Registration No. 33-
50449
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
POST-EFFECTIVE AMENDMENT NO. 1
to
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
GTE NORTH INCORPORATED
(Exact name of registrant as specified in its charter)
Wisconsin 35-1869961
(State of Incorporation) (I.R.S. Employer
Identification No.)
19845 North U.S.31, Westfield, Indiana 46074
(317) 896-6464
(Address and telephone number of principal executive offices)
DAVID S. KAUFFMAN, ESQ. EARLE A. GOODE
GTE Service Corporation GTE North
Incorporated
One Stamford Forum 19845 U.S. 31 North
Stamford, Connecticut 06904 P.O. Box 407
(203) 965-2986 Westfield, Indiana 46074
(317) 896-6100
(Names, addresses and telephone numbers of agents for
service)
_________
Copies to: George J. Forsyth, Esq., Milbank, Tweed, Hadley
& McCloy,
1 Chase Manhattan Plaza, New York, New York
10005.
Approximate date of commencement of proposed sale to the
public: As soon as practicable after the effective date of the
Registration Statement.
CALCULATION OF REGISTRATION
FEE
Proposed Proposed
Maximum Maximum
Title of Each Class Amount Offering Aggregate
Amount of
of Securities To Be Price Per Offering Registration
To Be
Registered Registered Unit Price Fee*
Debentures $250,000,000 101% $252,500,000
$78,906.25**
* Registration fee was calculated pursuant to Rule 457(a) under
the Securities
Act of 1933.
** Previously paid on September 30, 1993.
_________________________________________________________________
____________
PROSPECTUS
SUBJECT TO COMPLETION, DATED JANUARY 6, 1994
GTE NORTH INCORPORATED
$250,000,000
% DEBENTURES, SERIES A, DUE 2004
________________
Interest on the % Debentures, Series A, Due 2004 (the
"New Debentures") is payable on January 15 and July 15 of each
year, commencing July 15, 1994. The New Debentures will not be
redeemable prior to maturity.
________________
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR
ANY STATE SECURITIES COMMISSION PASSED UPON THE ACCURACY
OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE
CONTRARY IS A CRIMINAL OFFENSE.
________________
This Prospectus, when issued, will be used by GTE North
Incorporated (the "Company") only in connection with its
invitation for bids for the purchase from it of the New
Debentures referred to herein. If the Company accepts a bid for
the purchase of the New Debentures, this Prospectus will be
amended so as to include certain information not now included
herein.
________________
The date of this Prospectus is , 1994.
STATEMENT OF AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and, in accordance therewith, files reports and other information
with the Securities and Exchange Commission ("SEC"). These
reports and other information can be inspected and copied at the
public reference facilities maintained by the SEC at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, as well as at
the following Regional Offices: Seven World Trade Center, New
York, New York 10048 and 500 West Madison Street, Chicago,
Illinois 60661. Copies of such material can be obtained from the
public reference section of the SEC at its prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents are incorporated herein by reference:
1. The Registration Statement on Form S-4 of the Company
(File No. 33-55704);
2. Items 10, 11, 12, 13 and 14(b) of the Annual Report on
Form 10-K of GTE North Incorporated, a predecessor to
the Company which merged with and into the Company on
April 1, 1993 and whose name was adopted by the Company
on April 2, 1993 (the "Predecessor Corporation"), for
the fiscal year ended December 31, 1992;
3. The Quarterly Reports on Form 10-Q of the Company for
the quarters ended March 31, 1993, June 30, 1993 and
September 30, 1993; and
4. The Current Reports on Form 8-K of the Company dated
April 1, 1993 and September 28, 1993.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act on or after the date of
this Prospectus and prior to the termination of the offering of
the New Debentures hereunder shall be deemed to be incorporated
by reference in this Prospectus and to be part hereof from the
date of filing of such documents.
The Company hereby undertakes to provide without charge to each
person to whom a copy of this Prospectus has been delivered, on
the written or oral request of any such person, including any
beneficial owner, a copy of any or all of the documents referred
to above which have been or may be incorporated in this
Prospectus by reference, other than exhibits to such documents
unless such exhibits are specifically incorporated by reference
into the information that the Prospectus incorporates. Requests
for such copies should be directed to David S. Kauffman, Esq.,
Assistant Secretary of the Company, at One Stamford Forum,
Stamford, Connecticut 06904. Mr. Kauffman's telephone number is
(203) 965-2986.
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THE COMPANY
General
The Company was incorporated in Wisconsin as Contel North
Incorporated on June 22, 1992. There is no public trading market
for the Common Stock of the Company because all of the Common
Stock of the Company is owned by GTE Corporation, a New York
corporation ("GTE"). The Company has one wholly-owned
subsidiary, GTW Telephone Systems Incorporated, which markets and
services telecommunications customer premises equipment. The
Company's principal executive offices are located at 19845 North
U.S. 31, Westfield, Indiana, 46074, telephone number (317) 896-
6464. No matters have been submitted to a vote of the holders of
the Company's Preferred Stock or long-term debt since the date of
the incorporation of the Company.
The Predecessor Corporation, the Contel Subsidiaries and the
Mergers
Prior to April 1, 1993, the Company had no business operations
and no material assets. On April 1, 1993, the Predecessor
Corporation, along with Contel of Illinois, Inc., Contel of
Indiana, Inc. and Contel of Pennsylvania, Inc. (the "Contel
Subsidiaries"), merged with and into the Company (the "Mergers").
On April 2, 1993, the Company changed its name to GTE North
Incorporated.
The Predecessor Corporation was incorporated in Wisconsin on
January 27, 1987 and was the successor to the merger of eight
telephone companies into the Predecessor Corporation on March 31,
1987. All of the Common Stock of the Predecessor Corporation was
owned by GTE. Prior to March 31, 1993, the Predecessor
Corporation provided communication services in the states of
Illinois, Indiana, Iowa, Kansas, Michigan, Minnesota, Missouri,
Nebraska, Ohio, Pennsylvania and Wisconsin. On March 31, 1993,
the Predecessor Corporation transferred its assets and operations
in Iowa, Kansas, Minnesota, Missouri and Nebraska to GTE Midwest
Incorporated, which is now a wholly-owned subsidiary of GTE (the
"Midwest Transfer"). In addition, on March 31, 1993, all of the
directors and executive officers of the Predecessor Corporation
were elected as directors and executive officers, respectively,
of the Company (to the extent that such persons were not already
serving in such capacities prior to that date).
The Contel Subsidiaries were indirect, wholly-owned subsidiaries
of GTE. They provided communication services in the states of
Illinois, Indiana and Pennsylvania. The Contel Subsidiaries were,
individually and in the aggregate, significantly smaller in terms
of operating revenues, net income and total assets than the
Predecessor Corporation prior to the Midwest Transfer.
Where appropriate, financial and other information has been
restated in this Prospectus to reflect the Midwest Transfer and
the Mergers as if such events had been consummated as of the date
or at the beginning of the respective periods presented.
Business
The Company provides local telephone service within its franchise
areas and intraLATA (Local Access Transport Area) long distance
service between the Company's facilities and the facilities of
other telephone companies within the Company's LATAs. InterLATA
service to other points in and out of the states in which the
Company operates is provided through connection with
interexchange (long distance) common carriers. These common
carriers are charged fees (access charges) for interconnection to
the Company's local facilities. End user business and
residential customers are also charged access charges for access
to the facilities of the long distance carriers.
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The Company also earns other revenues by leasing interexchange
plant facilities and providing such services as billing and
collection and operator services to interexchange carriers,
primarily American Telephone and Telegraph Company (AT&T). The
number of access lines served has grown steadily from 3,537,907
on January 1, 1988 to 3,897,641 on December 31, 1992.
The following table denotes the access lines in the states in
which the Company operates as of December 31, 1992:
Access
State Lines Served
Indiana 810,877
Illinois 764,997
Ohio 740,866
Pennsylvania 584,005
Michigan 583,534
Wisconsin 413,362
Total 3,897,641
The Company's principal line of business is providing
telecommunication services. These services fall into five major
classes: local network, network access, long distance, equipment
sales and service, and other. Revenues from each of these
classes over the last three years were as follows:
Years Ended December 31
1992 1991 1990
(Thousands of Dollars)
Local Network Services $ 945,175 $ 916,302 $ 871,331
% of Total Revenues 37% 36% 35%
Network Access Services $ 973,661 $ 966,500 $ 964,457
% of Total Revenues 38% 39% 39%
Long Distance Services $ 332,150 $ 319,674 $ 319,577
% of Total Revenues 13% 13% 13%
Equipment Sales and Services $ 103,607 $ 127,485
$ 128,256
% of Total Revenues 4% 5% 5%
Other $ 205,449 $ 175,026 $ 193,932
% of Total Revenues 8% 7% 8%
The Company holds franchises, licenses and permits adequate for
the conduct of its business in the territory which it serves.
Rates, Regulation and Competition
The Company is subject to regulation by the regulatory bodies of
the states of Illinois, Indiana, Michigan, Ohio, Pennsylvania and
Wisconsin as to its intrastate business operations and by the
Federal Communications Commission (FCC) as to its interstate
business operations.
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FCC and other regulatory actions as well as advances in
technology have expanded the types of products and services
available in the marketplace, as well as the number of
alternative service providers. As a result, the Company faces
increasing competition in virtually all aspects of its business.
Specialized communications companies have been successful in some
markets in constructing new systems to bypass the local exchange
network. Additional competition from interexchange carriers as
well as wireless and cable TV companies continues to evolve for
both intrastate and interstate communications.
The GTE Consent Decree, which was issued in connection with the
1983 acquisition of GTE Sprint (since divested) and GTE Spacenet,
prohibits GTE's domestic telephone operating subsidiaries from
providing long distance service beyond the boundaries of the
local access transport area (LATA). This prohibition restricts
their direct provision of long distance service to relatively
short distances. The degree of competition allowed in the
intraLATA market is subject to state regulation. However,
regulatory constraints on intraLATA competition are gradually
being relaxed. Some form of intraLATA competition is authorized
in most of the states in which the Company provides service.
During 1993, GTE continued to introduce new business features and
pricing options. The introduction of Integrated Services Digital
Network (ISDN) and Switched Multimegabit Data Services (SMDS) is
specifically targeted at satisfying the increasing demand for
more efficient and effective data communications vehicles. In
1993, GTE initiated an infrastructure project which will
establish 50 Synchronous Optical (SONET) fiber ring networks in
twelve states to provide access to very high speed digital
transmission systems and self-healing fiber networks.
The Company expects its financial results to benefit from reduced
costs and the introduction of new products and services that will
result in the increased usage of its telephone networks.
However, it is likely that such improvements will be offset in
part by strategic price reductions and revenue erosion resulting
from increased competition.
Legal Matters
The Company, along with many other corporations, has been named
as a potentially responsible party at a number of "Superfund
Sites" - sites, lawfully used in the past, but now determined to
require remediation. Additionally, operations of the Company
have been subjected to new and increasingly stringent
environmental requirements. While the Company's annual
expenditures for site cleanups and environmental compliance have
not been
material, they are increasing. By way of illustration, these
increasing costs include the Company's share of cleanup expenses
for Superfund Sites, outlays required to keep existing operations
in compliance with environmental regulations and an underground
storage tank replacement program.
Although the complexity of environmental regulations, and the
widespread imposition of multi-party joint and several
liabilities at Superfund Sites, makes it difficult to assess the
Company's share of liability, management believes it has made
adequate provision in its financial statements.
There are no pending legal proceedings which would have a
material adverse impact on the Company's financial condition or
results of operations.
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Employees
At September 30, 1993, the Company had 18,404 employees. In
1992, agreements were reached on one contract with the
International Association of Machinists and Aerospace Workers,
four contracts with the International Brotherhood of Electrical
Workers ("IBEW"), and two contracts with the United Steelworkers
of America. In 1993, agreements were reached on one contract
with the Communications Workers of America ("CWA") and on four
contracts with the IBEW, one contract with the CWA expired and is
being renegotiated, and one contract with the Bakers,
Confectioners and Chocolate Workers expired and is being
renegotiated.
Properties
The Company's property consists of network facilities (80%),
company facilities (14%), customer premises equipment (3%) and
other (3%). From January 1, 1988 to December 31, 1992, the
Company made gross property additions in the amount of $2.8
billion and property retirements of $1.4 billion. Substantially
all of the Company's property is subject to liens securing long-
term debt. In the opinion of management, the Company's telephone
plant is substantially in good repair.
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USE OF PROCEEDS
The net proceeds from the offering and sale of the New
Debentures, exclusive of accrued interest, will be applied toward
the payment of short-term debt incurred for the purpose of
financing the Company's construction program in 1993. At
September 30, 1993, the Company had short-term borrowings of
$271,587,000 at an annual average interest rate of 3.10%. The
Company's construction budget in 1993 was approximately
$535,000,000 and approximately $401,300,000 had been spent
through September 30, 1993, principally for central office
equipment, outside plant and land and buildings. The balance of
the funds for the completion of the 1993 construction program
were obtained primarily from internal sources and short-term
loans.
RATIO OF EARNINGS TO FIXED CHARGES
Nine
Months
Ended
September 30, Years Ended
December 31,
1993(a)1992 1991 1990 1989 1988
Ratio of Earnings to Fixed
Charges (Unaudited)(b)..... 4.60 5.09 4.12 3.94 4.19 4.37
___________
(a) Reflects increased operating expenses related to the
adoption, effective January 1, 1993, of Statement of
Financial Accounting Standards (SFAS) No. 106 "Employers'
Accounting for Postretirement Benefits Other than Pensions"
and a one-time charge associated with the enhanced early
retirement and voluntary separation programs completed during
the second quarter of 1993. Excluding these items, the ratio
of earnings to fixed charges for the nine months ended
September 30, 1993 would have been 4.88.
(b) Computed as follows: (1) "earnings" have been calculated by
adding income taxes and fixed charges to income from
continuing operations; (2) "fixed charges" include interest
expense and the portion of rentals representing interest.
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SELECTED FINANCIAL DATA
Set forth below is certain selected financial data regarding the
Predecessor Corporation, Contel of Illinois, Inc., Contel of
Indiana, Inc., Contel of Pennsylvania, Inc. and the Company.
The selected financial data for the Predecessor Corporation does
not reflect the Midwest Transfer.
1992 1991(a) 1990
1989 1988
(Thousands of Dollars)
Predecessor Corporation:
Operating Revenues $2,461,347$2,390,016$2,352,312$2,348,708$2,190,305
Net Income 371,557 282,994 270,728 281,702 283,889
Total Assets 5,555,0335,244,0604,976,6394,880,9394,730,744
Long-term Obligations and
Preferred Stock, Subject
to Mandatory Redemption1,421,0691,445,3491,242,4071,267,9091,293,675
Contel of Illinois, Inc.:
Operating Revenues $ 122,601$ 130,969$ 135,041$ 125,885$ 125,858
Net Income 13,568 13,525 16,085 16,090 19,318
Total Assets 222,277 241,456 223,567 219,015 213,881
Long-term Obligations 38,206 49,775 54,410 39,525 41,463
Contel of Indiana, Inc.:
Operating Revenues $ 101,179$ 100,623$ 105,628$ 96,109$ 92,379
Net Income 14,218 12,849 15,136 12,529 12,441
Total Assets 180,159 174,968 172,733 170,072 168,999
Long-term Obligations 13,686 16,925 31,408 36,618 38,005
Contel of Pennsylvania, Inc.:
Operating Revenues $ 58,291$ 54,923$ 57,283$ 52,518$ 51,128
Net Income 5,502 4,049 6,520 5,976 5,330
Total Assets 94,836 102,694 94,470 92,840 90,776
Long-term Obligations 17,292 25,251 30,834 27,656 28,140
The Company:
Operating Revenues $2,560,042$2,504,987$2,480,553$2,461,450$2,306,040
Net Income 369,542 291,837 282,221 293,291 295,702
Total Assets 5,679,5705,385,3035,100,6674,991,7674,825,992
Long-term Obligations and
Preferred Stock, Subject to
Mandatory Redemption1,387,0721,434,2091,255,7811,266,1091,294,480
____________
(a) The 1991 net income includes one time costs
of $9.2 million, $3.0 million, $4.5 million, $2.1 million and
$17.1 million for the Predecessor Corporation, Contel of
Indiana, Inc., Contel of Illinois, Inc., Contel of
Pennsylvania, Inc. and the Company, respectively, related to
costs incurred for the merger of GTE and Contel Corporation
which was consummated on March 14, 1991.
Per share information is omitted since each of the above
corporation's Common Stock is 100% owned, directly or indirectly,
by GTE. Market values of the Preferred Stock of the Predecessor
Corporation and the Company are also omitted because there is no
established public trading market for the Preferred Stock and
price quotations are therefore generally unavailable.
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THE NEW DEBENTURES
The New Debentures are to be issued as a new series of the
Company's Debentures under an Indenture dated as of January 1,
1994 (the "Indenture"), between the Company and The First
National Bank of Chicago, as Trustee (the "Trustee"). By
resolution of the Board of Directors of the Company specifically
authorizing the New Debentures (the "Board Resolution"), the
Company will designate the title of the series, 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 such
series. The following summary does not purport to be complete
and is subject in all respects to the provisions of, and is
qualified in its entirety by express reference to, the cited
Articles and Sections of the Indenture and the Board Resolution,
which are filed as exhibits to the Registration Statement.
Form And Exchange
The New Debentures are to be issued in registered form only in
denominations of $1,000 and integral multiples thereof and will
be exchangeable for New Debentures of other denominations of a
like aggregate principal amount without charge except for
reimbursement of taxes, if any. (BOARD RESOLUTION)
Maturity, Interest And Payment
The New Debentures will mature January 15, 2004. Interest will
be payable semi-annually on January 15 and July 15, commencing
July 15, 1994, to the persons in whose names the New Debentures
are registered at the close of business on the January 1 or July
1, as the case may be, preceding such interest payment date,
subject to certain exceptions provided for in the Indenture.
(BOARD RESOLUTION)
Redemption
The New Debentures will not be redeemable prior to maturity.
(BOARD RESOLUTION)
Restrictions
The New Debentures will not be secured. The Indenture provides,
however, that if the Company shall at any time mortgage or pledge
any of its property, the Company will secure the New Debentures,
equally and ratably with the other indebtedness or obligations
secured by such mortgage or pledge, so long as such other
indebtedness or obligations shall be so secured. There are
certain exceptions to the foregoing, among them that the
Debentures need not be secured:
(i) in the case of (a) purchase money mortgages, (b) conditional
sales agreements or (c) mortgages existing at the time of
purchase, on property acquired after the date of the
Indenture;
(ii) with respect to certain deposits or pledges to secure the
performance of bids, tenders, contracts or leases or in
connection with workmen's compensation and similar matters;
(iii) with respect to mechanics' and similar liens in the
ordinary course of business;
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(iv) with respect to the Company's first mortgage bonds
outstanding on the date of the Indenture, issued and secured
by the Company and its predecessors in interest under
various security instruments, all of which have been assumed
by the Company (collectively, the "First Mortgage Bonds"),
and any replacement or renewal (without increase in
principal amount or extension of final maturity date) of
such outstanding First Mortgage Bonds;
(v) with respect to First Mortgage Bonds which may be issued by
the Company in connection with the consolidation or merger
of the Company with or into certain affiliates of the
Company in exchange for or otherwise in substitution for
long-term senior indebtedness of any such affiliate
("Affiliate Debt") which by its terms (x) is secured by a
mortgage on all or a portion of the property of such
affiliate, (y) prohibits long-term senior secured
indebtedness from being incurred by such affiliate, or a
successor thereto, unless the Affiliate Debt shall be
secured equally and ratably with such long-term senior
secured indebtedness or (z) prohibits long-term senior
secured indebtedness from being incurred by such affiliate;
or
(vi) with respect to indebtedness required to be assumed by the
Company in connection with the merger or consolidation of
certain affiliates of the Company with or into the Company.
(SECTION 4.05)
The Indenture does not limit the amount of debt securities which
may be issued or the amount of debt which may be incurred by the
Company. (SECTION 2.01) However, while the restriction in the
Indenture described above would not afford the holders of the New
Debentures protection in the event of a highly leveraged
transaction in which unsecured indebtedness was incurred, the
issuance of most debt securities by the Company, including the
New Debentures, does require state regulatory approval (which may
or may not be granted). In addition, in the event of a highly
leveraged transaction in which secured indebtedness was incurred,
the above restriction would require the New Debentures to be
secured equally and ratably with such secured indebtedness,
subject to the exceptions described above. It is unlikely that a
leveraged buyout initiated or supported by the Company, the
management of the Company or an affiliate of either party would
occur because all of the common stock of the Company is owned by
GTE, which has no intention of selling its ownership in the
Company.
Modifications Of Indenture
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a
majority in aggregate principal amount of the Debentures of any
series at the time outstanding and affected by such modification,
to modify the Indenture or any supplemental indenture affecting
that series of the Debentures or the rights of the holders of
that series of Debentures. However, no such modification shall
(i) extend the fixed maturity of any Debenture, or reduce the
principal amount thereof, or reduce the rate or extend the time
of payment of interest thereon, or reduce any premium payable
upon the redemption thereof, without the consent of the holder of
each Debenture so affected, or (ii) reduce the aforesaid
percentage of Debentures, the holders of which are required to
consent to any such supplemental indenture, without the consent
of each holder of Debentures then outstanding and affected
thereby. (SECTION 9.02)
The Company and the Trustee may execute, without the consent of
any holder of Debentures, any supplemental indenture for certain
other usual purposes including the creation of any new series of
Debentures. (SECTIONS 2.01, 9.01 and 10.01)
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Events of Default
The Indenture provides that the following described events
constitute "Events of Default" with respect to each series of the
Debentures thereunder: (a) failure for 30 business days to pay
interest on the Debentures of that series when due; (b) failure
to pay principal or premium, if any, on the Debentures of that
series when due, whether at maturity, upon redemption, by
declaration or otherwise, or to make any sinking fund payment
with respect to that series; (c) failure to observe or perform
any other covenant (other than those specifically relating to
another series) in the Indenture for 90 days after notice with
respect thereto; or (d) certain events in bankruptcy, insolvency
or reorganization. (SECTION 6.01)
The holders of a majority in aggregate outstanding principal
amount of any series of the Debentures have the right to direct
the time, method and place of conducting any proceeding for any
remedy available to the Trustee for that series. (SECTION 6.06)
The Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of any particular series of the
Debentures may declare the principal due and payable immediately
on default with respect to such series, but the holders of a
majority in aggregate outstanding principal amount of such series
may rescind and annul such declaration and waive the default if
the default has been cured and a sum sufficient to pay all
matured installments of interest and principal and any premium
has been deposited with the Trustee. (SECTION 6.01)
The holders of a majority in aggregate outstanding principal
amount of any series of the Debentures may, on behalf of the
holders of all the Debentures of such series, waive any past
default except a default in the payment of principal, premium, if
any, or interest. (SECTION 6.06) The Company is required to
file annually with the Trustee a certificate as to whether or not
the Company is in compliance with all the conditions and
covenants under the Indenture. (SECTION 5.03)
Concerning The Trustee
The Trustee, prior to an Event of Default, undertakes to perform
only such duties as are specifically set forth in the Indenture
and, after the occurrence of an Event of Default, shall exercise
the same degree of care as a prudent individual would exercise in
the conduct of his own affairs. (SECTION 7.01) Subject to such
provision, the Trustee is under no obligation to exercise any of
the powers vested in it by the Indenture at the request of any
holders of Debentures, unless offered reasonable security or
indemnity by such security holders against the costs, expenses
and liabilities which might be incurred thereby. (SECTION 7.02)
The Trustee is not required to expend or risk its own funds or
incur personal financial liability in the performance of its
duties if the Trustee reasonably believes that repayment or
adequate indemnity is not reasonably assured to it. (SECTION
7.01)
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EXPERTS AND LEGAL OPINIONS
The financial statements and schedules included as an exhibit to
the Company's Current Report on Form 8-K dated September 28,
1993, as well as the financial statements and schedules included
or incorporated by reference in the Registration Statement on
Form S-4 (File No. 33-55704) of the Company, each of which is
incorporated by reference in this Prospectus, have been audited
by Arthur Andersen & Co., independent public accountants, as
indicated in their reports with respect thereto, and are
incorporated herein in reliance upon the authority of said firm
as experts in giving said reports. Reference is made to said
reports on financial statements, which include an explanatory
paragraph with respect to the change in the method of accounting
for income taxes in 1992 as discussed in Note 1 to the financial
statements. Arthur Andersen & Co. has audited the financial
statements of the Company and the Predecessor Corporation since
their respective incorporations. For the periods presented in
the Company's Current Report on Form 8-K dated September 28,
1993, which is incorporated by reference herein, there have been
no changes in or disagreements with the Company's independent
public accountants on accounting and financial disclosure.
The statements of law and legal conclusions under "The New
Debentures" have been reviewed by Dale E. Sporleder, Esq., Area
Vice President-General Counsel and Secretary of the Company, and
are included upon his authority as an expert. Certain legal
matters in connection with the New Debentures will be passed upon
for the Company by Mr. Sporleder, and for the underwriters by
Milbank, Tweed, Hadley & McCloy of New York, New York.
UNDERWRITING
The underwriters of the New Debentures will be determined in the
manner set forth in the Invitation for Bids for the purchase of
the New Debentures.
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__________________________________________
______________________________
Neither the delivery of this Prospectus GTE North Incorporated
nor any sales made hereunder shall under
any circumstances create any implication
that there has been no change in the
affairs of the Company since the date $250,000,000
hereof. No dealer, salesman or any other % Debentures,
Series A,
person has been authorized to give any Due 2004
information or to make any representations
other than those contained in this Pros-
pectus in connection with the offer con- ____________
tained in this Prospectus, and if given
or made, such information or representa-
tions must not be relied upon. This PROSPECTUS
Prospectus does not constitute an offer-
ing by the Company or any Dealer in any ____________
jurisdiction in which such offering may
not be lawfully made.
