1
EXHIBIT 1
BELLSOUTH CAPITAL FUNDING CORPORATION
$500,000,000
SERIES C
MEDIUM-TERM NOTES
DUE FROM 9 MONTHS TO 40 YEARS FROM DATE OF ISSUE
DISTRIBUTION AGREEMENT
February , 1998
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Xxxxx & Co.
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
Xxxxxxx Xxxxx World Headquarters
North Tower, World Financial Center
New York, New York 10281-1298
Dear Sirs:
BellSouth Capital Funding Corporation, a Georgia corporation (the
"Company"), and BellSouth Corporation, a Georgia corporation ("BellSouth"),
confirm their agreement with Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx"),
Xxxxxxx, Xxxxx & Co. ("Goldman") and Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Xxxxxx,
Xxxxxx & Xxxxx Incorporated ("Xxxxxxx") with respect to the issue and sale by
the Company of up to U.S. $500,000,000 (or the equivalent thereof in other
currencies or currency units) aggregate principal amount of the Company's
Medium-Term Notes, Series C, due from 9 months to 40 years from date of issue
(the "Notes"). The Notes are to be issued under an Indenture dated as of August
1, 1992 (the "Indenture") among the Company, BellSouth and The Bank of New York,
as successor to Wachovia Bank of Georgia, N.A. (the "Trustee"), and have the
benefits of a Support Agreement dated as of October 15, 1987, as amended as of
August 1, 1992 (the "Support Agreement"), between the Company and BellSouth,
which contains a limited guaranty by BellSouth of the debt securities of the
Company. The Notes shall be issued in the currency or currency units and shall
have the maturity ranges, annual interest rates (whether fixed or floating),
redemption provisions and other terms set forth in the Prospectus referred to
below as it may be supplemented from time to time, including any pricing
supplement.
Subject to the terms and conditions stated herein and to the reservation by
the Company of the right to sell the Notes directly on its own behalf, the
Company hereby (i) appoints Xxxxxx, Goldman and Xxxxxxx (individually an "Agent"
and, collectively, the "Agents") as its exclusive agents for the purpose of
soliciting offers to purchase the Notes from the Company by others and (ii)
agrees that if the Company determines to sell Notes directly to any of the
Agents as principal for resale to others, it will enter into a Terms Agreement,
as defined below, relating to such sale in accordance with the provisions of
Section 2(b) hereof. On the basis of the representations and warranties herein
contained, but subject to the terms and conditions herein set forth, each Agent
agrees, severally and not jointly, to use its best efforts to solicit offers to
purchase Notes upon terms acceptable to the Company at such times and in such
amounts as the Company shall from time to
2
time specify. Each Agent shall communicate to the Company, orally or in writing,
each reasonable offer to purchase Notes received by it as agent. Each Agent is
authorized to solicit offers to purchase Notes only in principal amounts of U.S.
$100,000 or any amount in excess thereof which is an integral multiple of U.S.
$1,000 or, if denominated in a currency or currency unit other than U.S.
dollars, then the equivalent, as determined by the noon buying rate in New York
City for cable transfers of the specified currency or currency unit (the
"Specified Currency") as certified for customs purposes by the Federal Reserve
Bank of New York on the Business Day, as defined in the Indenture, immediately
preceding the trade date for such Notes, of U.S. $100,000 (rounded down to an
integral multiple of 1,000 units of such Specified Currency), and any larger
amount that is an integral multiple of 1,000 units of such Specified Currency.
The Company shall have the sole right to accept offers to purchase Notes and may
reject any offer in whole or in part. Each Agent shall have the right to reject
any offer to purchase Notes which it considers to be unacceptable, and any such
rejection shall not be deemed a breach of its agreements contained herein. In
acting under this Agreement and in connection with the sale of any Notes by the
Company (other than Notes sold to any Agent pursuant to a Terms Agreement), each
Agent is acting solely as agent of the Company and does not assume any
obligation towards or relationship of agency or trust with any purchaser of the
Notes.
1. Representations and Warranties. The Company and BellSouth represent and
warrant to and agree with each Agent as follows:
(a) The Company and BellSouth meet the requirement for use of Form S-3
under the Securities Act of 1933, as amended (the "Securities Act"), and
have filed with the Securities and Exchange Commission (the "Commission")
registration statements on such Form (Registration Nos. 33-51449 and
33- ), and such registration statements have become effective, for
the registration under the Securities Act of debt securities, including the
Notes and the obligations of BellSouth under the Support Agreement. Such
registration statements, including the exhibits thereto, as amended at the
date of the sale of any Notes, are collectively hereinafter called the
"Registration Statement". The Indenture has been qualified under the Trust
Indenture Act of 1939, as amended (the "Trust Indenture Act"), and the
Company has duly authorized the issuance of the Notes. XxxxXxxxx has duly
authorized the execution and delivery of the Support Agreement with regard
to the issuance of the Notes. The Registration Statement, as amended at the
date of this Agreement, meets the requirements set forth in Rule
415(a)(1)(x) under the Securities Act and complies in all other material
respects with said Rule. The Company and BellSouth propose to file with the
Commission from time to time, pursuant to its Rule 424 under the Securities
Act, supplements to the prospectus included in the Registration Statement
relating to the Notes which will describe certain terms of the Notes and
prior to any such filing will advise each Agent of all further information
(financial and other) with respect to the Company and BellSouth to be set
forth therein. Such prospectus in the form in which it appears in
Registration Statement, dated , 1998, is called the "Basic
Prospectus". The Term "Prospectus" means the Basic Prospectus together with
the prospectus supplement dated , 1998 and any other prospectus
supplement or supplements specifically relating to any Notes sold pursuant
to this Agreement (the "Prospectus Supplement"), as filed with, or included
for filing to, the Commission pursuant to Rule 424 under the Securities
Act. Any reference herein to the Registration Statement, Basic Prospectus
and Prospectus shall be deemed to refer to and include the documents
incorporated by reference therein pursuant to Item 12 of Form S-3 which
were filed under the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), other than any documents filed on Form 11-K.
(b)(i) Each document, if any, filed or to be filed pursuant to the
Exchange Act and incorporated by reference in the Prospectus complied or
will comply when so filed in all material respects with such Act and the
rules and regulations thereunder, (ii) each part of the Registration
Statement (including the documents incorporated by reference therein),
filed with the Commission pursuant to the Securities Act, when such part
became effective, did not contain any untrue statement of a material fact
or omit to state a material fact required to be stated therein or necessary
to make the statements therein not misleading, (iii) the Registration
Statement and the Prospectus comply and, as amended or supplemented, if
applicable, will comply in all material respects with the Securities Act
and the applicable rules and regulations thereunder and (iv) the
Registration Statement and the Prospectus at the date of the
2
3
Prospectus Supplement do not contain and, as further amended or
supplemented, if applicable, as of their respective dates, will not contain
any untrue statement of a material fact or omit to state a material fact
required to be stated therein or necessary to make the statements therein
not misleading, except that the representations and warranties set forth in
this Section 1(b) do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information furnished
to the Company or BellSouth in writing by any Agent expressly for use
therein or to any statements in or omissions from the Statement of
Eligibility and Qualification of the Trustee under the Indenture.
2. Solicitations as Agent; Purchases as Principal.
(a) Solicitations as Agent. On the basis of the representations and
warranties herein contained, but subject to the terms and conditions herein
set forth, each Agent will use its best efforts to solicit offers to
purchase the Notes upon the terms and conditions set forth in the
Prospectus as then amended or supplemented. The Company reserves the right,
in its sole discretion, to instruct the Agents to suspend at any time, for
any period of time or permanently, the solicitation of offers to purchase
the Notes. Upon receipt of at least one business day's prior notice from
the Company, the Agents will forthwith suspend solicitations of offers to
purchase Notes from the Company until such time as the Company has advised
the Agents that such solicitation may be resumed. During the period of time
that this Agreement is suspended, the Company shall not be required to
deliver any opinions or letters in accordance with Sections 3(i) and (j);
provided, however, that the Agents shall not be required to resume
soliciting offers to purchase Notes until the Company has delivered such
opinions or letters as requested by the Agents if any of the events
described in Section 3(i) and (j) have occurred during the period of
suspension. Unless otherwise agreed between the Company and the Agents, the
Company agrees to pay each Agent, as consideration for soliciting the sale
of any Notes, a commission in the form of a discount from the principal
amount of such Note sold by the Company hereunder as set forth in Schedule
A attached hereto.
(b) Purchases as Principal. Each sale of Notes to an Agent, as
principal, shall be made in accordance with the terms of this Agreement and
a separate agreement which will provide for the sale of such Notes to, and
the purchase and re-offering thereof by, such Agent. Each such separate
agreement is herein referred to as a "Terms Agreement". Each Terms
Agreement will take the form of either (i) a written agreement between the
Agent and the Company, which may be substantially in the form of Exhibit A
hereto, or (ii) an oral agreement between the Agent and the Company
promptly confirmed in writing by the Agent to the Company. An Agent's
commitment to purchase Notes pursuant to any Terms Agreement shall be
deemed to have been made on the basis of the representations and warranties
of the Company and BellSouth herein contained and shall be subject to the
terms and conditions herein set forth. Each Terms Agreement shall specify
the principal amount of any Notes to be purchased by such Agent pursuant
thereto, the maturity date thereof, the price to be paid to the Company for
such Notes, the currency or currency unit in which such Notes shall be
denominated, in which interest, if any, is to be paid and in which the
redemption price, if any, is to be paid, the rate at which interest, if
any, will be paid on the Notes, whether such rate of interest, if any, will
be fixed or floating, the time and place of delivery of and payment for
such Notes (the "Settlement Date") and any other terms of the Notes. Such
Terms Agreement shall also specify any requirements for officers'
certificates, opinions of counsel and letters from the independent
certified public accountants of the Company or BellSouth pursuant to
Section 4 hereof and may also contain additional provisions relating to
defaults by underwriters and other provisions relating to termination as
may be agreed at the time between the Company and the applicable Agent.
