITAL FUNDING
CORPORATION
By: /s/ Gary L. Walton
-------------------
Title: Vice President and Treasurer
----------------------------
BELLSOUTH CORPORATION
By: /s/ Mark E. Droege
-------------------
Title: Vice President - Financial
--------------------------
Management and Treasurer
------------------------
15
<PAGE> 16
The foregoing Agreement is hereby confirmed and
accepted as of the date first above written.
MORGAN STANLEY & CO. INCORPORATED
By: /s/ Steven B. Fitzpatrick
--------------------------
Title: Principal
---------
GOLDMAN, SACHS & CO.
/s/ Goldman, Sachs & Co.
- -------------------------
MERRILL LYNCH, PIERCE, FENNER & SMITH
INCORPORATED
By: /s/ Scott Primrose
------------------
Title: AUTHORIZED SIGNATORY
--------------------
16
<PAGE> 17
EXHIBIT A
BELLSOUTH CAPITAL FUNDING CORPORATION
MEDIUM TERM NOTES
TERMS AGREEMENT
BELLSOUTH CAPITAL FUNDING CORPORATION
1155 Peachtree St., N.E.
Atlanta, GA 30309-3610
Attention:
RE: Distribution Agreement
dated February 27, 1998
The undersigned agrees to purchase the following principal amount of
your Medium-Term Notes:
$
Interest Rate:
Maturity Date:
Purchase Date:
Settlement Date and Time:
Place of Delivery:
(Other terms)
(The certificates referred to in Section 3(h) of the Distribution
Agreement, the opinion referred to in Section 3(i) of the Distribution Agreement
and the accountants' letter referred to in Section 3(j) of the Distribution
Agreement will be required.)
[AGENT'S NAME]
By:
------------------------------
Title:
---------------------------
Accepted:
BELLSOUTH CAPITAL FUNDING CORPORATION
By:
----------------------------------------
Title:
-------------------------------------
17
<PAGE> 18
SCHEDULE A
Distribution Agreement dated February 27, 1998
Registration Statement Nos. 33-51449 and 333-45607
The Company agrees to pay Morgan Stanley & Co. Incorporated ("Morgan"),
Goldman, Sachs & Co. ("Goldman") or Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill") a commission equal to the following percentage of the
principal amount of each Note sold by such Agent.
<TABLE>
<CAPTION>
COMMISSION
PERCENTAGE OF
AGGREGATE PRINCIPAL
RANGE OF NOTE MATURITIES AMOUNT OF SECURITIES SOLD*
------------------------ --------------------------
<S> <C>
From 9 months to less than 12 months .100%
12 months to less than 18 months .150%
18 months to less than 2 years .200%
2 years to less than 3 years .250%
3 years to less than 4 years .350%
4 years to less than 5 years .450%
5 years to less than 6 years .500%
6 years to less than 7 years .550%
7 years to less than 10 years .600%
10 years to less than 15 years .625%
15 years to less than 20 years .700%
20 years to 40 years, inclusive .750%
</TABLE>
- ----------------
* No interpolation
Address for Notice to Agent: The Bank of New York, 101 Barclay Street,
New York, New York 10286. Attention: Marie E. Trimboli, Assistant Treasurer,
Corporate Trust Division.
Notices to Morgan shall be directed to it at 1585 Broadway, 2nd Floor,
New York, New York 10036. Attention: Manager - Continously Offered Products,
Telephone: (212) 761-4000, Telecopier: (212) 761-0780, with a copy to: 1585
Broadway, 34th Floor, New York, New York 10036 Attention: Peter Cooper,
Investment Banking Information Center, Telephone: (212) 761-8385, Telecopier:
(212) 761-0260.
Notices to Goldman shall be directed to it at 85 Broad Street, New
York, New York 10004. Attention: Credit Department.
Notices to Merrill shall be directed to it at Merrill Lynch World
Headquarters North Tower, 23rd Floor, World Financial Center, New York, New York
10281-1310. Attention: MTN Product Management.
18
<PAGE> 19
SCHEDULE B
SERIES C MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
Medium-Term Notes, Series C (the "Notes") are to be offered on a
continuing basis by BellSouth Capital Funding Corporation (the "Company").
Morgan Stanley & Co. Incorporated, Goldman, Sachs & Co. and Merrill Lynch,
Pierce, Fenner & Smith Incorporated, as agents (the "Agents"), have agreed to
solicit offers to purchase the Notes and they may also purchase Notes, as
principals, for their own accounts. The Notes are being sold pursuant to a
Distribution Agreement among the Company, BellSouth Corporation ("BellSouth")
and the Agents dated February 27, 1998 (the "Distribution Agreement"). The Notes
will rank equally with all other unsecured and unsubordinated debt of the
Company, have been registered with the Securities and Exchange Commission (the
"Commission"), will be offered pursuant to a Prospectus and a prospectus
supplement or supplements relating to the Notes (the "Prospectus") and will be
entitled to the benefits of a Support Agreement dated as of October 1, 1987
between the Company and BellSouth, as amended as of August 1, 1992 (the "Support
Agreement"). The Bank of New York ("BONY"), successor to Wachovia Bank of
Georgia, N.A., is the trustee (the "Trustee") under the Indenture dated as of
August 1, 1992 among the Company, BellSouth and the Trustee (the "Indenture").
