AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON
REGISTRATION NO. 333-_____
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
---------------------------
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
---------------------------
PACIFIC BELL
(Exact name of Registrant as specified in its charter)
A CALIFORNIA CORPORATION 94-0745535
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
140 NEW MONTGOMERY STREET
SAN FRANCISCO, CALIFORNIA 94105
(415) 542-9000
(Address, including zip code, and telephone number, including area
code, of Registrant's principal executive offices)
---------------------------
JUDITH SAHM
175 E. HOUSTON
SAN ANTONIO, TEXAS 78205
(210) 821-4105
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
---------------------------
Copies to:
WAYNE WIRTZ, ESQ. JOHN T. BOSTELMAN, ESQ.
SBC COMMUNICATIONS INC. SULLIVAN & CROMWELL
175 E. HOUSTON ST., 12TH FLOOR 125 BROAD STREET
SAN ANTONIO, TEXAS 78205 NEW YORK, NEW YORK 10004
---------------------------
Approximate date of commencement of proposed
sale to the public: FROM TIME TO TIME AFTER THE
EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. |_|
If any of the securities being registered on this Form are to be offered
on a delayed or continuous basis pursuant to Rule 415 under the Securities Act
of 1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. |X|
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of an earlier
effective registration statement for the same offering. |_|
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. |_|
If delivery of the prospectus is expected to be made pursuant to
Rule 434, please check the following box. |_|
---------------------------
<TABLE>
<CAPTION>
CALCULATION OF REGISTRATION FEE
===================================================================================================================================
<S> <C> <C> <C> <C>
Proposed maximum Proposed maximum
Title of each class of Amount to be offering price per aggregate offering Amount of
securities to be registered registered unit price registration fee
- -----------------------------------------------------------------------------------------------------------------------------------
Debt Securities $1,600,000,000(1) 100%(2) $1,600,000,000 $484,849(3)
===================================================================================================================================
</TABLE>
<PAGE>
(1) Or, in the case of debt securities issued at an original issue discount,
such greater principal amount as shall result in an aggregate public
offering price of the amount set forth above or, in the case of debt
securities denominated in a currency other than U.S. dollars or a
composite currency, such U.S. dollar amount as shall result from
converting the aggregate public offering price of such debt securities
into U.S. dollars at the spot exchange rate in effect on the date such
debt securities are initially offered to the public.
(2) Estimated solely for the purpose of calculating the registration fee in
accordance with Rule 457 under the Securities Act of 1933.
(3) Does not include an additional $150,000,000 of securities being carried
forward from Registration Statement No. 33-49477 on Form S-3 pursuant to
Rule 429 of the Securities Act. A registration fee of $45,455 for such
additional securities was previously paid with the filing of the previous
registration statement.
---------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THIS REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.
Pursuant to Rule 429 under the Securities Act of 1933, this Registration
Statement contains a combined prospectus that also relates to $150,000,000 of
Debt Securities registered under Registration Statement No. 33-49477 on Form S-3
previously filed by the Registrant and declared effective on April 12, 1993.
================================================================================
<PAGE>
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
<PAGE>
Subject to Completion dated October 9, 1997
PROSPECTUS
U.S. $1,750,000,000
Pacific Bell
DEBT SECURITIES
---------------------------
Pacific Bell (the "Company") may offer, in one or more series, debt
securities ("Debt Securities") in an aggregate principal amount (or net proceeds
in the case of debt securities issued at an original issue discount) of not more
than U.S. $1,750,000,000 or the equivalent thereof in one or more currencies or
currency units on terms to be determined at the time such Debt Securities are
offered for sale. As used herein, Debt Securities shall include securities
denominated in U.S. dollars or, at the option of the Company and if so specified
in the applicable Prospectus Supplement, in any other currency, including
composite currencies such as the European Currency Unit.
When a particular series of Debt Securities is offered, a prospectus
supplement ("Prospectus Supplement") together with this Prospectus will be
delivered setting forth the terms of the Debt Securities, including, where
applicable, the specific designation, aggregate principal amount, currency or
currencies in which the principal, premium, if any, and interest are payable,
denominations, maturity, rate or rates of any interest, any index, price or
formula to be used for determining the amount of any payment of principal,
premium, if any, or interest, any interest payment dates, whether the Debt
Securities are issuable in registered form, in bearer form, or in the form of
one or more global securities or a combination thereof, any redemption
provisions, the initial public offering price, the names of any underwriters,
dealers or agents, any compensation to such underwriters, dealers or agents and
any other specific terms in connection with the offering and sale of the Debt
Securities.
The Company may sell Debt Securities to or through underwriters, and may
also sell Debt Securities directly to other purchasers or through agents. See
"Plan of Distribution."
---------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
---------------------------
THE DATE OF THIS PROSPECTUS IS ___________, 1997.
<PAGE>
NO DEALER, SALESMAN OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR THE PROSPECTUS SUPPLEMENT AND,
IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED. NEITHER THE DELIVERY OF THIS PROSPECTUS OR THE
PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER AND THEREUNDER SHALL UNDER ANY
CIRCUMSTANCES CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS
OF THE COMPANY SINCE THE DATE HEREOF OR THEREOF. THIS PROSPECTUS AND THE
PROSPECTUS SUPPLEMENT DO NOT CONSTITUTE AN OFFER OR SOLICITATION BY ANYONE IN
ANY JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED OR IN
WHICH THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO OR
TO ANYONE TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION.
AVAILABLE INFORMATION
The Company is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended ("Exchange Act"), and in accordance therewith
files reports and other information with the Securities and Exchange Commission
("SEC"). Such reports, and other information filed by the Company can be
inspected and copied at the public reference facilities of the SEC, Room 1024,
Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549, as well as at the
following SEC Regional Offices: Seven World Trade Center, Suite 1300, New York,
NY 10048 and Northwest Atrium Center, 500 West Madison Street, Suite 1400,
Chicago, IL 60661. Copies can be obtained from the SEC by mail at prescribed
rates. Requests should be directed to the SEC's Public Reference Section, Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington, DC 20549. In
addition, the SEC maintains a web site that contains reports, proxy and
information statements and other information regarding registrants, such as the
Company, that file electronically with the SEC. The address of such site is
http://www.sec.gov. Such material can also be inspected at the New York and
Pacific Stock Exchanges on which certain of the Company's debt securities are
listed.
The Company has filed with the SEC a Registration Statement on Form S-3
(together with all amendments and exhibits thereto, the "Registration
Statement") under the Securities Act of 1933, as amended ("Securities Act").
This Prospectus does not contain all of the information set forth in the
Registration Statement, certain parts of which are omitted in accordance with
the rules and regulations of the SEC. For further information, reference is made
to the Registration Statement.
INCORPORATION OF DOCUMENTS BY REFERENCE
The following documents have been filed by the Company with the SEC (File
No. 1-1414) and are hereby incorporated herein by reference:
1. The Company's Annual Report on Form 10-K for the year ended December
31, 1996.
2. The Company's Quarterly Reports on Form 10-Q for the quarters ended
March 31 and June 30, 1997.
3. The Company's Current Report on Form 8-K, Date of Report, April 4,
1997.
-2-
<PAGE>
ALL DOCUMENTS FILED BY THE COMPANY PURSUANT TO SECTION 13(a), 13(c), 14 OR
15(d) OF THE EXCHANGE ACT SUBSEQUENT TO THE DATE OF THIS PROSPECTUS AND PRIOR TO
THE TERMINATION OF THE OFFERING OF THE DEBT SECURITIES SHALL BE DEEMED TO BE
INCORPORATED BY REFERENCE IN THIS PROSPECTUS AND TO BE PART HEREOF FROM THE DATE
OF FILING OF SUCH DOCUMENTS. ANY STATEMENT CONTAINED IN A DOCUMENT INCORPORATED
OR DEEMED TO BE INCORPORATED BY REFERENCE HEREIN SHALL BE DEEMED TO BE MODIFIED
OR SUPERSEDED FOR PURPOSES OF THIS PROSPECTUS TO THE EXTENT THAT A STATEMENT
CONTAINED HEREIN OR IN ANY OTHER SUBSEQUENTLY FILED DOCUMENT WHICH ALSO IS OR IS
DEEMED TO BE INCORPORATED BY REFERENCE HEREIN OR IN ANY PROSPECTUS SUPPLEMENT
MODIFIES OR SUPERSEDES SUCH STATEMENT. ANY SUCH STATEMENT SO MODIFIED OR
SUPERSEDED SHALL NOT BE DEEMED, EXCEPT AS SO MODIFIED OR SUPERSEDED, TO
CONSTITUTE A PART OF THIS PROSPECTUS.
Copies of the above documents (other than exhibits to such documents) may
be obtained upon request without charge from the Company's Investor Services
office, 130 Kearny Street, Suite 2926, San Francisco, California 94108
(telephone number (415) 394-3078).
THE COMPANY
Pacific Bell (the "Company") was incorporated in 1906 under the laws of
the State of California. It has its principal executive offices at 140 New
Montgomery Street, San Francisco, California 94105 (telephone number (415)
542-9000). Through December 31, 1983, the Company was an associated company of
the Bell System and a subsidiary of AT&T Corp. ("AT&T"). Effective January 1,
1984, the Company became a subsidiary of Pacific Telesis Group ("PAC"), one of
the seven regional holding companies formed by AT&T in connection with the
divestiture from AT&T of its 22 wholly owned operating telephone companies
pursuant to a consent decree approved by the United States District Court for
the District of Columbia. On April 1, 1997, SBC Communications Inc. ("SBC") and
PAC completed the merger of an SBC subsidiary with PAC, in a transaction in
which each outstanding share of PAC common stock was exchanged for 0.73145 of a
share of SBC common stock (equivalent to approximately 313 million shares).
Through the merger, PAC became a wholly-owned subsidiary of SBC. The transaction
was accounted for by SBC as a pooling of interests and a tax-free
reorganization.
The Company and its subsidiaries provide a wide variety of communications
services in California including local exchange and toll service, network access
and directory advertising, as well as wireless services in both California and
Nevada.
USE OF PROCEEDS
Unless otherwise indicated in the Prospectus Supplement, the net proceeds
from the sale of the Debt Securities are to be used to provide funds to repay
long- and short-term debt and for the general corporate purposes of the
Company.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges of
the Company for the periods indicated:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED JUNE 30, YEAR ENDED DECEMBER 31,
------------------ --------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
1997 1996 1996 1995 1994 1993 1992
-------------- ------------- -------------- ------------- ------------- -------------- -------------
(0.52) 5.62 5.15 4.51 4.53 0.92 4.51
</TABLE>
-3-
<PAGE>
For the purpose of calculating this ratio, earnings consist of income
before income taxes, extraordinary loss, cumulative effect of changes in
accounting principles and fixed charges. Fixed charges include interest on
indebtedness and one-third of rental expense (the portion of rentals
representative of the interest factor).
DESCRIPTION OF DEBT SECURITIES
The following description of the Debt Securities sets forth certain
general terms and provisions of the Debt Securities of any series to which any
Prospectus Supplement may relate. The particular terms and provisions of the
series of Debt Securities offered by a Prospectus Supplement, and the extent to
which such general terms and provisions described below may apply thereto, will
be described in the Prospectus Supplement relating to such series of Debt
Securities.
The Debt Securities are to be issued under an Indenture dated as of
October 7, 1997 ("Indenture"), from the Company to The Bank of New York, as
Trustee ("Trustee"). The following summaries of certain provisions of the Debt
Securities and the Indenture do not purport to be complete and are subject to,
and are qualified in their entirety by reference to, all provisions of the
Indenture, including the definitions therein of certain terms. Particular
sections of the Indenture which are relevant to the discussion are cited
parenthetically. Wherever particular sections or defined terms of the Indenture
are referred to, it is intended that such sections or defined terms shall be
incorporated herein by reference. "Principal" when used herein includes, when
appropriate, the premium, if any, on the Debt Securities.
GENERAL
The Indenture does not limit the amount of Debt Securities which may be
issued thereunder, and additional debt securities may be issued thereunder up to
the aggregate principal amount which may be authorized from time to time by, or
pursuant to, a resolution of the Company's Board of Directors. Reference is made
to the Prospectus Supplement for the following terms of the particular series of
Debt Securities being offered hereby: (i) the title of the Debt Securities of
the series; (ii) if other than U.S. dollars, the currency or currencies (which
may include composite currencies such as the European Currency Unit) of payment
of principal of and interest on the Debt Securities of the series; (iii) any
limit upon the aggregate principal amount of the Debt Securities of the series;
(iv) the date or dates on which the principal of the Debt Securities of the
series will mature; (v) the rate or rates (or manner of calculation thereof), if
any, at which the Debt Securities of the series will bear interest, the date or
dates from which any such interest will accrue and on which such interest will
be payable, and, with respect to Debt Securities of the series in registered
form, the record date for the interest payable on any interest payment date and
the extent to which, or the manner in which, any interest payable on a global
security on an interest payment date will be paid if other than in the manner
described under "--Book-Entry Securities"; (vi) the place or places where the
principal of and interest on the Debt Securities of the series will be payable;
(vii) any redemption or sinking fund provisions; (viii) if other than the
principal amount thereof, the portion of the principal amount of Debt Securities
of the series which will be payable upon declaration of acceleration of the
maturity thereof; (ix) whether the Debt Securities of the series will be
issuable in registered or bearer form or both, whether any such Debt Securities
are to be issuable initially in temporary global form and whether any such Debt
Securities are to be issuable in permanent global form with or without coupons
and, if so, whether beneficial owners of interests in any such permanent global
Debt Security may exchange such interests for Debt Securities of like tenor of
any authorized form and denomination and the circumstances under which any such
exchange may occur, any restrictions
-4-
<PAGE>
applicable to the offer, sale or delivery of Debt Securities in bearer form
("Bearer Debt Securities") and whether, and the terms upon which, Bearer Debt
Securities will be exchangeable for Debt Securities in registered form
("Registered Debt Securities") and vice versa; (x) whether and under what
circumstances the Company will pay additional amounts on the Debt Securities of
the series held by a person who is not a U.S. person (as defined below) in
respect of taxes or similar charges withheld or deducted and, if so, whether the
Company will have the option to redeem such Debt Securities rather than pay such
additional amounts; (xi) any index, price or formula used to determine the
amount of payments of principal of, premium, if any, and interest on the Debt
Securities of the series; and (xii) any additional provisions or other special
terms not inconsistent with the provisions of the Indenture, including any terms
which may be required by or advisable under United States laws or regulations or
advisable in connection with the marketing of Debt Securities of such series.
(Sections 2.01 and 2.02.)
Each series of Debt Securities will constitute unsecured and
unsubordinated indebtedness of the Company and will rank on a parity with the
Company's other unsecured and unsubordinated indebtedness.
Debt Securities of any series may be issued as Registered Debt Securities
or Bearer Debt Securities or both, or in the form of one or more global
securities, as specified in the terms of the series. Unless otherwise indicated
in the Prospectus Supplement, Debt Securities will be issued in denominations of
U.S. $1,000 and integral multiples thereof. Bearer Debt Securities will be
offered, sold and delivered only outside the United States to non-U.S. persons
and to offices located outside the United States of certain U.S. financial
institutions. For purposes of this Prospectus, "United States" means the United
States of America, including the states and the District of Columbia, its
territories, its possessions and all other areas subject to its jurisdiction.
"U.S. person" means a citizen or resident of the United States, a corporation,
partnership or other entity created or organized in or under the laws of the
United States or a political subdivision thereof, or an estate or trust the
income of which is subject to United States federal income taxation regardless
of its source. Any special federal income tax considerations applicable to
Bearer Debt Securities will be described in the Prospectus Supplement relating
thereto.
Except as set forth in an applicable Prospectus Supplement, interest on
Bearer Debt Securities will be payable only against presentation and surrender
of the coupons for the interest installments evidenced thereby as they mature at
a paying agency of the Company located outside of the United States. (Section
2.05(c).) The Company will maintain such an agency for a period of two years
after the principal of such Bearer Debt Securities has become due and payable.
During any period thereafter for which it is necessary in order to conform to
United States tax law or regulations, the Company will maintain a paying agent
outside the United States and its possessions to which the Bearer Debt
Securities may be presented for payment and will provide the necessary funds
therefor to such paying agent upon reasonable notice. (Section 2.04.) No payment
with respect to any Bearer Debt Securities will be made at any office or agency
in the United States or by check mailed in the United States or by transfer to
an account maintained with a bank located in the United States. Notwithstanding
the foregoing, payments on Bearer Debt Securities denominated and payable in
U.S. dollars will be made in the United States if (but only if) payment of the
full amount thereof in U.S. dollars at each office of each paying agent outside
the United States appointed and maintained by the Company is illegal or
effectively precluded by exchange controls or other similar restrictions.
(Section 2.05.)
Registration of transfer of Registered Debt Securities may be requested
upon surrender thereof at an agency of the Company maintained for such purpose
("Registrar") and upon fulfillment of all other requirements of such Registrar.
(Section 2.08(a).) Bearer Debt Securities and the coupons related thereto will
be transferable by delivery.
(Section 2.08(e).)
-5-
<PAGE>
Debt Securities may be issued under the Indenture as Original Issue
Discount Securities to be offered and sold at a substantial discount from the
principal amount thereof. Special Federal income tax, accounting and other
considerations applicable thereto will be described in the Prospectus Supplement
relating to such Original Issue Discount Securities. "Original Issue Discount
Security" means any Debt Security which provides for an amount less than the
stated principal amount thereof to be due and payable upon declaration of
acceleration of the maturity thereof upon the occurrence of an event of default
and the continuation thereof. (Section 1.01.)
Unless otherwise indicated in an applicable Prospectus Supplement, payment
of principal of and interest on Registered Debt Securities (other than a global
security) will be made at the office of such paying agent or paying agents as
the Company may designate from time to time, except that, at the option of the
Company, payment of any interest may be made (i) by check mailed to the address
of the payee entitled thereto or (ii) by wire transfer to an account maintained
by such payee. Unless otherwise indicated in an applicable Prospectus
Supplement, payment of any installment of interest on Registered Debt Securities
will be made to the person in whose name such registered Debt Security is
registered at the close of business on the record date for such interest
payment.
If the purchase price of any of the Debt Securities is denominated in
other than U.S. dollars or if the principal of and interest on any series of
Debt Securities is payable in other than U.S. dollars, then the restrictions,
elections, general tax considerations, specific terms and other information with
respect to such issue of Debt Securities and such currency or currencies will be
set forth in the applicable Prospectus Supplement.
BOOK-ENTRY SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more global securities that will be deposited with or on behalf
of a Depository (the "Depository") identified in the Prospectus Supplement
relating to such series. The specific terms of the Depository arrangement with
respect to any Debt Securities of a series will be described in the Prospectus
Supplement relating to such series. The Company anticipates that the following
provisions will apply to all Depository arrangements for Registered Debt
Securities.
Unless otherwise specified in an applicable Prospectus Supplement, Debt
Securities which are to be represented by a global security to be deposited with
or on behalf of a Depository will be represented by a global security registered
in the name of such Depository or its nominee. Upon issuance of a global
security in registered form, the Depository of such global security will credit,
on its book-entry registration and transfer system, the respective principal
amounts of the Debt Securities represented by such global security to the
accounts of institutions that have accounts with such Depository or its nominee
("Participants"). The accounts to be credited shall be designated by the
underwriters or agents of such Debt Securities, or by the Company if such Debt
Securities are offered and sold directly by the Company. Ownership of beneficial
interests in a global security will be limited to Participants or persons that
may hold interests through Participants. Ownership of beneficial interests in
such global securities will be shown on, and the transfer of that ownership will
be effected only through records maintained by, the Depository (with respect to
Participants' interests) or its nominee for such global security or by
Participants or persons that hold through Participants. The laws of some
jurisdictions require that certain purchasers of Debt Securities take physical
delivery of such securities in definitive form. Such laws may impair the ability
to transfer beneficial interests in a global security.
So long as the Depository for a global security in registered form, or its
nominee, is the registered owner of such global security, such Depository or
such nominee, as the case may be, will be considered the sole owner or holder of
the Debt Securities represented by such global security for all purposes under
the Indenture. Except as set forth below, owners of beneficial interests in such
global securities will not be entitled to have Debt Securities of the series
represented
-6-
<PAGE>
by such global security registered in their names, will not receive or be
entitled to receive physical delivery of Debt Securities of such series in
definitive form and will not be considered the owners or holders thereof under
the Indenture.
Principal, premium, if any, and interest payments on Debt Securities
registered in the name of or held by a Depository or its nominee will be made to
the Depository or its nominee, as the case may be, as the registered owner or
the holder of the global security representing such Debt Securities. Neither the
Company, the Trustee, or any paying agent for such Debt Securities will have any
responsibility or liability for any aspect of the records relating to or
payments made on account of beneficial ownership interests in a global security
for such Debt Securities or for maintaining, supervising or reviewing any
records relating to such beneficial ownership interests.
The Company expects that the Depository for Debt Securities of a series,
upon receipt of any payments of principal or interest in respect of a global
security, will credit immediately the accounts of the related Participants with
payments in amounts proportionate to their respective beneficial interests in
the principal amount of such global security as shown on the records of such
Depository. The Company also expects that payments by Participants to owners of
beneficial interests in such global security held through such Participants will
be governed by standing instructions and customary practices, as is now the case
with securities held for the accounts of customers in bearer form or registered
in "street name," and will be the responsibility of such Participants.
Unless and until it is exchanged in whole or in part for Debt Securities
in definitive form in accordance with the terms of the Debt Securities, a global
security may not be transferred except as a whole by the Depository for such
global security to a nominee of such Depository or by a nominee of such
Depository to such Depository or another nominee of such Depository or by such
Depository or any such nominee to a successor of such Depository or a nominee of
such successor. If a Depository for Debt Securities is at any time unwilling or
unable to continue as depository or if at any time such Depository ceases to be
a clearing agency registered under the Exchange Act, and a successor Depository
is not appointed by the Company within 90 days, the Company will issue Debt
Securities in definitive registered form in exchange for the global security
representing such Debt Securities. In addition, the Company may at any time and
in its sole discretion determine not to have any Debt Securities in registered
form represented by one or more global securities and, in such event, will issue
Debt Securities in definitive registered form in exchange for all global
securities representing such Debt Securities. Further, if an event of default,
or an event which, with the giving of notice or lapse of time, or both, would
constitute an event of default, under the Indenture occurs and is continuing
with respect to the Debt Securities of a series, or if the Company so specifies
with respect to the Debt Securities of a series, the Depository may exchange a
global security representing Debt Securities of such series for Debt Securities
of such series in definitive registered form. In any such instance, an owner of
a beneficial interest in a global security will be entitled to physical delivery
in definitive form of Debt Securities of the series represented by such global
security equal in principal amount to such beneficial interest and to have such
Debt Securities registered in its name.
EXCHANGE OF SECURITIES
Registered Debt Securities in definitive form may be exchanged for an
equal aggregate principal amount of Registered Debt Securities of the same
series and date of maturity in such authorized denominations as may be requested
upon surrender of the Registered Debt Securities to the Registrar and upon
fulfillment of all other requirements of such Registrar. (Section 2.08(a).)
To the extent permitted by the terms of a series of Debt Securities
authorized to be issued in registered form and bearer form, Bearer Debt
Securities in definitive form may be exchanged for an equal aggregate principal
amount of registered or Bearer Debt Securities of the same series and date of
maturity in such authorized denominations as may
-7-
<PAGE>
be requested upon surrender of the Bearer Debt Securities with all unpaid
coupons relating thereto (except as may otherwise be provided in the Debt
Securities) to the Registrar (or a paying agent if the exchange is for bearer
securities) and upon fulfillment of all other requirements of such Registrar.
(Section 2.08(b).) Registered Debt Securities may not be exchanged for Bearer
Debt Securities.
LIEN ON ASSETS
If at any time the Company mortgages, pledges or otherwise subjects to any
lien the whole or any part of any property or assets now owned or hereafter
acquired by it, except as hereinafter provided, the Company will secure the
outstanding Debt Securities, and any other obligations of the Company which may
then be outstanding and entitled to the benefit of a covenant similar in effect
to this covenant, equally and ratably with the indebtedness or obligations
secured by such mortgage, pledge or lien, for as long as any such indebtedness
or obligation is so secured. The foregoing covenant does not apply to the
creation, extension, renewal or refunding of purchase-money mortgages or liens,
or to the making of any deposit or pledge to obtain the benefits of any law
relating to workers' compensation, unemployment insurance, old age pensions or
other social security, or with any court, board, commission or governmental
agency as security incident to the proper conduct of any proceeding before it.
Nothing contained in the Indenture prevents a person directly or indirectly
controlling or controlled by, or under direct or indirect common control with,
the Company from mortgaging, pledging or subjecting to any lien any property or
assets, whether or not acquired from the Company. (Section 4.02.)
SUCCESSOR ENTITY
The Company may not consolidate with or merge into, or be merged into, or
transfer or lease its property and assets substantially as an entirety to,
another entity unless the successor entity is a U.S. corporation and assumes all
the obligations of the Company under the Debt Securities and any coupons related
thereto and the Indenture. Thereafter, except in the case of a lease, all such
obligations of the Company shall terminate. (Section 5.01.)
EVENTS OF DEFAULT
The following events are defined in the Indenture as "Events of Default"
with respect to a series of Debt Securities: (i) default in the payment of
interest on any Debt Security of such series for 90 days; (ii) default in the
payment of the principal of any Debt Security of such series when the same
becomes due and payable at maturity, upon redemption, or otherwise; (iii)
failure by the Company for 90 days after notice to it to comply with any of its
other agreements in the Debt Securities of such series, in the Indenture, in any
supplemental indenture under which the Debt Securities of that series may have
been issued (other than covenants relating only to other series); and (iv)
certain events of bankruptcy or insolvency. (Section 6.01.) If an Event of
Default occurs with respect to the Debt Securities of any series and is
continuing, the Trustee or the holders of at least 25% in principal amount of
all of the outstanding Debt Securities of that series may declare the principal
(or, if the Debt Securities of that series are Original Issue Discount Debt
Securities, such portion of the principal amount as may be specified in the
terms of that series) of, and any accrued interest on, all the Debt Securities
of that series to be due and payable. Upon such declaration, such principal (or,
in the case of Original Issue Discount Debt Securities, such specified amount)
and any accrued interest will become due and payable immediately. (Section
6.02.)
Debt Securityholders may not enforce the Indenture or the Debt Securities,
except as provided in the Indenture. (Section 6.06.) The Trustee may require
indemnity satisfactory to it before it enforces the Indenture or the Debt
Securities. (Section 7.07.) Subject to certain limitations, holders of a
majority in principal amount of the Debt Securities
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of each series affected may direct the Trustee in its exercise of any trust
power with respect to Debt Securities of that series. (Section 6.05.) The
Trustee may withhold from Debt Securityholders notice of any continuing default
(except a default in payment of principal or interest) if it determines that
withholding notice is in their interests. (Section 7.05.)
AMENDMENT AND WAIVER
Subject to certain exceptions, the Indenture or the Debt Securities may be
amended or supplemented by the Company and the Trustee with the written consent
of the holders of a majority in principal amount of the outstanding Debt
Securities of each series affected by the amendment or supplement (with each
such series voting as a class), or compliance with any provision may be waived
with the consent of the holders of a majority in principal amount of the
outstanding Debt Securities of each series affected by such waiver (with each
such series voting as a class). However, without the consent of each Debt
Securityholder affected, an amendment or waiver may not (i) reduce the amount of
Debt Securities whose holders must consent to an amendment or waiver; (ii)
reduce the rate of or change the time for payment of interest on any Debt
Security; (iii) reduce the principal of, or change the fixed maturity of, any
Debt Security; (iv) waive a default in the payment of the principal of or
interest on any Debt Security; (v) make any Debt Security payable in currency
other than that stated in the Debt Security; or (vi) impair the right to
institute suit for the enforcement of any payment on or with respect to any Debt
Securities. (Section 9.02.)