(c) Procedures. Each Agent and the Company agree to perform the
respective duties and obligations specifically provided to be performed in
the Medium-Term Note Administrative Procedures (attached hereto as Schedule
B) (the "Procedures"), as amended from time to time. The Procedures may be
amended only by written agreement of the Company and the Agents.
(d) Delivery. The documents required to be delivered by Section 4 of
this Agreement shall be delivered on the date hereof, or at such other time
as the Agents and the Company may agree upon in writing (the "Commencement
Date").
3
4
3. Agreements. The Company and BellSouth agree with the Agents that:
(a) prior to the termination of the offering of the Notes pursuant to
this Agreement, neither BellSouth nor the Company will file any amendment
of the Registration Statement or any Prospectus Supplement relating to the
Notes unless a copy thereof has previously been furnished to each Agent for
their review and neither BellSouth nor the Company will file any such
proposed amendment or supplement to which any Agent shall reasonably
object; provided, however, that the foregoing requirement shall not apply
to any of BellSouth's periodic filings with the Commission required to be
filed pursuant to Section 13(a), 13(c), 14 or 15(d) of the Exchange Act,
copies of which filings (other than any documents filed on Form 11-K)
BellSouth will cause to be delivered to each Agent promptly after filing
with the Commission. Subject to the foregoing sentence, the Company will
promptly cause each Prospectus Supplement to be filed with the Commission
pursuant to Rule 424. The Company or BellSouth will promptly advise each
Agent (i) of the filing of any amendment or supplement to the Basic
Prospectus, (ii) of the filing and effectiveness of any amendment to the
Registration Statement, (iii) of any request by the Commission for any
amendment of the Registration Statement or any amendment of or supplement
to the Basic Prospectus or for any additional information, (iv) of the
issuance by the Commission of any stop order suspending the effectiveness
of the Registration Statement or the institution or threatening of any
proceeding for that purpose and (v) of the receipt by the Company or
BellSouth of any notification with respect to the suspension of the
qualification of the Notes for sale in any jurisdiction or the initiation
or threatening of any proceeding for such sale in any jurisdiction or the
initiation or the threatening of any proceeding for such purpose. The
Company and BellSouth will use their best efforts to prevent the issuance
of any such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Notes is
required to be delivered under the Securities Act, any event occurs or
condition exists as a result of which the Registration Statement or the
Prospectus as then amended or supplemented would include an untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein, in the light of the circumstances under
which they were made, not misleading, or if, in the opinion of the Company
or BellSouth, it is necessary at any time to amend or supplement the
Registration Statement or the Basic Prospectus, as then amended or
supplemented, to comply with the Securities Act, the Company promptly will
notify each Agent to suspend solicitation of offers to purchase Notes and,
if so notified by the Company, each Agent shall forthwith suspend such
solicitation and cease using the Prospectus as then amended or
supplemented; and if the Company or BellSouth shall decide to amend or
supplement the Registration Statement or Prospectus as then amended or
supplemented, to so advise each Agent promptly by telephone (with
confirmation in writing) and to prepare and cause to be filed promptly with
the Commission an amendment or supplement to the Registration Statement or
Prospectus as then amended or supplemented which will include a description
of such facts or events and/or will correct such statement or omission or
effect such compliance and will supply such amended or supplemented
Prospectus to each Agent in such quantities as each Agent may reasonably
request; and, if such amendment or supplement, and any documents,
certificates and opinions furnished to each Agent pursuant to paragraph (f)
below in connection with the preparation or filing of such amendment or
supplement, are satisfactory in all respects to each Agent, upon the filing
of such amendment or supplement with the Commission or effectiveness of an
amendment to the Registration Statement each Agent will resume the
solicitation of offers to purchase Notes hereunder.
(c) The Company and BellSouth will make generally available to the
securityholders and to each Agent, as soon as practicable, an earnings
statement of BellSouth covering a twelve-month period beginning after the
date of the sale of any Notes hereunder which shall satisfy the provisions
of Section 11(a) of the Securities Act and the applicable rules and
regulations thereunder.
(d) The Company and BellSouth will furnish to each Agent, without
charge, two copies of the Registration Statement including exhibits and
materials, if any, incorporated by reference therein and, during the period
mentioned in Section 3(b) above, as many copies of the Prospectus, any
documents incorporated by reference therein and any supplements and
amendments thereto as each Agent may
4
5
reasonably request. The terms "supplement" and "amendment" or "amend" as
used in this Agreement shall include all documents filed by the Company or
BellSouth with the Commission subsequent to the date of the Basic
Prospectus pursuant to the Exchange Act which are incorporated by reference
in the Prospectus (other than any documents filed on Form 11-K).
(e) The Company and BellSouth will use their best efforts to qualify
the Notes or to assist in the qualification of the Notes by or on behalf of
each Agent for the offer and sale under applicable securities or Blue Sky
laws of such jurisdictions as each Agent shall reasonably request and to
pay all expenses (including fees and disbursements of counsel) in
connection with such qualification and in connection with the determination
of the eligibility of the Notes for investment under the laws of such
jurisdictions as each Agent may designate; provided, however, that the
Company or BellSouth shall not be obligated to file any general consent to
service of process or to qualify as a foreign corporation in any
jurisdiction in which it is not so qualified.
(f) The Company and BellSouth will pay all expenses incident to the
performance of their obligations under this Agreement, including: (i) the
preparation and filing of the Registration Statement and all amendments
thereto, (ii) the preparation, issuance and delivery of the Notes, (iii)
the fees and disbursements of the Company's and BellSouth's accountants and
of the Trustee, (iv) the qualification of the Notes under the securities
laws in accordance with the provisions of Section 3(e), including filing
fees and the reasonable fees and disbursements of the Agents' counsel in
connection therewith and in connection with the preparation of any Blue Sky
Memorandum and any Legal Investment Memorandum, (v) the printing and
delivery to the Agents in quantities as herein above stated of copies of
the Registration Statement and all amendments thereto, and of the Basic
Prospectus and any amendments or supplements thereto, (vi) the printing and
delivery to each Agent of copies of the Indenture and any Blue Sky
Memorandum and any Legal Investment Memorandum, (vii) any fees charged by
rating agencies for the rating of the Notes, (viii) any advertising
expenses incurred with the approval of the Company or BellSouth, (ix) any
reasonable out-of-pocket expenses incurred with the approval of the Company
or BellSouth and (x) the fees and expenses, if any, incurred with respect
to any filing with the National Association of Securities Dealers, Inc.
The Company shall also reimburse each Agent promptly upon receipt of
an invoice from such Agent for the reasonable fees of counsel for such
Agent incurred in connection with the offering and sale of the Notes
(including the reasonable fees and expenses of special counsel in any state
in the event it should become necessary to obtain opinions of such counsel
as to usury or other matters of local law in order to obtain or maintain
the qualifications referred to in Section 3(e) hereof).
(g) Each acceptance by the Company of an offer for the purchase of
Notes, and each sale of Notes to an Agent pursuant to a Terms Agreement,
shall be deemed to be an affirmation to such Agent that the representations
and warranties of the Company and BellSouth contained in this Agreement and
in any certificate theretofore delivered to such Agent pursuant hereto are
true and correct in all material respects at the time of such acceptance or
sale, as the case may be, and an undertaking that such representations and
warranties will be true and correct in all material respects at the time of
delivery to the purchaser or his agent, or to such Agent, of the Notes
relating to such acceptance or sale, as the case may be, as though made at
and as of each such time (and it is understood that such representations
and warranties shall relate to the Registration Statement and the Basic
Prospectus as amended and supplemented to each such time).
(h) Each time the Registration Statement or the Basic Prospectus is
amended or supplemented (other than by an amendment or supplement providing
solely for a change in the interest rates (excluding any change in the
formula by which such interest rate may be determined) or maturities
offered on the Notes or for a change deemed immaterial in the reasonable
opinion of each Agent) or, if so indicated in the applicable Terms
Agreement, each time the Company sells Notes to an Agent pursuant to a
Terms Agreement, the Company will deliver or cause to be delivered
forthwith to each Agent (or, in the case of a sale of Notes pursuant to a
Terms Agreement to the applicable Agent) a certificate of the Company
signed by the President, any Vice President or the Treasurer of the Company
and of BellSouth, dated the
5
6
date of the effectiveness of such amendment or filing or supplement or
sale, as the case may be, in form reasonably satisfactory to such Agent or
Agents, as the case may be, to the effect that the statements of the
Company and BellSouth contained in the certificate referred to in Section
4(c) that was last furnished to such Agent or Agents, as the case may be
(either pursuant to Section 4(c) or pursuant to this Section 3(h)), are
true and correct as though made at and as of such time (except that such
statements shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such time), or, in lieu of such
certificate, a certificate of the same tenor as the certificate referred to
in Section 4(c) relating to the Registration Statement and the Prospectus
as amended and supplemented to the time of delivery of such certificates.
