Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________
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. DALE E. SPORLEDER,
ESQ.
GTE Service Corporation GTE North Incorporated
One Stamford Forum 19845 North U.S.31
Stamford, Connecticut 06904 Westfield, Indiana
46074
(203) 965-2000 (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.
If the only securities being registered on this Form are
being offered pursuant to dividend or interest reinvestment
plans, please check the following box. [ ]
If any of the securities being registered on this Form are
to be offered on a delayed or continuous basis pursuant to Rule
415 under the Securities Act of 1933, other than securities
offered only in connection with dividend or interest
reinvestment plans, check the following box. [ ]
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 $300,000,000 101% $303,000,000
$104,482.76
* Registration fee is calculated pursuant to Rule
457(a) under the Securities
Act of 1933.
The registrant hereby amends this registration statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the registration statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS
BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. THESE
SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE ACCEPTED PRIOR TO
THE TIME THE REGISTRATION STATEMENT BECOMES EFFECTIVE. THIS
PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE SOLICITATION
OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES IN
ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL
PRIOR TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF
ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED JANUARY 14, 1994
GTE NORTH INCORPORATED
$300,000,000
% DEBENTURES, SERIES B, DUE 1999
________________
Interest on the % Debentures, Series B, Due 1999 (the
"New Debentures") is payable on February 15 and August 15 of
each year, commencing August 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 (the
"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, September 28, 1993 and January 13,
1994.
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 a 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.
-3-
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 (the "FCC") as to its
interstate business operations.
-4-
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.
-5-
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.
RECENT DEVELOPMENTS
The Company announced on January 13, 1994 that its results for
the fourth quarter of 1993 will include a one-time pre-tax
restructuring charge of $374.6 million related primarily to the
implementation of its re-engineering plan over the next three
years. The restructuring charge will reduce fourth quarter and
full year net income by $230.7 million.
The re-engineering plan will redesign and streamline processes
in order to improve customer-responsiveness and product quality,
reduce the time necessary to introduce new products and services
and further reduce costs. The re-engineering plan includes
$148.8 million to upgrade or replace existing customer service
and administrative systems and enhance network software, $169.4
million for employee separation benefits associated with
workforce reductions and $45.6 million primarily for the
consolidation of facilities and operations and other related
costs. The charge for employee separation benefits includes
$84.9 million related to the recognition of previously deferred
postretirement health and life insurance costs for separating
employees.
-6-
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 borrowings incurred in
connection with the redemption on November 15, 1993 of the
following series of the Company's first mortgage bonds:
Original Outstanding Total
Principal
Interest Maturity Principal Amount Premium
Paid and Premium
Rate Date at Redemption at
Redemption at Redemption
9.250%06/01/05 $ 29,990,000 $ 938,687 $ 30,928,687
9.375%08/01/05 39,472,000 1,330,206 40,802,206
9.250%10/01/05 34,934,000 1,226,183 36,160,183
9.000%06/01/06 40,000,000 1,364,000 41,364,000
9.000%05/15/16 50,000,000 2,690,000 52,690,000
9.375%06/01/16 80,000,000 4,488,000 84,488,000
9.125%08/01/00 17,000,000 312,800 17,312,800
9.000%12/01/00 25,000,000 542,500 25,542,500
$316,396,000 $12,892,376 $329,288,376
At September 30, 1993, the Company had short-term borrowings of
$271,587,000 at an annual average interest rate of 3.10%. The
balance of the funds required in connection with such redemption
was obtained primarily from internal sources and short-term
borrowings.
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.
-7-
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 February 15, 1999. Interest will
be payable semi-annually on February 15 and August 15,
commencing August 15, 1994, to the persons in whose names the
New Debentures are registered at the close of business on the
February 1 or August 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;
-9-
(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)
-10-
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)
-11-
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.
