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EXHIBIT 1.1
GTE CALIFORNIA INCORPORATED
PURCHASE AGREEMENT
GTE California Incorporated, a California corporation (the "Company"),
proposes to issue and sell $____,000,000 aggregate principal amount of its
_____% Debentures, Series ___, Due _____ (the "New Debentures"). Subject to the
terms and conditions set forth or incorporated by reference herein, the Company
agrees to sell and the purchaser or purchasers named in Schedule A attached
hereto (the "Purchasers") severally agree to purchase the New Debentures at
_______% of their principal amount, plus accrued interest, if any, from
____________ to the date of payment for the New Debentures and delivery
thereof. Interest on the New Debentures will be payable semi-annually on
_____________ and _____________, commencing ______________. The New Debentures
will be reoffered to the public at _______% of their principal amount.
All the provisions contained in the Company's Standard Purchase
Agreement Provisions (March 2000 Edition) (the "Standard Purchase Agreement
Provisions") annexed hereto shall be deemed to be a part of this Purchase
Agreement to the same extent as if such provisions had been set forth in full
herein.
REDEMPTION PROVISIONS:
[The New Debentures will not be redeemable prior to maturity.]
OR
[The New Debentures will not be redeemable prior to _____. Thereafter,
the New Debentures will be redeemable on not less than 30 nor more than 60
days' notice given as provided in the Indenture, as a whole or in part, at the
option of the Company at the redemption price set forth below. The "initial
regular redemption price" will be the initial public offering price as defined
below plus the rate of interest on the New Debentures. The redemption price
during the twelve-month period beginning ________ and during the twelve-month
periods beginning on each ____________ thereafter through the twelve-month
period ended ____________ will be determined by reducing the initial regular
redemption price by an amount determined by multiplying (a) 1/_ of the amount
by which such initial regular redemption price exceeds 100% by (b) the number
of such full twelve-month periods which shall have elapsed between ___________
and the date fixed for redemption; and thereafter the redemption prices during
the twelve-month periods beginning ____________ shall be 100%; provided,
however, that all such prices will be specified to the nearest 0.01%, or if
there is no nearest 0.01%, then to the next higher 0.01%.
For the purpose of determining the redemption prices of the New
Debentures, the initial public offering price of the New Debentures shall be
the price, expressed in percentage of principal amount (exclusive of accrued
interest), at which the New Debentures are to be initially offered for sale to
the public; if there is not a public offering of the New Debentures, the
initial public offering price of the New Debentures shall be deemed to be the
price, expressed in percentage of principal amount (exclusive of accrued
interest), to be paid to the Company by the Purchasers.]
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OR
[The New Debentures may be redeemed on not less than 30 nor more than
60 days' notice given as provided in the Indenture, as a whole or from time to
time in part, at the option of the Company, at a redemption price equal to the
greater of (i) 100% of the principal amount thereof and (ii) the sum of the
present values of the remaining scheduled payments of principal and interest
thereon discounted to the date of redemption on a semi-annual basis (assuming a
360-day year consisting of twelve 30-day months) at the Treasury Rate plus __
basis points, plus, in either case, accrued and unpaid interest on the
principal amount being redeemed to such redemption date.
"Treasury Rate" means, with respect to any redemption date, (i) the
yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical release
published by the Board of Governors of the Federal Reserve System designated as
"Statistical Release H.15(519)" or any successor publication which is published
weekly by the Board of Governors of the Federal Reserve System and which
establishes yields on actively traded United States Treasury securities
adjusted to constant maturity under the caption "Treasury Constant Maturities,"
for the maturity corresponding to the Comparable Treasury Issue (if no maturity
is within three months before or after the Remaining Life, yields for the two
published maturities most closely corresponding to the Comparable Treasury
Issue shall be determined and the Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding to the nearest
month) or (ii) if such release (or any successor release) is not published
during the week preceding the calculation date or does not contain such yields,
the rate per annum equal to the semi-annual equivalent yield to maturity of the
Comparable Treasury Issue, calculated using a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such redemption date. The Treasury Rate shall be
calculated on the third Business Day preceding the redemption date.
"Business Day" means any calendar day that is not a Saturday, Sunday
or legal holiday in New York, New York and on which commercial banks are open
for business in New York, New York.
"Comparable Treasury Issue" means the United States Treasury security
selected by an Independent Investment Banker as having a maturity comparable to
the remaining term ("Remaining Life") of the New Debentures to be redeemed that
would be utilized, at the time of selection and in accordance with customary
financial practice, in pricing new issues of corporate debt securities of
comparable maturity to the remaining term of such New Debentures.
"Independent Investment Banker" means ____________________ or, if such
firm is unwilling or unable to select the Comparable Treasury Issue, an
independent investment banking institution of national standing appointed by
the Trustee.
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"Comparable Treasury Price" means (i) the average of three Reference
Treasury Dealer Quotations for such redemption date, or (ii) if the Independent
Investment Banker is unable to obtain three such Reference Treasury Dealer
Quotations, the average of all such quotations obtained.
"Reference Treasury Dealer" means (i)___________________, __________
and ________________, and their respective successors, provided, however, that
if any of the foregoing shall cease to be a primary U.S. Government securities
dealer in The City of New York (a "Primary Treasury Dealer"), the Company shall
substitute therefor another Primary Treasure Dealer and (ii) any other Primary
Treasury Dealer selected by the Independent Investment Banker and approved in
writing by the Company.
"Reference Treasury Dealer Quotations" means, with respect to each
Reference Treasury Dealer and any redemption date, the average, as determined
by the Independent Investment Banker, or the bid and asked prices for the
Comparable Treasury Issue (expressed in each case as a percentage of its
principal amount) quoted in writing to the Independent Investment Banker at
3:30 p.m., New York City time, on the third Business Day preceding such
redemption date.