The Indenture may be amended or supplemented without the consent of any
Debt Securityholder (i) to cure any ambiguity, defect or inconsistency in the
Indenture or in the Debt Securities of any series; (ii) to provide for the
issuance of, and establish the form, terms and conditions of, a series of Debt
Securities or to establish the form of any certifications required to be
furnished pursuant to the terms of the Indenture or any series of Debt
Securities; (iii) to secure the Debt Securities pursuant to Section 4.02 of the
Indenture; (iv) to provide for the assumption of all the obligations of the
Company under the Debt Securities and any coupons related thereto and the
Indenture in connection with a merger, consolidation or transfer or lease of the
Company's property and assets substantially as an entirety as provided for in
the Indenture; (v) to provide for uncertificated Debt Securities in addition to
or in place of certificated Debt Securities; (vi) to add to rights of Debt
Securityholders or surrender any right or power conferred on the Company; or
(vii) to make any change that does not adversely affect the rights of any Debt
Securityholder. (Section 9.01.)
CONCERNING THE TRUSTEE
The Company maintains banking relationships in the ordinary course of
business with the Trustee. The Trustee is also the trustee under other
indentures with the Company and SBC, as well as with SBC Communications Capital
Corporation, Southwestern Bell Telephone Company, Pacific Telesis Group and
PacTel Capital Resources, each of which is a wholly-owned subsidiary of SBC.
PLAN OF DISTRIBUTION
GENERAL
The Company may sell Debt Securities to one or more underwriters for
public offering and sale by them or may sell Debt Securities to investors
directly or through agents. Any such underwriter or agent involved in the offer
and sale of the Debt Securities will be named in an applicable Prospectus
Supplement.
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Underwriters may offer and sell the Debt Securities at a fixed price or
prices, which may be changed, or from time to time at market prices prevailing
at the time of sale, at prices related to such prevailing market prices or at
negotiated prices. The Company also may, from time to time, authorize
underwriters acting as the Company's agents to offer and sell the Debt
Securities upon the terms and conditions as shall be set forth in any Prospectus
Supplement. In connection with the sale of Debt Securities, underwriters may be
deemed to have received compensation from the Company in the form of
underwriting discounts or commissions and may also receive commissions from
purchasers of Debt Securities for whom they may act as agent. Underwriters may
sell Debt Securities to or through dealers, and such dealers may receive
compensation in the form of discounts, concessions or commissions from the
underwriters and/or commissions (which may be changed from time to time) from
the purchasers for whom they may act as agent.
Any underwriting compensation paid by the Company to underwriters or
agents in connection with the offering of Debt Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in an applicable Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of the Debt Securities may be
deemed to be underwriters, and any discounts and commissions received by them
and any profit realized by them on resale of the Debt Securities may be deemed
to be underwriting discounts and commissions, under the Securities Act.
Underwriters, dealers and agents may be entitled, under agreements with the
Company, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act, and to
reimbursement by the Company for certain expenses.
All Debt Securities will be a new issue of securities with no established
trading market. Any underwriters to whom Debt Securities are sold by the Company
for public offering and sale may make a market in such Debt Securities, but such
underwriters will not be obligated to do so and may discontinue any market
making at any time without notice. No assurance can be given as to the liquidity
of or the trading markets for any Debt Securities.
Certain of the underwriters or agents and their associates may be
customers of, engage in transactions with and perform services for the Company
in the ordinary course of business.
Underwriters participating in this offering may engage in over-allotment,
stabilizing transactions, syndicate covering transactions and penalty bids in
accordance with Regulation M under the Exchange Act. Over-allotment involves
syndicate sales in excess of the offering size, which creates a syndicate short
position. Stabilizing transactions permit bids to purchase the underlying
security so long as the stabilizing bids do not exceed a specified maximum.
Syndicate covering transactions involve purchases of the Debt Securities in the
open market after the distribution has been completed in order to cover
syndicate short positions. Penalty bids permit the underwriters to reclaim a
selling concession from a syndicate member when the Debt Securities originally
sold by such syndicate member are purchased in a syndicate covering transaction
to cover syndicate short positions. Such stabilizing transactions, syndicate
covering transactions and penalty bids may cause the price of the Debt
Securities to be higher than it would otherwise be in the absence of such
transactions.
DELAYED DELIVERY ARRANGEMENTS
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters, dealers or other persons acting as the Company's agents to solicit
offers by certain institutions to purchase Debt Securities from the Company
pursuant to contracts providing for payment and delivery on a future date or
dates. Institutions with which such contracts may be made include commercial and
savings banks, insurance companies, pension funds, investment companies,
educational and charitable institutions and others, but in all cases such
institutions must be approved by the Company. The obligations of any purchaser
under any such contract will not be subject to any conditions except that (a)
the purchase of the Debt Securities shall not at the time of delivery be
prohibited under the laws of the jurisdiction to which
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such purchaser is subject, and (b) if the Debt Securities are also being sold to
underwriters, the Company shall have sold to such underwriters the Debt
Securities not sold for delayed delivery. The underwriters, dealers and such
other persons will not have any responsibility in respect of the validity or
performance of such contracts.
LEGAL OPINIONS
The validity of the Debt Securities offered hereby will be passed upon for
the Company by Counsel of the Company, and for any underwriters, dealers or
agents by Sullivan & Cromwell, New York, New York. Sullivan & Cromwell will rely
as to matters of California law on the opinion of Richard W. Odgers,
Counsel of the Company. As of October 1, 1997, Richard W. Odgers owned 1,887
shares of SBC stock and options to purchase 108,079 shares of such stock.
EXPERTS
The financial statements and financial statement schedules of the Company
appearing in the Company's Annual Report (Form 10-K) for the year ended December
31, 1996 have been audited by Coopers & Lybrand L.L.P., independent accountants,
as set forth in their report therein dated February 27, 1997, and incorporated
herein by reference. Such financial statements and financial statement schedules
are incorporated herein by reference in reliance upon such report given upon the
authority of such firm as experts in accounting and auditing.
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PACIFIC BELL
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Securities and Exchange Commission Filing Fee................. $484,849
Rating Agency Fees............................................ 210,000*
Legal Fees ................................................... 125,000*
Fees and Expenses of Trustee.................................. 25,000*
Printing and Engraving of Securities.......................... 12,000*
Printing and Distributing Registration Statement,
Prospectus, Underwriting or Agency Agreement,
Indenture and Miscellaneous Material........................ 25,000*
Accountants' Fees and Expenses................................ 70,000*
Blue Sky Fees and Expenses.................................... 10,000*
Miscellaneous Expenses........................................ 25,000*
-----------
Total......................................... $986,849*
===========
- ------------------
* Estimated.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Section 317 of the California Corporations Code (the "Code") specifies
circumstances under which a California corporation may indemnify a director,
officer, employee or agent, but further provides that a corporation's Articles
of Incorporation ("Articles") may authorize additional rights to
indemnification. Article Eleventh of the Company's Articles provides for such
additional indemnification, "subject only to the applicable limits set forth in
Section 204" of the Code. Section 204 generally limits the corporation's ability
to provide for indemnification rights for intentional misconduct, a knowing and
culpable violation of law, acts or omissions that involve the absence of good
faith, and unexcused pattern of inattention or reckless disregard for duty,
transactions from which the director or other indemnitee derives an improper
personal benefit, or improper shareholder distributions.
Indemnification rights authorized by the Code and the Company's Articles
are expressly provided for through by-law provision or indemnification
agreements. Article XII of the Company's by-laws provides for indemnification
and advancement of expenses in connection with an indemnitee's service with or
for the Company. All of the Company's directors and some of the Company's
officers have also entered into indemnity agreements with Pacific Telesis Group
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("Telesis") which provide that Telesis shall indemnify (and advance expenses to)
the indemnitee to the fullest extent permitted by applicable law and further
provide that in any proceeding to enforce the obligation to indemnify a person,
Telesis shall have the burden to establish that the indemnification is
prohibited.
The directors and officers of the Company are covered by insurance
policies indemnifying against certain liabilities, including certain liabilities
arising under the Securities Act of 1933, as amended ("Securities Act"), which
might be incurred by them in such capacities and against which they cannot be
indemnified by the Company.
Any underwriters, dealers or agents referred to in the forms of
underwriting or agency agreement filed as exhibits to this registration
statement will agree to indemnify the registrant's directors and its officers
who signed the registration statement against certain liabilities which might
arise under the Securities Act from information furnished to the registrant by
or on behalf of any such indemnifying party.
ITEM 16. EXHIBITS.
The exhibits identified in parentheses below, on file with the Securities
and Exchange Commission, are incorporated herein by reference as exhibits
hereto.
Exhibit
Number Description
- ------- -----------
1a Form of Underwriting Agreement.
1b Form of Selling Agency Agreement.
4 Indenture dated as of October 7, 1997 between the
Company and The Bank of New York, as Trustee. The form or
forms of Debt Securities with respect to each particular
series of Debt Securities will be filed as an exhibit to a
Current Report on Form 8-K of Pacific Bell and shall be deemed
to be incorporated herein by reference.
5 Opinion of Richard W. Odgers, Counsel of Pacific Bell, as to
the validity of the Debt Securities to be issued.
12 Computation of Ratio of Earnings to Fixed Charges (Exhibit 12
to Form 10-Q for the Second Quarter 1997, File No. 1-1414).
23a Consent of Coopers & Lybrand L.L.P., Independent Accountants.
23b Consent of Richard W. Odgers is contained in his
opinion filed as Exhibit 5.
24 Powers of Attorney of certain directors and officers of
Pacific Bell.
25 Form T-1 Statement of Eligibility of Trustee under the Trust
Indenture Act of 1939, as amended, of The Bank of New York, as
Trustee.
ITEM 17. UNDERTAKINGS.
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The undersigned registrant hereby undertakes:
(1) To file, during any period in which offers or sales are being made of
the securities registered hereby, a post-effective amendment to this
registration statement:
(i) To include any prospectus required by section 10(a)(3) of the
Securities Act of 1933, as amended ("Securities Act");
(ii) To reflect in the prospectus any facts or events arising after
the effective date of this registration statement (or the most
recent post-effective amendment thereof) which, individually
or in the aggregate, represent a fundamental change in the
information set forth in this registration statement.
Notwithstanding the foregoing, any increase or decrease in
volume of securities offered (if the total U.S. dollar value
of securities offered would not exceed that which was
registered) and any deviation from the low or high end of the
estimated maximum offering range may be reflected in the form
of prospectus filed with the Securities and Exchange
Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20%
change in the maximum aggregate offering price set forth in
the "Calculation of Registration Fee" table in the effective
Registration Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in this registration
statement or any material change to such information in this
registration statement;
provided, however, that the undertakings set forth in paragraphs
(1)(i) and (1)(ii) above do not apply if the information required to
be included in a post-effective amendment by those paragraphs is
contained in periodic reports filed by the registrant pursuant to
section 13 or section 15(d) of the Securities Exchange Act of 1934,
as amended ("Exchange Act"), that are incorporated by reference in
this registration statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to
be a new registration statement relating to the securities offered
herein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(3) To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
(4) That, for purposes of determining any liability under the Securities
Act, each filing of the registrant's annual report pursuant to
section 13(a) or section 15(d) of the Exchange Act that is
incorporated by reference in this registration statement shall be
deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time
shall be deemed to be the initial bona fide offering thereof.
* * * *
Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrant pursuant to the provisions referred to in Item 15 or otherwise (other
than the
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insurance policies referred to therein), the registrant has been advised that in
the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Securities Act and is, therefore,
unenforceable. In the event that a claim for indemnification against such
liabilities (other than the payment by the registrant of expenses incurred or
paid by a director, officer or controlling person of the registrant in the
successful defense of any action, suit or proceeding) is asserted against the
registrant by such director, officer or controlling person in connection with
the securities being registered, the registrant will, unless in the opinion of
its counsel the matter has been settled by controlling precedent, submit to a
court of appropriate jurisdiction the question whether such indemnification by
it is against public policy as expressed in the Securities Act and will be
governed by the final adjudication of such issue.
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SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned, thereunto
duly authorized, on the 9th day of October, 1997.
PACIFIC BELL
BY:
/s/ Michael F. G. Ashby
------------------------------------------
Michael F. G. Ashby
Vice President and Chief Financial Officer
Pursuant to the requirements of the Securities Act of 1933, as amended,
this registration statement has been signed by the following persons in the
capacities and on the dates indicated.
Principal Executive Officer:
Edward A. Mueller*
President, Chief Executive Officer
and Chairman of the Board
Principal Financial and
Accounting Officer:
Michael F. G. Ashby*
Vice President and Chief Financial Officer
Directors: *BY
Royce S. Caldwell*
Cassandra C. Carr* /s/ Michael F. G. Ashby
William E. Downing* ----------------------------------------
William E. Dreyer* Michael F. G. Ashby, as Attorney-in-fact
James D. Ellis* and on his own behalf as Principal
Charles E. Foster* Financial and Accounting Officer
Donald E. Kiernan*
Richard W. Odgers*
DATE October 9, 1997
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EXHIBIT INDEX
Exhibits identified in parentheses below, on file with the Securities and
Exchange Commission, are incorporated herein by reference as exhibits hereto.
All other exhibits are provided as part of the electronic transmission.
Exhibit
Number Description
- ------- -----------
1a Form of Underwriting Agreement.
1b Form of Selling Agency Agreement.
4 Indenture dated as of October 7, 1997 between the
Company and The Bank of New York, as Trustee. The form or
forms of Debt Securities with respect to each particular
series of Debt Securities will be filed as an exhibit to a
Current Report on Form 8-K of Pacific Bell and shall be deemed
to be incorporated herein by reference.
5 Opinion of Richard W. Odgers, Counsel of Pacific Bell, as to
the validity of the Debt Securities to be issued.
12 Computation of Ratio of Earnings to Fixed Charges (Exhibit 12
to Form 10-Q for the Second Quarter 1997, File No. 1-1414).
23a Consent of Coopers & Lybrand L.L.P., Independent Accountants.
23b Consent of Richard W. Odgers is contained in his
opinion filed as Exhibit 5.
24 Powers of Attorney of certain directors and officers of
Pacific Bell.
25 Form T-1 Statement of Eligibility of Trustee under the Trust
Indenture Act of 1939, as amended, of The Bank of New York, as
Trustee.
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Exhibit 1a
PACIFIC BELL
DEBT SECURITIES
FORM OF UNDERWRITING AGREEMENT
[Date]
To the Representative
named in Schedule I
hereto of the Underwriters
named in Schedule II hereto
Dear Sirs:
Pacific Bell, a California corporation (the "Company"), may issue and
sell from time to time series of its debt securities registered under the
registration statement referred to in Paragraph 1(a) hereof ("Securities" and,
individually, "Security"). The Securities will be issued under an Indenture,
dated as of October 7, 1997 (the "Indenture"), from the Company to The Bank of
New York, as Trustee, in one or more series, which series may vary as to
interest rates, maturities, redemption provisions and selling prices, with all
such terms for any particular series being determined at the time of sale. The
Company proposes to sell to the underwriters named in Schedule II hereto
("Underwriters") for whom you are acting as representative ("Representative") a
series of Securities, of the designation, with the terms and in the aggregate
principal amount specified in Schedule I hereto ("Underwritten Securities" and,
individually, "Underwritten Security").
1. The Company represents and warrants to, and agrees with, the several
Underwriters that:
(a) A registration statement on Form S-3 with respect to the
Securities has been prepared by the Company in conformity with the
requirements of the Securities Act of 1933, as amended ("Act" or
"Securities Act"), and the rules and regulations ("Rules and
Regulations") of the Securities and Exchange Commission ("Commission" or
"SEC") thereunder and has become effective. As used in this Agreement,
(i) "Registration Statement" means that registration statement, as
amended or supplemented to the date hereof (including all documents
incorporated therein by reference); (ii) "Preliminary Prospectus" means
each prospectus (including all documents incorporated therein by
reference) included in that
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Registration Statement, or amendments thereto or supplements thereof,
before it became effective under the Act, including any prospectus filed
with the Commission pursuant to Rule 424(a) of the Rules and Regulations;
(ii) "Basic Prospectus" means the prospectus (including all documents
incorporated therein by reference) included in the Registration
Statement; and (iv) "Prospectus" means the Basic Prospectus, together
with any prospectus amendment or supplement (including in each case all
documents incorporated therein by reference) specifically relating to the
Underwritten Securities, as filed with, or mailed for filing to, the
Commission pursuant to paragraph (b) or (c) of Rule 424 of the Rules and
Regulations. The Commission has not issued any order preventing or
suspending the use of the Prospectus.
(b) The Registration Statement and each Prospectus contain, and
(in the case of any amendment or supplement to any such document, or any
material incorporated by reference in any such document, filed with the
Commission after the date as of which this representation is being made)
will contain at all times during the period specified in Paragraph 8(c)
hereof, all statements which are required by the Act, the Securities
Exchange Act of 1934, as amended ("Exchange Act"), the Trust Indenture
Act of 1939, as amended ("Trust Indenture Act"), and the rules and
regulations of the Commission under such Acts; the Indenture, including
any amendments and supplements thereto, pursuant to which the
Underwritten Securities will be issued, will conform with the
requirements of the Trust Indenture Act and the rules and regulations of
the Commission thereunder, and the Registration Statement and the
Prospectus do not, and (in the case of any amendment or supplement to any
such document, or any material incorporated by reference in any such
document, filed with the Commission after the date as of which this
representation is being made) will not at any time during the period
specified in Paragraph 8(c) hereof, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary to make the statements therein not misleading;
provided that the Company makes no representation or warranty as to
information contained in or omitted from the Registration Statement or
the Prospectus in reliance upon and in conformity with information
furnished in writing to the Company through the Representative by or on
behalf of any Underwriter specifically for use therein, or as to any
statements in or omissions from the Statement of Eligibility of the
Trustee under the Indenture.
(c) The Company is not in violation of its corporate charter or
bylaws or in default under any agreement, indenture or instrument, the
effect of which violation or default would be material to the Company,
the execution, delivery and performance of this Agreement and any Delayed
Delivery Contracts (as defined in Paragraph 3 hereof) and compliance by
the Company with the provisions of the Underwritten Securities and the
Indenture will not conflict with, result in the
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the creation or imposition of any lien, charge or encumbrance upon any of
the assets of Company pursuant to the terms of, or constitute a default
under, any agreement, indenture or instrument, or result in a violation
of the corporate charter or bylaws of the Company or any order, rule or
regulation of any court or governmental agency having jurisdiction over
the Company; and except as required by the Act, the Trust Indenture Act
and applicable state securities laws, no consent, authorization or order
of, or filing or registration with, any court or governmental agency is
required for the execution, delivery and performance of this Agreement,
the Delayed Delivery Contract, if any, and the Indenture.
(d) Except as described in or contemplated by the Registration
Statement and the Prospectus, there shall have not occurred any changes
or any development involving a prospective change, or affecting
particularly the business or properties of the Company or its
subsidiaries which materially impairs the investment quality of the
Underwritten Securities since the dates as of which information is given
in the Registration Statement and the Prospectus.
(e) On the Delivery Date (as defined in Paragraph 7 hereof), (i)
the Indenture will have been duly authorized, executed and delivered by
the Company and will constitute the legally binding obligation of the
Company, enforceable in accordance with its terms, (ii) the Underwritten
Securities will have been duly authorized and, upon payment therefor as
provided in this Agreement, will constitute legally binding obligations
of the Company entitled to the benefits of the Indenture, and (iii) the
Underwritten Securities and the Indenture will conform to the
descriptions thereof contained in the Prospectus.
(f) The Company has been duly incorporated, is validly existing
as a corporation in good standing under the laws of the State of
California, with full corporate power and authority to own its properties
and conduct its business as described in the Prospectus, and is duly
qualified to do business as a foreign corporation and is in good standing
under the laws of each jurisdiction which requires such qualification
wherein it owns or leases properties or conducts business, except where
the failure to so qualify would not have a material adverse effect on the
Company.
(g) Except as described in the Prospectus, there is no material
litigation or governmental proceeding pending or, to the knowledge of the
Company, threatened against the Company which is reasonably expected to
result in any material adverse change in the financial condition, results
of operations, business or prospects of the Company or which is required
to be disclosed in the Registration Statement.
(h) The financial statements filed as part of the Registration
Statement or included in any Preliminary Prospectus or the Prospectus
present, or (in the case of
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any amendment or supplement to any such document, or any material
incorporated by reference in any such document, filed with the Commission
after the date as of which this representation is being made) will
present at all times during the period specified in Paragraph 8(c)
hereof, fairly, the financial condition and results of operations of the
Company, at the dates and for the periods indicated, and have been, and
(in the case of any amendment or supplement to any such document, or any
material incorporated by reference in any such document, filed with the
Commission after the date as of which this representation is being made)
will be at all times during the period specified in Paragraph 8(c)
hereof, prepared in conformity with generally accepted accounting
principles applied on a consistent basis throughout the periods involved
(except as described in the notes thereto).
(i) The documents incorporated by reference into any Preliminary
Prospectus or the Prospectus have been, and (in the case of any amendment
or supplement to any such document, or any material incorporated by
reference in any such document, filed with the Commission after the date
as of which this representation is being made) will be, at all times
during the period specified in Paragraph 8(c) hereof, prepared by the
Company in conformity with the applicable requirements of the Act and the
Rules and Regulations and the Exchange Act and the rules and regulations
of the Commission thereunder and such documents have been, or (in the
case of any amendment or supplement to any such document, or any material
incorporated by reference in any such document, filed with the Commission
after the date as of which this representation is being made) will be at
all times during the period specified in Paragraph 8(c) hereof, timely
filed as required thereby.
(j) There are no contracts or other documents which are required
to be filed as exhibits to the Registration Statement by the Act or by
the Rules and Regulations, or which were required to be filed as exhibits
to any document incorporated by reference in the Prospectus by the
Exchange Act or the rules and regulations of the Commission thereunder,
which have not been filed as exhibits to the Registration Statement or to
such document or incorporated therein by reference as permitted by the
Rules and Regulations or the rules and regulations of the Commission
under the Exchange Act as required.
(k) No order, consent, approval, authorization, registration or
qualification of or with any governmental agency or body having
jurisdiction over the Company or any of its properties is required for
the issue and sale of the Underwritten Securities or the consummation by
the Company of the transactions contemplated by this Agreement or the
Indenture, except such as have been, or will have been prior to the
Delivery Date, obtained under the Act and the Trust Indenture Act and
such consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Underwritten Securities by the
Underwriters.
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2. Subject to the terms and conditions and in reliance upon the
representations and warranties herein set forth, the Company agrees to sell to
each Underwriter, severally and not jointly, and each Underwriter agrees,
severally and not jointly, to purchase from the Company, at the purchase price
and on the other terms set forth in Schedule I hereto, the principal amount of
the Underwritten Securities set forth opposite its name in Schedule II hereto.
3. Any offer to purchase Underwritten Securities by institutional
investors solicited by the Underwriters for delayed delivery shall be made
pursuant to contracts substantially in the form of Exhibit A attached hereto,
with such changes therein as the Company and the Representative may approve
("Delayed Delivery Contracts"). The Company shall have the right, in its sole
discretion, to approve or disapprove each such institutional investor.
Underwritten Securities which are subject to Delayed Delivery Contracts are
herein sometimes called "Delayed Delivery Underwritten Securities" and
Underwritten Securities which are not subject to Delayed Delivery Contracts are
herein sometimes called "Immediate Delivery Underwritten Securities."
Contemporaneously with the purchase on the Delivery Date by the
Underwriters of the Immediate Delivery Underwritten Securities pursuant to this
Agreement, the Company will pay to the Representative, for the account of the
Underwriters, the compensation specified in Schedule I hereto for arranging the
sale of Delayed Delivery Underwritten Securities. The Underwriters shall have no
responsibility with respect to the validity or performance of any Delayed
Delivery Contracts.
For the purpose of determining the principal amount of Immediate Delivery
Underwritten Securities to be purchased by each Underwriter, there shall be
deducted from the principal amount of Underwritten Securities to be purchased by
such Underwriter as set forth in Schedule II hereto that portion of the
aggregate principal amount of Delayed Delivery Underwritten Securities that the
principal amount of Underwritten Securities to be purchased by such Underwriter
as set forth in Schedule II hereto bears to the aggregate principal amount of
Underwritten Securities set forth therein to be purchased by all of the
Underwriters (in each case as adjusted by the Representative to avoid fractions
of the minimum principal amount in which the Underwritten Securities may be
issued), except to the extent that the Representative determines, in its
discretion, that such deduction shall be otherwise than in such proportion and
so advises the Company.
4. [Reserved]
5. The Company shall not be obligated to deliver any Underwritten
Securities except upon payment for all Immediate Delivery Underwritten
Securities to be purchased pursuant to this Agreement as hereinafter provided.
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<PAGE>
6. If any Underwriter defaults in the performance of its obligations
under this Agreement, the remaining non-defaulting Underwriters shall be
obligated to purchase the Immediate Delivery Underwritten Securities which the
defaulting Underwriter agreed but failed to purchase in the respective
proportions which the principal amount of Underwritten Securities set forth in
Schedule II hereto to be purchased by each remaining non-defaulting Underwriter
set forth therein bears to the aggregate principal amount of Underwritten
Securities set forth therein to be purchased by all the remaining non-defaulting
Underwriters; provided that the remaining non-defaulting Underwriters shall not
be obligated to purchase any Immediate Delivery Underwritten Securities if the
aggregate principal amount of Immediate Delivery Underwritten Securities which
the defaulting Underwriter or Underwriters agreed but failed to purchase exceeds
9.09% of the total principal amount of Underwritten Securities, and any
remaining non-defaulting Underwriter shall not be obligated to purchase more
than 110% of the principal amount of Underwritten Securities set forth in
Schedule II hereto to be purchased by it. If the foregoing maximums are
exceeded, the remaining non-defaulting Underwriters, or those other underwriters
satisfactory to the Representative who so agree, shall have the right, but shall
not be obligated, to purchase, in such proportion as may be agreed upon among
them, all the Immediate Delivery Underwritten Securities. If the remaining
Underwriters or other underwriters satisfactory to the Representative do not
elect to purchase the Immediate Delivery Underwritten Securities which the
defaulting Underwriter or Underwriters agreed but failed to purchase, this
Agreement shall terminate without liability on the part of any non-defaulting
Underwriter, or the Company, except that the Company will continue to be liable
for the payment of expenses as set forth in Paragraph 8(i) hereof.
Nothing contained in this Paragraph 6 shall relieve a defaulting
Underwriter of any liability it may have to the Company for damages caused by
its default. If other Underwriters are obligated or agree to purchase the
Immediate Delivery Underwritten Securities of a defaulting or withdrawing
Underwriter, either the Representative or the Company may postpone the Delivery
Date for up to seven full business days in order to effect any changes that in
the opinion of the Company or the Representative may be necessary in the
Registration Statement, the Prospectus or in any other document or arrangement.
7. Delivery of and payment for the Immediate Delivery Underwritten
Securities shall be made at such address, date and time as specified in Schedule
I hereto. This date and time are sometimes referred to as the "Delivery Date."
On the Delivery Date, the Company shall deliver the Immediate Delivery
Underwritten Securities to the Representative for the account of each
Underwriter against payment to or upon the order of the Company of the purchase
price by wire transfer of immediately available funds settled through the New
York Clearing House or such other Clearing House as is named in Schedule I. Time
shall be of the essence, and delivery at the time and place specified pursuant
to this Agreement is a further condition of the obligation of each Underwriter
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<PAGE>
hereunder. Upon delivery, the Immediate Delivery Underwritten Securities shall
be in such form or forms and in such denominations as may be set forth in
Schedule I. Immediate Delivery Underwritten Securities in registered form shall
be in such authorized denominations and registered in such names as the
Representative shall request in writing not less than two full business days
prior to the Delivery Date. For the purpose of expediting the checking and
packaging of the Immediate Delivery Underwritten Securities, the Company shall
make the Immediate Delivery Underwritten Securities available for inspection by
the Representative in New York, New York not later than 2:00 P.M., local time,
on the business day prior to the Delivery Date. For purposes of Rule 15c6-1
under the Exchange Act, the Delivery Date (if later than the otherwise
applicable settlement date) shall be the date for payment of funds and delivery
of securities for all the Immediate Delivery Underwritten Securities sold
pursuant to the offering, other than Delayed Delivery Underwritten Securities
for which payment of funds and delivery of securities shall be as hereinafter
provided.