-12-
__________________________________________
______________________________
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 $300,000,000
hereof. No dealer, salesman or any other % Debentures,
Series B,
person has been authorized to give any Due 1999
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
Recent Developments.................. 6
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
_____________
___________________________________________
_____________________________
N2:S-3:15
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is a statement of estimated expenses in
connection with the issuance and distribution of the securities
being registered, other than underwriting discounts and
commission.
1. Registration fee.........................$104,482.76
2. Trustee's fees and expenses..............4,500.00
3. Cost of printing and engraving........... 15,000.00
4. Accounting fees..........................13,000.00
5. Rating Agencies' fees....................85,200.00
6. Miscellaneous............................7,817.24
__________
$230,000.00
Item 15. Indemnification of Directors and Officers.
Pursuant to Sections 180.0850 to 180.0858 of the Wisconsin
Business Corporation Law ("WBCL"), directors and officers of the
Company are entitled to mandatory indemnification from the
Company against certain liabilities and expenses (i) to the
extent such officers or directors are successful in the defense
of a proceeding and (ii) in proceedings in which the director or
officer is not successful in the defense thereof, unless (in the
latter case only) it is determined that the director or officer
breached or failed to perform his duties to the Company and such
breach or failure constituted: (a) a willful failure to deal
fairly with the Company or its shareholders in connection with a
matter in which the director or officer had a material conflict
of interest; (b) a violation of the criminal law unless the
director or officer had reasonable cause to believe his or her
conduct was lawful or had no reasonable cause to believe his or
her conduct was unlawful; (c) a transaction from which the
director or officer derived an improper personal profit; or (d)
willful misconduct. It should be noted that Section 180.0858 of
the WBCL states that it is the public policy of Wisconsin to
require or permit indemnification in connection with a
proceeding involving securities regulation, as described
therein, to the extent required or permitted under Sections
180.0850 to 180.0858 as described above. Additionally, under
Section 180.0828 of the WBCL, directors of the Company are not
subject to personal liability for certain breaches or failures
to perform any duty resulting solely from their status as such
directors, except in circumstances paralleling those in
subparagraphs (a) through (d) outlined above.
II-1
The indemnification provided as set forth above is not
exclusive of any other rights to which a director or officer of
the Company may be entitled. The general effect of the
foregoing provisions may be to reduce the circumstances in which
an officer or director may be required to bear the economic
burdens of the foregoing liabilities and expenses.
The Company has an insurance policy, as permitted by
Wisconsin law, on behalf of its directors and officers which may
cover liabilities under the Securities Act of 1933, as amended.
Item 16. Exhibits.
See Exhibit Index on Page E-1.
Item 17. Undertakings.
The Company hereby undertakes that, for purpose of
determining any liability under the Securities Act of 1933 (the
"Act"), each filing of the Company's annual report pursuant to
Section 13(a) or Section 15(d) of the Securities Exchange Act of
1934 that is incorporated by reference in the registration
statement shall be deemed to be a new registration statement
relating to the securities offered therein, and the offering of
such securities at that time shall be deemed to be the initial
bona fide offering thereof.
Insofar as indemnification for liabilities arising under
the Act may be permitted to officers, directors and controlling
persons of the Company pursuant to any charter provision, by-law
or otherwise, the Company has been advised that in the opinion
of the Securities and Exchange Commission such indemnification
is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for
indemnification against such liabilities (other than payment by
the Company of expenses incurred or paid by an officer, director
or controlling person of the Company in the successful defense
of any action, suit or proceeding) is asserted by such officer,
director or controlling person in connection with the securities
being registered, the Company will, unless in the opinion of its
counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question
whether such indemnification by it is against public policy as
expressed in the Act and will be governed by the final
adjudication of such issue.