BONY has been initially appointed to be the Paying Agent, Authenticating Agent
and Registrar thereunder.
Notes may provide for a fixed rate of interest ("Fixed Rate Notes") or
a floating rate of interest ("Floating Rate Notes"), and Fixed Rate Notes may
pay an amount in respect of both interest and principal amortized over the life
of the Notes (the "Amortizing Notes"). Each Note will be represented by either a
global security (a "Global Note") delivered to BONY, as agent for the Depository
Trust Company ("DTC"), with beneficial interests therein recorded in the
book-entry system maintained by DTC (a "Book-Entry Note"), or a certificate
delivered to the holder thereof or a person designated by such holder (a
"Certificated Note"). Except in limited circumstances, an owner of a Book-Entry
Note will not be entitled to receive a Certificated Note.
Administrative procedures and specific terms of the offering are
explained below. Part I contains provisions common to Global/Book-Entry Notes
and Certificated Notes. Part II contains provisions specific to issuances of
Global and Book-Entry Notes and Part III contains provisions specific to
issuances of Certificated Notes. To the extent the procedures set forth below
conflict with the provisions of the Notes, the Indenture or the Distribution
Agreement, the terms and provisions of the Notes, the Indenture and the
Distribution Agreement shall prevail. Unless otherwise defined herein, terms
defined in the Distribution Agreement, the Indenture or the Notes shall be used
herein as therein defined.
PART I: GENERAL
Maturities: Each Note will have a maturity from date of issue of
not less than 9 months and not more than 40 years.
Price to Public: Each Note will be issued at the percentage of the
principal amount specified in the applicable Company
Order, as defined in, and issued pursuant to Section
2.02(a) of, the Indenture.
19
<PAGE> 20
Other Terms: The currency if not denominated in U.S. dollars (the
"Specified Currency"), denomination, rate of
interest, date of maturity and any other terms with
respect to such Note as are not described in the
Prospectus shall be as set forth in the applicable
pricing supplement to the Prospectus (the "Pricing
Supplement"). The amortization schedule for
Amortizing Notes sold by an Agent will be prepared by
such Agent and delivered to the Company and BONY.
Denominations: Except as otherwise specified by applicable law, the
denomination of any Note will be a minimum of U.S.
$1,000 or any amount in excess thereof which is an
integral multiple of U.S. $1,000 or the equivalent,
as determined pursuant to the provisions of the
Distribution Agreement (rounded down to an integral
multiple of 1,000 units of such Specified Currency)
and any amounts in excess thereof which is an
integral multiple of 1,000 units of such Specified
Currency.
Registration: Notes will be issued only in fully registered form.
Interest Payments: The date of issue of each Note will be the date of
its authentication as provided in the Indenture. The
date of authentication of each Note will be the
settlement date. Interest (including payments for
partial periods) on Fixed Rate Notes will be
calculated on the basis of a 360-day year of twelve
30-day months. Interest on Floating Rate Notes will
be determined by the Company and the purchaser
thereof in accordance with provisions of the Pricing
Supplement relating thereto.
Within 10 days following each Record Date, BONY will
furnish the Company with a statement setting forth
the aggregate principal amount of the Notes
denominated in each Specified Currency outstanding as
of such Record Date and the amount of interest (and
principal in the case of Amortizing Notes), to be
paid on the following Interest Payment Date or
Installment Date, for each Note and in total with
respect to each Specified Currency. BONY will provide
monthly to the Company a list of the principal, if
any, and interest with respect to each Specified
Currency to be paid on the Notes maturing in the next
succeeding month.
BONY will pay the principal amount of each Note at
final maturity upon presentment of the Note to it.
Notes presented to BONY at final maturity for payment
will be cancelled and returned to the Company, marked
"cancelled".
Procedure for Rate
Setting and Posting: The Company and the Agents will discuss from time to
time the aggregate principal amount of, the issuance
price of and the interest rates to be borne by Notes
that may be sold as a result of the solicitation of
offers by the Agents. If the Company decides to set
prices of, and rates borne by, any Notes in respect
of which the
20
<PAGE> 21
Agents are to solicit offers (the setting of such
prices and rates to be referred to herein as
"posting") or if the Company decides to change prices
or rates previously posted by it, it will promptly
advise the Agents of the prices and rates to be
posted.
Acceptance of Offer: If the Company posts prices and rates as provided
above, each Agent, as agent for and on behalf of the
Company, shall promptly accept offers received by
such Agent to purchase Notes at the prices and rates
so posted, subject to (1) any instructions from the
Company received by such Agent concerning the
aggregate principal amount of Notes to be sold at the
prices and rates so posted or the period during which
such posted prices and rates are to be in effect, (2)
any instructions from the Company received by such
Agent changing or revoking any posted prices and
rates, (3) compliance with the securities laws of the
United States and all other jurisdictions and (4)
such Agent's right to reject any such offer as
provided below.
Each Agent will communicate, orally or in writing,
each reasonable offer to purchase Notes received by
it and if the Company has not posted rates, the
proposed rate of interest. The Company may reject any
offer in whole or in part. Each Agent may reject any
offer received by it in whole or in part.