8. The Company agrees with the several Underwriters:
(a) The Company will furnish promptly to the Representative and
to counsel for the Underwriters signed copies of the Registration
Statement as originally filed and each amendment and supplement thereto
filed prior to the date hereof and relating to or covering the
Underwritten Securities, and a copy of the Prospectus filed with the
Commission, including all documents incorporated therein by reference and
all consents and exhibits filed therewith;
(b) The Company will deliver promptly to the Representative such
reasonable number of the following documents as the Representative may
request: (i) conformed copies of the Registration Statement (excluding
exhibits other than the computation of the ratio of earnings to fixed
charges, the Indenture and this Agreement), (ii) the Prospectus and (iii)
any documents incorporated by reference in the Prospectus;
(c) During any period when a Prospectus relating to the
Underwritten Securities is required by law to be delivered, the Company
will not file any amendment of the Registration Statement nor will the
Company file any amendment or supplement to the Prospectus (except for
(i) an amendment or supplement consisting solely of the filing of a
document under the Exchange Act or (ii) a supplement relating to an
offering of securities other than the Underwritten Securities), unless
the Company has furnished you a copy of such proposed amendment or
supplement for your review prior to filing and will not file any such
proposed amendment or supplement to which you reasonably object. Subject
to the foregoing sentence, the Company will cause the Prospectus and any
amendment or supplement thereto to be filed with the SEC as required
pursuant to Rule 424 under the Securities Act. The Company will promptly
advise you (i) when the Prospectus
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<PAGE>
or any amendment or supplement thereto shall have been filed with the SEC
pursuant to Rule 424 under the Securities act, (ii) when any amendment of
the Registration Statement shall have become effective, (iii) of any
request by the SEC for any amendment of the Registration Statement or
amendment of or supplement to the Prospectus or for any additional
information, (iv) of the issuance by the SEC 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 of any notification with respect to the suspension of the
qualification of the Underwritten Securities for sale in any jurisdiction
or the initiation or threatening of any proceeding for such purpose. The
Company will promptly (upon filing thereof) furnish you a copy of any
amendment or supplement to the Prospectus or Registration Statement not
furnished to the Representative for prior review pursuant to exception
(i) or (ii) of the first sentence of this paragraph 8(c). The Company
will use its best efforts to prevent the issuance of any such stop order
and, if issued, to obtain as soon as possible the withdrawal thereof.
(d) If, at any time when a prospectus relating to the
Underwritten Securities is required to be delivered under the Securities
Act, any event occurs as a result of which the Registration Statement, as
then amended, or the Prospectus, as then supplemented, would include any
untrue statement of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, or if it shall
be necessary to amend the Registration Statement or to supplement the
Prospectus to comply with the Securities Act or the Exchange Act or the
respective rules thereunder, the Company promptly will (i) notify you of
the happening of such event, (ii) prepare and file with the SEC, subject
to the first sentence of paragraph (c) of this Section 8, an amendment or
supplement which will correct such statement or omission or an amendment
or supplement which will effect such compliance and (iii) will supply any
such amended or supplemented Prospectus to you in such quantities as the
Representative may reasonably request.
(e) As soon as practicable, the Company will make generally
available to its security holders and to the Representative an earnings
statement or statements of the Company which will satisfy the provisions
of Section 11(a) of the Securities Act and Rule 158 under the Securities
Act.
(f) During a period of five years after the date hereof, the
Company will furnish to the Representative copies of all reports and
financial statements furnished by the Company to each securities exchange
on which securities issued by the Company may be listed pursuant to
requirements of or agreements with such exchange or to the Commission
pursuant to the Exchange Act or any rule or regulation of the Commission
thereunder.
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<PAGE>
(g) The Company will endeavor to qualify the Underwritten
Securities for sale under the laws of such jurisdiction as you may
designate and will maintain such qualifications in effect so long as
required for the distribution of the Underwritten Securities, provided
that in connection therewith the Company shall not be required to qualify
as a foreign corporation or take any action which would subject it to
general or unlimited service of process in any jurisdiction where it is
not now so subject.
(h) The Company will pay the costs incident to the authorization,
issuance and delivery of the Underwritten Securities and any taxes
payable in that connection; the costs incident to the preparation,
printing and filing under the Act of the Registration Statement and any
amendments, supplements and exhibits thereto; the costs of distributing
the Registration Statement as originally filed and each amendment and
post-effective amendment thereof (including exhibits), any Preliminary
Prospectus, the Prospectus and any documents incorporated by reference in
any of the foregoing documents; the costs of producing this Agreement,
the Delayed Delivery Contracts, if any, and the Indenture; fees paid to
rating agencies in connection with the rating of the Securities,
including the Underwritten Securities; the fees and expenses of
qualifying the Underwritten Securities under the securities laws of the
several jurisdictions as provided in this Paragraph and of preparing and
printing a Blue Sky Memorandum and a memorandum concerning the legality
of the Securities, including the Underwritten Securities, as an
investment (including fees of counsel to the Underwriters); and all other
costs and expenses incident to the performance of the Company's
obligations under this Agreement; provided that, except as provided in
this Paragraph and in Paragraph 12 hereof, the Underwriters shall pay
their own costs and expenses, including the fees and expenses of their
counsel, any transfer taxes on the Underwritten Securities which they may
sell and the expenses of advertising any offering of the Underwritten
Securities made by the Underwriters; and
(i) Until the termination of the offering of the Underwritten
Securities, to timely file all documents, and any amendments to
previously filed documents, required to be filed by the Company pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act.
9. (a) The Company shall indemnify and hold harmless each Underwriter and
each person, if any, who controls any Underwriter within the meaning of
the Act from and against any loss, claim, damage or liability, joint or
several, and any action in respect thereof, to which that Underwriter or
controlling person may become subject, under the Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out of,
or is based upon, any untrue statement or alleged untrue statement of a
material fact contained in any Preliminary Prospectus, the Registration
Statement or the Prospectus, or arises out of, or is based upon, the
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<PAGE>
omission or alleged omission to state therein a material fact required to
be stated therein or necessary to make the statements therein not
misleading, and shall reimburse each Underwriter and such controlling
person for any legal and other expenses reasonably incurred by that
Underwriter or controlling person in investigating or defending or
preparing to defend against any such loss, claim, damage, liability or
action as such expenses are incurred (but no more frequently than
annually); provided, however, that the Company shall not be liable in any
such case to the extent that any such loss, claim, damage, liability or
action arises out of, or is based upon, any untrue statement or alleged
untrue statement or omission or alleged omission made in any Preliminary
Prospectus, the Registration Statement or the Prospectus in reliance upon
and in conformity with written information furnished to the Company
through the Representative by or on behalf of any Underwriter
specifically for use therein. The foregoing indemnity agreement is in
addition to any liability which the Company may otherwise have to any
Underwriter or controlling person.
(b) Each Underwriter shall indemnify and hold harmless the
Company, each of their directors, each of their officers who signed the
Registration Statement and any person who controls the Company, within
the meaning of the Act from and against any loss, claim, damage or
liability, joint or several, and any action in respect thereof, to which
the Company, or any such director, officer or controlling person may
become subject, under the Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, any untrue
statement or alleged untrue statement of a material fact contained in any
Preliminary Prospectus, the Registration Statement or the Prospectus, or
arises out of, or is based upon, the omission or alleged omission to
state therein a material fact required to be stated therein or necessary
to make the statements therein not misleading, but in each case only to
the extent that the untrue statement or alleged untrue statement or
omission or alleged omission was made in reliance upon and in conformity
with information furnished in writing to the Company through the
Representative by or on behalf of that Underwriter specifically for use
therein, and shall reimburse the Company for any legal and other expenses
reasonably incurred by the Company or any such director, officer or
controlling person in investigating or defending or preparing to defend
against any such loss, claim, damage, liability or action as such
expenses are incurred (but no more frequently that annually). The
foregoing indemnity agreement is in addition to any liability which any
Underwriter may otherwise have to the Company or any of its directors,
officers or controlling or persons.
(c) Promptly after receipt by an indemnified party under this
Paragraph 9 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Paragraph 9, notify the
indemnifying party in writing of the claim or the commencement of that
action, provided that the failure to notify the indemnifying
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<PAGE>
party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under Paragraph 9(a) or 9(b). If any
such claim or action shall be brought against an indemnified party, and
it shall notify the indemnifying party thereof, the indemnifying party
shall be entitled to participate therein, and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party, to
assume the defense thereof with counsel satisfactory to the indemnified
party. After notice from the indemnifying party to the indemnified party
of its election to assume the defense of such claim or action, the
indemnifying party shall not be liable to the indemnified party under
this Paragraph 9 for any legal or other expenses subsequently incurred by
the indemnified party in connection with the defense thereof other than
reasonable costs of investigation. 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 both the Company and one or
more Underwriters and either (i) the indemnifying party or parties and
indemnified party or parties mutually agree or (ii) representation of
both the indemnifying party or parties and the indemnified party or
parties by the same counsel is inappropriate under applicable standards
of professional conduct or in the opinion of such counsel 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 and satisfactory to the indemnifying party, 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
for all such indemnified parties, which firm shall be designated in
writing by the Representative in the case of an action in which one or
more Underwriters or controlling persons are indemnified parties and by
the Company in the case of an action in which the Company or any of its
directors, officers or controlling persons are indemnified parties. The
indemnifying party or parties 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.
(d) If the indemnification provided for in this Paragraph 9 shall
for any reason be unavailable to an indemnified party under Paragraph
9(a) or 9(b) hereof in respect of any loss, claim, damage, liability or
any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified party,
contribute to the amount paid or payable by such indemnified party as a
result of such loss, claim, damage or liability, or action in respect
thereof, in such proportion as is appropriate to reflect the relative
benefits by the Company, on the one hand, and the Underwriters, on the
other hand, from the offering of the
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<PAGE>
Underwritten Securities. If, however, this allocation is not permitted by
applicable law, then each indemnifying party shall contribute to the
amount paid or payable by such indemnified party as a result of such
loss, claim, damage or liability, or action in respect thereof, in such
proportion as shall be appropriate to reflect the relative benefits
received by the Company, on the one hand, and the Underwriters, on the
other hand, from the offering of the Underwritten Securities and the
relative fault of the Company, on the one hand, and the Underwriters, on
the other hand, with respect to the statements or omissions which
resulted in such loss, claim, damage or liability, or action in respect
thereof, as well as any other relevant equitable considerations. The
relative benefits received by the Company, on the one hand, and the
Underwriters, on the other hand, with respect to such offering shall be
deemed to be in the same proportion as the total net proceeds from the
offering of the Underwritten Securities (before deducting expenses)
received by the Company bear to the total underwriting discounts and
commissions received by the Underwriters with respect to such offering.
The relative fault shall be determined by reference to whether the untrue
or alleged untrue statement of a material fact or omission or alleged
omission to state a material fact relates to information supplied by the
Company or the Underwriters, the intent of the parties and their relative
knowledge, access to information and opportunity to correct or prevent
such statement or omission. The amount paid or payable by an indemnified
party as a result of the loss, claim, damage or liability, or action in
respect thereof, referred to above in this Paragraph 9(d) shall be deemed
to include, for purposes of this Paragraph 9(d), 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 Paragraph 9(d), no Underwriter shall be required to
contribute any amount in excess of the amount by which the total price at
which the Underwritten Securities underwritten by it and distributed to
the public were offered to the public exceeds the amount of any damages
which such Underwriter has otherwise paid or become liable to pay by
reason of any untrue or alleged untrue statement or omission or alleged
omission. No person guilty of fraudulent misrepresentation (within the
meaning of Section 11(f) of the Act) shall be entitled to contribution
from any person who was not guilty of such fraudulent misrepresentation.
The Underwriters' obligations to contribute as provided in this Paragraph
9(d) are several in proportion to their respective underwriting
obligations and not joint.
(e) The agreements contained in this Paragraph 9 and the
representations, warranties and agreements of the Company in Paragraph 1
and Paragraph 8 hereof shall survive the delivery of the Underwritten
Securities and shall remain in full force and effect, regardless of any
termination or cancellation of this Agreement or any investigation made
by or on behalf of any indemnified party.
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<PAGE>
10. The obligations of the Underwriters under this Agreement may be
terminated by the Representative, in its absolute discretion, by notice given to
and received by the Company prior to the delivery of and payment for the
Immediate Delivery Underwritten Securities, if, during the period beginning on
the date hereof to and including the Delivery Date, (a) trading in securities
generally on the New York Stock Exchange, Inc. is suspended or materially
limited, or (b) a banking moratorium is declared by either Federal or New York
State authorities, or (c) there shall have occurred any outbreak or material
escalation of hostilities or other calamity or crisis or the declaration by the
United States of war or a national emergency the effect of which on the
financial markets of the United States is material and adverse and is such as to
make it, in the reasonable judgment of the Representative, impracticable or
inadvisable to market such Underwritten Securities on the terms and in the
manner contemplated by the Prospectus, or (d) the Company shall have received
notice that any rating of any of the Company's unsecured senior debt securities
shall have been lowered by any nationally recognized statistical rating
organization (as defined in Rule 15c3-1 under the Exchange Act) or any such
organization has publicly announced that it has under surveillance or review,
with possible negative implications, the ratings of any of the Company's
unsecured senior debt securities, or (e) there shall have occurred any change,
or any development involving a prospective change, in or affecting particularly
the business or properties of the Company or its subsidiaries which, in the
Representative's reasonable judgment, materially impairs the investment quality
of the Underwritten Securities.
11. The respective obligations of the Underwriters under the Agreement
with respect to the Underwritten Securities are subject to the accuracy, on the
date hereof and on the Delivery Date, of the representations and warranties of
the Company contained herein, to performance by the Company of its obligations
hereunder, and to each of the following additional terms and conditions
applicable to the Underwritten Securities:
(a) At or before the Delivery Date, no stop order suspending the
effectiveness of the Registration Statement nor any order directed to any
document incorporated by reference in the Prospectus shall have been
issued and prior to that time no stop order proceeding shall have been
initiated or threatened by the Commission and no challenge shall have
been made by the Commission or its staff as to the accuracy or adequacy
of any document incorporated by reference in the Prospectus; any request
of the Commission for inclusion of additional information in the
Registration Statement or the Prospectus or otherwise shall have been
complied with; and after the date hereof the Company shall not have filed
with the Commission any amendment or supplement to the Registration
Statement or the Prospectus (or any document incorporated by reference
therein) that shall have been disapproved by the Representative.
(b) No Underwriter shall have discovered and disclosed to the
Company on or prior to the Delivery Date that the Registration Statement
or the Prospectus
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<PAGE>
contains an untrue statement of a fact which is material or omits to
state a fact which is material and is required to be stated therein or is
necessary to make the statements therein not misleading.
(c) All corporate proceedings and other legal matters incident to
the authorization, form and validity of this Agreement, the Underwritten
Securities and the Indenture and the form of the Registration Statement,
the Prospectus (other than financial statements and other financial data)
and all other legal matters relating to this Agreement and the
transactions contemplated hereby shall be satisfactory in all respects to
Sullivan & Cromwell, counsel for the Underwriters, and the Company shall
have furnished to such counsel all documents and information that they
may reasonably request to enable them to pass upon such matters.
(d) The Vice President and General Counsel to the Company shall
have furnished to the Representative his opinion addressed to the
Underwriters and dated the Delivery Date, as counsel, to the effect that:
(i) the Company has been duly incorporated and is
validly existing as a corporation in good standing under the laws
of the State of California, with full corporate power and
authority to own its properties and conduct its business as
described in the Prospectus, and is duly qualified to do business
as a foreign corporation and is in good standing under the laws
of each jurisdiction which requires such qualification wherein it
owns or leases properties or conducts business, except where the
failure to so qualify would not have a material adverse effect on
the Company;
(ii) the Indenture has been duly authorized, executed
and delivered, has been duly qualified under the Trust Indenture
Act, and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms
(subject, as to enforcement of remedies, to applicable
bankruptcy, insolvency, fraudulent transfer, reorganization,
moratorium or other similar laws of general applicability
relating to or affecting creditors' rights generally from time to
time in effect and to general principles of equity);
(iii) to the best knowledge of such counsel, there is
no pending or threatened action, suit or proceeding before any
court or governmental agency, authority, body or any arbitrator
involving the Company of a character required to be disclosed in
the Registration Statement which is not adequately disclosed in
the Prospectus, and there is no franchise, contract or other
document of a character required to be described in the
Registration Statement or Prospectus, or to be filed as
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an exhibit, which is not described or filed as required; and
the statements included or incorporated by reference in the
Prospectus describing any legal proceedings or material contracts
or agreements relating to the Company fairly summarize such
matters; the Underwritten Securities, the Indenture and any
Delayed Delivery Contracts conform to the descriptions thereof
contained under the following (or comparable) captions of the
Prospectus: "Description of Debt Securities" and "Plan of
Distribution";
(iv) the Immediate Delivery Underwritten Securities
have been duly authorized, executed, authenticated, issued and
delivered and are valid and legally binding obligations of the
Company entitled to the benefits of the Indenture;
(v) the Delayed Delivery Underwritten Securities, if
any, have been duly authorized and, when executed, authenticated,
issued and delivered to, and paid for by, the respective
purchasers thereof in accordance with the Indenture and the
related Delayed Delivery Contracts, will be valid and legally
binding obligations of the Company entitled to the benefits of
the Indenture;
(vi) the Registration Statement and any amendments
thereto have become effective under the Securities Act; to the
best knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued, no
proceedings for that purpose have been instituted or threatened,
and the Registration Statement, the Prospectus and each amendment
thereof or supplement thereto as of their respective effective or
issue dates (other than the financial statements and other
financial and statistical information contained therein as to
which such counsel need express no opinion) complied as to form
in all material respects with the applicable requirements of the
Securities Act, the Exchange Act and the Trust Indenture Act and
the respective rules and regulations thereunder; and such counsel
has no reason to believe that the Registration Statement, or any
amendment thereof, at the time it became effective or at the date
of this Agreement or at the Delivery Date, contained any untrue
statement of a material fact or omitted to state any material
fact required to be stated therein or necessary to make the
statements therein not misleading or that the Prospectus, at the
date of this Agreement or at the Delivery Date, included any
untrue statement of a material fact or omitted to state a
material fact necessary to make the statements therein, in the
light of the circumstances under which they were made, not
misleading;
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<PAGE>
(vii) this Agreement and the Delayed Delivery
Contracts, if any, have been duly authorized, executed and
delivered by the Company;
(viii) no order, consent, approval, authorization,
registration or qualification of or with any governmental agency
or body having jurisdiction over the Company or any of its
properties is required for the issue and sale of the Underwritten
Securities or the consummation by the Company of the transactions
contemplated by this Agreement or the Indenture, except such as
have been obtained under the Securities Act and the Trust
Indenture Act and such consents, approvals, authorizations,
registrations or qualifications as may be required under state
securities or Blue Sky laws in connection with the sale and
distribution of the Underwritten Securities; and
(ix) neither the execution and delivery of the
Indenture, this Agreement or any Delayed Delivery Contracts, the
issue and sale of the Underwritten Securities, nor the
consummation of any other of the transactions herein or therein
contemplated nor the fulfillment of the terms hereof or thereof
will conflict with, result in a breach of, or constitute a
default under, the charter or by-laws of the Company or the terms
of any indenture or other agreement or instrument known to such
counsel and to which the Company is a party or by which the
Company or any of its assets is bound, or any order or regulation
known to such counsel to be applicable to the Company of any
court, regulatory body, administrative agency, governmental body
or arbitrator having jurisdiction over the Company.
In rendering such opinion, such counsel may rely, as to the execution of the
Indenture by the Trustee, upon a certificate of the Trustee setting forth the
facts as to such execution.
In rendering such opinion, such counsel may also rely (A) as to matters
involving the application of laws of any jurisdiction other than the State of
California upon the opinion of other counsel of good standing believed to be
reliable, provided that such counsel states in such opinion that such counsel
and the Representative are justified in relying upon the opinion of such other
counsel, and (B) as to matters of fact, to the extent deemed proper, on
certificates of responsible officers of the Company and public officials.
In rendering such opinion with respect to clause (viii) above, insofar as it
relates to regulatory authorities in the states in which the Company operates,
such counsel may rely on the opinions of local counsel satisfactory to such
counsel.
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(e) The Representative shall have received from Sullivan &
Cromwell, counsel for the Underwriters, such opinion or opinions, dated
the date hereof, with respect to the issuance and sale of the
Underwritten Securities, the Indenture, the Registration Statement, the
Prospectus and other related matters as the Representative may
reasonably require, and the Company shall have furnished to such counsel
such documents as they request for the purpose of enabling them to pass
upon such matters.
(f) The Company shall have furnished to the Representative a
certificate signed by its Chairman of the Board or its President or a
Vice President and its Treasurer or an Assistant Treasurer stating that
after reasonable investigation and to the best of their knowledge:
(i) the representations and warranties of the Company
in this Agreement are true and correct in all material respects
on and as of the Delivery Date with the same effect as if made on
the Delivery Date; the Company has complied with all the
agreements and satisfied all the conditions on its part to be
performed or satisfied as a condition to the obligation of the
Underwriters to purchase the Underwritten Securities hereunder;
and the conditions set forth in Paragraphs 11(a) and 11(h) have
been fulfilled;
(ii) as of the date of the Prospectus, the
Registration Statement and the Prospectus did not include any
untrue statement of a material fact and did not omit to state a
material fact required to be stated therein or necessary to make
the statements therein not misleading; and
(iii) since the date of the most recent financial
statements included or incorporated by reference in the
Prospectus, there has been no material adverse change in the
condition (financial or other), earnings, business or properties
of the Company and its subsidiaries, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus.
(g) The Company shall have furnished to the Representative (i) a
letter of Ernst & Young LLP, addressed to the Board of Directors of the
Company and the Underwriters and dated the later of the effective date of
the Registration Statement or the date of the filing of the Company's
latest Annual Report on Form 10-K, of the type described in the American
Institute of Certified Public Accountants' Statement on Auditing
Standards No. 72 and covering such financial statement items as counsel
for the Underwriters may reasonably have requested; (ii) a letter of
Ernst & Young LLP, addressed to the Underwriters and dated the Delivery
Date,
-17-
<PAGE>
stating, as of the date of such letter (or, with respect to matters
involving changes or developments since the respective dates as of which
specified financial information is given in the Prospectus, as of a date
not more than five days prior to the date of such letter), the
conclusions and findings of such firm with respect to the financial
information and other matters covered by its letter referred to in
subclause (i) above and confirming in all material respects the
conclusions and findings set forth in such prior letter; and (iii) a
letter, dated the Delivery Date, of any other accountants that have
audited financial statements included or incorporated by reference in the
Registration Statement and Prospectus, addressed to the Underwriters, of
the type described in SAS 72 and covering such financial statement items
as the Underwriters may reasonably request.
(h) No order, consent, approval, authorization, registration or
qualification of or with any governmental agency or body having
jurisdiction over the Company or any of its properties is required for
the issue and sale of the Underwritten Securities or the consummation by
the Company of the transactions contemplated by this Agreement or the
Indenture, except such as have been, or will have been prior to the
Delivery Date, obtained under the Act and the Trust Indenture Act and
such consents, approvals, authorizations, registrations or qualifications
as may be required under state securities or Blue Sky laws in connection
with the purchase and distribution of the Underwritten Securities by the
Underwriters.
All opinions, letters, evidence and certificates mentioned above or
elsewhere in this Agreement shall be deemed to be in compliance with the
provisions hereof only if they are in form and substance satisfactory to the
Representative.
12. If the Company shall fail to tender the Immediate Delivery
Underwritten Securities for delivery to the Underwriters for any reason
permitted under this Agreement, or if the Underwriters shall decline to purchase
the Immediate Delivery Underwritten Securities for any reason permitted under
this Agreement (other than pursuant to Paragraph 6 or Paragraphs 10(a) - (d)
hereof), the Company shall reimburse the Underwriters for the reasonable fees
and expenses of their counsel and for such other out-of-pocket expenses as shall
have been incurred by them in connection with this Agreement and the proposed
purchase of Immediate Delivery Underwritten Securities and the solicitation of
any purchases of the Delayed Delivery Underwritten Securities, and upon demand
the Company shall pay the full amount thereof to the Representative. If this
Agreement is terminated pursuant to Paragraph 6 hereof by reason of the default
of one or more Underwriters or pursuant to Paragraphs 10(a) - (d) hereof, the
Company shall not be obligated to reimburse any Underwriter on account of those
expenses.
13. The Company shall be entitled to act and rely upon any request,
consent, notice or agreement by, or on behalf of, the Representative. Any notice
by the Company
-18-
<PAGE>
to the Underwriters shall be sufficient if given in writing or by facsimile
transmission confirmed promptly in writing addressed to the Representative at
its address set forth in Schedule I hereto, and any notice by the Underwriters
to the Company shall be sufficient if given in writing or by facsimile
transmission confirmed promptly in writing addressed to the Company at 175 E.
Houston St., 7th Floor, San Antonio, Texas 78205, Telecopy Number: (210)
351-3849, Attention of the Treasurer with a copy to the Corporate/SEC Attorney,
175 E. Houston St., 7th Floor, San Antonio, Texas 78205, Telecopy Number: (210)
351-3467.
14. This Agreement shall be binding upon the Underwriters, the Company
and their respective successors. This Agreement and the terms and provisions
hereof are for the sole benefit of only those persons, except that (a) the
representations, warranties, indemnities and agreements of the Company contained
in this Agreement shall also be deemed to be for the benefit of the person or
persons, if any, who control any Underwriter within the meaning of Section 15 of
the Act and (b) the indemnity agreement of the Underwriters contained in
Paragraph 9 hereof shall be deemed to be for the benefit of directors of the
Company, officers of the Company who have signed the Registration Statement and
any person controlling the Company. Nothing in this Agreement is intended or
shall be construed to give any person, other than the persons referred to in
this Paragraph 14, any legal or equitable right, remedy or claim under or in
respect of this Agreement or any provision contained herein.
15. For purposes of this Agreement, "business day" means any day on which
the New York Stock Exchange, Inc. is open for trading.
16. This Agreement may be executed by the parties hereto in any number of
counterparts, each of which shall be deemed to be an original, but all such
counterparts shall together constitute one and the same instrument.
-19-
<PAGE>
17. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAW OF NEW YORK.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this Agreement shall represent a binding agreement between the Company and the
several Underwriters.
Very truly yours,
PACIFIC BELL
By: ________________________
Title:
-20-
<PAGE>
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
For itself and as Representative of the
several Underwriters named in
Schedule II to the foregoing Agreement.
-21-
<PAGE>
SCHEDULE I
Underwriting Agreement, dated ________ __, 1997
Registration Statement No. 333-_____
Representative and Address:
Underwritten Securities:
Indenture, dated as of October 7, 1997, from Pacific Bell to The Bank of
New York, as Trustee (the "Indenture").
Designations:
Principal Amounts:
Dates of Maturity:
Interest Rates:
Purchase Prices:
Redemption Provisions:
<PAGE>
Form and Authorized
Denominations:
Delivery Date, Time
and Location:
Specified Funds for
Payment of Purchase Price:
The Delayed Delivery Contracts
shall have the following terms:
-2-
<PAGE>
SCHEDULE II
Principal
Underwriter Amount
----------- --------------
Total....................................... $=============
<PAGE>
EXHIBIT A
PACIFIC BELL
DELAYED DELIVERY CONTRACT
, 199
Pacific Bell
175 E. Houston
San Antonio, Texas 78205
Dear Sirs:
The undersigned hereby agrees to purchase from Pacific Bell, a
California corporation (the "Company"), and the Company hereby agrees to sell to
the undersigned, $ principal amount of the Company's above-captioned
securities ("Securities"), offered by the Company's prospectus dated , 199 , as
supplemented by the prospectus supplement dated , 199 (collectively, the
"Prospectus"), receipt of a copy of which is hereby acknowledged, at a purchase
price of % of the principal amount thereof plus accrued interest from , 199 to
the Delivery Date (as defined in the next paragraph) and on the further terms
and conditions set forth in this Contract.
