Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
GTE SOUTHWEST INCORPORATED
(Exact name of registrant as specified in its charter)
DELAWARE 75-0573444
(State of Incorporation) (I.R.S. Employer
Identification No.)
600 Hidden Ridge, Irving, Texas 75038
(214) 718-5600
(Address and telephone number of principal executive offices)
_________
DAVID S. KAUFFMAN, ESQ. CHARLES J. SOMES,
ESQ.
GTE Service Corporation GTE Southwest
Incorporated
One Stamford Forum 600 Hidden Ridge
Stamford, Connecticut 06904 Irving, Texas 75038
(203) 965-2986 (214) 718-6999
(Names, addresses and telephone numbers of agents for
service)
_________
Copies to: Robert W. Mullen, Jr., Esq., Milbank, Tweed,
Hadley &
McCloy, 1 Chase Manhattan Plaza, New York, New
York 10005.
Approximate date of commencement of proposed sale to the
public: From time to time 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. [X]
If this Form is filed to register additional securities
for an offering pursuant to Rule 462(b) under the Securities Act,
please check the following box and list the Securities Act
registration statement number of the earlier effective
registration statement for the same offering. [ ] 33-
If this Form is a post-effective amendment filed pursuant to
Rule 462(c) under the Securities Act, check the following box and
list the Securities Act registration statement number of the
earlier registration statement for the same offering. [ ] 33-
If delivery of the prospectus is expected to be made
pursuant to Rule 434, please check the following box. [ ]
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_________
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.
SUBJECT TO COMPLETION, DATED DECEMBER 7, 1995
GTE SOUTHWEST INCORPORATED
DEBENTURES
________________
GTE Southwest Incorporated (the "Company") intends to offer
from time to time up to $300,000,000 aggregate principal amount
of its debentures (the "New Debentures") in one or more series at
prices and on terms to be determined at the time or times of
sale. The aggregate principal amount, rate and time of payment
of interest, maturity, initial public offering price, if any,
redemption provisions and other specific terms of each series of
New Debentures will be set forth in an accompanying prospectus
supplement ("Prospectus Supplement").
________________
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.
________________
The Company may sell the New Debentures through underwriters
or agents, or directly to one or more institutional purchasers.
A Prospectus Supplement will set forth the names of underwriters,
if any, any applicable commissions or discounts, the price of the
New Debentures and the net proceeds to the Company from any such
sale or sales.
________________
The date of this Prospectus is , 1995.
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.
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 Annual Report on Form 10-K of the Company for the
year ended December 31, 1994;
2. The Quarterly Reports on Form 10-Q of the Company for
the quarters ended March 31, 1995, June 30, 1995 and
September 30, 1995; and
3. The Current Reports on Form 8-K of the Company dated
September 28, 1995, November 9, 1995 and December 1,
1995.
All documents filed by the Company pursuant to Sections 13(a),
13(c), 14 or 15(d) of the Exchange Act after the date of this
Prospectus and prior to the termination of the offering of the
New Debentures hereunder shall be deemed to be incorporated by
reference in this Prospectus and to be part hereof from the date
of filing of such documents.
The Company hereby undertakes to provide without charge to each
person to whom a copy of this Prospectus has been delivered, on
the written or oral request of any such person, including any
beneficial owner, a copy of any or all of the documents referred
to above which have been or may be incorporated in this
Prospectus by reference, other than exhibits to such documents
unless such exhibits are specifically incorporated by reference
into the information that the Prospectus incorporates. Requests
for such copies should be directed to David S. Kauffman, Esq.,
Assistant Secretary of the Company, at One Stamford Forum,
Stamford, Connecticut 06904. Mr. Kauffman's telephone number is
(203) 965-2986.
THE COMPANY
The Company was incorporated under the laws of the State of
Delaware in 1926 and provides telecommunications services in the
states of Arkansas, New Mexico, Oklahoma and Texas. All of the
common stock of the Company is owned by GTE Corporation ("GTE").
The Company's principal executive offices are located at 600
Hidden Ridge, Irving, Texas 75038, telephone number (214) 718-
5600.
-2-
RECENT DEVELOPMENTS
On February 28, 1995, the Company entered into an Agreement of
Merger with Contel of Texas, Inc., a Texas corporation ("Contel
Texas"), and Contel of the West, Inc., an Arizona corporation
("Contel West"). The Agreement provides that the aforementioned
companies (collectively, the "Contel Subsidiaries") would merge
with and into the Company, with the Company to be the surviving
corporation in the merger (the "Merger"). Each of the Contel
Subsidiaries is a wholly-owned subsidiary of Contel Corporation,
which is itself a wholly-owned subsidiary of GTE. The Contel
Subsidiaries provide communications services in the states of
Texas and New Mexico and, in the aggregate, served 251,070 access
lines as of October 31, 1995.
Certain historical financial statements of Contel Texas and
Contel West, together with unaudited pro forma condensed
consolidating income statements adjusted to give effect to the
Merger as if it had occurred at the beginning of the earliest
period presented and an unaudited pro forma condensed balance
sheet adjusted to give effect to the Merger as if it had occurred
on the balance sheet date, are included in the Company's Current
Report on Form 8-K dated December 1, 1995, which is incorporated
herein by reference. The Merger will be accounted for in such
financial statements in a manner consistent with a transfer of
entities under common control which is similar to a "pooling of
interests." It is currently anticipated that the Merger will
occur on December 31, 1995.
On November 9, 1995, the Company and the Contel Subsidiaries
announced through their parent, GTE Corporation, that in response
to recently enacted and pending legislation and the increasingly
competitive environment in which the Company and the Contel
Subsidiaries expect to operate, effective January 1, 1996, the
Company and the Contel Subsidiaries are discontinuing the use of
accounting practices appropriate to regulated enterprises. As a
result of this decision, the Company and the Contel Subsidiaries
will record a non-cash, extraordinary charge of approximately
$549.4 million after taxes during the fourth quarter of 1995.
This charge, which is based on the results of a comprehensive
study of the economic lives of the Company's and the Contel
Subsidiaries' telephone plant and equipment, will have no effect
on their customers or their liquidity and capital resources.
The Company and the Contel Subsidiaries have traditionally
followed the accounting for regulated enterprises prescribed by
Statement of Financial Accounting Standards No. 71, "Accounting
for the Effects of Certain Types of Regulation" ("SFAS No. 71").
In general, SFAS No. 71 required the Company and the Contel
Subsidiaries to depreciate their plant and equipment over
regulator approved lives which may extend beyond the assets'
actual economic lives. SFAS No. 71 also required the deferral of
certain costs based upon approvals received from regulators to
recover such costs in the future. As a result of these
requirements, the recorded net book value of certain assets and
liabilities, primarily telephone plant and equipment, was higher
than that which would otherwise have been recorded.
The charge will primarily represent an adjustment to the net book
value of the fixed assets of the Company and the Contel
Subsidiaries, through an increase in accumulated depreciation,
and is not expected to have a significant effect on depreciation
expense of existing plant and equipment or earnings over the next
several years. The income statement effect of this change in
accounting will be reflected in the statements of income as an
extraordinary charge, net of tax, under the provisions of
Statement of Financial Accounting Standards No. 101, "Regulated
Enterprises-Accounting for the Discontinuation of Application of
FASB Statement No. 71."
-3-
USE OF PROCEEDS
The net proceeds from the offering and sale of the New
Debentures, exclusive of accrued interest, will be applied toward
(A) the repayment of short-term borrowings incurred (i) in
connection with the redemption or repurchase on December 15, 1995
of the following series of first mortgage bonds of Contel Texas:
Original Outstanding Premium Total
Principal
Interest Maturity Principal Amount Paid at
and Premium
Series Rate Date at Redemption Redemption at
Redemption
G 8.75% 4/1/99 $3,700,000 $40,145 $3,740,145
K 8.50% 1/15/03 1,920,000 47,654 1,967,654
and (ii) for the purpose of financing the Company's construction
program, including the construction programs of the Contel
Subsidiaries following the Merger, and (B) for general corporate
purposes. At October 31, 1995, the Company had short-term
borrowings exclusive of current maturities of $55,017,000 at an
annual average interest rate of 5.80%. The Company's
construction budget is currently estimated at approximately
$321,000,000 for 1995 of which approximately $238,156,000 has
been incurred through October 31, 1995, principally for central
office equipment, outside plant and land and buildings. The
Contel Subsidiaries, in general, finance part of their respective
construction programs through the use of interim short-term notes
payable to affiliates. At October 31, 1995, the aggregate notes
payable to affiliates of the Contel Subsidiaries was $32,540,000.
The aggregate construction budget of the Contel Subsidiaries is
currently estimated at approximately $30,000,000 for 1995 of
which approximately $27,513,000 has been incurred through October
31, 1995, principally for central office equipment, outside plant
and land and buildings. The balance of the funds for the
completion of 1995 construction programs will be obtained
primarily from internal sources and short-term borrowings.
<TABLE>
<CAPTION>
RATIOS OF EARNINGS TO FIXED CHARGES
Nine
Months
Ended
September 30, Years Ended
December 31,
19951994 1993 1992 1991 1990
____ ____ ____ ____ ____ ____
<S> <C> <C> <C> <C> <C> <C>
Ratios of Earnings to Fixed
Charges (Unaudited)(a)..... 5.18(b) 4.02(c)--(d) 3.72
2.51 2.81
Pro Forma Combined Ratios of
Earnings to Fixed Charges
(Unaudited)(a)(e) 5.33(f) 4.95(g)1.47(h)4.05 2.81 2.97
</TABLE>
___________
(a) Computed as follows: (1) "earnings" have
been calculated by adding income taxes and fixed charges to
income before extraordinary charges; (2) "fixed charges"
include interest expense and the portion of rentals
representing interest.
-4-
(b)Results for the nine months ended September 30, 1995 include
after-tax gains of approximately $14,000,000 related to the
sale of the Company's unconsolidated investment in
Metropolitan Houston Paging Service, Inc. and non-strategic
local exchanges in Texas. Excluding these gains, the ratio
of earnings to fixed charges for the nine months ended
September 30, 1995 would have been 4.71.
(c)Results for 1994 include an after-tax gain of approximately
$15,000,000 related to the sale of non-strategic local
exchanges in Oklahoma. Excluding this sale, the ratio of
earnings to fixed charges for the year ended December 31,
1994 would have been 3.66.
(d)Results for 1993 include an after-tax restructuring charge of
approximately $106,000,000 for the implementation of a re-
engineering plan and a one-time, after-tax charge of
approximately $6,000,000 related to the enhanced early
retirement and voluntary separation programs offered to
eligible employees in 1993. This caused earnings to be
inadequate to cover fixed charges by approximately
$19,000,000 and resulted in the ratio of earnings to fixed
charges declining to .76. Excluding these items, the ratio
of earnings to fixed charges for the year ended December 31,
1993 would have been 3.08.