Preparation of Pricing
Supplement and Delivery
of Prospectus: If the Company accepts an offer to purchase a Note it
will (a) prepare a Pricing Supplement reflecting the
terms of such Note, (b) arrange to file such Pricing
Supplement with the Commission in accordance with the
applicable paragraph of Rule 424(b) under the Act,
and (c) as soon as possible and in any event not
later than 11:00 A.M., New York City time, on the
Business Day immediately following the applicable
trade date, deliver the number of copies of such
Pricing Supplement to the relevant Agent as such
Agent shall reasonably request (which number of
copies shall in no event be greater than 10), at the
following addresses:
If to Morgan Stanley:
Morgan Stanley & Co. Incorporated
1585 Broadway, 2nd Floor
New York, NY 10036
Attn: Medium-Term Note Trading Desk,
Carlos Cabrera
Fax: (212) 761-0780
21
<PAGE> 22
If to Goldman:
Goldman, Sachs & Co.
85 Broad Street, 26th Floor
New York, NY 10004
Attn: Medium-Term Note Trading,
Karen Robertson
Fax: (212) 902-0658
If to Merrill Lynch:
Tritech Services
44-B Colonial Drive
Piscataway, NJ 08854
Attn: Prospectus Operations,
Nachman Kimberling
Fax: (732) 885-2774/5/6
and deliver a copy to BONY.
The selling Agent will affix the Pricing Supplement
to the Prospectus and cause the Prospectus and the
applicable Pricing Supplement to be delivered to the
purchaser of the Note with the earlier of the
delivery of the confirmation of sale or the Note.
Outdated Pricing Supplements and Prospectuses (other
than those retained for files) will be destroyed.
Settlement: The receipt of immediately available funds by the
Company in payment for a Certificated Note or a
Book-Entry Note shall, with respect to such Note,
constitute "settlement". All orders accepted by the
Company will be settled on the third Business Day, as
defined in the Prospectus, pursuant to the timetables
for settlement set forth in Parts II and III below
unless the Company and the purchaser agree to
settlement on another date; provided, however, that
in the case of a delayed settlement, the Company will
notify BONY by the Business Day immediately prior to
the Business Day of settlement.
Suspension of Solicitations:
Amendment or
Supplements: The Company may instruct Agents to suspend
solicitations of offers for Notes at any time. Upon
receipt of at least one Business Day's prior notice
from the Company, the Agents will forthwith suspend
solicitations until such time as the Company has
advised them that solicitations of offers for Notes
may be resumed.
If the Company decides to amend or supplement the
Registration Statement or the Prospectus, it will
promptly advise the Agents and BONY and will furnish
the Agents and BONY with the proposed amendment or
supplement in accordance with the terms of the
Distribution Agreement. The Company will file with
the
22
<PAGE> 23
Commission any supplement to the Prospectus
(including any supplement which provides solely for a
change in the interest rates or currencies of the
Notes), provide each Agent with copies of any
supplement and confirm to the Agents that such
supplement has been filed with the Commission.
In the event that at the time the Company suspends
solicitations of offers for Notes (other than to
change currency denominations or interest rates)
there shall be any offers outstanding for settlement,
the Company will promptly advise the Agents and BONY
whether such offers may be settled and whether copies
of the Prospectus as in effect at the time of the
suspension may be delivered in connection with the
settlement of such offers. The Company will have the
sole responsibility for such decision and for any
arrangements which may be made in the event that the
Company determines that such offers may not be
settled or that copies of such Prospectus may not be
so delivered.
Authenticity of
Signatures: The Company will cause BONY and any Authenticating
Agent for the Notes (if other than BONY) to furnish
each Agent from time to time with the specimen
signatures of each of BONY's or such Authenticating
Agent's officers, employees or agents who have been
authorized by BONY or such Authenticating Agent to
authenticate Notes, but the Agents will have no
obligation or liability to the Company or the Trustee
in respect of the authenticity of the signature of
any officer, employee or agent of the Company, BONY
or such Authenticating Agent on any Note.
Payment of Selling
Commission
and Expenses: The Company agrees to pay each Agent a commission as
set forth in the Distribution Agreement in the form
of a discount equal to the percentage of the
principal of each Note sold by the Company as a
result of a solicitation made by such Agent.
Advertising Costs: The Company will determine with the Agents the amount
of advertising that may be appropriate in offering
the Notes. Advertising expenses will be paid by the
Company or reimbursed to the Agents by the Company.
PART II: BOOK-ENTRY NOTES
In connection with the qualification of Book-Entry Notes for
eligibility in the book-entry system maintained by DTC, BONY will perform the
custodial, document control and administrative functions described below, in
accordance with its respective obligations under a Letter of Representation from
the Company, BellSouth and BONY to DTC dated as of the date hereof (the "Letter
of Representation"), and a Medium-Term Note Certificate Agreement between BONY
and DTC, dated as of April 4, 1989, and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").