In the event of redemption of this Debenture in part only, a new
Debenture of like tenor for the unredeemed portion hereof and otherwise having
the same terms as this Debenture shall be issued in the name of the holder
hereof upon the presentation and surrender hereof.]
CLOSING:
The Purchasers agree to pay for the New Debentures, at the option of
the Company, by certified or official bank check or checks or by wire transfer
in each case in same day funds, upon delivery of such New Debentures at 10:00
a.m. (New York City time) on ______________ (the "Closing Date"), or at such
other time, not later than the seventh full business day thereafter, as shall
be agreed upon by the Company and the Purchasers or the firm or firms
designated as the representative or representatives, as the case may be, of the
Purchasers (the "Representative"). The Company shall advise the Representative
not later than the business day immediately preceding the Closing Date of its
decision whether to accept payment for the New Debentures by certified or
official bank check or by wire transfer and, if the Company chooses to accept
payment by wire transfer, the Company shall provide the Representative on such
date immediately preceding the Closing Date with the appropriate wire transfer
instructions.
DENOMINATION OF THE NEW DEBENTURES:
[The New Debentures shall be in the form of temporary or definitive
fully-registered New Debentures in denominations of One Thousand Dollars
($1,000) or any integral multiple thereof, registered in such names as the
Purchasers or the Representative shall request not less than two business days
before the Closing Date. The Company agrees to make the New Debentures
available to the Purchasers or the Representative for inspection at the office
of U.S. Bank Trust National Association (formerly known as First Trust of
California, National Association), Los Angeles, California or The Depository
Trust Company, New York, New York, at least twenty-four hours prior to the time
fixed for the delivery of the New Debentures on the Closing Date.]
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OR
[The New Debentures shall be in the form of one or more Global
Debentures which shall represent, and shall be denominated in an amount equal to
the aggregate principal amount of, the New Debentures and shall be registered in
the name of The Depository Trust Company or its nominee. The Company agrees to
make the New Debentures available to the Purchasers or the Representative for
inspection at the office of U.S. Bank Trust National Association (formerly known
as First Trust of California, National Association), Los Angeles, California or
The Depository Trust Company, New York, New York, at least twenty-four hours
prior to the time fixed for the delivery of the New Debentures on the Closing
Date.]
RESALE:
[The Purchasers represent that they intend to resell the New
Debentures, and therefore the provisions applicable to Reselling Purchasers in
the Standard Purchase Agreement Provisions will be applicable.]
OR
[The Purchasers represent that they do not intend to resell the New
Debentures, and therefore the provisions applicable to Reselling Purchasers in
the Standard Purchase Agreement Provisions will not be applicable.]
In witness whereof, the parties have executed this Purchase Agreement
this _____ day of ___________.
[Names of Purchasers or
Representative]
By:
---------------------------
Title:
GTE CALIFORNIA INCORPORATED
By:
---------------------------
Vice President
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SCHEDULE A
The names of the Purchasers and the principal amount of New Debentures
which each respectively agrees to purchase are as follows:
Principal
Amount
of New
Name Debentures
---- --------------
$ ,000,000
-------------
Total........................... $ ,000,000
=============
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GTE CALIFORNIA INCORPORATED
STANDARD PURCHASE AGREEMENT PROVISIONS
(March 2000 Edition)
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GTE California Incorporated, a California corporation (the "Company"),
may enter into one or more purchase agreements providing for the sale of
debentures to the purchaser or purchasers named therein (the "Purchasers"). The
standard provisions set forth herein will be incorporated by reference in any
such purchase agreement ("Purchase Agreement"). The Purchase Agreement,
including these Standard Purchase Agreement Provisions incorporated therein by
reference, is hereinafter referred to as "this Agreement". Unless otherwise
defined herein, terms used in this Agreement that are defined in the Purchase
Agreement have the meanings set forth therein.
I. SALE OF THE DEBENTURES
The Company proposes to issue one or more series of debentures
pursuant to the provisions of an Indenture dated as of December 1, 1993, as
amended and supplemented by the First Supplemental Indenture dated as of April
15, 1996 (as amended and supplemented, the "Indenture"), between the Company
and U.S. Bank Trust National Association (formerly known as First Trust of
California, National Association), as successor trustee to Bank of America
National Trust and Savings Association (the "Trustee"). In a supplemental
indenture to the Indenture, a resolution of the Board of Directors of the
Company or an officers' certificate pursuant to a supplemental indenture or
board resolution specifically authorizing each new series of debentures, the
Company will designate the title of each new series of debentures, and the
aggregate principal amount, date or dates of maturity, dates for payment and
rate of interest, redemption dates, prices, obligations and restrictions, if
any, and any other terms with respect to each such series.
The Company has filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"),
Registration Statement No. 333-63651 relating to $300,000,000 of the Company's
debentures registered thereunder (from time to time, is hereinafter referred to
as the "Debentures"), including a prospectus which relates to the Debentures,
and has filed with, or transmitted for filing to, the Commission (or will
promptly after the sale so file or transmit for filing) a prospectus supplement
specifically relating to a particular series of Debentures (such particular
series being hereinafter referred to as the "New Debentures") pursuant to Rule
424(b) under the Act ("Rule 424(b)"). The term "Registration Statement" means
the registration statement referred to herein, as amended to the date of the
Purchase Agreement. The term "Basic Prospectus" means the prospectus relating to
the Debentures included in the Registration Statement. The term "Prospectus"
means the Basic Prospectus together with the prospectus supplement specifically
relating to the New Debentures, as filed with, or transmitted for filing to, the
Commission pursuant to Rule 424(b). As used herein, the terms "Registration
Statement", "Basic Prospectus" and "Prospectus" shall include in each case the
material, if any, incorporated by reference therein.