(e)The pro forma combined ratios of earnings to fixed charges
represent the ratios of the Company as if the Merger had been
consummated at the beginning of each period presented.
(f)Excluding the gains specified in Note (b) above, the pro
forma combined ratio of earnings to fixed charges for the
nine months ended September 30, 1995 would have been 4.92.
(g)Excluding the gain specified in Note (c) above, and an after-
tax gain of approximately $25,000,000 related to Contel
West's sale of non-strategic local exchanges in Arizona, the
pro forma combined ratio of earnings to fixed charges for the
year ended December 31, 1994 would have been 4.05.
(h)Pro forma combined results for 1993 include an after-tax
restructuring charge of approximately $123,000,000 for the
implementation of a re-engineering plan and a one-time, after-
tax charge of approximately $6,000,000 related to the
enhanced early retirement and voluntary separation programs
offered to eligible employees in 1993. Excluding these items
and an after-tax gain of approximately $13,000,000 related to
Contel West's sale of non-strategic local exchanges in Utah,
the pro forma combined ratio of earnings to fixed charges for
the year ended December 31, 1993 would have been 3.56.
-5-
THE NEW DEBENTURES
The New Debentures are to be issued as one or more series of the
Company's debentures (the "Debentures") under an Indenture dated
as of November 15, 1993 as amended and supplemented by the First
Supplemental Indenture dated as of December 6, 1995 (as amended
and supplemented, the "Indenture"), between the Company and The
Bank of New York, as successor trustee to NationsBank of Georgia,
National Association (the "Trustee"). By resolution of the Board
of Directors of the Company specifically authorizing each new
series of Debentures (a "Board Resolution"), the Company will
designate the title of each 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 each 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 form of 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 the same series of other
denominations of a like aggregate principal amount without charge
except for reimbursement of taxes, if any. (ARTICLE TWO)
Maturity, Interest And Payment
Information concerning the maturity, interest rate and payment
dates of each series of the New Debentures will be contained in a
Prospectus Supplement relating to that series of New Debentures.
Redemption Provisions, Sinking Fund and Defeasance
Each series of the New Debentures may be redeemed upon not less
than 30 days' notice at the redemption prices and subject to the
conditions that will be set forth in a Board Resolution and in a
Prospectus Supplement relating to that series of New Debentures.
(ARTICLE THREE) If a sinking fund is established with respect to
any series of the New Debentures , a description of the terms of
such sinking fund will be set forth in a Board Resolution and in
a Prospectus Supplement relating to that series of New
Debentures. The Indenture provides that each series of the New
Debentures is subject to defeasance. (SECTION 11.02)
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 worker's compensation and similar matters;
-6-
(iii) with respect to mechanics' and similar liens in the
ordinary course of business;
(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) 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.
However, 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 current
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)
-7-
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
upon an Event of 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)
EXPERTS
The financial statements and schedules included in the Company's
Annual Report on Form 10-K for the year ended December 31, 1994
and, with respect to the Contel Subsidiaries, in the Company's
Current Report on Form 8-K dated December 1, 1995, each of which
is incorporated by reference in this Prospectus, have been
audited by Arthur Andersen LLP, 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
report on financial statements of the Company, which includes an
explanatory paragraph with respect to the
-8-
change in the method of accounting for postretirement benefits
other than pensions and for income taxes as discussed in Note 1
to the financial statements. Reference is also made to said
reports on financial statements of the Contel Subsidiaries, which
include explanatory paragraphs with respect to the change in
method of accounting for postretirement benefits other than
pensions as discussed in Note 1 to each of the financial
statements.
CERTAIN LEGAL MATTERS
The validity of the New Debentures will be passed upon for the
Company by Richard M. Cahill, Esq., Vice President-General
Counsel of the Company. Certain legal matters in connection with
the New Debentures will be passed upon for the underwriters,
agents or institutional purchasers by Milbank, Tweed, Hadley &
McCloy of New York, New York.
PLAN OF DISTRIBUTION
The Company may sell any series of the New Debentures in one or
more of the following ways: (i) to underwriters for resale to the
public or to institutional purchasers; (ii) directly to
institutional purchasers; or (iii) through Company agents to the
public or to institutional purchasers. The Prospectus Supplement
with respect to each series of New Debentures will set forth the
terms of the offering of such New Debentures, including the name
or names of any underwriters or agents, the purchase price of
such New Debentures and the proceeds to the Company from such
sale, any underwriting discounts or agency fees and other items
constituting underwriters' or agents' compensation, any initial
public offering price, any discounts or concessions allowed or
reallowed or paid to dealers and any securities exchanges on
which such New Debentures may be listed.
If underwriters are used in the sale, such New Debentures will be
acquired by the underwriters for their own account and may be
resold from time to time in one or more transactions, including
negotiated transactions, at a fixed public offering price or at
varying prices determined at the time of sale.
Unless otherwise set forth in the Prospectus Supplement, the
obligations of the underwriters to purchase any series of New
Debentures will be subject to certain conditions precedent and
the underwriters will be obligated to purchase all such New
Debentures if any are purchased. In the event of a default of
one or more of the underwriters involving not more than 10% of
the aggregate principal amount of the New Debentures offered for
sale, the non-defaulting underwriters would be required to
purchase the New Debentures agreed to be purchased by such
defaulting underwriter or underwriters. In the event of a
default in excess of 10% of the aggregate principal amount of the
New Debentures, the Company may, at its option, sell less than
all the New Debentures offered.
Underwriters and agents may be entitled under agreements entered
into with the Company to indemnification by the Company against
certain civil liabilities, including liabilities under the
Securities Act of 1933, as amended, or to contribution with
respect to payments which the underwriters or agents may be
required to make in respect thereof. Underwriters and agents may
be customers of, engage in transactions with, or perform services
for, the Company in the ordinary course of business.
-9-
____________________________________________
_____________________________
No dealer, salesman or any other person has
been authorized to give any information or
to make any representations other than those GTE Southwest
Incorporated
contained in this Prospectus in connection
with the offer contained in this Prospectus, ____________
and, if given or made, such information or
representations must not be relied upon. PROSPECTUS
This 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.
TABLE OF CONTENTS
Page
Statement of Available Information... 2
Incorporation of Certain Documents
by Reference........................ 2
The Company.......................... 2
Recent Developments.................. 3
Use of Proceeds...................... 4
Ratios of Earnings to Fixed Charges... 4
The New Debentures................... 6
Experts.............................. 8
Certain Legal Matters................ 9
Plan of Distribution................. 9
____________
, 1995
____________________________________________
_____________________________
SW:S-3:13
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
commissions.
1. Registration fee.........................$104,482.76
2. Trustee's fees .......................... 7,500.00
3. Cost of printing and engraving........... 25,000.00
4. Accounting fees.......................... 13,000.00
5. Rating agencies' fees.................... 155,700.00
6. Miscellaneous............................9,317.24
$315,000.00
Item 15. Indemnification of Directors and Officers.
Section 145 of the Delaware General Corporation Law (the
"DGCL") confers broad powers upon corporations incorporated in
that State with respect to indemnification of any person against
liabilities incurred by reason of the fact that such person is or
was a director, officer, employee or agent of the corporation, or
is or was serving at the request of the corporation as a
director, officer, employee or agent of another corporation or
other business entity. The provisions of Section 145 are not
exclusive of any other rights to which those seeking
indemnification may be entitled under any bylaw, agreement or
otherwise.
As permitted by the DGCL, the directors and officers of the
Company are covered by insurance against certain liabilities
which might be incurred by them in such capacities and in certain
cases against which they cannot be indemnified by the Company.
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, 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.
II-1
Insofar as indemnification for liabilities arising under the
Securities Act of 1933 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
Securities Act of 1933 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 Securities Act of 1933 and will be governed by the final
adjudication of such issue.
The Company hereby undertakes:
(1) To file, during any period in which offers or sales are
being made, a post-effective amendment to this registration
statement:
(i) To include any prospectus required by Section 10(a)(3)
of the Securities Act of 1933;
(ii) To reflect in the prospectus any facts or events
arising after the effective date of the registration
statement (or the most recent post-effective amendment
thereof) which, individually or in the aggregate, represent
a fundamental change in the information set forth in the
registration statement. Notwithstanding the foregoing, any
increase or decrease in volume of securities offered (if the
total dollar value of securities offered would not exceed
that which was registered) and any deviation from the low or
high and of the estimated maximum offering range may be
reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than 20
percent change in the maximum aggregate offering price set
forth in the "Calculation of Registration Fee" table in the
effective registration statement.
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in the
registration statement or any material change to such
information in the registration statement;
provided, however, that paragraphs (i) and (ii) shall not apply
if the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports
filed by the Company pursuant to Section 13 or Section 15(d) of
the Securities Exchange Act of 1934 that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability
under the Securities Act of 1933, each such post-effective
amendment 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.
(3) To remove from registration by means of a post-
effective amendment any of the securities being registered which
remain unsold at the termination of the offering.
II-2
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 Irving, State of Texas, on the 6th day of December,
1995.
GTE SOUTHWEST INCORPORATED
(Registrant)
By:
KATHERINE J. HARLESS
Katherine J. Harless
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.
)
KATHERINE J. HARLESS )
Katherine J. Harless President (Principal )
Executive Officer) )
)
)
)
)
GERALD K. DINSMORE )
Gerald K. Dinsmore Senior Vice President - )
Finance & Planning ) December
6, 1995
and Director )
(Principal Financial )
Officer) )
)
)
)
WILLIAM M. EDWARDS, III )
William M. Edwards, III Controller
)
(Principal Accounting )
Officer) )
)
)
)
)
RICHARD M. CAHILL )
Richard M. Cahill Director )
II-3
)
MICHAEL B. ESSTMAN )
Michael B. Esstman Director )
)
) December 6, 1995
)
)
THOMAS W. WHITE )
Thomas W. White Director )
II-4
CONSENT OF INDEPENDENT PUBLIC ACCOUNTANTS
As independent public accountants, we hereby consent to the
incorporation by reference in this Registration Statement on Form
S-3 of our reports, dated January 25, 1995, included in the GTE
Southwest Incorporated Form 10-K for the year ended December 31,
1994, and included in the Current Report on Form 8-K of GTE
Southwest Incorporated dated December 1, 1995, and to all
references to our Firm included in this Registration Statement.
ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Dallas, Texas
December 6, 1995
II-5
EXHIBIT INDEX
Exhibit
Number
1.1 -Form of Purchase Agreement, including Standard Purchase
Agreement Provisions (December 1995 Edition).
