Registration No. 33-
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM S-3
REGISTRATION STATEMENT
Under
THE SECURITIES ACT OF 1933
GTE NORTHWEST INCORPORATED
(Exact name of registrant as specified in its charter)
WASHINGTON 91-0466810
(State of Incorporation) (I.R.S. Employer
Identification No.)
1800 41st Street, Everett, Washington 98201
(206) 261-5321
(Address and telephone number of principal executive offices)
_________
DAVID S. KAUFFMAN, ESQ. RICHARD E. POTTER,
ESQ.
GTE Service Corporation GTE Northwest
Incorporated
One Stamford Forum 1800 41st Street
Stamford, Connecticut 06904 Everett, Washington
98201
(203) 965-2986 (206) 261-5006
(Names, addresses and telephone numbers of agents for
service)
_________
Copies to: George J. Forsyth, Esq., Milbank, Tweed, Hadley
& McCloy,
1 Chase Manhattan Plaza, New York, New York
10005.
Approximate date of commencement of proposed sale to the
public: 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]
_________
CALCULATION OF REGISTRATION
FEE
Proposed Proposed
Maximum Maximum
Title of Each Class Amount Offering Aggregate
Amount of
of Securities To Be Price Per Offering
Registration
To Be Registered Registered Unit
Price Fee*
Debentures $300,000,000 101% $303,000,000
$104,482.76
* Registration fee is calculated pursuant to Rule 457(a) under
the Securities
Act of 1933.
The registrant hereby amends this Registration Statement on
such date or dates as may be necessary to delay its effective
date until the registrant shall file a further amendment which
specifically states that this Registration Statement shall
thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933 or until the Registration Statement
shall become effective on such date as the Commission, acting
pursuant to said Section 8(a), may determine.
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR
AMENDMENT. A REGISTRATION STATEMENT RELATING TO THESE SECURITIES
HAS BEEN FILED WITH THE SECURITIES AND EXCHANGE COMMISSION.
THESE SECURITIES MAY NOT BE SOLD NOR MAY OFFERS TO BUY BE
ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL
OR THE SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY
SALE OF THESE SECURITIES IN ANY STATE IN WHICH SUCH OFFER,
SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR TO REGISTRATION OR
QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED MARCH 31, 1994
GTE NORTHWEST INCORPORATED
DEBENTURES
________________
GTE Northwest 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 , 1994.
STATEMENT OF AVAILABLE INFORMATION
The Company is subject to the informational requirements of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
and, in accordance therewith, files reports and other information
with the Securities and Exchange Commission (the "SEC"). These
reports and other information can be inspected and copied at the
public reference facilities maintained by the SEC at 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, as well as at
the following Regional Offices: Seven World Trade Center, New
York, New York 10048 and 500 West Madison Street, Chicago,
Illinois 60661. Copies of such material can be obtained from the
public reference section of the SEC at its prescribed rates.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Annual Report on Form 10-K of the Company for the year ended
December 31, 1993 is incorporated herein by reference.
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
Washington in 1964 and, together with its wholly-owned
subsidiary, GTE West Coast Incorporated, provides communications
services in the states of Washington, Oregon, Idaho, California
and Montana. All of the common stock of the Company is owned by
GTE Corporation ("GTE"). The Company's principal executive
offices are located at 1800 41st Street, Everett, Washington
98201, telephone number (206) 261-5321.
On February 23, 1993, the Idaho properties of Contel of the West,
Inc., an indirect wholly-owned subsidiary of GTE, were purchased
by the Company for approximately $24,000,000 in cash. On
February 26, 1993, Contel of the Northwest, Inc., an indirect
wholly-owned subsidiary of GTE ("Contel Northwest"), was merged
into the Company (the "Merger"). In addition, holders of
approximately $34,400,000 of Contel Northwest's notes exchanged
such notes for an equivalent amount of the Company's first
mortgage bonds. The Merger was accounted for in a manner
consistent with a transfer of entities under common control which
is similar to that of a "pooling of interests." On December 31,
1993, the Company sold a small portion of its telephone plant in
service, materials and supplies and customers in the state of
Idaho (representing approximately 17,000, or approximately 1%, of
its access lines) to Citizens Utilities Company ("Citizens"). On
May 18, 1993, the Company entered into an agreement to sell all
of its local exchange properties in the state of Montana,
consisting primarily of property, plant and equipment
(representing approximately 7,600, or less than 1%, of its access
lines), to Citizens. The Company expects to complete this sale
in 1994.