II. PURCHASERS' REPRESENTATIONS AND RESALE
Each Purchaser represents and warrants that information furnished in
writing to the Company expressly for use with respect to the New Debentures
will not contain any untrue statement of a material fact and will not omit any
material fact in connection with such information necessary to make such
information not misleading.
If the Purchasers advise the Company in the Purchase Agreement that
they intend to resell the New Debentures, the Company will assist the
Purchasers as hereinafter provided. The terms of any such resale will be set
forth in the Prospectus. The provisions of Paragraphs C and D of Article VI and
Articles VIII, IX and X of this Agreement apply only to Purchasers that have
advised the Company of their intention to resell the New Debentures ("Reselling
Purchasers"). All other provisions apply to any Purchaser including a Reselling
Purchaser.
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III. CLOSING
The closing will be held at the office of Milbank, Tweed, Xxxxxx &
XxXxxx LLP, One Chase Manhattan Plaza, New York, New York, on the Closing Date.
Concurrent with the delivery of the New Debentures to the Purchasers or to the
Representative for the account of each Purchaser, payment of the full purchase
price of the New Debentures shall be made, at the option of the Company, by
certified or official bank check or checks in same day funds, payable to the
Company or its order, at The Bank of New York, Attention: Corporate Trust
Department, or by wire transfer in same day funds to The Bank of New York for
the account of the Company. Upon receipt of such check or wire transfer by The
Bank of New York, such check or wire transfer shall be deemed to be delivered
at the closing.
IV. CONDITIONS TO PURCHASERS' OBLIGATIONS
The respective obligations of the Purchasers hereunder are subject to
the following conditions:
(A) The Registration Statement shall have become effective and no stop
order suspending the effectiveness of the Registration Statement shall be in
effect, and no proceedings for such purpose shall be pending before or
threatened by the Commission; since the latest date as of which information is
given in the Registration Statement, there shall have been no material adverse
change in the business, business prospects, properties, financial condition or
results of operations of the Company; and the Purchasers or the Representative
shall have received on the Closing Date the customary form of compliance
certificate, dated the Closing Date and signed by the President or a Vice
President of the Company, including the foregoing. The officer executing such
certificate may rely upon the best of his or her knowledge as to proceedings
pending or threatened.
(B) At the Closing Date, there shall be in full force and effect an
order or orders, satisfactory to counsel for the Purchasers, of the California
Public Utility Commission and of such other regulatory authorities, if any, as
may have jurisdiction over the issue and sale of the New Debentures by the
Company to the Purchasers, authorizing such issue and sale as herein and in the
Registration Statement provided, and none of such orders shall contain any
conditions inconsistent with the provisions of this Agreement or of the
Registration Statement.
(C) The Purchasers or the Representative shall have received on the
Closing Date an opinion of Xxxxxxx X. Xxxxx, Esq., Vice President-General
Counsel of the Company, or other counsel to the Company satisfactory to the
Purchasers and counsel to the Purchasers, dated the Closing Date, substantially
in the form set forth in Exhibit A hereto.
(D) The Purchasers or the Representative shall have received on the
Closing Date an opinion of Milbank, Tweed, Xxxxxx & XxXxxx LLP, counsel for the
Purchasers, dated the Closing Date, substantially in the form set forth in
Exhibit B hereto.
(E) The Purchasers or the Representative shall have received on the
Closing Date a letter from Xxxxxx Xxxxxxxx LLP, independent public accountants
for the Company, dated as of the Closing Date, to the effect set forth in
Exhibit C hereto.
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V. CONDITIONS TO COMPANY'S OBLIGATIONS
The obligations of the Company hereunder are subject to the following
conditions:
(A) The Registration Statement shall have become effective and no stop
order suspending the effectiveness of the Registration Statement shall be in
effect, and no proceedings for such purpose shall be pending before or
threatened by the Commission.
(B) At the Closing Date, there shall be in full force and effect an
order or orders, satisfactory to the Company, of the California Public Utility
Commission and of such other regulatory authorities, if any, as may have
jurisdiction over the issue and sale of the New Debentures by the Company to
the Purchasers.
(C) The Company shall have received on the Closing Date the full
purchase price of the New Debentures purchased hereunder.
VI. COVENANTS OF THE COMPANY
In further consideration of the agreements contained herein of the
Purchasers, the Company covenants to the several Purchasers as follows:
(A) To furnish to the Purchasers or the Representative a copy of the
Registration Statement including materials, if any, incorporated by reference
therein and, during the period mentioned in (C) below, to supply as many copies
of the Prospectus, any documents incorporated by reference therein and any
supplements and amendments thereto as the Purchasers or the Representative may
reasonably request. The terms "supplement" and "amendment" or "amend" as used
in this Agreement shall include all documents filed by the Company with the
Commission subsequent to the effective date of the Registration Statement, or
the date of the Basic Prospectus, as the case may be, pursuant to the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), which are
deemed to be incorporated by reference therein.
(B) Before amending or supplementing the Registration Statement or the
Prospectus with respect to the New Debentures, to furnish to any Purchaser or
the Representative, and to counsel for the Purchasers, a copy of each such
proposed amendment or supplement.
The covenants in Paragraphs (C) and (D) apply only to Reselling
Purchasers:
(C) If in the period after the first date of resale of the New
Debentures during which, in the opinion of counsel for the Reselling
Purchasers, the Prospectus is required by law to be delivered, any event shall
occur as a result of which it is necessary to amend or supplement the
Prospectus in order to make a statement therein, in light of the circumstances
when the Prospectus is delivered to a subsequent purchaser, not materially
misleading, or if it is otherwise necessary to amend or supplement the
Prospectus to comply with law, forthwith to prepare and furnish, at its own
expense (unless such amendment shall relate to information furnished by the
Purchasers or the Representative by or on behalf of the Purchasers in writing
expressly for use in the Prospectus), to the Reselling Purchasers, the number
of copies requested by the Reselling Purchasers or the Representative of either
amendments or supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in light of the
circumstances when the Prospectus is delivered to a subsequent purchaser, be
misleading or so that the Prospectus will comply with law.