II-2
The Company hereby undertakes (i) to use its best efforts
to distribute, prior to the opening of bids, to prospective
bidders, underwriters and dealers, a reasonable number of copies
of a prospectus which at that time meets the requirements of
Section 10(a) of the Act, and relating to the securities offered
at competitive bidding, as contained in the Registration
Statement, together with any supplements thereto, and (ii) to
file an amendment to the Registration Statement reflecting the
results of bidding, the terms of the reoffering and related
matters to the extent required by the applicable form, not later
than the first use, authorized by the Company after the opening
of bids, of a prospectus relating to the securities offered at
competitive bidding, unless no further public offering of such
securities by the Company and no reoffering of such securities
by the purchasers is proposed to be made.
II-3
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 Registration Statement to be signed
on its behalf by the undersigned thereunto duly authorized, in
the City of Westfield, State of Indiana, on the 13th 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 13,
1994
(Principal Financial )
Officer) )
)
)
)
WILLIAM M. EDWARDS III )
)
William M. Edwards III Controller )
(Principal Accounting )
Officer) )
)
)
)
KENT B. FOSTER )
)
Kent B. Foster Director )
II-4
EARL A. GOODE )
)
Earl A. Goode Director )
)
)
)
MICHAEL B. ESSTMAN )
)
Michael B. Esstman Director )
)
)
)
THOMAS W. WHITE )
) January 13, 1994
Thomas W. White Director )
)
)
)
GERALD K. DINSMORE )
)
Gerald K. Dinsmore Director )
)
)
)
RICHARD M. CAHILL )
)
Richard M. Cahill Director )
)
)
II-5
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 13, 1994
II-6
EXHIBIT INDEX
Exhibit
Number
1.1 - Form of Purchase Agreement, including Standard Purchase
Agreement Provisions (January, 1994 Edition).
2.1 - Agreement of Merger dated June 26, 1992 between Contel of
Indiana, Inc., Contel of Illinois, Inc., Contel of
Pennsylvania, Inc., Contel North Incorporated and GTE
North Incorporated (incorporated by reference from Exhibit
2 to GTE North Incorporated's Annual Report on Form 10-K
for the fiscal year ended December 31, 1992).
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.
5 - Opinion and consent of Dale E. Sporleder, Esq.
12 - Statement of the ratio of earnings to fixed charges.
23.1 - Consent of Arthur Andersen & Co. is included elsewhere in
this Registration Statement.
23.2 - Consent of Dale E. Sporleder (contained in opinion filed
as
Exhibit 5).
25 - Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of The First National Bank of
Chicago.
26 - Form of Invitation for Bids.
E-1
N2:S-3:22
GTE NORTH INCORPORATED
PURCHASE AGREEMENT
GTE North Incorporated, a Wisconsin corporation (the
"Company"), proposes to issue and sell $300,000,000 aggregate
principal amount of its ____% Debentures, Series B, Due 1999
(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
February 15, 1994, to the date of payment for the New Debentures
and delivery thereof. Interest on the New Debentures will be
payable on February 15 and August 15, commencing August 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 February ,
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 February, 1994.
[Name of Purchaser(s) or
Purchasers' Representative]
By
__________________________________
Title:
GTE NORTH INCORPORATED
By
__________________________________
Vice President
N2:S-3:25
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....................................
$300,000,000
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, included in the Post-Effective
Amendment, which reflects 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
-4-
independent public 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
-5-
material 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,
-8-
severally, to purchase under this Agreement shall be increased in
the proportions which the total amount of New Debentures which
they have respectively agreed to purchase bears to the total
amount of New Debentures which all non-defaulting Purchasers have
so agreed to purchase, or in such other proportions as the
Purchasers may specify to absorb such unpurchased New Debentures,
provided that such aggregate increases shall not exceed 10% of
the total amount of the New Debentures set forth in Schedule A
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.
N2:S-3:35
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,
N2:S-3:38
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
N2:S-3:41
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
-2-
available 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.
N2:S-3:43
________________________________________________________________
_____________
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
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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
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(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
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(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
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(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
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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
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(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
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(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
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(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.