Payment for and delivery of the Securities to be purchased by the
undersigned shall be made on , 199 , herein called the "Delivery Date."
At 10:00 A.M., New York time, on the Delivery Date, the Securities to
be purchased by the undersigned hereunder will be delivered by the Company to
the undersigned, and the undersigned will accept delivery of such Securities and
will make payment to the Company of the purchase price therefor at the office of
The Bank of New York. Payment will be by certified or official bank check
payable in next-day funds settled through the New York Clearing House, or such
other Clearing House as the Company may designate, to or upon the order of the
Company. The Securities will be delivered in such authorized forms and
denominations and registered in such names as the undersigned may designate by
written or telegraphic communication addressed to the Company not less than two
full business days prior to the Delivery Date or, if the undersigned fails to
make a timely designation in the foregoing manner, in the form of one definitive
fully
<PAGE>
registered certificate representing the Securities in the above principal
amount, registered in the name of the undersigned.
If any of the Securities are to be delivered to the undersigned in
bearer form, (i) the undersigned hereby represents that it is not a U.S. person
(or if it is a U.S. person it is a qualified financial institution) and agrees
that it will not offer to sell such Securities, directly or indirectly, to any
U.S. person other than a qualified financial institution and (ii) if the
undersigned is a dealer, that the undersigned also (A) represents that it has
not offered or sold and agrees that it will not offer, sell, or deliver any such
Securities within the United States or, directly or indirectly, to any U.S.
person other than a qualified financial institution and is not purchasing any of
such Securities for the account of any such U.S. person and (B) will deliver to
all purchasers of such Securities from it a written confirmation, containing a
statement to the effect set forth in clauses (i) and (ii) above. As used herein,
"United States" means the United States of America (including the States and the
District of Columbia), its territories, its possessions and all other areas
subject to its jurisdiction; "U.S. person" means a citizen or resident of the
United States, a corporation, partnership or other entity created or organized
in or under the laws of the United States or a political subdivision thereof, or
an estate or trust the income of which is subject to United States Federal
income taxation regardless of its source; and "qualified financial institution"
means a financial institution (as defined in Section 1.165-12(c)(1)(v) of the
Treasury Department regulations) that provides a written statement that it will
comply with Section 165(j)(3)(A), (B), or (C) of the Code and the regulations
thereunder. Delivery of Securities in bearer form shall be made only upon
receipt of a certificate manually signed by the undersigned, containing
substantially the following:
"This is to certify that as of the date hereof (the date of
delivery of the Securities in bearer form), the above-captioned
Securities which are to be delivered to the undersigned in bearer form
are not being acquired by or on behalf of a U.S. person, or for offer to
resell or for resale to a U.S. person or, if any beneficial owner of the
Securities is a U.S. person, such U.S. person is a financial institution
(as defined in Treasury Department Regulations Section 1.165-12(c)(1)(v))
or acquiring through a financial institution and that the Securities are
held by a financial institution that has agreed to comply with the
requirements of Section 165(j)(3)(A), (B), or (C) of the Internal Revenue
Code of 1986, and the regulations thereunder. If the undersigned is a
clearing organization, the undersigned represents that the certificate is
based on statements provided to it by its member organizations. As used
herein, "United States" means the United States of America (including the
States and the District of Columbia), its territories, its possessions
and all other areas subject to its jurisdiction; "U.S. person" means a
citizen or resident of the United States, a corporation, partnership or
other entity created or organized in or under the laws of the United
States or a political subdivision thereof, or an estate or trust the
income of which is subject to United States Federal
-2-
<PAGE>
income taxation regardless of its source; and a "clearing organization"
means an entity which is in the business of holding obligations for
member organizations and transferring obligations among such members by
credit or debit to the account of a member without the necessity of
physical delivery of the obligation. If the undersigned is a dealer, the
undersigned agrees to obtain a similar certificate from each person
entitled to delivery of any of the above-captioned Securities in bearer
form purchased from it. However, if the undersigned has actual knowledge
that the information contained in such certificate is false, the
undersigned will not deliver a Security in temporary or definitive bearer
form to the person who signed such certificate notwithstanding the
delivery of such certificate to the undersigned. The undersigned will be
deemed to have actual knowledge that the beneficial owner is a U.S.
person for this purpose if the undersigned has a U.S. address for the
beneficial owner of the Security."
This Contract will terminate and be of no further force and effect
after , unless (i) on or before such date it shall have been executed
and delivered by both parties hereto and (ii) the Company shall have sold to
the Underwriters named in the Prospectus the Immediate Delivery Underwritten
Securities (as defined in the Underwriting Agreement referred to in the
Prospectus). The Company will mail or deliver to the undersigned at its address
set forth below a notice to that effect, stating the date of the occurrence
thereof, accompanied by copies of the opinion of counsel for the Company
delivered to such Underwriters pursuant to Paragraph 11(d) of the Underwriting
Agreement.
The obligation of the undersigned to accept delivery of and make
payment for the Securities on the Delivery Date will be subject to the condition
that the Securities shall not, on the Delivery Date, be an investment prohibited
by the laws of the jurisdiction to which the undersigned is subject, the
undersigned hereby representing that such an investment is not so prohibited on
the date hereof.
This Contract will inure to the benefit of and be binding upon the
parties hereto and their respective successors but will not be assignable by
either party hereto without the written consent of the other.
This Contract may be executed by any of the parties hereto in any
number of counterparts, each of which shall be deemed to be an original, but all
such counterparts shall together constitute one and the same instrument.
It is understood that acceptance of any Delayed Delivery Contract (as
defined in said Underwriting Agreement) is in the Company's sole discretion and,
without limiting the foregoing, need not be on a first-come, first-served basis.
If this Contract is acceptable to the Company, it is requested that the Company
sign the form of acceptance below and
-3-
<PAGE>
mail or deliver one of the counterparts hereof to the undersigned at its address
set forth below. This will become a binding contract between the Company and
the undersigned when such counterpart is so mailed or delivered.
Very truly yours,
By_________________________________
___________________________________
Title
___________________________________
___________________________________
Address
Accepted as of , 199
PACIFIC BELL
By_________________________________
Title:
-4-
Pacific Bell
U.S. $1,750,000,000 Medium-Term Notes, Series A
Due Nine Months or More From Date of Issue
Selling Agency Agreement
[Date]
[Agents]
Dear Sirs:
Pacific Bell, a California corporation (the "Company"), confirms its
agreement with each of you (collectively, the "Agents" and individually, an
"Agent") with respect to the issue and sale by the Company of up to U.S.
$1,750,000,000 aggregate principal amount (or the equivalent thereof in one or
more currencies or currency units) of its Medium-Term Notes, Series A, Due Nine
Months or More From Date of Issue (the "Notes"). The Notes will be issued under
an indenture dated as of October 7, 1997 (the "Indenture"), from the Company to
The Bank of New York, as trustee (the "Trustee").
Unless otherwise specified in the applicable supplement to the Prospectus
referred to below, the Notes will be issued only in registered form in minimum
denominations of U.S. $1,000 and any amount in excess thereof that is an
integral multiple of U.S. $1,000 or, in the case of Notes denominated in a
currency other than U.S. dollars, the authorized denominations set forth in the
applicable supplement to the Prospectus.
The Notes will have the maturities, interest rates, if any, redemption
provisions and other terms set forth in a supplement to the Prospectus referred
to below. The Notes will be issued, and the terms thereof established, in
accordance with the Indenture and the Medium-Term Notes, Series A Administrative
Procedures as may be agreed to from time to time by the Company, each Agent and
the Trustee (the "Procedures"). The Procedures may only be amended by written
agreement of the Company, the Agents and the Trustee.
1. Representations and Warranties. The Company represents and warrants to,
and agrees with, each of you that:
<PAGE>
(a) The Company meets the requirements for use of Form S-3 under the
Securities Act of 1933, as amended (the "Securities Act"), and has
filed with the Securities and Exchange Commission ("SEC") a
registration statement (No. 333-______), which has become effective,
for the registration under the Securities Act of the Notes. Such
registration statement, as amended at the date of this Selling Agency
Agreement (the "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. In connection with the sale of the
Notes, the Company proposes to file with the SEC pursuant to Rule 424
under the Securities Act a supplement to the form of prospectus
included in such registration statement relating to the Notes and the
plan of distribution thereof and has previously advised the Agent of
all further information (financial and other) with respect to the
Company to be set forth therein. Such registration statement,
including the exhibits thereto, as amended to the date of this
Agreement, is herein collectively called the "Registration
Statement"; such prospectus, as supplemented pursuant to the previous
sentence, is herein called the "Prospectus." Any reference herein to
the Registration Statement or the Prospectus shall be deemed to refer
to and include the documents incorporated by reference therein which
were filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), on or before the date of this Agreement or the date
of the Prospectus, as the case may be; and any reference herein to
the terms "amend," "amendment" or "supplement" with respect to the
Registration Statement or the Prospectus shall be deemed to refer to
and include the filing of any document under the Exchange Act after
the date of this Agreement or the date of the Prospectus, as the case
may be, incorporated therein by reference.
(b) As of the date hereof, when any amendment to the Registration
Statement becomes effective (including the filing of any document
incorporated by reference in the Registration Statement), when any
supplement to the Prospectus is filed with the SEC, and at the date
of delivery by the Company of any Notes sold hereunder (a "Closing
Date"), (i) the Registration Statement, as amended as of any such
time, the Prospectus as supplemented as of any such time, and the
Indenture will comply in all material respects with the applicable
requirements of the Securities Act, the Trust Indenture Act of 1939,
as amended (the "Trust Indenture Act"), and the Exchange Act and the
respective rules and regulations thereunder, and (ii) neither the
Registration Statement, as amended as of any such time, nor the
Prospectus as supplemented as of any such time, will contain any
untrue statement of a material fact or omit to state any material
fact required to be stated therein or necessary in order to make the
statements therein not misleading; provided, however, that the
Company does not make any representations or warranties as to (i)
that part of the Registration Statement which shall constitute the
Statement of Eligibility (Form T-l) under the Trust Indenture Act of
the Trustee or (ii) the information contained in or omitted from the
Registration Statement or Prospectus in reliance upon and in
conformity with information furnished in writing to the Company by or
on behalf of you specifically for use in connection with the
preparation of the Registration Statement and the Prospectus.
2
<PAGE>
(c) As of the date hereof, when any amendment to the Registration
Statement becomes effective (including the filing of any document
incorporated by reference in the Registration Statement), when any
supplement to the Prospectus is filed with the SEC, and at the
Closing Date, no order, consent, approval, authorization,
registration or qualification of or with any governmental agency or
body having jurisdiction over the Company or any of its properties is
required for the issue and sale of the Notes or the consummation by
the Company of the transactions contemplated by this Agreement or the
Indenture, except such as have been, or will have been prior to the
Closing Date, obtained under the Act and the Trust Indenture Act and
such consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or Blue Sky
laws in connection with the purchase and distribution of the Notes.
2. Appointment of Agents; Solicitations by the Agents of Offers to Purchase;
Sales of Notes to a Purchaser.
(a) Subject to the terms and conditions set forth herein, the Company
hereby authorizes each of the Agents to act as its agent to solicit
offers for the purchase of all or part of the Notes from the Company.
On the basis of the representations and warranties, and subject to
the terms and conditions set forth herein, each of the Agents agrees,
as agent of the Company, to use its reasonable best efforts to
solicit offers to purchase the Notes from the Company upon the terms
and conditions set forth in the Prospectus as amended or supplemented
and in the Procedures.
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 instructions from the Company, the Agents will forthwith
suspend solicitation of offers to purchase Notes from the Company
until such time as the Company has advised it that such solicitation
may be resumed.
The Company agrees to pay each Agent (or jointly to two or more
Agents if such solicitation is jointly made) a commission, at the
time of settlement of each sale of Notes by the Company as a result
of a solicitation made by such Agent, in an amount equal to that
percentage specified in Schedule I hereto of the aggregate principal
amount of the Notes sold by the Company, and such commission shall be
payable as specified in the Procedures.
Subject to the provisions of this Section and to the Procedures,
offers for the purchase of Notes may be solicited by an Agent as
agent for the Company at such time and in such amounts as such Agent
deems advisable.
3
<PAGE>
The Company may appoint other agents for the purpose of soliciting
purchases of the Notes on a continuous or limited basis, provided
that such agent is engaged on the same commission schedule as the
Agents (set forth hereto as Schedule I).
(b) Subject to the terms and conditions stated herein, the Company agrees
that, whenever the Company determines to sell Notes directly to you
as principal for resale to others, it will enter into a Terms
Agreement, as defined below, relating to such sale in accordance with
the provisions of this Section 2(b). For the purposes of this
Agreement, the term "Agent" shall refer to each of you acting solely
in the capacity as agent for the Company hereunder and not as
principal, the term "Purchaser" shall refer to each of you acting
solely as principal hereunder and not as agent, and the term "you"
shall refer to any of you acting in both such capacities or in either
such capacity.
Each sale of Notes to the Purchaser shall be made in accordance with
the terms of this Agreement and the Procedures and a supplemental
agreement which will provide for the sale of such Notes to, and the
purchase and reoffering thereof by, the Purchaser. Each such
supplemental agreement (which may be in either oral or written form)
is herein referred to as a "Terms Agreement." The Purchaser'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 herein contained and shall be subject to
the terms and conditions herein set forth. Each Terms Agreement shall
describe the Notes to be purchased by the Purchaser pursuant thereto,
specify the aggregate principal amount of such Notes, the price to be
paid to the Company for such Notes, the maturity date of such Notes,
the rate at which interest will be paid on the Notes, the date and
time of delivery of payment for such Notes (the "Purchase Date"), the
place of delivery of the Notes and payment therefor, the method of
payment and the requirements, if any, for the delivery of the opinion
of counsel, the certificates from the Company or their officers, the
letters from Ernst & Young LLP, and any other accountants that have
audited financial statements included or incorporated by reference in
the Registration Statement or Prospectus, pursuant to Section 6(b)
and such other matters as determined by the parties thereto. Such
Terms Agreement may also specify the period of time referred to in
Section 4(m). Any written Terms Agreement may be in the form attached
hereto as Exhibit A.
Delivery of the certificates for Notes sold to the Purchaser pursuant
to any Terms Agreement shall be made as agreed to between the Company
and the Purchaser as set forth in the respective Terms Agreement, not
later than the Purchase Date set forth in such Terms Agreement,
against payment of funds to the Company in the net amount due to the
Company for such Notes by the method and in the form set forth in the
respective Terms Agreement.
Unless otherwise agreed to between the Company and the Purchaser in a
Terms Agreement, any Note sold to a Purchaser (i) shall be purchased
by such Purchaser at
4
<PAGE>
a price equal to 100% of the principal amount thereof less a
percentage equal to the commission applicable to an agency sale of a
Note of identical maturity and (ii) may be resold by such Purchaser
at varying prices from time to time, or if set forth in the
applicable Terms Agreement and Pricing Supplement, at a fixed public
offering price. In connection with any resale of Notes purchased, a
Purchaser may use a selling or dealer group and may reallow to any
broker or dealer any portion of the discount or commission payable
pursuant hereto.
(c) The Company reserves the right to sell Notes directly to investors on
its own behalf or to purchasers (other than the Agents) acting as
principal for resale to others.
3. Offering Procedure. Each of the Agents shall communicate to the Company,
orally or in writing, each offer to purchase Notes (other than those
offers rejected by an Agent as provided herein) on terms previously
communicated by the Company to such Agent, and except as otherwise
provided in the Procedures, the Company shall have the sole right to
accept such offers to purchase Notes and may refuse any proposed purchase
of Notes, as a whole or in part, for any reason. Each of the Agents shall
have the right, in its discretion reasonably exercised, to reject any
proposed purchase of Notes, as a whole or in part, and any such rejection
shall not be deemed a breach of its agreement contained herein. Each of
the Agents and the Company agree to perform the respective duties and
obligations specifically provided to be performed by them in the
Procedures.
4. Agreements. The Company agrees with each of you that:
(a) Prior to the termination of the offering of the Notes, the Company
will not file any amendment of the Registration Statement nor will
the Company file any supplement to the Prospectus (except for (i) an
amendment or supplement consisting solely of the filing of a document
under the Exchange Act, (ii) a supplement relating to an offering of
securities other than the Notes, or (iii) a supplement relating
solely to pricing and related information concerning a particular
sale of Notes) unless the Company has furnished you a copy of such
proposed amendment or supplement for your review prior to filing and
will not file any such proposed amendment or supplement to which you
reasonably object. Subject to the foregoing sentence, the Company
will cause each supplement to the Prospectus to be filed with the SEC
as required pursuant to Rule 424 under the Securities Act. The
Company will promptly advise you (i) when each supplement to the
Prospectus shall have been filed with the SEC pursuant to Rule 424
under the Securities Act, (ii) when any amendment of the Registration
Statement shall have become effective, (iii) of any request by the
SEC for any amendment of the Registration Statement or amendment of
or supplement to the Prospectus or for any additional information,
(iv) of the issuance by the SEC 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 of any notification with respect to the
suspension of the qualification of the Notes for sale in any
5
<PAGE>
jurisdiction or the initiation or threatening of any proceeding for
such purpose. The Company will promptly (upon filing thereof) furnish
you a copy of any amendment or supplement to the Prospectus or
Registration Statement not furnished to you for prior review pursuant
to exceptions (i), (ii) or (iii) of the first sentence of this
subsection (a). The Company will use its 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 as a
result of which the Registration Statement, as then amended, or the
Prospectus, as then supplemented, would include any untrue statement
of a material fact or omit to state any material fact necessary to
amend the Registration Statement or to make the statements therein in
light of the circumstances under which they were made not misleading,
or if it shall be necessary to amend the Registration Statement or to
supplement the Prospectus to comply with the Securities Act or the
Exchange Act or the respective rules and regulations thereunder, the
Company promptly will (i) notify you to suspend solicitation of
offers to purchase Notes (and, if so notified by the Company, you
shall forthwith suspend such solicitation and cease using the
Prospectus as then amended or supplemented), (ii) prepare and file
with the SEC, subject to the first sentence of paragraph (a) of this
Section 4, an amendment or supplement which will correct such
statement or omission or an amendment or supplement which will effect
such compliance, and (iii) supply any such amended or supplemented
Prospectus to you in such quantities as you may reasonably request.
If such amendment or supplement, and documents, certificates and
opinions furnished to you pursuant to paragraph (g) of this Section 4
in connection with the preparation or filing of such amendment or
supplement are reasonably satisfactory in all respects to you, you
will, upon the filing of such amendment or supplement with the SEC
and upon the effectiveness of an amendment to the Registration
Statement if such an amendment is required, resume your obligation to
solicit offers to purchase Notes hereunder.
(c) As soon as practicable, the Company will make generally available to
its security holders and to you an earnings statement or statements
of the Company which will satisfy the provisions of Section 11(a) of
the Securities Act and Rule 158 under the Securities Act.
(d) Until the termination of the offering of the Notes, the Company will
timely file all documents, and any amendments to previously filed
documents, required to be filed by the Company pursuant to Sections
13(a), 13(c), 14 and 15(d) of the Exchange Act.
(e) The Company will furnish to you and to your counsel, without charge,
copies of the Registration Statement (including exhibits thereto) and
each amendment thereto which shall become effective and, so long as
delivery of a prospectus may be required by the Securities Act, as
many copies of any preliminary Prospectus and the Prospectus and any
amendments thereof and supplements thereto as you may reasonably
request.
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(f) The Company will endeavor to qualify the Notes for sale under the
laws of such jurisdictions as you may designate and will maintain
such qualifications in effect so long as required for the
distribution of the Notes, provided that in connection therewith the
Company shall not be required to qualify as a foreign corporation or
take any action which would subject it to general or unlimited
service of process in any jurisdiction where it is not now so
subject.
(g) The Company shall furnish to you such documents, certificates of
officers of the Company and opinions of counsel for the Company
relating to the business, operations and affairs of the Company, the
Registration Statement, any preliminary Prospectus, the Prospectus,
and any amendments or supplements thereto, the Indenture, the Notes,
this Agreement, the Procedures and the performance by the Company and
you of the respective obligations of each hereunder and thereunder as
you may from time to time and at any time prior to the termination of
this Agreement reasonably request.
(h) The Company shall, whether or not any sale of any Notes is
consummated, (i) pay all expenses incident to the performance of its
obligations under this Agreement, including the fees and
disbursements of its accountants and counsel, the cost of printing
and delivery of the Registration Statement, the Prospectus, all
amendments thereof and supplements thereto, the Indenture, this
Agreement and all other documents relating to the offering, the cost
of preparing, printing, packaging and delivering the Notes, the fees
and disbursements, including fees of counsel, incurred in connection
with the qualification of the Notes for sale and determination of
eligibility for investment of the Notes under the securities or Blue
Sky laws of each such jurisdiction as the Agent may reasonably
designate, the fees and disbursements of the Trustee and the fees of
any agency that rates the Notes, (ii) reimburse you on an as-needed
basis for all out-of- pocket expenses incurred by you and approved by
the Company in advance, in connection with the offering and the sale
of the Notes, and (iii) be responsible for the reasonable fees and
expenses of your counsel incurred in connection with the offering and
sale of the Notes.
(i) Each acceptance by the Company of an offer to purchase Notes (the
date of each such acceptance, an "Acceptance Date") will be deemed to
be a representation and warranty to you by the Company that neither
the Registration Statement nor the Prospectus, as then amended or
supplemented, fails to reflect any facts or events which,
individually or in the aggregate, represent a fundamental change in
the information set forth in the Registration Statement or the
Prospectus, as then amended or supplemented, and/or includes any
untrue statement of a material fact, or omits to state any material
fact necessary to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that
the foregoing does not apply to (i) that part of the Registration
Statement which shall constitute the Statement of Eligibility (Form
T-1) under the Trust Indenture Act of the Trustee or (ii) the
information contained in or omitted from the Registration Statement
or the Prospectus or any amendment thereof
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<PAGE>
or supplement thereto in reliance upon and in conformity with
information furnished in writing to the Company by or on behalf of
you specifically for use in connection with the preparation of the
Registration Statement and the Prospectus or any amendments thereof
or supplements thereto.
(j) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than by (i) an amendment or supplement
consisting solely of the filing of a document under the Exchange Act
unless such amendment or supplement sets forth or incorporates by
reference financial statements for a fiscal quarter or unless
otherwise requested by you, (ii) a supplement relating to an offering
of securities other than the Notes, or (iii) a supplement relating
solely to pricing and related information concerning a particular
sale of Notes), the Company will deliver or cause to be delivered
forthwith to you a certificate of it signed by its Chairman of the
Board or its President or a Vice President and its Treasurer or an
Assistant Treasurer, dated the date of the effectiveness of such
amendment or the date of filing of such supplement, in form
reasonably satisfactory to you, to the effect that the statements
contained in the certificate that was last furnished to you by it
pursuant to either Section 5(d) or this Section 4(j) are true and
correct at the time of the effectiveness of such amendment or the
filing of such supplement as though made at and as of such time
(except that (i) the last day of the fiscal quarter for which
financial statements of the Company were last filed with the SEC
shall be substituted for the corresponding date in such certificate
and (ii) such statements shall be deemed to relate to the
Registration Statement and the Prospectus as amended and supplemented
to the time of the effectiveness of such amendment or the filing of
such supplement) or, in lieu of such certificate, a certificate of
the same tenor as the certificate referred to in Section 5(d) but
modified to relate to the last day of the fiscal quarter for which
financial statements of the Company were last filed with the SEC and
to the Registration Statement and the Prospectus as amended and
supplemented to the time of the effectiveness of such amendment or
the filing of such supplement.
(k) Each time that the Registration Statement or the Prospectus is
amended or supplemented (other than by (i) an amendment or supplement
consisting solely of the filing of a document under the Exchange Act
unless such amendment or supplement sets forth or incorporates by
reference financial statements for a fiscal quarter or unless
otherwise requested by you, (ii) a supplement relating to an offering
of securities other than the Notes, or (iii) a supplement relating
solely to pricing and related information concerning a particular
sale of Notes), the Company shall furnish or cause to be furnished
forthwith to you a written opinion of its counsel satisfactory to
you, and, at your option, Sullivan & Cromwell shall furnish to you a
written opinion, dated the date of the effectiveness of such
amendment or the date of filing of such supplement, in form
satisfactory to you, of the same tenor as the opinion referred to in
Sections 5(b) and 5(c), respectively, but modified to relate to the
Registration Statement and the Prospectus as amended and supplemented
to the time of the effectiveness of such
8
<PAGE>
amendment or the filing of such supplement or, in lieu of such
opinion, counsel last furnishing such an opinion to you may furnish
you with a letter to the effect that you may rely on such last
opinion to the same extent as though it were dated the date of such
letter authorizing reliance (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 the
effectiveness of such amendment or the filing of such supplement).
(l) Each time that the Registration Statement or the 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
Prospectus, the Company shall cause Ernst & Young LLP, independent
auditors, forthwith to furnish you a letter, dated the date of the
effectiveness of such amendment or the date of filing of such
supplement, in form satisfactory to you, of the same tenor as the
letters referred to in Section 5(e) with such changes as may be
necessary to reflect the amended and 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, provided that if the Registration Statement or the
Prospectus is amended or supplemented solely to include or
incorporate by reference unaudited financial information as of and
for a fiscal quarter, Ernst & Young LLP may limit the scope of its
letter, which shall be satisfactory in form to you, to the unaudited
financial statements included or incorporated by reference in such
amendment or supplement, unless any other information included or
incorporated by reference therein of an accounting, financial or
statistical nature (which is limited to accounting, financial or
statistical information derived from the general accounting records
of the Company) is of such a nature that, in your reasonable
judgment, such letter should cover such other information.
(m) During the period, if any, specified in any Terms Agreement, the
Company shall not, without the prior consent of the Purchaser, issue
or announce the proposed issuance of any of its Debt Securities,
including Notes, which Debt Securities have terms substantially
similar to those of the Notes being purchased pursuant to such Terms
Agreement.
5. Conditions to the Obligations of the Agents. The obligation of each of the
Agents to solicit offers to purchase the Notes shall be subject to the
accuracy of the representations and warranties on the part of the Company
contained herein as of the date hereof, as of the date of the
effectiveness of any amendment to the Registration Statement (including
the filing of any document incorporated by reference therein), as of the
date any supplement to the Prospectus is filed with the SEC, as of each
Acceptance Date and as of each Closing Date,
9
<PAGE>
to the accuracy of the statements of the Company made in any certificates
pursuant to the provisions hereof, to the performance by the Company of
its obligations hereunder and to the following additional conditions:
(a) No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and
no proceedings for that purpose shall have been instituted or
threatened.