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USE OF PROCEEDS
The net proceeds from the offering and sale of the New
Debentures, exclusive of accrued interest, will be applied toward
the repayment of short-term borrowings incurred (i) in connection
with the redemption on November 8, 1993 of Series S and Series X
of the Company's first mortgage bonds and the redemption on
November 15, 1993 of Series DD of the Company's first mortgage
bonds, as described below:
Original Outstanding Total
Principal
Interest Maturity Principal Amount Premium Paid
and Premium
Series Rate Date at Redemption at
Redemption at Redemption
S 9.250%02/01/00 $ 25,000,000 $ 477,500$ 25,477,500
X 9.375%07/01/08 50,000,000 2,265,000 52,265,000
DD 9.750%11/15/17 50,000,000 2,260,000 52,260,000
$125,000,000 $5,002,500$130,002,500
and (ii) for the purpose of financing the Company's construction
program. At December 31, 1993, the Company had short-term
borrowings of $188,550,000 at an annual average interest rate of
3.19%. The Company incurred $274,634,000 in construction costs
during 1993, principally for central office equipment, outside
plant and land and buildings. The Company's 1994 construction
budget is currently estimated at approximately $250,000,000.
RATIO OF EARNINGS TO FIXED CHARGES
Years Ended December 31
1993(a) 1992 1991 1990 1989
____________________________________
Ratio of Earnings to Fixed
Charges (Unaudited)(b)..... 1.32 4.32 3.39 4.21 4.56
___________
(a) Reflects increased operating expenses related to a one-time
restructuring charge for the implementation of a re-engineering
plan, the adoption, effective January 1, 1993, of Statement of
Financial Accounting Standards (SFAS) No. 106 "Employers'
Accounting for Postretirement Benefits Other than Pensions" on a
delayed recognition basis and a one-time charge associated with
enhanced early retirement and voluntary separation programs
completed during the second quarter of 1993. Excluding these
items, the ratio of earnings to fixed charges for the year ended
December 31, 1993 would have been 3.72.
(b) Computed as follows: (1) "earnings" have been calculated by
adding income taxes and fixed charges to income from continuing
operations; (2) "fixed charges" include interest expense and the
portion of rentals representing interest.
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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 April 1, 1994 (the "Indenture"), between the Company and
Bank of America National Trust and Savings Association, as
Trustee (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;
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(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) However, while the restriction in the
Indenture described above would not afford holders of the New
Debentures protection in the event of a highly leveraged
transaction in which unsecured indebtedness was incurred, the
issuance of most debt securities by the Company, including the
New Debentures, does require state regulatory approval (which may
or may not be granted). In addition, in the event of a highly
leveraged transaction in which secured indebtedness was incurred,
the above restriction would require the New Debentures to be
secured equally and ratably with such secured indebtedness,
subject to the exceptions described above. It is unlikely that a
leveraged buyout initiated or supported by the Company, the
management of the Company or an affiliate of either party would
occur, because all of the common stock of the Company is owned by
GTE, which has no intention of selling its ownership in the
Company.