23
<PAGE> 24
Issuance: All Fixed Rate Notes issued as Book-Entry Notes
having the same terms (collectively, the "Fixed Rate
Terms") will be represented initially by a single
Global Note in fully registered form without coupons;
and all Floating Rate Notes issued as Book-Entry
Notes having the same terms, including the base rate
upon which interest may be determined (the "Base
Rate") (collectively, "Floating Rate Terms"), will be
represented initially by a single Global Note.
Each Global Note will be dated and issued as of the
date of its authentication by BONY. No Global Note
shall represent any Certificated Note.
Identification: The Company has arranged with the CUSIP Service
Bureau of Standard & Poor's Corporation (the "CUSIP
Service Bureau") for the reservation of 900 CUSIP
numbers which have been reserved for and relating to
Global Notes, and the Company has delivered to BONY
and DTC such list of such CUSIP numbers. Some of such
numbers have previously been assigned to Global Notes
in Series B and C. The Company will assign CUSIP
numbers to Global Notes in connection with Settlement
Procedure B. DTC will notify the CUSIP Service Bureau
periodically of the CUSIP numbers that the Company
has assigned to Global Notes. BONY will notify the
Company at any time when fewer than 100 of the
reserved CUSIP numbers remain unassigned to Global
Notes, and, if it deems necessary, the Company will
reserve additional CUSIP numbers for assignment to
Global Notes. Upon obtaining such additional CUSIP
numbers, the Company will deliver a list of such
additional numbers to BONY and DTC. Book-Entry Notes
having an aggregate principal amount in excess of
$200,000,000 and otherwise required to be represented
by the same Global Note will instead be represented
by two or more Global Notes which shall all be
assigned the same CUSIP number.
Registration: Each Global Note will be registered in the name of
Cede & Co., as nominee for DTC, on the register
maintained by BONY. The beneficial owner of an
interest in a Global Note (i.e., an owner of a
Book-Entry Note) (or one or more indirect
participants in DTC designated by such owner) will
designate one or more participants in DTC (with
respect to such Book-Entry Note, the "Participants")
to act as agent for such beneficial owner in
connection with the book-entry system maintained by
DTC, and DTC will record in its book-entry system, in
accordance with instructions provided by such
Participants, a credit balance with respect to such
Book-Entry Note in the accounts of such Participants.
The ownership interest of such beneficial owner in
such Book-Entry Note will be recorded through the
records of such Participants or through the separate
records of such Participants and one or more indirect
participants in DTC.
24
<PAGE> 25
Transfers: Transfers of a Book-Entry Note will be accomplished
by book entries made by DTC and, in turn, by
Participants (and in certain cases, one or more
indirect participants in DTC) acting on behalf of
beneficial transferors and transferees of such
Book-Entry Note.
Exchanges: The Company or BONY may deliver to DTC and the CUSIP
Service Bureau at any time a written notice
specifying (a) the CUSIP numbers of two or more
Global Notes outstanding on such date that represent
Book-Entry Notes having the same Fixed Rate Terms or
Floating Rate Terms, as the case may be, (other than
original issue dates) and for which interest has been
paid to the same date; (b) a date, occurring at least
30 days after such written notice is delivered and at
least 30 days before the next Interest Payment Date
for the related Book-Entry Notes, on which such
Global Notes shall be exchanged for a single
replacement Global Note; and (c) a new CUSIP number,
obtained from the Company, to be assigned to such
replacement Global Note. Upon receipt of such a
notice, DTC will send to its participants (including
BONY) a written reorganization notice to the effect
that such exchange will occur on such date. Prior to
the specified exchange date, BONY will deliver to the
CUSIP Service Bureau written notice setting forth
such exchange date and the new CUSIP number and
stating that, as of such exchange date, the CUSIP
numbers of the Global Notes to be exchanged will no
longer be valid. On the specified exchange date, BONY
will exchange such Global Notes for a single Global
note bearing the new CUSIP number, and the CUSIP
numbers of the exchanged Global Notes will, in
accordance with CUSIP Service Bureau procedures, be
cancelled and not reassigned. BONY shall cancel the
exchanged Global Notes and return them to the
Company, marked "cancelled".
Denominations: Global Notes will be denominated in principal amounts
not in excess of $200,000,000. If one or more
Book-Entry Notes having identical terms and
comprising the same issue have an aggregate principal
amount in excess of $200,000,000, then one Global
Note will be issued to represent each $200,000,000
principal amount of such Book-Entry Notes and an
additional Global Note will be issued to represent
any remaining principal amounts.
Payments of Principal and
Interest: Payments Prior to Maturity. Promptly after each
Record Date, BONY will deliver to the Company and DTC
a written notice specifying by CUSIP number the
amount of interest to be paid on each Global Note on
the following Interest Payment Date and the amounts
of principal and interest (an "Installment") to be
paid on each Installment Date in the case of an
Amortizing Note (other than an Interest Payment Date
or Installment Date coinciding with final maturity)
and the total of such amounts. DTC will confirm the
amount payable on each Global Note on such Interest
Payment
25
<PAGE> 26
Date or Installment Date by reference to the daily
bond reports published by Standard & Poor's. On such
Interest Payment Date or Installment Date, the
Company will pay to BONY, and BONY in turn will pay
to DTC, such total amount of interest and principal,
if any, due (other than at final maturity), at the
times and in the manner set forth below under "Manner
of Payment."