(b) The Company shall have furnished to the Agents the opinion of counsel
to the Company, dated the date hereof, to the effect that:
(i) the Company has been duly incorporated and is validly existing
as a corporation in good standing under the laws of the state
of California, with full corporate power and authority to own
its properties and conduct its business as described in the
Prospectus, and is duly qualified to do business as a foreign
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns
or leases properties or conducts business, except where the
failure to so qualify would not have a material adverse effect
on the Company;
(ii) the Indenture has been duly authorized, executed and
delivered, has been duly qualified under the Trust Indenture
Act, and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms
(subject, as to enforcement of remedies, to applicable
bankruptcy, reorganization, insolvency, fraudulent transfer,
reorganization, moratorium and similar laws of general
applicability relating to or affecting creditors' rights,
generally from time to time in effect and to general
principles of equity); the Notes have been duly authorized and
established in conformity with the Indenture, and, when the
terms of the Notes have been duly established in conformity
with the Indenture so as not to violate or conflict with any
provisions of law or any agreement or instrument applicable to
the Company or any of its properties, when the Notes have been
duly executed by the proper officers of the Company,
registered and duly authenticated pursuant to the Indenture
and delivered to and paid for by the purchasers thereof, the
Notes will constitute legal, valid and binding obligations of
the Company entitled to the benefits of the Indenture;
(iii) to the best knowledge of such counsel, there is no pending
or threatened action, suit or proceeding before any court or
governmental agency, authority, body or any arbitrator
involving the Company, of a character required to be disclosed
in the Registration Statement which is not adequately
disclosed in the Prospectus, and there is no franchise,
contract or other document of a character required to be
described in the Registration Statement or Prospectus, or to
be filed as an exhibit, which is not described or filed as
required; and the statements included or
10
<PAGE>
incorporated in the Prospectus describing any legal
proceedings or material contracts or agreements relating to
the Company fairly summarize such matters;
(iv) the Registration Statement and any amendments thereto have
become effective under the Securities Act; to the best
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued,
no proceedings for that purpose have been instituted or
threatened, and the Registration Statement, the Prospectus and
each amendment thereof or supplement thereto as of their
respective effective or issue dates (other than the financial
statements and other financial and statistical information
contained therein as to which such counsel need express no
opinion) complied as to form in all material respects with the
applicable requirements of the Securities Act, the Exchange
Act and the Trust Indenture Act and the respective rules and
regulations thereunder; and such counsel has no reason to
believe that the Registration Statement, or any amendment
thereof, at the time it became effective or at the date of
this Agreement, contained any untrue statement of a material
fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus, at its issue date or at the
date of this Agreement, included any untrue statement of a
material fact or omitted to state a material fact necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading;
(v) this Agreement has been duly authorized, executed and
delivered by the Company;
(vi) no order, consent, approval, authorization, registration or
qualification of or with any governmental agency or body
having jurisdiction over the Company or any of its properties
is required for the issue and sale of the Notes or the
consummation by the Company of the transactions contemplated
by this Agreement or the Indenture, except such as have been,
or will have been prior to the Closing Date, obtained under
the Securities Act and the Trust Indenture Act and such
consents, approvals, authorizations, registrations or
qualifications as may be required under state securities or
Blue Sky laws in connection with the sale and distribution of
the Notes; and
(vii) neither the execution and delivery of the Indenture or this
Agreement, the issue and sale of the Notes (when the terms of
the Notes have been duly established in conformity with the
Indenture so as not to violate or conflict with any provisions
of law or any agreement or instrument applicable to the
Company or any of its properties and when the Notes have been
duly executed by the proper officers of the Company,
registered and duly authenticated pursuant to the Indenture
and delivered to and paid for by the purchasers thereof), nor
the consummation of any other of the transactions herein or
therein contemplated nor the fulfillment of the
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<PAGE>
terms hereof or thereof will conflict with, result in a breach
of, or constitute a default under, the charter or by-laws of
the Company or the terms of any indenture or other agreement
or instrument known to such counsel and to which the Company
is a party or by which the Company or any of its assets is
bound, or any order or regulation known to such counsel to be
applicable to the Company of any court, regulatory body,
administrative agency, governmental body or arbitrator having
jurisdiction over the Company.
In rendering such opinion, such counsel may rely, as to the execution
of the Indenture by the Trustee, upon a certificate of the Trustee
setting forth the facts as to such execution.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
state of California or the United States, to the extent deemed proper
and specified in such opinion, upon the opinion of other counsel of
good standing believed to be reliable and who are satisfactory to the
Agents and (B) as to matters of fact, to the extent deemed proper, on
certificates of responsible officers of the Company and public
officials.
In rendering such opinion with respect to clause (vi) above, insofar
as it relates to regulatory authorities in the states in which the
Company operates, such counsel may rely on the opinions of local
counsel satisfactory to such counsel.
(c) The Agents shall have received from Sullivan & Cromwell, counsel for
the Agents, such opinion or opinions, dated the date hereof, with
respect to the issuance and sale of the Notes, the Indenture, the
Registration Statement, the Prospectus and other related matters as
the Agents may reasonably require, and the Company shall have
furnished to such counsel such documents as they request for the
purpose of enabling them to pass upon such matters.
(d) The Company shall have furnished to the Agents a certificate signed
by its Chairman of the Board or its President or a Vice President and
its Treasurer or an Assistant Treasurer stating that after reasonable
investigation and to the best of their knowledge:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and
as of the date hereof with the same effect as if made on the
date hereof; the Company has complied with all the agreements
and satisfied all the conditions on its part to be performed
or satisfied as a condition to the obligation of the Agents to
solicit offers to purchase the Notes; and the conditions set
forth in Paragraph 5(a) have been fulfilled;
(ii) as of the date of the Prospectus, the Registration Statement
and the Prospectus did not include any untrue statement of a
material fact and did not omit to state
12
<PAGE>
a material fact required to be stated therein or necessary to
make the statements therein not misleading; and
(iii) since the date of the most recent financial statements
included or incorporated by reference in the Prospectus, there
has been no material adverse change in the condition
(financial or other), earnings, business or properties of the
Company and its subsidiaries, whether or not arising from
transactions in the ordinary course of business, except as set
forth in or contemplated in the Prospectus.
(e) The Company shall have furnished to the Agents (i) a letter of Ernst
& Young LLP, addressed to the Board of Directors of the Company and
the Agents and dated the later of the effective date of the
Registration Statement or the date of the filing of the Company's
latest Annual Report on Form 10-K, of the type described in the
American Institute of Certified Public Accountants' Statement on
Auditing Standards No. 72 ("SAS 72") and covering such financial
statement items of the Company as the Agents may reasonably have
requested; (ii) a letter of Ernst & Young LLP, addressed to the
Agents and dated the date hereof, stating, as of the date of such
letter (or, with respect to matters involving changes or developments
since the respective dates as of which specified financial
information is given in the Prospectus, as of a date not more than
five business days prior to the date of such letter), the conclusions
and findings of such firm with respect to the financial information
and other matters of the Company covered by its letter referred to in
subclause (i) above and confirming in all material respects the
conclusions and findings set forth in such prior letter; and (iii) a
letter, dated the date hereof, of any other accountants that have
audited financial statements included or incorporated by reference in
the Registration Statement and Prospectus, addressed to the Agents,
of the type described in SAS 72 and covering such financial statement
items as the Agents may reasonably request.
References to the Registration Statement and the Prospectus in this
paragraph (e) are to such documents as amended and supplemented at
the date of the letter.
(f) Subsequent to the respective dates as of which information is given
in the Registration Statement and the Prospectus (with respect to
Section 6(c) hereof, only as the Registration Statement and the
Prospectus are amended or supplemented through the date of the Terms
Agreement) there shall not have been any change, or any development
involving a prospective change, in or affecting the business or
properties of the Company and its principal subsidiaries the effect
of which is, in the reasonable judgment of the Agents, so material
and adverse as to make it impractical or inadvisable to proceed with
the soliciting of offers to purchase the Notes as contemplated by the
Registration Statement and the Prospectus (or, in the case of a Terms
Agreement, to proceed with the offering or the delivery of the Notes
to be purchased as contemplated by the Terms Agreement).
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(g) Prior to the date hereof, the Company shall have furnished to the
Agents such further information, certificates and documents as the
Agents may reasonably request.
If any of the conditions specified in this Section 5 shall not have been
fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in
this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Agents, this Agreement and all
obligations of the Agents hereunder may be canceled at any time by the
Agents. Notice of such cancellation shall be given to the Company in
writing or by telephone or telegraph confirmed in writing.
The documents required to be delivered by this Section 5 shall be
delivered at the office of Sullivan & Cromwell, counsel for the Agents, at
125 Broad Street, New York, NY 10004, or such other location as the
parties hereto agree, on the date hereof.
6. Conditions to the Obligations of the Purchaser. The obligations of the
Purchaser to purchase Notes pursuant to any Terms Agreement will be
subject to the accuracy of the representations and warranties on the part
of the Company herein as of the date of the respective Terms Agreement and
as of the Purchase Date thereunder, to the performance and observance by
the Company of all covenants and agreements herein contained on their part
to be performed and observed and to the following additional conditions
precedent:
(a) No stop order suspending the effectiveness of the Registration
Statement, as amended from time to time, shall have been issued and
no proceedings for that purpose shall have been instituted or
threatened.
(b) To the extent required by the respective Terms Agreement, the
Purchaser shall have received, appropriately updated, (i) a
certificate of the Company, dated as of the Purchase Date, to the
effect set forth in Section 5(d), (ii) opinion of counsel to the
Company, dated as of the Purchase Date, to the effect set forth in
Section 5(b), (iii) the opinion of Sullivan & Cromwell, counsel for
the Purchaser, dated as of the Purchase Date, to the effect set forth
in Section 5(c), and (iv) letters of Ernst & Young LLP, dated as of
the Purchase Date, to the effect set forth in Section 5(e).
(c) The conditions set forth in Section 5(f) shall have been satisfied.
(d) Prior to the Purchase Date, the Company shall have furnished to the
Purchaser such further information, certificates and documents as the
Purchaser may reasonably request.
(e) Subsequent to the execution of any Terms Agreement, the Company shall
not have received notice that any rating of any of the Company's
unsecured senior debt securities shall have been lowered by any
nationally recognized statistical rating organization (as
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defined in Rule 15c3-1 under the Exchange Act) or that any such
organization has publicly announced that it has under surveillance or
review, with possible negative implications, the ratings of any of
the Company's unsecured senior debt securities.
If any of the conditions specified in this Section 6 shall not have been
fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in
this Agreement shall not be in all material respects reasonably
satisfactory in form and substance to the Purchaser, the Terms Agreement
and all obligations of the Purchaser thereunder may be canceled at, or at
any time prior to, the respective Purchase Date by the Purchaser. Notice
of such cancellation shall be given to the Company in writing or by
telephone or telegraph confirmed in writing.
7. Reimbursement of the Agents' and the Purchaser's Expenses. In connection
with the sale of any Notes under this Agreement, if any condition to the
obligations of the Agents set forth in Section 5 hereof is not satisfied,
if any condition to the obligations of the Purchaser set forth in Section
6 (other than Section 6(e)) hereof is not satisfied, if any termination
pursuant to Section 9(b)(i) hereof shall occur or in the case of any
refusal, inability or failure on the part of the Company to perform any
agreement herein or comply with any provision hereof other than by reason
of a default by any of the Agents, the Company will (in addition to any
other obligations hereunder) reimburse each of the Agents or the Purchaser
upon demand for all reasonable out-of-pocket expenses (including
reasonable fees and disbursements of counsel but excluding advertising
expenses) that shall have been incurred by such Agent or the Purchaser in
connection with such sale.
8. Indemnification and Contribution.
(a) The Company agrees to indemnify and hold harmless each of you and
each person, if any, who controls any of you within the meaning of
the Securities Act from and against any loss, claim, damage or
liability, joint or several, and any action in respect thereof, to
which any of you or any such controlling person may become subject,
under the Securities Act or otherwise, insofar as such loss, claim,
damage, liability or action arises out of, or is based upon, any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement or the Prospectus, or arises
out of, or is based upon, the omission or alleged omission to state
therein a material fact required to be stated therein or necessary to
make the statements therein not misleading, and shall reimburse each
of you and such controlling person for any legal and other expenses
reasonably incurred by you or such controlling person in
investigating or defending or preparing to defend against any such
loss, claim, damage, liability or action as such expenses are
incurred (but no more frequently than annually), provided, however,
that the Company shall not be liable in any such case to the extent
that any such loss, claim, damage, liability or action arises out of,
or is based upon, any untrue statement or alleged untrue statement or
omission or alleged omission made in the Registration Statement or
the Prospectus, in reliance upon and in conformity with written
information furnished to the Company specifically for use therein.
The foregoing
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<PAGE>
indemnity agreement is in addition to any liability which the Company
may otherwise have to any of you or any controlling person.
(b) Each of you shall indemnify and hold harmless the Company, each of
its directors, each of its officers who signed the Registration
Statement and any person who controls the Company within the meaning
of the Securities Act from and against any loss, claim, damage or
liability, joint or several, and any action in respect thereof, to
which the Company, or any such director, officer or controlling
person may become subject, under the Securities Act or otherwise,
insofar as such loss, claim, damage, liability or action arises out
of, or is based upon, any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement
or the Prospectus, or arises out of, or is based upon, the omission
or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not
misleading, but in each case only to the extent that the untrue
statement or alleged untrue statement or omission or alleged omission
was made in reliance upon and in conformity with information
furnished in writing to the Company by any of you specifically for
use therein, and shall reimburse the Company for any legal and other
expenses reasonably incurred by the Company or any such director,
officer or controlling person in investigating or defending or
preparing to defend against any such loss, claim, damage, liability
or action as such expenses are incurred (but no more frequently than
annually). The foregoing indemnity agreement is in addition to any
liability which any of you may otherwise have to the Company or any
of their directors, officers or controlling persons.
(c) Promptly after receipt by an indemnified party under this Section 8
of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 8, notify the
indemnifying party in writing of the claim or the commencement of
that action, provided that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have to an
indemnified party otherwise than under Section 8(a) or 8(b). If any
such claim or action shall be brought against an indemnified party,
and it shall notify the indemnifying party thereof, the indemnifying
party shall be entitled to participate therein, and, to the extent
that it wishes, jointly with any other similarly notified
indemnifying party, to assume the defense thereof with counsel
satisfactory to the indemnified party. After notice from the
indemnifying party to the indemnified party of its election to assume
the defense of such claim or action, the indemnifying party shall not
be liable to the indemnified party under this Section 8 for any legal
or other expenses subsequently incurred by the indemnified party in
connection with the defense thereof other than reasonable costs of
investigation. 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 the Company and one or
more Agents and either (i) the indemnifying party or parties and
indemnified party or parties mutually agree or (ii) representation of
both the indemnifying party or parties and the indemnified party or
parties by the same counsel
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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 and satisfactory to the indemnifying party,
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 for all such
indemnified parties, which firm shall be designated in writing by the
applicable representative in the case of an action in which any of
you or controlling persons are indemnified parties and by the Company
or any of its directors, officers or controlling persons in the case
of any action in which any of them are indemnified parties. The
indemnifying party or parties 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.
(d) If the indemnification provided for in this Section 8 shall for any
reason be unavailable to an indemnified party under Section 8(a) or
8(b) hereof in respect of any loss, claim, damage or liability, or
any action in respect thereof, referred to therein, then each
indemnifying party shall, in lieu of indemnifying such indemnified
party, contribute to the amount paid or payable by such indemnified
party as a result of such loss, claim, damage or liability, or action
in respect thereof, in such proportion as is appropriate to reflect
the relative benefits received by the Company, on the one hand, and
each of you, on the other hand, from the offering of the Notes. If,
however, this allocation is not permitted by applicable law, then
each indemnifying party shall contribute to the amount paid or
payable by such indemnified party as a result of such loss, claim,
damage or liability, or action in respect thereof, in such proportion
as shall be appropriate to reflect the relative benefits received by
the Company, on the one hand, and each of you on the other hand, from
the offering of the Notes and the relative fault of the Company, on
the one hand, and each of you, on the other hand, with respect to the
statements or omissions which resulted in such loss, claim, damage or
liability, or action in respect thereof, as well as any other
relevant equitable considerations. The relative benefits received by
the Company, on the one hand, and each of you, on the other hand,
with respect to such offering shall be deemed to be in the same
proportion as the aggregate commissions received by each of you (in
the case of a Terms Agreement, as if such commission had been
payable) pursuant to Section 2 to the aggregate principal amount of
the Notes sold. The relative fault shall be determined by reference
to whether the untrue or alleged untrue statement of a material fact
or omission or alleged omission to state a material fact relates to
information supplied by the Company or by any of you, the intent of
the parties and their relative knowledge, access to information and
opportunity to correct or prevent such statement or omission. The
amount paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect thereof,
referred to above in this Section 8(d) shall be deemed to include,
for purposes of this Section 8(d), any legal or other expenses
reasonably
17
<PAGE>
incurred by such indemnified party in connection with investigating
or defending any such action or claim. Notwithstanding the provisions
of this Section 8(d), you shall not be required to contribute any
amount in excess of the amount by which the total price at which the
Notes purchased by or through you were sold to the public exceeds the
amount of any damages which any of you have otherwise paid or become
liable to pay by reason of any 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. Your obligations
to contribute as provided in this Section 8(d) are several in
proportion to your respective obligations and not joint.
9. Termination. This Agreement will continue in effect until terminated as
provided in this Section 9.
(a) This Agreement may be terminated by the Company as to any Agent or
any Agent insofar as this Agreement relates to such Agent giving
written notice of such termination to such Agent or the Company. This
Agreement shall so terminate at the close of business on the first
business day following the receipt of such notice by the party to
whom such notice is given. In the event of such termination, no party
shall have any liability to the other parties hereto, except as
provided in the fourth paragraph of Section 2(a), Section 4(h),
Section 7, Section 8 and Section 10.
(b) Each Terms Agreement shall be subject to termination in the absolute
discretion of the Purchaser, by notice given to the Company prior to
delivery of any payment for Notes to be purchased thereunder, if
prior to such time (i) there shall have occurred any change, or any
development involving a prospective change, in or affecting
particularly the business or properties of the Company or its
subsidiaries which, in the Purchaser's reasonable judgment,
materially impairs the investment quality of the Notes; (ii) trading
in securities generally on the New York Stock Exchange shall have
been suspended or materially limited and the effect of which, in the
Purchaser's reasonable judgment, materially impairs the investment
quality of the Notes; (iii) a banking moratorium shall have been
declared by either federal or New York State authorities; or (iv)
there shall have occurred any outbreak or escalation of hostilities
or other calamity or crisis or the declaration by the United States
of a national emergency or war the effect of which on the financial
markets of the United States is material and adverse and is such as
to make it, in the reasonable judgment of the Purchaser,
impracticable or inadvisable to market such Notes on the terms and in
the manner contemplated by the Prospectus.
10. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the
Company and its officers and of each of the Agents set forth in or made
pursuant to this Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of any of the Agents,
the Company or any of the officers, directors or controlling persons
referred to in Section 8 hereof, and will
18
<PAGE>
survive delivery of and payment for the Notes. The provisions of the
fourth paragraph of Section 2(a), Section 4(h), Section 7 and Section 8
hereof shall survive the termination or cancellation of this Agreement.
11. Right of Person Who Agreed to Purchase to Refuse to Purchase. A person who
has agreed to purchase and pay for Notes as a result of an offer to
purchase solicited by an Agent, may refuse to purchase such Notes if, on
the related Closing Date fixed pursuant to the Procedures, any condition
set forth in Section 5(a) or 5(f) shall not be satisfied or if, subsequent
to the Acceptance Date and on or prior to the Closing Date fixed pursuant
to the Procedures, the Company shall have received notice that any rating
of any of the Company's unsecured senior debt securities shall have been
lowered by any nationally recognized statistical rating organization (as
defined in Rule 15c3-1 under the Exchange Act) or that any such
organization has publicly announced that it has under surveillance or
review, with possible negative implications, the ratings of any of the
Company's unsecured senior debt securities.
12. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to [Agents]; to Pacific Bell at 2600 Camino
Ramon, Room 4CS100, San Ramon, CA 94583, Attention: Vice President; and
duplicate copies will be mailed, delivered or telegraphed and confirmed to
Pacific Bell at 175 E. Houston, 7th Floor, San Antonio, TX 78205,
Attention: Treasurer, and to SBC Communications Inc., 175 E. Houston, 12th
Floor, San Antonio, TX 78205, Attention: General Attorney - Corporate/SEC.
13. Successors. This Agreement will inure to the benefit of and be binding
upon each of the parties hereto and their respective successors and the
officers and directors and controlling persons referred to in Section 8
hereof, and no other person (other than the persons and to the extent
referred to in Section 11 hereof) will have any right or obligation
hereunder.
14. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the state of New York.
15. Counterparts. This Agreement may be executed by each of the parties hereto
in any number of counterparts, each of which shall be deemed to be an
original, but all such counterparts shall together constitute one and the
same instrument.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and each of the Agents as of the date first set forth above.
19
<PAGE>
Very truly yours,
PACIFIC BELL
By:
------------------------------
The foregoing Selling Agency Agreement is hereby confirmed and accepted as of
the date first set forth above.
By:
------------------------------
By:
------------------------------
By:
------------------------------
20
<PAGE>
SCHEDULE I
Pursuant to Section 2(a) of the Selling Agency Agreement, the Company
agrees to pay each of the Agents a commission equal to the following percentage
of the principal amount of each Note sold by such Agent:
COMMISSION
TERM RATE
From 9 months to less than 1 year.............................
From 1 year to less than 18 months............................
From 18 months to less than 2 years...........................
From 2 years to less than 3 years.............................
From 3 years to less than 4 years.............................
From 4 years to less than 5 years.............................
From 5 years to less than 6 years.............................
From 6 years to less than 7 years.............................
From 7 years to less than 10 years............................
From 10 years up to and including 15 years....................
From more than 15 years up to and including 20 years..........
From more than 20 years up to and including 30 years..........
More than 30 years ........................................... *
- --------------------
* The commission will be negotiated.
<PAGE>
EXHIBIT A
Pacific Bell
Medium-Term Notes, Series A
Due Nine Months or More From Date of Issue
TERMS AGREEMENT
_______________, 19____
Pacific Bell
175 E. Houston
San Antonio, Texas 78205
Attention: Treasurer
Subject in all respects to the terms and conditions of the Selling Agency
Agreement dated _____________, 1997, between [the Agents] and Pacific Bell (the
"Agreement"), the undersigned agrees to purchase the following Notes of Pacific
Bell:
Aggregate Principal Amount:
Specified Currency:
Form of Note: _____ Definitive Securities
_____ Permanent Global
_____ Temporary Global
Type of Note: _____ Fixed Rate
_____ Floating Rate
For Fixed Rate Notes:
Interest Rate: _____% per annum
For Floating Rate Notes:
Initial Interest Rate: _____% per annum
Exhibit A - Page 1
<PAGE>
Base Rate: _____ Commercial Paper Rate
_____ LIBOR
_____ Treasury Rate
_____ Other (specify):
Index Maturity:
Spread (if applicable): _____ basis points
Spread Multiplier (if applicable): _____%
Maximum Interest Rate (if applicable):
Minimum Interest Rate (if applicable):
Interest Reset Dates (if applicable):
Calculation Agent:
Maturity:
Initial Redemption Date:
Redemption Premium:
Interest Payment Dates:
Record Dates:
Purchase Price: _________% of Principal Amount (plus accrued interest
from ________________, 199__ )
Purchase Date and Time:
Place for Delivery of Notes and
Payment Therefor:
Method of Payment:
Redemption:
Exhibit A - Page 2
<PAGE>
____ The Notes are not redeemable prior to Maturity.
____ The Notes are redeemable prior to Maturity on and after
________________, 19___ (the "Initial Redemption Date") at
prices that shall initially be ____% of the principal amount
of the Note to be redeemed and shall decline at each one-year
anniversary of the Initial Redemption Date by ____% of the
principal amount to be redeemed until the redemption price is
100% of such principal amount.
Additional terms, if any:
Modification, if any, in the requirements to
deliver the documents specified in Section 6(b)
of the Agreement:
Period during which Debt Securities may not be
sold pursuant to Section 4(m) of the Agreement:
By:
-------------------------------
Title:
Accepted:
Pacific Bell
By:
---------------------------------
Title:
Exhibit A - Page 3
Exhibit 4
================================================================================
PACIFIC BELL
TO
THE BANK OF NEW YORK
TRUSTEE
------------------
INDENTURE
DATED AS OF OCTOBER 7, 1997
------------------
PROVIDING FOR ISSUANCE OF
SECURITIES IN SERIES
================================================================================
<PAGE>
Reconciliation and tie between Indenture dated as of October 7, 1997 and the
Trust Indenture Act of 1939. This reconciliation section does not constitute
part of the Indenture.
INDENTURE
TRUST INDENTURE ACT SECTION
- ------------------ ------------
310(a)(1).......................................................... 7.10
(a)(2).......................................................... 7.10
(a)(3)..........................................................Inapplicable
(a)(4)..........................................................Inapplicable
(b)............................................................. 7.08; 7.10
(c).............................................................Inapplicable
311(a)............................................................. 7.11
(b)............................................................. 7.11
(c).............................................................Inapplicable
312(a)............................................................. 2.07
(b)............................................................. 10.03
(c)............................................................. 10.03
313(a)............................................................. 7.06
(b)(1)..........................................................Inapplicable
(b)(2).......................................................... 7.06; 10.02
(c)............................................................. 10.02
(d)............................................................. 7.06
314(a)............................................................. 4.03; 10.02
(b).............................................................Inapplicable
(c)(1).......................................................... 10.04
(c)(2).......................................................... 10.04
(c)(3)..........................................................Inapplicable
(d).............................................................Inapplicable
(e)............................................................. 10.05
(f).............................................................Inapplicable
315(a)............................................................. 7.01(b)
(b)............................................................. 7.05; 10.02
(c)............................................................. 7.01(a)
(d)............................................................. 7.01(c)
(e)............................................................. 6.11
316(a)(last sentence).............................................. 2.11
(a)(1)(A)....................................................... 6.05
(a)(1)(B)....................................................... 6.04
(a)(2)..........................................................Inapplicable
(b)............................................................. 6.07
317(a)(1).......................................................... 6.08
(a)(2).......................................................... 6.09
(b)............................................................. 2.06
318(a)............................................................. 10.01
-2-
<PAGE>
TABLE OF CONTENTS
Page
ARTICLE 1 DEFINITIONS AND INCORPORATION BY REFERENCE.........................1
SECTION 1.01. Definitions.........................................1
SECTION 1.02. Other Definitions...................................3
SECTION 1.03. Incorporation by Reference of Trust Indenture Act...4
SECTION 1.04. Rules of Construction...............................4
ARTICLE 2 THE SECURITIES.....................................................5
SECTION 2.01. Issuable in Series..................................5
SECTION 2.02. Establishment of Terms and Form of Series of
Securities........................................5
SECTION 2.03. Execution, Authentication and Delivery..............7
SECTION 2.04. Registrar and Paying Agent..........................9
SECTION 2.05. Payment on Securities...............................9
SECTION 2.06. Paying Agent to Hold Money in Trust................10
SECTION 2.07. Securityholder Lists; Ownership of Securities......11
SECTION 2.08. Registration of Transfer and Exchange..............11
SECTION 2.09. Replacement Securities.............................14
SECTION 2.10. Outstanding Securities.............................15
SECTION 2.11. Treasury Securities................................15
SECTION 2.12. Temporary Securities...............................15
SECTION 2.13. Cancellation.......................................16
SECTION 2.14. Defaulted Interest.................................16
ARTICLE 3 REDEMPTION........................................................17
SECTION 3.01. Notice to Trustee..................................17
SECTION 3.02. Selection of Securities to be Redeemed.............17
SECTION 3.03. Notice of Redemption...............................17
SECTION 3.04. Effect of Notice of Redemption.....................18
SECTION 3.05. Deposit of Redemption Price........................18
SECTION 3.06. Securities Redeemed in Part........................19
ARTICLE 4 COVENANTS.........................................................19
SECTION 4.01. Payment of Securities..............................19
SECTION 4.02. Lien on Assets.....................................19
SECTION 4.03. Reports by the Company.............................20
ARTICLE 5 SUCCESSOR CORPORATION.............................................20
SECTION 5.01. When Company May Merge, etc........................20
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<PAGE>
Page
ARTICLE 6 DEFAULTS AND REMEDIES.............................................21
SECTION 6.01. Events of Default..................................21
SECTION 6.02. Acceleration.......................................22
SECTION 6.03. Other Remedies Available to Trustee................23
SECTION 6.04. Waiver of Existing Defaults........................23
SECTION 6.05. Control by Majority................................24
SECTION 6.06. Limitation on Suits by Securityholders.............24
SECTION 6.07. Rights of Holders to Receive Payment...............25
SECTION 6.08. Collection Suits by Trustee........................25
SECTION 6.09. Trustee May File Proofs of Claim...................25
SECTION 6.10. Priorities.........................................25
SECTION 6.11. Undertaking for Costs..............................26
ARTICLE 7 TRUSTEE...........................................................26
SECTION 7.01. Duties of Trustee..................................26
SECTION 7.02. Rights of Trustee..................................27
SECTION 7.03. Individual Rights of Trustee.......................28
SECTION 7.04. Trustee's Disclaimer...............................28
SECTION 7.05. Notice of Defaults.................................28
SECTION 7.06. Reports by Trustee to Holders......................28
SECTION 7.07. Compensation and Indemnity.........................28
SECTION 7.08. Replacement of Trustee.............................29
SECTION 7.09. Successor Trustee, Agents by Merger, etc...........31
SECTION 7.10. Eligibility, Disqualification......................31
SECTION 7.11. Preferential Collection of Claims Against Company..31
ARTICLE 8 DISCHARGE OF INDENTURE............................................31
SECTION 8.01. Termination of Company's Obligations...............31
SECTION 8.02. Application of Trust Money.........................32
SECTION 8.03. Repayment to Company...............................32
SECTION 8.04. Indemnity for Government Obligations...............33
ARTICLE 9 AMENDMENTS AND WAIVERS............................................34
SECTION 9.01. Without Consent of Holders.........................34
SECTION 9.02. With Consent of Holders............................34
SECTION 9.03. Compliance with Trust Indenture Act................35
SECTION 9.04. Revocation and Effect of Consents..................36
SECTION 9.05. Notation on or Exchange of Securities..............36
SECTION 9.06. Trustee Protected..................................36
-ii-
<PAGE>
Page
ARTICLE 10 MISCELLANEOUS.....................................................36
SECTION 10.01. Trust Indenture Act Controls......................36
SECTION 10.02. Notices...........................................36
SECTION 10.03. Communication by Holders with Other Holders.......38
SECTION 10.04. Certificate and Opinion as to Conditions
Precedent.......................................38
SECTION 10.05. Statements Required in Certificate or Opinion.....38
SECTION 10.06. Rules by Trustee and Agents.......................38
SECTION 10.07. Legal Holidays....................................39
SECTION 10.08. Governing Law.....................................39
SECTION 10.09. No Adverse Interpretation of Other Agreements.....39
SECTION 10.10. No Recourse Against Others........................39
SECTION 10.11. Execution in Counterparts.........................39
SIGNATURES...................................................................40
-iii-
<PAGE>
INDENTURE dated as of October 7, 1997 from PACIFIC BELL, a California
corporation ("Company"), to THE BANK OF NEW YORK, a banking corporation duly
organized and validly existing under the laws of the State of New York
("Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness ("Securities") as herein
provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed as
follows for the equal and ratable benefit of the Holders of the Securities:
ARTICLE 1
DEFINITIONS AND INCORPORATION BY REFERENCE
SECTION 1.01. Definitions.