2.1 -Agreement of Merger, dated February 28, 1995, between GTE
Southwest Incorporated, Contel of Texas, Inc. and Contel
of the West, Inc. (incorporated by reference from the
Current Report on Form 8-K of GTE Southwest Incorporated
dated December 1, 1995).
4.1 -Indenture between GTE Southwest Incorporated and
NationsBank of Georgia, National Association, as Trustee,
dated as of November 15, 1993 (incorporated by reference
from GTE Southwest Incorporated's Registration Statement,
File No. 33-50938, filed with the Securities and Exchange
Commission on November 5, 1993.)
4.2 -Form of First Supplemental Indenture between GTE Southwest
Incorporated and The Bank of New York, as Trustee (as
successor Trustee to NationsBank of Georgia, National
Association), dated as of December 6, 1995.
4.3 - Form of the Board Resolution under which the Debentures
being registered are to be issued.
5 - Opinion and consent of Richard M. Cahill, Esq.
12.1 - Statements of the ratio of earnings to fixed charges.
12.2 - Pro forma combined statements of the ratio of earnings to
fixed charges.
23.1 - Consent of Arthur Andersen LLP is included elsewhere in
this Registration Statement.
23.2 - Consent of Richard M. Cahill, Esq. (contained in opinion
filed as
Exhibit 5).
25 - Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of The Bank of New York.
26 - Form of Invitation for Bids.
E-1
SW:S-3:19
GTE SOUTHWEST INCORPORATED
PURCHASE AGREEMENT
GTE Southwest Incorporated, a Delaware corporation (the
"Company"), proposes to issue and sell $___,000,000 aggregate
principal amount of its Debentures, consisting of $___,000,000
aggregate principal amount of its __% Debentures, Series _, Due
____ (the "Series _ Debentures") and $___,000,000 aggregate
principal amount of its __% Debentures, Series _, Due ___ (the
"Series _ Debentures" and, together with the Series _
Debentures, collectively, the "New Debentures"). Subject to the
terms and conditions set forth or incorporated by reference
herein, the Company agrees to sell and the purchasers named in
Schedule A attached hereto (the "Purchasers") agree to purchase
the Series _ Debentures at __% of their principal amount and the
Series _ Debentures at __% of their principal amount, each plus
accrued interest from ______________ to the date of payment for
the New Debentures and delivery thereof. Interest on the New
Debentures will be payable semi-annually on ____________ and
___________, commencing _________. [The Series _ Debentures
will be reoffered to the public at ____% of their principal
amount and the Series _ Debentures will be reoffered to the
public at __% of their principal amount.]
All the provisions contained in the Company's Standard
Purchase Agreement Provisions (December 1995 Edition) (the
"Standard Purchase Agreement Provisions") annexed hereto shall
be deemed to be a part of this Purchase Agreement to the same
extent as if such provisions had been set forth in full herein.
REDEMPTION PROVISIONS:
[The New Debentures will not be redeemable prior to
maturity.]
OR
[The New Debentures will not be redeemable prior to _____.
Thereafter, the New Debentures will be redeemable on not less
than 30 nor more than 60 days' notice given as provided in the
Indenture, as a whole or from time to time in part, at the
option of the Company at the redemption price set forth below.
The "initial regular redemption price" will be the initial
public offering price as defined below plus the rate of interest
on the New Debentures. The redemption price during the twelve
month period beginning _______ and during the twelve month
periods beginning on each ___________ thereafter through the
twelve month period ended __________ will be determined by
reducing the initial regular redemption price by an amount
determined by multiplying (a) 1/_ of the amount by which such
initial regular redemption price exceeds 100% by (b) the number
of such full twelve month periods which shall have elapsed
between _________ and the date fixed for redemption; and
thereafter the redemption prices during the twelve month periods
beginning _________ shall be 100%; provided, however, that all
such prices will be specified to the nearest 0.01% or if there
is no nearest 0.01%, then to the next higher 0.01%.
For the purpose of determining the redemption prices of the
New Debentures, the initial public offering price of the New
Debentures shall be the price, expressed in percentage of
principal amount (exclusive of accrued interest), at which the
New Debentures are to be initially offered for sale
-2-
to the public; if there is not a public offering of the New
Debentures, the initial public offering price of the New
Debentures shall be deemed to be the price, expressed in
percentage of principal amount (exclusive of accrued interest),
to be paid to the Company by the Purchasers.]
CLOSING:
The Purchasers agree to pay for the New Debentures by
official or certified bank check or by wire transfer in each
case in same day funds, at the option of the Company, upon
delivery of such New Debentures at 10:00 A.M. (New York City
time) on _____________ (the "Closing Date") or at such other
time, not later than the seventh full business day thereafter,
as shall be agreed upon by the Company and the Purchasers or the
firm or firms designated as the representative or
representatives, as the case may be, of the Purchasers (the
"Representative").
RESALE:
[The Purchasers represent that they intend to resell the
New Debentures, and therefore the provisions applicable to
Reselling Purchasers in the Standard Purchase Agreement
Provisions will be applicable.]
OR
[The Purchasers represent that they do not intend to resell
the New Debentures, and therefore the provisions applicable to
Reselling Purchasers in the Standard Purchase Agreement
Provisions will not be applicable.]
In witness whereof, the parties have executed this Purchase
Agreement this _____ day of ______________.
[Names of Purchasers or
Representative]
By___________________________
Title:
GTE SOUTHWEST INCORPORATED
By___________________________
Vice President
-3-
SCHEDULE A
The names of the Purchasers and the principal amount
of New Debentures which each respectively offers to purchase are
as follows:
Principal Principal
Amount Amount
of Series _ of Series _
Name Debentures Debentures
_______________
______________
$ $
______________
______________
Total........................ $___,000,000 $___,000,000
GTE SOUTHWEST INCORPORATED
STANDARD PURCHASE AGREEMENT PROVISIONS
(December 1995 Edition)
GTE Southwest Incorporated, a Delaware corporation (the
"Company"), may enter into one or more purchase agreements
providing for the sale of debentures to the purchaser or
purchasers named therein (the "Purchasers"). The standard
provisions set forth herein will be incorporated by reference in
any such purchase agreement ("Purchase Agreement"). The
Purchase Agreement, including these Standard Purchase Agreement
Provisions incorporated therein by reference, is hereinafter
referred to as "this Agreement". Unless otherwise defined
herein, terms used in this Agreement that are defined in the
Purchase Agreement have the meanings set forth therein.
I. SALE OF THE DEBENTURES
The Company proposes to issue one or more series of
debentures pursuant to the provisions of an Indenture dated as
of November 15, 1993 as amended and supplemented by the First
Supplemental Indenture dated as of December 6, 1995 (as amended
and supplemented, the "Indenture"), between the Company and The
Bank of New York, as successor trustee to NationsBank of
Georgia, National Association (the "Trustee"). By resolution of
the Board of Directors of the Company specifically authorizing
each new series of debentures (a "Board Resolution"), the
Company will designate the title of each 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 each
such series.
The Company has filed with the Securities and Exchange
Commission (the "Commission") under the Securities Act of 1933,
as amended (the "Act"), registration statement No. 33-
___________ relating to $300,000,000 of the Company's debentures
(the amount remaining unsold thereunder, from time to time, is
hereinafter referred to as the "Debentures"), including a
prospectus relating to the Debentures, and has filed with, or
transmitted for filing to, the Commission (or will promptly
after the sale so file or transmit for filing) a prospectus
supplement specifically relating to a particular series of
Debentures (such particular series being hereinafter referred to
as the "New Debentures") pursuant to Rule 424(b) under the Act
("Rule 424(b)"). The term "Registration Statement" means the
registration statement referred to herein, as amended to the
date of the Purchase Agreement. The term "Basic Prospectus"
means the prospectus relating to the Debentures included in the
Registration Statement. The term "Prospectus" means the Basic
Prospectus together with the prospectus supplement specifically
relating to the New Debentures, as filed with, or transmitted
for filing to, the Commission pursuant to Rule 424(b). As used
herein, the terms "Registration Statement", "Basic Prospectus"
and "Prospectus" shall include in each case the material, if
any, incorporated by reference therein.
II. PURCHASERS' REPRESENTATIONS AND RESALE
Each Purchaser represents and warrants that information
furnished in writing to the Company expressly for use with
respect to the New Debentures will not contain any untrue
statement of a material fact and will not omit any material fact
in connection with such information necessary to make such
information not misleading.
If the Purchasers advise the Company in the Purchase
Agreement that they intend to resell the New Debentures, the
Company will assist the Purchasers as hereinafter provided. The
terms of any such resale will be set forth in the Prospectus.
The provisions of Paragraphs C and D of Article VI and Articles
VIII, IX and X of this Agreement apply only to Purchasers that
have advised the Company of their intention to resell the New
Debentures ("Reselling Purchasers"). All other provisions apply
to any Purchaser including a Reselling Purchaser.
-2-
III. CLOSING
The closing will be held at the office of GTE Service
Corporation, 4th Floor, One Stamford Forum, Stamford,
Connecticut 06904 on the Closing Date. Concurrent with the
delivery of the New Debentures to the Purchasers or to the
Representative for the account of each Purchaser, payment of the
full purchase price of the New Debentures shall be made at the
option of the Company by certified or official bank check or
checks in same day funds, payable to the Company or its order,
at The Bank of New York, Attention: Corporate Trust Department
or by wire transfer in same day funds to The Bank of New York
for the account of the Company. Upon receipt of such check or
wire transfer by The Bank of New York, such check or wire
transfer shall be deemed to be delivered at the closing. The
New Debentures shall be in the form of temporary or definitive
fully-registered New Debentures in denominations of One Thousand
Dollars ($1,000) or any integral multiple thereof, registered in
such names as the Purchasers or the Representative shall request
not less than two business days before the Closing Date. The
Company agrees to make the New Debentures available to the
Purchasers or the Representative for inspection at the office of
The Bank of New York or The Depository Trust Company, New York,
New York, at least twenty-four hours prior to the time fixed for
the delivery of the New Debentures on the Closing Date.
IV. CONDITIONS TO PURCHASERS' OBLIGATIONS
The respective obligations of the Purchasers hereunder are
subject to the following conditions:
(A) The Registration Statement shall have become effective
and no stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceedings
for such purpose shall be pending before or threatened by the
Commission; since the latest date as of which information is
given in the Registration Statement, there shall have been no
material adverse change in the business, business prospects,
properties, financial condition or results of operations of the
Company; and the Purchasers or the Representative shall have
received on the Closing Date the customary form of compliance
certificate, dated the Closing Date and signed by the President
or a Vice President of the Company, including the foregoing.