Modifications of Indenture
The Indenture contains provisions permitting the Company and the
Trustee, with the consent of the holders of not less than a
majority in aggregate principal amount of the Debentures of any
series at the time outstanding and affected by such modification,
to modify the Indenture or any supplemental indenture affecting
that series of the Debentures or the rights of the holders of
that series of Debentures. However, no such modification shall
(i) extend the fixed maturity of any Debenture, or reduce the
principal amount thereof, or reduce the rate or extend the time
of payment of interest thereon, or reduce any premium payable
upon the redemption thereof, without the consent of the holder of
each Debenture so affected, or (ii) reduce the aforesaid
percentage of Debentures, the holders of which are required to
consent to any such supplemental indenture, without the consent
of each holder of Debentures then outstanding and affected
thereby. (SECTION 9.02)
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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)
Events of Default
The Indenture provides that the following described events
constitute "Events of Default" with respect to each series of the
Debentures thereunder: (a) failure for 30 business days to pay
interest on the Debentures of that series when due; (b) failure
to pay principal or premium, if any, on the Debentures of that
series when due, whether at maturity, upon redemption, by
declaration or otherwise, or to make any sinking fund payment
with respect to that series; (c) failure to observe or perform
any other covenant (other than those specifically relating to
another series) in the Indenture for 90 days after notice with
respect thereto; or (d) certain events in bankruptcy, insolvency
or reorganization. (SECTION 6.01)
The holders of a majority in aggregate outstanding principal
amount of any series of the Debentures have the right to direct
the time, method and place of conducting any proceeding for any
remedy available to the Trustee for that series. (SECTION 6.06)
The Trustee or the holders of not less than 25% in aggregate
outstanding principal amount of any particular series of the
Debentures may declare the principal due and payable immediately
on default with respect to such series, but the holders of a
majority in aggregate outstanding principal amount of such series
may rescind and annul such declaration and waive the default if
the default has been cured and a sum sufficient to pay all
matured installments of interest and principal and any premium
has been deposited with the Trustee. (SECTION 6.01)
The holders of a majority in aggregate outstanding principal
amount of any series of the Debentures may, on behalf of the
holders of all the Debentures of such series, waive any past
default except a default in the payment of principal, premium, if
any, or interest. (SECTION 6.06) The Company is required to
file annually with the Trustee a certificate as to whether or not
the Company is in compliance with all the conditions and
covenants under the Indenture. (SECTION 5.03)
Concerning the Trustee
The Trustee, prior to an Event of Default, undertakes to perform
only such duties as are specifically set forth in the Indenture
and, after the occurrence of an Event of Default, shall exercise
the same degree of care as a prudent individual would exercise in
the conduct of his own affairs. (SECTION 7.01) Subject to such
provision, the Trustee is under no obligation to exercise any of
the powers vested in it by the Indenture at the request of any
holders of Debentures, unless offered reasonable security or
indemnity by such security holders against the costs, expenses
and liabilities which might be incurred thereby. (SECTION 7.02)
The Trustee is not required to expend or risk its own funds or
incur personal financial liability in the performance of its
duties if the Trustee reasonably believes that repayment or
adequate indemnity is not reasonably assured to it. (SECTION
7.01)
The Company maintains a banking relationship with the Trustee.
The Trustee serves as trustee under the indenture pursuant to
which First Mortgage Bonds are outstanding.
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EXPERTS AND LEGAL OPINIONS
The financial statements and schedules included or incorporated
by reference in the Company's Annual Report on Form 10-K for the
year ended December 31, 1993 which is incorporated by reference
in this Prospectus, have been audited by Arthur Andersen & Co.,
independent public accountants, as indicated in their reports
with respect thereto, and are incorporated herein in reliance
upon the authority of said firm as experts in giving said
reports. Reference is made to said reports on financial
statements of the Company which include an explanatory paragraph
with respect to the 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.
The statements of law and legal conclusions under "The New
Debentures" have been reviewed by Kenneth K. Okel, Esq., Area
Vice President-General Counsel and Secretary of the Company, and
are included upon his authority as an expert. Certain legal
matters in connection with the New Debentures will be passed upon
for the Company by Mr. Okel, and 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.
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____________________________________________
_____________________________
No dealer, salesman or any other person has
been authorized to give any information or
to make any representations other than those GTE Northwest
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
Use of Proceeds...................... 3
Ratio of Earnings to Fixed Charges... 3
The New Debentures................... 4
Experts and Legal Opinions........... 7
Plan of Distribution................. 7
____________
, 1994
____________________________________________
_____________________________
NW:S-3:10
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 .......................... 5,000.00
3. Cost of printing and engraving........... 25,000.00
4. Accounting fees.......................... 13,000.00
5. Rating agencies' fees.................... 64,900.00
6. Miscellaneous............................ 7,617.24
$220,000.00
Item 15. Indemnification of Directors and Officers.
Pursuant to Section 23B.08.500 et seq. of the Revised Code
of Washington, under the Washington Business Corporation Act (the
"WBCA"), a corporation may indemnify its directors and officers
in cases involving conduct in an individual's official capacity
against liability incurred in connection with any proceeding to
which the director or officer was or is a party or is threatened
to be made a party; provided, however, the director or officer
has acted in good faith and in a manner reasonably believed to be
in the best interests of the corporation. With respect to any
criminal proceedings, the director or officer must have had no
reasonable cause to believe that his or her conduct was unlawful.