"Affiliate" means any person directly or indirectly controlling or
controlled by, or under direct or indirect common control with, the Company.
"Agent" means any Paying Agent, Registrar, or co-Registrar.
"Authorized Newspaper" means a newspaper of general circulation, in an
official language of the country of publication or in the English language,
customarily published on days other than Legal Holiday as defined in Section
10.07, in such country. Whenever successive weekly publications in an Authorized
Newspaper are required hereunder, they may be made (unless otherwise expressly
provided herein) on the same or different days of the week and in the same or
different Authorized Newspapers.
"Board of Directors" means the Board of Directors of the Company or any
duly authorized committee thereof.
"Board Resolution" means a copy of a resolution of the Board of Directors,
certified by the Secretary or an Assistant Secretary of the Company to have been
duly adopted by the Board of Directors and to be in full force and effect on the
date of the certificate, and delivery to the Trustee.
<PAGE>
"Company" means the party named as such in this Indenture until a
successor replaces it pursuant to the applicable provisions hereof and
thereafter means the successor.
"Company Order" means an order signed in the name of the Company by two
Officers or by any Officer and an Assistant Treasurer or an Assistant Secretary
of the Company.
"Default" means any event which is, or after notice or passage of time
would be, an Event of Default.
"Depository" means, with respect to the Securities of any Series issuable
or issued in whole or in part in the form of one or more Global Securities, the
person designated as Depository by the Company pursuant to Section 2.02.
"Global Security" means a Security in the form prescribed in Section 2.02
evidencing all or part of a Series of Securities, issued to the Depositary for
such Series or its nominee, and registered in the name of such Depositary or
nominee.
"Holder" or "Securityholder" means the bearer of an Unregistered Security
or of a coupon appertaining thereto or the person in whose name a Registered
Security is registered on the Registrar's books.
"Indenture" means this Indenture as amended or supplemented from time to
time and shall include the forms and terms of particular Series of Securities
established as contemplated hereunder.
"Officer" means the Chairman of the Board of Directors, any Vice-Chairman
of the Board of Directors, the President, any Vice-President, the Treasurer or
the Secretary of the Company.
"Officers' Certificate" means a certificate signed by two Officers or by
any Officer and an Assistant Treasurer or an Assistant Secretary of the Company.
"Opinion of Counsel" means a written opinion of legal counsel who may be
an employee of or counsel to the Company or who may be other counsel
satisfactory to the Trustee.
"Original Issue Discount Security" means any Security which provides for
an amount less than the stated principal amount thereof to be due and payable
upon declaration of acceleration of the maturity thereof pursuant to Section
6.02.
"Principal" of a debt security means the principal of the security plus,
when appropriate, the premium, if any, on the security.
"Registered Security" means any Security issued hereunder and registered
by the Registrar.
-2-
<PAGE>
"Responsible Officer" when used with respect to the Trustee, shall mean
the chairman or any vice-chairman of the board of directors or trustees, the
chairman or any vice-chairman of the executive committee of the board of
directors or trustees, the president, any vice-president, the treasurer, the
secretary, any trust officer, any second or assistant vice-president or any
other officer or assistant officer of the Trustee customarily performing
functions similar to those performed by the persons who at the time shall be
such officers, respectively, or to whom any corporate trust matter is referred
because of his knowledge of and familiarity with a particular subject.
"SEC" means the Securities and Exchange Commission.
"Series" or "Series of Securities" means a series of Securities.
"Securities" means the debentures, notes or other obligations of the
Company issued, authenticated and delivered under this Indenture.
"TIA" means the Trust Indenture Act of 1939 (15 U.S.C. Sections
77aaa-77bbbb) as in effect on the date of this Indenture.
"Trustee" means the party named as such in this Indenture until a
successor replaces it pursuant to the applicable provisions hereof and
thereafter means the successor and if, at any time, there is more than one
Trustee, "Trustee" as used with respect to the Securities of any Series shall
mean the Trustee with respect to that Series.
"U.S. person" means a citizen, national or resident of the United States,
a corporation, partnership or other entity created or organized in or under the
laws of the United States or any political subdivision thereof, or an estate or
trust whose income from sources without the United States is includible in gross
income for United States federal income tax purposes regardless of its
connection with the conduct of a trade or business within the United States.
"Unregistered Security" means any Security issued hereunder which is not
a Registered Security.
"Yield to Maturity" means the yield to maturity, calculated by the Company
at the time of issuance of a Series of Securities or, if applicable, at the most
recent determination of interest on such Series in accordance with accepted
financial practice.
SECTION 1.02. Other Definitions.
TERM SECTION
---- -------
"Bankruptcy Law"..................................... 6.01
"Custodian".......................................... 6.01
"Event of Default"................................... 6.01
"Legal Holiday"...................................... 10.07
"Paying Agent"....................................... 2.04
-3-
<PAGE>
TERM SECTION
---- -------
"Registrar".......................................... 2.04
"U.S. Government Obligations......................... 8.01
SECTION 1.03. Incorporation by Reference of Trust Indenture Act.
Whenever this Indenture refers to a provision of the TIA, the provision is
incorporated by reference in and made a part of this lndenture. The following
TIA terms used in this Indenture have the following meanings:
"Commission" means the SEC.
"indenture securities" means the Securities.
"indenture security holder" means a Holder or a Securityholder.
"indenture to be qualified" means this Indenture.
"indenture trustee" or "institutional trustee" means the Trustee.
"obligor" on the indenture securities means the Company.
All other terms used in this Indenture that are defined by the TIA,
defined by TIA reference to another statute or defined by SEC rule under the TIA
have the meanings assigned to them therein.
SECTION 1.04. Rules of Construction.
Unless the context otherwise requires:
(1) a term has the meaning assigned to it;
(2) an accounting term not otherwise defined has the meaning assigned
to it in accordance with accounting principles generally accepted in the
United States of America;
(3) "or" is not exclusive; and
(4) words in the singular include the plural, and words in the plural
include the singular.
-4-
<PAGE>
ARTICLE 2
THE SECURITIES
SECTION 2.01. Issuable in Series.
The aggregate principal amount of Securities which may be authenticated
and delivered under this Indenture is unlimited. The Securities may be issued in
one or more Series. There may be Registered Securities and Unregistered
Securities within a Series and the Unregistered Securities may be subject to
such restrictions, and contain such legends, as may be required by United States
laws and regulations. Except as provided in the foregoing sentence, all
Securities of a Series shall be identical in all respects except that Securities
of a Series with serial maturities may differ with respect to maturity date,
interest rate, redemption price and denomination. Securities of different Series
may differ in any respect; provided that all Series of Securities shall be
equally and ratably entitled to the benefits of this Indenture.
SECTION 2.02. Establishment of Terms and Form of Series of Securities.
(a) At or prior to the issuance of any Series of Securities, the following
shall be established either by or pursuant to a Board Resolution, and set forth
in an Officers' Certificate, or by an indenture supplemental hereto:
(1) the title of the Securities of the Series (which title shall
distinguish the Securities of the Series from the Securities of all other
Series and from all other securities issued by the Company);
(2) any limit upon the aggregate principal amount of the Securities
of the Series which may be authenticated and delivered under this
Indenture (except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in lieu of, other
Securities of the Series pursuant to Section 2.08, 2.09, 2.12, 3.06 or
9.05);
(3) the date or dates on which the principal of the Securities of the
Series is payable;
(4) the rate or rates at which the Securities of the Series shall
bear interest, if any, or the method of calculating such rate or rates of
interest, the date or dates from which such interest shall accrue, the
dates on which such interest shall be payable and, with respect to
Registered Securities, the record date for the interest payable on any
interest payment date;
(5) the place or places where the principal of and interest on
Registered and any Unregistered Securities of the Series shall be payable;
-5-
<PAGE>
(6) the period or periods within which, the price or prices at which,
and the terms and conditions upon which, Securities of the Series may be
redeemed, in whole or in part, at the option of the Company;
(7) the obligation, if any, of the Company to redeem or purchase
Securities of the Series pursuant to any sinking fund or analogous
provisions or upon the happening of a specified event or at the option of
a Holder thereof and the period or periods within which, the price or
prices at which, and the terms and conditions upon which, Securities of
the Series shall be redeemed or purchased, in whole or in part, pursuant
to such obligation;
(8) if in other than denominations of $1,000 and any integral
multiple thereof, the denominations in which Securities of the Series
shall be issuable;
(9) if other than the principal amount thereof, the portion of the
principal amount of Securities of the Series which shall be payable upon
declaration of acceleration of the maturity thereof pursuant to Section
6.02;
(10) whether Securities of the Series shall be issuable as Registered
Securities or Unregistered Securities (with or without interest coupons),
or both, and any restrictions applicable to the offering, sale or delivery
of Unregistered Securities and whether, and the terms upon which,
Unregistered Securities of a Series may be exchanged for Registered
Securities of the same Series and vice versa;
(11) whether and under what circumstances the Company will pay
additional amounts on the Securities of that Series held by a person who
is not a U.S. person in respect of taxes or similar charges withheld or
deducted and, if so, whether the Company will have the option to redeem
such Securities rather than pay such additional amounts;
(12) whether the Securities of the Series shall be issuable in whole
or in part in the form of one or more Global Securities and, in such case,
the Depository for such Global Security or Securities, which Depository
shall be a clearing agency registered under the Securities Exchange Act of
1934, as amended;
(13) the currency or currencies, including composite currencies, in
which payment of the principal of and interest on the Securities of the
Series shall be payable (if other than the currency of the United States
of America);
(14) if the amount or payments of principal of or interest on the
Securities of the Series may be determined with reference to an index, the
manner in which such amounts shall be determined;
(15) any other terms of the Series (which terms shall not be
inconsistent with the provisions of this Indenture), including any terms
which may be required by or advisable under United
-6-
<PAGE>
States laws or egulations or advisable in connection with the marketing of
Securities of that Series; and
(16) the form of the Securities (or forms thereof if Unregistered and
Registered Securities shall be issuable in such Series, including such
legends as may be required by United States laws or regulations, the form
of any coupons or temporary global Security which may be issued and the
forms of any certificates which may be required hereunder or under United
States laws or regulations in connection with the offering, sale, delivery
or exchange of Unregistered Securities).
(b) If the terms and form or forms of any Series of Securities are
established by or pursuant to a Board Resolution, the Company shall deliver a
copy of such Board Resolution to the Trustee at or prior to the issuance of such
Series with (1) the form or forms of Security which have been approved attached
thereto, or (2) if such Board Resolution authorizes Officers to approve the
terms and form or forms of the Securities, an Officers' Certificate approving
the terms and form or forms of Security with such form or forms of Securities
attached thereto.
SECTION 2.03. Execution, Authentication and Delivery.
(a) Securities shall be executed on behalf of the Company by its Chairman
of the Board of Directors or a Vice-Chairman of the Board of Directors or the
President or a Vice-President, and by its Treasurer or an Assistant Treasurer or
its Secretary or an Assistant Secretary. Signature shall be manual or facsimile.
The Company's seal shall be reproduced on the Securities and may, but need not,
be attested. The coupons of Unregistered Securities shall bear the facsimile
signature of the Treasurer or an Assistant Treasurer of the Company.
(b) If an Officer, an Assistant Treasurer or an Assistant Secretary whose
signature is on a Security or coupon no longer holds that office at the time the
Security is authenticated, the Security or coupon shall be valid nevertheless.
(c) A Security shall not be valid until authenticated by the manual
signature of the Trustee or an authenticating agent and no coupon shall be valid
until the Security to which it appertains has been so authenticated. Such
signature shall be conclusive evidence that the Security has been authenticated
under this Indenture. Each Registered Security shall be dated the date of its
authentication. and each Unregistered Security shall be dated as provided in
connection with the establishment of the Series thereof.
(d) The Trustee shall at any time, and from time to time, authenticate and
deliver Securities of any Series executed and delivered by the Company for
original issue in an aggregate principal amount not in excess of the principal
amount authorized for such Series, upon receipt by the Trustee of (i) a Company
Order for the authentication and delivery of such Securities, (ii) if the terms
and form or forms of the Securities of such Series have been established by or
pursuant to a Board Resolution as
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permitted by Section 2.02, a copy of such Board Resolution and any Officers'
Certificate that may be required pursuant to 2.02(b) and (iii) an Opinion of
Counsel stating:
(1) if the form of such Securities has been established by or
pursuant to a Board Resolution as permitted by Section 2.02, that such
form has been established in conformity with the provisions of this
Indenture;
(2) if the terms of such Securities have been established by or
pursuant to a Board Resolution as permitted by Section 2.02, that such
terms have been established in conformity with the provisions of this
Indenture; and
(3) that such Securities, when authenticated and delivered by the
Trustee and issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company entitled to the benefits of the
Indenture.
If the terms and form or forms of such Securities have been established by
or pursuant to a Board Resolution as permitted by Section 2.02, the Trustee
shall not be required to authenticate such Securities if the issue of such
Securities pursuant to this Indenture will adversely affect the Trustee's own
rights, duties or immunities under the Securities and this Indenture or
otherwise in a manner which is not reasonably acceptable to the Trustee.
Notwithstanding the foregoing, until the Company has delivered an
Officers' Certificate to the Trustee and the Registrar stating that, as a result
of the action described, the Company would not suffer adverse consequences under
the provisions of United States law or regulations in effect at the time of the
delivery of Unregistered Securities, (i) delivery of Unregistered Securities by
the Trustee or Registrar will be made only outside the United States and its
possessions and (ii) Unregistered Securities will be released by the Trustee or
Registrar in definitive form to the person entitled to physical delivery thereof
only upon presentation of a certificate in the form prescribed by the Company.
(e) If the Company shall establish pursuant to Section 2.02 that the
Securities of a series are to be issued in whole or in part in the form of one
or more Global Securities, then the Company shall execute and the Trustee shall,
in accordance with this Section and the Company's order with respect to such
Series, authenticate and deliver one or more Global Securities that (i) shall
represent and shall be denominated in an amount equal to the aggregate principal
amount of outstanding Securities of such Series to be represented by one or more
Global Securities; (ii) shall be registered in the name of the Depository for
such Global Security or Securities or the nominee of such Depository; (iii)
shall be delivered by the Trustee to such Depository or pursuant to such
Depository's instruction; and (iv) shall bear a legend substantially to the
following effect: "This Security is a Global Security within the meaning of the
Indenture hereinafter referred to and is registered in the name of a Depository
or a nominee of a Depository. Unless and until it is exchanged in whole or in
part for Securities in
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definitive form in accordance with the provisions of the Indenture and the terms
of the Securities, this Security may not be transferred except as a whole by the
Depository to a nominee of the Depository or by a nominee of the Depository to
the Depository or another nominee of the Depository or by the Depository or any
such nominee to a successor Depository or a nominee of such successor
Depository."
Each depository designated pursuant to Section 2.02 for a Global Security
must, at the time of its designation and at all times while it serves as
Depository, be a clearing agency registered under the Securities Exchange Act of
1934, as amended, and any other applicable statute or regulation.
(f) The Trustee may appoint an authenticating agent to authenticate
Securities. An authenticating agent may authenticate Securities whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee includes authentication by such agent. An authenticating agent has the
same rights as an Agent to deal with the Company or an Affiliate.
SECTION 2.04. Registrar and Paying Agent.
The Company shall maintain in the Borough of Manhattan, the City of New
York, State of New York, an office or agency where Registered Securities may be
presented for registration of transfer or for exchange ("Registrar") and an
office or agency where (subject to Sections 2.05(c) and 2.08(b)) Securities may
be presented for payment or for exchange ("Paying Agent"). With respect to any
Series of Securities issued in whole or in part as Unregistered Securities, the
Company shall maintain one or more Paying Agents located outside the United
States and its possessions and shall maintain such Paying Agents for a period of
two years after the principal of such Unregistered Securities has become due and
payable. During any period thereafter for which it is necessary in order to
conform to United States tax law or regulations, the Company will maintain a
Paying Agent outside the United States and its possessions to which the
Unregistered Securities or coupons appertaining thereto may be presented for
payment and will provide the necessary funds therefor to such Paying Agent upon
reasonable notice. The Registrar shall keep a register with respect to each
Series of Securities issued in whole or in part as Registered Securities and to
their transfer and exchange. The Company may appoint one or more co-Registrars
acceptable to the Trustee and one or more additional Paying Agents for each
Series of Securities and the Company may terminate the appointment of any
co-Registrar or Paying Agent at any time upon written notice. The term
"Registrar" includes any co-Registrar. The term "Paying Agent"' includes any
additional Paying Agent. The Company shall notify the Trustee of the name and
address of any Agent not a party to this Indenture. If the Company fails to
maintain a Registrar or Paying Agent, the Trustee shall act as such.
The Company initially appoints the Trustee as Registrar and Paying Agent.
SECTION 2.05. Payment on Securities.
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(a) Subject to the following provisions, the Company will pay to the
Trustee the amounts, in such coin or currency as is at the time legal tender for
the payment of public or private debt, in the manner, at the times and for the
purposes set forth herein and in the text of the Securities for each Series, and
the Company hereby authorizes and directs the Trustee from funds so paid to it
to make or cause to be made payment of the principal of and interest, if any, on
the Securities and coupons of each Series as set forth herein and in the text of
such Securities and coupons. The Trustee will arrange directly with any Paying
Agents for the payment, or the Trustee will make payment, from funds furnished
by the Company, of the principal of and interest, if any, on the Securities and
coupons of each Series by check drawn upon a bank in The City of New York.
(b) Interest, if any, on Registered Securities of a Series shall be paid
on each interest payment date for such Series to the Holder thereof at the close
of business on the relevant record dates specified in the Securities of such
Series. The Company may pay such interest by check mailed to such Holder's
address as it appears on the register for Securities of such Series. Principal
of Registered Securities shall be payable only against presentation and
surrender thereof at the office of the Paying Agent in New York, New York,
unless the Company shall have otherwise instructed the Trustee in writing.
(c) To the extent provided in the Securities of a Series, (i) interest if
any, on Unregistered Securities shall be paid only against presentation and
surrender of the coupons for such interest installments as are evidenced thereby
as they mature and (ii) original issue discount (as defined in Section 1273 of
the Internal Revenue Code of 1954, as amended), if any, on Unregistered
Securities shall be paid only against presentation and surrender of such
Securities, in either case at the office of a Paying Agent located outside of
the United States and its possessions, unless the Company shall have otherwise
instructed the Trustee in writing. Principal of Unregistered Securities shall be
paid only against presentation and surrender thereof as provided in the
Securities of a Series. If at the time a payment of principal of or interest, if
any, or original issue discount, if any, on an Unregistered Security or coupon
shall become due the payment of the full amount so payable at the office or
offices of all the Paying Agents outside the United States and its possessions
is illegal or effectively precluded because of the imposition of exchange
controls or other similar restrictions on the payment of such amount in United
States currency, then the Company may instruct the Trustee to make such payments
at the office of a Paying Agent located in the United States, provided that
provision for such payment in the United States would not cause such
Unregistered Security to be treated as a "registration-required obligation"
under United States law and regulations.
SECTION 2.06. Paying Agent to Hold Money in Trust.
The Company will require each Paying Agent for any Series of Securities
other than the Trustee to agree in writing that it will hold all sums held by it
for the payment of principal of and interest on Securities of that Series in
trust for the benefit of the persons entitled thereto until such sums are paid
to such persons or otherwise disposed of as herein provided, and that the Paying
Agent will notify the Trustee of any default by the Company in making any such
payment. While any such default
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continues, the Trustee may require a Paying Agent to pay all money held by it to
the Trustee. If the Company acts as Paying Agent, it shall segregate the money
held by it for the payment of principal of and interest on any Series of
Securities and hold such money as a separate trust fund. The Company at any time
may require a Paying Agent to pay all money held by it to the Trustee. Upon so
doing the Paying Agent shall have no further liability for the money so paid.
SECTION 2.07. Securityholder Lists; Ownership of Securities.
(a) The Trustee shall preserve in as current a form as is reasonably
practicable the most recent list received by or furnished to it of the names and
addresses of Holders of Securities. If the Trustee is not the Registrar or if
Unregistered Securities are outstanding under the Indenture, the Company shall
furnish to the Trustee semiannually on or before the last day of June and
December in each year, and at such other times as the Trustee may request in
writing, a list, in such form and as of such date as the Trustee may reasonably
require, containing all the information in the possession or control of the
Registrar, any co-Registrar, the Company or any of its Paying Agents other than
the Trustee as to the names and addresses of Holders of Securities.
(b) Ownership of Registered Securities of a Series shall be proved by the
register for such Series kept by the Registrar. Ownership of Unregistered
Securities may be proved by the production of such Unregistered Securities or by
a certificate or affidavit executed by the person holding such Unregistered
Securities or by a depository with whom such Unregistered Securities were
deposited, if the certificate or affidavit is satisfactory to the Trustee. The
Company, the Trustee and any agent of the Company may treat the bearer of any
Unregistered Security or coupon and the person in whose name a Registered
Security is registered as the absolute owner thereof for all purposes.
(c) Notwithstanding the foregoing, with respect to any Global Security,
nothing herein shall prevent the Company, the Trustee or any agent of the
Company or the Trustee from giving effect to any written certification, proxy or
other authorization furnished by a Depository or impair, as between a Depository
and holders of beneficial interest in any Global Security, the operation of
customary practices governing the exercise of the rights of the Depository as
Holder of such Global Security. None of the Company, the Trustee, and Paying
Agent or the Security Registrar will have any responsibility or liability for
any aspect of the records relating to or payments made on account of beneficial
ownership interests of a Global Security or for maintaining, supervising or
reviewing any records relating to such beneficial ownership interests.
SECTION 2.08. Registration of Transfer and Exchange.
(a) When Registered Securities of a Series are presented to the Registrar
with a request to register their transfer or to exchange them for an equal
principal amount of Registered Securities of the same Series and date of
maturity of other authorized denominations, the Registrar shall register the
transfer or make the exchange if its customary requirements for such
transactions are met.
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(b) If both Registered and Unregistered Securities are authorized for a
Series of Securities and the terms of such Securities permit, (i) Unregistered
Securities may be exchanged for an equal principal amount of Registered or
Unregistered Securities of the same Series and date of maturity in any
authorized denominations upon delivery to the Registrar (or a Paying Agent, if
the exchange is for Unregistered Securities) of the Unregistered Security with
all unmatured coupons and all matured coupons in default appertaining thereto
and if all other requirements of the Registrar (or such Paying Agent) and such
Securities for such exchange are met, and (ii) Registered Securities may be
exchanged for an equal principal amount of Unregistered Securities of the same
Series and date of maturity in any authorized denominations (except that any
coupons appertaining to such Unregistered Securities which have matured and have
been paid shall be detached) upon delivery to the Registrar of the Registered
Securities and if all other requirements of the Registrar (or such Paying Agent)
and such Securities for such exchange are met.
Notwithstanding the foregoing, the exchange of Unregistered Securities for
Registered Securities or Registered Securities for Unregistered Securities will
be subject to the satisfaction of the provisions of United States law and
regulations in effect at the time of such exchange, and no exchange of
Registered Securities for Unregistered Securities will be made until the Company
has notified the Trustee and the Registrar that, as a result of such exchange,
the Company would not suffer adverse consequences under such law or regulations.
(c) To permit registrations of transfers and exchanges, the Trustee shall
authenticate Securities upon surrender of Securities for registration of
transfer or for exchange as provided in this Section. The Company will not make
any charge for any registration of transfer or exchange but may require the
payment by the party requesting such registration of transfer or exchange of a
sum sufficient to cover any tax or other governmental charge payable in
connection therewith, but not for any exchange pursuant to Section 2.12, 3.06 or
9.05.
(d) Neither the Company nor the Registrar shall be required (i) to issue,
register the transfer of or exchange Securities of any Series for the period
beginning at the opening of business 15 days immediately preceding the selection
of any such Securities to be redeemed and ending at the close of business on the
day of first publication of the relevant notice of redemption or, if there is no
publication, the mailing of the relevant notice of redemption, or (ii) to
register the transfer of or exchange Securities of any Series selected, called
or being called for redemption as a whole or the portion being redeemed of any
such Securities selected, called or being called for redemption in part.
(e) Unregistered Securities or any coupons appertaining thereto shall be
transferable by delivery.
(f) Notwithstanding the foregoing, any Global Security shall be
exchangeable pursuant to this Section 2.08 for Securities registered in the
names of Persons other than the Depository for such Security or its nominee only
if (i) such Depository notifies the Company that it is unwilling or unable to
continue as Depository for such Global Security or if at any time such
Depository ceases to be a clearing agency registered under the Securities
Exchange Act of 1934, as amended, (ii) the Company
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executes and delivers to the Trustee a Company Order that such Global Security
shall be so exchangeable or (iii) there shall have occurred and be continuing an
Event of Default with respect to the Securities. Any Global Security that is
exchangeable pursuant to the preceding sentence shall be exchangeable for
Securities registered in such names as such Depository shall direct.
Notwithstanding any other provision in this Indenture, a Global Security
may not be transferred except as a whole by the Depository with respect to such
Global Security to a nominee of such Depository or by a nominee of such
Depository to such Depository or another nominee of such Depository.
(g) If at any time the Depository for the Securities of a Series notifies
the Company that it is unwilling or unable to continue as Depository for the
Securities of such Series or if at any time the Depository for the Securities of
such Series shall no longer be eligible under Section 2.03, the Company shall
appoint a successor Depository with respect to the Securities of such Series. If
a successor depository for the Securities of such Series is not appointed by the
Company within 90 days after the Company receives such notice or becomes aware
of such ineligibility, the Company's election pursuant to Section 2.02(10) shall
no longer be effective with respect to the Securities of such Series and the
Company will execute, and the Trustee, upon receipt of the Company's Order for
the authentication and delivery of definitive Securities of such series, will
authenticate and deliver, Securities of such Series in definitive form in an
aggregate principal amount equal to the principal amount of the Global Security
or Securities representing such Series in exchange for such Global Security or
Securities.