The officer executing such certificate may rely upon the best of
his or her knowledge as to proceedings pending or threatened.
(B) The Purchasers or the Representative shall have
received on the Closing Date an opinion of Richard M. Cahill,
Esq., Vice President-General Counsel of the Company, or other
counsel to the Company satisfactory to the Purchasers and
counsel to the Purchasers, dated the Closing Date, substantially
in the form set forth in Exhibit A hereto.
(C) The Purchasers or the Representative shall have
received on the Closing Date an opinion of Milbank, Tweed,
Hadley & McCloy, counsel for the Purchasers, dated the Closing
Date, substantially in the form set forth in Exhibit B hereto.
(D) The Purchasers or the Representative shall have
received on the Closing Date a letter from Arthur Andersen LLP,
independent public accountants for the Company, dated the
Closing Date, to the effect set forth in Exhibit C hereto.
-3-
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) The Company shall have received on the Closing Date
the full purchase price of the New Debentures purchased
hereunder.
VI. COVENANTS OF THE COMPANY
In further consideration of the agreements contained herein
of the Purchasers, the Company covenants to the several
Purchasers as follows:
(A) To furnish to the Purchasers or the Representative a
copy of the Registration Statement including materials, if any,
incorporated by reference therein and, during the period
mentioned in (C) below, to supply as many copies of the
Prospectus, any documents incorporated by reference therein and
any supplements and amendments thereto as the Purchasers or the
Representative may reasonably request. The terms "supplement"
and "amendment" or "amend" as used in this Agreement shall
include all documents filed by the Company with the Commission
subsequent to the effective date of the Registration Statement,
or the date of the Basic Prospectus, as the case may be,
pursuant to the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), which are deemed to be incorporated by
reference therein.
(B) Before amending or supplementing the Registration
Statement or the Prospectus with respect to the New Debentures,
to furnish to any Purchaser or the Representative, and to
counsel for the Purchasers, a copy of each such proposed
amendment or supplement.
The covenants in Paragraphs (C) and (D) apply only to
Reselling Purchasers:
(C) If in the period after the first date of resale of the
New Debentures during which, in the opinion of counsel for the
Reselling Purchasers, the Prospectus is required by law to be
delivered, any event shall occur as a result of which it is
necessary to amend or supplement the Prospectus in order to make
a statement therein, in light of the circumstances when the
Prospectus is delivered to a subsequent purchaser, not
materially misleading, or if it is otherwise necessary to amend
or supplement the Prospectus to comply with law, forthwith to
prepare and furnish, at its own expense (unless such amendment
shall relate to information furnished by the Purchasers or the
Representative by or on behalf of the Purchasers in writing
expressly for use in the Prospectus), to the Reselling
Purchasers, the number of copies requested by the Reselling
Purchasers or the Representative of either amendments or
supplements to the Prospectus so that the statements in the
Prospectus as so amended or supplemented will not, in light of
the circumstances when the Prospectus is delivered to a
subsequent purchaser, be misleading or so that the Prospectus
will comply with law.
-4-
(D) To use its best efforts to qualify the New Debentures
for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Purchasers or the Representative shall
reasonably request and to pay all expenses (including fees and
disbursements of counsel) in connection therewith; provided,
however, that the Company, in complying with the foregoing
provisions of this paragraph, shall not be required to qualify
as a foreign company or to register or qualify as a broker or
dealer in securities in any jurisdiction or to consent to
service of process in any jurisdiction other than with respect
to claims arising out of the offering or sale of the New
Debentures, and provided further that the Company shall not be
required to continue the qualification of the New Debentures
beyond one year from the date of the sale of the New Debentures.
VII. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the several
Purchasers that (i) each document, if any, filed or to be filed
pursuant to the Exchange Act and incorporated by reference in
the Basic Prospectus or the Prospectus complied or will comply
when so filed in all material respects with the Exchange Act and
the rules and regulations thereunder, (ii) each part of the
Registration Statement filed with the Commission pursuant to the
Act relating to the New Debentures, when such part became
effective, did not contain any untrue statement of a material
fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein not
misleading, (iii) on the effective date of the Registration
Statement, the date the Prospectus is filed pursuant to Rule
424(b) and at all times subsequent to and including the Closing
Date, the Registration Statement and the Prospectus, as amended
or supplemented, if applicable, complied or will comply in all
material respects with the Act and the applicable rules and
regulations thereunder, (iv) on the effective date of the
Registration Statement, the Registration Statement did not
contain, and as amended or supplemented, if applicable, will not
contain, any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements
therein not misleading, and on the date the Prospectus, or any
amendment or supplement thereto, is filed pursuant to Rule
424(b) and on the Closing Date, the Prospectus will not contain
any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein,
in the light of the circumstances under which they were made,
not misleading; except that these representations and warranties
do not apply to statements or omissions in the Registration
Statement or the Prospectus based upon information furnished to
the Company by any Purchaser or the Representative by or on
behalf of any Purchaser in writing expressly for use therein or
to statements or omissions in the Statement of Eligibility of
the Trustee under the Indenture, (v) 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.
-5-
VIII. INDEMNIFICATION
The Company agrees to indemnify and hold harmless each
Reselling Purchaser and each person, if any, who controls such
Reselling Purchaser within the meaning of either Section 15 of
the Act or Section 20 of the Exchange Act, from and against any
and all losses, claims, damages and liabilities based upon any
untrue statement or alleged untrue statement of a material fact
contained in the Registration Statement, the Basic Prospectus or
the Prospectus (if used within the period set forth in Paragraph
(C) of Article VI hereof, and as amended or supplemented if the
Company shall have furnished any amendments or supplements
thereto), or based upon any omission or alleged omission to
state therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are based
upon any such untrue statement or omission or alleged untrue
statement or omission based upon information furnished to the
Company by any Reselling Purchaser or the Representative by or
on behalf of any Reselling Purchaser in writing expressly for
use therein or by any statement or omission in the Statement of
Eligibility of the Trustee under the Indenture. The foregoing
agreement, insofar as it relates to the Prospectus, shall not
inure to the benefit of any Reselling Purchaser (or to the
benefit of any person controlling such Reselling Purchaser) on
account of any losses, claims, damages or liabilities arising
from the sale of any New Debentures by said Reselling Purchaser
to any person if a copy of the Prospectus (as amended or
supplemented, if prior to distribution of the Prospectus to the
Reselling Purchaser, the Company shall have made any supplements
or amendments which have been furnished to said Reselling
Purchaser) shall not have been sent or given by or on behalf of
such Reselling Purchaser to such person at or prior to the
written confirmation of the sale of the New Debentures to such
person and such statement or omission is cured in the
Prospectus.
Each Reselling Purchaser agrees to indemnify and hold
harmless the Company, its directors, its officers who sign the
Registration Statement and any person controlling the Company to
the same extent as the foregoing indemnity from the Company to
each Reselling Purchaser, but only with reference to information
relating to said Reselling Purchaser furnished to the Company in
writing by the Reselling Purchaser or the Representative by or
on behalf of said Reselling Purchaser expressly for use in the
Registration Statement or the Prospectus.
In case any proceeding (including any governmental
investigation) shall be instituted involving any person in
respect of which indemnity may be sought pursuant to either of
the two preceding paragraphs, such person (the "indemnified
party") shall promptly notify the person or persons against whom
such indemnity may be sought (the "indemnifying party") in
writing and the indemnifying party, upon request of the
indemnified party, shall retain counsel reasonably satisfactory
to the indemnified party to represent the indemnified party and
any others the indemnifying party may designate in such
proceeding 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.
-6-
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 Purchasers on the other from the offering of
the New Debentures or (ii) if the allocation provided by clause
(i) above is not permitted by applicable law, in such proportion
as is appropriate to reflect not only the relative benefits
referred to in clause (i) above but also the relative fault of
the Company on the one hand and of the Reselling Purchasers on
the other in connection with the statement or omission that
resulted in such losses, claims, damages or liabilities, as well
as any other relevant equitable considerations. The relative
benefits received by the Company on the one hand and the
Reselling Purchasers on the other in connection with the
offering of the New Debentures shall be deemed to be in the same
proportion as the total net proceeds from the offering of the
New Debentures received by the Company bear to the total
commissions, if any, received by all of the Reselling Purchasers
in respect thereof. If there are no commissions allowed or paid
by the Company to the Reselling Purchasers in respect of the New
Debentures, the relative benefits received by the Reselling
Purchasers in the preceding sentence shall be the difference
between the price received by such Reselling Purchasers upon
resale of the New Debentures and the price paid for the New
Debentures pursuant to the Purchase Agreement. The relative
fault of the Company on the one hand and of the Reselling
Purchasers on the other shall be determined by reference to,
among other things, whether the untrue or alleged untrue
statement of a material fact or the omission or alleged omission
to state a material fact relates to information supplied by the
Company or by the Reselling Purchasers and the parties' relative
intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred
to in 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.
-7-
X. TERMINATION BY RESELLING PURCHASERS
At any time prior to the Closing Date this Agreement shall
be subject to termination in the absolute discretion of the
Reselling Purchasers, by notice given to the Company, if (i)
trading in securities generally on the New York Stock Exchange
shall have been suspended or materially limited, (ii) a general
moratorium on commercial banking activities in New York shall
have been declared by either Federal or New York State
authorities, (iii) minimum prices shall have been established on
the New York Stock Exchange by Federal or New York State
authorities or (iv) any outbreak or material escalation of
hostilities involving the United States or declaration by the
United States of a national emergency or war or other calamity
or crisis shall have occurred, the effect of any of which is
such as to make it impracticable or inadvisable to proceed with
the delivery of the New Debentures on the terms and in the
manner contemplated by the Prospectus.
XI. TERMINATION BY PURCHASERS
If this Agreement shall be terminated by the Purchasers
because of any failure or refusal on the part of the Company to
comply with the terms or to fulfill any of the conditions of
this Agreement, or if for any reason (other than those set forth
in Article V) the Company shall be unable to perform its
obligations under this Agreement, the Company will reimburse the
Purchasers for all out-of-pocket expenses (including the fees
and disbursements of counsel) reasonably incurred by such
Purchasers in connection with the New Debentures. Except as
provided herein, the Purchasers shall bear all of their
expenses, including the fees and disbursements of counsel.
XII. SUBSTITUTION OF PURCHASERS
If for any reason any Purchaser shall not purchase the New
Debentures it has agreed to purchase hereunder, the remaining
Purchasers shall have the right within 24 hours to make
arrangements satisfactory to the Company for the purchase of
such New Debentures hereunder. If they fail to do so, the
amounts of New Debentures that the remaining Purchasers are
obligated, severally, to purchase under this Agreement shall be
increased in the proportions which the total amount of New
Debentures which they have respectively agreed to purchase bears
to the total amount of New Debentures which all non-defaulting
Purchasers have so agreed to purchase, or in such other
proportions as the Purchasers may specify to absorb such
unpurchased New Debentures, provided that such aggregate
increases shall not exceed 10% of the total amount of the New
Debentures set forth in Schedule A to the Purchase Agreement.