In actions by, or in the right of, a corporation or in any
proceeding involving an improper personal benefit to a director
or officer, no indemnification is available for expenses incurred
if a director or officer is adjudged liable. Indemnification
against reasonable expenses incurred is mandatory to the extent
the director or officer is wholly successful in defense of the
proceeding. In other cases, a determination that indemnification
is permissible must be made by the court conducting the
proceeding or by the corporation acting through its shareholders,
disinterested directors or special legal counsel.
The indemnification provided as set forth above is not
exclusive and a corporation may, under the WBCA, grant additional
rights to indemnification; provided, however, that such
indemnification may not limit the liability of directors or
officers (i) for acts or omissions that involve intentional
misconduct or a knowing violation of law, (ii) for acts or
omissions believed to be contrary to the best interests of the
corporation or its shareholders or that involve the absence of
good faith and (iii) for any transaction from which the director
or officer derived an improper personal benefit whether monetary
or otherwise.
As permitted by the WBCA, the Company's bylaws provide for
indemnifi-cation of directors and officers in accordance with the
foregoing standards, provided such persons have acted in
accordance with such standards. The Company also has insurance
policies, as permitted by the WBCA, on behalf of its directors
and officers against certain liabilities which might be incurred
by them in such capacities
Item 16. Exhibits.
See Exhibit Index on Page E-1.
II-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.
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;
(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 Everett, State of Washington, on the 30th day of
March, 1994.
GTE NORTHWEST INCORPORATED
(Registrant)
By: LARRY J. SPARROW
Larry J. Sparrow
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.
LARRY J. SPARROW )
)
Larry J. Sparrow President and Director)
(Principal Executive )
Officer) )
)
)
GERALD K. DINSMORE )
)
Gerald K. Dinsmore Senior Vice President )
- Finance and )
Planning ) March 30, 1994
(Principal Financial )
Officer) )
)
)
)
WILLIAM M. EDWARDS III )
)
William M. Edwards III Controller )
(Principal Accounting )
Officer) )
)
)
)
KENT B. FOSTER )
)
Kent B. Foster Director )
II-3
MICHAEL B. ESSTMAN )
)
Michael B. Esstman Director )
)
)
)
THOMAS W. WHITE )
)
Thomas W. White Director )
)
) March 30, 1994
)
GERALD K. DINSMORE )
)
Gerald K. Dinsmore Director )
)
)
)
RICHARD M. CAHILL )
)
Richard M. Cahill 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 28, 1994, included or
incorporated by reference in the Annual Report on Form 10-K of
GTE Northwest Incorporated for the year ended December 31, 1993,
and to the reference to our Firm under the caption "Experts and
Legal Opinions" in this Registration Statement.
ARTHUR ANDERSEN & CO.
ARTHUR ANDERSEN & CO.
Dallas, Texas
March 30, 1994
II-5
EXHIBIT INDEX
Exhibit
Number
1.1 - Form of Purchase Agreement, including Standard Purchase
Agreement Provisions (April, 1994 Edition).
2.1 - Agreement of Merger, dated February 26, 1993, between GTE
Northwest Incorporated and Contel of the Northwest, Inc.
(incorporated by reference to the Annual Report on Form 10-
K of GTE Northwest Incorporated for the Year Ended December
31, 1993).
4.1 - Form of Indenture between GTE Northwest Incorporated and
Bank of America National Trust and Savings Association, as
Trustee, dated as of April 1, 1994.
4.2 - Form of the Board Resolution under which the Debentures
being registered are to be issued.
5 - Opinion and consent of Kenneth K. Okel, Esq.
12 - Statement of the ratio of earnings to fixed charges.
23.1 - Consent of Arthur Andersen & Co. is included elsewhere in
this Registration Statement.
23.2 - Consent of Kenneth K. Okel, Esq. (contained in opinion
filed as Exhibit 5).
25 - Form T-1 Statement of Eligibility under the Trust
Indenture Act of 1939 of Bank of America National Trust and
Savings Association.
26 - Form of Invitation for Bids.