Unless otherwise set forth in a Board Resolution or one or
more indentures supplemental hereto establishing the terms of
any series of Securities pursuant to Section 2.01 hereof, 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 or renewal (without increase in principal amount or
extension of final maturity date) of the indebtedness secured
thereby;
(3) Liens for taxes or assessments or governmental charges or
levies; pledges or deposits to secure obligations under worker'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 or renewal (without increase in principal amount or
extension of final maturity date) 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 long-term senior indebtedness of such Affiliate ("Affiliate
Debt") which by its terms (i) is secured by a mortgage on all or
a portion of the property of such Affiliate, (ii) 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 (iii) prohibits long-term senior
secured indebtedness from being incurred by such Affiliate; or
(6) Indebtedness assumed by the Company of the character
specified in clause (a) of the second paragraph 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.
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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 interest, pledge or lien so
long as such other indebtedness or obligations shall be so
secured; provided, however, that (a) 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 (b) 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
19
(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.
20
(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;
21
(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.
23
(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
analogous 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 issued under this Indenture;
provided that there shall be
31
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 direct or
indirect underwriting of any such
34
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:
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(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 Trustee shall
be responsible for any act or failure to act on the part of any
other Trustee
38
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.
40
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
47
same 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 written certification thereof
delivered to the Trustee, to pay at maturity or upon redemption
all Securities of that
48
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
N1:Ind: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 $300,000,000
designated as the "GTE North Incorporated _____% Debentures,
Series B, Due 1999" (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
February 15, 1999.
(b) The Debentures shall bear
interest from February 15, 1994, until the principal thereof
becomes due and payable at the rate of _____% per annum,
payable semi-annually on February 15 and August 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
February 1 or August 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 B, Due 1999
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 February 15, 1999 and to
pay interest on said principal sum from February 15, 1994, or
from the most recent interest payment date to which interest has
been paid or duly provided for, semi-annually on February 15 and
August 15 in each year, commencing August 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 February 1 or August 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 Security 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
(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 $300,000,000.
-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 B as required
by Section 2.01 of the Indenture.
(3) The President or any Vice President is hereby
authorized and directed to execute $300,000,000 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.
N2:S-3:117
Exhibit 5
DALE E. SPORLEDER
Area Vice President - General Counsel
19845 North U.S. 31
P.O. Box 407
Westfield, IN 46074
(317) 896-6572
January 13, 1994
GTE North Incorporated
19845 North U.S. 31
P.O. Box 407
Westfield, IN 46074
Gentlemen:
I have examined a copy of the Registration Statement of GTE
North Incorporated (the "Company") on Form S-3 for the
registration under the Securities Act of 1933, as amended, of
$300,000,000 aggregate principal amount of Debentures (the "New
Debentures"). I have also examined a copy of the Company's
Articles of Incorporation, as amended, and such corporate
records and other documents as I have deemed to be requisite in
the premises. I am familiar with the proceedings taken and
proposed to be taken by you under my supervision as your counsel
in connection with the proposed authorization, issuance, and
sale of the New Debentures.
It is my opinion that, subject to the approval of the sale of
the New Debentures by all applicable public utility commissions
(such approvals to be obtained prior to the sale of the New
Debentures), the New Debentures, upon the issuance and sale
thereof in the manner contemplated in said Registration
Statement, will be legally and validly issued and will be
binding obligations of the Company.
I hereby consent to the reference to me under the caption
"Experts and Legal Opinions" in the Prospectus forming a part of
the Registration Statement and to the filing of this opinion as
an exhibit to the Registration Statement.
Yours truly,
Dale E. Sporleder
N2:S-3:119
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$293,2
91 $295,702
Add -
Income taxes150,198139,542192,264130,037108,230112,522116,1
64
Fixed changes102,845102,845137,369135,017132,780127,241122,
195
________ ___________________________________________
$501,891 $473,596$699,175$556,891$523,231$533,054$5
34,061
Fixed Charges:
Interest charges$ 94,062$ 94,062$124,197$122,970$119,915$116,5
18 $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$1
22,195
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).