If any unpurchased New Debentures still remain, the Company
shall have the right either to elect to consummate the sale
except as to any such unpurchased New Debentures so remaining
or, within the next succeeding 24 hours, to make arrangements
satisfactory to the remaining Purchasers for the purchase of
such New Debentures. In any such cases, either the Purchasers
or the Representative or the Company shall have the right to
postpone the Closing Date for not more than seven business days
to a mutually acceptable date. If the Company shall not elect to
so consummate the sale and any unpurchased New Debentures remain
for which no satisfactory substitute Purchaser is obtained in
accordance with the above provisions, then this Agreement shall
terminate without liability on the part of any non-defaulting
Purchaser or the Company for the purchase or sale of any New
Debenture under this Agreement. No provision in this paragraph
shall relieve any defaulting Purchaser of liability to the
Company for damages occasioned by such default.
-8-
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.
SW:S-3:31
EXHIBIT A
LETTERHEAD OF
RICHARD M. CAHILL, ESQ.
Vice President - General Counsel
_____________, 199_
and the other Purchasers named in
the Purchase Agreement dated ____________,
199_, between GTE Southwest Incorporated
and such Purchasers
Re: GTE Southwest Incorporated
___% Debentures, Series _, Due ____
___% Debentures, Series _, Due ____
Dear Sirs:
I have been requested by GTE Southwest Incorporated, a
Delaware corporation (the "Company"), as its Area Vice President-
General Counsel and Secretary to furnish you with my opinion
pursuant to a Purchase Agreement dated ______, 199_ (the
"Agreement") between you and the Company, relating to the
purchase and sale of $___,000,000 aggregate principal amount of
its Debentures, consisting of $___,000,000 aggregate principal
amount of __% Debentures, Series _, Due ____ and $___,000,000
aggregate principal amount of __% Debentures, Series _, Due ____
(collectively, the "New Debentures").
In this connection I have examined among other things:
(a) The Restated Certificate 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 November 15, 1993
as amended and supplemented by the First Supplemental Indenture
dated as of December 6, 1995 (as amended and supplemented, the
"Indenture"), between the Company and The Bank of New York, as
successor trustee to NationsBank of Georgia, National
Association (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 forms 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-_____), 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 prospectus dated _________,
together with the prospectus supplement dated __________
relating to the New Debentures in the form filed under Rule
424(b) of the Act, is hereinafter called the "Prospectus");
-2-
(g) Statutes, permits and other documents relating to the
Company's franchises; and
(h) The Registration Statement, the Prospectus and all
documents filed by the Company under the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), which are incorporated
by reference in the Prospectus (the "Incorporated Documents") .
On the basis of my examination of the foregoing and of such
other documents and matters as I have deemed necessary as the
basis for the opinions hereinafter expressed, I am of the
opinion that:
1. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Delaware, is a duly licensed and qualified foreign corporation in
good standing under the laws of the States of Arkansas, New
Mexico, Oklahoma 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
where the failure to be so qualified or licensed would have a
material adverse affect on the business or prospects of the
Company.
2. All legal proceedings necessary to the authorization,
issue and sale of the New Debentures to you have been taken by
the Company.
3. The Agreement has been duly and validly authorized,
executed and delivered by the Company.
4. The Indenture is in proper form, has been duly
authorized 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.
6. Except as may be required by the Securities or Blue Sky
laws of certain jurisdictions, no authorization, approval or
consent of any governmental regulatory authority is required for
the issuance and sale of the New Debentures.
7. The Company holds valid and subsisting franchises,
licenses and permits adequate for the conduct of its business in
the territory served by it, except for limited areas where the
Company operates by sufferance, and none of the franchises,
licenses or permits of the Company contain any unduly burdensome
restrictions.
8. The Registration Statement became effective on
_______________, 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.
Without my prior written consent, this opinion may not be
relied upon by any person or entity other than the addressee,
quoted in whole or in part, or otherwise referred to in any
report or document, or furnished to any other person or entity,
except that Milbank, Tweed, Hadley & McCloy may rely upon this
opinion as if this opinion were separately addressed to them.
Very truly yours,
Richard M. Cahill, Esq.
cc: Milbank, Tweed, Hadley & McCloy
SW:S-3:34
EXHIBIT B
MILBANK, TWEED, HADLEY & McCLOY
1 Chase Manhattan Plaza
New York, New York 10005
__________, 199_
GTE SOUTHWEST INCORPORATED
$___,000,000 __% Debentures, Series _, Due ____
$___,000,000 __% Debentures, Series _, Due ____
and the other several Purchasers
referred to in the Purchase Agreement
dated ___________________, among such
Purchasers and GTE Southwest Incorporated
Dear Sirs:
We have been designated by GTE Southwest Incorporated (the
"Company") as counsel for the purchasers of $___,000,000
aggregate principal amount of its Debentures, consisting of
$___,000,000 aggregate principal amount of its __% Debentures,
Series _, Due ____ and $___,000,000 aggregate principal amount
of its __% Debentures, Series _, Due ____ (collectively, the
"New Debentures"). Pursuant to such designation and the terms
of a Purchase Agreement dated ________, relating to the New
Debentures (the "Purchase Agreement"), entered into by you with
the Company, we have acted as your counsel in connection with
your several purchases this day from the Company of the New
Debentures, which are issued under an Indenture dated as of
November 15, 1993, as amended and supplemented by the First
Supplemental Indenture dated as of December 6, 1995 (as amended
and supplemented, the "Indenture") between the Company and The
Bank of New York, as successor trustee to NationsBank of
Georgia, National Association (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 the New
Debentures to be delivered to your representatives at The
Depository Trust Company, 55 Water Street, New York, New York
for your several accounts, against payment therefor.
On the basis of the foregoing, and having regard to legal
considerations which we deem relevant, we are of the opinion
that:
1. The Company is a validly existing corporation, in good
standing, under the laws of the State of Delaware.
-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. On the basis of information received by the Company
from the Securities and Exchange Commission (the "Commission"),
Registration Statement No. ___________ 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 _________, and
thereupon the Prospectus dated _________, as supplemented by the
Prospectus Supplement dated ____________ (collectively, the
"Prospectus"), became lawful for use for the purposes specified
in the Act, in connection with the offer for sale and sale of
the New Debentures in the manner therein specified, subject to
compliance with the provisions of securities or Blue Sky laws of
certain 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.
6. The Registration Statement, as of its effective date,
and the Prospectus, as of the date hereof, together with the
documents incorporated by reference therein (the "Incorporated
Documents") (except any financial statements or other financial
data contained or incorporated by reference in the Registration
Statement, the Prospectus or the Incorporated Documents, as to
which no opinion is expressed), appear on their face to be
appropriately responsive, in all material respects relevant to
the offering of the New Debentures, to the requirements of the
Act and the Securities Exchange Act of 1934, as amended (the
"Exchange Act"), as applicable, and the applicable rules and
regulations of the Commission thereunder.
The Registration Statement was filed on Form S-3 under the
Act and, accordingly, the Prospectus does not necessarily
contain a current description of the Company's business and
affairs, since Form S-3 provides for the incorporation by
reference of certain documents filed with the Commission which
contain descriptions as of various dates. We participated in
conferences with counsel for, and representatives of, the
Company in connection with the preparation of the Registration
Statement and Prospectus
-3-
and we have reviewed the Incorporated Documents. In connection
with our participation in the preparation of the Registration
Statement and the Prospectus, we have not independently verified
the accuracy, completeness or fairness of the statements
contained therein or in the Incorporated Documents, and the
limitations inherent in the review made by us and the knowledge
available to us are such that we are unable to assume, and we do
not assume, any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration
Statement, the Prospectus or the Incorporated Documents, except
as otherwise specifically stated herein. None of the foregoing
disclosed to us any information which gave us reason to believe
that the Registration Statement or the Incorporated Documents,
considered as a whole on the effective date of the Registration
Statement, contained or contain any untrue statement of a
material fact or omitted or omit to state a material fact
required to be stated therein or necessary in order to make the
statements therein not misleading or that the Prospectus and the
Incorporated Documents, considered as a whole on the date
hereof, contain any untrue statement of a material fact or omit
to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under
which they were made, not misleading. We express no opinion as
to any document filed by the Company under the Exchange Act,
whether prior or subsequent to such effective date, except to
the extent that such documents are Incorporated Documents read
together with the Registration Statement or the Prospectus and
considered as a whole, nor do we express any opinion as to the
financial statements or other financial data included in or
omitted from, or incorporated by reference in the Registration
Statement, the Prospectus or the Incorporated Documents.
We express no opinion as to matters governed by any laws
other than the laws of the State of New York, the Federal laws of
the United States of America and, to the extent that the
foregoing opinions involve the laws of the States of Delaware,
Arkansas, New Mexico, Oklahoma and Texas, in reliance upon the
opinion of even date herewith of Richard M. Cahill, Vice
President-General Counsel of the Company, the laws of the States
of Delaware, Arkansas, New Mexico, Oklahoma and Texas.
The opinions contained herein are rendered to you and are
solely for your benefit and the benefit of the Purchasers
represented by you in connection with the transaction
contemplated by the Purchase Agreement. These opinions may not
be relied upon by you or such other person, firm or corporation
for any purpose without our prior written consent.
Very truly yours,
MILBANK, TWEED, HADLEY &
McCLOY
SW:S-3:38
EXHIBIT C
LETTER OF INDEPENDENT PUBLIC ACCOUNTANTS
The letter of independent public accountants for the
Company to be delivered pursuant to Article IV, paragraph (D) of
the document entitled Standard Purchase Agreement Provisions,
December 1995 Edition, shall be to the effect that:
At the closing, the Purchasers shall have received such
number of copies as are necessary to provide one for each
Purchaser of a letter addressed to the Company and satisfactory
to the Purchasers or the Representative and counsel to the
Purchasers, dated as of the Closing Date and encompassing the
performance of certain procedures described in the letter as of a
date not more than five business days prior to the Closing Date
(the "Cut-off Date"), from Arthur Andersen LLP, 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
audited by them and incorporated by reference in the Prospectus
comply as to form in all material respects with the applicable
accounting requirements of the Act, and the 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 and for the comparable period of the
preceding year; they have performed the procedures specified by
the American Institute of Certified Public Accountants for a
review of interim financial information as described in SAS No.