E-1
NW:S-3:16
GTE NORTHWEST INCORPORATED
PURCHASE AGREEMENT
GTE Northwest Incorporated, a Washington 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 (April, 1994 Edition) (the
"Standard Purchase Agreement Provisions") annexed hereto shall be
deemed to be a part of this Purchase Agreement to the same extent
as if such provisions had been set forth in full herein.
REDEMPTION PROVISIONS:
[The New Debentures will not be redeemable prior to
maturity.]
OR
[The redemption price applicable to redemptions to and
including _______ (the "initial regular redemption price") will
be the initial public offering price as defined below plus the
rate of interest on the New Debentures; the redemption price
during the twelve month period beginning _______ and during the
twelve month periods beginning on each ___________ thereafter
through the twelve month period ended __________ will be
determined by reducing the initial regular redemption price by an
amount determined by multiplying (a) 1/_ of the amount by which
such initial regular redemption price exceeds 100% by (b) the
number of such full twelve month periods which shall have elapsed
between _________ and the date fixed for redemption; and
thereafter the redemption prices during the twelve month periods
beginning _________ shall be 100%; provided, however, that all
such prices will be specified to the nearest 0.01% or if there is
no nearest 0.01%, then to the next higher 0.01%.
For the purpose of determining the redemption prices of the
New Debentures, the initial public offering price of the New
Debentures shall be the price, expressed in percentage of
principal amount (exclusive of accrued interest), at which the
New Debentures are to be initially offered for sale to the
public; if there is not a public offering of the New Debentures,
the initial public offering price of the New Debentures shall be
deemed to be the price, expressed in percentage of principal
amount (exclusive of accrued interest), to be paid to the Company
by the Purchasers.
-2-
None of the New Debentures may be called for redemption at
the option of the Company prior to _____________ if such
redemption is for the purpose or in anticipation of refunding any
New Debentures by the application, directly or indirectly, of
funds borrowed by the Company at an annual cost of money
(calculated in accordance with generally accepted financial
practice) less than the annual cost of money to the Company
resulting from the sale of the New Debentures to the Purchasers
(If Applicable)]
CLOSING:
The Purchasers agree to pay for the New Debentures in New
York Clearing House (next day) funds upon delivery of such New
Debentures at 10:00 A.M. (New York City time) on _____________
(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 NORTHWEST INCORPORATED
By___________________________
Title:
-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 NORTHWEST INCORPORATED
STANDARD PURCHASE AGREEMENT PROVISIONS
(April, 1994 Edition)
GTE Northwest Incorporated, a Washington 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
April 1, 1994 (the "Indenture"), between the Company and Bank of
America National Trust and Savings Association, as Trustee (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.
-2-
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 D and E 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.
III. CLOSING
The closing will be held at the office of GTE Service
Corporation, 5th Floor, One Stamford Forum, Stamford, Connecticut
06904 on the Closing Date. Concurrent with the delivery of the
New Debentures 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 by certified or official bank
check or checks in New York Clearing House (next day) funds,
payable to the Company or its order, at The Bank of New York,
Attention: Corporate Trust Department. Upon notification to the
Company of receipt of such check by The Bank of New York, such
check shall be deemed to be delivered at the closing. The New
Debentures shall be in the form of temporary or definitive fully-
registered New Debentures in denominations of One Thousand
Dollars ($1,000) or any integral multiple thereof, registered in
such names as the Purchasers or the Representative shall request
not less than three 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
_____________, 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) At the Closing Date, there shall be in full force and
effect an order or orders, satisfactory to counsel for the
Purchasers, of the Washington Utilities and Transportation
Commission, the Public Utility Commission of Oregon and of such
other regulatory authorities, if any, as may have jurisdiction
over the issue and sale of the New Debentures by the Company to
the Purchasers, authorizing such issue and sale as herein and in
the Registration Statement provided, and none of such orders
shall contain any conditions inconsistent with the provisions of
this Agreement or of the Registration Statement.
(C) The Purchasers or the Representative shall have
received on the Closing Date an opinion of Kenneth K. Okel, Esq.,
Area Vice President-General Counsel and Secretary of the Company,
dated the Closing Date, substantially in the form set forth in
Exhibit A hereto.
-3-
(D) The 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.
(E) The Purchasers or the Representative shall have
received on the Closing Date a letter from Arthur Andersen & Co.,
independent public accountants for the Company, dated as of a
date not more than five business days prior to the Closing Date,
to the effect set forth in Exhibit C hereto.