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(D) To use its best efforts to qualify the New Debentures for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the
Purchasers or the Representative shall reasonably request and to pay all
expenses (including fees and disbursements of counsel) in connection therewith;
provided, however, that the Company, in complying with the foregoing provisions
of this paragraph, shall not be required to qualify as a foreign company or to
register or qualify as a broker or dealer in securities in any jurisdiction or
to consent to service of process in any jurisdiction other than with respect to
claims arising out of the offering or sale of the New Debentures, and provided
further that the Company shall not be required to continue the qualification of
the New Debentures beyond one year from the date of the sale of the New
Debentures.
VII. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the several Purchasers that (i)
each document, if any, filed or to be filed pursuant to the Exchange Act and
incorporated by reference in the Basic Prospectus or the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act and
the rules and regulations thereunder, (ii) each part of the Registration
Statement filed with the Commission pursuant to the Act relating to the New
Debentures, 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) on the effective date of the Registration Statement, the date the
Prospectus is filed pursuant to Rule 424(b) and at all times subsequent to and
including the Closing Date, the Registration Statement and the Prospectus, as
amended or supplemented, if applicable, complied or will comply in all material
respects with the Act and the applicable rules and regulations thereunder, (iv)
on the effective date of the Registration Statement, the Registration Statement
did not contain, and as amended or supplemented, if applicable, will not
contain, any untrue statement of a material fact or omit to state a material
fact necessary in order to make the statements therein not misleading, and on
the date the Prospectus, or any amendment or supplement thereto, is filed
pursuant to Rule 424(b) and on the Closing Date, the Prospectus will not
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; except that these
representations and warranties do not apply to statements or omissions in the
Registration Statement or the Prospectus based upon information furnished to
the Company by any Purchaser or the Representative by or on behalf of any
Purchaser in writing expressly for use therein or to statements or omissions in
the Statement of Eligibility of the Trustee under the Indenture, (v) there are
no legal or governmental proceedings required to be described in the Prospectus
which are not described as required, (vi) the consummation of any transaction
herein contemplated will not result in a breach of any of the terms of any
agreement or instrument to which the Company is a party or any statute or any
order, rule or regulation of any court or governmental agency or body by which
the Company is bound, and (vii) the Indenture has been qualified under the
Trust Indenture Act of 1939, as amended.
VIII. INDEMNIFICATION
The Company agrees to indemnify and hold harmless each Reselling
Purchaser and each person, if any, who controls such Reselling Purchaser within
the meaning of either Section 15 of the Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages and liabilities based upon
any untrue statement or alleged untrue statement of a material fact contained
in the Registration Statement, the Basic Prospectus or the Prospectus (if used
within the period set forth in Paragraph (C) of Article VI hereof, and as
amended or supplemented if the Company shall have
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furnished any amendments or supplements thereto), or based upon any omission or
alleged omission to state therein a material fact required to be stated therein
or necessary to make the statements therein not misleading, except insofar as
such losses, claims, damages or liabilities are based upon any such untrue
statement or omission or alleged untrue statement or omission based upon
information furnished to the Company by any Reselling Purchaser or the
Representative by or on behalf of any Reselling Purchaser in writing expressly
for use therein or by any statement or omission in the Statement of Eligibility
of the Trustee under the Indenture. The foregoing agreement, insofar as it
relates to the Prospectus, shall not inure to the benefit of any Reselling
Purchaser (or to the benefit of any person controlling such Reselling
Purchaser) on account of any losses, claims, damages or liabilities arising
from the sale of any New Debentures by said Reselling Purchaser to any person
if a copy of the Prospectus (as amended or supplemented, if prior to
distribution of the Prospectus to the Reselling Purchaser, the Company shall
have made any supplements or amendments which have been furnished to said
Reselling Purchaser) shall not have been sent or given by or on behalf of such
Reselling Purchaser to such person at or prior to the written confirmation of
the sale of the New Debentures to such person and such statement or omission is
cured in the Prospectus.
Each Reselling Purchaser agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement and
any person controlling the Company to the same extent as the foregoing
indemnity from the Company to each Reselling Purchaser, but only with reference
to information relating to said Reselling Purchaser furnished to the Company in
writing by the Reselling Purchaser or the Representative by or on behalf of
said Reselling Purchaser expressly for use in the Registration Statement or the
Prospectus.
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 of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person or persons against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
(provided, however, that if such indemnified party shall object to the
selection of counsel after having been advised by such counsel that there may
be one or more legal defenses available to the indemnified party which are
different from or additional to those available to the indemnifying party, the
indemnifying party shall designate other counsel reasonably satisfactory to the
indemnified party) and the indemnifying party shall pay the fees and
disbursements of such counsel related to such proceeding. In any such
proceeding, any indemnified party shall have the right to retain its own
counsel, but the fees and expenses of such counsel shall be at the expense of
such indemnified party unless the indemnifying party and the indemnified party
shall have mutually agreed to the retention of such counsel. The indemnifying
party shall not be liable for any settlement of any proceeding effected without
its written consent but if settled with such consent or if there be 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
settlement or judgment.