CONTENTS
Page
Statement of Available Information... 2
Incorporation of Certain Documents
by Reference........................ 2
The Company.......................... 3
Use of Proceeds...................... 7 Dated ,
1994
Ratio of Earnings to Fixed Charges... 7
Selected Financial Data.............. 8
The New Debentures................... 9
Experts and Legal Opinions........... 12
Underwriting......................... 12
_____________
___________________________________________
_____________________________
N:S-3/A:17
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 16. Exhibits.
See Exhibit Index on Page E-1.
II-1
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933,
the registrant certifies that it has reasonable grounds to
believe that it meets all of the requirements for filing on Form
S-3 and has duly caused this Amendment to Registration Statement
to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Westfield, State of Indiana, on the
6th day of January, 1994.
GTE NORTH INCORPORATED
(Registrant)
By: EARL A. GOODE
Earl A. Goode
President
Pursuant to the requirements of the Securities Act of 1933,
this Registration Statement is signed below by the following
persons in the capacities and on the dates indicated.
EARL A. GOODE )
)
Earl A. Goode President and )
Director )
(Principal Executive )
Officer) )
)
)
GERALD K. DINSMORE )
)
Gerald K. Dinsmore Vice President )
- Finance ) January 6, 1994
(Principal Financial )
Officer) )
)
)
)
WILLIAM M. EDWARDS III )
)
William M. Edwards III Controller )
(Principal Accounting )
Officer) )
)
)
)
KENT B. FOSTER )
)
Kent B. Foster Director )
II-2
EARL A. GOODE )
)
Earl A. Goode Director )
)
)
)
MICHAEL B. ESSTMAN )
)
Michael B. Esstman Director )
)
)
)
THOMAS W. WHITE )
) January 6, 1994
Thomas W. White Director )
)
)
)
GERALD K. DINSMORE )
)
Gerald K. Dinsmore Director )
)
)
)
RICHARD M. CAHILL )
)
Richard M. Cahill Director )
)
)
II-3
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Form S-3 of the following:
1.Our reports, dated January 24, 1992, on the financial
statements of Contel of Indiana, Inc., Contel of
Illinois, Inc. and Contel of Pennsylvania, Inc., and our
reports dated January 28, 1992 on the consolidated
financial statements and supporting schedules of GTE
North Incorporated and subsidiaries (the Predecessor
Corporation), included or incorporated by reference in
the previously filed Registration Statement on Form S-4
(File No. 33-55704) of Contel North Incorporated;
2.Our reports, dated September 24, 1993, on the
consolidated financial statements and supporting
schedules of GTE North Incorporated and subsidiaries
included in its previously filed Current Report on Form 8-
K dated September 28, 1993; and
3.To the reference to our Firm under the caption "Experts
and Legal Opinions" in this Registration Statement.
ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Dallas, Texas
January 6, 1994
II-4
EXHIBIT INDEX
Exhibit
Number
1.1 - Form of Purchase Agreement, including Standard Purchase
Agreement Provisions (January, 1994 Edition).
4.1 - Form of Indenture between GTE North Incorporated and The
First National Bank of Chicago, as Trustee, dated as of
January 1, 1994.
4.2 - Form of the Board Resolution under which the Debentures
being registered are to be issued.
12 - Statement of the ratio of earnings to fixed charges.
23.1 - Consent of Arthur Andersen & Co. is included elsewhere in
this Registration Statement.
26 - Form of Invitation for Bids.
E-1
N:S-3/A:22
GTE NORTH INCORPORATED
PURCHASE AGREEMENT
GTE North Incorporated, a Wisconsin corporation (the
"Company"), proposes to issue and sell $250,000,000 aggregate
principal amount of its ____% Debentures, Series A, Due 2004 (the
"New Debentures"). Subject to the terms and conditions set forth
or incorporated by reference herein, the Company agrees to sell
and the purchaser(s) named in Schedule A attached hereto (the
"Purchaser"), agree(s) to purchase such New Debentures at _____%
of their principal amount plus accrued interest from January 15,
1994, to the date of payment for the New Debentures and delivery
thereof. Interest on the New Debentures will be payable on
January 15 and July 15, commencing July 15, 1994. 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 (January, 1994 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.
CLOSING:
The Purchaser agrees to pay for the New Debentures in New
York Clearing House (next day) funds upon delivery of such New
Debentures at 10:00 A.M. (New York City time) on January , 1994
(the "Closing Date") or at such other time, not later than the
seventh full business day thereafter, as shall be agreed upon.
-2-
RESALE:
[The Purchaser represents that it intends to resell the New
Debentures, and therefore the provisions applicable to a
Reselling Purchaser in the Standard Purchase Agreement Provisions
will be applicable.]
[or]
[The Purchaser represents that it does not intend to resell
the New Debentures and therefore the provisions applicable to a
Reselling Purchaser in the Standard Purchase Agreement Provisions
will not be applicable.]
In witness whereof, the parties have executed this Purchase
Agreement this day of January, 1994.
[Name of Purchaser(s) or
Purchasers' Representative]
By
__________________________________
Title:
GTE NORTH INCORPORATED
By
__________________________________
Vice President
N:S-3/A:25
SCHEDULE A
The names of the Purchaser(s) and the principal amount of
New Debentures which each respectively offers to purchase are as
follows:
Principal Amount
Name of New
Debentures
__________________
$
Total....................................
$250,000,000
___________
GTE NORTH INCORPORATED
STANDARD PURCHASE AGREEMENT PROVISIONS
(January, 1994 Edition)
GTE North Incorporated, a Wisconsin 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 "Purchaser"). 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 (the "New Debentures") pursuant to the provisions of
an Indenture dated as of January 1, 1994 (the "Indenture"),
between the Company and The First National Bank of Chicago, as
Trustee (the "Trustee"). By resolution of the Board of Directors
of the Company specifically authorizing the New Debentures (the
"Board Resolution"), the Company will designate the title of the
series, 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 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 33- ,
including a prospectus, relating to the New Debentures and has
filed with the Commission (or will promptly file with the
Commission) a post-effective amendment (the "Post-Effective
Amendment") to said registration statement to reflect the results
of the competitive bidding for the New Debentures. The term
"Registration Statement" means the registration statement
including the prospectus referred to herein, as amended by the
Post-Effective Amendment, when the latter becomes effective
(including all parts thereof), and the term "Bidding Prospectus"
means the prospectus, as amended, included in the Registration
Statement at the time it became effective. The term "Prospectus"
means the prospectus, as amended, first filed with the Commission
pursuant to Rule 424(b)(3) under the Act, reflecting the results
of the competitive bidding for the New Debentures. As used
herein, the terms "Registration Statement" and "Prospectus" shall
include in each case the material, if any, incorporated by
reference therein.
II. PURCHASER'S 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 Purchaser advises the Company in the Purchase
Agreement that it intends to resell the New Debentures, the
Company will assist the Purchaser as hereinafter provided. The
terms of any such resale will be set forth in the Prospectus.
The provisions of Paragraphs D and E of Article VI and Articles
VIII, IX and X of this Agreement apply only to a Purchaser that
has advised the Company of its intention to resell the New
Debentures ("Reselling Purchaser"). All other provisions apply
to any Purchaser including a Reselling Purchaser.
-2-
III. CLOSING
The closing will be held at the office of GTE Service
Corporation, 5th Floor, One Stamford Forum, Stamford, Connecticut
06904 on the Closing Date. Concurrent with the delivery of the
New Debentures, payment of the full purchase price of the New
Debentures shall be made by the Purchaser by certified or
official bank check or checks in New York Clearing House (next
day) funds, payable to the Company or its order, at The Bank of
New York, Attention: Corporate Trust Department. Upon
notification to the Company of receipt of such check by The Bank
of New York, such check shall be deemed to be delivered at the
closing. 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 Purchaser shall request not less
than three business days before the Closing Date. The Company
agrees to make the New Debentures available to the Purchaser for
inspection at the office of The First National Bank of Chicago,
14 Wall Street, 8th floor, 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.
IV. CONDITIONS TO PURCHASER'S OBLIGATIONS
The obligations of the Purchaser 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
Purchaser 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 Purchaser, of the Illinois Commerce Commission, Indiana
Utility Regulatory Commission, Michigan Public Service
Commission, Public Utilities Commission of Ohio,
Pennsylvania Public Utility Commission, and Public Service
Commission of Wisconsin, 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
Purchaser, 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 Purchaser shall have received on the Closing
Date an opinion of Dale E. Sporleder, Esq., Area Vice
President-General Counsel and Secretary of the Company,
dated the Closing Date, substantially in the form set forth
in Exhibit A hereto.
-3-
(D) The Purchaser shall have received on the Closing
Date an opinion of Milbank, Tweed, Hadley & McCloy, counsel
for the Purchaser, dated the Closing Date, substantially in
the form set forth in Exhibit B hereto.
(E) The Purchaser shall have received on the Closing
Date a letter from Arthur Andersen & Co., independent public
accountants for the Company, dated as of a date not more
than five business days prior to the Closing Date, to the
effect set forth in Exhibit C hereto.
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 Illinois Commerce Commission, Indiana Utility Regulatory
Commission, Michigan Public Service Commission, Public
Utilities Commission of Ohio, Pennsylvania Public Utility
Commission, and Public Service Commission of Wisconsin, 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 Purchaser.
(C) The Company shall receive the full purchase price
of the New Debentures purchased hereunder.
VI. COVENANTS OF THE COMPANY
In further consideration of the agreements contained herein
of any Purchaser, the Company covenants to said Purchaser as
follows:
(A) To furnish to the Purchaser a copy of the
Registration Statement including materials, if any,
incorporated by reference therein and, during the period
mentioned in (D) below, to supply as many copies of the
Prospectus, any documents incorporated by reference therein
and any supplements and amendments thereto as the Purchaser
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 on or after the date of the Bidding Prospectus,
pursuant to the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), which are deemed to be incorporated by
reference in the Prospectus.
(B) For a period of five years, unless all of the New
Debentures shall be sooner retired, to deliver to any
Purchaser who may so request, as soon as practicable after
the end of each fiscal year, a consolidated balance sheet of
the Company as of the end of such year and related
consolidated statements of income, reinvested earnings and
changes in financial position for such year, all as examined
by independent public
-4-
accountants, and to deliver to any Purchaser upon request,
as soon as practicable after the end of each of the first
three quarterly periods of each year a Form 10-Q of the
Company as filed with the Commission.
(C) Before amending or supplementing the Registration
Statement or the Prospectus with respect to the New
Debentures, to furnish to any Purchaser a copy of each such
proposed amendment or supplement.
The covenants in Paragraphs (D) and (E) apply only to
Reselling
Purchasers:
(D) If in the period after the first date of resale of
the New Debentures during which, in the opinion of counsel
for the Reselling Purchaser, 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 Purchaser in writing expressly
for use in the Prospectus), to the Reselling Purchaser, the
number of copies requested by the Reselling Purchaser 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.
(E) 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 Purchaser shall
reasonably request and to pay all expenses (including fees
and disbursements of counsel) in connection therewith and in
connection with the determination of the eligibility of the
New Debentures for investment under the laws of such
jurisdictions as the Purchaser may designate, 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 each Purchaser that
(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 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
-5-
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, (iii) when filed, the Bidding Prospectus complied in
all material respects with the Act and the applicable rules and
regulations thereunder, and the Registration Statement and the
Prospectus so comply and, as amended or supplemented, if
applicable, will so comply, (iv) the Registration Statement and
the Prospectus do 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, in 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 Reselling Purchaser
in writing expressly for use therein or to statements or
omissions in the Statement of Eligibility of the Trustee under
the Indenture, (v) 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, and
(vi) 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 Bidding Prospectus
or the Prospectus (if used within the period set forth in
Paragraph (D) of Article VI hereof, and as amended or
supplemented if the Company shall have 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 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 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 in
-6-
writing 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 and 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 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 benefits received by the Company on the one hand and
the Reselling Purchaser 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 Purchaser 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
Purchaser 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 Purchaser in respect of the New Debentures, the
relative benefits received by the Reselling Purchaser in the
preceding sentence shall be the difference between the price
received by such Purchaser 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 Purchaser 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 Purchaser and the parties'
relative intent, knowledge, access to information and opportunity
to correct or prevent such statement or omission.
-7-
The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to
in the immediately preceding paragraph 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 person controlling any Reselling Purchaser and (iii)
acceptance of and payment for any of the New Debentures.
X. TERMINATION BY RESELLING PURCHASER
At any time prior to the Closing Date this Agreement shall
be subject to termination in the absolute discretion of any
Reselling Purchaser, 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.
XI. TERMINATION BY PURCHASER
If this Agreement shall be terminated by the Purchaser
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 Purchaser
for all out-of-pocket expenses (including the fees and
disbursements of counsel) reasonably incurred by such Purchaser
in connection with the New Debentures. Except as provided
herein, the Purchaser shall bear all of its 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
-8-
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 hereto. 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 their representatives 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 the 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.
N:S-3/A:35
EXHIBIT A
DALE E. SPORLEDER, ESQ.
Area Vice President-General Counsel and Secretary
, 1994
and the other Purchasers named in
the Purchase Agreement dated
1994, between GTE North Incorporated
and such Purchasers
Re: GTE North Incorporated
% Debentures, Series , Due
Dear Sirs:
I have been requested by GTE North Incorporated, a Wisconsin
corporation (the "Company"), as its Area Vice President-General
Counsel and Secretary to furnish you with my opinion pursuant to
a Purchase Agreement dated ,
1994 (the "Agreement") between you and the Company, relating to
the purchase and sale of $ ,000,000 aggregate principal amount
of % Debentures, Series , Due of the Company (the "New
Debentures").
In this connection I have examined among other things:
(a) The Articles of Incorporation of the Company, as
amended, and the by-laws, each as presently in effect;
(b) A copy of the Indenture dated as of January 1,
1994 (the "Indenture"), between the Company and The First
National Bank of Chicago, as Trustee (the "Trustee"), under
which the New Debentures are being issued, and the
resolution of the Board of Directors of the Company
specifically authorizing the New Debentures, including the
issuance and sale of the New Debentures (the "Board
Resolution");
(c) The form of the New Debentures set forth in the
Board Resolution;
(d) The records of the corporate proceedings of the
Company relating to the authorization, execution and
delivery of the Indenture;
(e) The records of the corporate proceedings of the
Company relating to the authorization, execution and
delivery of the Agreement;
(f) 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"), particularly the
Registration Statement (File No. 33- ), and the Post-
Effective Amendment thereto, including the form of
Prospectus contained therein (unless the context shall
otherwise require, the Registration Statement as amended is
hereinafter called the "Registration Statement" and the
final prospectus, in the form filed under Rule 424 of the
Act, dated
, 1994 is hereinafter called the "Prospectus").
-2-
(g) Statutes, permits and other documents relating to
the Company's certificates of convenience and necessity;
(h) The records of proceedings and orders issued by
the Illinois Commerce Commission, Indiana Utility Regulatory
Commission, Michigan Public Service Commission, Public
Utilities Commission of Ohio, Pennsylvania Public Utility
Commission and Public Service Commission of Wisconsin
authorizing the issuance and sale of the New Debentures; and
(i) Certain 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 Wisconsin, is a duly licensed and qualified foreign
corporation in good standing under the laws of the states of
Illinois, Indiana, Michigan, Ohio, Pennsylvania and Texas,
and has adequate corporate power to carry on the business in
which it is now engaged. There are no other states or
jurisdictions in which the qualification or licensing of the
Company as a foreign corporation is necessary.
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 by the Company, 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.
-3-
6. The issuance and sale of the New Debentures, as
contemplated by the Agreement, have been duly authorized by
the Illinois Commerce Commission, Indiana Utility Regulatory
Commission, Michigan Public Service Commission, Public
Utilities Commission of Ohio, Pennsylvania Public Utility
Commission, and Public Service Commission of Wisconsin, and
such authorizations are in full force and effect and, except
as may be required by the Securities or blue sky laws of
certain jurisdictions, no other authorization, approval or
consent of any governmental regulatory authority is required
for such 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. The Registration Statement became effective for
bidding purposes on , 1994, and on , 1994 a
Post-Effective Amendment was filed under Rule 445 of the
Act; and thereupon the Prospectus became lawful for use for
the purposes specified in the Act in connection with the
offer for sale of the New Debentures in the manner therein
specified; 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 documents incorporated by reference into said
Registration Statement and the applicable rules and
regulations of the Securities and Exchange Commission
thereunder, except that I express no opinion as to the
financial statements 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. The Statements
of law and legal conclusions referred to in the Registration
Statement and Prospectus as expressing my opinion as counsel
for the Company are correct. I participated in the
preparation of the Registration Statement and Prospectus and
I have no reason to believe that the Registration Statement,
the Prospectus or any document incorporated therein by
reference, considered as a whole on the effective date of
the Registration Statement and on the date hereof, contained
or contains any untrue statement of a material fact or
omitted or omits to state any material fact required to be
stated therein or necessary to make the statements therein
not misleading.
Very truly yours,
N:S-3/A:38
EXHIBIT B
MILBANK, TWEED, HADLEY & McCLOY
1 Chase Manhattan Plaza
New York, New York 10005
, 1994
GTE NORTH INCORPORATED
$ ,000,000 % Debentures, Series , Due
and the other several Purchasers
referred to in the Purchase Agreement
dated , 1994, among such
Purchasers and GTE North Incorporated
Dear Sirs:
We have been designated by GTE North Incorporated (the
"Company") as counsel for the successful bidders for $ ,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 , 1994, 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
January 1, 1994, ("Indenture") between the Company and The First
National Bank of Chicago, as trustee (the "Trustee").
We have reviewed originals, or copies certified to our
satisfaction, of such corporate records of the Company,
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 GTE Service Corporation, One Stamford Forum, Stamford,
Connecticut, at which the Company caused to be delivered to your
representatives for your several accounts $ ,000,000 aggregate
principal amount of the New Debentures against payment therefor.
On the basis of the foregoing and having regard to legal
considerations which we deem relevant, we express the following
opinions:
1. The Company is a validly existing corporation, in
good standing, under the laws of the State of Wisconsin.
-2-
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 valid, legal
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. The issuance and sale of the New Debentures as
contemplated by the Purchase Agreement have been duly
authorized by Illinois Commerce Commission, Indiana Utility
Regulatory Commission, Michigan Public Service Commission,
Public Utilities Commission of Ohio, Pennsylvania Public
Utility Commission, and Public Service Commission of
Wisconsin, and, except as may be required by the securities
or blue sky laws of certain jurisdictions, no authorization,
approval or consent of any other governmental regulatory
authority is required for such issuance and sale of the New
Debentures.
6. On the basis of information received by the Company
from the Securities and Exchange Commission (the
"Commission") the Registration Statement with respect to the
New Debentures (the "Registration Statement"), filed with
the Commission pursuant to the Securities Act of 1933, as
amended (the "Act"), became effective under the Act on
, 1994 for the purpose of inviting bids. Post-Effective
Amendment No. 1 to said Registration Statement was filed
with the Commission on
, 1994 (the Registration Statement as so amended,
except where the context otherwise requires, being herein
called the "Registration Statement"). From and after the
time of filing with the Commission of such Amendment, the
Prospectus dated , 1994 (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 jurisdictions in connection with the offer
for sale or sale of the New Debentures in such
jurisdictions. To the best of our knowledge the
Registration Statement remains in effect at this date.
-3-
7. The Registration Statement and the Prospectus
(except any financial statements or other financial data
contained or incorporated by reference therein, as to which
no opinion is expressed) comply as to form in all material
respects with the relevant requirements of the Act and the
applicable published instructions, rules and regulations of
the Commission thereunder.
We are members of the State of New York bar only and, except
as set forth in the next paragraph, express no opinion as to
matters governed by any laws other than the laws of the State of
New York and the Federal laws of the United States of America.
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 certain 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 (such
documents as have been filed prior to the effective date of the
Registration Statement and listed in the Prospectus as being
incorporated by reference are herein called 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,
the Prospectus or the Incorporated Documents, considered as a
whole on the effective date of the Registration Statement and on
the date hereof, 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. 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.
Very truly yours,
MILBANK, TWEED, HADLEY &
McCLOY
N:S-3/A:41
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,
January, 1994 Edition, shall be to the effect that:
At the closing, the Purchaser(s) 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 Purchaser(s), dated as of a date not more than five
business days prior to the Closing Date, from Arthur Andersen &
Co., confirming that they are independent public accountants with
respect to the Company within the meaning of 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 examined 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 Exchange
Act, and the published rules and regulations thereunder, and (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 balance sheet as of the latest
available interim date, and the unaudited condensed 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; 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 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
Purchaser(s), nothing has come to their attention which caused
them to believe that: (a) any unaudited interim condensed
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
interim financial statements prepared by the Company, there was
any change in the capital stock, short-term indebtedness or long-
term debt of the Company or any decrease in net assets as
compared with the amounts shown on the latest balance sheet
incorporated by reference in the Prospectus, (ii) for the period
ended as of the date of the latest available
-2-
unaudited interim financial statements prepared by the Company
there were any decreases, as compared with the corresponding
period of the prior year, in operating revenues, net operating
income, net income, or ratio of earnings to fixed charges, or
(iii) at the date of such letter there was any change in the
capital stock, short-term indebtedness or long-term debt of the
Company or any decrease in net assets as compared with amounts
shown on the latest balance sheet incorporated by reference in
the Prospectus, 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.
N:S-3/A:43
_________________________________________________________________
____________
GTE NORTH INCORPORATED
AND
THE FIRST NATIONAL BANK OF CHICAGO
TRUSTEE
____________
INDENTURE
Dated as of January 1, 1994
____________
Securities
_________________________________________________________________
_____________
CROSS-REFERENCE TABLE
Section of
Trust Indenture Act Section of
of 1939, as amended Indenture
310(a)............................. 7.09
310(b)............................. 7.08
7.10
310(c)............................. Inapplicable
311(a)............................. 7.13(a)
311(b)............................. 7.13(b)
311(c)............................. Inapplicable
312(a)............................. 5.01
5.02(a)
312(b)............................. 5.02(b)
312(c)............................. 5.02(c)
313(a)............................. 5.04(a)
313(b)............................. 5.04(b)
313(c)............................. 5.04(a)
5.04(b)
313(d)............................. 5.04(c)
314(a)............................. 5.03
314(b)............................. Inapplicable
314(c)............................. 13.06
314(d)............................. Inapplicable
314(e)............................. 13.06
314(f)............................. Inapplicable
315(a) 7.01(a)
7.02
315(b)............................. 6.07
315(c)............................. 7.01
315(d)............................. 7.01(b)
7.01(c)
315(e)............................. 6.08
316(a)............................. 6.06
8.04
316(b)............................. 6.04
316(c)............................. 8.01
317(a)............................. 6.02
317(b)............................. 4.04
318(a)............................. 13.08
TABLE OF CONTENTS*
Page
PARTIES..................................................... 1
RECITALS:
Purpose of Indenture........................................ 1
Compliance with legal requirements.......................... 1
Purpose of and consideration for Indenture.................. 1
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Certain terms defined; other terms defined in
Trust Indenture Act of 1939, as amended or by
reference therein in Securities Act of 1933,
as amended, to have meanings therein
assigned...................................... 2
Affiliate............................................... 2
Authenticating Agent.................................... 2
Board of Directors...................................... 2
Board Resolution........................................ 2
Business day............................................ 2
Certificate............................................. 3
Corporate Trust Office.................................. 3
Company................................................. 3
Default................................................. 3
Event of Default........................................ 3
First Mortgage Bonds.................................... 3
Governmental Obligations................................ 4
Indenture............................................... 4
Interest payment date................................... 4
Officers' Certificate................................... 5
Opinion of Counsel...................................... 5
Outstanding............................................. 5
Predecessor Security.................................... 5
Responsible officer..................................... 5
Security or Securities.................................. 6
Securityholder.......................................... 6
Subsidiary.............................................. 6
Trustee................................................. 6
Trust Indenture Act of 1939, as amended................. 6
__________
* This Table of Contents does not constitute part of the
Indenture and should not have any bearing upon the interpretation
of any of its terms or provisions.