71, Interim Financial Information, on the latest available
unaudited interim financial statements prepared by the Company,
inquired of certain officials of the Company responsible for
financial and accounting matters, and read the minutes of the
Board of Directors and shareholders of the Company, all of which
procedures have been agreed to by the Purchasers, nothing has
come to their attention which caused them to believe that: (a)
any unaudited interim condensed 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 have been any changes in the capital stock or any increase
in the short-term indebtedness or long-term debt of the Company,
or any decreases in net assets, in each case as compared with the
amounts shown on the latest balance sheet incorporated by
reference in the Prospectus, (ii) for the period from the date of
the latest financial statements included or incorporated by
reference in the Prospectus to the specified date referred to in
the preceding clause (i), there were any decreases in operating
revenues, net operating income, net income or the Company's ratio
of earnings to fixed charges, in each case as compared with the
comparable period of the preceding year, (iii) as of the
-2-
Cut-off Date of such letter there have been any material changes
in the capital stock or any material increases in the debt of
the Company, or any material decreases in net assets, in each
case as compared with amounts shown in the latest balance sheet
included or incorporated by reference in the Prospectus, and
(iv) for the period from the date of the latest available
interim financial statements referred to in clause (b)(i) above
to the Cut-off Date, there were any material decreases in
operating revenues, net operating income or net income, in each
case as compared with the comparable period of the preceding
year, except in all instances for changes or decreases which the
Prospectus discloses have occurred or may occur or as disclosed
in such letter and except for changes occasioned by the
declaration and payment of dividends on the stock of the Company
or occasioned by sinking fund payments made on the debt
securities of the Company, and (3) that they have performed the
following additional procedures with respect to the ratios of
earnings to fixed charges included or incorporated by reference
in the Prospectus: (i) compared the amounts used in the
computation of such ratios with the amounts included in the
financial statements incorporated by reference in the Prospectus
and noted agreement in all material respects and (ii) recomputed
the ratios and noted agreement in all material respects.
SW:S-3:40
FIRST SUPPLEMENTAL INDENTURE, dated as of the 6th day of
December, 1995 (herein called the "First Supplemental
Indenture"), between GTE SOUTHWEST CORPORATION, a corporation
duly organized and existing under the laws of the State of
Delaware (hereinafter referred to as the "Company"), and THE BANK
OF NEW YORK, a banking corporation duly organized and existing
under the laws of the State of New York (hereinafter referred to
as the "Trustee") (as successor trustee to NationsBank of
Georgia, National Association), as Trustee under the Indenture
dated as of November 15, 1993, between the Company and the
Trustee (hereinafter referred to as the "Original Indenture").
Capitalized terms used in this First Supplemental Indenture and
not otherwise defined herein shall have the meanings set forth in
the Original Indenture.
WHEREAS, in accordance with Section 9.01(b) of the Original
Indenture, the Company and the Trustee may enter into
supplemental indentures to the Original Indenture without the
consent of the Securityholders to, among other things, 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
WHEREAS, in accordance with Section 9.01(c) of the Original
Indenture, the Company and the Trustee may enter into
supplemental indentures to the Original Indenture without the
consent of the Securityholders to cure any ambiguity or to
correct or supplement any provision which may be defective or
inconsistent with the Original Indenture or any supplemental
indenture, or to make such other provisions in regard to matters
or questions arising under the Original Indenture as shall not be
inconsistent with the provisions of the Original Indenture and
not adversely affect the interests of the holders of the
Securities of any series; and
WHEREAS, the Company desires to amend the Original Indenture
in accordance with Sections 9.01(b) and 9.01(c) and has requested
the Trustee to join with it in the execution and delivery of this
First Supplemental Indenture; all requirements necessary to make
this First Supplemental Indenture a valid instrument, in
accordance with its terms, have been met and the execution and
delivery hereof have been in all respects duly authorized;
NOW, THEREFORE, for good and valuable consideration the
sufficiency of which is hereby recognized, the Company covenants
and agrees with the Trustee as follows:
ARTICLE ONE
AMENDMENTS TO TERMS OF THE INDENTURE
Section 1.01 Regular Record Date. The Company and Trustee
hereby amend the sixth paragraph of Section 2.03 of the Original
Indenture in its entirety pursuant to Section 9.01(c) of the
Original Indenture for the benefit of all Securityholders, to
read as follows:
"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
-2-
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
first day of 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."
Section 1.02 Covenants against Prior Liens. The Company
and Trustee hereby amend clauses (2), (4) and (5) of Section 4.05
of the Original Indenture in their entirety, pursuant to Sections
9.01(b) and 9.01(c) of the Original Indenture for the benefit of
all Securityholders, to read as follows:
"(2) The replacement, extension or renewal of any such
mortgage, lien, pledge, security interest or other
encumbrance, or of any such agreement, permitted by the
foregoing clause (1), or the replacement, extension or
renewal (without increase in principal amount or extension
of final maturity date) of the indebtedness secured
thereby;"
"(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"
Section 1.03 Merger or Consolidation. The Company and the
Trustee hereby amend Section 4.06 of the Original Indenture in
its entirety, pursuant to Section 9.01(c) of the Original
Indenture for the benefit of all Securityholders, to read as
follows:
"The Company will not, while any of the Securities remain
outstanding, consolidate with, or merge into, or merge into
itself, or sell or convey all or substantially all of its
property to, any other Company unless the provisions of
Article Ten hereof are complied with.
If upon any such consolidation or merger, or sale or
conveyance any of the property of the Company owned by the
Company prior thereto would thereupon become subject to any
mortgage, security interest, pledge or lien, the Company,
prior to such consolidation, merger, sale or conveyance,
will secure the outstanding Securities, or cause the same to
be secured, equally and ratably with the other indebtedness
or obligations secured by such mortgage, security 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
-3-
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."
Section 1.04 Notice of Default. The Company and Trustee
hereby amend the first paragraph of Section 6.07 of the Original
Indenture in its entirety, pursuant to Section 9.01(c) of the
Original Indenture for the benefit of all Securityholders, to
read as follows:
"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 fund 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 that series no notice shall be given until
at least 30 days after the occurrence thereof."
ARTICLE TWO
MISCELLANEOUS
Section 2.01 Execution of Supplemental Indenture. This
First Supplemental Indenture is executed and shall be construed
as an indenture supplemental to the Original Indenture and, as
provided in the Original Indenture, this First Supplemental
Indenture forms a part thereof.
Section 2.02 Conflict With Trust Indenture Act. If and to
the extent that any provision hereof 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 2.03 Successors and Assigns. All covenants and
agreements in this First Supplemental Indenture by the Company
shall bind its successors and assigns, whether so expressed or
not.
Section 2.04 Separability Clause. In case any one or more
of the provisions contained in this First Supplemental Indenture,
the Original 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 First Supplemental
Indenture, the Original Indenture or of such Securities, but this
First Supplemental Indenture, the Original Indenture and such
Securities shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or
therein.
-4-
Section 2.05 Benefits of First Supplemental Indenture.
Nothing in this First Supplemental Indenture or in the Original
Indenture, express or implied, shall give to any person, other
than the parties hereto and their successors hereunder and the
Securityholders (to the extent specified herein or therein), any
benefit or any legal or equitable right, remedy or claim under
this First Supplemental Indenture.
Section 2.06 Governing Law. This First Supplemental
Indenture 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 2.07 Execution and Counterparts. This First
Supplemental 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.
-5-
IN WITNESS WHEREOF, the parties hereto have caused this
First Supplemental 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 SOUTHWEST INCORPORATED
By ______________________
Attest:
By _______________________
Secretary
THE BANK OF NEW YORK
as Trustee
By _______________________
Attest:
By _______________________
SW:SupInd:46
Exhibit
4.3
GTE SOUTHWEST INCORPORATED
BOARD OF DIRECTORS' RESOLUTION
RESOLVED:
(1) GTE Southwest Incorporated (the "Company") shall create
and issue $___,000,000 aggregate principal amount of its
debentures, consisting of $___,000,000 aggregate principal
amount of debentures designated as the "GTE Southwest
Incorporated _____% Debentures, Series _, Due ____" and
$___,000,000 aggregate principal amount of debentures designated
as the "GTE Southwest Incorporated ____% Debentures, Series _,
Due ____" (collectively, the "New Debentures"), with the terms
set forth in the proposal of the purchasers and the Indenture
dated as of November 15, 1993 as amended and supplemented by the
First Supplemental Indenture dated as of December 6, 1995 (as
amended and supplemented, the "Indenture"), between the Company
and The Bank of New York, as successor trustee to NationsBank of
Georgia, National Association ("Trustee"), to wit:
(a) The Series _ Debentures shall
mature on __________________ and the Series _ Debentures
will mature on __________________.
(b) The New Debentures shall bear
interest from ____________, 199_, until the principal
thereof becomes due and payable at the rate of _____% per
annum, payable semi-annually on ____________ and
____________ in each year commencing __________, 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 the New 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 Borough of Manhattan, City and State of New York;
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 New Debentures shall mean the
____________ or ____________, as the case may be, next
preceding such interest payment date, whether or not such
date is a business day.
(c) [The New Debentures will not
be redeemable prior to maturity.]
OR
[The New Debentures will not be redeemable prior to
________. Thereafter, the New Debentures will be redeemable
on not less than 30 nor more than 60 days' notice given as
provided in the Indenture, as a whole or from time to time
in part, at the option of the Company at the redemption
prices set forth below. The "initial regular redemption
price" will be the initial public offering price as defined
below plus the rate of interest on the New Debentures. The
redemption price during the twelve month period beginning
________________ and during the twelve month periods
beginning on each ____________ thereafter through the twelve
month period ended ________________ will be determined by
reducing the initial regular redemption price by an amount
determined by
-2-
multiplying (a) 1/_ of the amount by which such initial
regular redemption price exceeds 100% by (b) the number of
such full twelve month periods which shall have elapsed
between ________________ and the date fixed for redemption;
and thereafter the redemption prices during the twelve month
periods beginning ________________ shall be 100%; provided,
however, that all such prices will be specified to the
nearest 0.01% or if there is no nearest 0.01%, then to the
next higher 0.01%.
For the purpose of determining the redemption prices of
the New Debentures, the initial public offering price of the
New Debentures shall be the price, expressed in percentage
of principal amount (exclusive of accrued interest), at
which the New Debentures are to be initially offered for
sale to the public; if there is not a public offering of the
New Debentures, the initial public offering price of the New
Debentures shall be deemed to be the price, expressed in
percentage of principal amount (exclusive of accrued
interest), to be paid to the Company by the Purchasers.]