If the indemnification provided for in this Article VIII is
unavailable to an indemnified party under the first or second paragraph 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 severally contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
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benefits received by the Company on the one hand and the Reselling Purchasers
on the other from the offering of the New Debentures or (ii) if the allocation
provided by clause (i) above is not permitted by applicable law, in such
proportion as is appropriate to reflect not only the relative benefits referred
to in clause (i) above but also the relative fault of the Company on the one
hand and of the Reselling Purchasers on the other in connection with the
statement or omission that resulted in such losses, claims, damages or
liabilities, as well as any other relevant equitable considerations. The
relative benefits received by the Company on the one hand and the Reselling
Purchasers on the other in connection with the offering of the New Debentures
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the New Debentures received by the Company bear to the total
commissions, if any, received by all of the Reselling Purchasers in respect
thereof. If there are no commissions allowed or paid by the Company to the
Reselling Purchasers in respect of the New Debentures, the relative benefits
received by the Reselling Purchasers in the preceding sentence shall be the
difference between the price received by such Reselling Purchasers upon resale
of the New Debentures and the price paid for the New Debentures pursuant to the
Purchase Agreement. The relative fault of the Company on the one hand and of
the Reselling Purchasers 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 or by the Reselling Purchasers
and the parties' relative intent, knowledge, access to information and
opportunity to correct or prevent such statement or omission.
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in this Article VIII 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. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
IX. SURVIVAL
The indemnity and contribution agreements contained in Article VIII
and the representations and warranties of the Company contained in Article VII
of this Agreement shall remain operative and in full force and effect
regardless of (i) any termination of this Agreement, (ii) any investigation
made by any Reselling Purchaser or on behalf of any Reselling Purchaser or any
persons controlling any Reselling Purchaser and (iii) acceptance of and payment
for any of the New Debentures.
X. TERMINATION BY RESELLING PURCHASERS
At any time prior to the Closing Date this Agreement shall be subject
to termination in the absolute discretion of the Reselling Purchasers, by
notice given to the Company, if (i) trading in securities generally on the New
York Stock Exchange shall have been suspended or materially limited, (ii) a
general moratorium on commercial banking activities in New York shall have been
declared by either Federal or New York State authorities, (iii) minimum prices
shall have been established on the New York Stock Exchange by Federal or New
York State authorities or (iv) any outbreak or material escalation of
hostilities involving the United States or declaration by the United States of
a national emergency or war or other calamity or crisis shall have occurred,
the effect of any of which is such as to make it impracticable or inadvisable
to proceed with the delivery of the New Debentures on the terms and in the
manner contemplated by the Prospectus.
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XI. TERMINATION BY PURCHASERS
If this Agreement shall be terminated by the Purchasers because of any
failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason (other
than those set forth in Article V) the Company shall be unable to perform its
obligations under this Agreement, the Company will reimburse the Purchasers for
all out-of-pocket expenses (including the fees and disbursements of counsel)
reasonably incurred by such Purchasers in connection with the New Debentures.
Except as provided herein, the Purchasers shall bear all of their expenses,
including the fees and disbursements of counsel.
XII. SUBSTITUTION OF PURCHASERS
If for any reason any Purchaser shall not purchase the New Debentures
it has agreed to purchase hereunder, the remaining Purchasers shall have the
right within 24 hours to make arrangements satisfactory to the Company for the
purchase of such New Debentures hereunder. If they fail to do so, the amounts
of New Debentures that the remaining Purchasers are obligated, severally, to
purchase under this Agreement shall be increased in the proportions which the
total amount of New Debentures which they have respectively agreed to purchase
bears to the total amount of New Debentures which all non-defaulting Purchasers
have so agreed to purchase, or in such other proportions as the Purchasers may
specify to absorb such unpurchased New Debentures, provided that such aggregate
increases shall not exceed 10% of the total amount of the New Debentures set
forth in Schedule A to the Purchase Agreement. If any unpurchased New
Debentures still remain, the Company shall have the right either to elect to
consummate the sale except as to any such unpurchased New Debentures so
remaining or, within the next succeeding 24 hours, to make arrangements
satisfactory to the remaining Purchasers for the purchase of such New
Debentures. In any such cases, either the Purchasers or the Representative or
the Company shall have the right to postpone the Closing Date for not more than
seven business days to a mutually acceptable date. If the Company shall not
elect to so consummate the sale and any unpurchased New Debentures remain for
which no satisfactory substitute Purchaser is obtained in accordance with the
above provisions, then this Agreement shall terminate without liability on the
part of any non-defaulting Purchaser or the Company for the purchase or sale of
any New Debenture under this Agreement. No provision in this paragraph shall
relieve any defaulting Purchaser of liability to the Company for damages
occasioned by such default.
XIII. MISCELLANEOUS
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
This Agreement shall be governed by and construed in accordance with
the substantive laws of the State of New York.
14
EXHIBIT A
XXXXXXX X. XXXXX
Vice President-General Counsel
GTE California Incorporated
000 Xxxxxx Xxxxx
Xxxxxx, XX 00000
-------------
and the other several Purchasers
referred to in the Purchase Agreement
dated ____________________, among such
Purchasers and GTE California Incorporated
Re: GTE California Incorporated
___% Debentures, Series __, Due ____
Dear Sirs:
I have been requested by GTE California Incorporated, a California
corporation (the "Company"), as its Vice President-General Counsel to furnish
you with my opinion pursuant to a Purchase Agreement dated ______ (the
"Agreement") between you and the Company, relating to the purchase and sale of
$___,000,000 aggregate principal amount of its ___% Debentures, Series __, Due
____ (the "New Debentures").
In this connection I have examined among other things:
(a) The Restated Articles of Incorporation of the Company, as amended,
and the By-laws of the Company, each as presently in effect;
(b) A copy of the Indenture dated as of December 1, 1993, as amended
and supplemented by the First Supplemental Indenture dated as of April 15, 1996
(as amended and supplemented, the "Indenture"), between the Company and U.S.