i
ARTICLE TWO
ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION
AND EXCHANGE OF SECURITIES
Page
SECTION 2.01. Designation, terms, amount, authentication
and delivery of Securities................... 6
SECTION 2.02. Form of Securities and Trustee's certificate. 7
SECTION 2.03. Date and denominations of Securities, and
provisions for payment of principal, premium
and interest................................. 8
SECTION 2.04. Execution of Securities...................... 9
SECTION 2.05. Exchange of Securities....................... 10
(a) Registration and transfer of Securities.. 10
(b) Securities to be accompanied by proper
instruments of transfer...................... 10
(c) Charges upon exchange, transfer or
registration of Securities................... 11
(d) Restrictions on transfer or exchange at
time of redemption........................... 11
SECTION 2.06. Temporary Securities......................... 11
SECTION 2.07. Mutilated, destroyed, lost or stolen
Securities................................... 11
SECTION 2.08. Cancellation of surrendered Securities....... 12
SECTION 2.09. Provisions of Indenture and Securities for
sole benefit of parties and Securityholders.. 12
SECTION 2.10. Appointment of Authenticating Agent.......... 13
ARTICLE THREE
REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS
SECTION 3.01. Redemption of Securities..................... 13
SECTION 3.02. (a) Notice of redemption..................... 13
(b) Selection of Securities in case less than
all Securities to be redeemed................ 14
SECTION 3.03. (a) When Securities called for redemption
become due and payable....................... 14
(b) Receipt of new Security upon partial
payment...................................... 15
ii
Page
SECTION 3.04. Sinking Fund for Securities.................. 15
SECTION 3.05. Satisfaction of Sinking Fund Payments with
Securities................................... 15
SECTION 3.06. Redemption of Securities for Sinking Fund.... 15
ARTICLE FOUR
PARTICULAR COVENANTS OF THE COMPANY
SECTION 4.01. Payment of principal of (and premium, if any)
and interest on Securities................... 16
SECTION 4.02. Maintenance of office or agency for payment
of Securities; designation of office or agency
for payment, registration, transfer and
exchange of Securities....................... 16
SECTION 4.03. (a) Duties of paying agent................... 16
(b) Company as paying agent.................. 17
(c) Holding sums in trust.................... 17
SECTION 4.04. Appointment to fill vacancy in office
of Trustee................................... 17
SECTION 4.05. Covenant against certain prior liens......... 17
SECTION 4.06. Restriction on consolidation,
merger or sale............................... 18
ARTICLE FIVE
SECURITYHOLDERS' LISTS, AND REPORTS BY THE COMPANY
AND THE TRUSTEE
SECTION 5.01. Company to furnish Trustee information as to
names and addresses of Securityholders....... 19
SECTION 5.02. (a) Trustee to preserve information as to
names and addresses of Securityholders
received by it in capacity of paying agent... 19
(b) Trustee may destroy list of Securityholders
on certain conditions........................ 19
(c) Trustee to make information as to names
and addresses of Securityholders available
to "applicants" or mail communications to
Securityholders in certain circumstances..... 19
(d) Procedure if Trustee elects not to make
information available to applicants.......... 20
iii
Page
(e) Company and Trustee not accountable for
disclosure of information.................... 20
SECTION 5.03. (a) Annual and other reports to be filed by
Company with Trustee......................... 20
(b) Additional information and reports to be
filed with Trustee and Securities and
Exchange Commission.......................... 21
(c) Summaries of information and reports to
be transmitted by Company to Securityholders. 21
(d) Annual Certificate to be furnished to
the Trust.................................... 21
SECTION 5.04. (a) Trustee to transmit annual report to
Securityholders.............................. 21
(b) Trustee to transmit certain further
reports to Securityholders................... 22
(c) Copies of reports to be filed with stock
exchanges and Securities and Exchange
Commission................................... 22
ARTICLE SIX
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
UPON EVENT OF DEFAULT
SECTION 6.01. (a) Events of Default defined................ 22
(b) Acceleration of maturity upon Event of
Default...................................... 23
(c) Waiver of default and rescission of
declaration of maturity...................... 24
(d) Restoration of former position and rights
upon curing default.......................... 24
SECTION 6.02. (a) Covenant of Company to pay to Trustee
whole amount due on Securities on default in
payment of interest or principal (and
premium, if any)............................. 24
(b) Trustee may recover judgment for whole
amount due on Securities on failure of
Company to pay............................... 24
(c) Filing of proof of claim by Trustee in
bankruptcy, reorganization or receivership
proceedings.................................. 25
iv
Page
(d) Rights of action and of asserting claims
may be enforced by Trustee without possession
of Securities................................ 25
SECTION 6.03. Application of moneys collected by Trustee... 25
SECTION 6.04. Limitation on suits by holders of Securities. 26
SECTION 6.05. (a) Remedies cumulative...................... 26
(b) Delay or omission in exercise of rights
not waiver of default........................ 26
SECTION 6.06. Rights of holders of majority in principal
amount of Securities to direct Trustee and to
waive defaults............................... 27
SECTION 6.07. Trustee to give notice of defaults known to
it, but may withhold in certain
circumstances................................ 27
SECTION 6.08. Requirements of an undertaking to pay costs
in certain suits under Indenture or against
Trustee...................................... 27
ARTICLE SEVEN
CONCERNING THE TRUSTEE
SECTION 7.01. (a) Upon Event of Default occurring and
continuing, Trustee shall exercise powers
vested in it, and use same degree of care and
skill in their exercise, as prudent
individual would use......................... 28
(b) Trustee not relieved from liability for
negligence or willful misconduct except as
provided in this section..................... 28
(1) Prior to Event of Default and after the
curing of all Events of Default which may
have occurred................................ 28
(i) Trustee not liable except for performance
of duties specifically set forth............. 28
(ii) In absence of bad faith, Trustee may
conclusively rely on certificates or opinions
furnished it hereunder, subject to duty to
examine the same if specifically required to
be furnished to it........................... 28
(2) Trustee not liable for error of judgment
made in good faith by responsible officer
unless Trustee negligent..................... 29
v
Page
(3) Trustee not liable for action or
non-action in accordance with direction of
holders of majority in principal amount of
Securities................................... 29
(4) Trustee need not expend own funds without
adequate indemnity........................... 29
SECTION 7.02. Subject to provisions of Section 7.01:
(a) Trustee may rely on documents believed
genuine and properly signed or presented..... 29
(b) Sufficient evidence by certain
instruments provided for..................... 29
(c) Trustee may consult with counsel and act
on advice or Opinion of Counsel.............. 29
(d) Trustee may require indemnity from
Securityholders.............................. 29
(e) Trustee not liable for actions in good
faith believed to be authorized.............. 29
(f) Prior to Event of Default Trustee not
bound to investigate facts or matters stated
in certificates, etc., unless requested in
writing by Securityholders................... 30
(g) Trustee may perform duties directly or
through agents or attorneys.................. 30
SECTION 7.03. (a) Trustee not liable for recitals in
Indenture or in Securities................... 30
(b) No representations by Trustee as to
validity or Indenture or of Securities....... 30
(c) Trustee not accountable for use of
Securities or proceeds....................... 30
SECTION 7.04. Trustee, paying agent or Security Registrar
may own Securities........................... 30
SECTION 7.05. Moneys received by Trustee to be held in
trust without interest....................... 30
SECTION 7.06. (a) Trustee entitled to compensation,
reimbursement and indemnity.................. 30
(b) Obligations to Trustee to be secured by
lien prior to Securities..................... 31
vi
Page
SECTION 7.07. Right of Trustee to rely on certificate of
officers of Company where no other evidence
specifically prescribed...................... 31
SECTION 7.08. (a) Trustee acquiring conflicting interest
to eliminate conflict or resign.............. 31
(b) Notice to Securityholders in case of
failure to comply with subsection (a)........ 31
(c) Definition of conflicting interest....... 31
(d) Definition of certain terms.............. 34
(e) Calculation of percentages of Securities. 35
(f) Trustee resignation not required under
certain circumstances........................ 36
SECTION 7.09. Requirements for eligibility of Trustee.........
36
SECTION 7.10. (a) Resignation of Trustee and appointment
of successor................................. 37
(b) Removal of Trustee by Company or by court
on Securityholders' application.............. 37
(c) Removal of Trustee by holders of majority
in principal amount of Securities............ 38
(d) Time when resignation or removal of
Trustee effective............................ 38
(e) One Trustee for each series.............. 38
SECTION 7.11. (a) Acceptance by successor to Trustee....... 38
(b) Trustee with respect to less than all
series....................................... 38
(c) Company to confirm Trustee's rights...... 39
(d) Successor Trustee to be qualified........ 39
(e) Notice of succession..................... 39
SECTION 7.12. Successor to Trustee by merger, consolidation
or succession to business.................... 39
SECTION 7.13. (a) Limitations on rights of Trustee as a
creditor to obtain payment of certain claims
within four months prior to default or during
default, or to realize on property as such
creditor thereafter.......................... 39
vii
Page
(b) Certain creditor relationships excluded.. 42
(c) Definition of certain terms.............. 42
ARTICLE EIGHT
CONCERNING THE SECURITYHOLDERS
SECTION 8.01. Evidence of action by Securityholders...........
43
SECTION 8.02. Proof of execution of instruments and of
holding of Securities........................ 43
SECTION 8.03. Who may be deemed owners of Securities..........
44
SECTION 8.04. Securities owned by Company or controlled or
controlling companies disregarded for certain
purposes..................................... 44
SECTION 8.05. Instruments executed by Securityholders
bind future holders.......................... 44
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 9.01. Purposes for which supplemental indenture may
be entered into without consent of
Securityholders.............................. 45
SECTION 9.02. Modification of Indenture with consent of
Securityholders.............................. 46
SECTION 9.03. Effect of supplemental indentures...............
46
SECTION 9.04. Securities may bear notation of changes by
supplemental indentures...................... 47
SECTION 9.05. Opinion of Counsel..............................
47
ARTICLE TEN
CONSOLIDATION, MERGER AND SALE
SECTION 10.01. Consolidations or mergers of Company and
sales or conveyances of property of
Company permitted............................ 47
SECTION 10.02. (a) Rights and duties of successor company...
47
(b) Appropriate changes may be made in
phraseology and form of Securities........... 48
viii
Page
(c) Company may consolidate or merge into
itself or acquire properties of other
corporations................................. 48
SECTION 10.03. Opinion of Counsel..............................
48
ARTICLE ELEVEN
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 11.01. Satisfaction and discharge of Indenture.........
48
SECTION 11.02. Discharge of Company's Obligations..............
49
SECTION 11.03. Application by Trustee of funds deposited
for payment of Securities.................... 49
SECTION 11.04. Repayment of moneys held by paying agent........
49
SECTION 11.05. Repayment of moneys held by Trustee.............
49
ARTICLE TWELVE
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01. Incorporators, stockholders, officers and
directors of Company exempt from individual
liability.................................... 50
ARTICLE THIRTEEN
SUNDRY PROVISIONS
SECTION 13.01. Successors and assigns of Company bound by
Indenture.................................... 50
SECTION 13.02. Acts of board, committee or officer of
successor company valid...................... 50
SECTION 13.03. Surrender of powers by Company..................
50
SECTION 13.04. Required notices or demands may be served
by mail...................................... 50
SECTION 13.05. Indenture and Securities to be construed in
accordance with laws of the State of
Illinois..................................... 51
SECTION 13.06. (a) Officers' Certificate and Opinion of
Counsel to be furnished upon applications or
demands by Company........................... 51
ix
Page
(b) Statements to be included in each
certificate or opinion with respect to
compliance with condition or covenant........ 51
SECTION 13.07. Payments due on Sundays or holidays.............
51
SECTION 13.08. Provisions required by Trust Indenture Act of
1939 to control.............................. 51
SECTION 13.09. Indenture may be executed in counterparts.......
51
SECTION 13.10. Separability of Indenture provisions............
51
ACCEPTANCE OF TRUST BY TRUSTEE.................................
52
TESTIMONIUM....................................................
52
SIGNATURES AND SEALS...........................................
52
ACKNOWLEDGMENTS................................................
53
x
THIS INDENTURE, dated as of the 1st day of January, 1994,
between GTE NORTH INCORPORATED, a corporation duly organized and
existing under the laws of the State of Wisconsin (hereinafter
sometimes referred to as the "Company"), and THE FIRST NATIONAL
BANK OF CHICAGO, a national banking association organized and
existing under the laws of the United States of America
(hereinafter sometimes referred to as the "Trustee"):
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the execution and delivery of this Indenture to
provide for the issuance of unsecured securities, debentures,
notes or other evidences of indebtedness (hereinafter referred to
as the "Securities"), in an unlimited aggregate principal amount
to be issued from time to time in one or more series as in this
Indenture provided as registered Securities without coupons, to
be authenticated by the certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the
Securities are to be authenticated, issued and delivered, the
Company has duly authorized the execution of this Indenture;
WHEREAS, the Securities and the certificate of
authentication to be borne by the Securities (the "Certificate of
Authentication") are to be substantially in such forms as may be
approved by the Board of Directors (as defined below) or set
forth in any indenture supplemental to this Indenture;
AND WHEREAS, all acts and things necessary to make the
Securities issued pursuant hereto, when executed by the Company
and authenticated and delivered by the Trustee as in this
Indenture provided, the valid, binding and legal obligations of
the Company, and to constitute these presents a valid indenture
and agreement according to its terms, have been done and
performed or will be done and performed prior to the issuance of
such Securities, and the execution of this Indenture and the
issuance hereunder of the Securities have been or will be prior
to issuance in all respects duly authorized, and the Company, in
the exercise of the legal right and power in it vested, executes
this Indenture and proposes to make, execute, issue and deliver
the Securities;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which
the Securities are and are to be authenticated, issued and
delivered, and in consideration of the premises, of the purchase
and acceptance of the Securities by the holders thereof and of
the sum of one dollar ($1.00) to it duly paid by the Trustee at
the execution of these presents, the receipt whereof is hereby
acknowledged, the Company covenants and agrees with the Trustee,
for the equal and proportionate benefit (subject to the
provisions of this Indenture) of the respective holders from time
to time of the Securities, without any discrimination, preference
or priority of any one Security over any other by reason of
priority in the time of issue, sale or negotiation thereof, or
otherwise, except as provided herein, as follows:
ARTICLE ONE
Definitions
SECTION 1.01. The terms defined in this Section (except as
in this Indenture otherwise expressly provided or unless the
context otherwise requires) for all purposes of this Indenture,
any resolution of the Board of Directors of the Company and of
any indenture supplemental hereto shall have the respective
meanings specified in this Section. All other terms used in this
Indenture which are defined in the Trust Indenture Act of 1939,
as amended, or which are by reference in such Act defined in the
Securities Act of 1933, as amended (except as herein otherwise
expressly provided or unless the context otherwise requires),
shall have the meanings assigned to such terms in said Trust
Indenture Act and in said Securities Act as in force at the date
of the execution of this instrument.
Affiliate:
The term "Affiliate" of the Company shall mean any company at
least a majority of whose outstanding voting stock shall at the
time be owned by GTE Corporation, a New York corporation, or by
one or more direct or indirect subsidiaries of GTE Corporation or
by GTE Corporation and one or more direct or indirect
subsidiaries of GTE Corporation. For the purposes only of this
definition of the term "Affiliate", the term "voting stock", as
applied to the stock of any company, shall mean stock of any
class or classes having ordinary voting power for the election of
a majority of the directors of such company, other than stock
having such power only by reason of the occurrence of a
contingency.
Authenticating Agent:
The term "Authenticating Agent" means an authenticating agent
with respect to all or any of the series of Securities, as the
case may be, appointed with respect to all or any series of the
Securities, as the case may be, by the Trustee pursuant to
Section 2.10.
Board of Directors:
The term "Board of Directors" shall mean the Board of Directors
of the Company, or an Executive or Special Committee of such
Board.
Board Resolution:
The term "Board Resolution" shall mean a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification.
Business day:
The term "business day", with respect to any series of
securities, shall mean any day other than a day on which banking
institutions in the City of Chicago, County of Cook, State of
Illinois or the Borough of Manhattan, the City and State of New
York, as the case may be (depending on whether an office or
agency of the Company is being maintained in either such city
with respect to any such series), are authorized or obligated by
law or executive order to close.
2
Certificate:
The term "Certificate" shall mean a certificate signed by the
principal executive officer, the principal financial officer or
the principal accounting officer of the Company. The Certificate
need not comply with the provisions of Section 13.06.
Corporate Trust Office:
The term "Corporate Trust Office" shall mean the office of the
Trustee at which at any particular time its corporate trust
business shall be principally administered, which office at the
date of the execution of this Indenture is located at One First
National Plaza, Chicago, Illinois 60670.
Company:
The term "Company" shall mean GTE North Incorporated, a Wisconsin
corporation, and, subject to the provisions of Article Ten, shall
also include its successors and assigns.
Default:
The term "Default" shall mean any event, act or condition which
with notice or lapse of time, or both, would constitute an Event
of Default.
Event of Default:
The term "Event of Default" with respect to Securities of a
particular series shall mean any event specified in Section 6.01,
continued for the period of time, if any, therein designated.
First Mortgage Bonds:
The term "First Mortgage Bonds" shall mean (a) the bonds
outstanding from time to time issued by the Company under and
secured by the (i) Indenture of Mortgage and Deed of Trust dated
as of February 1, 1940, between General Telephone Company of
Indiana, Inc. (later named GTE MTO Inc. and now the Company), The
First National Bank of Chicago, as trustee and Richard D. Manella
as co-trustee, as supplemented and amended; (ii) Indenture of
Mortgage and Deed of Trust dated as of June 1, 1940, between
Illinois Commercial Telephone Company (later named General
Telephone Company of Illinois and now the Company) and
Continental Illinois National Bank and Trust Company of Chicago,
as trustee, as supplemented and amended; (iii) Indenture of
Mortgage and Deed of Trust dated as of November 1, 1938, between
Michigan Associated Telephone Company (later named General
Telephone Company of Michigan and now the Company), Continental
Illinois National Bank and Trust Company of Chicago and M. J.
Kruger (originally Harold P. Smith), as trustees, as supplemented
and amended; (iv) Indenture of Mortgage and Deed of Trust dated
as of September 1, 1946, between Ohio Associated Telephone
Company (later named General Telephone Company of Ohio and now
the Company) and City National Bank (Successor by merger to The
National City Bank of Cleveland), as trustee, as supplemented and
amended; (v) Indenture of Mortgage and Deed of Trust dated as of
July 1, 1945, between Pennsylvania Telephone Corporation (later
named General Telephone Company of Pennsylvania and now the
Company) and Bankers Trust Company, as trustee, as supplemented
and amended; (vi) Indenture of Mortgage and Deed of Trust dated
as of October 1, 1940, between Commonwealth Telephone Company
(later named General Telephone Company of Wisconsin and now the
Company), Continental Illinois National Bank and Trust Company of
Chicago and M. J. Kruger (originally Harold P. Smith), as
trustees, as supplemented
3
and amended; (vii) Indenture of Mortgage and Deed of Trust dated
as of January 1, 1974, between Continental Telephone Company of
Illinois (later named as Contel of Illinois, Inc. and now the
Company) and Mercantile Trust Company National Association (now
named Mercantile Bank of St. Louis National Association), as
trustee, as supplemented and amended; (viii) Indenture of
Mortgage and Deed of Trust dated as of April 1, 1977, between
Continental Telephone Company of Indiana, Inc. (later named
Contel of Indiana, Inc. and now the Company), Mercantile Trust
Company National Association (now named Mercantile Bank of St.
Louis National Association) and American Fletcher National Bank
and Trust Company (now named Bank One, Indianapolis, NA), as co-
trustees, as supplemented and amended; and (ix) Indenture of
Mortgage and Deed of Trust dated as of July 1, 1986, between
Continental Telephone Company of Pennsylvania (later named Contel
of Pennsylvania, Inc. and now the Company) and Fidelity Bank,
National Association, as trustee, as supplemented and amended and
(b) the loans and notes by the United States of America acting
though the Rural Electrification Administration (REA) or the
Rural Telephone Bank (RTB) which have been assumed by the
Company.
Governmental Obligations:
The term, "Governmental Obligations" shall mean securities that
are (i) direct obligations of the United States of America for
the payment of which its full faith and credit is pledged or (ii)
obligations of a person controlled or supervised by and acting as
an agency or instrumentality of the United States of America, the
payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in
either case, are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities
Act of 1933, as amended) as custodian with respect to any such
Governmental Obligation or a specific payment of principal of or
interest on any such Governmental Obligation held by such
custodian for the account of the holder of such depository
receipt; provided that (except as required by law) such custodian
is not authorized to make any deduction from the amount payable
to the holder of such depository receipt from any amount received
by the custodian in respect of the Governmental Obligation or the
specific payment of principal of or interest on the Governmental
Obligation evidenced by such depository receipt.
Indenture:
The term "Indenture" shall mean this instrument as originally
executed, or, if amended or supplemented as herein provided, as
so amended or supplemented.
Interest payment date:
The term "interest payment date" when used with respect to any
installment of interest on a Security of a particular series
shall mean the date specified in such Security or in a Board
Resolution or in an indenture supplemental hereto with respect to
such series as the fixed date on which an installment of interest
with respect to Securities of that series is due and payable.
4
Officers' Certificate:
The term "Officers' Certificate" shall mean a certificate signed
by the President or a Vice President and by the Treasurer or an
Assistant Treasurer or the Controller or an Assistant Controller
or the Secretary or an Assistant Secretary of the Company. Each
such certificate shall include the statements provided for in
Section 13.06, if and to the extent required by the provisions
thereof.
Opinion of Counsel:
The term "Opinion of Counsel" shall mean an opinion in writing
signed by legal counsel, who shall be satisfactory to the Trustee
and who may be an employee of or counsel for the Company. Each
such opinion shall include the statements provided for in Section
13.06, if and to the extent required by the provisions thereof.
Outstanding:
The term "outstanding", when used with reference to Securities of
any series, shall, subject to the provisions of Section 8.04,
mean, as of any particular time, all Securities of that series
theretofore authenticated and delivered by the Trustee under this
Indenture, except (a) Securities theretofore cancelled by the
Trustee or any paying agent, or delivered to the Trustee or any
paying agent for cancellation or which have previously been
cancelled; (b) Securities or portions thereof for the payment or
redemption of which moneys or Governmental Obligations in the
necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or
shall have been set aside and segregated in trust by the Company
(if the Company shall act as its own paying agent); provided,
however, that if such Securities or portions of such Securities
are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as in Article Three provided, or
provision satisfactory to the Trustee shall have been made for
giving such notice; and (c) Securities in lieu of or in
substitution for which other Securities shall have been
authenticated and delivered pursuant to the terms of Section
2.07.
Predecessor Security:
The term "Predecessor Security" of any particular Security shall
mean every previous Security evidencing all or a portion of the
same debt as that evidenced by such particular Security; and, for
the purposes of this definition, any Security authenticated and
delivered under Section 2.07 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.
Responsible officer:
The term "responsible officer" when used with respect to the
Trustee shall mean the chairman of the board of directors, the
president, any vice president, the secretary, the treasurer, any
trust officer, any corporate trust officer or any other officer
or assistant officer of the Trustee customarily performing
functions similar to those performed by the persons who at the
time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his or her
knowledge of and familiarity with the particular subject.
5
Security or Securities:
The term "Security" or "Securities" shall mean any Security or
Securities, as the case may be, authenticated and delivered under
this Indenture.
Securityholder:
The term "Securityholder", "holder of Securities", "registered
holder", or other similar term, shall mean the person or persons
in whose name or names a particular Security shall be registered
on the books of the Company kept for that purpose in accordance
with the terms of this Indenture.
Subsidiary:
The term "Subsidiary" shall mean any corporation at least a
majority of whose outstanding voting stock shall at the time be
owned by the Company or by one or more Subsidiaries or by the
Company and one or more Subsidiaries. For the purposes only of
this definition of the term "Subsidiary", the term "voting
stock", as applied to the stock of any corporation, shall mean
stock of any class or classes having ordinary voting power for
the election of a majority of the directors of such corporation,
other than stock having such power only by reason of the
occurrence of a contingency.
Trustee:
The term "Trustee" shall mean The First National Bank of Chicago
and, subject to the provisions of Article Seven, shall also
include its successors and assigns, and, if at any time there is
more than one person acting in such capacity hereunder, "Trustee"
shall mean each such person. The term "Trustee" as used with
respect to a particular series of the Securities shall mean the
trustee with respect to that series.
Trust Indenture Act of 1939, as amended:
The term "Trust Indenture Act of 1939, as amended," subject to
the provisions of Sections 9.01, 9.02, and 10.01, shall mean the
Trust Indenture Act of 1939, as amended and in effect at the date
of execution of this Indenture.
ARTICLE TWO
Issue, Description, Terms, Execution,
Registration and Exchange of Securities
SECTION 2.01. The aggregate principal amount of Securities
which may be authenticated and delivered under this Indenture is
unlimited.
The Securities may be issued in one or more series up to the
aggregate principal amount of Securities of that series from time
to time authorized by or pursuant to a Board Resolution or
pursuant to one or more indentures supplemental hereto, prior to
the initial issuance of Securities of a particular series. Prior
to the initial issuance of Securities of any series, there shall
be established in or pursuant to a Board Resolution, and set
forth in an Officers' Certificate, or established in one or more
indentures supplemental hereto:
(1) the title of the Securities of the series (which
shall distinguish the Securities of the series from all
other Securities);
6
(2) any limit upon the aggregate principal amount of
the Securities of that series which may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities of
that series);
(3) the date or dates on which the principal of the
Securities of the series is payable;
(4) the rate or rates at which the Securities of the
series shall bear interest or the manner of calculation of
such rate or rates, if any, the date or dates from which
such interest shall accrue, the interest payment dates on
which such interest shall be payable or the manner of
determination of such interest payment dates;
(5) the period or periods within which, the price or
prices at which and the terms and conditions upon which,
Securities of the series may be redeemed, in whole or in
part, at the option of the Company;
(6) the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking
fund or analogous provisions (including payments made in
cash in anticipation of future sinking fund obligations) or
at the option of a holder thereof and the period or periods
within which, the price or prices at which, and the terms
and conditions upon which, Securities of the series shall be
redeemed or purchased, in whole or in part, pursuant to such
obligation;
(7) the form of the Securities of the series including
the form of the Certificate of Authentication for such
series;
(8) if other than denominations of $1,000 or any
integral multiple thereof, the denominations in which the
Securities of the series shall be issuable; and
(9) any and all other terms with respect to such series
(which terms shall not be inconsistent with the terms of
this Indenture).
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise
be provided in or pursuant to any such Board Resolution or in any
indentures supplemental hereto.
If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate
record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee
at or prior to the delivery of the Officers' Certificate setting
forth the terms of the series.
SECTION 2.02. The Securities of any series and the Trustee's
Certificate of Authentication to be borne by such Securities
shall be substantially of the tenor and purport as set forth in
one or more indentures supplemental hereto or as provided in a
Board Resolution and as set forth in an Officers' Certificate,
and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of
this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which Securities of
that series may be listed, or to conform to usage.
7
SECTION 2.03. The Securities shall be issuable as registered
Securities and in the denominations of $1,000 or any multiple
thereof, subject to Section 2.01(8). The Securities of a
particular series shall bear interest payable on the dates and at
the rate specified with respect to that series. The principal of
and the interest on the Securities of any series, as well as any
premium thereon in case of redemption thereof prior to maturity,
shall be payable in the coin or currency of the United States of
America which at the time is legal tender for public and private
debt, at the office or agency of the Company maintained for that
purpose in either the City of Chicago, County of Cook, State of
Illinois or the Borough of Manhattan, the City and State of New
York. Each Security shall be dated the date of its
authentication. Interest on the Securities shall be computed on
the basis of a 360-day year composed of twelve 30-day months;
provided that interest on Securities bearing interest of a
floating rate shall be computed on the basis of a year of 365 or
366 days, as appropriate, for the actual number of days elapsed.