(d) The Series _ Debentures and the Trustee's Certificate
of Authentication to be endorsed thereon are to be
substantially in the following form:
-3-
(FORM OF FACE OF DEBENTURE)
No. _____________ $ _____________
GTE Southwest Incorporated
____% Debentures, Series _, Due ____
GTE Southwest Incorporated, a corporation duly organized and
existing under the laws of the State of Delaware (herein referred
to as the "Company"), for value received, hereby promises to pay
to _______________ or registered assigns, the principal sum of
__________________ Dollars on __________________ and to pay
interest on said principal sum from __________________, or from
the most recent interest payment date to which interest has been
paid or duly provided for, semi-annually on _________ and
____________ in each year, commencing ____________, 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 __________ or __________, 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 Borough of Manhattan,
City and State of New York 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.
-4-
IN WITNESS WHEREOF, the Company has caused this instrument
to be executed.
Dated _______________________
GTE SOUTHWEST INCORPORATED
By __________________________
President
Attest:
By __________________________
Secretary
(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 Bank of New York
as Trustee, Authenticating Agent and
Security Registrar
By __________________________
Authorized Signatory
(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 November 15, 1993,
duly executed and delivered between the Company and The Bank of
New York, a banking corporation organized and existing under the
laws of the State of New York, as successor trustee to
NationsBank of Georgia, National Association (herein referred to
as the "Trustee") (said Indenture as amended and supplemented by
the First Supplemental Indenture dated as of December 6, 1995 is
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 $___,000,000.
-5-
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
Borough of Manhattan, City and State of New York, 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.]
OR
[The Debentures may not be redeemed prior to ________________.
The Debentures may be redeemed on not less than 30 nor more than
60 days' prior notice given as provided in the Indenture, as a
whole or from time to time in part, at the option of the Company,
on any date or dates on or after ______________, and prior to
maturity, at the applicable percentage of the principal amount
thereof to be redeemed as set forth below under the heading
"Redemption Price" during the respective twelve month periods
beginning ____ of the years shown below:
-6-
Year Redemption Price
____ ________________
%
together, in each case, with accrued interest 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).]
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 Borough of Manhattan,
City and State of New York, 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 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.
(e) The Series _ Debentures and
the Trustee's Certificate of Authentication to be endorsed
thereon are to be substantially in the following form:
-7-
(FORM OF FACE OF DEBENTURE)
No. _____________ $ _____________
GTE Southwest Incorporated
____% Debentures, Series _, Due ____
GTE Southwest Incorporated, a corporation duly organized and
existing under the laws of the State of Delaware (herein referred
to as the "Company"), for value received, hereby promises to pay
to _______________ or registered assigns, the principal sum of
_____________________ Dollars on _______________ and to pay
interest on said principal sum from _______________, or from the
most recent interest payment date to which interest has been paid
or duly provided for, semi-annually on _______________ and
_______________ in each year, commencing ______________, 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 ________ or
_______________, 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 Borough of Manhattan, City and State of New York,
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.
-8-
IN WITNESS WHEREOF, the Company has caused this instrument
to be executed.
Dated _______________________
GTE SOUTHWEST INCORPORATED
By __________________________
President
Attest:
By __________________________
Secretary
(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 Bank of New York
as Trustee, Authenticating Agent and
Security Registrar
By __________________________
Authorized Signatory
(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 November 15, 1993,
duly executed and delivered between the Company and The Bank of
New York, a banking corporation organized and existing under the
laws of the State of New York, as successor trustee to
NationsBank of Georgia, National Association (herein referred to
as the "Trustee") (said Indenture as amended and supplemented by
the First Supplemental Indenture dated as of December 6, 1995 is
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 $___,000,000.
-9-
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
Borough of Manhattan, City and State of New York, 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.]
OR
[The Debentures may not be redeemed prior to _____________. The
Debentures may be redeemed on not less than 30 nor more than 60
days' prior notice given as provided in the Indenture, as a whole
or from time to time in part, at the option of the Company, on
any date or dates on or after ______________, and prior to
maturity, at the applicable percentage of the principal amount
thereof to be redeemed as set forth below under the heading
"Redemption Price" during the respective twelve month periods
beginning ____ of the years
-10-
shown below:
Year Redemption Price
____ ________________
%
together, in each case, with accrued interest 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).]
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 Borough of Manhattan,
City and State of New York, 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 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 Bank of New York is hereby designated
and created as the agency of the Company in the Borough of
Manhattan, City and State of New York, at which (i) both the
principal and the interest on the New Debentures are payable and
notices, presentations and demands to or upon the Company in
respect of the New Debentures may be given or made, (ii) the New
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 New Debentures shall be kept;
-11-
(3) The office of The Bank of New York is hereby designated
and created as Security Registrar of the Company in the Borough
of Manhattan, City and State of New York, at which (i) the
Company shall register the New Debentures, (ii) the New
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 New Debentures shall be kept;
(4) The New Debentures authorized at this meeting shall be
in substantially the forms and shall have the characteristics
provided in the Indenture, and the forms of the New Debentures of
each 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
New Debentures (the "Registration Statement"), reflecting the
terms of the New Debentures approved hereby.
(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 the New Debentures as
required by Section 2.01 of the Indenture.
(3) The President or any Vice President is hereby
authorized and directed to execute $____,000,000 aggregate
principal amount of New 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 New Debentures,
cease to be such an officer prior to their issuance, the New
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 Katherine J. Harless, President, and the
facsimile signature of Charles J. Somes, Secretary, are hereby
expressly approved and adopted;
(4) The officers are hereby authorized and directed to
cause the New 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 New 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 New Debentures;
-12-
(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 New
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 New
Debentures at the price and upon the terms and conditions set
forth in the Purchase Agreement covering the sale of the New
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.
SW:S-3:58
Exhibit 5
RICHARD M. CAHILL, ESQ.
Vice President - General Counsel
GTE Southwest Incorporated
600 Hidden Ridge
Irving, Texas 75038
(214) 718-6304
December 6, 1995
GTE Southwest Incorporated
600 Hidden Ridge
Irving, Texas 75038
Gentlemen:
I have examined a copy of the Registration Statement of GTE
Southwest 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
"Debentures"). I have also examined a copy of the Company's
Restated Certificate 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 Debentures.
It is my opinion that subject to any applicable regulatory
approvals, the 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
"Certain Legal Matters" 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,
Richard M. Cahill, Esq.
SW:S-3:60
EXHIBIT
12.1
GTE SOUTHWEST INCORPORATED
STATEMENTS OF THE RATIO OF EARNINGS TO FIXED CHARGES
(Thousands of Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended Years
Ended December 31
September 30, September 30,
1995(a) 1995 1994(b) 1994
1993(c)
<C> <C> <C> <C> <C>
Net Earnings Available for
Fixed Charges:
Income before extra-
ordinary charge $112,536 $126,955 $108,722 $123,386$124,609
Add -
Income tax expense
(benefit) 56,836 64,180 53,097 60,354 38,139
Fixed charges 45,690 45,690 60,802 60,802 78,202
________ ________ ________ _______ _______
Adjusted earnings $215,062 $236,825 $222,621 $244,542$240,950
Fixed Charges:
Interest expense $ 42,123 $ 42,123 $ 56,499 $ 56,499$ 73,874
Portion of rent expense
representing interest3,567 3,567 4,303 4,303 4,328
________ ________ ________ _______ _______
Adjusted fixed charges$ 45,690$ 45,690$ 60,802$ 60,802$ 78,202
Ratio of Earnings to
Fixed Charges 4.71 5.18 3.66 4.02
3.08
Years Ended December 31, (cont'd.)
1993 1992 1991 1990
<C> <C> <C> <C>
Net Earnings Available for
Fixed Charges:
Income before extra-
ordinary charge $12,209 $147,379 $101,131 $110,705
Add -
Income tax expense
(benefit) (30,661) 72,720 24,757 31,245
Fixed charges 78,202 80,938 83,524 78,561
_______ ________ ________ _______
Adjusted earnings $59,750 $301,037 $209,412 $220,511
Fixed Charges:
Interest expense $73,874 $ 76,177 $ 79,284 $ 73,894
Portion of rent expense
representing interest4,328 4,761 4,240 4,667
_______ ________ ________ _______
Adjusted fixed charges$78,202$ 80,938$ 83,524 $ 78,561
Ratio of Earnings to
Fixed Charges 0.76 3.72 2.51 2.81
(a)Results for the nine months ended September 30, 1995 include
after-tax gains of approximately $14,000,000 related to the
sale of the Company's unconsolidated investment in
Metropolitan Houston Paging Service, Inc. and non-strategic
local exchanges in Texas.
(b)Results for 1994 include an after-tax gain of approximately
$15,000,000 related to the sale of non-strategic local
exchanges in Oklahoma.
(c)Results for 1993 include an after-tax restructuring charge of
approximately $106,000,000 for the implementation of a re-
engineering plan and a one-time, after-tax charge of
approximately $6,000,000 related to the enhanced early
retirement and voluntary separation programs offered to
eligible employees in 1993. This caused earnings to be
inadequate to cover fixed charges by approximately
$19,000,000 and resulted in the ratio of earnings to fixed
charges declining to .76.
</TABLE>
EXHIBIT
12.2
GTE SOUTHWEST INCORPORATED
PRO FORMA COMBINED STATEMENTS OF THE RATIO OF EARNINGS TO FIXED
CHARGES(a)
(Thousands of Dollars)
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Nine Months
Ended Ended Years
Ended December 31
September 30, September 30,
1995(b) 1995 1994(c) 1994
1993(d)
<C> <C> <C> <C> <C>
Net Earnings Available for
Fixed Charges:
Income before extra-
ordinary charge $135,656 $150,075 $144,762 $184,528$171,814
Add-Income tax expense
(benefit) 72,742 80,086 71,146 95,068 61,684
Fixed charges 53,190 53,190 70,761 70,761 91,107
________ ________ ________ _______ _______
Adjusted earnings $261,588 $283,351 $286,669 $350,357$324,605
Fixed Charges:
Interest expense $ 49,309 $ 49,309 $ 65,913 $ 65,913$ 85,044
Portion of rent expense
representing interest3,881 3,881 4,848 4,848 6,063
________ ________ ________ _______ _______
Adjusted fixed charges$ 53,190$ 53,190$ 70,761 $ 70,761$ 91,107
Pro Forma Combined Ratio
of Earnings to Fixed Charges 4.92 5.33 4.05
4.95 3.56
Years Ended December 31, (cont'd.)