Bank Trust National Association (formerly known as First Trust of California,
National Association), as successor trustee to Bank of America National Trust
and Savings Association (the "Trustee"), under which the New Debentures are
being issued;
(c) [The Supplemental Indenture, dated as of ____________ (the
"Supplemental Indenture") between the Company and the Trustee] [The resolutions
of the Board of Directors adopted ____________ (the "Board Resolution")] [The
certificate, dated ____________, of authorized officers of the Company pursuant
to authorization from the Board of Directors of the Company (the "Officers'
Certificate")] specifically authorizing the New Debentures, including the
issuance and sale of the New Debentures;
(d) The form of the New Debentures set forth in the [Supplemental
Indenture] [Board Resolution] [Officers' Certificate];
(e) The records of the corporate proceedings of the Company relating
to the authorization, execution and delivery of the Indenture and the
[Supplemental Indenture] [Board Resolution] [Officers' Certificate];
(f) The records of the corporate proceedings of the Company relating
to the authorization, execution and delivery of the Agreement;
15
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(g) The record of all proceedings taken by the Company relating to the
registration of the New Debentures under the Securities Act of 1933, as amended
(the "Act"), and qualification of the Indenture under the Trust Indenture Act
of 1939, as amended (the "TIA");
(h) Statutes, permits and other documents relating to the Company's
franchises;
(i) The records of proceedings and orders issued by the California
Public Utility Commission authorizing the issuance and sale of the New
Debentures; and
(j) Registration Statement No. 333-63651 (hereinafter called the
"Registration Statement"), the prospectus dated __________, together with the
prospectus supplement dated __________ relating to the New Debentures in the
form filed under Rule 424(b) of the Act (hereinafter called the "Prospectus"),
and all documents filed by the Company under the Securities Exchange Act of
1934, as amended (the "Exchange Act"), which are incorporated by reference in
the Prospectus (the "Incorporated Documents").
On the basis of my examination of the foregoing and of such other
documents and matters as I have deemed necessary as the basis for the opinions
hereinafter expressed, I am of the opinion that:
1. The Company is a corporation duly incorporated, validly existing
and in good standing under the laws of the State of California, is a duly
licensed and qualified foreign corporation in good standing under the laws of
the States of Arizona and Nevada, and has adequate corporate power to own and
operate its properties and to carry on the business in which it is now engaged.
There are no states or jurisdictions in which the qualification or licensing of
the Company as a foreign corporation is necessary where the failure to be
qualified or licensed would have a material adverse effect on the Company.
2. All legal proceedings necessary to the authorization, issue and
sale of the New Debentures to you have been taken by the Company.
3. The Agreement has been duly and validly authorized, executed and
delivered by the Company.
4. The Indenture is in proper form, has been duly authorized, has been
duly executed by the Company and the Trustee, and delivered by the Company and
constitutes a legal, valid and binding agreement of the Company enforceable in
accordance with its terms, except as limited by bankruptcy, insolvency and
other laws affecting the enforcement of creditors' rights and the availability
of equitable remedies. The Indenture has been duly qualified under the TIA.
5. The New Debentures conform as to legal matters with the statements
concerning them in the Registration Statement and Prospectus and have been duly
authorized and executed by the Company and (assuming due authentication and
delivery thereof by the Trustee) have been duly issued for value by the Company
and (subject to the qualifications set forth in paragraph 4 above) constitute
legal, valid and binding obligations of the Company enforceable in accordance
with their terms and are entitled to the benefits afforded by the Indenture.
6. The issuance and sale of the New Debentures, as contemplated by the
Agreement, have been duly authorized by the California Public Utility
Commission, and such authorization is in full force and effect and, except as
may be required by the securities or Blue Sky laws of certain jurisdictions,
16
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no other authorization, approval or consent of any governmental regulatory
authority is required for the issuance and sale of the New Debentures.
7. The Company holds valid and subsisting franchises, licenses and
permits adequate for the conduct of its business in the territory served by it,
except for limited areas where the Company operates by sufferance, and none of
the franchises, licenses or permits of the Company contain any unduly
burdensome restrictions.
8. Registration Statement No. 333-63651 became effective on September
28, 1998, and, to the best of my knowledge, no proceedings under Section 8 of
the Act looking toward the possible issuance of a stop order with respect
thereto are pending or threatened and the Registration Statement remains in
effect on the date hereof. The Registration Statement and the Prospectus comply
as to form in all material respects with the relevant provisions of the Act and
of the Exchange Act as to the Incorporated Documents and the applicable rules
and regulations of the Securities and Exchange Commission thereunder, except
that I express no opinion as to the financial statements or other financial
data contained therein. The Prospectus is lawful for use for the purposes
specified in the Act in connection with the offer for sale and sale of the New
Debentures in the manner therein specified. I have no reason to believe that
the Registration Statement or the Incorporated Documents, considered as a whole
on the effective date of the Registration Statement, contained any untrue
statement of a material fact or omitted to state a material fact required to be
stated therein or necessary in order to make the statements therein not
misleading or that the Prospectus and the Incorporated Documents, considered as
a whole on the date hereof, 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, except that in each case I express no opinion as to the financial
statements or other financial data contained therein.
Without my prior written consent, this opinion may not be relied upon
by any person or entity other than the addressee, quoted in whole or in part,
or otherwise referred to in any report or document, or furnished to any other
person or entity, except that Milbank, Tweed, Xxxxxx & XxXxxx LLP may rely upon
this opinion as if this opinion were separately addressed to them.