Payments at Final Maturity. On or about the first
Business Day of each month, BONY will deliver to the
Company and DTC a written list of principal, interest
and premium, if any, to be paid on each Global Note
maturing either at stated maturity or on a redemption
date in the following month. BONY, the Company and
DTC will confirm the amounts of such payments on or
about the fifth Business Day preceding such maturity
of such Global Note. At such maturity, the Company
will pay to BONY, and BONY in turn will pay to DTC,
the principal amount of such Global Note, together
with interest and premium, if any, due at such
maturity, at the times and in the manner set forth
below under "Manner of Payment". If any such maturity
of a Global Note is not a Business Day, the payment
due on such day shall be made on the next succeeding
Business Day and no interest shall accrue on such
payment for the period from and after such maturity.
Promptly after payment to DTC of the principal,
interest and premium, if any, due at such maturity of
such Global Note, BONY will cancel such Global Note
and deliver the Global Note, marked "cancelled", to
the Company.
Manner of Payment. The total amount of any principal,
interest and premium, if any, due on Global Notes on
any Interest Payment Date or Installment Date or at
final maturity shall be paid by the Company to BONY
in funds available for use by BONY as of 9:30 a.m.,
New York City time, on such date. Prior to 10:00
a.m., New York City time, on such date or as soon as
possible thereafter, BONY will pay by separate wire
transfer (using Fedwire message entry instructions in
a form previously specified by DTC) to an account at
the Federal Reserve Bank of New York previously
specified by DTC, in funds available for immediate
use by DTC, each payment of interest, principal and
premium, if any, due on a Global Note on such date.
Thereafter on such date, DTC will pay, in accordance
with its SDFS operating procedures then in effect,
such amounts in funds available for immediate use to
the respective Participants in whose names Book-Entry
Notes are recorded in the book-entry system
maintained by DTC. Neither the Company nor BONY shall
have any responsibility or liability for the payment
by DTC of the principal of, or premium, if any, or
interest on, the Book-Entry Notes to such
Participants.
Settlement Procedures: Settlement Procedures with regard to each Book-Entry
Note sold by the Company or through an Agent (except
pursuant to a Terms Agreement, as defined in the
Distribution Agreement), shall be as follows:
26
<PAGE> 27
A. The selling Agent will confirm with the
Company by telephone that such Note is a
Book-Entry Note and of the following
settlement information:
1. Principal amount.
2. Maturity date.
3. Interest rate.
4. Interest Payment Dates or
Installment Dates.
5. Redemption provisions, if any.
6. Settlement date.
7. Trade date.
8. Price.
9. Selling Agent's commission, if any,
determined as provided in the
Distribution Agreement.
10. Amortization schedule, if any.
11. Any other applicable terms.
B. The Company will advise BONY by telephone or
electronic transmission (confirmed in
writing at any time on the same date) of the
information set forth in Settlement
Procedure "A" above. The Company will assign
a CUSIP number to the Global Note
representing such Book-Entry Note or Notes.
C. BONY will communicate to DTC and the selling
Agent through DTC's Participant Terminal
System, which shall route such information
to Standard & Poor's Corporation and
Interactive Data Corporation, a pending
deposit message specifying the following
settlement information:
1. The information set forth in
Settlement Procedure "A".
2. Identification numbers of the
Participant accounts maintained by
DTC on behalf of BONY and the
Agent.
3. Identification as a Fixed-Rate or
Floating-Rate Book-Entry Note.
4. Initial Interest Payment Date for
such Note, (or the initial
27
<PAGE> 28
Installment Date in the case of an
Amortizing Note), number of days by
which such date succeeds the
related Record Date for DTC
purposes (or, in the case of
Floating Rate Notes which reset
daily or weekly, the date five
calendar days preceding the
Interest Payment Date) and, if then
calculable, the amount of interest
payable on such Interest Payment
Date (or the amount of principal
and interest payable on such
Installment Date in the case of an
Amortizing Note) (which amount
shall have been confirmed by BONY).
5. CUSIP number of the Global Note
representing such Book-Entry Note.
6. Whether such Global Note represents
any other Book-Entry Notes.
D. BONY will complete and authenticate the
Global Note representing such Book-Entry
Note or Notes.
E. DTC will credit such Global Note to BONY's
Participant account at DTC.
F. BONY will enter an SDFS delivery order
through DTC's Participant Terminal System
instructing DTC to (i) debit such Global
Note to BONY's Participant account and
credit interests in such Global Note to the
selling Agent's Participant account and (ii)
debit the selling Agent's settlement account
and credit BONY's settlement account for an
amount equal to the price of such Global
Note, less selling Agent's commission.
G. Unless the selling Agent purchased such
Global Note as principal, the selling Agent
will enter an SDFS delivery order through
DTC's Participant Terminal System
instructing DTC (i) to debit interests in
such Global Note to the selling Agent's
Participant account and credit interests in
such Global Note to the accounts of the
Participants with respect to such Global
Note and (ii) to debit the settlement
account of such Participants and credit the
settlement accounts of the selling Agent for
an amount equal to the price of such Global
Note or relevant interests therein.