(i) Each time the Registration Statement or the Basic Prospectus is
amended or supplemented, or, if so indicated in the applicable Terms
Agreement, the Company sells Notes to an Agent pursuant to a Terms
Agreement, the Company shall furnish or cause to be furnished forthwith to
each Agent (or, in the case of a sale of Notes pursuant to a Terms
Agreement to the applicable Agent) a written opinion (or opinions) of
counsel of the Company and BellSouth, who may be an employee of BellSouth;
provided, however, that such opinion (or opinions) need not be furnished
with respect to an amendment or supplement (i) providing solely for a
change in the interest rates offered on the Notes (other than a change in
the formula by which such interest rate may be determined) or for a change
deemed immaterial in the reasonable opinion of such Agent or Agents, as the
case may be, or (ii) setting forth or incorporating by reference financial
statements or other information as of and for a fiscal quarter, unless, in
the case of clause (ii) above, in the reasonable judgment of such Agent or
Agents, as the case may be, such financial statements or other information
are of such a nature that an opinion (or opinions) of counsel should be
furnished; provided, further, that such counsel need not provide an opinion
regarding the content or form of such financial statements or schedules or
the accuracy or validity of other numerical data included in the
Registration Statement and the Prospectus. Any such opinion (or opinions)
shall be dated the date of such amendment or supplement, in form
satisfactory to the Agent or Agents, as the case may be, to which such
opinion (or opinions) will be delivered, and shall be of the same tenor as
the opinion (or opinions) referred to in Section 4(b)(i) but modified to
relate to the Registration Statement and the Prospectus as amended and
supplemented to the time of delivery of such opinion (or opinions). In lieu
of an opinion, counsel last furnishing such an opinion to such Agent or
Agents, as the case may be, may furnish to such Agent or Agents a letter to
the effect that such Agent or Agents may rely on such last opinion to the
same extent as though it were dated the date of such letter authorizing
reliance on such last opinion (except that statements in such last opinion
will be deemed to relate to the Registration Statement and the Prospectus
as amended and supplemented to the time of delivery of such letter
authorizing reliance.)
(j) Each time that the Registration Statement or the Basic Prospectus
is amended or supplemented to set forth amended or supplemental financial
information or such amended or supplemental information is incorporated by
reference in the Registration Statement or the Basic Prospectus or, if so
indicated in the applicable Terms Agreement, each time the Company sells
Notes to an Agent pursuant to a Terms Agreement, BellSouth shall cause its
independent certified public accountants forthwith to furnish each Agent
(or in the case of a sale of Notes pursuant to a Terms Agreement, to the
applicable Agent) with a letter, dated the date of the effectiveness of
such amendment or the date of filing of such supplement, or the date of
such sale, as the case may be, in a form reasonably satisfactory to each
Agent (or in the case of a sale of Notes pursuant to a Terms Agreement, to
the applicable Agent), of the same tenor as the letter referred to in
Section 4(d), with regard to the amended or supplemental financial
information included or incorporated by reference in the Registration
Statement and the Prospectus, as amended or supplemented to the date of
such letter.
(k) Between the date of any Terms Agreement and the Settlement Date
with respect to such Terms Agreement, the Company will not, without the
applicable Agent's prior consent, offer, sell, contract to sell or
otherwise dispose of any debt securities of the Company substantially
similar to the Notes (other than (i) the Securities that are to be sold
pursuant to such Terms Agreement, (ii) debt securities issued
6
7
for consideration other than cash and (iii) commercial paper in the
ordinary course of business), except as may otherwise be provided in any
such Terms Agreement.
(l) The Company will not issue any Notes except as have been duly
authorized by all necessary corporate action on the part of the Company.
4. Conditions of the Obligations of the Agents. The obligations of the
Agents to solicit offers to purchase the Notes as agents of the Company and to
purchase Notes as principals pursuant to any Terms Agreement will be subject to
the accuracy of the representations and warranties on the part of the Company
and BellSouth herein, to the accuracy of the statements of the Company's and
BellSouth's officers made in each certificate furnished pursuant to the
provisions hereof, to the performance and observance by the Company and
BellSouth of all covenants and agreements herein contained on its part to be
performed and observed and to the following additional conditions precedent:
(a) At the Commencement Date and at each Settlement Date with respect
to any applicable Terms Agreement, no stop order suspending the
effectiveness of the Registration Statement shall be in effect and no
proceedings for that purpose shall have been instituted or threatened by
the Commission, and there shall have been no material adverse change and no
development which, in the reasonable judgement of the Agents, involves a
substantial likelihood of a prospective material adverse change in the
condition of BellSouth and its subsidiaries, taken as a whole, from that
set forth in the Registration Statement or the Prospectus, as amended or
supplemented to such date.
(b) At the Commencement Date, each Agent shall have received, and at
each Settlement Date with respect to any applicable Terms Agreement, if
called for by such Terms Agreement, the applicable Agent shall have
received:
(i) The opinion (or opinions), dated as of such date, of counsel
for the Company and BellSouth, who may be an employee of BellSouth, to
the effect that:
(A) Each of the Company and BellSouth has been duly incorporated
and is validly existing as a corporation in good standing under the
laws of the State of Georgia.
(B) This Agreement (and, if the opinion is being given pursuant
to Section 3(i) on account of the Company having entered into a Terms
Agreement, the applicable Terms Agreement) has been duly authorized,
executed and delivered by the Company and BellSouth.
(C) The Indenture has been duly authorized, executed and
delivered by the Company and BellSouth and is a valid and binding
agreement of the Company and of BellSouth enforceable against them in
accordance with its terms, except as the enforceability thereof may
be limited by bankruptcy, insolvency, reorganization or other similar
laws of general application, and except that the enforceability of
the obligations of the Company and BellSouth is subject to general
principles of equity (regardless of whether such enforceability is
considered in a proceeding of equity or at law); the Indenture has
been duly qualified under the Trust Indenture Act of 1939, as
amended.
(D) The Notes, when authorized, executed and authenticated in
accordance with the Indenture and delivered to and paid for by the
purchasers thereof, will be valid and binding obligations of the
Company enforceable against it in accordance with their terms, except
as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws of general
application, and except that the enforceability of the obligations of
the Company is subject to general principles of equity (regardless of
whether such enforceability is considered in a proceeding of equity
or at law), except that, in the case of floating rate Notes, no
opinion need be expressed with respect to the validity or
enforceability thereof in the event that the rate of interest
provided for therein, or imputed with respect thereto, exceeds the
maximum rate from time to time permissible under applicable usury
laws; the Notes will be entitled to the benefits of the Indenture.
7
8
(E) The Support Agreement has been duly authorized, executed and
delivered by BellSouth and is a valid and binding agreement of the
Company and BellSouth enforceable in accordance with its terms,
except as the enforceability thereof may be limited by bankruptcy,
insolvency, reorganization or other similar laws of general
application, and except that the enforceability of the obligations of
the Company and BellSouth is subject to general principles of equity
(regardless of whether such enforceability is considered in a
proceeding of equity or at law).
(F) The performance of this Agreement will not contravene any
provision of applicable federal law or law of the State of Georgia or
the articles of incorporation or by-laws of the Company or BellSouth
or, to the knowledge of such counsel, any agreement or other
instrument binding upon the Company or BellSouth, and no consent,
approval or authorization of any governmental body is required for
the performance of this Agreement, except that the offer and sale of
the Notes in certain jurisdictions may be subject to the Blue Sky or
securities laws of such jurisdictions.
(G) The statements in the Prospectus under the captions
"Description of Securities" and "Plan of Distribution", insofar as
such statements constitute summaries of the documents and matters
referred to therein, fairly present the information called for with
respect to such documents and matters.
(H)(1) Each document filed pursuant to the Exchange Act (except
as to financial statements or schedules included therein, and except
as to the accuracy or validity of other numerical data included in
the Registration Statement and the Prospectus, as to which such
counsel need not express any conclusion) and incorporated by
reference in the Prospectus complied when so filed as to form in all
material respects with the Exchange Act and the applicable rules and
regulations thereunder; and (2) the Registration Statement and
Prospectus, as amended or supplemented, if applicable (except as to
financial statements or schedules included therein, and except as to
the accuracy or validity of other numerical data included in the
Registration Statement and the Prospectus, as to which such counsel
need not express any conclusion), comply as to form in all material
respects with the Securities Act and the applicable rules and
regulations thereunder.
(I) Nothing has come to the attention of such counsel to cause
him to believe that (1) (except as to financial statements or
schedules included therein, and except as to the accuracy or validity
of other numerical data included in the Registration Statement and
the Prospectus, as to which such counsel need not express any
conclusion) each part of the Registration Statement (including the
documents incorporated by reference therein) filed with the
Commission pursuant to the Securities Act, when such part became
effective, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or
necessary to make the statements therein not misleading; or (2)
(except as to financial statements or schedules included therein, and
except as to the accuracy or validity of other numerical data
included in the Registration Statement and the Prospectus, as to
which such counsel need not express any conclusion) the Registration
Statement and the Prospectus, as amended or supplemented, if
applicable, as of the date of this opinion, contain any untrue
statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of
the circumstances under which they were made, not misleading.
(J) the discussion set forth under the heading "Taxation" in the
Prospectus Supplement is an accurate summary of the principal United
States Federal income tax consequences of the ownership of the Notes.
With respect to the matters set forth in (I) above, such counsel
may state that its conclusion is based upon its participation in the
preparation of the Registration Statement and the Prospectus and any
amendments and supplements thereto and upon review and discussion
8
9
of the contents thereof, but, except for the statements in the
Prospectus referred to in clause (G) above and in "Item 3 -- Legal
Proceedings" of BellSouth's latest annual report on Form 10-K
incorporated by reference into the Prospectus, is without independent
check or verification except as otherwise specified.
(ii) The opinion dated as of such date, of Xxxxx Xxxx & Xxxxxxxx,
counsel to the Agents, covering the matters in (B), (C), (D), (G),
(H)(2) and (I) above, provided that with respect to (H)(2) and (I)
above, such counsel may state that their conclusion is based upon their
participation in the preparation of the Registration Statement and the
Prospectus and any amendments or supplements thereto (other than
documents incorporated by reference), and review and discussion of the
contents thereof (including documents incorporated by reference) but is
without independent check or verification except as specified.