N2:S-3:121
Securities and Exchange Commission
Washington, D.C. 20549
Form T-1
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939
OF A CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE ELIGIBILITY
OF A TRUSTEE PURSUANT TO SECTION 305(b)(2)___
__________
THE FIRST NATIONAL BANK OF CHICAGO
(Exact name of trustee as specified in its charter)
A National Banking Association 36-0899825
(I.R.S. Employer
Identification Number)
One First National Plaza, Chicago, IL 60670-0126
(Address and zip code of principal executive offices)
The First National Bank of Chicago
One First National Plaza, Suite 0286
Chicago, Illinois 60670-0286
Attn: Lynn A. Goldstein, Law Department, (312) 732-6919
(Name, address and telephone number of agent for service)
__________
GTE NORTH INCORPORATED
(Exact name of obligor as specified in its charter)
WISCONSIN 35-
1869961
(State or other jurisdiction of (I.R.S.
Employer
incorporation or organization) Identification
Number)
19845 U.S. 31 North
Westfield, IN 46074
(Address of principal executive offices) (Zip Code)
Debentures
(Title of Indenture Securities)
-2-
Item 1.General Information. Furnish the following information
as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Comptroller of Currency, Washington, D.C.,
Federal Deposit Insurance Corporation, Washington, D.C.,
The Board of Governors of the Federal Reserve System,
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
The trustee is authorized to exercise corporate trust
powers.
Item 2.Affiliations With the Obligor. If the obligor is an
affiliate of the trustee, describe each such affiliation.
No such affiliation exists with the trustee.
Item 16. List of Exhibits. List below all exhibits filed as
a part of this Statement of Eligibility.
1. A copy of the articles of association of the trustee
now in effect.*
2. A copy of the certificates of authority of the
trustee to commence business.*
3. A copy of the authorization of the trustee to
exercise corporate trust powers.*
4. A copy of the existing by-laws of the trustee.*
5. Not applicable.
6. The consent of the trustee required by Section
321(b) of the Act.
7. A copy of the latest report of condition of the
trustee published pursuant to law or the requirements of
its supervising or examining authority.
8. Not applicable.
9. Not applicable.
____________
* Exhibits 1, 2, 3, and 4 are herein incorporated by reference
to Exhibits bearing identical numbers in Item 12 of the Form
T-1 of The First National Bank of Chicago, filed as Exhibit
26(b) to the Registration Statement on Form S-3 of Dow
Capital B.V. and The Dow Chemical Company, filed with the
Securities and Exchange Commission on June 3, 1991
(Registration No. 33-36314).
-3-
Pursuant to the requirements of the Trust Indenture Act of 1939,
as amended, the trustee, The First National Bank of Chicago, a
national banking association organized and existing under the
laws of the United States of America, has duly caused this
Statement of Eligibility to be signed on its behalf by the
undersigned, thereunto duly authorized, all in the City of
Chicago and State of Illinois, on the 7th day of January, 1994.
The First National Bank of Chicago,
Trustee
By /s/ R. D. Manella
R. D. Manella
Vice President
-4-
EXHIBIT 6
THE CONSENT OF THE TRUSTEE REQUIRED
BY SECTION 321(b) OF THE ACT
January 7, 1994
Securities and Exchange Commission
Washington, DC 20549
Gentlemen:
In connection with the qualification of an indenture between GTE
North Incorporated and The First National Bank of Chicago, the
undersigned, in accordance with Section 321(b) of the Trust
Indenture Act of 1939, as amended, hereby consents that the
reports of examinations of the undersigned, made by Federal or
State authorities authorized to make such examinations, may be
furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.