Very truly yours,
Xxxxxxx X. Xxxxx
Vice President-General Counsel
c: Milbank, Tweed, Xxxxxx & XxXxxx LLP
17
EXHIBIT B
MILBANK, TWEED, XXXXXX & XxXXXX LLP
0 Xxxxx Xxxxxxxxx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
----------
GTE CALIFORNIA INCORPORATED
$___,000,000 __% Debentures, Series __, Due ____
and the other several Purchasers
referred to in the Purchase Agreement
dated ___________________, among such
Purchasers and GTE California Incorporated
Dear Sirs:
We have been designated by GTE California Incorporated (the "Company")
as counsel for the purchasers of $___,000,000 aggregate principal amount of its
___% Debentures, Series __, Due ____ (the "New Debentures"). Pursuant to such
designation and the terms of a Purchase Agreement dated ________, relating to
the New Debentures (the "Purchase Agreement"), entered into by you with the
Company, we have acted as your counsel in connection with your several
purchases this day from the Company of the New Debentures, which are issued
under an Indenture dated as of December 1, 1993, as amended and supplemented by
the First Supplemental Indenture dated as of April 15, 1996 (as amended and
supplemented, the "Indenture"), between the Company and U.S. Bank Trust
National Association (formerly known as First Trust of California, National
Association), as successor trustee to Bank of America National Trust and
Savings Association (the "Trustee").
We have reviewed originals, or copies certified to our satisfaction,
of such corporate records of the Company, indentures, agreements and other
instruments, certificates of public officials and of officers and
representatives of the Company, and other documents, as we have deemed
necessary as a basis for the opinions hereinafter expressed. In such
examination we have assumed the genuineness of all signatures, the authenticity
of all documents submitted to us as originals, the conformity with the original
documents of all documents submitted to us as copies, and the authenticity of
the originals of such latter documents. As to various questions of fact
material to such opinions, we have, when relevant facts were not independently
established, relied upon certifications by officers of the Company and
statements contained in the Registration Statement hereinafter mentioned.
In addition, we attended the closing held today at the offices of
Milbank, Tweed, Xxxxxx & XxXxxx LLP, 1 Chase Manhattan Plaza, New York, New
York, at which the Company caused the New Debentures to be delivered to your
representatives at the Depository Trust Company, 00 Xxxxx Xxxxxx, Xxx Xxxx, Xxx
Xxxx, for your several accounts, against payment therefor.
18
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On the basis of the foregoing and having regard to legal
considerations which we deem relevant, we are of the opinion that:
1. The Company is a validly existing corporation, in good standing,
under the laws of the State of California.
2. The Purchase Agreement has been duly authorized, executed and
delivered by and on behalf of the Company.
3. The Indenture has been duly authorized, executed and delivered by
the Company and constitutes a legal, valid and binding agreement of the Company
enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws of general applicability
affecting the enforceability of creditors' rights. The enforceability of the
Indenture is subject to the effect of general principles of equity (regardless
of whether considered in a proceeding in equity or at law), including without
limitation (i) the possible unavailability of specific performance, injunctive
relief or any other equitable remedy and (ii) concepts of materiality,
reasonableness, good faith and fair dealing. The Indenture has been duly
qualified under the Trust Indenture Act of 1939, as amended.
4. The New Debentures have been duly authorized and conform as to
legal matters in all substantial respects to the description thereof contained
in the Registration Statement and Prospectus hereinafter mentioned. The New
Debentures (assuming due execution thereof by the Company and due
authentication and delivery by the Trustee) have been duly issued for value by
the Company and (subject to the qualifications stated in paragraph 3 above)
constitute legal, valid and binding obligations of the Company, and are
entitled to the benefits afforded by the Indenture in accordance with the terms
of the Indenture and of the New Debentures.
5. On the basis of information received by the Company from the
Securities and Exchange Commission (the "Commission") Registration Statement
No. 333-63651 (the "Registration Statements"), filed with the Commission
pursuant to the Securities Act of 1933, as amended (the "Act"), became
effective under the Act on September 28, 1998, and thereupon the Prospectus
dated __________, as supplemented by the Prospectus Supplement dated
____________ (collectively, the "Prospectus") became lawful for use for the
purposes specified in the Act, in connection with the offer for sale and sale
of the New Debentures in the manner therein specified, subject to compliance
with the provisions of securities or Blue Sky laws of certain States in
connection with the offer for sale or sale of the New Debentures in such
States. To the best of our knowledge, the Registration Statement remains in
effect at this date.
6. The Registration Statement, as of its effective date, and the
Prospectus, as of the date hereof, together with the documents incorporated by
reference therein (the "Incorporated Documents") (except any financial
statements or other financial data contained or incorporated by reference in
the Registration Statement, the Prospectus or such Incorporated Documents, as
to which no opinion is expressed) appear on their face to be appropriately
19
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responsive, in all material respects relevant to the offering of the New
Debentures, to the requirements of the Act and the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as applicable, and the applicable rules
and regulations of the Commission thereunder.
The Registration Statement was filed on Form S-3 under the Act and,
accordingly, the Prospectus does not necessarily contain a current description
of the Company's business and affairs, since Form S-3 provides for the
incorporation by reference of certain documents filed with the Commission which
contain descriptions as of various dates. We participated in conferences with
counsel for, and representatives of, the Company in connection with the
preparation of the Registration Statement and Prospectus and we have reviewed
the Incorporated Documents. In connection with our participation in the
preparation of the Registration Statement and the Prospectus, we have not
independently verified the accuracy, completeness or fairness of the statements
contained therein or in the Incorporated Documents, and the limitations
inherent in the review made by us and the knowledge available to us are such
that we are unable to assume, and we do not assume, any responsibility for the
accuracy, completeness or fairness of the statements contained in the
Registration Statement, the Prospectus or the Incorporated Documents, except as
otherwise specifically stated herein. None of the foregoing disclosed to us any
information which gave us reason to believe that the Registration Statement or
the Incorporated Documents, considered as a whole on the effective date of the
Registration Statement, contained or contain any untrue statement of a material
fact or omitted or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading or that the
Prospectus and the Incorporated Documents, considered as a whole on the date
hereof, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of
the circumstances under which they were made, not misleading. We express no
opinion as to any document filed by the Company under the Exchange Act, whether
prior or subsequent to such effective date, except to the extent that such
documents are Incorporated Documents read together with the Registration
Statement or the Prospectus and considered as a whole, nor do we express any
opinion as to the financial statements or other financial data included in or
omitted from, or incorporated by reference in the Registration Statement, the
Prospectus or the Incorporated Documents.