The interest installment on any Security which is payable,
and is punctually paid or duly provided for, on any interest
payment date for Securities of that series shall be paid to the
person in whose name said Security (or one or more Predecessor
Securities) is registered at the close of business on the regular
record date for such interest installment. In the event that any
Security of a particular series or portion thereof is called for
redemption and the redemption date is subsequent to a regular
record date with respect to any interest payment date and prior
to such interest payment date, interest on such Security will be
paid upon presentation and surrender of such Security as provided
in Section 3.03.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any interest payment
date for Securities of the same series (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered
holder on the relevant regular record date by virtue of having
been such holder; and such Defaulted Interest shall be paid by
the Company, at its election, as provided in clause (1) or clause
(2) below:
(1) The Company may make payment of any Defaulted
Interest on Securities to the persons in whose names such
Securities (or their respective Predecessor Securities) are
registered at the close of business on a special record date
for the payment of such Defaulted Interest, which shall be
fixed in the following manner: the Company shall notify the
Trustee in writing of the amount of Defaulted Interest
proposed to be paid on each such Security and the date of
the proposed payment, and at the same time the Company shall
deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory
to the Trustee for such deposit prior to the date of the
proposed payment, such money when deposited to be held in
trust for the benefit of the persons entitled to such
Defaulted Interest as in this clause provided. Thereupon the
Trustee shall fix a special record date for the payment of
such Defaulted Interest which shall not be more than 15 or
less than 10 days prior to the date of the proposed payment
and not less than 10 days after the receipt by the Trustee
of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such special record date and,
in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest
and the special record date therefor to be mailed, first
class
8
postage prepaid, to each Securityholder at his or her
address as it appears in the Security Register (as
hereinafter defined), not less than 10 days prior to such
special record date. Notice of the proposed payment of such
Defaulted Interest and the special record date therefor
having been mailed as aforesaid, such Defaulted Interest
shall be paid to the persons in whose names such Securities
(or their respective Predecessor Securities) are registered
on such special record date and shall be no longer payable
pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted
Interest on any Securities in any other lawful manner not
inconsistent with the requirements of any securities
exchange on which such Securities may be listed, and upon
such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed
payment pursuant to this clause, such manner of payment
shall be deemed practicable by the Trustee.
The term "regular record date" as used in this Section with
respect to a series of Securities with respect to any interest
payment date for such series shall mean either the fifteenth day
of the month immediately preceding the month in which an interest
payment date established for such series pursuant to Section 2.01
hereof shall occur, if such interest payment date is the first
day of a month, or the last day of the month immediately
preceding the month in which an interest payment date established
for such series pursuant to Section 2.01 hereof shall occur, if
such interest payment date is the fifteenth day of a month,
whether or not such date is a business day.
Subject to the foregoing provisions of this Section, each
Security of a series delivered under this Indenture upon transfer
of or in exchange for or in lieu of any other Security of such
series shall carry the rights to interest accrued and unpaid, and
to accrue, which were carried by such other Security.
SECTION 2.04. The Securities shall, subject to the
provisions of Section 2.06, be printed on steel engraved borders
or fully or partially engraved, or legibly typed, as the proper
officers of the Company may determine, and shall be signed on
behalf of the Company by its President or one of its Vice
Presidents, under its corporate seal attested by its Secretary or
one of its Assistant Secretaries. The signature of the President
or a Vice President and/or the signature of the Secretary or an
Assistant Secretary in attestation of the corporate seal, upon
the Securities, may be in the form of a facsimile signature of a
present or any future President or Vice President and of a
present or any future Secretary or Assistant Secretary and may be
imprinted or otherwise reproduced on the Securities and for that
purpose the Company may use the facsimile signature of any person
who shall have been a President or Vice President, or of any
person who shall have been a Secretary or Assistant Secretary,
notwithstanding the fact that at the time the Securities shall be
authenticated and delivered or disposed of such person shall have
ceased to be the President or a Vice President, or the Secretary
or an Assistant Secretary, of the Company, as the case may be.
The seal of the Company may be in the form of a facsimile of the
seal of the Company and may be impressed, affixed, imprinted or
otherwise reproduced on the Securities.
9
Only such Securities as shall bear thereon a certificate of
authentication substantially in the form established for such
Securities, executed manually by an authorized officer of the
Trustee, or by any Authenticating Agent with respect to such
Securities, shall be entitled to the benefits of this Indenture
or be valid or obligatory for any purpose. Such certificate
executed by the Trustee, or by any Authenticating Agent appointed
by the Trustee with respect to such Securities, upon any Security
executed by the Company shall be conclusive evidence that the
Security so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of
any series executed by the Company to the Trustee for
authentication, together with a written order of the Company for
the authentication and delivery of such Securities, signed by its
President or any Vice President and its Treasurer or any
Assistant Treasurer, and the Trustee in accordance with such
written order shall authenticate and deliver such Securities.
In authenticating such Securities and accepting the
additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and
(subject to Section 7.01) shall be fully protected in relying
upon, an Opinion of Counsel stating that the form and terms
thereof have been established in conformity with the provisions
of this Indenture and that such Securities, when authenticated
and delivered by the Trustee, will be duly authorized, executed
and delivered and will constitute the legal, valid and binding
obligations of the Company, enforceable against it in accordance
with their terms.
The Trustee shall not be required to authenticate such
Securities if the issue of such Securities pursuant to this
Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.
SECTION 2.05. (a) Securities of any series may be exchanged
upon presentation thereof at the office or agency of the Company
designated for such purpose in either the City of Chicago, County
of Cook, State of Illinois or the Borough of Manhattan, the City
and State of New York, for other Securities of such series of
authorized denominations, and for a like aggregate principal
amount, upon payment of a sum sufficient to cover any tax or
other governmental charge in relation thereto, all as provided in
this Section. In respect of any Securities so surrendered for
exchange, the Company shall execute, the Trustee shall
authenticate and such office or agency shall deliver in exchange
therefor the Security or Securities of the same series which the
Securityholder making the exchange shall be entitled to receive,
bearing numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at its
office or agency designated for such purpose in either the City
of Chicago, County of Cook, State of Illinois, or the Borough of
Manhattan, the City and State of New York, or such other location
designated by the Company a register or registers (herein
referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall
register the Securities and the transfers of Securities as in
this Article provided and which at all reasonable times shall be
open for inspection by the Trustee. The registrar for the purpose
of registering Securities and transfer of Securities as herein
provided shall be appointed by the Board of Directors by Board
Resolution (the "Security Registrar").
10
Upon surrender for transfer of any Security at the office or
agency of the Company designated for such purpose in either the
City of Chicago, County of Cook, State of Illinois, or the
Borough of Manhattan, the City and State of New York, the Company
shall execute, the Trustee shall authenticate and such office or
agency shall deliver in the name of the transferee or transferees
a new Security or Securities of the same series as the Security
presented for a like aggregate principal amount.
All Securities presented or surrendered for exchange or
registration of transfer, as provided in this Section, shall be
accompanied (if so required by the Company or the Security
Registrar) by a written instrument or instruments of transfer, in
form satisfactory to the Company or the Security Registrar, duly
executed by the registered holder or by his duly authorized
attorney in writing.
(c) No service charge shall be made for any exchange or
registration of transfer of Securities, or issue of new
Securities in case of partial redemption of any series, but the
Company may require payment of a sum sufficient to cover any tax
or other governmental charge in relation thereto, other than
exchanges pursuant to Section 2.06, the second paragraph of
Section 3.03 and Section 9.04 not involving any transfer.
(d) The Company shall not be required (a) to issue, exchange
or register the transfer of any Securities during a period
beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of less than all the
outstanding Securities of the same series and ending at the close
of business on the day of such mailing, nor (b) to register the
transfer of or exchange any Securities of any series or portions
thereof called for redemption.
SECTION 2.06. Pending the preparation of definitive
Securities of any series, the Company may execute, and the
Trustee shall authenticate and deliver, temporary Securities
(printed, lithographed or typewritten) of any authorized
denomination, and substantially in the form of the definitive
Securities in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for
temporary Securities, all as may be determined by the Company.
Every temporary Security of any series shall be executed by the
Company and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with like
effect, as the definitive Securities of such series. Without
unnecessary delay the Company will execute and will furnish
definitive Securities of such series and thereupon any or all
temporary Securities of such series may be surrendered in
exchange therefor (without charge to the holders), at the office
or agency of the Company designated for the purpose in either the
City of Chicago, County of Cook, State of Illinois, or the
Borough of Manhattan, the City and State of New York, and the
Trustee shall authenticate and such office or agency shall
deliver in exchange for such temporary Securities an equal
aggregate principal amount of definitive Securities of such
series. Until so exchanged, the temporary Securities of such
series shall be entitled to the same benefits under this
Indenture as definitive Securities of such series authenticated
and delivered hereunder.
SECTION 2.07. In case any temporary or definitive Security
shall become mutilated or be destroyed, lost or stolen, the
Company (subject to the next succeeding sentence) shall execute,
and upon its request the Trustee (subject as aforesaid) shall
authenticate and deliver, a new Security of the same series
bearing a number not contemporaneously outstanding, in exchange
and
11
substitution for the mutilated Security, or in lieu of and in
substitution for the Security so destroyed, lost or stolen. In
every case the applicant for a substituted Security shall furnish
to the Company and to the Trustee such security or indemnity as
may be required by them to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall
also furnish to the Company and to the Trustee evidence to their
satisfaction of the destruction, loss or theft of the applicant's
Security and of the ownership thereof. The Trustee may
authenticate any such substituted Security and deliver the same
upon the written request or authorization of any officer of the
Company. Upon the issue of any substituted Security, the Company
may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto
and any other expenses (including the fees and expenses of the
Trustee) connected therewith. In case any Security which has
matured or is about to mature shall become mutilated or be
destroyed, lost or stolen, the Company may, instead of issuing a
substitute Security, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated
Security) if the applicant for such payment shall furnish to the
Company and to the Trustee such security or indemnity as they may
require to save them harmless, and, in case of destruction, loss
or theft, evidence to the satisfaction of the Company and the
Trustee of the destruction, loss or theft of such Security and of
the ownership thereof.
Every Security issued pursuant to the provisions of this
Section in substitution for any Security which is mutilated,
destroyed, lost or stolen shall constitute an additional
contractual obligation of the Company, whether or not the
mutilated, destroyed, lost or stolen Security shall be found at
any time, or be enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately
with any and all other Securities of the same series duly issued
hereunder. All Securities shall be held and owned upon the
express condition that the foregoing provisions are exclusive
with respect to the replacement or payment of mutilated,
destroyed, lost or stolen Securities, and shall preclude (to the
extent lawful) any and all other rights or remedies,
notwithstanding any law or statute existing or hereafter enacted
to the contrary with respect to the replacement or payment of
negotiable instruments or other securities without their
surrender.
SECTION 2.08. All Securities surrendered for the purpose of
payment, redemption, exchange or registration of transfer shall,
if surrendered to the Company or any paying agent, be delivered
to the Trustee for cancellation, or, if surrendered to the
Trustee, shall be cancelled by it, and no Securities shall be
issued in lieu thereof except as expressly required or permitted
by any of the provisions of this Indenture. On request of the
Company, the Trustee shall deliver to the Company cancelled
Securities held by the Trustee. In the absence of such request
the Trustee may dispose of cancelled Securities in accordance
with its standard procedures and deliver a certificate of
disposition to the Company. If the Company shall otherwise
acquire any of the Securities, however, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are
delivered to the Trustee for cancellation.
SECTION 2.09. Nothing in this Indenture or in the
Securities, express or implied, shall give or be construed to
give to any person, firm or corporation, other than the parties
hereto and the holders of the Securities, any legal or equitable
right, remedy or claim under or in respect of this Indenture, or
under any covenant, condition or provision herein contained; all
such covenants, conditions and provisions being for the sole
benefit of the parties hereto and of the holders of the
Securities.
12
SECTION 2.10. So long as any of the Securities of any series
remain outstanding there may be an Authenticating Agent for any
or all such series of Securities which the Trustee shall have the
right to appoint. Said Authenticating Agent shall be authorized
to act on behalf of the Trustee to authenticate Securities of
such series issued upon exchange, transfer or partial redemption
thereof, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. All
references in this Indenture to the authentication of Securities
by the Trustee shall be deemed to include authentication by an
Authenticating Agent for such series except for authentication
upon original issuance or pursuant to Section 2.07 hereof. Each
Authenticating Agent shall be acceptable to the Company and shall
be a corporation which has a combined capital and surplus, as
most recently reported or determined by it, sufficient under the
laws of any jurisdiction under which it is organized or in which
it is doing business to conduct a trust business, and which is
otherwise authorized under such laws to conduct such business and
is subject to supervision or examination by Federal or State
authorities. If at any time any Authenticating Agent shall cease
to be eligible in accordance with these provisions, it shall
resign immediately.
Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company.
The Trustee may at any time (and upon request by the Company
shall) terminate the agency of any Authenticating Agent by giving
written notice of termination to such Authenticating Agent and to
the Company. Upon resignation, termination or cessation of
eligibility of any Authenticating Agent, the Trustee may appoint
an eligible successor Authenticating Agent acceptable to the
Company. Any successor Authenticating Agent, upon acceptance of
its appointment hereunder, shall become vested with all the
rights, powers and duties of its predecessor hereunder as if
originally named as an Authenticating Agent pursuant hereto.
ARTICLE THREE
Redemption of Securities and Sinking Fund Provisions
SECTION 3.01. The Company may redeem the Securities of any
series issued hereunder on and after the dates and in accordance
with the terms established for such series pursuant to Section
2.01 hereof.
SECTION 3.02. (a) In case the Company shall desire to
exercise such right to redeem all or, as the case may be, a
portion of the Securities of any series in accordance with the
right reserved so to do, it shall give notice of such redemption
to holders of the Securities of such series to be redeemed by
mailing, first class postage prepaid, a notice of such redemption
not less than 30 days and not more than 60 days before the date
fixed for redemption of that series to such holders at their last
addresses as they shall appear upon the Security Register. Any
notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the
registered holder receives the notice. In any case, failure duly
to give such notice to the holder of any Security of any series
designated for redemption in whole or in part, or any defect in
the notice, shall not affect the validity of the proceedings for
the redemption of any other Securities of such series or any
other series. In the case of any redemption of Securities prior
to the expiration of any restriction on such redemption provided
in the terms of such Securities or elsewhere in this Indenture,
the Company shall furnish the Trustee with an Officers'
Certificate evidencing compliance with any such restriction.
13
Each such notice of redemption shall specify the date fixed
for redemption and the redemption price at which Securities of
that series are to be redeemed, and shall state that payment of
the redemption price of such Securities to be redeemed will be
made at the office or agency of the Company in either the City of
Chicago, County of Cook, State of Illinois, or the Borough of
Manhattan, the City and State of New York, upon presentation and
surrender of such Securities, that interest accrued to the date
fixed for redemption will be paid as specified in said notice,
that from and after said date interest will cease to accrue and
that the redemption is for a sinking fund, if such is the case.
If less than all the Securities of a series are to be redeemed,
the notice to the holders of Securities of that series to be
redeemed in whole or in part shall specify the particular
Securities to be so redeemed. In case any Security is to be
redeemed in part only, the notice which relates to such Security
shall state the portion of the principal amount thereof to be
redeemed, and shall state that on and after the redemption date,
upon surrender of such Security, a new Security or Securities of
such series in principal amount equal to the unredeemed portion
thereof will be issued.
(b) If less than all the Securities of a series are to be
redeemed, the Company shall give the Trustee at least 45 days'
notice in advance of the date fixed for redemption as to the
aggregate principal amount of Securities of the series to be
redeemed, and thereupon the Trustee shall select, in such manner
as it shall deem appropriate and fair in its discretion and which
may provide for the selection of a portion or portions (equal to
$1,000 or any multiple thereof) of the principal amount of such
Securities of a denomination larger than $1,000, the Securities
to be redeemed and shall thereafter promptly notify the Company
in writing of the numbers of the Securities to be redeemed, in
whole or in part.
The Company may, if and whenever it shall so elect, by
delivery of instructions signed on its behalf by its President or
any Vice President, instruct the Trustee or any paying agent to
call all or any part of the Securities of a particular series for
redemption and to give notice of redemption in the manner set
forth in this Section, such notice to be in the name of the
Company or its own name as the Trustee or such paying agent may
deem advisable. In any case in which notice of redemption is to
be given by the Trustee or any such paying agent, the Company
shall deliver or cause to be delivered to, or permit to remain
with, the Trustee or such paying agent, as the case may be, such
Security Register, transfer books or other records, or suitable
copies or extracts therefrom, sufficient to enable the Trustee or
such paying agent to give any notice by mail that may be required
under the provisions of this Section.
SECTION 3.03. (a) If the giving of notice of redemption
shall have been completed as above provided, the Securities or
portions of Securities of the series to be redeemed specified in
such notice shall become due and payable on the date and at the
place stated in such notice at the applicable redemption price,
together with interest accrued to the date fixed for redemption
and interest on such Securities or portions of Securities shall
cease to accrue on and after the date fixed for redemption,
unless the Company shall default in the payment of such
redemption price and accrued interest with respect to any such
Security or portion thereof. On presentation and surrender of
such Securities on or after the date fixed for redemption at the
place of payment specified in the notice, said Securities shall
be paid and redeemed at the applicable redemption price for such
series, together with interest accrued thereon to the date fixed
for redemption (but if the date fixed for redemption is an
interest payment date, the interest installment payable on such
date shall be payable to the registered holder at the close of
business on the applicable record date pursuant to Section 2.03).
14
(b) Upon presentation of any Security of such series which
is to be redeemed in part only, the Company shall execute and the
Trustee shall authenticate and the office or agency where the
Security is presented shall deliver to the holder thereof, at the
expense of the Company, a new Security or Securities of the same
series, of authorized denominations in principal amount equal to
the unredeemed portion of the Security so presented.
SECTION 3.04. The provisions of Sections 3.04, 3.05 and 3.06
shall be applicable to any sinking fund for the retirement of
Securities of a series, except as otherwise specified as
contemplated by Section 2.01 for Securities of such series.
The minimum amount of any sinking fund payment provided for
by the terms of Securities of any series is herein referred to as
a "mandatory sinking fund payment", and any payment in excess of
such minimum amount provided for by the terms of Securities of
any series is herein referred to as an "optional sinking fund
payment". If provided for by the terms of Securities of any
series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 3.05. Each sinking
fund payment shall be applied to the redemption of Securities of
any series as provided for by the terms of Securities of such
series.
SECTION 3.05. The Company (1) may deliver Outstanding
Securities of a series (other than any previously called for
redemption) and (2) may apply as a credit Securities of a series
which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant
to the terms of such Securities, in each case in satisfaction of
all or any part of any sinking fund payment with respect to the
Securities of such series required to be made pursuant to the
terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so
credited. Such Securities shall be received and credited for such
purpose by the Trustee at the redemption price specified in such
Securities for redemption through operation of the sinking fund
and the amount of such sinking fund payment shall be reduced
accordingly.
SECTION 3.06. Not less than 45 days prior to each sinking
fund payment date for any series of Securities, the Company will
deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if
any, which is to be satisfied by delivering and crediting
Securities of that series pursuant to Section 3.05 and the basis
for such credit and will also deliver to the Trustee any
Securities to be so delivered. Not less than 30 days before each
such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in
the manner specified in Section 3.02 and cause notice of the
redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 3.02. Such
notice having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in Section
3.03.
15
ARTICLE FOUR
Particular Covenants of the Company
The Company covenants and agrees for each series of the
Securities as follows:
SECTION 4.01. The Company will duly and punctually pay or
cause to be paid the principal of (and premium, if any) and
interest on the Securities of that series at the time and place
and in the manner provided herein and established with respect to
such Securities.
SECTION 4.02. So long as any series of the Securities remain
outstanding, the Company agrees to maintain an office or agency
in either the City of Chicago, County of Cook, State of Illinois,
or the Borough of Manhattan, the City and State of New York, with
respect to each such series and at such other location or
locations as may be designated as provided in this Section 4.02,
where (i) Securities of that series may be presented for payment,
(ii) Securities of that series may be presented as hereinabove
authorized for registration of transfer and exchange, and (iii)
notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be given or
served. As to such office or agency in either the City of
Chicago, County of Cook, State of Illinois, or the Borough of
Manhattan, the City and State of New York, the Company shall,
designate the required office or agency to be located in either
the City of Chicago, County of Cook, State of Illinois, or the
Borough of Manhattan, the City and State of New York, for each
Series of Securities, such designation to continue with respect
to such office or agency until the Company shall, by written
notice signed by its President or a Vice President and delivered
to the Trustee, designate some other office or agency for such
purposes or any of them. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to
furnish the Trustee with the address thereof, such presentations,
notices and demands may be made or served at the Corporate Trust
Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, notices
and demands.
SECTION 4.03. (a) If the Company shall appoint one or more
paying agents for all or any series of the Securities, other than
the Trustee, the Company will cause each such paying agent to
execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of
this Section,
(1) that it will hold all sums held by it as such agent for
the payment of the principal of (and premium, if any) or
interest on the Securities of that series (whether such sums
have been paid to it by the Company or by any other obligor
on such securities) in trust for the benefit of the persons
entitled thereto;
(2) that it will give the Trustee notice of any failure by
the Company (or by any other obligor on such Securities) to
make any payment of the principal of (and premium, if any)
or interest on the Securities of that series when the same
shall be due and payable;
(3) that it will, at any time during the continuance of any
failure referred to in the preceding paragraph (a)(2) above,
upon the written request of the Trustee, forthwith pay to
the Trustee all sums so held in trust by such paying agent;
and
(4) that it will perform all other duties of paying agent as
set forth in this Indenture.
16
(b) If the Company shall act as its own paying agent with
respect to any series of the Securities, it will on or before
each due date of the principal of (and premium, if any) or
interest on Securities of that series, set aside, segregate and
hold in trust for the benefit of the persons entitled thereto a
sum sufficient to pay such principal (and premium, if any) or
interest so becoming due on Securities of that series until such
sums shall be paid to such persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of such
action, or any failure (by it or any other obligor on such
Securities) to take such action. Whenever the Company shall have
one or more paying agents for any series of Securities, it will,
prior to each due date of the principal of (and premium, if any)
or interest on any Securities of that series, deposit with a
paying agent a sum sufficient to pay the principal (and premium,
if any) or interest so becoming due, such sum to be held in trust
for the benefit of the persons entitled to such principal,
premium or interest, and (unless such paying agent is the
Trustee) the Company will promptly notify the Trustee of its
action or failure so to act.
(c) Anything in this Section to the contrary
notwithstanding, (i) the agreement to hold sums in trust as
provided in this Section is subject to the provisions of Section
11.05, and (ii) the Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for
any other purpose, pay, or direct any paying agent to pay, to the
Trustee all sums held in trust by the Company or such paying
agent, such sums to be held by the Trustee upon the same terms as
those upon which such sums were held by the Company or such
paying agent; and, upon such payment by any paying agent to the
Trustee, such paying agent shall be released from all further
liability with respect to such money.
SECTION 4.04. The Company, whenever necessary to avoid or
fill a vacancy in the office of Trustee, will appoint, in the
manner provided in Section 7.10, a Trustee, so that there shall
at all times be a Trustee hereunder.
SECTION 4.05. The Company will not, while any of the
Securities remain outstanding, create, or suffer to be created or
to exist, any mortgage, lien, pledge, security interest or other
encumbrance of any kind upon any property of any character of the
Company whether now owned or hereafter acquired or upon any of
the income or profits therefrom unless it shall make effective
provision whereby the Securities then outstanding shall be
secured by such mortgage, lien, pledge, security interest or
other encumbrance equally and ratably with any and all
obligations and indebtedness thereby secured so long as any such
obligations and indebtedness shall be so secured; provided,
however, that nothing in this Section shall be construed to
prevent the Company from creating, or from suffering to be
created or to exist, any mortgages, liens, pledges, security
interests or other encumbrances, or any agreements, with respect
to:
(1) Purchase money mortgages, or other purchase money liens,
pledges or encumbrances of any kind upon property hereafter
acquired by the Company, or mortgages, liens, pledges,
security interests or other encumbrances of any kind
existing on such property at the time of the acquisition
thereof, or conditional sales agreements or other title
retention agreements with respect to any property hereafter
acquired; provided, however, that no such mortgage, lien,
pledge, security interest or other encumbrance, and no such
agreement, shall extend to or cover any other property of
the Company;
17
(2) The replacement, extension or renewal of any such
mortgage, lien, pledge, security interest or other
encumbrance, or of any such agreement, permitted by the
foregoing clause (1), or the replacement, extension or
renewal (without increase) of the indebtedness secured
thereby;
(3) Liens for taxes or assessments or governmental charges
or levies; pledges or deposits to secure obligations under
workmen's compensation laws or similar legislation; pledges
or deposits to secure performance in connection with bids,
tenders, contracts (other than contracts for the payment of
money) or leases to which the Company is a party; deposits
to secure public or statutory obligations of the Company;
materialmen's, mechanics', carriers', workers', repairmen's
or other like liens in the ordinary course of business, or
deposits to obtain the release of such liens; deposits to
secure surety and appeal bonds to which the Company is a
party; other pledges or deposits for similar purposes in the
ordinary course of business; liens created by or resulting
from any litigation or legal proceeding which at the time is
currently being contested in good faith by appropriate
proceedings; leases made, or existing on property acquired,
in the ordinary course of business; landlord's liens under
leases to which the Company is a party; zoning restrictions,
easements, licenses, restrictions on the use of real
property or minor irregularities in title thereto, which do
not materially impair the use of such property in the
operation of the business of the Company or the value of
such property for the purpose of such business; or the lien
of the Trustee described in Section 7.06 hereof;
(4) First Mortgage Bonds outstanding on the date hereof and
any replacement, extension or renewal (without increase) of
such outstanding First Mortgage Bonds;
(5) First Mortgage Bonds which may be issued by the Company
in connection with a consolidation or merger of the Company
with or into any Affiliate in exchange for or otherwise in
substitution for indebtedness of such Affiliate which by its
terms in effect requires the Company as a result of such
consolidation or merger to equally and ratably secure such
indebtedness with the First Mortgage Bonds or by its terms
prohibits long-term senior secured indebtedness from being
incurred by such Affiliate or a successor thereto unless
such First Mortgage Bonds are issued; or
(6) Indebtedness assumed by the Company of the character
specified in the first proviso of Section 4.06 hereof.
SECTION 4.06. The Company will not, while any of the
Securities remain outstanding, consolidate with, or merge into,
or merge into itself, or sell or convey all or substantially all
of its property to, any other Company unless the provisions of
Article Ten hereof are complied with.