Very truly yours,
The First National Bank of Chicago
By /s/ R. D. Manella
R. D. Manella
Vice President
-5-
EXHIBIT 7
A copy of the latest report of conditions of the trustee
published pursuant to law or the requirements of its supervising
or examining authority.
-6-
Legal Title of Bank: First National Bank of
Chicago Call Date: 9/30/93 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page
RC-1
City, State Zip: Chicago,
IL 60670
FDIC Certificate No.: 0/3/6/1/8
Consolidated Report of Condition for Insured Commercial
and State-Chartered Savings Banks for September 30, 1993
All schedules are to be reported in thousands of dollars.
Unless otherwise indicated, report the amount
outstanding of the last business day of the quarter.
Schedule RC-Balance Sheet
Dollar Amounts in
C400 <-
_____
Thousands RCFD
BIL MIL THOU
_________________ ____
_____________
ASSETS
1. Cash and balances due from depository institutions
(from Schedule RCA-A):
a. Noninterest-bearing balances and currency and coin(1) ..
0081 6,140,040 1.a.
b. Interest-bearing balances(2) ...........................
0071 6,078,671 1.b.
2. Securities (from Schedule RC-B) ..........................
0390 580,723 2
3. Federal funds sold and securities purchased under agree-
ments to resell in domestic offices of the bank and its
Edge and Agreement subsidiaries, and in IBFs:
a. Federal Funds sold ....................................
0276 3,134,457 3.a.
b. Securities purchased under agreements to resell .......
0277 252,650 3.b
4. Loans and lease financing receivables:
a. Loans and leases, net of unearned income (from
Schedule RC-C) ........................................RCFD
2122 13,404,247 4.a.
b. LESS: Allowance for loan and lease losses .............RCFD
3123 343,005 4.b.
c. LESS: Allocated transfer risk reserve .................RCFD
3128 0 4.c.
d. Loans and leases, net of unearned income, allowance
and reserve (item 4.a minus 4.b and 4.c) ...............
2125 13,061,242 4.d.
5. Assets held in trading accounts ..........................
2146 2,202,246 5.
6. Premises and fixed assets (including capitalized leases) .
2145 500,925 6.
7. Other real estate owned (from Schedule RC-M) .............
2150 111,329 7.
8. Investments in unconsolidated subsidiaries and
associated companies (from Schedule RC-M) ................
2130 14,491 8.
9. Customers' liability to this bank on acceptances
outstanding ..............................................
2155 552,637 9.
10. Intangible assets (from Schedule RC-M) ..................
2143 155,975 10.
11. Other assets (from Schedule RC-F) .......................
2160 2,847,290 11.
12. Total assets (sum of items 1 through 11) ................
2170 35,632,676 12.
__________
(1) Includes cash items in process of collection and unposted
debits.
(2) Includes time certificates of deposit not held in trading
accounts.
-7-
Legal Title of Bank: First National Bank of
Chicago Call Date: 9/30/93 ST-BK: 17-1630 FFIEC 031
Address: One First National Plaza, Suite 0460 Page
RC-2
City, State Zip: Chicago,
IL 60670
FDIC Certificate No.: 0/3/6/1/8
Schedule RC-Continued
Dollar Amounts in
Thousands BIL
MIL THOU
__________________
____________
LIABILITIES
13. Deposits:
a. In domestic offices (sum of totals of columns A
and C from Schedule RC-E, part 1) ............. RCON
2200 14,261,174 13.a.
(1) Noninterest-bearing(1) ....................RCON 6631
6,124,322 13.a.(1)
(2) Interest-bearing ..........................RCON 6636
8,136,852 13.a.(2)
b. In foreign offices, Edge and Agreement subsid-
iaries, and IBFs (from Schedule RC-E, part II) RCFN
2200 10,168,389 13.b.