H. Transfers of funds in accordance with SDFS
delivery orders described in Settlement
Procedures "F" and "G" will be settled in
accordance with SDFS operating procedures in
effect on the settlement date.
I. BONY will deposit funds in the Company's
account in the amount transferred to BONY in
accordance with Settlement Procedure "F".
28
<PAGE> 29
J. Unless the selling Agent purchased such
Book-Entry Note or Notes as principal, the
selling Agent will confirm the purchase of
such Book-Entry Note or Notes to the
purchaser either by transmitting to the
Participants with respect to such Book-Entry
Note or Notes a confirmation order or orders
through DTC's institutional delivery system
or by mailing a written confirmation to such
purchaser.
Receipt by the customer of the Prospectus,
appropriately amended or supplemented, must
accompany or precede any written offer of
the Book-Entry Note or Notes by the selling
Agent and any confirmation by the selling
Agent of purchase of the Book-Entry Note or
Notes.
Settlement Procedures
Timetable: For sales by the Company of Book-Entry Notes
to or through the selling Agent (except
pursuant to a Terms Agreement) for
settlement on the first Business Day after
the sale date, the Settlement Procedures set
forth above shall be completed as soon as
possible but not later than the respective
times (New York City time) set forth below:
<TABLE>
<CAPTION>
SETTLEMENT
PROCEDURE TIME
--------- ----
<S> <C>
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 9:00 A.M. on the settlement date
E 10:00 A.M. on the settlement date
F-G 2:00 P.M. on the settlement date
H 4:45 P.M. on the settlement date
I-J 5:00 P.M. on the settlement date
</TABLE>
If a sale is to be settled more than one
Business Day after the sale date, Settlement
Procedures "A", "B" and "C" shall be
completed as soon as practicable but no
later than 11:00 A.M., 12:00 Noon and 2:00
P.M., respectively, on the first Business
Day after the sale date. Settlement
Procedure "H" is subject to extension in
accordance with any extension of Fedwire
closing deadlines and in the other events
specified in the SDFS operating procedures
in effect on the settlement date.
If settlement of a Book-Entry Note is
rescheduled or cancelled, BONY, after
receiving notice from the Company or the
selling Agent, will deliver to DTC a
cancellation message through DTC's
Participant Terminal System by no later than
2:00 P.M. on the Business Day immediately
preceding the scheduled settlement date.
29
<PAGE> 30
Fails: If BONY fails to enter an SDFS delivery
order with respect to a Book-Entry Note
pursuant to Settlement Procedure "F", BONY
may deliver to DTC, through DTC's
Participant Terminal System, as soon as
practicable a withdrawal message instructing
DTC to debit such Book-Entry Note to BONY's
Participant account, provided that BONY's
Participant account contains a principal
amount of the Global Note representing such
Book-Entry Note that is at least equal to
the principal amount to be debited. If a
withdrawal message is processed with respect
to all the Book-Entry Notes represented by a
Global Note, BONY will cancel such Global
Note, make appropriate entries in BONY's
records and deliver the Global Note, marked
"cancelled", to the Company. If a withdrawal
message is processed with respect to one or
more, but not all, of the Book-Entry Notes
represented by a Global Note, BONY will
exchange such Global Note for two Global
Notes, one of which shall represent such
Book-Entry Note or Notes and shall be
likewise cancelled and delivered to the
Company, marked "cancelled", immediately
after issuance and the other of which shall
represent the remaining Book-Entry Notes
previously represented by the surrendered
Global Note and shall bear the CUSIP number
of the surrendered Global Note.
If the purchase price for any Book-Entry
Note is not timely paid to the Participants
with respect to such Note by the beneficial
purchaser thereof (or a person, including an
indirect participant in DTC, acting on
behalf of such purchaser), such
Participants, and, in turn, the selling
Agent, may enter SDFS delivery orders
through DTC's Participant Terminal System
reversing the orders entered pursuant to
Settlement Procedures "F" and "G",
respectively. Thereafter, BONY will deliver
the withdrawal message and take the related
actions described in the preceding
paragraph. Notwithstanding the foregoing,
upon any failure to settle with respect to a
Book-Entry Note, DTC may take any actions in
accordance with SDFS operating procedures
then in effect.
In the event of a failure to settle with
respect to one or more, but not all, of the
Book-Entry Notes to have been represented by
a Global Note, BONY will provide, in
accordance with Settlement Procedures "D"
and "F", for the authentication and issuance
of a Global Note representing the Book-Entry
Notes for which settlement is made and will
make appropriate entries in its records.