The Company may at any time and in its sole discretion determine that the
Securities of any Series issued in the form of one or more Global Securities
shall no longer be represented by such Global Security or Securities. In such
event the Company will execute, and the Trustee, upon receipt of the Company's
Order for the authentication and delivery of definitive Securities of such
Series, will authenticate and deliver, Securities of such Series in definitive
form and in an aggregate principal amount equal to the principal amount of the
Global Security or Securities representing such Series in exchange for such
Global Security or Securities.
If (a) there shall have occurred and be continuing an Event of Default (as
defined in Section 6.01) or an event which, with the giving of notice or lapse
of time, or both, would constitute an Event of Default with respect to a Series
of Securities issued in the form of one or more Global Securities, or (b) if
specified by the Company pursuant to Section 2.02 with respect to a Series of
Securities, the Depository for such Series of Securities may surrender a Global
Security for such Series of Securities in exchange in whole or in part for
Securities of such Series in definitive form. Thereupon, the Company shall
execute, and the Trustee shall authenticate and deliver, without service closing
charge:
(i) to each person specified by such Depository a new Security or
Securities of the same Series, of any authorized denomination as requested
by such person in aggregate
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principal amount equal to and in exchange for such person's beneficial
interest in the Global Security; and
(ii) to such Depository a new Global Security in a denomination equal
to the difference, if any, between the principal amount of the surrendered
Global Security and the aggregate principal amount of Securities delivered
to Holders thereof.
In any exchange provided for in any of the preceding three paragraphs, the
Company will execute and the Trustee will authenticate and deliver Securities in
definitive registered form in authorized denominations;
Upon the exchange of a Global Security for Securities in definitive form,
such Global Security shall be canceled by the Trustee. Registered Securities
issued in exchange for a Global Security pursuant to this Section shall be
registered in such names and in such authorized denominations as the Depository
for such Global Security, pursuant to instructions from its direct or indirect
participants or otherwise, shall instruct the Trustee.
SECTION 2.09. Replacement Securities.
(a) If a mutilated Security or a Security with a mutilated coupon
appertaining to it is surrendered to the Trustee, the Company shall issue and
the Trustee shall authenticate and deliver in exchange therefor a replacement
Registered Security, if such surrendered security was a Registered Security, or
a replacement Unregistered Security with coupons corresponding to the coupons
appertaining to the surrendered Security, if such surrendered Security was an
Unregistered Security, of the same Series and date of maturity, if the Trustee's
requirements are met.
(b) If the Holder of a Security claims that the Security or any coupon
appertaining thereto has been lost, destroyed or wrongfully taken, the Company
shall issue and the Trustee shall authenticate a replacement Registered
Security, if such Holder's claim pertains to a Registered Security, or a
replacement Unregistered Security with coupons corresponding to the coupons
appertaining to the lost, destroyed or wrongfully taken Unregistered Security or
the Unregistered Security to which such lost, destroyed or wrongfully taken
coupon appertains, if such Holder's claim pertains to an Unregistered Security,
of the same Series and date of maturity, if the Trustee's requirements are met;
provided, however, that the Trustee or the Company may require any such Holder
to provide to the Trustee or the Company security or indemnity sufficient in the
judgment of the Company and the Trustee to protect the Company, the Trustee, any
Agent or any authenticating agent from any loss which any of them may suffer if
a Security or any coupon appertaining thereto is replaced. The Company may
charge the party requesting a replacement Security for its expenses in replacing
a Security.
(c) Every replacement Security is an additional obligation of the Company.
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(d) The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other remedies with respect to the replacement or payment
of mutilated, destroyed, lost or stolen Securities or coupons.
SECTION 2.10. Outstanding Securities.
(a) Securities outstanding at any time are all Securities authenticated by
the Trustee except for those canceled by it, those delivered to it for
cancellation, and those described in this Section as not outstanding.
(b) If a Security is replaced pursuant to Section 2.09, it ceases to be
outstanding until the Trustee receives proof satisfactory to it that the
replaced Security is held by a bona fide purchaser.
(c) If a Paying Agent (other than the Company) holds on a redemption date
or maturity date money sufficient to pay all amounts due on Securities of any
Series on that date, then on and after that date all Securities of such Series
due on such date cease to be outstanding and interest on them ceases to accrue,
provided that if the Securities are to be redeemed, notice of such redemption
has been duly given pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made.
(d) A Security does not cease to be outstanding because the Company or an
Affiliate holds the Security.
SECTION 2.11. Treasury Securities.
In determining whether the Holders of the requisite principal amount of
Securities of any Series have concurred in any direction, waiver or consent,
Securities of such Series owned by the Company or an Affiliate shall be
disregarded, except that for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, waiver or consent, only
Securities of such Series which the Trustee knows are so owned shall be so
disregarded. Securities of such Series owned by the Company which have been
pledged in good faith may be considered by the Trustee if the pledgee
establishes to the satisfaction of the Trustee the pledgee's right to so act
with respect to such Securities and that the pledgee is not the Company or an
Affiliate.
SECTION 2.12. Temporary Securities.
(a) Until definitive Registered Securities of any Series are ready for
delivery, the Company may prepare and execute and the Trustee shall authenticate
temporary Registered Securities of such Series. Temporary Registered Securities
of any Series shall be substantially in the form of definitive Registered
Securities of such Series but may have variations that the Company considers
appropriate for temporary Securities. Every temporary Registered Security shall
be executed by the Company and authenticated by the Trustee, and registered by
the Registrar, upon the same conditions, and with
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like effect, as a definitive Registered Security. Without unreasonable delay,
the Company shall prepare and the Trustee shall authenticate definitive
Registered Securities of the same Series and date of maturity in exchange for
temporary Registered Securities.
(b) Until definitive Unregistered Securities of any Series are ready for
delivery, the Company may prepare and execute and the Trustee shall authenticate
one or more temporary Unregistered Securities, which may have coupons attached
or which may be in the form of a single temporary global Unregistered Security
of that Series without coupons. The temporary Unregistered Security or
Securities of any Series shall be substantially in the form approved by or
pursuant to a Board Resolution and shall be delivered to one of the Paying
Agents located outside the United States and its possessions or to such other
person or persons as the Company shall direct against such certification as the
Company may from time to time prescribe. The temporary Unregistered Security or
Securities of a Series shall be executed by the Company and authenticated by the
Trustee upon the same conditions, and with like effect, as a definitive
Unregistered Security of such Series, except as provided herein or in the Board
Resolution or supplemental indenture relating thereto. A temporary Unregistered
Security or Securities shall be exchangeable for definitive Unregistered
Securities at the time and on the conditions, if any, specified in the temporary
Security.
Upon any exchange of a part of a temporary Unregistered Security of a
Series for definitive Unregistered Securities of such Series, the temporary
Unregistered Security shall be endorsed by the Trustee or Paying Agent to
reflect the reduction of its principal amount by an amount equal to the
aggregate principal amount of the definitive Unregistered Securities of such
Series so exchanged and endorsed.
SECTION 2.13. Cancellation.
The Company at any time may deliver Securities and coupons to the Trustee
for cancellation. The Registrar and the Paying Agent shall forward to the
Trustee any Securities and coupons surrendered to them for registration of
transfer, for exchange or for payment. The Trustee shall cancel all Securities
and coupons surrendered for registration of transfer, exchange, payment or
cancellation and may dispose of canceled Securities and coupons as the Company
directs; provided, however, that any Unregistered Securities of a Series
delivered to the Trustee for exchange prior to maturity shall be retained by the
Trustee for reissue as provided herein or in the Securities of such Series. The
Company may not issue new Securities to replace Securities that it has paid for
or delivered to the Trustee for cancellation.
SECTION 2.14. Defaulted Interest.
If the Company defaults on a payment of interest on a Series of
Securities, it shall pay the defaulted interest as provided in such Securities
or in any other lawful manner not inconsistent with the requirements of any
securities exchange on which such Securities may be listed and acceptable to the
Trustee.
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With respect to Registered Securities, the Trustee may pay the defaulted
interest, plus any interest payable on the defaulted interest, to the Holders of
such Registered Securities on a subsequent special record date. The Company
shall fix the record date and the payment date. At least 15 days before the
record date the Company shall mail to such Holders a notice that states the
record date, the payment date and the amount of interest to be paid.
ARTICLE 3
REDEMPTION
SECTION 3.01. Notice to Trustee.
The Company may, with respect to any Series of Securities, reserve the
right to redeem and pay such Series of Securities or any part thereof, or may
covenant to redeem and pay the Series of Securities or any plan thereof, before
maturity at such time and on such terms as provided for in such Securities. If a
Series of Securities is redeemable and the Company wants or is obligated to
redeem all or part of the Series of Securities pursuant to the terms of such
Securities, it shall notify the Trustee of the redemption date and the principal
amount of the Series of Securities to be redeemed. The Company shall give such
notice at least 75 days before the redemption date (or such shorter notice as
may be acceptable to the Trustee).
SECTION 3.02. Selection of Securities to be Redeemed.
If less than all the Securities of a Series are to be redeemed, the
Trustee, not more than 75 days prior to the redemption date, shall select the
Securities of the Series to be redeemed pro rata or by lot or in such other
manner as the Trustee shall deem fair and appropriate. The Trustee shall make
the selection from Securities of the Series that are outstanding and that have
not previously been called for redemption. Securities of the Series and portions
of them selected by the Trustee shall be in amounts of $1,000 or integral
multiples of $1,000 or, with respect to Securities of any Series issuable in
other denominations pursuant to Section 2.02(a)(8), in amounts equal to the
minimum principal denomination for each such Series and integral multiples
thereof. Provisions of this Indenture that apply to Securities of a Series
called for redemption also apply to portions of Securities of that Series called
for redemption. The Trustee shall promptly notify the Company in writing of the
Securities selected for redemption and, in the case of any Securities selected
for partial redemption, the principal amount thereof to be redeemed.
SECTION 3.03. Notice of Redemption.
(a) At least 30 days but not more than 60 days before a redemption date,
the Company shall mail a notice of redemption by first-class mail to each Holder
of Registered Securities that are to be redeemed.
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(b) If Unregistered Securities are to be redeemed, notice of redemption
shall be published in an Authorized Newspaper in each of The City of New York,
London and, if such Securities to be redeemed are listed on the Luxembourg Stock
Exchange, Luxembourg twice in different calendar weeks, the first publication to
be not less than 30 nor more than 60 days before the redemption date.
(c) All notices shall identify the Series of Securities to be redeemed and
shall state:
(1) the redemption date;
(2) the redemption price;
(3) if less than all the outstanding Securities of a Series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Securities to be redeemed;
(4) the name and address of the Paying Agent;
(5) that Securities of the Series called for redemption and all
unmatured coupons, if any, appertaining thereto must be surrendered to the
Paying Agent to collect the redemption price; and
(6) that interest on Securities of the Series called for redemption
ceases to accrue on and after the redemption date.
At the Company's request, the Trustee shall give the notice of redemption
in the Company's name and at its expense.
SECTION 3.04. Effect of Notice of Redemption.
Once notice of redemption is mailed or published, Securities of a Series
called for redemption become due and payable on the redemption date at the
redemption price. Upon surrender to the Paying Agent of such Securities together
with all unmatured coupons, if any, appertaining thereto, such Securities shall
be paid at the redemption price plus accrued interest to the redemption date,
but installments of interest due on or prior to the redemption date will be
payable, in the case of Unregistered Securities, to the bearers of the coupons
for such interest upon surrender thereof and, in the case of Registered
Securities, to the Holders of such Securities of record at the close of business
on the relevant record dates.
SECTION 3.05. Deposit of Redemption Price.
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On or before the redemption date, the Company shall deposit with the
Trustee money sufficient to pay the redemption price of and (unless the
redemption date shall be an interest payment date) interest accrued to the
redemption date on all Securities to be redeemed on that date.
SECTION 3.06. Securities Redeemed in Part.
Upon surrender of a Security that is redeemed in part, the Company shall
issue and the Trustee shall authenticate for the Holder of that Security a new
Security or Securities of the same Series, the same form and the same maturity
in authorized denominations equal in aggregate principal amount to the
unredeemed portion of the Security surrendered. If a Global Security is so
surrendered, such new Security so issued shall be a new Global Security.
ARTICLE 4
COVENANTS
SECTION 4.01. Payment of Securities.
The Company shall pay or cause to be paid the principal of and interest on
the Securities on the dates and in the manner provided herein and in the
Securities.
The Company shall pay interest on overdue principal of a Security of any
Series at the rate of interest (or, in the case of Original Issue Discount
Securities, Yield to Maturity) borne by the Securities of that Series, and, to
the extent lawful, it shall pay interest on overdue installments of interest at
the same rate.
SECTION 4.02. Lien on Assets.
If at any time the Company mortgages, pledges or otherwise subjects to any
lien the whole or any part of any property or assets now owned or hereinafter
acquired by it, except as hereinafter provided in this Section 4.02, the Company
will secure the outstanding Securities, and any other obligations of the Company
which may then be outstanding and entitled to the benefit of a covenant similar
in effect to this covenant, equally and ratably with the indebtedness or
obligations secured by such mortgage, pledge or lien, for as long as any such
indebtedness or obligation is so secured. The foregoing covenant does not apply
to the creation, extension, renewal or refunding of purchase-money mortgages or
liens, or to the making of any deposit or pledge to secure public or statutory
obligations or with any governmental agency at any time required by law in order
to qualify the Company to conduct its business or any part thereof or in order
to entitle it to maintain self-insurance or to obtain the benefits of any law
relating to workers' compensation, unemployment insurance, old age pensions or
other social security, or with any court, board, commission or governmental
agency as security incident to the proper conduct of any proceeding before it.
Nothing contained in this
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Indenture prevents an Affiliate from mortgaging, pledging or subjecting to any
lien any property or assets, whether or not acquired by such Affiliate from the
Company.
SECTION 4.03. Reports by the Company.
The Company agrees:
(a) to file with the Trustee, within 15 days after the Company is
required to file the same with the SEC, copies of the annual reports and
of the information, documents and other reports (or copies of such
portions of any of the foregoing as the SEC may from time to time by rules
and regulations prescribe) which the Company may be required to file with
the SEC pursuant to section 13 or section 15(d) of the Securities Exchange
Act of 1934, as amended; or, if the Company is not required to file
information, documents or reports pursuant to either of such sections,
then to file with the Trustee and the SEC, in accordance with rules and
regulations prescribed from time to time by the SEC, such of the
supplementary and periodic information, documents and reports which may be
required pursuant to section 13 of the Securities Exchange Act of 1934, as
amended, in respect of a security listed and registered on a national
securities exchange as may be prescribed from time to time in such rules
and regulations;
(b) to file with the Trustee and the SEC, in accordance with the
rules and regulations prescribed from time to time by the SEC, such
additional information, documents and reports with respect to compliance
by the Company with the conditions and covenants provided for in this
Indenture as may be required from time to time by such rules and
regulations; and
(c) to transmit by mail to all Holders of Registered Securities, as
the names and addresses of such Holders appear on the register for each
Series of Securities, to such Holders of Unregistered Securities as have,
within the two years preceding such transmission, filed their names and
addresses with the Trustee for that purpose and to all Holders of
Securities whose names and addresses have been furnished to the Trustee
pursuant to Section 2.07, within 30 days after the filing thereof with the
Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to subsections (a) and (b) of this
Section 4.03 as may be required by rules and regulations prescribed from
time to time by the SEC.
ARTICLE 5
SUCCESSOR CORPORATION
SECTION 5.01. When Company May Merge, etc.
The Company may not consolidate with, or merge into, or be merged into, or
transfer or lease its properties and assets substantially as an entirety to, any
person, unless the person is a corporation
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organized under the laws of the United States, any State thereof or the District
of Columbia, the person assumes by supplemental indenture all the obligations of
the Company under the Securities and any coupons appertaining thereto and under
this Indenture and, after giving effect thereto, no Default or Event of Default
shall have occurred and be continuing. The surviving transferee or lessee
corporation shall be the successor Company, and the predecessor Company, except
in the case of a lease, shall be relieved of all obligations under this
Indenture and the Securities.
ARTICLE 6
DEFAULTS AND REMEDIES
SECTION 6.01. Events of Default.
An "Event of Default" occurs with respect to the Securities of any Series
if:
(1) the Company defaults in the payment of interest on any Security
of that Series when the same becomes due and payable and the Default
continues for a period of 90 days;
(2) the Company defaults in the payment of the principal of any
Security of that Series when the same becomes due and payable at maturity,
upon redemption or otherwise;
(3) the Company fails to comply with any of its other agreements in
the Securities of that Series, or in any supplemental indenture under
which the Securities of that Series may have been issued or in the
Indenture (other than an agreement included solely for the benefit of
Series of Securities other than that Series) and the Default continues for
the period and after the notice specified below;
(4) the Company pursuant to or within the meaning of any Bankruptcy
Law:
(A) commences a voluntary case,
(B) consents to the entry of an order for relief against it in
an involuntary case,
(C) consents to the appointment of a Custodian of it or for all
or substantially all of its property, or
(D) makes a general assignment for the benefit of its creditors;
or
(5) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that:
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(A) is for relief against the Company in an involuntary case,
(B) appoints a Custodian of the Company or for all or
substantially all of its property, or
(C) orders the liquidation of the Company,
and the order or decree remains unstayed and in effect for 60 days.
The term "Bankruptcy Law" means Title 11, U.S. Code or any similar federal
or state law for the relief of debtors. The term "Custodian" means any receiver,
trustee, assignee, liquidator or similar official under any Bankruptcy Law.
A Default under clause (3) is not an Event of Default until the Trustee or
the Holders of at least 25% in principal amount of all the outstanding
Securities of that Series notify the Company (and the Trustee in the case of
notification by such Holder) of the Default and the Company does not cure the
Default within 90 days after receipt of the notice. The notice must specify the
Default, demand that it be remedied and state that the notice is a "Notice of
Default".
Upon receipt by the Trustee of any Notice of Default pursuant to this
Section 6.01 with respect to Securities of a Series all or part of which is
represented by a Global Security, a record date shall be established for
determining Holders of outstanding Securities of such Series entitled to join in
such Notice of Default, which record date shall be at the close of business on
the day the Trustee receives such Notice of Default. The Holders on such record
date, or their duly designated proxies, and only such Persons, shall be entitled
to join in such Notice of Default, whether or not such Holders remain Holders
after such record date; provided, that unless Holders of at least 10% in
principal amount of the outstanding Securities of such Series, or their proxies,
shall have joined in such Notice of Default prior to the day which is 90 days
after such record date, such Notice of Default shall automatically and without
further action by any Holder be canceled and of no further effect. Nothing in
this paragraph shall prevent a Holder, or a proxy of a Holder, from giving,
after expiration of such 90-day period, a new Notice of Default identical to a
Notice of Default which has been canceled pursuant to the proviso to the
preceding sentence, in which event a new record date shall be established
pursuant to the provisions of this Section 6.01.
SECTION 6.02. Acceleration.
If an Event of Default occurs with respect to the Securities of any Series
and is continuing, the Trustee, by notice to the Company, or the Holders of at
least 25% in principal amount of all of the outstanding Securities of that
Series, by notice to the Company and to the Trustee, may declare the principal
(or, if the Securities of that Series are Original Issue Discount Securities,
such portion of the principal amount as may be specified in the terms of that
Series) of, and any accrued interest on, all the Securities of that Series to be
due and payable. Upon such declaration, such principal (or, in
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the case of Original Issue Discount Securities, such specified amount) and any
accrued interest shall be due and payable immediately. The Holders of a majority
in principal amount of all of the Securities of that Series, by notice to the
Company and the Trustee, may rescind such acceleration and its consequences if
the rescission would not conflict with any judgment or decree and if all
existing Events of Default have been cured or waived except nonpayment of
principal or interest that have become due solely because of the acceleration.
Upon receipt by the Trustee of any declaration of acceleration, or
rescission thereof, with respect to Securities of a Series all or part of which
is represented by a Global Security, the Trustee shall establish a record date
for determining Holders of outstanding Securities of such Series entitled to
join in such declaration of acceleration, or rescission, as the case may be,
which record date shall be at the close of business on the day the Trustee
receives such declaration of acceleration, or rescission, as the case may be.
The Holders on such record date, or their duly designated proxies, and only such
persons, shall be entitled to join in such declaration of acceleration, or
rescission, as the case may be, whether or not such Holders remain Holders after
such record date; provided, that unless such declaration of acceleration, or
rescission, as the case may be, shall have become effective by virtue of the
requisite percentage having been obtained prior to the day which is 90 days
after such record date, such declaration of acceleration, or rescission, as the
case may be, shall automatically and without further action by any Holder be
canceled and of no further effect. Nothing in this paragraph shall prevent a
Holder, or a proxy of a Holder, from giving, after expiration of such 90-day
period, a new declaration of acceleration, or rescission thereof, as the case
may be, that is identical to a declaration of acceleration, or rescission
thereof, which has been canceled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be established pursuant to the
provisions of this Section 6.02.
SECTION 6.03. Other Remedies Available to Trustee.
(a) If an Event of Default occurs and is continuing, the Trustee may
pursue any available remedy to collect the payment of principal of and interest
on the Securities of the Series that is in Default or to enforce the performance
of any provision of the Securities of that Series or this Indenture.
(b) The Trustee may maintain a proceeding even if it does not possess any
of the Securities or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Securityholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in the Event of Default. To the extent
permitted by law no remedy is exclusive of any other remedy and all available
remedies are cumulative.
SECTION 6.04. Waiver of Existing Defaults.
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The Holders of a majority in principal amount of any Series of Securities
by notice to the Trustee may waive an existing Default with respect to that
Series and its consequences except a Default in the payment of the principal of
or interest on any Security.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to waive any past default hereunder.
If a record date is fixed, the Holders on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to waive any
default hereunder, whether or not such Holders remain Holders after such record
date; provided, that unless such majority in principal amount shall have waived
such default prior to the date which is 90 days after such record date, any such
waiver previously given shall automatically and without further action by any
Holder be canceled and of no further effect.
SECTION 6.05. Control by Majority.
The Holders of a majority in principal amount of the Securities of each
Series affected (with each such Series voting as a class) may direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on it with respect to
Securities of that Series. However, the Trustee may refuse to follow any
direction that conflicts with law or this Indenture or that is unduly
prejudicial to the rights of the Securityholders of that Series.
Upon receipt by the Trustee of any such direction with respect to
Securities of a Series all or part of which is represented by a Global Security,
the Trustee shall establish a record date for determining Holders of outstanding
Securities of such Series entitled to join in such direction, which record date
shall be at the close of business on the day the Trustee receives such
direction. The Holders on such record date, or their duly designated proxies,
and only such Persons, shall be entitled to join in such direction, whether or
not such Holders remain Holders after such record date; provided, that unless
such majority in principal amount shall have been obtained prior to the day
which is 90 days after such record date, such direction shall automatically and
without further action by any Holder be canceled and of no further action by any
Holder be canceled and of no further effect. Nothing in this paragraph shall
prevent a Holder, or a proxy of a Holder, from giving, after expiration of such
90-day period, a new direction identical to a direction which has been canceled
pursuant to the proviso to the preceding sentence, in which event a new record
date shall be established pursuant to the provisions of this Section 6.05.
SECTION 6.06. Limitation on Suits by Securityholders.
A Securityholder may pursue a remedy with respect to this Indenture or the
Securities of any Series only if:
(1) the Holder gives to the Trustee written notice of a continuing
Event of Default with respect to Securities of that Series;
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(2) the Holders of at least 25% in principal amount of the Securities
of that Series make a written request to the Trustee to pursue the remedy;
(3) such Holder or Holders offer to the Trustee indemnity
satisfactory to the Trustee against any loss, liability or expense to be,
or which may be, incurred by the Trustee in pursuing the remedy;
(4) the Trustee does not comply with the request within 60 days after
receipt of the request and the offer of indemnity; and
(5) during such 60-day period, the Holders of a majority in principal
amount of the Securities of that Series do not give the Trustee a
direction inconsistent with the request.
A Securityholder of any Series may not use this Indenture to prejudice the
rights of another Securityholder of that Series or any other Series or to obtain
a preference or priority over another Securityholder of that Series or any other
Securities.
SECTION 6.07. Rights of Holders to Receive Payment.
Notwithstanding any other provision of this Indenture, the right of any
Holder of a Security to receive payment of principal of and interest on the
Security, on or after the respective due dates expressed in the Security, and
the right of any Holder of a coupon to receive payment of interest due as
provided in such coupon, or to bring suit for the enforcement of any such
payment on or after such respective dates, shall not be impaired or affected
without the consent of such Holder.
SECTION 6.08. Collection Suits by Trustee.
If an Event of Default specified in Section 6.01(1) or (2) occurs with
respect to Securities of any Series and is continuing, the Trustee may recover
judgment in its own name and as trustee of an express trust against the Company
for the whole amount of the principal of and interest on Securities of that
Series remaining unpaid.
SECTION 6.09. Trustee May File Proofs of Claim.
The Trustee may file such proofs of claim and other papers or documents as
may be necessary or advisable in order to have the claims of the Trustee and the
Securityholders allowed in any judicial proceedings relating to the Company, its
creditors or its property.
SECTION 6.10. Priorities.
If the Trustee collects any money pursuant to this Article, it shall pay
out the money in the following order:
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FIRST: to the Trustee for amounts due under Section 7.07;
SECOND: to Holders of Securities in respect of which or for the
benefit of which such money has been collected for amounts due and unpaid
on such Securities for principal and interest, ratably, without preference
or priority of any kind, according to the amounts due and payable on such
Securities for principal and interest, respectively; and
THIRD: to the Company.
The Trustee may fix a record date (with respect to Registered Securities)
and payment date for any such payment to Holders of Securities.
SECTION 6.11. Undertaking for Costs.
In any suit for the enforcement of any right or remedy under this
Indenture or in any suit against the Trustee for any action taken or omitted by
it as Trustee, a court in its discretion may require the filing by any party
litigant in the suit of an undertaking to pay the costs of the suit, and the
court in its discretion may assess reasonable costs, including reasonable
attorneys' fees, against any party litigant in the suit, having due regard to
the merits and good faith of the claims or defenses made by the party litigant.
This Section does not apply to a suit by the Company, the Trustee, a Holder
pursuant to Section 6.07, or a Holder or Holders of more than 10% in principal
amount of the Securities of any Series.
ARTICLE 7
TRUSTEE
SECTION 7.01. Duties of Trustee.
(a) If an Event of Default has occurred and is continuing, the Trustee
shall exercise such of its rights and powers under this Indenture, and use the
same degree of care and skill in their exercise, as a prudent man would exercise
or use under the circumstances in the conduct of his own affairs.
(b) Except during the continuance of an Event of Default:
(1) The Trustee need perform only those duties that are specifically
set forth in this Indenture, and no implied covenants or obligations shall
be read into this Indenture against the Trustee.
(2) In the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness
of the opinions expressed therein, upon certificates or
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opinions furnished to the Trustee and conforming to the requirements of
this Indenture. However, the Trustee shall examine the certificates and
opinions to determine whether or not they conform to the requirements of
this Indenture.
(c) The Trustee may not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1) This paragraph does not limit the effect of paragraph (b) of this
Section.
(2) The Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts.
(3) The Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 6.05.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to paragraphs (a), (b) and (c) of this Section.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense.
(f) The Trustee shall not be liable for interest on any money received by
it except as the Trustee may agree with the Company. Money held in trust by the
Trustee need not be segregated from other funds except to the extent required by
law.
SECTION 7.02. Rights of Trustee.
(a) The Trustee may rely on any document believed by it to be genuine and
to have been signed or presented by the proper person. The Trustee need not
investigate any fact or matter stated in the document.
(b) Before the Trustee acts or refrains from acting, it may consult with
counsel or require an Officers' Certificate or an Opinion of Counsel. The
Trustee shall not be liable for any action it takes or omits to take in good
faith in reliance on a Board Resolution, an Officers' Certificate, an Opinion of
Counsel or the written advice of counsel acceptable to the Trustee.
(c) The Trustee may act through agents and shall not be responsible for
the misconduct or negligence of any agent appointed with due care.