(c) On the Commencement Date, the Company shall have furnished to each
Agent and at each Settlement Date with respect to any Terms Agreement, the
Company shall have furnished to the applicable Agent, a certificate signed
by the President, any Vice President or the Treasurer of the Company and
BellSouth dated as of the Commencement Date or such Settlement Date, to the
effect that the signers of such certificate have examined the Registration
Statement, the Basic Prospectus, any Prospectus Supplement and this
Agreement and that:
(i) the representations and warranties of the Company and BellSouth
in this Agreement are true and correct in all material respects on and
as of the date of such certificate, and the Company and BellSouth have
complied with all the agreements and satisfied all the conditions on
their part to be performed or satisfied at or prior to the date of such
certificate;
(ii) no stop order suspending the effectiveness of the Registration
Statement has been issued and no proceedings for that purpose have been
instituted or, to the Company's or BellSouth's knowledge, threatened by
the Commission; and
(iii) Since the date of the most recent financial statements
included or incorporated by reference in the Prospectus, as amended or
supplemented, there has been no material adverse change and no
development which, in the reasonable judgment of the signer of such
certificate, involves a substantial likelihood of a prospective material
adverse change in the condition of BellSouth and its subsidiaries, taken
as a whole, from that set forth in the Registration Statement and the
Prospectus, as amended or supplemented to such date.
(d) On the Commencement Date, BellSouth's independent certified public
accountants shall have furnished to each Agent, and at each Settlement Date
with respect to any Terms Agreement, if called for by such Terms Agreement,
BellSouth's independent certified public accountants shall have furnished
to the applicable Agent, a letter or letters, dated as of the Commencement
Date or such Settlement Date, in form and substance satisfactory to such
Agent or Agents, as the case may be, confirming that they are independent
accountants within the meaning of the Securities Act and the Exchange Act
and the respective applicable published rules and regulations thereunder,
and containing statements and information of the type ordinarily included
in accountants' "comfort letters" to underwriters with respect to the
financial statements and certain financial information contained in or
incorporated by reference into the Registration Statement and the
Prospectus.
In the event that, at the Commencement Date, any of the conditions
specified in (a), (b)(i), (c) or (d) in this Section 4 shall not have been
fulfilled, this Agreement may be terminated by the Agents, by delivering written
notice of termination to the Company. Any such termination shall be without
liability of any party to any other party.
5. Indemnification and Contribution.
(a) The Company and BellSouth agree to indemnify and hold harmless
each Agent and each person, if any, who controls such Agent within the
meaning of either Section 15 of the Securities Act or Section 20 of the
Exchange Act from and against any and all losses, claims, damages or
liabilities
9
10
(including the reasonable fees and expenses of counsel in connection with
any governmental or regulatory investigation or proceeding) caused by any
untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement as originally filed or in any amendment
thereof or the Prospectus (if used within the period set forth in paragraph
(b) of Section 3 hereof and as amended or supplemented if the Company or
BellSouth shall have furnished any amendments or supplements thereto), or
caused by any omission or alleged omission to state therein a material fact
required to be stated therein or necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading; provided, however, that the Company and BellSouth will not be
liable in any such case to the extent that any such loss, claim, damage or
liability is caused by any such untrue statement or alleged untrue
statement or omission or alleged omission made therein based upon
information furnished in writing to the Company or BellSouth by an Agent
specifically for use in connection with the preparation thereof, or caused
by any statement in or omission from the Statement of Eligibility and
Qualification of the Trustee under the Indenture.
(b) Each Agent agrees, severally and not jointly, to indemnify and
hold harmless the Company, BellSouth, their directors, their officers who
sign the Registration Statement and any person controlling the Company or
BellSouth to the same extent as the foregoing indemnity from the Company
and BellSouth to the Agents, but only with reference to information
relating to such Agent furnished in writing by such Agent expressly for use
in the Registration Statement or the Prospectus.
(c) In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may
be sought pursuant to either paragraph (a) or (b) above, such person (the
"indemnified party") shall promptly notify the person against whom such
indemnity may be sought (the "indemnifying party") in writing, but the
omission so to notify such indemnifying party of any such action shall not
relieve such indemnifying party from any liability which it or they may
have to the indemnified party otherwise than on account of this agreement.
In case such notice of any such action shall be so given, such indemnifying
party shall be entitled to participate at its own expense in the defense of
such action, or, if it so elects, to assume the defense of such action, and
in the latter event such defense shall be conducted by counsel chosen by
such indemnifying party and satisfactory to the indemnified party who shall
be defendant in such action, and such defendant shall bear the fees and
expenses of any additional counsel retained by them; but if the
indemnifying party shall not elect to assume the defense of such action,
such indemnifying party will reimburse such indemnified party for the
reasonable fees and expenses of any counsel retained by them. In the event
that the parties to any such action (including impleaded parties) include
either the Company or BellSouth and any Agent and either (i) the
indemnifying party and indemnified party mutually agree or (ii)
representation of both the indemnifying party and the indemnified party by
the same counsel is inappropriate under applicable standards of
professional conduct due to actual or potential differing interests between
them, then the indemnifying party shall not have the right to assume the
defense of such action on behalf of such indemnified party and will
reimburse such indemnified party for the reasonable fees and expenses of
any counsel retained by them, it being understood that the indemnifying
party shall not, in connection with any one action or separate but similar
or related actions in the same jurisdiction arising out of the same general
allegations or circumstances, be liable for the reasonable fees and
expenses of more than one separate firm of attorneys (in addition to local
counsel) for all such indemnified parties, which firm shall be designated
in writing by the Agent who is a party to the proceedings or, if more than
one Agent is party to the proceedings, by mutual agreement of the agents in
the case of an action in which one or more of the Agents or controlling
persons are indemnified parties and by the Company or BellSouth in the case
of an action in which the Company, BellSouth or any of their respective
directors, officers or controlling persons are indemnified parties. It is
also understood that the fees and expenses referred to in the immediately
preceding sentence shall be reimbursed as they are incurred. The
indemnifying party shall not be liable under this agreement with respect to
any settlement made by any indemnified party or parties without prior
written consent by the indemnifying party or parties to such settlement,
but if settled with such consent or if there is a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified party
from and against any loss or liability by reason of such judgment or
settlement. Any indemnifying party shall, prior to agreeing to any
settlement of any pending or threatened
10
11
proceeding in respect of which any indemnified party is or could have been
a party and indemnity could have been sought hereunder by such indemnified
party, make their best effort to obtain the unconditional release of such
indemnified party from all liability or claims rising out of the subject
matter of such proceeding.
(d) If the indemnification provided for in this Section 5 is
unavailable to an indemnified party under paragraph (a) or (b) hereof or
insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party, in lieu of indemnifying
such indemnified party, shall contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities in such proportion as is appropriate to reflect primarily the
relative benefits received by the Company and BellSouth on the one hand and
the Agent or Agents, as the case may be, on the other from the offering of
the Notes and also to reflect where appropriate the relative fault of the
Company or BellSouth on the one hand and the Agent or Agents, as the case
may be, on the other in connection with the statements or omissions which
resulted in such losses, claims, damages or liabilities, as well as any
other relevant equitable considerations. The relative benefits received by
the Company or BellSouth on the one hand and the Agent or Agents, as the
case may be, on the other in connection with the offering of the Notes
shall be deemed to be in the same proportion as the total net proceeds from
the offering of such Notes (before deducting expenses) received by the
Company bear to the total commissions received by the Agent or Agents, as
the case may be. The relative fault of the Company or BellSouth on the one
hand and of the Agent or Agents, as the case may be, on the other shall be
determined by reference to, among other things, whether the untrue or
alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the
Company, by BellSouth or by the Agent or Agents, as the case may be, and
the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
(e) The Company, XxxxXxxxx and the Agents agree that it would not be
just and equitable if contribution pursuant to this Section 5 were
determined by pro rata allocation or by any other method of allocation
which does not take account of the considerations referred to in the
immediately preceding paragraph. The amount paid or payable by an
indemnified party as a result of the losses, claims, damages and
liabilities referred to in paragraph (d) above shall be deemed to include,
subject to the limitations set forth above, any legal or other expenses
reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. Notwithstanding the
provisions of this Section 5, no Agent shall be required to contribute any
amount in excess of the amount by which the total price at which the Notes
offered and sold to the public through such Agent exceeds the amount of any
damages which such Agent has otherwise been required to pay by reason of
such untrue or alleged untrue statement or omission or alleged omission. No
person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Securities Act) shall be entitled to contribution from
any person who was not guilty of such fraudulent misrepresentation. The
remedies provided for in this Section 5 are not exclusive and shall not
limit any rights or remedies which may otherwise be available to any
indemnified party at law or in equity.
The indemnity and contribution agreements contained in this Section 5 shall
remain operative and in full force and effect regardless of (i) any termination
of this Agreement or of any Terms Agreement hereunder, (ii) any investigation
made by any Agent or on its behalf or any person controlling any Agent or by or
on behalf of the Company, its directors or officers or any person controlling
the Company and (iii) acceptance of and payment for any of the Notes.
6. Position of the Agents. In soliciting offers to purchase the Notes,
each Agent is acting solely as agent for the Company, and not as principal. Each
Agent shall make reasonable efforts to assist the Company in obtaining
performance by each purchaser whose offer to purchase Notes has been solicited
by such Agent and accepted by the Company, but such Agent shall not have any
liability to the Company in the event any such purchase is not consummated for
any reason.