30
<PAGE> 31
PART III: CERTIFICATED NOTES
Payments of Principal
and Interest: Upon presentment and delivery of the Certificated
Note, BONY will pay the principal amount of each
Certificated Note at final maturity and the final
installment of interest in immediately available
funds. All interest payments on a Certificated Note,
other than interest due at maturity, and all
Installments on Amortizing Notes, will be made by
check drawn on BONY and mailed by BONY to the person
entitled thereto as provided in the Certificated
Note. However, holders of $10 million or more in
aggregate principal amount of Certificated Notes
having the same Interest Payment Date or Installment
Date (whether having other identical or different
terms and provisions) shall be entitled to receive
payments of interest or Installments, other than at
maturity, by wire transfer of immediately available
funds if appropriate wire transfer instructions have
been received in writing by BONY not less than 15
days prior to the applicable Interest Payment Date or
Installment Date. Any payment of principal or
interest required to be made on an Interest Payment
Date or Installment Date or at final maturity 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 the
Interest Payment Date or Installment Date or at
maturity, as the case may be, and, except in the case
of payment at final maturity, no interest shall
accrue for the period from and after such Interest
Payment Date or Installment Date or final maturity.
Certificated Notes presented to BONY at final
maturity for payment will be cancelled by BONY. All
cancelled Certificated Notes held by BONY shall be
marked "cancelled", and BONY shall deliver to the
Company the cancelled Notes so marked.
Settlement Procedures: Settlement Procedures with regard to each
Certificated Note sold by the Company to or through
an Agent (except pursuant to a Terms Agreement) shall
be as follows:
A. The selling Agent will confirm with the
Company by telephone that such Note is a
Certificated Note and of the following
settlement information:
1. Name in which such Note is to be
registered ("Registered Owner").
2. Address of the Registered Owner and
address for payment of principal
and interest.
3. Taxpayer identification number of
the Registered Owner (if
available).
4. Principal amount.
5. Maturity date.
6. Interest rate.
31
<PAGE> 32
7. Interest Payment Dates or
Installment Dates.
8. Redemption provisions, if any.
9. Settlement date.
10. Price.
11. Selling Agent's commission, if any,
determined as provided in the
Distribution Agreement.
12. Amortization schedule, if any.
13. Denomination in which such Note is
to be issued.
14. Any other applicable terms.
B. The Company will advise BONY by telephone or
electronic transmission (confirmed in
writing at any time on the same date) of the
information set forth in Settlement
Procedure "A" above.
C. BONY will complete and distribute a
pre-printed 4-ply Note packet containing the
following documents (or a 1-ply Note with
attached confirmation and 3 appropriately
designated photocopies thereof) in forms
approved by the Company and the selling
Agent:
1. Certificated Note with customer
information.
2. Stub (copy) One -- for BONY.
3. Stub (copy) Two -- for the selling
Agent.
4. Stub (copy) Three -- for the
Company.
D. BONY will deliver the Certificated Note
(with the confirmation) and Stub (copy) Two
to the selling Agent or to its
representative designated in writing by the
selling Agent (the "Representative") at an
office of the selling Agent or the
Representative located in the borough of
Manhattan and south of Chambers Street, and
the selling Agent or its Representative will
acknowledge receipt of the Certificated Note
by stamping the delivery receipt with the
date and time received and returning it to
BONY. Such delivery will be made only
against such receipt and evidence that
instructions have been given by the selling
Agent for payment to the account of the
Company in funds available for immediate
use, of an amount equal to the principal
amount of the Certificated Note. In the
event that the instructions given by the
selling Agent for payment to the account of
the Company are revoked, the Company will as
promptly as possible wire transfer to the
account of the selling Agent or
Representative an amount of immediately
available funds equal to the amount of such
payment.
E. The selling Agent or its Representative will
deliver the Certificated Note (with
confirmation) to the customer against
payment in immediately available funds.
Receipt by the customer of the Prospectus,
appropriately amended or supplemented, must
accompany or precede any written offer of
the Certificated Note by the selling Agent,
any delivery of the
32
<PAGE> 33
Certificated Note by the selling Agent and
any confirmation by the selling Agent of
purchase of the Certificated Note.
If the selling Agent is instructed by the
purchaser to deliver the Certificated Note
and confirmation to different locations, the
Certificated Note and the confirmation will
each be accompanied or preceded by the
Prospectus, appropriately amended or
supplemented, then in effect.
F. The selling Agent or its Representative will
obtain the acknowledgment of receipt of the
Certificated Note by the customer through
completion of Stub (copy) Two.
G. BONY will send Stub (copy) Three by
first-class mail to the Company.
Periodically, BONY will also send a
statement to the Company setting forth the
principal amount of the Certificated Notes
outstanding as of that date after giving
effect to such transactions.
In the event of a purchase of Certificated
Notes by the Selling Agent, as principal,
appropriate settlement details will be set
forth in the applicable Terms Agreement to
be entered into between the selling Agent,
BellSouth and the Company.
Settlement Procedures
Timetable: For offers accepted by the Company, the Settlement
Procedures set forth above shall be completed on or
before the respective times (New York City time) set
forth below:
<TABLE>
<CAPTION>
SETTLEMENT
PROCEDURE TIME
--------- ----
<S> <C>
A 5:00 P.M. on day of offer, if
available
B 3:00 P.M. on Business Day prior
to settlement
C-D 2:15 P.M. on day of settlement
E-F 5:00 P.M. on day of settlement
G 5:00 P.M. on day of settlement
</TABLE>
Confirmations: The selling Agent shall, for each
Certificated Note offer received by it and
accepted by the Company, issue a
confirmation to the purchaser, setting forth
the details set forth above.
