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EXHIBIT 1
PACIFIC BELL
DEBT SECURITIES
UNDERWRITING AGREEMENT
November 4, 1997
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) Two registration statements on Form S-3 with respect to the
Securities have 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 have become effective. As used in this Agreement, (i)
"Registration Statement" means those registration statements (File Nos.
33-49477 and 333-37513), as amended or supplemented to the date hereof
(including all documents incorporated therein by reference); (ii)
"Preliminary
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Prospectus" means each prospectus (including all documents incorporated
therein by reference) included in that 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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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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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
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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 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
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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 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
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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;
(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; 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
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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, 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 persons.
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(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 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
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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
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.
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(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.
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
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14
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 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 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
-14-
15
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 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;
and 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
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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;
(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
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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.
(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 Represen tative 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,
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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 Coopers & Lybrand 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, 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
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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 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.
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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: /s/ ROGER W. WOHLERT
------------------------------------
Title: Treasurer
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The foregoing Agreement is hereby confirmed and accepted as
of the date first above written.
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner
& Smith Incorporated
/s/ CARL W. GARDINER III
-------------------------------------
Title: Vice President
For itself and as Representative of the several
Underwriters named in Schedule II to the foregoing
Agreement.
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SCHEDULE I
Underwriting Agreement dated November 4, 1997
Registration Statement Nos. 33-49477 and 333-37513
Representative and Address:
Merrill Lynch & Co.,
Merrill Lynch, Pierce, Fenner & Smith
Incorporated,
World Financial Center, North Tower,
250 Vesey Street,
New York, New York 10281.
Underwritten Securities:
Indenture, dated as of October 7, 1997, from Pacific Bell to The Bank of
New York, as Trustee (the "Indenture").
As used in this Underwriting Agreement, references to "Underwritten
Securities" shall be deemed to be separate references to the 6 5/8% Notes
(as hereinafter defined) and the 7 1/4% Debentures (as hereinafter
defined), each of which constitutes a separate series of Securities
under the Indenture.
Designations: 6 5/8% Notes due November 1, 2009
("6 5/8% Notes")
7 1/4% Debentures due November 1, 2027
("7 1/4% Debentures")
Principal Amounts: 6 5/8% Notes: $150,000,000
7 1/4% Debentures: $100,000,000
Dates of Maturity: 6 5/8% Notes: November 1, 2009
7 1/4% Debentures: November 1, 2027
23
Interest Rates: 6 5/8% Notes: 6 5/8% per annum.
7 1/4% Debentures: 7 1/4% per annum. In each case
payable semi-annually on each May 1 and November 1,
commencing May 1, 1998, to holders of record at the
close of business on the preceding April 15 or
October 15.
Purchase Prices: 6 5/8% Notes: 98.432% of the principal amount.
7 1/4% Debentures: 98.282% of the principal amount.
Plus, in each case, accrued interest, if any, from
November 7, 1997 to the date of delivery.
Redemption Provisions: The 65/8% Notes are not redeemable prior to maturity.
The 7 1/4% Debentures are not redeemable prior to
November 1, 2007. On or after November 1, 2007 and
prior to maturity, the Company, at its option, may
redeem all or from time to time any part of the 7 1/4%
Debentures upon not less than 30 days but not more than
60 days' notice at the following redemption prices
(expressed in percentages of the principal amount)
during the 12-month periods beginning November 1:
REDEMPTION
YEAR PRICE
---- ----------
2007 103.2035%
2008 102.8832
2009 102.5628
2010 102.2425
2011 101.9221
2012 101.6018
2013 101.2814
2014 100.9611
2015 100.6407
2016 100.3204
and thereafter at 100% of the principal amount thereof,
in each case together with accrued interest to the
redemption date.
Form and Authorized The 6 5/8% Notes and the 7 1/4% Debentures each
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24
Denominations: will be issued only in registered, book-entry form in
denominations of $1,000 and integral multiples thereof.
The 6 5/8% Notes and the 7 1/4% Debentures each will be
represented by a global security or securities deposited
with, or on behalf of, The Depository Trust Company, and
registered in the name of Cede & Co., as nominee for The
Depository Trust Company.
Delivery Date, Time 10:00 a.m. (New York time)
and Location: November 7, 1997, at the offices of
Sullivan & Cromwell, 125 Broad Street,
New York, New York 10004.
Specified Funds for Immediately available funds.
Payment of Purchase
Price:
The Delayed Delivery There are no Delayed Delivery Contracts.
Contracts shall have
the following terms:
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25
SCHEDULE II
6 5/8% Notes 7 1/4% Debentures
Underwriter Principal Amount Principal Amount
----------- ---------------- -----------------
Merrill Lynch, Pierce, Fenner & Smith
Incorporated ................................ 37,500,000 25,000,000
Bear, Stearns & Co. Inc. .................... 37,500,000 25,000,000
Goldman, Sachs & Co. ........................ 37,500,000 25,000,000
Salomon Brothers Inc. ....................... 37,500,000 25,000,000
Total ................................ $150,000,000 $100,000,000
============ ============
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26
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 registered certificate representing the Securities in the
above principal amount, registered in the name of the undersigned.
27
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 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
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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
-3-
29
below and mail or deliver one of the counterparts hereof to the undersigned at
its address set forth below. This will become a binding contract between the
Company and the undersigned when such counterpart is so mailed or delivered.
Very truly yours,
By
-------------------------------------
---------------------------------------
Title
---------------------------------------
---------------------------------------
Address
Accepted as of , 199
PACIFIC BELL
By
--------------------------------
Title:
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