If upon any such consolidation or merger, or sale or
conveyance, any of the property of the Company owned by the
Company prior thereto would thereupon become subject to any
mortgage, security interest, pledge or lien, the Company prior to
such consolidation, merger, sale or conveyance will secure the
outstanding Securities, or cause the same to be secured, equally
and ratably with the other indebtedness or obligations secured by
such mortgage, security
18
interest, pledge or lien so long as such other indebtedness or
obligations shall be so secured; provided, however, that the
subjection of the property of the Company to any mortgage,
security interest, pledge or lien securing indebtedness of an
Affiliate which is required to be assumed by the Company in
connection with any merger or consolidation of such Affiliate
shall be deemed excluded from the operation of this Section and
shall not require that any of the Securities be secured; and
provided, further, that the subjection of property of the Company
to any mortgage, security interest, pledge or lien of the
character referred to in clauses (1), (2), (3), (4) and (5) of
Section 4.05 shall be deemed excluded from the operation of this
Section and shall not require that any of the Securities be
secured.
ARTICLE FIVE
Securityholders' Lists and Reports by the Company
and the Trustee
SECTION 5.01. The Company will furnish or cause to be
furnished to the Trustee (a) semi-annually, not more than 15 days
after each regular record date (as defined in Section 2.03), a
list, in such form as the Trustee may reasonably require, of the
names and addresses of the holders of each series of Securities
as of such regular record date and (b) at such other times as the
Trustee may request in writing, within 30 days after the receipt
by the Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the time such
list is furnished; provided, however, no such list need be
furnished for any series for which the Trustee shall be the
Security Registrar.
SECTION 5.02. (a) The Trustee shall preserve, in as current
a form as is reasonably practicable, all information as to the
names and addresses of the holders of Securities contained in the
most recent list furnished to it as provided in Section 5.01 and
as to the names and addresses of holders of Securities received
by the Trustee in its capacity as Security Registrar (if acting
in such capacity).
(b) The Trustee may destroy any list furnished to it as
provided in Section 5.01 upon receipt of a new list so furnished.
(c) In case three or more holders of Securities of a series
(hereinafter referred to as "applicants") apply in writing to the
Trustee, and furnish to the Trustee reasonable proof that each
such applicant has owned a Security for a period of at least six
months preceding the date of such application, and such
application states that the applicants desire to communicate with
other holders of Securities of such series or holders of all
Securities with respect to their rights under this Indenture or
under such Securities, and is accompanied by a copy of the form
of proxy or other communication which such applicants propose to
transmit, then the Trustee shall, within five business days after
the receipt of such application, at its election, either
(1) afford to such applicants access to the information
preserved at the time by the Trustee in accordance with the
provisions of subsection (a) of this Section, or
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(2) inform such applicants as to the approximate number of
holders of Securities of such series or of all Securities,
as the case may be, whose names and addresses appear in the
information preserved at the time by the Trustee, in
accordance with the provisions of subsection (a) of this
Section, and as to the approximate cost of mailing to such
Securityholders the form of proxy or other communication, if
any, specified in such application.
(d) If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written
request of such applicants, mail to each holder of such series or
of all Securities, as the case may be, whose name and address
appears in the information preserved at the time by the Trustee
in accordance with the provisions of subsection (a) of this
Section, a copy of the form of proxy or other communication which
is specified in such request, with reasonable promptness after a
tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses
of mailing, unless within five days after such tender, the
Trustee shall mail to such applicants and file with the
Securities and Exchange Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in
the opinion of the Trustee, such mailing would be contrary to the
best interests of the holders of Securities of such series or of
all Securities, as the case may be, or would be in violation of
applicable law. Such written statement shall specify the basis of
such opinion. If said Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed,
shall enter an order refusing to sustain any of such objections
or if, after the entry of an order sustaining one or more of such
objections, said Commission shall find, after notice and
opportunity for hearing, that all the objections so sustained
have been met and shall enter an order so declaring, the Trustee
shall mail copies of such material to all such Securityholders
with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved
of any obligation or duty to such applicants respecting their
application.
(e) Each and every holder of the Securities, by receiving
and holding the same, agrees with the Company and the Trustee
that neither the Company nor the Trustee nor any paying agent nor
any Security Registrar shall be held accountable by reason of the
disclosure of any such information as to the names and addresses
of the holders of Securities in accordance with the provisions of
subsection (b) of this Section, regardless of the source from
which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material
pursuant to a request made under said subsection (b).
SECTION 5.03. (a) The Company covenants and agrees to file
with the Trustee, within 15 days after the Company is required to
file the same with the Securities and Exchange Commission, copies
of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as
said Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with said
Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended; or, if the Company
is not required to file information, documents or reports
pursuant to either of such sections, then to file with the
Trustee and said Commission, in accordance with the rules and
regulations prescribed from time to time by said Commission, such
of the supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of the
Securities Exchange Act of 1934, as amended, in respect of a
security listed and registered on a national securities exchange
as may be prescribed from time to time in such rules and
regulations.
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(b) The Company covenants and agrees to file with the
Trustee and the Securities and Exchange Commission, in accordance
with the rules and regulations prescribed from time to time by
said Commission, such additional information, documents and
reports with respect to compliance by the Company with the
conditions and covenants provided for in this Indenture as may be
required from time to time by such rules and regulations.
(c) The Company covenants and agrees to transmit by mail,
first class postage prepaid, or reputable over-night delivery
service which provides for evidence of receipt, to the
Securityholders, as their names and addresses appear upon the
Security Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to
subsections (a) and (b) of this Section as may be required by
rules and regulations prescribed from time to time by the
Securities and Exchange Commission.
(d) The Company covenants and agrees to furnish to the
Trustee, on or before May 15 in each calendar year in which any of
the Securities are outstanding, or on or before such other day in
each calendar year as the Company and the Trustee may from time to
time agree upon, a certificate from the principal executive
officer, principal financial officer or principal accounting
officer as to his or her knowledge of the Company's compliance
with all conditions and covenants under this Indenture. For
purposes of this subsection (d), such compliance shall be
determined without regard to any period of grace or requirement of
notice provided under this Indenture.
SECTION 5.04. (a) On or before July 15 in each year in which
any Securities are outstanding hereunder, the Trustee shall
transmit by mail, first class postage prepaid, to the
Securityholders, as their names and addresses appear upon the
Security Register, a brief report dated as of the preceding May
15, with respect to any of the following events which may have
occurred within the previous twelve months (but if no such event
has occurred within such period no report need be transmitted):
(1) any change to its eligibility under Section 7.09, and
its qualifications under Section 7.08;
(2) the creation of or any material change to a relationship
specified in paragraphs (1) through (10) of subsection (c)
of Section 7.08;
(3) the character and amount of any advances (and if the
Trustee elects so to state, the circumstances surrounding
the making thereof) made by the Trustee (as such) which
remain unpaid on the date of such report, and for the
reimbursement of which it claims or may claim a lien or
charge, prior to that of the Securities, on any property or
funds held or collected by it as Trustee if such advances so
remaining unpaid aggregate more than 1/2 of 1% of the
principal amount of the Securities outstanding on the date
of such report;
(4) any change to the amount, interest rate, and maturity
date of all other indebtedness owing by the Company, or by
any other obligor on the Securities, to the Trustee in its
individual capacity, on the date of such report, with a
brief description of any property held as collateral
security therefor, except any indebtedness based upon a
creditor relationship arising in any manner described in
paragraphs (2), (3), (4), or (6) of subsection (b) of
Section 7.13;
(5) any change to the property and funds, if any, physically
in the possession of the Trustee as such on the date of such
report;
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(6) any release, or release and substitution, of property
subject to the lien of this Indenture (and the consideration
thereof, if any) which it has not previously reported;
(7) any additional issue of Securities which the Trustee has
not previously reported; and
(8) any action taken by the Trustee in the performance of
its duties under this Indenture which it has not previously
reported and which in its opinion materially affects the
Securities or the Securities of any series, except any
action in respect of a default, notice of which has been or
is to be withheld by it in accordance with the provisions of
Section 6.07.
(b) The Trustee shall transmit by mail, first class postage
prepaid, to the Securityholders, as their names and addresses
appear upon the Security Register, a brief report with respect to
the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making
thereof) made by the Trustee as such since the date of the last
report transmitted pursuant to the provisions of subsection (a)
of this Section (or if no such report has yet been so
transmitted, since the date of execution of this Indenture), for
the reimbursement of which it claims or may claim a lien or
charge prior to that of the Securities of any series on property
or funds held or collected by it as Trustee, and which it has not
previously reported pursuant to this subsection if such advances
remaining unpaid at any time aggregate more than 10% of the
principal amount of Securities of such series outstanding at such
time, such report to be transmitted within 90 days after such
time.
(c) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with the
Company, with each stock exchange upon which any Securities are
listed (if so listed) and also with the Securities and Exchange
Commission. The Company agrees to notify the Trustee when any
Securities become listed on any stock exchange.
ARTICLE SIX
Remedies of the Trustee and Securityholders
on Event of Default
SECTION 6.01. (a) Whenever used herein with respect to
Securities of a particular series, "Event of Default" means any
one or more of the following events which has occurred and is
continuing:
(1) default in the payment of any installment of interest
upon any of the Securities of that series, as and when the
same shall become due and payable, and continuance of such
default for a period of 30 business days;
(2) default in the payment of the principal of (or premium,
if any, on) any of the Securities of that series as and when
the same shall become due and payable whether at maturity,
upon redemption, by declaration or otherwise, or in any
payment required by any sinking or analogous fund
established with respect to that series;
22
(3) failure on the part of the Company duly to observe or
perform any other of the covenants or agreements on the part
of the Company with respect to that series contained in such
Securities or otherwise established with respect to that
series of Securities pursuant to Section 2.01 hereof or
contained in this Indenture (other than a covenant or
agreement which has been expressly included in this
Indenture solely for the benefit of one or more series of
Securities other than such series) for a period of 90 days
after the date on which written notice of such failure,
requiring the same to be remedied and stating that such
notice is a "Notice of Default" hereunder, shall have been
given to the Company by the Trustee, by registered or
certified mail, or to the Company and the Trustee by the
holders of at least 25% in principal amount of the
Securities of that series at the time outstanding;
(4) a decree or order by a court having jurisdiction in the
premises shall have been entered adjudging the Company a
bankrupt or insolvent, or approving as properly filed a
petition seeking liquidation or reorganization of the
Company under the Federal Bankruptcy Code or any other
similar applicable Federal or State law, and such decree or
order shall have continued unvacated and unstayed for a
period of 90 days; or an involuntary case shall be commenced
under such Code in respect of the Company and shall continue
undismissed for a period of 90 days or an order for relief
in such case shall have been entered; or a decree or order
of a court having jurisdiction in the premises shall have
been entered for the appointment on the ground of insolvency
or bankruptcy of a receiver or custodian or liquidator or
trustee or assignee in bankruptcy or insolvency of the
Company or of its property, or for the winding up or
liquidation of its affairs, and such decree or order shall
have remained in force unvacated and unstayed for a period
of 90 days; or
(5) the Company shall institute proceedings to be
adjudicated a voluntary bankrupt, or shall consent to the
filing of a bankruptcy proceeding against it, or shall file
a petition or answer or consent seeking liquidation or
reorganization under the Federal Bankruptcy Code or any
other similar applicable Federal or State law, or shall
consent to the filing of any such petition, or shall consent
to the appointment on the ground of insolvency or bankruptcy
of a receiver or custodian or liquidator or trustee or
assignee in bankruptcy or insolvency of it or of its
property, or shall make an assignment for the benefit of
creditors.
(b) In each and every such case, unless the principal of all
the Securities of that series shall have already become due and
payable, either the Trustee or the holders of not less than 25%
in aggregate principal amount of the Securities of that series
then outstanding hereunder, by notice in writing to the Company
(and to the Trustee if given by such Securityholders), may
declare the principal of all the Securities of that series to be
due and payable immediately, and upon any such declaration the
same shall become and shall be immediately due and payable,
anything contained in this Indenture or in the Securities of that
series or established with respect to that series pursuant to
Section 2.01 hereof to the contrary notwithstanding.
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(c) This provision, however, is subject to the condition
that if, at any time after the principal of the Securities of
that series shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon all
the Securities of that series and the principal of (and premium,
if any, on) any and all Securities of that series which shall
have become due otherwise than by acceleration (with interest
upon such principal and premium, if any, and, to the extent that
such payment is enforceable under applicable law, upon overdue
installments of interest, at the rate per annum expressed in the
Securities of that series to the date of such payment or deposit)
and the amount payable to the Trustee under Section 7.06, and any
and all defaults under the Indenture, other than the nonpayment
of principal on Securities of that series which shall not have
become due by their terms, shall have been remedied or waived as
provided in Section 6.06 then and in every such case the holders
of a majority in aggregate principal amount of the Securities of
that series then outstanding, by written notice to the Company
and to the Trustee, may rescind and annul such declaration and
its consequences; but no such rescission and annulment shall
extend to or shall affect any subsequent default, or shall impair
any right consequent thereon.
(d) In case the Trustee shall have proceeded to enforce any
right with respect to Securities of that series under this
Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any
other reason or shall have been determined adversely to the
Trustee, then and in every such case the Company and the Trustee
shall be restored respectively to their former positions and
rights hereunder, and all rights, remedies and powers of the
Company and the Trustee shall continue as though no such
proceedings had been taken.
SECTION 6.02. (a) The Company covenants that (1) in case
default shall be made in the payment of any installment of
interest on any of the Securities of a series, or any payment
required by any sinking or analogous fund established with
respect to that series as and when the same shall become due and
payable, and such default shall have continued for a period of 30
business days, or (2) in case default shall be made in the
payment of the principal of (or premium, if any, on) any of the
Securities of a series when the same shall have become due and
payable, whether upon maturity of the Securities of a series or
upon redemption or upon declaration or otherwise--then, upon
demand of the Trustee, the Company will pay to the Trustee, for
the benefit of the holders of the Securities of that series, the
whole amount that then shall have become due and payable on all
such Securities for principal (and premium, if any) or interest,
or both, as the case may be, with interest upon the overdue
principal (and premium, if any) and (to the extent that payment
of such interest is enforceable under applicable law) upon
overdue installments of interest at the rate per annum expressed
in the Securities of that series; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and
expenses of collection, and the amount payable to the Trustee
under Section 7.06.
(b) In case the Company shall fail forthwith to pay such
amounts upon such demand, the Trustee, in its own name and as
trustee of an express trust, shall be entitled and empowered to
institute any action or proceedings at law or in equity for the
collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Company or
other obligor upon the Securities of that series and collect in
the manner provided by law out of the property of the Company or
other obligor upon the Securities of that series wherever
situated the moneys adjudged or decreed to be payable.
24
(c) In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement,
composition or other judicial proceedings affecting the Company,
any other obligor on such Securities, or the creditors or
property of either, the Trustee shall have power to intervene in
such proceedings and take any action therein that may be
permitted by the court and shall (except as may be otherwise
provided by law) be entitled to file such proofs of claim and
other papers and documents as may be necessary or advisable in
order to have the claims of the Trustee and of the holders of
Securities of such series allowed for the entire amount due and
payable by the Company or such other obligor under the Indenture
at the date of institution of such proceedings and for any
additional amount which may become due and payable by the Company
or such other obligor after such date, and to collect and receive
any moneys or other property payable or deliverable on any such
claim, and to distribute the same after the deduction of the
amount payable to the Trustee under Section 7.06; and any
receiver, assignee or trustee in bankruptcy or reorganization is
hereby authorized by each of the holders of Securities of such
series to make such payments to the Trustee, and, in the event
that the Trustee shall consent to the making of such payments
directly to such Securityholders, to pay to the Trustee any
amount due it under Section 7.06.
(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to
Securities of that series, may be enforced by the Trustee without
the possession of any of such Securities, or the production
thereof at any trial or other proceeding relative thereto, and
any such suit or proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for payment to the
Trustee of any amounts due under Section 7.06, be for the ratable
benefit of the holders of the Securities of such series.
In case of an Event of Default hereunder the Trustee may in
its discretion proceed to protect and enforce the rights vested
in it by this Indenture by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce
any of such rights, either at law or in equity or in bankruptcy
or otherwise, whether for the specific enforcement of any
covenant or agreement contained in the Indenture or in aid of the
exercise of any power granted in this Indenture, or to enforce
any other legal or equitable right vested in the Trustee by this
Indenture or by law.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf
of any Securityholder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities of that series
or the rights of any holder thereof or to authorize the Trustee
to vote in respect of the claim of any Securityholder in any such
proceeding.
SECTION 6.03. Any moneys collected by the Trustee pursuant
to Section 6.02 with respect to a particular series of Securities
shall be applied in the order following, at the date or dates
fixed by the Trustee and, in case of the distribution of such
moneys on account of principal (or premium, if any) or interest,
upon presentation of the several Securities of that series, and
stamping thereon the payment, if only partially paid, and upon
surrender thereof if fully paid:
FIRST: To the payment of costs and expenses of collection
and of all amounts payable to the Trustee under Section
7.06;
25
SECOND: To the payment of the amounts then due and unpaid
upon Securities of such series for principal (and premium,
if any) and interest, in respect of which or for the benefit
of which such money has been collected, ratably, without
preference or priority of any kind, according to the amounts
due and payable on such Securities for principal (and
premium, if any) and interest, respectively.
SECTION 6.04. No holder of any Security of any series shall
have any right by virtue or by availing of any provision of this
Indenture to institute any suit, action or proceeding in equity
or at law upon or under or with respect to this Indenture or for
the appointment of a receiver or trustee, or for any other remedy
hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default and of the
continuance thereof with respect to Securities of such series
specifying such Event of Default, as hereinbefore provided, and
unless also the holders of not less than 25% in aggregate
principal amount of the Securities of such series then
outstanding shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as
trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and
the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity, shall have failed to institute any such
action, suit or proceeding; it being understood and intended, and
being expressly covenanted by the taker and holder of every
Security of such series with every other such taker and holder
and the Trustee, that no one or more holders of Securities of
such series shall have any right in any manner whatsoever by
virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of the holders of any
other of such Securities, or to obtain or seek to obtain priority
over or preference to any other such holder, or to enforce any
right under this Indenture, except in the manner herein provided
and for the equal, ratable and common benefit of all holders of
Securities of such series. For the protection and enforcement of
the provisions of this Section, each and every Securityholder and
the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Notwithstanding any other provisions of this Indenture,
however, the right of any holder of any Security to receive
payment of the principal of (and premium, if any) and interest on
such Security, as therein provided, on or after the respective
due dates expressed in such Security (or in the case of
redemption, on the redemption date), or to institute suit for the
enforcement of any such payment on or after such respective dates
or redemption date, shall not be impaired or affected without the
consent of such holder.
SECTION 6.05. (a) All powers and remedies given by this
Article to the Trustee or to the Securityholders shall, to the
extent permitted by law, be deemed cumulative and not exclusive
of any others thereof or of any other powers and remedies
available to the Trustee or the holders of the Securities, by
judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this
Indenture or otherwise established with respect to such
Securities.
(b) No delay or omission of the Trustee or of any holder of
any of the Securities to exercise any right or power accruing
upon any Event of Default occurring and continuing as aforesaid
shall impair any such right or power, or shall be construed to be
a waiver of any such default or an acquiescence therein; and,
subject to the provisions of Section 6.04, every power and remedy
given by this Article or by law to the Trustee or to the
Securityholders may be exercised from time to time, and as often
as shall be deemed expedient, by the Trustee or by the
Securityholders.
26
SECTION 6.06. The holders of a majority in aggregate
principal amount of the Securities of any series at the time
outstanding, determined in accordance with Section 8.04, shall
have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee with
respect to such series; provided, however, that such direction
shall not be in conflict with any rule of law or with this
Indenture or unduly prejudicial to the rights of holders of
Securities of any other series at the time outstanding determined
in accordance with Section 8.04, not parties thereto. Subject to
the provisions of Section 7.01, the Trustee shall have the right
to decline to follow any such direction if the Trustee in good
faith shall, by a responsible officer or officers of the Trustee,
determine that the proceeding so directed would involve the
Trustee in personal liability. The holders of a majority in
aggregate principal amount of the Securities of any series at the
time outstanding, determined in accordance with Section 8.04, may
on behalf of the holders of all of the Securities of that series
waive any past default in the performance of any of the covenants
contained herein or established pursuant to Section 2.01 with
respect to such series and its consequences, except a default in
the payment of the principal of, or premium, if any, or interest
on, any of the Securities of that series as and when the same
shall become due by the terms of such Securities or a call for
redemption of Securities of that series. Upon any such waiver,
the default covered thereby shall be deemed to be cured for all
purposes of this Indenture and the Company, the Trustee and the
holders of the Securities of that series shall be restored to
their former positions and rights hereunder, respectively; but no
such waiver shall extend to any subsequent or other default or
impair any right consequent thereon.
SECTION 6.07. The Trustee shall, within 90 days after the
occurrence of a default with respect to a particular series,
transmit by mail, first class postage prepaid, to the holders of
Securities of that series, as their names and addresses appear
upon the Security Register, notice of all defaults with respect
to that series known to the Trustee, unless such defaults shall
have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section being hereby defined
to be the events specified in subsections (1), (2), (3), (4) and
(5) of Section 6.01(a), not including any periods of grace
provided for therein and irrespective of the giving of notice
provided for by subsection (3) of Section 6.01(a)); provided,
that, except in the case of default in the payment of the
principal of (or premium, if any) or interest on any of the
Securities of that series or in the payment of any sinking or
analagous fund installment established with respect to that
series, the Trustee shall be protected in withholding such notice
if and so long as the board of directors, the executive
committee, or a trust committee of directors and/or responsible
officers, of the Trustee in good faith determine that the
withholding of such notice is in the interests of the
Securityholders of Securities of that series; provided further,
that in the case of any default of the character specified in
Section 6.01(a)(3) with respect to Securities of such series no
such notice to the holders of the Securities of that series shall
be given until at least 30 days after the occurrence thereof.
The Trustee shall not be deemed to have knowledge of any
default, except (i) a default under subsections (a)(1) or (a)(2)
of Section 6.01 as long as the Trustee is acting as paying agent
for such series of Securities or (ii) any default as to which the
Trustee shall have received written notice or a responsible
officer charged with the administration of this Indenture shall
have obtained actual knowledge.
27
SECTION 6.08. All parties to this Indenture agree, and each
holder of any Securities by his or her acceptance thereof shall
be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but
the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any
Securityholder, or group of Securityholders, holding more than
10% in aggregate principal amount of the outstanding Securities
of any series, or to any suit instituted by any Securityholder
for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security of such series, on
or after the respective due dates expressed in such Security or
established pursuant to this Indenture.
ARTICLE SEVEN
Concerning the Trustee
SECTION 7.01. (a) The Trustee, prior to the occurrence of an
Event of Default with respect to Securities of a series and after
the curing of all Events of Default with respect to Securities of
that series which may have occurred, shall undertake to perform
with respect to Securities of such series such duties and only
such duties as are specifically set forth in this Indenture, and
no implied covenants shall be read into this Indenture against
the Trustee. In case an Event of Default with respect to
Securities of a series has occurred (which has not been cured or
waived), the Trustee shall exercise with respect to Securities of
that series such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct,
except that
(1) prior to the occurrence of an Event of Default with
respect to Securities of a series and after the curing or
waiving of all such Events of Default with respect to that
series which may have occurred:
(i) the duties and obligations of the Trustee shall with
respect to Securities of such series be determined solely by
the express provisions of this Indenture, and the Trustee
shall not be liable with respect to Securities of such
series except for the performance of such duties and
obligations as are specifically set forth in this Indenture,
and no implied covenants or obligations shall be read into
this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee,
the Trustee may with respect to Securities of such series
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but in the
case of any such certificates or opinions which by any
provision hereof are specifically required to be furnished
to the Trustee, the Trustee shall be under a duty to examine
the same to determine whether or not they conform to the
requirements of this Indenture;
28
(2) the Trustee shall not be liable for any error of
judgment made in good faith by a responsible officer or
responsible officers of the Trustee, unless it shall be
proved that the Trustee was negligent in ascertaining the
pertinent facts;
(3) the Trustee shall not be liable with respect to any
action taken or omitted to be taken by it in good faith in
accordance with the direction of the holders of not less
than a majority in principal amount of the Securities of any
series at the time outstanding relating to the time, method
and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power
conferred upon the Trustee under this Indenture with respect
to the Securities of that series; and
(4) None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or
otherwise incur personal financial liability in the
performance of any of its duties or in the exercise of any
of its rights or powers, if there is reasonable ground for
believing that the repayment of such funds or liability is
not reasonably assured to it under the terms of this
Indenture or adequate indemnity against such risk is not
reasonably assured to it.
SECTION 7.02. Except as otherwise provided in Section
7.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, security or other paper or document
believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Board
Resolution or an instrument signed in the name of the Company by
the President or any Vice President and by the Secretary or an
Assistant Secretary or the Treasurer or an Assistant Treasurer
(unless other evidence in respect thereof is specifically
prescribed herein);
(c) The Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any
action taken or suffered or omitted hereunder in good faith and
in reliance thereon;
(d) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Securityholders,
pursuant to the provisions of this Indenture, unless such
Securityholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; nothing herein
contained shall, however, relieve the Trustee of the obligation,
upon the occurrence of an Event of Default with respect to a
series of the Securities (which has not been cured or waived) to
exercise with respect to Securities of that series such of the
rights and powers vested in it by this Indenture, and to use the
same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of
his own affairs;
(e) The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred
upon it by this Indenture;
29
(f) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, security, or other papers or documents,
unless requested in writing so to do by the holders of not less
than a majority in principal amount of the outstanding Securities
of the particular series affected thereby (determined as provided
in Section 8.04); provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the
terms of this Indenture, the Trustee may require reasonable
indemnity against such costs, expenses or liabilities as a
condition to so proceeding. The reasonable expense of every such
examination shall be paid by the Company or, if paid by the
Trustee, shall be repaid by the Company upon demand; and
(g) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by
or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder.
SECTION 7.03. (a) The recitals contained herein and in the
Securities (other than the Certificate of Authentication on the
Securities) shall be taken as the statements of the Company, and
the Trustee assumes no responsibility for the correctness of the
same.