Note Deliveries and Cash
Payment: Upon instructions from the Company, BONY
will deliver the Certificated Notes to the
selling Agent or its Representative (for the
benefit of the purchaser).
Delivery by BONY of the Certificated Notes
will be made in accordance with paragraph D
of the Settlement Procedures.
33
<PAGE> 34
Fails: For offers received by the selling Agent, in
the event that a purchaser shall fail to
accept delivery of and make payment for a
Certificated Note, the selling Agent will
notify BONY and the Company by telephone,
confirmed in writing, and return the
Certificated Note to BONY. Upon receipt of
such notice, the Company will immediately
wire transfer to the account of the selling
Agent an amount equal to the amount
previously credited thereto in respect of
such Certificated Note. Such wire transfer
will be made on the settlement date, if
possible, and in any event not later than
the Business Day following the settlement
date. If such fail shall have occurred for
any reason other than a default by the
selling Agent in the performance of its
obligations hereunder and under the
Distribution Agreement, the company will
reimburse the selling Agent on an equitable
basis for its loss of the use of funds
during the period when such funds were
credited to the account of the Company.
Immediately upon receipt of the Certificated
Note in respect of which the fail occurred,
BONY will make appropriate entries in its
records, cancel the Certificated Note and
deliver to the Company the Certificated
Note, marked "cancelled".
34
<PAGE> 1
EXHIBIT 4-F
February 27, 1998
BellSouth Capital Funding Corporation
1155 Peachtree Street, N.E.
Atlanta, Georgia 30309-3610
The Bank of New York, as Trustee
101 Barclay Street
421 West Street
New York, N.Y. 10286
Attention: Corporate Trust Administration
Dear Sir/Mesdames:
We refer to the Indenture dated as of August 1, 1992 (the "Indenture")
among BellSouth Capital Funding Corporation (the "Company"), The Bank of New
York, as successor to Wachovia Bank of Georgia, N.A., as trustee (the
"Trustee"), and ourselves pursuant to which the Company has from time to time
issued debt securities, and contemplates issuing additional debt securities in
the future (collectively, the "Securities", and individually, a "Security"),
including the Company's medium-term notes, Series C, previously or hereafter
issued under and pursuant to the Indenture (the "Notes"). The Securities,
including the Notes, are entitled to benefits of a Support Agreement dated
October 15, 1987, as amended as of August 1, 1992, between the Company and
ourselves.
With a view to confirming the manner in which BellSouth Corporation has
always interpreted the Support Agreement and intends that the Support Agreement
be construed, and for the avoidance of any doubts, BellSouth Corporation hereby
waives any and all rights, claims, or defenses which it may have with respect to
the Support Agreement or any of its obligations thereunder under any provision
of the laws of the State of Georgia, reserving for itself only those rights,
claims or defenses which are expressly set forth in the Support Agreement.
Without limiting the generality of the immediate preceding sentence, BellSouth
hereby waives any and all claims or defenses which it may have with respect to
the Support Agreement or any of its obligations thereunder under any provisions
of Article 2 of Chapter 7 of Title 10 of the Official Code of Georgia Annotated,
including without limitation any and all rights, claims or defenses which
BellSouth may have arising from (i) any release or compounding of any cosurety,
(ii) any novation of any Security, (iii) any increase of BellSouth's risk of
liability under the Support Agreement with respect to any Security, (iv) any
refusal by any Securityholder to deliver any Security upon tender
<PAGE> 2
BellSouth Capital Funding Corporation
The Bank of New York
February 27, 1998
Page -2-
and demand by BellSouth, (v) any refusal of any Securityholder to sue the
Company after notice by BellSouth, or (vi) any extension of the Company's
liability on any Security.
BellSouth hereby declares it expressly intends that all
Securityholders, past and future, shall be entitled to the benefits of the
foregoing waivers.
Very truly yours,
BELLSOUTH CORPORATION
By: /s/ Mark E. Droege
----------------------------------
Name: Mark E. Droege
Title: Vice President - Financial
Management and Treasurer
Acknowledged:
BELLSOUTH CAPITAL FUNDING CORPORATION
By: /s/ Gary L. Walton
-----------------------------------
Name: Gary L. Walton
Title: Vice President and Treasurer
THE BANK OF NEW YORK, as Trustee
By: /s/ Marie E. Trimboli
------------------------------------
Name: Marie E. Trimboli
Title: Assistant Treasurer
<PAGE> 1
EXHIBIT 23-d
February 27, 1998
BellSouth Capital Funding Corporation
1155 Peachtree Street, NE
Atlanta, Georgia 30309-3610
BellSouth Corporation
1155 Peachtree Street, N.E.
Atlanta, Georgia 30309-3610
Dear Sirs:
I refer to Registration Statement No. 333-45607 which BellSouth Capital
Funding Corporation (the "Company") and BellSouth Corporation ("BellSouth") have
filed with the Securities and Exchange Commission under the Securities Act of
1933, as amended, relating to $500,000,000 of debt securities to be issued by
the Company.
I hereby consent to the making of the statement with respect to me in
the related prospectus under the heading "Legal Opinions."
Very truly yours,
/s/ Mark D. Hallenbeck
-----------------------
Mark D. Hallenbeck