We express no opinion as to matters governed by any laws other than
the laws of the State of New York, the Federal laws of the United States of
America and, to the extent the foregoing opinions involve laws other than the
laws of the State of New York or the Federal laws of the United States of
America, in reliance upon the opinion of even date herewith of Xxxxxxx X.
Xxxxx, Esq., Vice President-General Counsel of the Company, such other laws.
20
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The opinions contained herein are rendered to you and are solely for
your benefit and the benefit of the Purchasers represented by you in connection
with the transaction contemplated by the Purchase Agreement. These opinions may
not be relied upon by you for any other purpose, or furnished to, quoted or
relied upon by any other person, firm or corporation for any purpose, without
our prior written consent.
Very truly yours,
MILBANK, TWEED, XXXXXX & XxXXXX LLP
21
EXHIBIT C
LETTER OF INDEPENDENT PUBLIC ACCOUNTANTS
The letter of independent public accountants for the Company to be
delivered pursuant to Article IV, paragraph (E) of the document entitled
Standard Purchase Agreement Provisions (March 2000 Edition) shall be to the
effect that:
At the closing, the Purchasers shall have received such number of
copies as are necessary to provide one for each Purchaser of a letter addressed
to the Company and satisfactory to the Purchasers or the Representative and
counsel to the Purchasers, dated as of the Closing Date and encompassing the
performance of certain procedures described in the letter as of a date not more
than five business days prior to the Closing Date (the "Cutoff Date"), from
Xxxxxx Xxxxxxxx LLP, confirming that they are independent public accountants
with respect to the Company within the meaning of the Securities Act of 1933,
as amended (the "Act") and the applicable published rules and regulations of
the Commission thereunder, specifically Rule 2-01 of Regulation S-X, and
stating in effect (1) that in their opinion, the financial statements and
schedules audited by them and incorporated by reference in the Prospectus
comply as to form in all material respects with the applicable accounting
requirements of the Act, and the Securities Exchange Act of 1934, as amended
the ("Exchange Act") and the published rules and regulations thereunder, (2)
that although they have not audited any financial statements of the Company as
of any date or for any period subsequent to the prior-year audit, and although
they have conducted an audit for that period, the purpose (and therefore the
scope) of the audit was to enable them to express their opinion on the
financial statements as of that date and for the year then ended, but not on
the financial statements for any interim period within that year; therefore,
they are unable to and do not express any opinion on the unaudited condensed
consolidated balance sheet as of the latest available interim date, and the
unaudited condensed consolidated statements of income, reinvested earnings, and
cash flows for the latest available interim period subsequent to that
prior-year audit which are included in the Prospectus and for the comparable
period of the preceding year; they have performed the procedures specified by
the American Institute of Certified Public Accountants for a review of interim
financial information as described in SAS No. 71, Interim Financial
Information, on the latest available unaudited interim condensed consolidated
financial statements prepared by the Company, inquired of certain officials of
the Company responsible for financial and accounting matters, and read the
minutes of the Board of Directors and shareholders of the Company, all of which
procedures have been agreed to by the Purchasers, nothing has come to their
attention which caused them to believe that: (a) any unaudited interim
condensed consolidated financial statements incorporated by reference in the
Prospectus (i) do not comply as to form in all material respects with the
applicable accounting requirements of the Exchange Act as it applies to Form
10-Q and the related published rules and regulations thereunder or (ii) have
not been presented in conformity with generally accepted accounting principles
applied on a basis substantially consistent with that of the audited financial
statements incorporated by reference in the Prospectus; or (b) (i) as of the
date of the latest available unaudited condensed consolidated interim financial
Statement prepared by the Company, there have been any changes in the capital
stock or any increase in the short-term indebtedness or long-term debt of the
Company or any decrease in net assets, in each case as compared with the
amounts shown on the latest balance sheet incorporated by reference in the
Prospectus, (ii) for the period from the date of the latest financial
statements included or incorporated by reference in the Prospectus to the
specified date referred to in the preceding clause (i), there were any
decreases in operating revenues, net operating income, net income or the
Company's ratio to earnings to fixed charges, in each case as compared with the
comparable period of the preceding year, or (iii) as of the Cutoff Date there
have been any material changes in the capital stock or any material increase in
the debt of the Company, or any material decreases in net assets, in each case
as compared with amounts shown in the latest balance sheet included or
22
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incorporated by reference in the Prospectus, and (iv) for the period from the
date of the latest available interim financial Statement referred to in clause
(b)(i) above to the Cutoff Date, there were any material decreases in operating
revenues, net operating income or net income, in each case as compared with the
comparable period of the preceding year, except in all instances for changes or
decreases which the Prospectus discloses have occurred or may occur or as
disclosed in such letter and except for changes occasioned by the declaration
and payment of dividends on the stock of the Company or occasioned by sinking
fund payments made on the debt securities of the Company, and (3) that they have
performed the following additional procedures with respect to the ratios of
earnings to fixed charges included or incorporated by reference in the
Prospectus: (i) compared the amounts used in the computation of such ratios with
the amounts included in the financial Statement incorporated by reference in the
Prospectus and noted agreement in all material respects, and (ii) recomputed the
ratios and noted agreement in all material respects.