(1) Noninterest bearing .......................RCFN 6631
2,339,236 13.b.(1)
(2) Interest-bearing ..........................RCFN 6636
7,829,153 13.b.(2)
14. Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of
the bank and of its Edge and Agreement subsid-
iaries, and in IBFs:
a. Federal funds purchased ........................ RCFD
0278 2,411,666 14.a.
b. Securities sold under agreements to repurchase . RCFD
0279 7,738 14.b.
15. Demand notes issued to the U. S. Treasury ......... RCON
2840 102,420 15.
16. Other borrowed money .............................. RCFD
2850 1,871,318 16.
17. Mortgage indebtedness and obligations under
capitalized leases ................................ RCFD
2910 267,000 17.
18. Bank's liability on acceptance executed and
outstanding ....................................... RCFD
2920 552,637 18.
19. Subordinated notes and debentures ................. RCFD
3200 1,175,000 19.
20. Other liabilities (from Schedule RC-G) ............ RCFD
2930 2,196,402 20.
21. Total liabilities (sum of items 13 through 20) .... RCFD
2948 33,013,744 21.
22. Limited-Life preferred stock and related surplus .. RCFD
3282 0 22.
EQUITY CAPITAL
23. Perpetual preferred stock and related surplus ..... RCFD
3838 0 23.
24. Common stock ...................................... RCFD
3230 200,858 24.
25. Surplus (exclude all surplus related to preferred
stock ............................................. RCFD
3839 2,249,790 25.
26. a. Undivided profits and capital reserves ......... RCFD
3632 169,255 26.a.
b. LESS: Net unrealized loss on marketable equity
securities ..................................... RCFD
0297 0 26.b.
27. Cumulative foreign currency translation adjustments RCFD
3284 (971) 27.
28. Total equity capital (sum of items 23 through 27) .. RCFD
3210 2,618,932 28.
29. Total liabilities, limited-life preferred stock,
and equity capital (sum of items 21, 22, and 28) .. RCFD
3300 35,632,676 29.
Memorandum
To be reported only with the March Report of Condition.
1. Indicate in the box at the right the number of the
statement below that best describes
the most comprehensive level of auditing work performed for the
bank by independent
external auditors of any date during 1992
........................................... RCFA 6724 N/A
M.1.
_______________
1 = Independent audit of the bank conducted in accordance 4 =
Directors' examination of the bank performed
with generally accepted
auditing standards by a by other external auditors
(may be required
certified public accounting
firm which submits a by state chartering
authority)
report on the bank 5 =
Review of the bank's financial statements
2 = Independent audit of the bank's parent holding company
by external auditors
conducted in accordance with
generally accepted 6 = Compilation of the
bank's financial state
auditing standards by a
certified public accounting ments by external auditors
firm which submits a report
on the consolidated 7 = Other audit procedures
(excluding tax
holding company (but not on
the bank separately) preparation work)
3 = Directors' examination of the bank conducted in 8 = No
external audit work
accordance with generally
accepted auditing standards
by a certified public
accounting firm (may be required
by state chartering
authority)
__________
(1) Includes total demand deposits and noninterest-bearing time
and savings deposits.
N2:S-3:129
Exhibit 26
GTE NORTH INCORPORATED
Invitation For Bids For the Purchase of
$300,000,000 _____% Debentures, Series B, Due 1999
GTE NORTH INCORPORATED (the "Company") is inviting bids,
subject to the terms and conditions stated herein, for the
purchase from it of $300,000,000 aggregate principal amount of its
_____% Debentures, Series B, Due 1999 (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 February , 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
February , 1994
N2:S-3:134
EXHIBIT A
GTE NORTH INCORPORATED
(the "Company")
CONFIRMATION OF BID FOR
$300,000,000 % Debentures, Series B, Due 1999
(the "Debentures")
TERMS
Maturity: February 15, 1999.
Interest Payable: Semi-annually on February 15 and August 15,
commencing
August 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
February __, 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 February 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
February __, 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: February , 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)
N2:S-3:136
