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:
(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.
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(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.
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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
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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
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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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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
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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,
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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
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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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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
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).
13
(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
14
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
15
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
16
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
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
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
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
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.
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
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
____ 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