(d) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
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SECTION 7.03. Individual Rights of Trustee.
The Trustee in its individual or any other capacity may become the owner
or pledgee of Securities and may otherwise deal with the Company or an Affiliate
with the same rights it would have if it were not Trustee. Any Agent may do the
same with like rights. However, the Trustee is subject to Sections 7.10 and
7.11.
SECTION 7.04. Trustee's Disclaimer.
The Trustee makes no representation as to the validity or adequacy of this
Indenture or the Securities, shall not be accountable for the Company's use of
the proceeds from the Securities and shall not be responsible for any statement
in the Securities other than its certificate of authentication.
SECTION 7.05. Notice of Defaults.
If a Default occurs and is continuing with respect to the Securities of
any Series and if it is known to the Trustee, the Trustee shall mail to each
Holder of a Security of that Series entitled to receive reports pursuant to
Section 4.03(c) (and, if Unregistered Securities of that Series are outstanding,
shall cause to be published at least once in an Authorized Newspaper in each of
The City of New York, London and, if Securities of that Series are listed on the
Luxembourg Stock Exchange, Luxembourg) notice of the Default within 90 days
after it occurs. Except in the case of a Default in payment on the Securities of
any Series, the Trustee may withhold the notice if and so long as a committee of
its Responsible Officers in good faith determines that withholding such notice
is in the interests of Securityholders of that Series.
SECTION 7.06. Reports by Trustee to Holders.
(a) Within 60 days after each anniversary date of the first issue of a
Series of Securities, the Trustee shall mail to each Securityholder of that
Series entitled to receive reports pursuant to Section 4.03(c) a brief report,
dated as of such date, that complies with TIA Section 313(a). The Trustee also
shall comply with TIA Section 313(b)(2).
(b) At the time that it mails such a report to Securityholders of any
Series, the Trustee shall file a copy of that report with the SEC and with each
stock exchange on which the Securities of that Series are listed. The Company
shall provide written notice to the Trustee when the Securities of any Series
are listed on any stock exchange.
SECTION 7.07. Compensation and Indemnity.
(a) The Company shall pay to the Trustee from time to time reasonable
compensation for its services. The Trustee's compensation shall not be limited
by any law on compensation of a trustee of an express trust. The Company shall
reimburse the Trustee upon request for all reasonable out-of-
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pocket expenses incurred by it in connection with the performance of its duties
under this Indenture. Such expenses shall include the reasonable compensation
and out-of-pocket expenses of the Trustee's agents and counsel.
(b) The Company shall indemnify the Trustee against any loss or liability
incurred by it arising out of or in connection with its acceptance or
administration of the trust or trusts hereunder. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. The Company shall
defend the claim and the Trustee shall cooperate in the defense. The Trustee may
have separate counsel and the Company shall pay the reasonable fees and expenses
of such counsel. The Company need not pay for any settlement made without its
consent.
(c) The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through negligence or bad faith.
(d) To secure the payment obligations of the Company pursuant to this
Section, the Trustee shall have a lien prior to the Securities of any Series on
all money or property held or collected by the Trustee, except that held in
trust to pay principal of and interest on particular Securities of a Series.
(e) If the Trustee incurs expenses or renders services after an Event of
Default specified in Section 6.01(4) or (5) occurs, such expenses and the
compensation for such services are intended to constitute expenses of
administration under any Bankruptcy Law.
SECTION 7.08. Replacement of Trustee.
(a) The resignation or removal of the Trustee and the appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in this Section.
(b) The Trustee may resign with respect to the Securities of any Series by
so notifying the Company. The Holders of a majority in principal amount of the
Securities of any Series may remove the Trustee with respect to that Series by
so notifying the Trustee and the Company. The Company may remove the Trustee
with respect to Securities of any Series if:
(1) the Trustee fails to comply with Section 7.10;
(2) the Trustee is adjudged a bankrupt or an insolvent;
(3) a receiver or public officer takes charge of the Trustee or its
property; or
(4) the Trustee becomes incapable of acting.
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(c) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason with respect to Securities of any Series, the
Company shall promptly appoint a successor Trustee for such Series. Within one
year after a successor Trustee with respect to the Securities of any Series
takes office the Holders of a majority in principal amount of Securities of that
Series may appoint a successor Trustee with respect to the Securities of that
Series to replace the successor Trustee appointed by the Company.
(d) If a successor Trustee with respect to the Securities of any Series
does not take office within 60 days after the retiring Trustee resigns or is
removed, the retiring Trustee, the Company or the Holders of at least 10% in
principal amount of the Securities of the applicable Series may petition any
court of competent jurisdiction for the appointment of a successor Trustee with
respect to the Securities of such Series.
(e) If the Trustee with respect to the Securities of any Series fails to
comply with Section 7.10, any Securityholder of the applicable Series may
petition any court of competent jurisdiction for the removal of such Trustee and
the appointment of a successor Trustee.
(f) A successor Trustee shall deliver a written acceptance of its
appointment to the retiring Trustee and to the Company. Thereupon, the
resignation or removal of the retiring Trustee for any Series of Securities
shall become effective, and the successor Trustee shall have all the rights,
powers and duties of the retiring Trustee with respect to all Series of
Securities for which the successor Trustee is to be acting as Trustee under this
Indenture. The retiring Trustee shall promptly transfer all property held by it
as Trustee with respect to such Series of Securities to the successor Trustee
subject to the lien provided for in Section 7.07. The Company shall give notice
of each appointment of a successor Trustee for any Series of Securities by
mailing written notice of such event by first-class mail to the Holders of
Securities of such Series entitled to receive reports pursuant to Section
4.03(c) and, if any Unregistered Securities are outstanding, by publishing
notice of such event once in an Authorized Newspaper in each of The City of New
York, London, and, if Securities of that Series are listed on the Luxembourg
Stock Exchange, Luxembourg.
(g) All provisions of this Section 7.08 except subparagraphs (b)(l), (e)
and (h) and the words "subject to the lien provided for in Section 7.07" in
subparagraph (f) shall apply also to any Paying Agent located outside the United
States and its possessions and required by Section 2.04.
(h) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) Series, the Company, the
retiring Trustee and such successor Trustee shall execute and deliver a
supplemental indenture wherein such successor Trustee shall accept such
appointment and which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, such successor Trustee all
the rights, powers, trusts and duties of the retiring Trustee with respect to
the Securities of that or those Series to which the appointment of such
successor Trustee relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights,
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powers, trusts and duties of the retiring Trustee with respect to the Securities
of that or those Series as to which the retiring Trustee is not retiring shall
continue to be vested in the retiring Trustee, and (3) shall add to or change
any of the provisions of this Indenture as shall be necessary to provide for or
facilitate the administration of the trusts hereunder by more than one Trustee,
it being understood that nothing herein or in such supplemental indenture shall
constitute such Trustees co-trustees of the same trust and that each such
Trustee shall be trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such Trustee.
SECTION 7.09. Successor Trustee, Agents by Merger, etc.
If the Trustee or any Agent consolidates with, merges or converts into, or
transfers all or substantially all of its corporate trust business assets to,
another corporation, the successor corporation, without any further act, shall
be the successor Trustee or Agent, as the case may be.
SECTION 7.10. Eligibility, Disqualification.
This Indenture shall always have a Trustee with respect to each Series of
Securities which satisfies the requirements of TIA Section 310(a)(1). The
Trustee shall always have a combined capital and surplus of at least
$100,000,000, as set forth in its most recent published annual report of
condition. The Trustee is subject to TIA Section 310(b), including the optional
provision permitted by the second sentence of TIA Section 310(b)(9), except that
in determining whether the Trustee has a conflicting interest, as defined in TIA
Section 310(b)(1), there shall be excluded all indentures of the Company now or
hereafter existing which may be excluded under the proviso of TIA Section
310(b)(1).
SECTION 7.11. Preferential Collection of Claims Against Company.
The Trustee is subject to TIA Section 311 (a), excluding any creditor
relationship listed in TIA Section 311(b). A Trustee who has resigned or been
removed shall be subject to TIA Section 311(a) to the extent indicated.
ARTICLE 8
DISCHARGE OF INDENTURE
SECTION 8.01. Termination of Company's Obligations.
(a) The Company reserves the right to terminate all of its obligations
under (i) this Indenture and the Securities, or (ii) the Securities of any
Series if the Company irrevocably deposits in trust with the Trustee money or
U.S. Government Obligations sufficient to pay, when due, the principal of and
any interest on all the Securities or all the Securities of that Series, as the
case may be, to maturity or redemption and if all other conditions set forth in
the Securities of that Series are met. However,
-31-
<PAGE>
the Company's obligations in Sections 2.04, 2.05, 2.06, 2.07, 2.08, 2.09, 4.01,
7.07, 7.08, 8.03 and 8.04 shall survive until the Securities are no longer
outstanding. Thereafter the Company's obligations in Sections 7.07, 8.03 and
8.04 shall survive.
(b) Before or after a deposit the Company may make arrangements
satisfactory to the Trustee for the redemption of Securities at a future in
accordance with Article 3.
(c) After a deposit by the Company in a accordance with this Section in
respect of the Securities of a Series, the Trustee upon request shall
acknowledge in writing the discharge of the Company's obligations under the
Securities of the Series in respect of which the deposit has been made and this
Indenture with respect to the Securities of that Series except for those
surviving obligations specified above.
(d) In order to have money available on a payment date to pay principal of
and interest on the Securities of any Series, the U.S. Government Obligations
shall be payable as to principal or interest on or before such payment date in
such amounts as will provide the necessary money.
(e) "U.S. Government Obligations" means:
(i) direct obligations of the United States of America for the
payment of which the full faith and credit of the United States of America
are pledged; or
(ii) obligations of a person controlled or supervised by and acting
as an agency or instrumentality of the United States of America pursuant
to authority granted by the Congress of the United States, the payment of
which is unconditionally guaranteed as a full faith and credit obligation
by the United States of America;
provided, however, that U.S. Government Obligations shall not be callable at the
issuer's option.
SECTION 8.02. Application of Trust Money.
The Trustee shall hold in trust all money or U.S. Government Obligations
deposited with it pursuant to Section 8.01. It shall apply the deposited money
and the money from U.S. Government Obligations through the Paying Agent and in
accordance with this Indenture to the payment of principal of and interest on
the Securities of each Series in respect of which the deposit shall have been
made.
SECTION 8.03. Repayment to Company.
(a) The Trustee and the Paying Agent shall promptly pay to the Company
upon request any excess money or securities held by them at any time.
-32-
<PAGE>
(b) The Trustee and the Paying Agent shall pay to the Company upon request
any money held by them for the payment of principal or interest that remains
unclaimed for two years after such principal or interest became due. After
payment to the Company, Securityholders entitled to the money must look to the
Company for payment as general creditors unless an applicable abandoned property
law designates another person.
SECTION 8.04. Indemnity for Government Obligations.
The Company shall pay and shall indemnify the Trustee and each
Securityholder of each Series in respect of which the deposit shall have been
made against any tax, fee or other charge imposed on or assessed against
deposited U.S. Government Obligations or the principal and interest received on
such obligations.
-33-
<PAGE>
ARTICLE 9
AMENDMENTS AND WAIVERS
SECTION 9.01. Without Consent of Holders.
The Company and the Trustee may enter into one or more supplemental
indentures without consent of any Securityholder for any of the following
purposes:
(1) to cure any ambiguity, defect or inconsistency herein or in the
Securities of any Series;
(2) to provide for the issuance of and establish the form and terms
and conditions of Securities of any Series as provided in Section 2.02,
and to establish the form of any certifications required to be furnished
pursuant to the terms of this Indenture or any Series of Securities;
(3) to secure the Securities pursuant to Section 4.02;
(4) to comply with Article 5;
(5) to provide for uncertificated Securities in addition to or in
place of certificated Securities;
(6) to add to the rights of the Holders of any Series of Securities
or to surrender any right or power herein conferred on the Company; or
(7) to make any change that does not adversely affect the rights of
any Securityholder.
SECTION 9.02. With Consent of Holders.
(a) With the written consent of the Holders of a majority in principal
amount of the outstanding Securities of each Series affected by such
supplemental indenture (with each Series voting as a class), the Company and the
Trustee may enter into a supplemental indenture to add any provisions to or to
change or eliminate any provisions of this Indenture or of any supplemental
indenture or to modify, in each case in any manner not covered by Section 9.01,
the rights of the Securityholders of each such Series. The Holders of a majority
in principal amount of the outstanding Securities of each Series affected by
such waiver (with each Series voting as a class), by notice to the Trustee, may
waive compliance by the Company with any provision of this Indenture, any
supplemental indenture or the Securities of any such Series except a Default in
the payment of the principal of or interest on any Security. However, without
the consent of each Securityholder affected, an amendment or waiver may not:
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<PAGE>
(1) reduce the amount of Securities whose Holders must consent to an
amendment or waiver;
(2) reduce the rate of or change the time for payment of interest on
any Security;
(3) reduce the principal of or change the fixed maturity of any
Security;
(4) waive a Default in the payment of the principal of or interest on
any Security;
(5) make any Security payable in money other than that stated in the
Security; or
(6) make any change in Section 6.04, 6.07 or 9.02(a) (third
sentence).
(b) The Company may, but shall not be obligated to, fix a record date for
the purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record date,
or their duly designated proxies, and only such Persons, shall be entitled to
consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; provided, that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
canceled and of no further effect.
(c) It is not necessary under this Section 9.02 for the Securityholders to
consent to the particular form of any proposed supplemental indenture, but it is
sufficient if they consent to the substance thereof.
(d) Promptly after the execution by the Company and the Trustee of any
supplemental indenture pursuant to the provisions of this Section 9.02, the
Company shall transmit by mail a notice, setting forth in general terms the
substance of such supplemental indenture, to all Holders of Registered
Securities, as the names and addresses of such Holders appear on the register
for each Series of Securities, and to such Holders of Unregistered Securities as
are entitled to receive reports pursuant to Section 4.03(c). Any failure of the
Company to mail such notice, or any defect therein. shall not, however, in any
way impair or affect the validity of any such supplemental indenture.
SECTION 9.03. Compliance with Trust Indenture Act.
Every amendment to this Indenture or the Securities of one or more Series
shall be set forth in a supplemental indenture that complies with the TIA as
then in effect.
-35-
<PAGE>
SECTION 9.04. Revocation and Effect of Consents.
Until an amendment or waiver becomes effective, a consent to it by a
Holder of a Security is a continuing consent by the Holder and every subsequent
Holder of a Security or portion of a Security that evidences the same debt as
the consenting Holder's Security, even if notation of the consent is not made on
any Security. However, any such Holder or subsequent Holder may revoke the
consent as to his Security or portion of a Security if the Trustee receives the
notice of revocation before the date the amendment or waiver becomes effective.
After an amendment or waiver becomes effective, it shall bind every
Securityholder of each Series affected by such amendment or waiver.
SECTION 9.05. Notation on or Exchange of Securities.
The Trustee may place an appropriate notation about an amendment or waiver
on any Security of any Series thereafter authenticated. The Company in exchange
for Securities of that Series may issue and the Trustee shall authenticate new
Securities of that Series that reflect the amendment or waiver.
SECTION 9.06. Trustee Protected.
The Trustee need not sign any supplemental indenture that is reasonably
likely to adversely affect its rights.
ARTICLE 10
MISCELLANEOUS
SECTION 10.01. Trust Indenture Act Controls.
If any provision of this Indenture limits, qualifies or conflicts with
another provision which is required to be included in this Indenture by the TIA,
the required provision shall control.
SECTION 10.02. Notices.
(a) Any notice or communication by the Company or the Trustee to the other
is duly given if in writing and delivered in person or mailed by first-class
mail:
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<PAGE>
if to the Company to:
Pacific Bell
175 E. Houston, 7th Floor
San Antonio, Texas 78205
Attention: Treasurer
with a copy to:
Pacific Bell
175 E. Houston, 12th Floor
San Antonio, Texas 78205
Attention: General Attorney - Corporate/SEC
if to the Trustee to:
The Bank of New York
101 Barclay Street, 21W
New York, New York 10286
Attention: Corporate Trust Trustee Administration
(b) The Company or the Trustee by notice to the other may designate
additional or different addresses for subsequent notices or communications.
(c) Any notice or communication to Holders of Securities entitled to
receive reports pursuant to 4.03(c) shall be mailed by first-class mail to the
addresses for Holders of Registered Securities shown on the register kept by the
Registrar and to addresses filed with the Trustee for other Holders. Failure to
so mail a notice or communication or any defect in such notice or communication
shall not affect its sufficiency with respect to other Holders of Securities of
that or any other Series entitled to receive notice.
(d) If a notice or communication is mailed in the manner provided above
within the time prescribed, it is duly given, whether or not the addressee
receives it.
(e) If the Company mails a notice or communication to Securityholders, it
shall mail a copy to the Trustee and to each Agent at the same time.
(f) If it shall be impractical in the opinion of the Trustee or the
Company to make any publication of any notice required hereby in an Authorized
Newspaper, any publication or other notice in lieu thereof which is made or
given with the approval of the Trustee shall constitute a sufficient publication
of such notice.
(g) All other notices or communications will be in writing.
-37-
<PAGE>
SECTION 10.03. Communication by Holders with Other Holders.
Securityholders of any Series may communicate pursuant to TIA Section
312(b) with other Securityholders of that Series or of all Series with respect
to their rights under this Indenture or under the Securities of that Series or
of all Series. The Company, the Trustee, the Registrar and anyone else shall
have the protection of TIA Section 312(c).
SECTION 10.04. Certificate and Opinion as to Conditions Precedent.
Upon any request or application by the Company to the Trustee to take any
action under this Indenture, the Company shall furnish to the Trustee:
(1) an Officers' Certificate stating that, in the opinion of the
signers, all conditions precedent, if any, provided for in this Indenture
relating to the proposed action have been complied with; and
(2) an Opinion of Counsel stating that, in the opinion of such
counsel, all such conditions precedent have been complied with.
SECTION 10.05. Statements Required in Certificate or Opinion.
Each certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that the person making such certificate or opinion
has read such covenant or condition;
(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with; and
(4) a statement as to whether or not, in the opinion of such person,
such condition or covenant has been complied with.
SECTION 10.06. Rules by Trustee and Agents.
The Trustee may make reasonable rules for action by or a meeting of
Securityholders of one or more Series. The Paying Agent or Registrar may make
reasonable rules and set reasonable require ments for its functions.
-38-
<PAGE>
SECTION 10.07. Legal Holidays.
A "Legal Holiday" is a Saturday, a Sunday or a day on which banking
institutions are not required to be open. If a payment date is a Legal Holiday
at a place of payment, payment may be made at such place on the next succeeding
day that is not a Legal Holiday, and no interest shall accrue for the
intervening period.
SECTION 10.08. Governing Law.
The laws of the State of New York shall govern this Indenture, the
Securities and any coupons appertaining thereto.
SECTION 10.09. No Adverse Interpretation of Other Agreements.
This Indenture may not be used to interpret another indenture, loan or
debt agreement of the Company or an Affiliate. No such indenture, loan or debt
agreement may be used to interpret this Indenture.
SECTION 10.10. No Recourse Against Others.
No director, officer, employee or stockholder, as such, of the Company
shall have any liability for any obligation of the Company under the Securities
or the Indenture or for any claim based on, in respect of or by reason of such
obligations or their creation. Each Securityholder by accepting a Security
waives and releases all such liability. The waiver and release are part of the
consideration for the issue of the Securities.
SECTION 10.11. Execution in Counterparts.
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one instrument.
-39-
<PAGE>
PACIFIC BELL
By: /s/ Roger W. Wohlert
-------------------------------------
Name: Roger W. Wohlert
Title: Treasurer
(SEAL)
ATTEST:
THE BANK OF NEW YORK
By: /s/ Mary Beth Lewicki
-------------------------------------
Name: Mary Beth Lewicki
Title: Assistant Vice President
-40-
October 7, 1997
Pacific Bell
140 New Montgomery Street
San Francisco, California 94105
Dear Sirs:
With reference to the Registration Statement on Form S-3 which Pacific Bell (the
"Company") proposes to file with the Securities and Exchange Commission under
the Securities Act of 1933, as amended, relating to $1,750,000,000 principal
amount of the Company's Debt Securities (the "Securities"), issuable in series
under an Indenture dated as of October 7, 1997, from the Company to The Bank of
New York, as Trustee, (the "Trustee"), I am of the opinion that:
1. The Company has been duly incorporated and is validly existing and
in good standing under the laws of the State of California.
2. Each series of the Securities, when duly established by or pursuant
to a resolution of the Company's Board of Directors or in a supplemental
indenture, executed, authenticated and issued as provided in the Indenture and
delivered against payment, will constitute valid and legally binding obligations
of the Company entitled to the benefits of the Indenture.
I hereby consent to the filing of this opinion with the Securities and Exchange
Commission in connection with the filing of the Registration Statement referred
to above and the making of the statements with respect to me which are set forth
under the caption "Legal Opinions" in the prospectus forming a part of the
Registration Statement referred to above.
In giving this consent, I do not thereby admit that I am within the category of
persons whose consent is required under Section 7 of the Securities Act of 1933,
as amended, or the rules and regulations of the Securities and Exchange
Commission.
Sincerely,
/s/ Richard W. Odgers
Counsel for Pacific Bell
EXHIBIT 23.A
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference in this registration statement of
Pacific Bell and Subsidiaries (the Company) on Form S-3 of our report dated
February 27, 1997 on our audits of the consolidated financial statements and
financial statements schedule of the Company as of December 31, 1996 and 1995
and each of the three years in the period ended December 31, 1996 which report
is included in the Company's Annual Report on Form 10-K. We also consent to the
reference to our firm under the caption "Experts."
Coopers & Lybrand L.L.P.
San Francisco, California
October 7, 1997
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS:
THAT, WHEREAS, PACIFIC BELL, a California corporation, hereinafter
referred to as the "Company," proposes to file with the Securities and Exchange
Commission, under the provisions of the Securities Act of 1933, as amended, a
Registration Statement on Form S-3 with respect to an issue or a series of
issues of up to One Billion Seven Hundred Fifty Million Dollars ($1,750,000,000)
principal amount of debt securities; and
NOW, THEREFORE, each of the undersigned hereby constitutes and appoints
Edward A. Mueller, Michael F.G. Ashby, Alfred G. Richter, Jr., Donald E.
Kiernan, Roger W. Wohlert, Charles P. Allen, Wayne A. Wirtz, or any one of them,
the undersigned's attorneys for the undersigned and in the undersigned's name,
place and stead, and each of the undersigned's offices and capacities in the
Company, to execute and file such Registration Statement, and thereafter to
execute and file any other amended registration statement and amended prospectus
or amendments or supplements to any of the foregoing, hereby giving and granting
to said attorneys full power and authority to do and perform each and every act
and thing whatsoever requisite and necessary to be done in and concerning the
premises, as fully to all intents and purposes as the undersigned might or could
do if personally present at the doing thereof, hereby ratifying and confirming
all that said attorneys may or shall lawfully do, or cause to be done, by virtue
hereof.
IN WITNESS WHEREOF, each of the undersigned has hereunto set his or her
hand as of the 2nd day of October, 1997.
/s/ Edward A. Mueller /s/ Michael F.G. Ashby
- ---------------------------------- ----------------------------------------
Edward A. Mueller Michael F.G. Ashby
President, Chief Executive Officer Vice President, Chief Financial Officer
and Chairman of the Board and Director
/s/ Royce S. Caldwell /s/ Cassandra C. Carr
- ---------------------------------- ----------------------------------------
Royce S. Caldwell Cassandra C. Carr
Director Director
<PAGE>
/s/ William E. Downing /s/ William E. Dreyer
- ---------------------------------- ----------------------------------------
William E. Downing William E. Dreyer
Director Director
/s/ James D. Ellis /s/ Charles E. Foster
- ---------------------------------- ----------------------------------------
James D. Ellis Charles E. Foster
Director Director
/s/ Donald E. Kiernan /s/ Richard W. Odgers
- ---------------------------------- ----------------------------------------
Donald E. Kiernan Richard W. Odgers
Director Director
-2-
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
------------------------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
------------------------------------
PACIFIC BELL
(Exact name of obligor as specified in its charter)
A California Corporation 94-0745535
(State or other jurisdiction of (I.R.S.
employer incorporation or organization) identification no.)
140 New Montgomery Street
San Francisco, California 94105
(Address of principal executive offices) (Zip code)
------------------------------------
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE>
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH IT
IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the State of 2 Rector Street, New York,
New York N.Y. 10006, and Albany,
N.Y. 12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION,
ARE INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO
RULE 7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17
C.F.R. 229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1 filed
with Registration Statement No. 33-6215, Exhibits 1a and 1b to Form T-1
filed with Registration Statement No. 33-21672 and Exhibit 1 to Form
T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form T-1
filed with Registration Statement No. 33-31019.)
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or examining
authority.
-2-
<PAGE>
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New York,
a corporation organized and existing under the laws of the State of New York,
has duly caused this statement of eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in The City of New York, and State
of New York, on the 3rd day of October, 1997.
THE BANK OF NEW YORK
By: /s/ VIVIAN GEORGES
----------------------------------
Name: VIVIAN GEORGES
Title: ASSISTANT VICE PRESIDENT
-3-
<PAGE>
Exhibit 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business June 30, 1997,
published in accordance with a call made by the Federal Reserve Bank of this
District pursuant to the provisions of the Federal Reserve Act.
Dollar Amounts
ASSETS in Thousands
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin .................. $ 7,769,502
Interest-bearing balances .......... 1,472,524
Securities:
Held-to-maturity securities ........ 1,080,234
Available-for-sale securities ...... 3,046,199
Federal funds sold and Securities pur-
chased under agreements to resell...... 3,193,800
Loans and lease financing
receivables:
Loans and leases, net of unearned
income .................35,352,045
LESS: Allowance for loan and
lease losses ..............625,042
LESS: Allocated transfer risk
reserve........................429
Loans and leases, net of unearned
income, allowance, and reserve 34,726,574
Assets held in trading accounts ...... 1,611,096
Premises and fixed assets (including
capitalized leases) ................ 676,729
Other real estate owned .............. 22,460
Investments in unconsolidated
subsidiaries and associated
companies .......................... 209,959
Customers' liability to this bank on
acceptances outstanding ............ 1,357,731
Intangible assets .................... 720,883
Other assets ......................... 1,627,267
-----------
Total assets ......................... $57,514,958
===========
LIABILITIES
Deposits:
In domestic offices ................ $26,875,596
Noninterest-bearing ......11,213,657
Interest-bearing .........15,661,939
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ... 16,334,270
Noninterest-bearing .........596,369
Interest-bearing .........15,737,901
Federal funds purchased and Securities
sold under agreements to repurchase. 1,583,157
Demand notes issued to the U.S.
Treasury ........................... 303,000
Trading liabilities .................. 1,308,173
Other borrowed money:
With remaining maturity of one year
or less .......................... 2,383,570
With remaining maturity of more than
one year through three years.......... 0
With remaining maturity of more than
three years ......................... 20,679
Bank's liability on acceptances exe-
cuted and outstanding .............. 1,377,244
Subordinated notes and debentures .... 1,018,940
Other liabilities .................... 1,732,792
-----------
Total liabilities .................... 52,937,421
-----------
<PAGE>
EQUITY CAPITAL
Common stock ........................ 1,135,284
Surplus ............................. 731,319
Undivided profits and capital
reserves .......................... 2,721,258
Net unrealized holding gains
(losses) on available-for-sale
securities ........................ 1,948
Cumulative foreign currency transla-
tion adjustments .................. ( 12,272)
-----------
Total equity capital ................ 4,577,537
-----------
Total liabilities and equity
capital ........................... $57,514,958
===========
I, Robert E. Keilman, Senior Vice President and Comptroller of the above-named
bank do hereby declare that this Report of Condition has been prepared in
conformance with the instructions issued by the Board of Governors of the
Federal Reserve System and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this Report of
Condition and declare that it has been examined by us and to the best of our
knowledge and belief has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System and is true and
correct.
Alan R. Griffith
J. Carter Bacot Directors
Thomas A. Renyi