7. Termination. This Agreement may be terminated at any time either by the
Company or by BellSouth as to any Agent or by any Agent insofar as this
Agreement relates to such Agent, upon the giving of
11
12
written notice of such termination to such Agent, the Company or BellSouth, as
the case may be. Any Terms Agreement may be terminated, immediately upon notice
to the Company or BellSouth, at any time prior to the Settlement Date relating
to a Terms Agreement (i) if there has been, since the respective dates as of
which information is given in the Registration Statement, as amended, any
material adverse change in the condition of the Company or BellSouth and its
subsidiaries, taken as a whole, or (ii) if there has occurred any outbreak or
escalation of hostilities or other calamity or crisis the effect of which on the
financial markets of the United States is such as to make it, in the judgment of
the applicable Agent, impracticable to market the Notes, or (iii) if trading
generally on the New York Stock Exchange has been suspended or materially
limited or if a general moratorium on commercial banking activities has been
declared by either Federal or New York State authorities. In the event of
termination of this Agreement or any Terms Agreement, no party shall have any
liability to the other parties hereto, except as provided in the last sentence
of Section 2(a), Section 3(f), Section 5 and Section 8; provided that, if at the
time of termination an offer to purchase any of the Notes has been accepted by
the Company but the time of delivery to the purchaser or its agent of the Note
or Notes relating thereto has not occurred, the Company's and BellSouth's
obligations provided in Section 3(g) through 3(k) shall not be terminated.
8. Representations and Indemnities to Survive. The respective agreements,
representations, warranties, indemnities and other statements of the Company and
BellSouth or their officers and the Agents set forth in or made pursuant to this
Agreement or any Terms Agreement will remain in full force and effect,
regardless of any investigation made by or on behalf of the Agents or the
Company or BellSouth or any of the officers, directors or controlling persons
referred to in Section 5 hereof, and will survive delivery of and payment for
the Notes. The provisions of Sections 3(f), 5 and 6 hereof shall survive the
termination or cancellation of this Agreement or the Terms Agreement.
9. Notices. All communications hereunder will be in writing and effective
only on receipt, and, if sent to the Agents, will be mailed, delivered or
telegraphed and confirmed as set forth on Schedule A or, if sent to the Company
or BellSouth, will be mailed, delivered or telegraphed and confirmed to it at
0000 Xxxxxxxxx Xx., X.X. Atlanta, GA 30309-3610, Attention: Xxxx X. Xxxxxx.
10. Successors. This Agreement and any Terms Agreement will inure to the
benefit of and be binding upon the parties hereto and their respective
successors and the officers and directors and controlling persons referred to in
Section 5 hereof, and no other person will have any right or obligation
hereunder.
11. Applicable Law. This Agreement will be governed by and construed in
accordance with the laws of the State of New York.
12. Amended and Restated Agreement. This Agreement amends and restates the
Distribution Agreement dated December 1, 1993 among the Company, BellSouth,
Xxxxxx, Goldman and Xxxxxxx relating to the Company's Series C Medium-Term
Notes.
If the foregoing is in accordance with your understanding of our agreement,
please sign and return to us the enclosed duplicate hereof, whereupon this
letter and the acceptance of the Agent shall represent a binding agreement
between the Company and the Agents.
Very truly yours,
BELLSOUTH CAPITAL FUNDING CORPORATION
By:
--------------------------------------
Title:
--------------------------------------
BELLSOUTH CORPORATION
By:
--------------------------------------
Title:
--------------------------------------
13
The foregoing Agreement is hereby
confirmed and accepted as of the date
first above written.
XXXXXX XXXXXXX & CO. INCORPORATED
By:
--------------------------------------
Title:
--------------------------------------
XXXXXXX, XXXXX & CO.
By:
--------------------------------------
Title:
--------------------------------------
XXXXXXX XXXXX, XXXXXX, XXXXXX & XXXXX
INCORPORATED
By:
--------------------------------------
Title:
--------------------------------------
14
EXHIBIT A
BELLSOUTH CAPITAL FUNDING CORPORATION
MEDIUM TERM NOTES
TERMS AGREEMENT
BELLSOUTH CAPITAL FUNDING CORPORATION
0000 Xxxxxxxxx Xx., X.X.
Atlanta, GA 30309-3610
Attention:
RE: Distribution Agreement
dated February , 1998
The undersigned agrees to purchase the following principal amount of your
Medium-Term Notes:
$
Interest Rate:
Maturity Date:
Purchase Date:
Settlement Date and Time:
Place of Delivery:
(Other terms)
(The certificates referred to in Section 3(h) of the Distribution
Agreement, the opinion referred to in Section 3(i) of the Distribution Agreement
and the accountants' letter referred to in Section 3(j) of the Distribution
Agreement will be required.)
[AGENT'S NAME]
By:
--------------------------------------
Title:
--------------------------------------
Accepted:
BELLSOUTH CAPITAL FUNDING CORPORATION
By:
--------------------------------------
Title:
--------------------------------------
15
SCHEDULE A
Distribution Agreement dated February , 1998
Registration Statement No. 33-
The Company agrees to pay Xxxxxx Xxxxxxx & Co. Incorporated ("Xxxxxx"),
Xxxxxxx, Xxxxx & Co. ("Goldman") or Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch, Xxxxxx,
Xxxxxx & Xxxxx Incorporated ("Xxxxxxx") a commission equal to the following
percentage of the principal amount of each Note sold by such Agent.
COMMISSION
PERCENTAGE OF
AGGREGATE PRINCIPAL
RANGE OF NOTE MATURITIES AMOUNT OF SECURITIES SOLD*
------------------------ --------------------------
From 9 months to less than 12 months............... .100%
12 months to less than 18 months............. .150%
18 months to less than 2 years............... .200%
2 years to less than 3 years................. .250%
3 years to less than 4 years................. .350%
4 years to less than 5 years................. .450%
5 years to less than 6 years................. .500%
6 years to less than 7 years................. .550%
7 years to less than 10 years................ .600%
10 years to less than 15 years............... .625%
15 years to less than 20 years............... .700%
20 years to 40 years, inclusive.............. .750%
---------------
* No interpolation
Address for Notice to Agent: The Bank of New York, 000 Xxxxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000. Attention: Xxxxx X. Xxxxxxxx, Assistant Treasurer,
Corporate Trust Division.
Notices to Xxxxxx shall be directed to it at 0000 Xxxxxxxx, Xxx Xxxx, Xxx
Xxxx 00000. Attention: Managing Director, Short- and Medium-Term Finance
Department, with a copy to Manager, Credit Department.
Notices to Goldman shall be directed to it at 00 Xxxxx Xxxxxx, Xxx Xxxx,
Xxx Xxxx 00000. Attention: Credit Department.
Notices to Xxxxxxx shall be directed to it at Xxxxxxx Xxxxx World
Headquarters North Tower, 23rd Floor, World Financial Center, New York, New York
10281-1310. Attention: MTN product Management.
16
SCHEDULE B
SERIES C MEDIUM-TERM NOTE ADMINISTRATIVE PROCEDURES
Medium-Term Notes, Series C (the "Notes") are to be offered on a continuing
basis by BellSouth Capital Funding Corporation (the "Company"). Xxxxxx Xxxxxxx &
Co. Incorporated, Xxxxxxx, Xxxxx & Co. and Xxxxxxx Xxxxx & Co., Xxxxxxx Lynch,
Xxxxxx, Xxxxxx & Xxxxx Incorporated, as agents (the "Agents"), have agreed to
solicit offers to purchase the Notes and they may also purchase Notes, as
principals, for their own accounts. The Notes are being sold pursuant to a
Distribution Agreement among the Company, BellSouth Corporation ("BellSouth")
and the Agents dated January , 1998 (the "Distribution Agreement"). The Notes
will rank equally with all other unsecured and unsubordinated debt of the
Company, have been registered with the Securities and Exchange Commission (the
"Commission"), will be offered pursuant to a Prospectus and a prospectus
supplement or supplements relating to the Notes (the "Prospectus") and will be
entitled to the benefits of a Support Agreement dated as of October 1, 1987
between the Company and BellSouth, as amended as of August 1, 1992 (the "Support
Agreement"). The Bank of New York ("BONY"), successor to Wachovia Bank of
Georgia, N.A., is the trustee (the "Trustee") under the Indenture dated as of
August 1, 1992 among the Company, BellSouth and the Trustee (the "Indenture").
XXXX has been initially appointed to be the Paying Agent, Authenticating Agent
and Registrar thereunder.
Notes may provide for a fixed rate of interest ("Fixed Rate Notes") or a
floating rate of interest ("Floating Rate Notes"), and Fixed Rate Notes may pay
an amount in respect of both interest and principal amortized over the life of
the Notes (the "Amortizing Notes"). Each Note will be represented by either a
global security (a "Global Note") delivered to BONY, as agent for the Depository
Trust Company ("DTC"), with beneficial interests therein recorded in the
book-entry system maintained by DTC (a "Book-Entry Note"), or a certificate
delivered to the holder thereof or a person designated by such holder (a
"Certificated Note"). Except in limited circumstances, an owner of a Book-Entry
Note will not be entitled to receive a Certificated Note.
Administrative procedures and specific terms of the offering are explained
below. Part I contains provisions common to Global/Book-Entry Notes and
Certificated Notes. Part II contains provisions specific to issuances of Global
and Book-Entry Notes and Part III contains provisions specific to issuances of
Certificated Notes. To the extent the procedures set forth below conflict with
the provisions of the Notes, the Indenture or the Distribution Agreement, the
terms and provisions of the Notes, the Indenture and the Distribution Agreement
shall prevail. Unless otherwise defined herein, terms defined in the
Distribution Agreement, the Indenture or the Notes shall be used herein as
therein defined.
PART I: GENERAL
Maturities: Each Note will have a maturity from date of issue
of not less than 9 months and not more than 40
years.
Price to Public: Each Note will be issued at the percentage of the
principal amount specified in the applicable
Company Order, as defined in, and issued pursuant
to Section 2.02(a) of, the Indenture.
Other Terms The currency if not denominated in U.S. dollars
(the "Specified Currency"), denomination, rate of
interest, date of maturity and any other terms with
respect to such Note as are not described in the
Prospectus shall be as set forth in the applicable
pricing supplement to the Prospectus (the "Pricing
Supplement"). The amortization schedule for
Amortizing Notes sold by an Agent will be prepared
by such Agent and delivered to the Company and
BONY.