(b) The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities.
(c) The Trustee shall not be accountable for the use or
application by the Company of any of the Securities or of the
proceeds of such Securities, or for the use or application of any
moneys paid over by the Trustee in accordance with any provision
of this Indenture or established pursuant to Section 2.01, or for
the use or application of any moneys received by any paying agent
other than the Trustee.
SECTION 7.04. The Trustee or any paying agent or Security
Registrar, in its individual or any other capacity, may become
the owner or pledgee of Securities with the same rights it would
have if it were not Trustee, paying agent or Security Registrar.
SECTION 7.05. Subject to the provisions of Section 11.05,
all moneys received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which
they were received, but need not be segregated from other funds
except to the extent required by law. The Trustee shall be under
no liability for interest on any moneys received by it hereunder
except such as it may agree with the Company to pay thereon.
SECTION 7.06. (a) The Company covenants and agrees to pay to
the Trustee from time to time, and the Trustee shall be entitled
to, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust) for all services rendered by it in the execution
of the trusts hereby created and in the exercise and performance
of any of the powers and duties hereunder of the Trustee, and the
Company will pay or reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any of the provisions of
this Indenture (including the
30
reasonable compensation and the expenses and disbursements of its
counsel (including in-house counsel) and of all persons not
regularly in its employ) except any such expense, disbursement or
advance as may arise from its negligence or bad faith. The
Company also covenants to indemnify the Trustee (and its
officers, agents, directors and employees) for, and to hold it
harmless against, any loss, liability or expense incurred without
negligence or bad faith on the part of the Trustee and arising
out of or in connection with the acceptance or administration of
this trust, including the costs and expenses of defending itself
against any claim of liability in the premises.
(b) The obligations of the Company under this Section to
compensate and indemnify the Trustee and to pay or reimburse the
Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder. Such additional indebtedness
shall be secured by a lien prior to that of the Securities upon
all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the holders of
particular Securities.
SECTION 7.07. Except as otherwise provided in Section 7.01,
whenever in the administration of the provisions of this
Indenture the Trustee shall deem it necessary or desirable that a
matter be proved or established prior to taking or suffering or
omitting to take any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed)
may, in the absence of negligence or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by
an Officers' Certificate delivered to the Trustee and such
certificate, in the absence of negligence or bad faith on the
part of the Trustee, shall be full warrant to the Trustee for any
action taken, suffered or omitted to be taken by it under the
provisions of this Indenture upon the faith thereof.
SECTION 7.08. (a) If the Trustee has or shall acquire any
conflicting interest, as defined in this Section, with respect to
the Securities of any series and if the Default to which such
conflicting interest relates has not been cured, duly waived or
otherwise eliminated, within 90 days after ascertaining that it
has such conflicting interest, it shall either eliminate such
conflicting interest, except as otherwise provided herein, or
resign with respect to the Securities of that series in the
manner and with the effect specified in Section 7.10 and the
Company shall promptly appoint a successor Trustee in the manner
provided herein.
(b) In the event that the Trustee shall fail to comply with
the provisions of subsection (a) of this Section, with respect to
the Securities of any series the Trustee shall, within ten days
after the expiration of such 90-day period, transmit notice of
such failure by mail, first class postage prepaid, to the
Securityholders of that series as their names and addresses
appear upon the registration books.
(c) For the purposes of this Section the Trustee shall be
deemed to have a conflicting interest with respect to the
Securities of any series if a Default has occurred and is
continuing and:
(1) the Trustee is trustee under this Indenture with respect
to the outstanding Securities of any series other than that
series, or is trustee under another indenture under which
any other securities, or certificates of interest or
participation in any other securities, of the Company are
outstanding, unless such other indenture is a collateral
trust indenture under which the only collateral consists of
Securities
31
issued under this Indenture; provided that there shall be
excluded from the operation of this paragraph the Securities
of any series other than that series and any other indenture
or indentures under which other securities, or certificates
of interest or participation in other securities, of the
Company are outstanding if (i) this Indenture and such other
indenture or indentures and all series of securities
issuable thereunder are wholly unsecured and rank equally
and such other indenture or indentures (and such series) are
hereafter qualified under the Trust Indenture Act of 1939,
as amended, unless the Securities and Exchange Commission
shall have found and declared by order pursuant to
subsection (b) of Section 305 or subsection (c) of Section
307 of the Trust Indenture Act of 1939, as amended, that
differences exist between (A) the provisions of this
Indenture with respect to Securities of that series and with
respect to one or more other series or (B) the provisions of
this Indenture and the provisions of such other indenture or
indentures (or such series), which are so likely to involve
a material conflict of interest as to make it necessary in
the public interest or for the protection of investors to
disqualify the Trustee from acting as such under this
Indenture with respect to the Securities of that series and
such other series or such other indenture or indentures, or
(ii) the Company shall have sustained the burden of proving,
on application to the Securities and Exchange Commission and
after opportunity for hearing thereon, that the trusteeship
under this Indenture with respect to Securities of that
series and such other series or such other indenture or
indentures is not so likely to involve a material conflict
of interest as to make it necessary in the public interest
or for the protection of investors to disqualify the Trustee
from acting as such under this Indenture with respect to
Securities of that series and such other series or under
such other indentures;
(2) the Trustee or any of its directors or executive
officers is an underwriter for the Company;
(3) the Trustee directly or indirectly controls or is
directly or indirectly controlled by or is under direct or
indirect common control with or an underwriter for the
Company;
(4) the Trustee or any of its directors or executive
officers is a director, officer, partner, employee,
appointee or representative of the Company, or of an
underwriter (other than the Trustee itself) for the Company
who is currently engaged in the business of underwriting,
except that (A) one individual may be a director and/or an
executive officer of the Trustee and a director and/or an
executive officer of the Company, but may not be at the same
time an executive officer of both the Trustee and the
Company; (B) if and so long as the number of directors of
the Trustee in office is more than nine, one additional
individual may be a director and/or an executive officer of
the Trustee and a director of the Company; and (C) the
Trustee may be designated by the Company or by an
underwriter for the Company to act in the capacity of
transfer agent, registrar, custodian, paying agent, fiscal
agent, escrow agent, or depository, or in any other similar
capacity, or, subject to the provisions of paragraph (1) of
this subsection (c), to act as trustee whether under an
indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director,
partner, or executive officer thereof, or 20% or more of
such voting securities is beneficially owned, collectively,
by any two or more of such persons; or 10% or more of the
voting securities of the Trustee is beneficially
32
owned either by an underwriter for the Company or by any
director, partner, or executive officer thereof, or is
beneficially owned, collectively, by any two or more such
persons;
(6) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default
(as hereinafter in this subsection (c) defined), (A) 5% or
more of the voting securities, or 10% or more of any other
class of security, of the Company, not including the
Securities issued under this Indenture and securities issued
under any other indenture under which the Trustee is also
trustee, or (B) 10% or more of any class of security of an
underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default
(as hereinafter in this subsection (c) defined), 5% or more
of the voting securities of any person who, to the knowledge
of the Trustee, owns 10% or more of the voting securities
of, or controls directly or indirectly or is under direct or
indirect common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default
(as hereinafter in this subsection (c) defined), 10% or more
of any class of security of any person who, to the knowledge
of the Trustee, owns 50% or more of the voting securities of
the Company;
(9) the Trustee owns, on the date of Default upon the
Securities of any series or any anniversary of such Default
while such Default upon the Securities issued under this
Indenture remains outstanding, in the capacity of executor,
administrator, testamentary or inter vivos trustee,
guardian, committee or conservator, or in any other similar
capacity, an aggregate of 25% or more of the voting
securities, or of any class of security, of any person, the
beneficial ownership of a specified percentage of which
would have constituted a conflicting interest under
paragraph (6), (7), or (8) of this subsection (d). As to any
such securities of which the Trustee acquired ownership
through becoming executor, administrator or testamentary
trustee of an estate which include them, the provisions of
the preceding sentence shall not apply, for a period of two
years from the date of such acquisition, to the extent that
such securities included in such estate do not exceed 25% of
such voting securities or 25% of any such class of security.
Promptly after the dates of any such Default upon the
Securities issued under this Indenture and annually in each
succeeding year that the Securities issued under this
Indenture remain in Default, the Trustee shall make a check
of its holding of such securities in any of the
above-mentioned capacities as of such dates. If the Company
fails to make payment in full of principal of or interest on
any of the Securities when and as the same becomes due and
payable, and such failure continues for 30 days thereafter,
the Trustee shall make a prompt check of its holding of such
securities in any of the above-mentioned capacities as of
the date of the expiration of such 30-day period, and after
such date, notwithstanding the foregoing provisions of this
paragraph (9), all such securities so held by the Trustee,
with sole or joint control over such securities vested in
it, shall, but only so long as such failure shall continue,
be considered as though beneficially owned by the Trustee
for the purposes of paragraphs (6), (7) and (8) of this
subsection (c); or
(10) except under the circumstances described in paragraphs
(1), (3),
33
(4), (5) or (6) of subsection (b) of Section 7.13 the
Trustee shall be or shall become a creditor of the Company.
For purposes of paragraph (1) of this subsection (c), and of
Section 6.06, the term "series of Securities" or "series" means a
series, class or group of securities issuable under an indenture
pursuant to whose terms holders of one such series may vote to
direct the indenture trustee, or otherwise take action pursuant
to a vote of such holders, separately from holders of another
such series; provided, that "series of securities" or "series"
shall not include any series of securities issuable under an
indenture if all such series rank equally and are wholly
unsecured.
The specification of percentages in paragraphs (5) to (9),
inclusive, of this subsection (c) shall not be construed as
indicating that the ownership of such percentages of the
securities of a person is or is not necessary or sufficient to
constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this subsection (c).
For the purposes of paragraphs (6), (7), (8) and (9) of this
subsection (c) only, (A) the terms "security" and "securities"
shall include only such securities as are generally known as
corporate securities, but shall not include any note or other
evidence of indebtedness issued to evidence an obligation to
repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or
participation in any such note or evidence of indebtedness; (B)
an obligation shall be deemed to be in "default" when a default
in payment of principal shall have continued for 30 days or more
and shall not have been cured; and (C) the Trustee shall not be
deemed to be the owner or holder of (i) any security which it
holds as collateral security (as trustee or otherwise) for any
obligation which is not in default as defined in clause (B)
above, or (ii) any security which it holds as collateral security
under this Indenture, irrespective of any Default hereunder, or
(iii) any security which it holds as agent for collection, or as
custodian, escrow agent or depositary, or in any similar
representative capacity.
Except as above provided, the word "security" or
"securities" as used in this Indenture shall mean any note,
stock, treasury stock, bond, debenture, evidence of indebtedness,
certificate of interest or participation in any profit-sharing
agreement, collateral-trust certificate, pre-organization
certificate or subscription, transferable share, investment
contract, voting-trust certificate, certificate of deposit for a
security, fractional undivided interest in oil, gas, or other
mineral rights, or, in general, any interest or instrument
commonly known as a "security", or any certificate of interest or
participation in, temporary or interim certificate for, receipt
for, guarantee of, or warrant or right to subscribe to or
purchase, any of the foregoing.
(d) For the purposes of this Section:
(1) The term "underwriter" when used with reference to
the Company shall mean every person, who, within one year
prior to the time as of which the determination is made, has
purchased from the Company with a view to, or has offered or
sold for the Company in connection with, the distribution of
any security of the Company outstanding at such time, or has
participated or has had a direct or indirect participation
in any such undertaking, or has participated or has had a
participation in the
34
direct or indirect underwriting of any such undertaking, but
such term shall not include a person whose interest was
limited to a commission from an underwriter or dealer not in
excess of the usual and customary distributors' or sellers'
commission.
(2) The term "director" shall mean any member of the
board of directors of a corporation or any individual
performing similar functions with respect to any
organization whether incorporated or unincorporated.
(3) The term "person" shall mean an individual, a
corporation, a partnership, an association, a joint-stock
company, a trust, an unincorporated organization or a
government or political subdivision thereof. As used in
this paragraph, the term "trust" shall include only a trust
where the interest or interests of the beneficiary or
beneficiaries are evidenced by a security.
(4) The term "voting security" shall mean any security
presently entitling the owner or holder thereof to vote in
the direction or management of the affairs of a person, or
any security issued under or pursuant to any trust,
agreement or arrangement whereby a trustee or trustees or
agent or agents for the owner or holder of such security are
presently entitled to vote in the direction or management of
the affairs of a person.
(5) The term "Company" shall mean any obligor upon the
Securities.
(6) The term "executive officer" shall mean the
president, every vice president, every assistant vice
president, every trust officer, the cashier, the secretary,
and the treasurer of a corporation, and any individual
customarily performing similar functions with respect to any
organization whether incorporated or unincorporated, but
shall not include the chairman of the board of directors.
(e) The percentages of voting securities and other
securities specified in this Section shall be calculated in
accordance with the following provisions:
(1) A specified percentage of the voting securities of
the Trustee, the Company or any other person referred to in
this Section (each of whom is referred to as a "person" in
this paragraph) means such amount of the outstanding voting
securities of such person as entitles the holder or holders
thereof to cast such specified percentage of the aggregate
votes which the holders of all the outstanding voting
securities of such person are entitled to cast in the
direction or management of the affairs of such person.
(2) A specified percentage of a class of securities of
a person means such percentage of the aggregate amount of
securities of the class outstanding.
(3) The term "amount", when used in regard to
securities, means the principal amount if relating to
evidences of indebtedness, the number of shares if relating
to capital shares, and the number of units if relating to
any other kind of security.
(4) The term "outstanding" means issued and not held by
or for the account of the issuer. The following securities
shall not be deemed outstanding within the meaning of this
definition:
35
(i) securities of an issuer held in a sinking fund
relating to securities of the issuer of the same class,
(ii) securities of an issuer held in a sinking fund
relating to another class of securities of the issuer, if
the obligation evidenced by such other class of
securities is not in default as to principal or interest
or otherwise,
(iii) securities pledged by the issuer thereof as
security for an obligation of the issuer not in default
as to principal or interest or otherwise,
(iv) securities held in escrow if placed in escrow by the
issuer thereof.
Provided, however, that any voting securities of an issuer shall
be deemed outstanding if any person other than the issuer is
entitled to exercise the voting rights thereof.
(5) A security shall be deemed to be of the same class
as another security if both securities confer upon the
holder or holders thereof substantially the same rights and
privileges; provided, however, that, in the case of secured
evidences of indebtedness, all of which are issued under a
single indenture, differences in the interest rates or
maturity dates of various series thereof shall not be deemed
sufficient to constitute such series different classes; and
provided, further, that, in the case of unsecured evidences
of indebtedness, differences in the interest rates or
maturity dates thereof shall not be deemed sufficient to
constitute them securities of different classes, whether or
not they are issued under a single indenture.
(f) Except in the case of a default in the payment of the
principal of (or premium, if any) or interest on any Securities
issued under this Indenture, or in the payment of any sinking or
analogous fund installment, the Trustee shall not be required to
resign as provided by this Section 7.08 if such Trustee shall
have sustained the burden of proving, on application to the
Securities and Exchange Commission and after opportunity for
hearing thereon, that (i) the default under the Indenture may be
cured or waived during a reasonable period and under the
procedures described in such application and (ii) a stay of the
Trustee's duty to resign will not be inconsistent with the
interests of Securityholders. The filing of such an application
shall automatically stay the performance of the duty to resign
until the Securities and Exchange Commission orders otherwise.
Any resignation of the Trustee shall become effective only
upon the appointment of a successor trustee and such successor's
acceptance of such an appointment.
SECTION 7.09. There shall at all times be a Trustee with
respect to the Securities issued hereunder which shall at all
times be a corporation organized and doing business under the
laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or other
person permitted to act as trustee by the Securities and Exchange
Commission, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least
50 million dollars, and subject to supervision or examination by
Federal, State, Territorial, or
36
District of Columbia authority. If such corporation publishes
reports of condition at least annually, pursuant to law or to the
requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and
surplus of such corporation shall be deemed to be its combined
capital and surplus as set forth in its most recent report of
condition so published. The Company may not, nor may any person
directly or indirectly controlling, controlled by, or under
common control with the Company, serve as Trustee. In case at any
time the Trustee shall cease to be eligible in accordance with
the provisions of this Section, the Trustee shall resign
immediately in the manner and with the effect specified in
Section 7.10.
SECTION 7.10. (a) The Trustee or any successor hereafter
appointed, may at any time resign with respect to the Securities
of one or more series by giving written notice thereof to the
Company and by transmitting notice of resignation by mail, first
class postage prepaid, to the Securityholders of such series, as
their names and addresses appear upon the Security Register. Upon
receiving such notice of resignation, the Company shall promptly
appoint a successor trustee with respect to Securities of such
series by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 30 days after the mailing of
such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a
successor trustee with respect to Securities of such series, or
any Securityholder of that series who has been a bona fide holder
of a Security or Securities for at least six months may, subject
to the provisions of Section 6.08, on behalf of himself and all
others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon
after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any of the following shall occur--
(1) the Trustee shall fail to comply with the
provisions of subsection (a) of Section 7.08 after written
request therefor by the Company or by any Securityholder who
has been a bona fide holder of a Security or Securities for
at least six months, or
(2) the Trustee shall cease to be eligible in
accordance with the provisions of Section 7.09 and shall
fail to resign after written request therefor by the Company
or by any such Securityholder of Securities, or
(3) the Trustee shall become incapable of acting, or
shall be adjudged a bankrupt or insolvent, or a receiver of
the Trustee or of its property shall be appointed, or any
public officer shall take charge or control of the Trustee
or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, the Company may remove the Trustee with
respect to all Securities and appoint a successor trustee by
written instrument, in duplicate, executed by order of the Board
of Directors, one copy of which instrument shall be delivered to
the Trustee so removed and one copy to the successor trustee, or,
subject to the provisions of Section 6.08, unless the Trustee's
duty to resign is stayed as provided herein, any Securityholder
who
37
has been a bona fide holder of a Security or Securities for at
least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint
a successor trustee.
(c) The holders of a majority in aggregate principal amount
of the Securities of any series at the time outstanding may at
any time remove the Trustee with respect to such series and
appoint a successor trustee.
(d) Any resignation or removal of the Trustee and
appointment of a successor trustee with respect to the Securities
of a series pursuant to any of the provisions of this Section
shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section
may be appointed with respect to the Securities of one or more
series or all of such series, and at any time there shall be only
one Trustee with respect to the Securities of any particular
series.
SECTION 7.11. (a) In case of the appointment hereunder of a
successor trustee with respect to all Securities, every such
successor trustee so appointed shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such
successor trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the
Company or the successor trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument
transferring to such successor trustee all the rights, powers,
and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor trustee all property and
money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor
trustee with respect to the Securities of one or more (but not
all) series, the Company, the retiring Trustee and each successor
trustee with respect to the Securities of one or more series
shall execute and deliver an indenture supplemental hereto
wherein each successor trustee shall accept such appointment and
which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each
successor trustee all the rights, powers, trusts and duties of
the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor trustee
relates, (2) shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for
or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in
such supplemental indenture shall constitute such Trustees
co-trustees of the same trust, that each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such
Trustee and that no
38
Trustee shall be responsible for any act or failure to act on the
part of any other Trustee hereunder; and upon the execution and
delivery of such supplemental indenture the resignation or
removal of the retiring Trustee shall become effective to the
extent provided therein, such retiring Trustee shall with respect
to the Securities of that or those series to which the
appointment of such successor trustee relates have no further
responsibility for the exercise of rights and powers or for the
performance of the duties and obligations vested in the Trustee
under this Indenture, and each such successor trustee, without
any further act, deed or conveyance, shall become vested with all
the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which
the appointment of such successor trustee relates; but, on
request of the Company or any successor trustee, such retiring
Trustee shall duly assign, transfer and deliver to such successor
trustee, to the extent contemplated by such supplemental
indenture, the property and money held by such retiring Trustee
hereunder with respect to the Securities of that or those series
to which the appointment of such successor trustee relates.
(c) Upon request of any such successor trustee, the Company
shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor trustee all
such rights, powers and trusts referred to in paragraph (a) or
(b) of this Section, as the case may be.
(d) No successor trustee shall accept its appointment unless
at the time of such acceptance such successor trustee shall be
qualified and eligible under this Article.
(e) Upon acceptance of appointment by a successor trustee as
provided in this Section, the Company shall transmit notice of
the succession of such trustee hereunder by mail, first class
postage prepaid, to the Securityholders, as their names and
addresses appear upon the Security Register. If the Company fails
to transmit such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall
cause such notice to be transmitted at the expense of the
Company.
SECTION 7.12. Any corporation into which the Trustee may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be qualified under the provisions
of Section 7.08 and eligible under the provisions of Section
7.09, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding. In case any Securities shall have
been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated with the same effect as
if such successor Trustee had itself authenticated such
Securities.
SECTION 7.13. (a) Subject to the provisions of subsection
(b) of this Section, if the Trustee shall be or shall become a
creditor, directly or indirectly, secured or unsecured, of the
Company within three months prior to a default, as defined in
subsection (c) of this Section, or subsequent to such a default,
then, unless and until such default shall be cured, the Trustee
shall set apart and hold in a special account for the benefit of
the Trustee individually, the holders of the Securities and the
holders of other indenture securities (as defined in subsection
(c) of this Section)
39
(1) an amount equal to any and all reductions in the
amount due and owing upon any claim as such creditor in
respect of principal or interest, effected after the
beginning of such three months' period and valid as against
the Company and its other creditors, except any such
reduction resulting from the receipt or disposition of any
property described in paragraph (2) of this subsection, or
from the exercise of any right of set-off which the Trustee
could have exercised if a petition in bankruptcy had been
filed by or against the Company upon the date of such
default; and
(2) all property received by the Trustee in respect of
any claim as such creditor, either as security therefor, or
in satisfaction or composition thereof, or otherwise, after
the beginning of such three months' period, or an amount
equal to the proceeds of any such property, if disposed of,
subject, however, to the rights, if any, of the Company and
its other creditors in such property or such proceeds.
Nothing herein contained, however, shall affect the right of
the Trustee
(A) to retain for its own account (i) payments made on
account of any such claim by any person (other than the
Company) who is liable thereon, and (ii) the proceeds of the
bona fide sale of any such claim by the Trustee to a third
person, and (iii) distributions made in cash, securities, or
other property in respect of claims filed against the
Company in bankruptcy or receivership or in a case for
reorganization pursuant to the Federal Bankruptcy Code or
applicable State law;
(B) to realize, for its own account, upon any property
held by it as security for any such claim, if such property
was so held prior to the beginning of such three months'
period;
(C) to realize, for its own account, but only to the
extent of the claim hereinafter mentioned, upon any property
held by it as security for any such claim, if such claim was
created after the beginning of such three months' period and
such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee
shall sustain the burden of proving that at the time such
property was so received the Trustee had no reasonable cause
to believe that a default, as defined in subsection (c) of
this Section, would occur within three months; or
(D) to receive payment on any claim referred to in
paragraph (B) or (C), against the release of any property
held as security for such claim as provided in such
paragraph (B) or (C), as the case may be, to the extent of
the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such three months' period for
property held as security at the time of such substitution shall,
to the extent of the fair value of the property released, have
the same status as the property released, and, to the extent that
any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying
or refunding any pre-existing claim of the Trustee as such
creditor, such claim shall have the same status as such pre-
existing claim.
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If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof
shall be apportioned between the Trustee, the Securityholders and
the holders of other indenture securities in such manner that the
Trustee, the Securityholders and the holders of other indenture
securities realize, as a result of payments from such special
account and payments of dividends on claims filed against the
Company in bankruptcy or receivership or in a case for
reorganization pursuant to the Federal Bankruptcy Code or
applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Company of the
funds and property in such special account and before crediting
to the respective claims of the Trustee, the Securityholders and
the holders of other indenture securities dividends on claims
filed against the Company in bankruptcy or receivership or in a
case for reorganization pursuant to the Federal Bankruptcy Code
or applicable State law, but after crediting thereon receipts on
account of the indebtedness represented by their respective
claims from all sources other than from such dividends and from
the funds and property so held in such special account. As used
in this paragraph, with respect to any claim, the term
"dividends" shall include any distribution with respect to such
claim, in bankruptcy or receivership or in a case for
reorganization pursuant to the Federal Bankruptcy Code or
applicable State law, whether such distribution is made in cash,
securities, or other property, but shall not include any such
distribution with respect to the secured portion, if any, of such
claim. The court in which such bankruptcy, receivership or a case
for reorganization is pending shall have jurisdiction (i) to
apportion between the Trustee, the Securityholders and the
holders of other indenture securities, in accordance with the
provisions of this paragraph, the funds and property held in such
special account and the proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of
this paragraph due consideration in determining the fairness of
the distributions to be made to the Trustee, the Securityholders
and the holders of other indenture securities with respect to
their respective claims, in which event it shall not be necessary
to liquidate or to appraise the value of any securities or other
property held in such special account or as security for any such
claim, or to make a specific allocation of such distributions as
between the secured and unsecured portions of such claims, or
otherwise to apply the provisions of this paragraph as a
mathematical formula.
Any Trustee who has resigned or been removed after the
beginning of such three months' period shall be subject to the
provisions of this subsection (a) as though such resignation or
removal had not occurred. If any Trustee has resigned or been
removed prior to the beginning of such three months' period, it
shall be subject to the provisions of this subsection (a) if and
only if the following conditions exist:
(i) the receipt of property or reduction of claim which
would have given rise to the obligation to account, if such
Trustee had continued as trustee, occurred after the
beginning of such three months' period; and
(ii) such receipt of property or reduction of claim
occurred within three months after such resignation or
removal.