1993 1992 1991 1990
<C> <C> <C> <C>
Net Earnings Available for
Fixed Charges:
Income before extra-
ordinary charge $ 55,373 $190,759 $141,009 $148,463
Add-Income tax expense
(benefit) (12,731) 93,692 38,487 42,358
Fixed charges 91,107 93,355 98,968 96,987
________ ________ ________ _______
Adjusted earnings$133,749 $377,806 $278,464 $287,808
Fixed Charges:
Interest expense $ 85,044 $ 87,561 $ 93,761 $ 90,054
Portion of rent expense
representing interest6,063 5,794 5,207 6,933
________ ________ ________ _______
Adjusted fixed charges$ 91,107$ 93,355$ 98,968$ 96,987
Pro Forma Combined Ratio
of Earnings to Fixed Charges 1.47 4.05 2.81 2.97
(a)Represents the pro forma combined ratios of the Company as if
the merger of Contel of Texas, Inc. and Contel of the West,
Inc. with and into GTE Southwest Incorporated had been
consummated at the beginning of each period presented.
(b)Pro forma combined results for the nine months ended
September 30, 1995 include after-tax gains of approximately
$14,000,000 related to the sale of the Company's
unconsolidated investment in Metropolitan Houston Paging
Service, Inc. and non-strategic local exchanges in Texas.
(c)Pro forma combined results for 1994 include after-tax gains
of approximately $40,000,000 related to the sale of non-
strategic local exchanges in Oklahoma and Arizona.
(d)Pro forma combined results for 1993 include an after-tax
restructuring charge of approximately $123,000,000 for the
implementation of a re-engineering plan, a one-time, after-
tax charge of approximately $6,000,000 related to the
enhanced early retirement and voluntary separation programs
offered to eligible employees in 1993, and an after-tax gain
of approximately $13,000,000 related to Contel of the West,
Inc.'s sale of non-strategic local exchanges in Utah.
SW:S-3:65
</TABLE>
_________________________________________________________________
_____________
Exhibit 25
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 BANK OF NEW YORK
(Exact name of trustee as specified in its
charter)
New York 13-5160382
(State of incorporation (I.R.S.
employer
if not a U.S. national bank)
identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
___________________
GTE SOUTHWEST INCORPORATED
(Exact name of obligor as specified in its
charter)
Delaware 75-0573444
(State or other jurisdiction of (I.R.S
employer
incorporation or organization)
identification no.)
600 Hidden Ridge
Irving, Texas 75038
(Address of principal executive offices) (Zip code)
___________________
Debentures
(Title of the indenture securities)
_________________________________________________________________
_____________
-2-
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.
_________________________________________________________________
________
Name
Address
_________________________________________________________________
________
Superintendent of Banks of the State of 2 Rector Street,
New York,
New York N.Y. 10006, and
Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty
Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C.
20429
New York Clearing House Association New York, New
York
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
2. Affiliations with Obligor.
If the obligor is an affiliate of the trustee, describe each
such affiliation.
None. (See Note on page 3.)
16.List of Exhibits.
Exhibits identified in parentheses below, on file with the
Commission, are incorporated herein by reference as an
exhibit hereto, pursuant to Rule 7a-29 under the Trust
Indenture Act of 1939 (the "Act") and Rule 24 of the
Commission's Rules of Practice.
1. A copy of the Organization Certificate of The Bank of
New York (formerly Irving Trust Company) as now in effect,
which contains the authority to commence business and a
grant of powers to exercise corporate trust powers.
(Exhibit 1 to Amendment No. 1 to Form T-1 filed with
Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672
and Exhibit 1 to Form T-1 filed with Registration
Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee.
(Exhibit 4 to Form T-1 filed with Registration Statement
No. 33-31019.)
6. The consent of the Trustee required by Section 321(b)
of the Act. (Exhibit 6 to Form T-1 filed with
Registration Statement No. 33-44051.)
7. A copy of the latest report of condition of the
Trustee published pursuant to law or to the requirements
of its supervising or examining authority.
-3-
NOTE
Inasmuch as this Form T-1 is filed prior to the ascertainment by
the Trustee of all facts on which to base a responsive answer to
Item 2, the answer to said Item is based on incomplete
information.
Item 2 may, however, be considered as correct unless amended by
an amendment to this Form T-1.
-4-
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The
Bank of New York, a corporation organized and existing under the
laws of the State of New York, has duly caused this statement of
eligibility to be signed on its behalf by the undersigned,
thereunto duly authorized, all in The City of New York, and State
of New York, on the 22nd day of November, 1995.
THE BANK OF NEW YORK
By: /S/ VIVIAN
GEORGES
Name: VIVIAN
GEORGES
Title: ASSISTANT
VICE PRESIDENT
-5-
EXHIBIT 7 TO FORM T-1
Consolidated Report of Condition
of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries
a member of the Federal Reserve System at the close of business
June 30, 1995, published in accordance with a call made by the
Federal Reserve Bank of the District pursuant to the provisions
of the Federal Reserve Act.
Dollar Amounts
Statement of Resources and Liabilities in
Thousands
ASSETS
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin.....
3,025,419
Interest-bearing balances..............................
881,413
Securities:
Held-to-maturity securities............................
1,242,368
Available-for-sale securities..........................
1,774,079
Federal funds sold in domestic offices of the bank ......
5,503,445
Securities purchased under agreements to resell..........
200,634
Loans and lease financing receivables:
Loans and leases, net of unearned income.............26,599,533
LESS: Allowance for loan and lease losses............ 516,283
Loans and leases, net of unearned income,
and allowance..........................................
26,083,250
Assets held in trading accounts..........................
1,455,639
Premises and fixed assets (including capitalized leases)
612,547
Other real estate owned..................................
79,667
Investments in unconsolidated subsidiaries and
associated companies...................................
198,737
Customers' liability to this bank on acceptances
outstanding............................................
1,111,464
Intangible assets........................................
105,263
Other assets.............................................
1,237,264
Total assets.............................................
$43,511,189
-6-
EXHIBIT 7 TO FORM T-1
LIABILITIES
Deposits:
In domestic offices................................ 19,233,885
Noninterest-bearing................................7,677,954
Interest-bearing...................................11,555,931
In foreign offices, Edge and Agreement subsidiaries,
and IBFs............................................ 12,641,676
Noninterest-bearing...................................72,479
Interest-bearing......................................12,569,197
Federal funds purchased and securities sold under
agreements to repurchase in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds purchased............................. 1,747,659
Securities sold under agreements to repurchase...... 73,553
Demand notes issued to the U.S. Treasury.............. 300,000
Trading liabilities................................... 738,317
Other borrowed money:
With original maturity of one year or less.......... 1,586,443
With original maturity of more than one year........ 220,877
Bank's liability on acceptances executed and
outstanding......................................... 1,113,102
Subordinated notes and debentures..................... 1,053,860
Other liabilities..................................... 1,489,252
Total liabilities..................................... 40,198,624
EQUITY CAPITAL
Common stock.......................................... 942,284
Surplus............................................... 525,666
Undivided profits and capital reserves................ 1,849,221
Net unrealized holding gains (losses) on available-
for-sale securities................................. ( 6
62)
Cumulative foreign currency translation adjustments... ( 3,9
44)
Total equity capital.................................. 3,312,565
Total liabilities and equity capital.................. $43,511,1
89
I, Robert E. Keilman, Senior Vice President and Comptroller of
the above-named bank do hereby declare that this Report of
Condition has been prepared in conformance with the instructions
issued by the Board of Governors of the Federal Reserve System
and is true to the best of my knowledge and belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us
and to the best of our knowledge and belief has been prepared in
conformance with the instructions issued by the Board of
Governors of the Federal Reserve System and is true and correct.
J. Carter Bacot
Thomas A. Renyi Directors
Samuel F. Chevalier
SW:S-3:73
Exhibit 26
GTE SOUTHWEST INCORPORATED
Invitation For Bids For the Purchase of
$____,000,000 _____% Debentures, Series _, Due ____
GTE SOUTHWEST INCORPORATED (the "Company") is inviting bids,
subject to the terms and conditions stated herein, for the
purchase from it of $___,000,000 aggregate principal amount of
its ____% Debentures, Series _, Due ___ (the "Debentures").
1. Information Respecting the Company and the Debentures.
Prospective bidders may examine, at the office of the
Secretary of the Company, 600 Hidden Ridge, Irving, Texas 75038,
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 Restated Certificate of Incorporation of the
Company, as amended;
(c) a copy of the Indenture dated as of November 15,
1993 and the First Supplemental Indenture dated as of
December 6, 1995 (the Indenture as so supplemented is 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 (December 1995
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 Restated Certificate 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 Irving and
Stamford.
-2-
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.
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 ____________________ (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
-3-
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.
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, 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 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.
-4-
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.
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.: Robert W. Mullen, Jr., 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 SOUTHWEST INCORPORATED
_____________, 199_
SW:S-3:74
EXHIBIT A
GTE SOUTHWEST INCORPORATED
(the "Company")
CONFIRMATION OF BID FOR
$___,000,000 ____% Debentures, Series _, Due ____
(the "Debentures")
TERMS
Maturity: ________________.
Interest Payable: Semi-annually on _____ and _____, commencing
______,
____.
Redemption Provisions:
[The Debentures will not be redeemable prior to maturity.]
OR
[The New Debentures will not be redeemable prior to _____.
Thereafter, the New Debentures will be redeemable on not less
than 30 nor more than 60 days' notice given as provided in the
Indenture, as a whole or from time to time in part, at the option
of the Company at the redemption prices set forth below. The
"initial regular redemption price" will be the initial public
offering price as defined below plus the rate of interest on the
Debentures. The redemption price during the twelve month period
beginning _______ and during the twelve month periods beginning
on each ___________ thereafter through the twelve month period
ended __________ will be determined by reducing the initial
regular redemption price by an amount determined by multiplying
(a) 1/_ of the amount by which such initial regular redemption
price exceeds 100% by (b) the number of such full twelve month
periods which shall have elapsed between _________ and the date
fixed for redemption; and thereafter the redemption prices during
the twelve month periods beginning _________ shall be 100%;
provided, however, that all such prices will be specified to the
nearest 0.01% or if there is no nearest 0.01%, then to the next
higher 0.01%.
For the purpose of determining the redemption prices of the
Debentures, the initial public offering price of the Debentures
shall be the price, expressed in percentage of principal amount
(exclusive of accrued interest), at which the Debentures are to
be initially offered for sale to the public; if there is not a
public offering of the Debentures, the initial public offering
price of the Debentures shall be deemed to be the price,
expressed in percentage of principal amount (exclusive of accrued
interest), to be paid to the Company by the Purchasers.]
NAME OF BIDDER:
_________________________________________________________
TELEPHONE NUMBER TO BE USED TO CALL IN BID:
_____________________________
-2-
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 _________________.
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 _______________, 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
____________, ____, or such later time and/or date as the
Company may specify (the "Bid Time").
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 203-965-3746 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: __________________ at 10:00 A.M., New York City
time.
-3-
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)
SW:S-3:77