Denominations: Except as otherwise specified by applicable law,
the denomination of any Note will be a minimum of
U.S. $1,000 or any amount in excess thereof which
is an integral multiple of U.S. $1,000 or the
equivalent, as determined pursuant to the
provisions of the Distribution Agreement
17
(rounded down to an integral multiple of 1,000
units of such Specified Currency) and any amounts
in excess thereof which is an integral multiple of
1,000 units of such Specified Currency.
Registration: Notes will be issued only in fully registered form.
Interest Payments: The date of issue of each Note will be the date of
its authentication as provided in the Indenture.
The date of authentication of each Note will be the
settlement date. Interest (including payments for
partial periods) on Fixed Rate Notes will be
calculated on the basis of a 360-day year of twelve
30-day months. Interest on Floating Rate Notes will
be determined by the Company and the purchaser
thereof in accordance with provisions of the
Pricing Supplement relating thereto.
Within 10 days following each Record Date, BONY
will furnish the Company with a statement setting
forth the aggregate principal amount of the Notes
denominated in each Specified Currency outstanding
as of such Record Date and the amount of interest
(and principal in the case of Amortizing Notes), to
be paid on the following Interest Payment Date or
Installment Date, for each Note and in total with
respect to each Specified Currency. BONY will
provide monthly to the Company a list of the
principal, if any, and interest with respect to
each Specified Currency to be paid on the Notes
maturing in the next succeeding month.
BONY will pay the principal amount of each Note at
final maturity upon presentment of the Note to it.
Notes presented to BONY at final maturity for
payment will be cancelled and destroyed it. BONY
will provide the Company with a certificate of
destruction.
Procedure for Rate Setting
and Posting: The Company and the Agents will discuss from time
to time the aggregate principal amount of, the
issuance price of and the interest rates to be
borne by Notes that may be sold as a result of the
solicitation of offers by the Agents. If the
Company decides to set prices of, and rates borne
by, any Notes in respect of which the Agents are to
solicit offers (the setting of such prices and
rates to be referred to herein as "posting") or if
the Company decides to change prices or rates
previously posted by it, it will promptly advise
the Agents of the prices and rates to be posted.
Acceptance of Offer: If the Company posts prices and rates as provided
above, each Agent, as agent for and on behalf of
the Company, shall promptly accept offers received
by such Agent to purchase Notes at the prices and
rates so posted, subject to (1) any instructions
from the Company received by such Agent concerning
the aggregate principal amount of Notes to be sold
at the prices and rates so posted or the period
during which such posted prices and rates are to be
in effect, (2) any instructions from the Company
received by such Agent changing or revoking any
posted prices and rates, (3) compliance with the
securities laws of the United States and all other
jurisdictions and (4) such Agent's right to reject
any such offer as provided below.
Each Agent will communicate, orally or in writing,
each reasonable offer to purchase Notes received by
it and if the Company has not posted
2
18
rates, the proposed rate of interest. The Company
may reject any offer in whole or in part. Each
Agent may reject any offer received by it in whole
or in part.
Preparation of Pricing
Supplement and Delivery
of Prospectus: If the Company accepts an offer to purchase a Note
it will (a) prepare a Pricing Supplement reflecting
the terms of such Note, (b) arrange to file such
Pricing Supplement with the Commission in
accordance with the applicable paragraph of Rule
424(b) under the Act, and (c) as soon as possible
and in any event not later than 11:00 A.M., New
York City time, on the Business Day immediately
following the applicable trade date, deliver the
number of copies of such Pricing Supplement to the
relevant Agent as such Agent shall reasonably
request (which number of copies shall in no event
be greater than 10), at the following addresses:
If to Xxxxxx Xxxxxxx:
Xxxxxx Xxxxxxx & Co. Incorporated
0000 Xxxxxxxx, 0xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Medium-Term Note Trading Desk,
Xxxxxx Xxxxxxx
Fax: (000) 000-0000
If to Goldman:
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Medium-Term Note Trading,
Xxxxx Xxxxxxxxx
Fax: (000) 000-0000
If to Xxxxxxx Xxxxx:
Tritech Services
00-X Xxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Attn: Prospectus Operations,
Xxxxxxx Xxxxxxxxxx
Fax: (000) 000-0000/5/6
and deliver a copy to BONY.
The selling Agent will affix the Pricing Supplement
to the Prospectus and cause the Prospectus and the
applicable Pricing Supplement to be delivered to
the purchaser of the Note with the earlier of the
delivery of the confirmation of sale or the Note.
Outdated Pricing Supplements and Prospectuses
(other than those retained for files) will be
destroyed.
Settlement: The receipt of immediately available funds by the
Company in payment for a Certificated Note or a
Book-Entry Note shall, with respect to such Note,
constitute "settlement". All orders accepted by the
Company will be settled on the third Business Day,
as defined in the Prospectus, pursuant to the
timetables for settlement set forth in Parts II and
III below unless the Company and the purchaser
agree to settlement on another date; provided,
however, that in the case of a delayed settlement,
3
19
the Company will notify BONY by the Business Day
immediately prior to the Business Day of
settlement.
Suspension of
Solicitations: Amendment or
Supplements: The Company may instruct Agents to suspend
solicitations of offers for Notes at any time. Upon
receipt of at least one Business Day's prior notice
from the Company, the Agents will forthwith suspend
solicitations until such time as the Company has
advised them that solicitations of offers for Notes
may be resumed.
If the Company decides to amend or supplement the
Registration Statement or the Prospectus, it will
promptly advise the Agents and BONY and will
furnish the Agents and BONY with the proposed
amendment or supplement in accordance with the
terms of the Distribution Agreement. The Company
will file with the Commission any supplement to the
Prospectus (including any supplement which provides
solely for a change in the interest rates or
currencies of the Notes), provide each Agent with
copies of any supplement and confirm to the Agents
that such supplement has been filed with the
Commission.
In the event that at the time the Company suspends
solicitations of offers for Notes (other than to
change currency denominations or interest rates)
there shall be any offers outstanding for
settlement, the Company will promptly advise the
Agents and BONY whether such offers may be settled
and whether copies of the Prospectus as in effect
at the time of the suspension may be delivered in
connection with the settlement of such offers. The
Company will have the sole responsibility for such
decision and for any arrangements which may be made
in the event that the Company determines that such
offers may not be settled or that copies of such
Prospectus may not be so delivered.
Authenticity of Signatures: The Company will cause BONY and any Authenticating
Agent for the Notes (if other than BONY) to furnish
each Agent from time to time with the specimen
signatures of each of BONY's or such Authenticating
Agent's officers, employees or agents who have been
authorized by BONY or such Authenticating Agent to
authenticate Notes, but the Agents will have no
obligation or liability to the Company or the
Trustee in respect of the authenticity of the
signature of any officer, employee or agent of the
Company, BONY or such Authenticating Agent on any
Note.
Payment of Selling
Commission and Expenses: The Company agrees to pay each Agent a commission
as set forth in the Distribution Agreement in the
form of a discount equal to the percentage of the
principal of each Note sold by the Company as a
result of a solicitation made by such Agent.
Advertising Costs: The Company will determine with the Agents the
amount of advertising that may be appropriate in
offering the Notes. Advertising expenses will be
paid by the Company or reimbursed to the Agents by
the Company.
PART II: BOOK-ENTRY NOTES
In connection with the qualification of Book-Entry Notes for eligibility in
the book-entry system maintained by DTC, BONY will perform the custodial,
document control and administrative functions described below, in accordance
with its respective obligations under a Letter of Representation from the
4
20
Company, BellSouth and BONY to DTC dated as of the date hereof (the "Letter of
Representation"), and a Medium-Term Note Certificate Agreement between BONY and
DTC, dated as of April 4, 1989, and its obligations as a participant in DTC,
including DTC's Same-Day Funds Settlement System ("SDFS").
Issuance: All Fixed Rate Notes issued as Book-Entry Notes
having the same terms (collectively, the "Fixed
Rate Terms") will be represented initially by a
single Global Note in fully registered form without
coupons; and all Floating Rate Notes issued as
Book-Entry Notes having the same terms, including
the base rate upon which interest may be determined
(the "Base Rate") (collectively, "Floating Rate
Terms"), will be represented initially by a single
Global Note.
Each Global Notes will be dated and issued as of
the date of its authentication by BONY. No Global
Note shall represent any Certificated Note.
Identification: The Company has arranged with the CUSIP Service
Bureau of Standard & Poor's Corporation (the "CUSIP
Service Bureau") for the reservation of 900 CUSIP
numbers which have been reserved for and relating
to Global Notes, and the Company has delivered to
BONY and DTC such list of such CUSIP numbers. Some
of such numbers have previously been assigned to
Global Notes in Series B and C. The Company will
assign CUSIP numbers to Global Notes in connection
with Settlement Procedure B. DTC will notify the
CUSIP Service Bureau periodically of the CUSIP
numbers that the Company has assigned to Global
Notes. BONY will notify the Company at any time
when fewer than 100 of the reserved CUSIP numbers
remain unassigned to Global Notes, and, if it deems
necessary, the Company will reserve additional
CUSIP numbers for assignment to Global Notes. Upon
obtaining such additional CUSIP numbers, the
Company will deliver a list of such additional
numbers to BONY and DTC. Book-Entry Notes having an
aggregate principal amount in excess of
$200,000,000 and otherwise required to be
represented by the same Global Note will instead be
represented by two or more Global Notes which shall
all be assigned the same CUSIP number.