41
(b) There shall be excluded from the operation of subsection
(a) of this Section a creditor relationship arising from
(1) the ownership or acquisition of securities issued
under any indenture, or any security or securities having a
maturity of one year or more at the time of acquisition by
the Trustee;
(2) advances authorized by a receivership or bankruptcy
court of competent jurisdiction, or by this Indenture, for
the purpose of preserving any property other than cash which
shall at any time be subject to the lien, if any, of this
Indenture or of discharging tax liens or other prior liens
or encumbrances thereon, if notice of such advance and of
the circumstances surrounding the making thereof is given to
the Securityholders at the time and in the manner provided
in this Indenture;
(3) disbursements made in the ordinary course of
business in the capacity of trustee under an indenture,
transfer agent, registrar, custodian, paying agent,
subscription agent, fiscal agent or depositary, or other
similar capacity;
(4) an indebtedness created as a result of services
rendered or premises rented; or an indebtedness created as a
result of goods or securities sold in a cash transaction as
defined in subsection (c) of this Section;
(5) the ownership of stock or of other securities of a
Company organized under the provisions of Section 25(a) of
the Federal Reserve Act, as amended, which is directly or
indirectly a creditor of the Company; or
(6) the acquisition, ownership, acceptance or
negotiation of any drafts, bills of exchange, acceptances or
obligations which fall within the classification of
self-liquidating paper as defined in subsection (c) of this
Section.
(c) As used in this Section:
(1) The term "default" shall mean any failure to make
payment in full of the principal of (or premium, if any) or
interest upon any of the Securities or upon the other
indenture securities when and as such principal (or premium,
if any) or interest becomes due and payable.
(2) The term "other indenture securities" shall mean
securities upon which the Company is an obligor (as defined
in the Trust Indenture Act of 1939, as amended) outstanding
under any other indenture (A) under which the Trustee is
also trustee, (B) which contains provisions substantially
similar to the provisions of subsection (a) of this Section,
and (C) under which a default exists at the time of the
apportionment of the funds and property held in said special
account.
(3) The term "cash transaction" shall mean any
transaction in which full payment for goods or securities
sold is made within seven days after delivery of the goods
or securities in currency or in checks or other orders drawn
upon banks or bankers and payable upon demand.
42
(4) The term "self-liquidating paper" shall mean any
draft, bill of exchange, acceptance or obligation which is
made, drawn, negotiated or incurred by the Company for the
purpose of financing the purchase, processing, manufacture,
shipment, storage or sale of goods, wares or merchandise and
which is secured by documents evidencing title to,
possession of, or a lien upon, the goods, wares or
merchandise or the receivables or proceeds arising from the
sale of the goods, wares or merchandise previously
constituting the security, provided the security is received
by the Trustee simultaneously with the creation of the
creditor relationship with the Company arising from the
making, drawing, negotiating or incurring of the draft, bill
of exchange, acceptance or obligation.
(5) The term "Company" shall mean any obligor upon any
of the Securities.
ARTICLE EIGHT
Concerning the Securityholders
SECTION 8.01. Whenever in this Indenture it is provided that
the holders of a majority or specified percentage in aggregate
principal amount of the Securities of a particular series may
take any action (including the making of any demand or request,
the giving of any notice, consent or waiver or the taking of any
other action), the fact that at the time of taking any such
action the holders of such majority or specified percentage of
that series have joined therein may be evidenced by any
instrument or any number of instruments of similar tenor executed
by such holders of Securities of that series in person or by
agent or proxy appointed in writing.
If the Company shall solicit from the Securityholders of any
series any request, demand, authorization, direction, notice,
consent, waiver or other action, the Company may, at its option,
as evidenced by an Officers' Certificate, fix in advance a record
date for such series for the determination of Securityholders
entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other action, but the Company shall
have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent,
waiver or other action may be given before or after the record
date, but only the Securityholders of record at the close of
business on the record date shall be deemed to be Securityholders
for the purposes of determining whether Securityholders of the
requisite proportion of outstanding Securities of that series
have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other
action, and for that purpose the outstanding Securities of that
series shall be computed as of the record date; provided that no
such authorization, agreement or consent by such Securityholders
on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not
later than six months after the record date.
SECTION 8.02. Subject to the provisions of Section 7.01,
proof of the execution of any instrument by a Securityholder
(such proof will not require notarization) or his agent or proxy
and proof of the holding by any person of any of the Securities
shall be sufficient if made in the following manner:
(a) The fact and date of the execution by any such person of
any instrument may be proved in any reasonable manner acceptable
to the Trustee.
43
(b) The ownership of Securities shall be proved by the
Security Register of such Securities or by a certificate of the
Security Registrar thereof.
(c) The Trustee may require such additional proof of any
matter referred to in this Section as it shall deem necessary.
SECTION 8.03. Prior to the due presentment for registration
of transfer of any Security, the Company, the Trustee, any paying
agent and any Security Registrar may deem and treat the person in
whose name such Security shall be registered upon the books of
the Company as the absolute owner of such Security (whether or
not such Security shall be overdue and notwithstanding any notice
of ownership or writing thereon made by anyone other than the
Security Registrar) for the purpose of receiving payment of or on
account of the principal of, premium, if any, and (subject to
Section 2.03) interest on such Security and for all other
purposes; and neither the Company nor the Trustee nor any paying
agent nor any Security Registrar shall be affected by any notice
to the contrary.
SECTION 8.04. In determining whether the holders of the
requisite aggregate principal amount of Securities of a
particular series have concurred in any direction, consent or
waiver under this Indenture, Securities of that series which are
owned by the Company or any other obligor on the Securities of
that series or by any person directly or indirectly controlling
or controlled by or under common control with the Company or any
other obligor on the Securities of that series shall be
disregarded and deemed not to be outstanding for the purpose of
any such determination, except that for the purpose of
determining whether the Trustee shall be protected in relying on
any such direction, consent or waiver only Securities of such
series which the Trustee knows are so owned shall be so
disregarded. Securities so owned which have been pledged in good
faith may be regarded as outstanding for the purposes of this
Section, if the pledgee shall establish to the satisfaction of
the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not a person directly or
indirectly controlling or controlled by or under direct or
indirect common control with the Company or any such other
obligor. In case of a dispute as to such right, any decision by
the Trustee taken upon the advice of counsel shall be full
protection to the Trustee.
SECTION 8.05. At any time prior to (but not after) the
evidencing to the Trustee, as provided in Section 8.01, of the
taking of any action by the holders of the majority or percentage
in aggregate principal amount of the Securities of a particular
series specified in this Indenture in connection with such
action, any holder of a Security of that series which is shown by
the evidence to be included in the Securities the holders of
which have consented to such action may, by filing written notice
with the Trustee, and upon proof of holding as provided in
Section 8.02, revoke such action so far as concerns such
Security. Except as aforesaid any such action taken by the holder
of any Security shall be conclusive and binding upon such holder
and upon all future holders and owners of such Security, and of
any Security issued in exchange therefor, on registration of
transfer thereof or in place thereof, irrespective of whether or
not any notation in regard thereto is made upon such Security.
Any action taken by the holders of the majority or percentage in
aggregate principal amount of the Securities of a particular
series specified in this Indenture in connection with such action
shall be conclusively binding upon the Company, the Trustee and
the holders of all the Securities of that series.
44
ARTICLE NINE
Supplemental Indentures
SECTION 9.01. In addition to any supplemental indenture
otherwise authorized by this Indenture, the Company, when
authorized by a Board Resolution, and the Trustee may from time
to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act of 1939 as then in effect), without the
consent of the Securityholders, for one or more of the following
purposes:
(a) to evidence the succession of another corporation to the
Company, and the assumption by any such successor of the
covenants of the Company contained herein or otherwise
established with respect to the Securities; or
(b) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions for the
protection of the holders of the Securities of all or any series
as the Board of Directors and the Trustee shall consider to be
for the protection of the holders of Securities of all or any
series, and to make the occurrence, or the occurrence and
continuance, of a default in any of such additional covenants,
restrictions, conditions or provisions a default or an Event of
Default with respect to such series permitting the enforcement of
all or any of the several remedies provided in this Indenture as
herein set forth; provided, however, that in respect of any such
additional covenant, restriction, condition or provision such
supplemental indenture may provide for a particular period of
grace after default (which period may be shorter or longer than
that allowed in the case of other defaults) or may provide for an
immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default or may limit the right
of the holders of a majority in aggregate principal amount of the
Securities of such series to waive such default; or
(c) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which
may be defective or inconsistent with any other provision
contained herein or in any supplemental indenture, or to make
such other provisions in regard to matters or questions arising
under this Indenture as shall not be inconsistent with the
provisions of this Indenture and shall not adversely affect the
interests of the holders of the Securities of any series; or
(d) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall
become effective only when there is no Security outstanding of
any series created prior to the execution of such supplemental
indenture which is entitled to the benefit of such provision.
The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, and to make any
further appropriate agreements and stipulations which may be
therein contained, but the Trustee shall not be obligated to
enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provisions of
this Section may be executed by the Company and the Trustee
without the consent of the holders of any of the Securities at
the time outstanding, notwithstanding any of the provisions of
Section 9.02.
45
SECTION 9.02. With the consent (evidenced as provided in
Section 8.01) of the holders of not less than a majority in
aggregate principal amount of the Securities of each series
affected by such supplemental indenture or indentures at the time
outstanding, the Company, when authorized by a Board Resolution,
and the Trustee may from time to time and at any time enter into
an indenture or indentures supplemental hereto (which shall
conform to the provisions of the Trust Indenture Act of 1939 as
then in effect) for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying
in any manner the rights of the holders of the Securities of such
series under this Indenture; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of any
Securities of any series, or reduce the principal amount thereof,
or reduce the rate or extend the time of payment of interest
thereon, or reduce any premium payable upon the redemption
thereof, without the consent of the holder of each Security so
affected, or (ii) reduce the aforesaid percentage of Securities,
the holders of which are required to consent to any such
supplemental indenture, without the consent of the holders of
each Security then outstanding and affected thereby.
Upon the request of the Company, accompanied by a Board
Resolution authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of
the consent of Securityholders required to consent thereto as
aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may
in its discretion but shall not be obligated to enter into such
supplemental indenture.
It shall not be necessary for the consent of the
Securityholders of any series affected thereby under this Section
to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall
approve the substance thereof.
Promptly after the execution by the Company and the Trustee
of any supplemental indenture pursuant to the provisions of this
Section, the Trustee shall transmit by mail, first class postage
prepaid, a notice, setting forth in general terms the substance
of such supplemental indenture, to the Securityholders of all
series affected thereby as their names and addresses appear upon
the Security Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.03. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article or of
Section 10.01, this Indenture shall, with respect to such series,
be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the
Trustee, the Company and the holders of Securities of the series
affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
46
SECTION 9.04. Securities of any series, affected by a
supplemental indenture, authenticated and delivered after the
execution of such supplemental indenture pursuant to the
provisions of this Article or of Section 10.01, may bear a
notation in form approved by the Trustee, provided such form
meets the requirements of any exchange upon which such series may
be listed, as to any matter provided for in such supplemental
indenture. If the Company or the Trustee shall so determine, new
Securities of that series so modified as to conform, in the
opinion of the Trustee and the Board of Directors, to any
modification of this Indenture contained in any such supplemental
indenture may be prepared by the Company, authenticated by the
Trustee and delivered in exchange for the Securities of that
series then outstanding.
SECTION 9.05. The Trustee, subject to the provisions of
Section 7.01, may receive an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to
this Article is authorized or permitted by, and conforms to, the
terms of this Article and that it is proper for the Trustee under
the provisions of this Article to join in the execution thereof.
ARTICLE TEN
Consolidation, Merger and Sale
SECTION 10.01. Nothing contained in this Indenture or in any
of the Securities shall prevent any consolidation or merger of
the Company with or into any other corporation or corporations
(whether or not affiliated with the Company), or successive
consolidations or mergers in which the Company or its successor
or successors shall be a party or parties, or shall prevent any
sale, conveyance, transfer or other disposition of the property
of the Company or its successor or successors as an entirety, or
substantially as an entirety, to any other corporation (whether
or not affiliated with the Company or its successor or
successors) authorized to acquire and operate the same; provided,
however, the Company hereby covenants and agrees that, upon any
such consolidation, merger, sale, conveyance, transfer or other
disposition, the due and punctual payment of the principal of
(premium, if any) and interest on all of the Securities of all
series in accordance with the terms of each series, according to
their tenor, and the due and punctual performance and observance
of all the covenants and conditions of this Indenture with
respect to each series or established with respect to such series
pursuant to Section 2.01 to be kept or performed by the Company,
shall be expressly assumed, by supplemental indenture (which
shall conform to the provisions of the Trust Indenture Act of
1939 as then in effect) satisfactory in form to the Trustee
executed and delivered to the Trustee by the Company formed by
such consolidation, or into which the Company shall have been
merged, or by the corporation which shall have acquired such
property.
SECTION 10.02. (a) In case of any such consolidation,
merger, sale, conveyance, transfer or other disposition and upon
the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the due and punctual payment of the
principal of, premium, if any, and interest on all of the
Securities of all series outstanding and the due and punctual
performance of all of the covenants and conditions of this
Indenture or established with respect to each series of the
Securities pursuant to Section 2.01 to be performed by the
Company with respect to each series, such successor corporation
shall succeed to and be substituted for the Company, with the
same
47
effect as if it had been named herein as the party of the first
part, and thereupon the predecessor corporation shall be relieved
of all obligations and covenants under this Indenture and the
Securities. Such successor corporation thereupon may cause to be
signed, and may issue either in its own name or in the name of
the Company or any other predecessor obligor on the Securities,
any or all of the Securities issuable hereunder which theretofore
shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor company, instead
of the Company, and subject to all the terms, conditions and
limitations in this Indenture prescribed, the Trustee shall
authenticate and shall deliver any Securities which previously
shall have been signed and delivered by the officers of the
predecessor Company to the Trustee for authentication, and any
Securities which such successor corporation thereafter shall
cause to be signed and delivered to the Trustee for that purpose.
All the Securities so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of
this Indenture as though all of such Securities had been issued
at the date of the execution hereof.
(b) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition such changes in
phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
(c) Nothing contained in this Indenture or in any of the
Securities shall prevent the Company from merging into itself or
acquiring by purchase or otherwise all or any part of the
property of any other corporation (whether or not affiliated with
the Company).
SECTION 10.03. The Trustee, subject to the provisions of
Section 7.01, may receive an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance,
transfer or other disposition, and any such assumption, comply
with the provisions of this Article.
ARTICLE ELEVEN
Satisfaction and Discharge of Indenture;
Unclaimed Moneys
SECTION 11.01. If at any time: (a) the Company shall have
delivered to the Trustee for cancellation all Securities of a
series theretofore authenticated (other than any Securities which
shall have been destroyed, lost or stolen and which shall have
been replaced or paid as provided in Section 2.07) and Securities
for whose payment money or Governmental Obligations has
theretofore been deposited in trust or segregated and held in
trust by the Company (and thereupon repaid to the Company or
discharged from such trust, as provided in Section 11.05); (b)
all such Securities of a particular series not theretofore
delivered to the Trustee for cancellation shall have become due
and payable, or are by their terms to become due and payable
within one year or are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the
giving of notice of redemption, and the Company shall deposit or
cause to be deposited with the Trustee as trust funds the entire
amount in moneys or Governmental Obligations sufficient; or (c) a
combination thereof, sufficient, without reinvestment, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a
48
written certification thereof delivered to the Trustee, to pay at
maturity or upon redemption all Securities of that series not
theretofore delivered to the Trustee for cancellation, including
principal (and premium, if any) and interest due or to become due
to such date of maturity or date fixed for redemption, as the
case may be, and if the Company shall also pay or cause to be
paid all other sums payable hereunder with respect to such series
by the Company, then this Indenture shall thereupon cease to be
of further effect with respect to such series except for the
provisions of Sections 2.05, 2.07, 4.02 and 7.10, which shall
survive until the date of maturity or redemption date, as the
case may be, and Sections 7.06 and 11.05 which shall survive to
such date and thereafter, and the Trustee, on demand of the
Company and at the cost and expense of the Company, shall execute
proper instruments acknowledging satisfaction of and discharging
this Indenture with respect to such series.
SECTION 11.02. If at any time all such Securities of a
particular series not heretofore delivered to the Trustee for
cancellation or which have not become due and payable as
described in Section 11.01 shall have been paid by the Company by
depositing irrevocably with the Trustee as trust funds moneys or
an amount of Governmental Obligations sufficient to pay at
maturity or upon redemption all such Securities of that series
not theretofore delivered to the Trustee for cancellation,
including principal (and premium, if any) and interest due or to
become due to such date of maturity or date fixed for redemption,
as the case may be, and if the Company shall also pay or cause to
be paid all other sums payable hereunder by the Company with
respect to such series, then after the date such moneys or
Governmental Obligations, as the case may be, are deposited with
the Trustee the obligations of the Company under this Indenture
with respect to such series shall cease to be of further effect
except for the provisions of Sections 2.05, 2.07, 4.02, 7.06,
7.10 and 11.05 hereof which shall survive until such Securities
shall mature and be paid. Thereafter, Sections 7.06 and 11.05
shall survive.
SECTION 11.03. All moneys or Governmental Obligations
deposited with the Trustee pursuant to Sections 11.01 or 11.02
shall be held in trust and shall be available for payment as due,
either directly or through any paying agent (including the
Company acting as its own paying agent), to the holders of the
particular series of Securities for the payment or redemption of
which such moneys or Governmental Obligations have been deposited
with the Trustee.
SECTION 11.04. In connection with the satisfaction and
discharge of this Indenture all moneys or Governmental
Obligations then held by any paying agent under the provisions of
this Indenture shall, upon demand of the Company, be paid to the
Trustee and thereupon such paying agent shall be released from
all further liability with respect to such moneys or Governmental
Obligations.
SECTION 11.05. Any moneys or Governmental Obligations
deposited with any paying agent or the Trustee, or then held by
the Company, in trust for payment of principal of or premium or
interest on the Securities of a particular series that are not
applied but remain unclaimed by the holders of such Securities
for at least two years after the date upon which the principal of
(and premium, if any) or interest on such Securities shall have
respectively become due and payable, shall be repaid to the
Company on May 31 of each year or (if then held by the Company)
shall be discharged from such trust; and thereupon the paying
agent and the Trustee shall be released from all further
liability with respect to such moneys or Governmental
Obligations, and the holder of any of the Securities entitled to
receive such payment shall thereafter, as an unsecured general
creditor, look only to the Company for the payment thereof.
49
ARTICLE TWELVE
Immunity of Incorporators, Stockholders, Officers
and Directors
SECTION 12.01. No recourse under or upon any obligation,
covenant or agreement of this Indenture, or of any Security, or
for any claim based thereon or otherwise in respect thereof,
shall be had against any incorporator, stockholder, officer or
director, past, present or future as such, of the Company or of
any predecessor or successor corporation, either directly or
through the Company or any such predecessor or successor
corporation, whether by virtue of any constitution, statute or
rule of law, or by the enforcement of any assessment or penalty
or otherwise; it being expressly understood that this Indenture
and the obligations issued hereunder are solely corporate
obligations, and that no such personal liability whatever shall
attach to, or is or shall be incurred by, the incorporators,
stockholders, officers or directors as such, of the Company or of
any predecessor or successor corporation, or any of them, because
of the creation of the indebtedness hereby authorized, or under
or by reason of the obligations, covenants or agreements
contained in this Indenture or in any of the Securities or
implied therefrom; and that any and all such personal liability
of every name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and
claims against, every such incorporator, stockholder, officer or
director as such, because of the creation of the indebtedness
hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of
the Securities or implied therefrom, are hereby expressly waived
and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of such Securities.
ARTICLE THIRTEEN
Sundry Provisions
SECTION 13.01. All the covenants, stipulations, promises and
agreements in this Indenture contained by or on behalf of the
Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 13.02. Any act or proceeding by any provision of
this Indenture authorized or required to be done or performed by
any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the
corresponding board, committee or officer of any corporation that
shall at the time be the lawful sole successor of the Company.
SECTION 13.03. The Company by instrument in writing executed
by authority of two-thirds of its Board of Directors and
delivered to the Trustee may surrender any of the powers reserved
to the Company and thereupon such power so surrendered shall
terminate both as to the Company and as to any successor
corporation.
SECTION 13.04. Except as otherwise expressly provided herein
any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by
the holders of Securities to or on the Company may be given or
served by being deposited first class postage prepaid in a post-
office letterbox addressed (until another address is filed in
writing by the Company with the Trustee), as follows: GTE North
Incorporated, 19845 North U.S. 31, P.O. Box 407, Westfield,
Indiana 46074, Attention: Secretary. Any notice, election,
request or demand by the Company or any Securityholder to or upon
the Trustee shall be deemed to have been sufficiently given or
made, for all purposes, if given or made in writing at the
Corporate Trust Office of the Trustee, Attention: Corporate
Trustee Administration Department.
50
SECTION 13.05. This Indenture and each Security shall be
deemed to be a contract made under the laws of the State of New
York, and for all purposes shall be construed in accordance with
the laws of said State.
SECTION 13.06. (a) Upon any application or demand by the
Company to the Trustee to take any action under any of the
provisions of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions
precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent
have been complied with, except that in the case of any such
application or demand as to which the furnishing of such
documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
(b) Each certificate or opinion provided for in this
Indenture and delivered to the Trustee with respect to compliance
with a condition or covenant in this Indenture (other than the
certificate provided pursuant to Section 5.03(d) of this
Indenture) shall include (1) a statement that the person making
such certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based; (3)
a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to
whether or not, in the opinion of such person, such condition or
covenant has been complied with.
SECTION 13.07. In any case where the date of maturity of
interest or principal of any Security or the date of redemption
of any Security shall not be a business day then payment of
interest or principal (and premium, if any) may be made on the
next succeeding business day with the same force and effect as if
made on the nominal date of maturity or redemption, and no
interest shall accrue for the period after such nominal date.
SECTION 13.08. If and to the extent that any provision of
this Indenture limits, qualifies or conflicts with the duties
imposed by Sections 310 to 317, inclusive, of the Trust Indenture
Act of 1939, as amended, such imposed duties shall control.
SECTION 13.09. This Indenture may be executed in any number
of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same
instrument.
SECTION 13.10. In case any one or more of the provisions
contained in this Indenture or in the Securities of any series
shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this
Indenture or of such Securities, but this Indenture and such
Securities shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or
therein.
THE FIRST NATIONAL BANK OF CHICAGO hereby accepts the trusts
in this Indenture declared and provided, upon the terms and
conditions hereinabove set forth.
51
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
GTE NORTH INCORPORATED
By ___________________________
Vice President
Attest:
By _____________________________
Secretary
THE FIRST NATIONAL BANK OF CHICAGO
as Trustee
By ___________________________
Vice President
Attest:
By _____________________________
Assistant Secretary
52
STATE OF INDIANA )
ss:
COUNTY OF HAMILTON )
I, the undersigned, a Notary Public in and for the County of
Hamilton, State of Indiana, do hereby certify that on the ____
day of _________, 1994, before me personally came
_________________ and __________________, both to me known and
known to me to be Vice President and Secretary, respectively, of
GTE North Incorporated, one of the corporations described in and
which executed the foregoing instrument, and to be the persons
who executed the said instrument for and on behalf of said GTE
North Incorporated as Vice President and Secretary, respectively,
who, being by me severally duly sworn, did depose and say that
the said ________________ is a Vice President of said GTE North
Incorporated, and the said ___________________ is Secretary of
said GTE North Incorporated; and that they know the seal of said
corporation; that one of the seals affixed to said instrument is
such corporate seal and is the true and genuine corporate seal of
said corporation; that it was so affixed by order of the Board of
Directors of said corporation and that they signed their names
thereto by like order; and they severally further acknowledged
that they signed, sealed and delivered the said instrument for
and on behalf of the said corporation as by the Board of
Directors of said corporation directed as the free and voluntary
act and deed of the said corporation and for all the uses and
purposes therein expressed.
In WITNESS WHEREOF, I have hereunto set my official
signature and affixed my notarial seal this _____ day of
_________, 1994.
_______________________________________
Notary Public, Hamilton County, Indiana
My Commission Expires _________________
53
COUNTY OF COOK )
ss.:
STATE OF ILLINOIS )
I, the undersigned, a Notary Public in and for the County of
Cook and State of Illinois, do hereby certify that on the ____
day of _________, 1994, before me personally came
________________ and ______________, both to me known and known
to me to be a Vice President and Assistant Secretary,
respectively, of The First National Bank of Chicago, one of the
corporations described in and which executed the foregoing
instrument, and to be the persons who executed the said
instrument for and on behalf of said The First National Bank of
Chicago as a Vice President and Assistant Secretary respectively,
who, being by me severally duly sworn, did depose and say that he
is a Vice President of said The First National Bank of Chicago,
and the said _______________ and that he is an Assistant
Secretary of said The First National Bank of Chicago; and that
they know the seal of said corporation; that one of the seals
affixed to said instrument is such corporate seal and is the true
and genuine corporate seal of said corporation; that is was so
affixed by the authority of the board of directors of said
corporation and that they signed their names thereto by like
authority; and they severally further acknowledged that they
signed, sealed and delivered the said instrument for and on
behalf of the said corporation as by the board of directors of
said corporation authorized as the free and voluntary act and
deed of the said corporation and for all the uses and purposes
therein expressed.
IN WITNESS WHEREOF, I have hereunto set my official
signature and affixed my notarial seal this _____ day of
_________, 1994.
_____________________________________
Notary No. __________________________
Qualified in ________________________
Certificate Filed in Cook County
Commission Expires __________________
54
N:S-3/A:110
Exhibit 4.2
GTE NORTH INCORPORATED
BOARD OF DIRECTORS' RESOLUTION
RESOLVED:
(1) GTE North Incorporated (the "Company") shall create and
issue debentures in the principal amount of $250,000,000 designated
as the "GTE North Incorporated _____% Debentures, Series A, Due
2004" (the "Debentures"), with the terms set forth in the proposal
of the purchasers and the Indenture dated as of January 1, 1994
("Indenture"), between the Company and The First National Bank of
Chicago, as Trustee ("Trustee"), to wit:
(a) The Debentures shall mature on
January 15, 2004.
(b) The Debentures shall bear
interest from July 15, 1994, until the principal thereof
becomes due and payable at the rate of _____% per annum,
payable semi-annually on January 15 and July 15 in each year,
and any overdue principal and (to the extent that the payment
of such interest is enforceable under applicable law) any
overdue installment of interest thereon shall bear interest at
the same rate per annum; the principal of and the interest on
said Debentures shall be payable in any coin or currency of
the United States of America which at the time of payment is
legal tender for the payment of public and private debts, at
the office or agency of the Company in the City of Chicago,
County of Cook and State of Illinois, provided, however, that
payment of interest may be made at the option of the Company
by check mailed to the registered holder at such address as
shall appear in the Security Register. The regular record date
with respect to any interest payment date for the Debentures
shall mean the January 1 or July 1, as the case may be, next
preceding such interest payment date, whether or not such
dates are a business day.