Registration: Each Global Note will be registered in the name of
Cede & Co., as nominee for DTC, on the register
maintained by BONY. The beneficial owner of an
interest in a Global Note (i.e., an owner of a
Book-Entry Note) (or one or more indirect
participants in DTC designated by such owner) will
designate one or more participants in DTC (with
respect to such Book-Entry Note, the
"Participants") to act as agent for such beneficial
owner in connection with the book-entry system
maintained by DTC, and DTC will record in its
book-entry system, in accordance with instructions
provided by such Participants, a credit balance
with respect to such Book-Entry Note in the
accounts of such Participants. The ownership
interest of such beneficial owner in such
Book-Entry Note will be recorded through the
records of such Participants or through the
separate records of such Participants and one or
more indirect participants in DTC.
Transfers: Transfers of a Book-Entry Note will be accomplished
by book entries made by DTC and, in turn, by
Participants (and in certain cases, one or more
indirect participants in DTC) acting on behalf of
beneficial transferors and transferees of such
Book-Entry Note.
5
21
Exchanges: The Company or BONY may deliver to DTC and the
CUSIP Service Bureau at any time a written notice
specifying (a) the CUSIP numbers of two or more
Global Notes outstanding on such date that
represent Book-Entry Notes having the same Fixed
Rate Terms or Floating Rate Terms, as the case may
be, (other than original issue dates) and for which
interest has been paid to the same date; (b) a
date, occurring at least 30 days after such written
notice is delivered and at least 30 days before the
next Interest Payment Date for the related
Book-Entry Notes, on which such Global Notes shall
be exchanged for a single replacement Global Note;
and (c) a new CUSIP number, obtained from the
Company, to be assigned to such replacement Global
Note. Upon receipt of such a notice, DTC will send
to its participants (including BONY) a written
reorganization notice to the effect that such
exchange will occur on such date. Prior to the
specified exchange date, BONY will deliver to the
CUSIP Service Bureau written notice setting forth
such exchange date and the new CUSIP number and
stating that, as of such exchange date, the CUSIP
numbers of the Global Notes to be exchanged will no
longer be valid. On the specified exchange date,
BONY will exchange such Global Notes for a single
Global note bearing the new CUSIP number, and the
CUSIP numbers of the exchanged Global Notes will,
in accordance with CUSIP Service Bureau procedures,
be cancelled and not reassigned. BONY shall cancel
and destroy the exchanged Global Notes and deliver
to the Company a certificate of destruction.
Denominations: Global Notes will be denominated in principal
amounts not in excess of $200,000,000. If one or
more Book-Entry Notes having identical terms and
comprising the same issue have an aggregate
principal amount in excess of $200,000,000, then
one Global Note will be issued to represent each
$200,000,000 principal amount of such Book-Entry
Notes and an additional Global Note will be issued
to represent any remaining principal amounts.
Payments of Principal and
Interest: Payments Prior to Maturity. Promptly after each
Record Date, BONY will deliver to the Company and
DTC a written notice specifying by CUSIP number the
amount of interest to be paid on each Global Note
on the following Interest Payment Date and the
amounts of principal and interest (an
"Installment") to be paid on each Installment Date
in the case of an Amortizing Note (other than an
Interest Payment Date or Installment Date
coinciding with final maturity) and the total of
such amounts. DTC will confirm the amount payable
on each Global Note on such Interest Payment Date
or Installment Date by reference to the daily bond
reports published by Standard & Poor's. On such
Interest Payment Date or Installment Date, the
Company will pay to BONY, and BONY in turn will pay
to DTC, such total amount of interest and
principal, if any, due (other than at final
maturity), at the times and in the manner set forth
below under "Manner of Payment."
Payments at Final Maturity. On or about the first
Business Day of each month, BONY will deliver to
the Company and DTC a written list of principal,
interest and premium, if any, to be paid on each
Global Note maturing either at stated maturity or
on a redemption date in the following month. BONY,
the Company and DTC will confirm the amounts of
such payments on or about the fifth Business Day
preceding
6
22
such maturity of such Global Note. At such
maturity, the Company will pay to BONY, and BONY in
turn will pay to DTC, the principal amount of such
Global Note, together with interest and premium, if
any, due at such maturity, at the times and in the
manner set forth below under "Manner of Payment".
If any such maturity of a Global Note is not a
Business Day, the payment due on such day shall be
made on the next succeeding Business Day and no
interest shall accrue on such payment for the
period from and after such maturity. Promptly after
payment to DTC of the principal, interest and
premium, if any, due at such maturity of such
Global Note, BONY will cancel and destroy such
Global Note and deliver to the Company a
certificate of destruction.
Manner of Payment. The total amount of any
principal, interest and premium, if any, due on
Global Notes on any Interest Payment Date or
Installment Date or at final maturity shall be paid
by the Company to BONY in funds available for use
by BONY as of 9:30 a.m., New York City time, on
such date. Prior to 10:00 a.m., New York City time,
on such date or as soon as possible thereafter,
BONY will pay by separate wire transfer (using
Fedwire message entry instructions in a form
previously specified by DTC) to an account at the
Federal Reserve Bank of New York previously
specified by DTC, in funds available for immediate
use by DTC, each payment of interest, principal and
premium, if any, due on a Global Note on such date.
Thereafter on such date, DTC will pay, in
accordance with its SDFS operating procedures then
in effect, such amounts in funds available for
immediate use to the respective Participants in
whose names Book-Entry Notes are recorded in the
book-entry system maintained by DTC. Neither the
Company nor BONY shall have any responsibility or
liability for the payment by DTC of the principal
of, or premium, if any, or interest on, the
Book-Entry Notes to such Participants.
Settlement Procedures: Settlement Procedures with regard to each
Book-Entry Note sold by the Company or through an
Agent (except pursuant to a Terms Agreement, as
defined in the Distribution Agreement), shall be as
follows:
A. The selling Agent will confirm with the
Company by telephone that such Note is a
Book-Entry Note and of the following
settlement information:
1. Principal amount.
2. Maturity date.
3. Interest rate.
4. Interest Payment Dates or Installment
Dates.
5. Redemption provisions, if any.
6. Settlement date.
7. Trade date.
8. Price.
9. Selling Agent's commission, if any,
determined as provided in the
Distribution Agreement.
10. Amortization schedule, if any.
7
23
11. Any other applicable terms.
B. The Company will advise BONY by telephone or
electronic transmission (confirmed in
writing at any time on the same date) of the
information set forth in Settlement
Procedure "A" above. The Company will assign
a CUSIP number to the Global Note
representing such Book-Entry Note or Notes.
C. BONY will communicate to DTC and the selling
Agent through DTC's Participant Terminal
System, which shall route such information
to Standard & Poor's Corporation and
Interactive Data Corporation, a pending
deposit message specifying the following
settlement information:
1. The information set forth in Settlement
Procedure "A".
2. Identification numbers of the
Participant accounts maintained by DTC
on behalf of XXXX and the Agent.
3. Identification as a Fixed-Rate or
Floating-Rate Book-Entry Note.
4. Initial Interest Payment Date for such
Note, (or the initial Installment Date
in the case of an Amortizing Note),
number of days by which such date
succeeds the related Record Date for
DTC purposes (or, in the case of
Floating Rate Notes which reset daily
or weekly, the date five calendar days
preceding the Interest Payment Date)
and, if then calculable, the amount of
interest payable on such Interest
Payment Date (or the amount of
principal and interest payable on such
Installment Date in the case of an
Amortizing Note) (which amount shall
have been confirmed by BONY).
5. CUSIP number of the Global Note
representing such Book-Entry Note.
6. Whether such Global Note represents any
other Book-Entry Notes.
X. XXXX will complete and authenticate the Global
Note representing such Book-Entry Note or
Notes.
E. DTC will credit such Global Note to BONY's
Participant account at DTC.
F. BONY will enter an SDFS delivery order through
DTC's Participant Terminal System instructing
DTC to (i) debit such Global Note to BONY's
Participant account and credit interests in
such Global Note to the selling Agent's
Participant account and (ii) debit the selling
Agent's settlement account and credit XXXX's
settlement account for an amount equal to the
price of such Global Note, less selling Agent's
commission.
G. Unless the selling Agent purchased such Global
Note as principal, the selling Agent will enter
an SDFS delivery order through DTC's
Participant Terminal System instructing DTC (i)
to debit interests
8
24
in such Global Note to the selling Agent's
Participant account and credit interests in
such Global Note to the accounts of the
Participants with respect to such Global Note
and (ii) to debit the settlement account of
such Participants and credit the settlement
accounts of the selling Agent for an amount
equal to the price of such Global Note or
relevant interests therein.
H. Transfers of funds in accordance with SDFS
delivery orders described in Settlement
Procedures "F" and "G" will be settled in
accordance with SDFS operating procedures in
effect on the settlement date.
I. BONY will deposit funds in the Company's
account in the amount transferred to BONY in
accordance with Settlement Procedure "F".
J. Unless the selling Agent purchased such
Book-Entry Note or Notes as principal, the
selling Agent will confirm the purchase of
such Book-Entry Note or Notes to the purchaser
either by transmitting to the Participants
with respect to such Book-Entry Note or Notes
a confirmation order or orders through DTC's
institutional delivery system or by mailing a
written confirmation to such purchaser.
Receipt by the customer of the Prospectus,
appropriately amended or supplemented, must
accompany or precede any written offer of the
Book-Entry Note or Notes by the selling Agent
and any confirmation by the selling Agent of
purchase of the Book-Entry Note or Notes.
Settlement Procedures
Timetable: For sales by the Company of Book-Entry Notes to or
through the selling Agent (except pursuant to a
Terms Agreement) for settlement on the first
Business Day after the sale date, the Settlement
Procedures set forth above shall be completed as
soon as possible but not later than the respective
times (New York City time) set forth below:
SETTLEMENT
PROCEDURE TIME
---------- ----
A 11:00 A.M. on the sale date
B 12:00 Noon on the sale date
C 2:00 P.M. on the sale date
D 9:00 A.M. on the settlement date
E 10:00 A.M. on the settlement date
F-G 2:00 P.M. on the settlement date
H 4:45 P.M. on the settlement date
I-J 5:00 P.M. on the settlement date
If a sale is to be settled more than one Business
Date after the sale date, Settlement Procedures
"A", "B" and "C" shall be completed as soon as
practicable but no later than 11:00 A.M., 12:00
Noon and 2:00 P.M., respectively, on the first
Business Day after the sale date. Settlement
Procedure "H" is subject to extension in accordance
with any extension of Fedwire closing deadlines and
in the other events specified in the SDFS operating
procedures in effect on the settlement date.