(c) The Debentures will not be
redeemable prior to maturity.
(d) The Debentures and the Trustee's
Certificate of Authentication to be endorsed thereon are to be
substantially in the following forms:
(FORM OF FACE OF DEBENTURE)
No. _____________ $ _____________
GTE North Incorporated
____% Debentures, Series A, Due 2004
GTE North Incorporated, a corporation duly organized and existing
under the laws of the State of Wisconsin (herein referred to as
the "Company"), for value received, hereby promises to pay to
.................. or registered assigns, the principal sum
of......................... Dollars on January 15, 2004 and to
pay interest on said principal sum from January 15, 1994, or from
the most recent interest payment date to which interest has been
paid or duly provided for, semi-annually on January 15 and July
15 in each year, commencing July 15, 1994 at the rate of _____%
per annum until the principal hereof shall have become due and
payable, and on any overdue principal and (to the extent that
payment of such interest is enforceable under applicable law) on
any overdue installment of interest at the same rate per annum.
The interest installment so payable, and punctually paid or duly
provided for, on any interest payment date will, as provided in
the Indenture hereinafter referred to, be paid to the person in
whose name this Debenture (or one or more Predecessor Securities,
as defined in said Indenture) is registered at the close of
business on the regular record date for such interest
installment, which shall be the January 1 or July 1, as the case
may be (whether or not a business day), next preceding such
interest payment date. Any such interest installment not so
punctually paid or duly provided for shall forthwith cease to be
payable to the registered holder on such regular record date, and
may be paid to the person in whose name this Debenture (or one or
more Predecessor Securities) is registered at the close of
business on a special record date to be fixed by the Trustee for
the payment of such defaulted interest, notice whereof shall be
given to the registered holders of this series of Debentures not
less than 10 days prior to such special record date, or may be
paid at any time in any other lawful manner not inconsistent with
the requirements of any securities exchange on which the
Debentures may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in the Indenture
hereinafter referred to. The principal of and the interest on
this Debenture shall be payable at the office or agency of the
Company maintained for that purpose in the City of Chicago,
County of Cook and State of Illinois in any coin or currency of
the United States of America which at the time of payment is
legal tender for payment of public and private debts; provided,
however, that payment of interest may be made at the option of
the Company by check mailed to the registered holder at such
address as shall appear in the Securities Register.
This Debenture shall not be entitled to any benefit under the
Indenture hereinafter referred to, or be valid or become
obligatory for any purpose, until the Certificate of
Authentication hereon shall have been signed by or on behalf of
the Trustee.
The provisions of this Debenture are continued on the reverse
side hereof and such continued provisions shall for all purposes
have the same effect as though fully set forth at this place.
-2-
IN WITNESS WHEREOF, the Company has caused this instrument
to be executed.
Dated _______________________
GTE NORTH INCORPORATED
By __________________________
Title: _____________________
Attest:
By __________________________
Title: _____________________
ILLINOIS COMMERCE COMMISSION IDENTIFICATION NUMBER 5851
(FORM OF CERTIFICATE OF AUTHENTICATION)
Certificate of Authentication
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
The First National Bank of Chicago,
as Trustee, Authenticating Agent and
Security Registrar
By __________________________
Authorized Officer
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Securities
of the Company (herein sometimes referred to as the
"Securities"), all issued or to be issued in one or more series
under and pursuant to an Indenture dated as of January 1, 1994,
duly executed and delivered between the Company and The First
National Bank of Chicago, a national banking association
organized and existing under the laws of the United States of
America, as Trustee (herein referred to as the "Trustee") (said
Indenture hereinafter referred to as the "Indenture"), to which
Indenture reference is hereby made for a description of the
rights, limitation of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the holders of the
Securities. By the terms of the Indenture, the Securities are
issuable in series which may vary as to amount, date of maturity,
rate of interest and in other respects as in the Indenture
provided. This Debenture is one of the series designated on the
face hereof (herein called the "Debentures") limited in aggregate
principal amount to $250,000,000.
-3-
In case an Event of Default, as defined in the Indenture, with
respect to the Debentures shall have occurred and be continuing,
the principal of all of the Debentures may be declared, and upon
such declaration shall become, due and payable, in the manner,
with the effect and subject to the conditions provided in the
Indenture.
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a
majority in aggregate principal amount of the Securities of each
series affected at the time outstanding, as defined in the
Indenture, to execute supplemental indentures for the purpose of
adding any provisions to or changing in any manner or eliminating
any of the provisions of the Indenture or of any supplemental
indenture or of modifying in any manner the rights of the holders
of the Securities; provided, however, that no such supplemental
indenture shall (i) extend the fixed maturity of any Securities
of any series, or reduce the principal amount thereof, or reduce
the rate or extend the time of payment of interest thereon, or
reduce any premium payable upon the redemption thereof, without
the consent of the holder of each Security so affected, or (ii)
reduce the aforesaid percentage of Securities, the holders of
which are required to consent to any such supplemental indenture,
without the consent of the holders of each Security then
outstanding and affected thereby. The Indenture also contains
provisions permitting the holders of a majority in aggregate
principal amount of the Securities of any series at the time
outstanding, on behalf of the holders of Securities of such
series, to waive any past default in the performance of any of
the covenants contained in the Indenture, or established pursuant
to the Indenture with respect to such series, and its
consequences, except a default in the payment of the principal
of, or premium, if any, or interest on any of the Securities of
such series. Any such consent or waiver by the registered holder
of this Debenture (unless revoked as provided in the Indenture)
shall be conclusive and binding upon such holder and upon all
future holders and owners of this Debenture and of any Debenture
issued in exchange herefor or in place hereof (whether by
registration of transfer or otherwise), irrespective of whether
or not any notation of such consent or waiver is made upon this
Debenture.
No reference herein to the Indenture and no provision of this
Debenture or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional,
to pay the principal of and interest on this Debenture at the
times and place and at the rate and in the money herein
prescribed.
The Debentures are issuable as registered Debentures without
coupons in denominations of $1,000 or any integral multiple
thereof. Debentures may be exchanged, upon presentation thereof
for that purpose, at the office or agency of the Company in the
City of Chicago, County of Cook and State of Illinois, for other
Debentures of authorized denominations, and for a like aggregate
principal amount and series, and upon payment of a sum sufficient
to cover any tax or other governmental charge in relation
thereto.
The Debentures will not be redeemable prior to maturity.
As provided in the Indenture and subject to certain limitations
therein set forth, this Debenture is transferable by the
registered holder hereof on the Security Register of the Company,
upon surrender of this Debenture for registration of transfer at
the office or agency of the Company in the City of Chicago,
County of Cook and State of Illinois accompanied by a written
instrument or instruments of transfer in form satisfactory to the
Company or the Security Registrar duly executed by the registered
holder hereof or his attorney duly authorized in writing, and
thereupon one or more new Debentures of authorized denominations
and for the same aggregate principal amount and series will be
issued to the designated transferee or transferees. No service
-4-
charge will be made for any such transfer, but the Company may
require payment of a sum sufficient to cover any tax or other
governmental charge payable in relation thereto.
Prior to due presentment for registration of transfer of this
Debenture the Company, the Trustee, any paying agent and any
Security Registrar may deem and treat the registered holder
hereof as the absolute owner hereof (whether or not this
Debenture shall be overdue and notwithstanding any notice of
ownership or writing hereon made by anyone other than the
Security Registrar) for the purpose of receiving payment of or on
account of the principal hereof and (subject to Section 2.03 of
the Indenture) interest due hereon and for all other purposes,
and neither the Company nor the Trustee nor any paying agent nor
any Security Registrar shall be affected by any notice to the
contrary.
No recourse shall be had for the payment of the principal of or
the interest on this Debenture, or for any claim based hereon, or
otherwise in respect hereof, or based on or in respect of the
Indenture, against any incorporator, stockholder, officer or
director, past, present or future, as such, of the Company or of
any predecessor or successor corporation, whether by virtue of
any constitution, statute or rule of law, or by the enforcement
of any assessment or penalty or otherwise, all such liability
being, by the acceptance hereof and as part of the consideration
for the issuance hereof, expressly waived and released.
Capitalized terms used herein and not otherwise defined herein
shall have the respective meanings set forth in the Indenture.
(2) The office of The First National Bank of Chicago is
hereby designated and created as the agency of the Company in the
City of Chicago, County of Cook and State of Illinois at which (i)
both the principal and the interest on the Debentures are payable
and where notices, presentations and demands to or upon the Company
in respect of the Debentures may be given or made, (ii) the
Debentures may be surrendered for transfer or exchange and
transferred or exchanged in accordance with the terms of the
Indenture and (iii) books for the registration and transfer of the
Debentures shall be kept;
(3) The office of The First National Bank of Chicago is
hereby designated and created as Security Registrar of the Company
in the City of Chicago, County of Cook and State of Illinois at
which (i) the Company shall register the Debentures, (ii) the
Debentures may be surrendered for transfer or exchange and
transferred or exchanged in accordance with the terms of the
Indenture, and (iii) books for the registration and transfer of the
Debentures shall be kept;
(4) The Debentures authorized at this meeting shall be in
substantially the form and shall have the characteristics provided
in the Indenture, and the form of the Debentures of such series set
forth in these resolutions is hereby approved and adopted;
FURTHER RESOLVED:
(1) The President or any Vice President is hereby authorized
and directed to sign a Purchase Agreement in substantially the form
of the Purchase Agreement provided as an exhibit to the
registration statement filed with respect to the Debentures (the
"Registration Statement"), reflecting the terms of the Debentures
approved hereby.
-5-
(2) The President or any Vice President and the Secretary or
any Assistant Secretary are hereby authorized and directed to
deliver to the Trustee a certified record of this Board Resolution
setting forth the terms of this series as required by Section 2.01
of the Indenture.
(3) The President or any Vice President is hereby authorized
and directed to execute $250,000,000 aggregate principal amount of
Debentures on behalf of the Company under its corporate seal or a
facsimile attested by the Secretary or any Assistant Secretary, and
the signature of the President, or any Vice President, may be in
the form of a facsimile signature of the present or any future
President or Vice President and/or the signature of the Secretary
or any Assistant Secretary in attestation of the corporate seal may
be in the form of a facsimile signature of the present or any
future Secretary or Assistant Secretary, and should any officer who
signs, or whose facsimile signature appears upon, any of the
Debentures, cease to be such an officer prior to their issuance,
the Debentures so signed or bearing such facsimile signature shall
still be valid and, without prejudice to the use of the facsimile
signature of any other officer as hereinabove authorized, the
facsimile signature of Earl A. Goode, President, and the facsimile
signature of Dale E. Sporleder, Secretary, are hereby expressly
approved and adopted;
(4) The officers are hereby authorized and directed to cause
the Debentures to be delivered to the Trustee for authentication
and delivery by it in accordance with the provisions of the
Indenture, and the Trustee is hereby authorized and requested to
authenticate the Debentures upon compliance by the Company with the
provisions of the Indenture and to deliver the same to or upon the
written order of the President or any Vice President, and the
President or any Vice President is hereby authorized and directed
to apply to the Trustee for the authentication and delivery of the
Debentures;
(5) The President or any Vice President and the Treasurer or
any Assistant Treasurer are hereby authorized and empowered to
endorse, in the name and on behalf of the Company, any and all
checks received in connection with the sales of the Debentures for
application as set forth in the "Use of Proceeds" section of the
Registration Statement, or for deposit to the account of the
Company in any bank, and that any such endorsement be sufficient to
bind the Company;
(6) The officers are hereby authorized and directed to sell
to the purchasers the aggregate principal amounts of the Debentures
at the price and upon the terms and conditions set forth in the
Purchase Agreement covering the sale of the Debentures; and
(7) The officers are authorized and directed to execute and
deliver all such instruments and documents, to incur on behalf of
the Company all such expenses and obligations, to make all such
payments, and to do all such other acts and things as they may
consider necessary or desirable in connection with the
accomplishment of the intent and purposes of the foregoing
resolutions.
N:S-3/A:117
Exhibit 12
GTE NORTH INCORPORATED
STATEMENT OF THE RATIO OF EARNINGS TO FIXED CHARGES
(Thousands of Dollars)
(Unaudited)
Nine Months Nine Months
Years Ended December 31
Ended Ended
Sept 30, 1993(a) Sept 30, 1993 1992 1991
1990 1989 1988
________________ ______________ ____ ____
____ ____ ____
Earnings Available for
Fixed Charges:
Income from Continuing
Operations (b)$248,848$231,209$369,542$291,837$282,221$293,291 $295,702
Add -
Income taxes150,198139,542192,264130,037108,230112,522116,164
Fixed changes102,845102,845137,369135,017132,780127,241122,195
________ ___________________________________________
$501,891 $473,596$699,175$556,891$523,231$533,054$534,061
Fixed Charges:
Interest charges$ 94,062$ 94,062$124,197$122,970$119,915$116,518 $112,220
Portion of rentals
representing interest8,783 8,783 13,17212,047 12,865 10,723 9,975
________ ___________________________________________
$102,845 $102,845$137,369$135,017$132,780$127,241$122,195
Ratio of Earnings to
Fixed Charges 4.88 4.60 5.09 4.12 3.94 4.19
4.37
____________
(a) Excludes
operating expenses related to the adoption, effective January
1, 1993, of Statement of Financial Accounting Standards
(SFAS) No. 106 "Employers' Accounting for Postretirement
Benefits Other than Pensions" and a one-time charge
associated with the enhanced early retirement and voluntary
separation programs completed during the second quarter of
1993.
(b) Includes allowance for funds used during construction
(credits).
N:S-3/A:119
Exhibit 26
GTE NORTH INCORPORATED
Invitation For Bids For the Purchase of
$250,000,000 _____% Debentures, Series A, Due 2004
GTE NORTH INCORPORATED (the "Company") is inviting bids,
subject to the terms and conditions stated herein, for the
purchase from it of $250,000,000 aggregate principal amount of
its _____% Debentures, Series A, Due 2004 (the "Debentures").
1. Information Respecting the Company and the Debentures.
Prospective bidders may examine, at the office of the
Assistant Secretary of the Company, 19845 North U.S. 31,
Westfield, Indiana 46074, or at the office of GTE Service
Corporation, 10th Floor, One Stamford Forum, Stamford,
Connecticut 06904 (Telephone (203) 965-2986), on any business day
between 10:00 A.M. and 4:00 P.M., the following:
(a) the Registration Statement on Form S-3 (including
the Prospectus, documents incorporated by reference and
exhibits), with respect to the Debentures;
(b) the Articles of Incorporation of the Company, as
amended;
(c) a copy of the Indenture dated as of January 1,
1994 (herein called the "Indenture") under which the
Debentures are to be issued, together with the resolution of
the Board of Directors of the Company specifically
authorizing the issuance of the Debentures;
(d) the form of Purchase Agreement (including the
Standard Purchase Agreement Provisions (January, 1994
Edition)) to be used in submitting bids for the purchase of
the Debentures;
(e) the form of questionnaire to be provided by
prospective bidders; and
(f) memoranda prepared by counsel to the Company with
respect to the status of the Debentures under securities or
blue sky laws of certain jurisdictions.
Copies of said documents in reasonable quantities (except
the Articles of Incorporation of the Company, the Indenture, and
other exhibits to the Registration Statement) will be supplied
upon request, so long as available, to prospective bidders.
The Company reserves the right to amend the Registration
Statement (including exhibits thereto) and Prospectus and to
supplement the Prospectus in such manner as shall not be
unsatisfactory to Messrs. Milbank, Tweed, Hadley & McCloy. The
Company will make copies of any such amendments or supplements
available for examination at the above offices in Westfield and
Stamford.
2. Information Respecting the Bidders to be Furnished to the
Company.
In the case of a bid by a group of bidders, the several
bidders in the group shall act through a duly authorized
representative or representatives (the "Representative"), who may
be included in such group, and who shall be designated and
authorized as such in the questionnaires filed by members of such
group.
-2-
No bid will be considered unless the bidder or, in the case
of a group of bidders, each member of the group, shall have
furnished to the Company, and the Company shall have received,
two signed copies of the form of questionnaire referred to above,
properly filled out (the Company reserving, however, the right to
waive the form of the questionnaire or any irregularity which it
deems to be immaterial in any such questionnaire and to extend
either generally or in specific instances the time for furnishing
questionnaires, and specifically reserving the right to obtain
all required bidder information by telegraph or other means of
communication). Such copies shall be furnished to the Company at
the office of GTE Service Corporation, 10th Floor, One Stamford
Forum, Stamford, CT 06904, Attention: David S. Kauffman, Esq.,
before 5:00 P.M., New York City time on January , 1994 (or on
such later date as may be determined pursuant to Section 4
hereof). Notwithstanding the furnishing of such questionnaires
to the Company, any prospective bidder or group of prospective
bidders thereafter may determine, without liability to the
Company, not to bid, or any of the several members of a group may
withdraw therefrom and additional members may be added thereto if
a questionnaire properly filled out and signed by each additional
member is filed at or before the time of submission of the bid of
such group. Without the consent of the Company not more than
three additional members may be so included in such group after
the time or any extended time for filing questionnaires shall
have expired.
3. Form and Contents of Bids.
Each bid shall be for the purchase of all of the Debentures.
Each bid may be made by a single bidder or by a group of
bidders. In case the bid of a group of bidders is accepted, the
obligations of the members of the group to purchase the
respective principal amounts of Debentures indicated in the bid
shall be several and not joint. Such bidders shall act through a
duly authorized Representative who may be included in the group
and said Representative shall be empowered to bind the bidders in
the group. No bidder may submit or participate in more than one
bid.
4. Submission of Bids and Delivery of Confirmation of Bids.
All bids must be submitted by telephone and confirmed in
writing in the manner set forth in Exhibit A, Confirmation of
Bid, attached, signed by the Representative on behalf of the
members of a group of bidders, or in the case of a single bidder,
by such bidder. Each bid must specify: (a) the interest rate,
which shall be a multiple of 1/8 of 1%; and (b) the price to be
paid to the Company for the Debentures, which shall be expressed
as a percentage of the principal amount of the Debentures and
shall not be less than 98% thereof nor more than 101% thereof.
The Confirmation of Bid shall specify the same interest rate and
price specified in the telephonic bid.
The Company reserves the right in its discretion from time
to time to postpone the time and the date for submission of bids
for an aggregate period
of not exceeding thirty days, and will give notice of any such
postponement to each prospective bidder, or the Representative of
each group of prospective bidders, who have filed questionnaires
as provided in Section 2 hereof, specifying in such notice the
changes in the times and dates set forth in the Purchase
Agreement occasioned by such postponement. In the event that any
such postponement should be for a period of more than three full
business days after the date of sending or delivering such
notice, the time for filing of questionnaires by prospective
bidders under Section 2 hereof shall by such notice be postponed
to 5:00 P.M., New York City time, at the place of delivery
specified in Section 2 hereof, on the third full business day
prior to the postponed date for presentation and opening of bids.
-3-
5. Acceptance or Rejection of Bids.
The Company may reject all bids, but if any bid for the
Debentures is accepted the Company will accept that bid which
shall result in the lowest "annual cost of money" to the Company
for the Debentures, and any bid not so accepted by the Company
shall, unless such bid shall be involved in rebidding as
hereinafter provided, be deemed to have been rejected. The
lowest annual cost of money to the Company for the Debentures
shall be determined by the Company and such determination shall
be final. In case the lowest annual cost of money to the Company
is provided by two or more such bids, the Company (unless it
shall reject all bids) will give the makers of such identical
bids an opportunity (the duration of which the Company may in its
sole discretion determine) to improve their bids. The Company
will accept, unless it shall reject all bids, the improved bid
providing the Company with the lowest annual cost of money for
the Debentures. If no improved bid is made within the time fixed
by the Company, or if upon such rebidding the lowest annual cost
of money to the Company is again provided by two or more bids,
the Company may without liability to the maker of any other bid
accept any one of such bids in its sole discretion, or may reject
all bids.
The Company further reserves the right to reject the bid of
any bidder or group of bidders if the Company, in the opinion of
its counsel, may not lawfully sell the Debentures to such bidder
or to any member of such group, and to reject the bid of any
bidder or group of bidders if such bidder or any member of such
group is in such relationship with the Trustee under the
Indenture or the trustees under the Company's first mortgage
indenture as would disqualify it under Section 310(b) of the
Trust Indenture Act of 1939, as amended, from acting as such
trustee if the bid of such bidder or group of bidders should be
accepted, unless, in the case of a group of bidders, prior to
1:00 P.M., New York City time, on the date on which the bids are
opened, the member or members to which, in the opinion of the
Company's counsel, the Debentures may not be lawfully sold or
which would cause such disqualification have withdrawn from the
group and the remaining members have agreed to purchase the
Debentures which such withdrawing member or members had offered
to purchase.
6. Purchase Agreement and Completion of Registration Statement.
The Company will signify its acceptance of a bid by signing
the Purchase Agreement. The Company shall, upon request, execute
the acceptance on additional copies of the Purchase Agreement
furnished by the Representative of the successful bidders. Upon
the acceptance of a bid, the successful bidder, or, in the case
of a bid by a group of bidders, the Representative on behalf of
the successful bidders, shall furnish to the Company, in writing,
all information regarding the bidder or bidders and the public
offering, if any, of the Debentures required in connection with
the post-effective amendment to the Registration Statement, any
further information regarding the bidders and the public
offering, if any, to be made by them, which may be required to
complete the applications filed by the Company with public
authorities having jurisdiction, and other information required
by law in respect of the purchase or sale of the Debentures as
herein contemplated.
7. Delivery of the Debentures.
The Debentures will be delivered in temporary or definitive
form, at the election of the Company, to the purchasers of the
Debentures at the place, at the time and in the manner indicated
in the Purchase Agreement, against payment of the purchase price
therefor as provided in the Purchase Agreement.
-4-
8. Opinion of Counsel for the Purchasers.
Messrs. Milbank, Tweed, Hadley & McCloy, 1 Chase Manhattan
Plaza, New York, N.Y. 10005, have been requested by the Company
to act as counsel for the successful bidder or bidders of the
Debentures and to give to the purchasers an opinion as outlined
in the Purchase Agreement. Such counsel have reviewed or will
review, from the standpoint of possible purchasers of the
Debentures, the form of the Registration Statement and the
Prospectus and competitive bidding papers, including the Purchase
Agreement, and have reviewed or will review the corporate
proceedings with respect to the issue and sale of the Debentures.
Prospective bidders may confer with Messrs. Milbank, Tweed,
Hadley & McCloy with respect to any of the foregoing matters at
the offices of said firm, 1 Chase Manhattan Plaza, New York, N.Y.
10005, Attn.: George J. Forsyth, Esq. The successful bidders are
to pay the compensation and disbursements of such counsel, except
as otherwise provided in the Purchase Agreement. Such counsel
will, on request, advise any prospective bidder who has, or the
Representative of any group of prospective bidders who have,
furnished questionnaires as provided in Section 2 hereof, of the
amount of such compensation and of the estimated amount of such
disbursements.
GTE NORTH INCORPORATED
Earl A. Goode
President
January , 1994
N:S-3/A:124
EXHIBIT A
GTE NORTH INCORPORATED
(the "Company")
CONFIRMATION OF BID FOR
$250,000,000 % Debentures, Series A, Due 2004
(the "Debentures")
TERMS
Maturity: January 15, 2004.
Interest Payable: Semi-annually on January 15 and July 15,
commencing
July 15, 1994.
Redemption Provisions: The Debentures will not be redeemable
prior to
maturity.
NAME OF BIDDER:
_________________________________________________________
TELEPHONE NUMBER TO BE USED TO CALL IN BID:
_____________________________
TIME AND DATE BID RECEIVED:
_____________________________________________
(to be completed by GTE Service Corporation on behalf of the
Company)
By submitting this bid, the bidder named above agrees to the
following terms and conditions:
o Each bid shall be for the purchase of all of the Debentures.
o Each bid may be made by a single bidder or by a group of
bidders.
o the bidder acknowledges that it (and all members of the
bidding group it represents) has received a copy of the
Prospectus dated January __, 1994.
o If the bid is made by a group of bidders, the undersigned
represents and warrants that it is fully authorized by all
bidders in the group to act on their behalf and to bind them
to the terms of the Purchase Agreement relating to the
Debentures.
o Each bid shall specify:
- the annual interest rate on the Debentures, which rate
shall be a multiple of 1/8%;
- the price (exclusive of accrued interest) to be paid to
the Company for the Debentures, which price shall not be
less than 98% and not more than 101% of the principal
amount of the Debentures, and that accrued interest on
the Debentures from January 15, 1994, to the date of
payment of the Debentures and the delivery thereof will
be paid to the Company by the purchaser or purchasers;
and
- in the case of a bid by a group of bidders, the name of,
and amount to be purchased by each bidder;
o Bids must be received by 10:00 A.M., New York City time, on
January __, 1994, or such later time and/or date as the
Company may specify (the "Bid Time").
-2-
o Bids shall be irrevocable for one (1) hour after the Bid Time.
o The winning bid shall be selected on the basis of the lowest
"annual cost of money" to the Company.
o Whether or not this bid is accepted by the Company, an
executed copy of this Confirmation of Bid must be sent
promptly by facsimile to GTE Service Corporation on behalf of
the Company at 203-965-3209 or 203-965-2830.
o If this bid is accepted, upon acceptance the undersigned
agrees to promptly furnish to the Company a signed copy of the
Purchase Agreement relating to the Debentures and a copy of
all information required to be included in the Prospectus
relating to the Debentures.
o Closing Date: January , 1994 at 10:00 A.M., New York City
time.
BID:
Interest Rate ________________
%
Price to be paid to the Company
________________ %
For a cost of money to the
Company of ________________ % *
(6 places beyond
decimal point)
_______
* subject to verification by
the Company
___________________________________
(Name of Bidder)
__________________________________
(Authorized Signature)
N:S-3/A:126