If settlement of a Book-Entry Note is rescheduled
or cancelled, BONY, after receiving notice from the
Company or the selling Agent, will deliver to DTC a
cancellation message through DTC's Participant
Terminal
9
25
System by no later than 2:00 P.M. on the Business
Day immediately preceding the scheduled settlement
date.
Fails: If BONY fails to enter an SDFS delivery order with
respect to a Book-Entry Note pursuant to Settlement
Procedure "F", BONY may deliver to DTC, through
DTC's Participant Terminal System, as soon as
practicable a withdrawal message instructing DTC to
debit such Book-Entry Note to BONY's Participant
account, provided that BONY's Participant account
contains a principal amount of the Global Note
representing such Book-Entry Note that is at least
equal to the principal amount to be debited. If a
withdrawal message is processed with respect to all
the Book-Entry Notes represented by a Global Note,
BONY will cancel and destroy such Global Note, make
appropriate entries in BONY's records and deliver
to the Trustee and the Company a certificate of
destruction. If a withdrawal message is processed
with respect to one or more, but not all, of the
Book-Entry Notes represented by a Global Note, BONY
will exchange such Global Note for two Global
Notes, one of which shall represent such Book-Entry
Note or Notes and shall be likewise cancelled and
destroyed immediately after issuance and the other
of which shall represent the remaining Book-Entry
Notes previously represented by the surrendered
Global Note and shall bear the CUSIP number of the
surrendered Global Note.
If the purchase price for any Book-Entry Note is
not timely paid to the Participants with respect to
such Note by the beneficial purchaser thereof (or a
person, including an indirect participant in DTC,
acting on behalf of such purchaser), such
Participants, and, in turn, the selling Agent, may
enter SDFS delivery orders through DTC's
Participant Terminal System reversing the orders
entered pursuant to Settlement Procedures "F" and
"G", respectively. Thereafter, XXXX will deliver
the withdrawal message and take the related actions
described in the preceding paragraph.
Notwithstanding the foregoing, upon any failure to
settle with respect to a Book-Entry Note, DTC may
take any actions in accordance with SDFS operating
procedures then in effect.
In the event of a failure to settle with respect to
one or more, but not all, of the Book-Entry Notes
to have been represented by a Global Note, BONY
will provide, in accordance with Settlement
Procedures "D" and "F", for the authentication and
issuance of a Global Note representing the
Book-Entry Notes for which settlement is made and
will make appropriate entries in its records.
PART III: CERTIFICATED NOTES
Payments of Principal and
Interest: Upon presentment and delivery of the Certificated
Note, BONY will pay the principal amount of each
Certificated Note at final maturity and the final
installment of interest in immediately available
funds. All interest payments on a Certificated
Note, other than interest due at maturity, and all
Installments on Amortizing Notes, will be made by
check drawn on BONY and mailed by BONY to the
person entitled thereto as provided in the
Certificated Note. However, holders of $10 million
or more in aggregate principal amount of
Certificated Notes having the same Interest Payment
Date or Installment Date (whether having other
10
26
identical or different terms and provisions) shall
be entitled to receive payments of interest or
Installments, other than at maturity, by wire
transfer of immediately available funds if
appropriate wire transfer instructions have been
received in writing by BONY not less than 15 days
prior to the applicable Interest Payment Date or
Installment Date. Any payment of principal or
interest required to be made on an Interest Payment
Date or Installment Date or at final maturity which
is not a Business Day need not be made on such day,
but may be made on the next succeeding Business Day
with the same force and effect as if made on the
Interest Payment Date or Installment Date or at
maturity, as the case may be, and, except in the
case of payment at final maturity, no interest
shall accrue for the period from and after such
Interest Payment Date or Installment Date or final
maturity.
Certificated Notes presented to BONY at final
maturity for payment will be cancelled by BONY. All
cancelled Certificated Notes held by BONY shall be
destroyed, and BONY shall deliver to the Company a
certificate of destruction.
Settlement Procedures: Settlement Procedures with regard to each
Certificated Note sold by the Company to or through
an Agent (except pursuant to a Terms Agreement)
shall be as follows:
A. The selling Agent will confirm with the
Company by telephone that such Note is a
Certificated Note and of the following
settlement information:
1. Name in which such Note is to be
registered ("Registered Owner").
2. Address of the Registered Owner and
address for payment of principal and
interest.
3. Taxpayer identification number of the
Registered Owner (if available).
4. Principal amount.
5. Maturity date.
6. Interest rate.
7. Interest Payment Dates or Installment
Dates.
8. Redemption provisions, if any.
9. Settlement date.
10. Price.
11. Selling Agent's commission, if any,
determined as provided in the
Distribution Agreement.
12. Amortization schedule, if any.
13. Denomination in which such Note is to be
issued.
14. Any other applicable terms.
B. The Company will advise BONY by telephone or
electronic transmission (confirmed in
writing at any time on the same date) of the
information set forth in Settlement
Procedure "A" above.
C. BONY will complete and distribute a
pre-printed 4-ply Note packet containing the
following documents (or a 1-ply Note with
attached confirmation and 3 appropriately
designated photocopies thereof) in forms
approved by the Company and the selling
Agent:
11
27
1. Certificated Note with customer
information.
2. Stub (copy) One -- for BONY.
3. Stub (copy) Two -- for the selling
Agent.
4. Stub (copy) Three -- for the Company.
X. XXXX will deliver the Certificated Note (with
the confirmation) and Stub (copy) Two to the
selling Agent or to its representative
designated in writing by the selling Agent
(the "Representative") at an office of the
selling Agent or the Representative located
in the borough of Manhattan and south of
Xxxxxxxx Street, and the selling Agent or its
Representative will acknowledge receipt of
the Certificated Note by stamping the
delivery receipt with the date and time
received and returning it to BONY. Such
delivery will be made only against such
receipt and evidence that instructions have
been given by the selling Agent for payment
to the account of the Company in funds
available for immediate use, of an amount
equal to the principal amount of the
Certificated Note. In the event that the
instructions given by the selling Agent for
payment to the account of the Company are
revoked, the Company will as promptly as
possible wire transfer to the account of the
selling Agent or Representative an amount of
immediately available funds equal to the
amount of such payment.
E. The selling Agent or its Representative will
deliver the Certificated Note (with
confirmation) to the customer against
payment in immediately available funds.
Receipt by the customer of the Prospectus,
appropriately amended or supplemented, must
accompany or precede any written offer of
the Certificated Note by the selling Agent,
any delivery of the Certificated Note by the
selling Agent and any confirmation by the
selling Agent of purchase of the
Certificated Note.
If the selling Agent is instructed by the
purchaser to deliver the Certificated Note
and confirmation to different locations, the
Certificated Note and the confirmation will
each be accompanied or preceded by the
Prospectus, appropriately amended or
supplemented, then in effect.
F. The selling Agent or its Representative will
obtain the acknowledgement of receipt of the
Certificated Note by the customer through
completion of Stub (copy) Two.
X. XXXX will send Stub (copy) Three by
first-class mail to the Company.
Periodically, XXXX will also send a statement
to the Company setting forth the principal
amount of the Certificated Notes outstanding
as of that date after giving effect to such
transactions.
In the event of a purchase of Certificated
Notes by the Selling Agent, as principal,
appropriate settlement details will be set
forth in the applicable Terms Agreement to be
entered into between the selling Agent,
BellSouth and the Company.
12
28
Settlement Procedures
Timetable: For offers accepted by the Company, the Settlement
Procedures set forth above shall be completed on or
before the respective times (New York City time)
set forth below:
SETTLEMENT
PROCEDURE TIME
---------- ----
A 5:00 P.M. on day of offer, if available
B 3:00 P.M. on Business Day prior to settlement
C-D 2:15 P.M. on day of settlement
E-F 5:00 P.M. on day of settlement
G 5:00 P.M. on day of settlement
Confirmations: The selling Agent shall, for each Certificated Note
offer received by it and accepted by the Company,
issue a confirmation to the purchaser, setting
forth the details set forth above.
Note Deliveries and Cash
Payment: Upon instructions from the Company, XXXX will
deliver the Certificated Notes to the selling Agent
or its Representative (for the benefit of the
purchaser).
Delivery by BONY of the Certificated Notes will be
made in accordance with paragraph D of the
Settlement Procedures.
Fails: For offers received by the selling Agent, in the
event that a purchaser shall fail to accept
delivery of and make payment for a Certificated
Note, the selling Agent will notify BONY and the
Company by telephone, confirmed in writing, and
return the Certificated Note to BONY. Upon receipt
of such notice, the Company will immediately wire
transfer to the account of the selling Agent an
amount equal to the amount previously credited
thereto in respect of such Certificated Note. Such
wire transfer will be made on the settlement date,
if possible, and in any event not later than the
Business Day following the settlement date. If such
fail shall have occurred for any reason other than
a default by the selling Agent in the performance
of its obligations hereunder and under the
Distribution Agreement, the company will reimburse
the selling Agent on an equitable basis for its
loss of the use of funds during the period when
such funds were credited to the account of the
Company.
Immediately upon receipt of the Certificated Note
in respect of which the fail occurred, BONY will
make appropriate entries in its records, cancel and
destroy the Certificate Note and deliver to the
Company a certificate of destruction.
13