V. CONDITIONS TO COMPANY'S OBLIGATIONS
The obligations of the Company hereunder are subject to the
following conditions:
(A) The Registration Statement shall have become effective
and no stop order suspending the effectiveness of the
Registration Statement shall be in effect, and no proceedings for
such purpose shall be pending before or threatened by the
Commission.
(B) At the Closing Date, there shall be in full force and
effect an order or orders, satisfactory to the Company, of the
Washington Utilities and Transportation Commission, the Public
Utility Commission of Oregon and such other regulatory
authorities, if any, as may have jurisdiction over the issue and
sale of the New Debentures by the Company to the Purchasers.
(C) The Company shall have received on the Closing Date the
full purchase price of the New Debentures purchased hereunder.
VI. COVENANTS OF THE COMPANY
In further consideration of the agreements contained herein
of the Purchasers, the Company covenants to the several
Purchasers as follows:
(A) To furnish to the Purchasers or the Representative a
copy of the Registration Statement including materials, if any,
incorporated by reference therein and, during the period
mentioned in (D) 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) For a period of five years, unless all of the New
Debentures shall be sooner retired, to deliver to any Purchaser
who may so request, as soon as practicable after the end of each
fiscal year, a consolidated balance sheet of the Company as of
the end of such year and related consolidated statements of
income, reinvested earnings and changes in financial position for
such year, all as examined by independent public accountants, and
to deliver to any Purchaser upon request, as soon as practicable
after the end of each of the first three quarterly periods of
each year a Form 10-Q of the Company as filed with the
Commission.
(C) Before amending or supplementing the Registration
Statement or the Prospectus with respect to the New Debentures,
to furnish to any Purchaser or the Representative, and to counsel
for the Purchasers, a copy of each such proposed amendment or
supplement.
-4-
The covenants in Paragraphs (D) and (E) apply only to
Reselling Purchasers:
(D) If in the period after the first date of resale of the
New Debentures during which, in the opinion of counsel for the
Reselling 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.
(E) To use its best efforts to qualify the New Debentures
for offer and sale under the securities or Blue Sky laws of such
jurisdictions as the Purchasers or the Representative shall
reasonably request and to pay all expenses (including fees and
disbursements of counsel) in connection therewith and in
connection with the determination of the eligibility of the New
Debentures for investment under the laws of such jurisdictions as
the Purchasers or the Representative may designate; provided,
however, that the Company, in complying with the foregoing
provisions of this paragraph, shall not be required to qualify as
a foreign company or to register or qualify as a broker or dealer
in securities in any jurisdiction or to consent to service of
process in any jurisdiction other than with respect to claims
arising out of the offering or sale of the New Debentures, and
provided further that the Company shall not be required to
continue the qualification of the New Debentures beyond one year
from the date of the sale of the New Debentures.
VII. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to 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
-5-
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.
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
(D) of Article VI hereof, and as amended or supplemented if the
Company shall have furnished any amendments or supplements
thereto), or based upon any omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein not misleading, except
insofar as such losses, claims, damages or liabilities are based
upon any such untrue statement or omission or alleged untrue
statement or omission based upon information furnished to the
Company by any Reselling Purchaser 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
-6-
proceeding and shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any
indemnified party shall have the right to retain its own counsel,
but the fees and expenses of such counsel shall be at the expense
of such indemnified party unless the indemnifying party and the
indemnified party shall have mutually agreed to the retention of
such counsel. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent
but if settled with such consent or if there be a final judgment
for the plaintiff, the indemnifying party agrees to indemnify the
indemnified party from and against any loss or liability by
reason of such settlement or judgment.
If the indemnification provided for in this Article VIII is
unavailable to an indemnified party under the first or second
paragraph hereof or insufficient in respect of any losses,
claims, damages or liabilities referred to therein, then each
indemnifying party, in lieu of indemnifying such indemnified
party shall contribute to the amount paid or payable by such
indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect
the relative benefits received by the Company on the one hand and
the Reselling 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
-7-
Reselling Purchaser or on behalf of any Reselling Purchaser or
any person controlling any Reselling Purchaser and (iii)
acceptance of and payment for any of the New Debentures.
X. TERMINATION BY RESELLING PURCHASERS
At any time prior to the Closing Date this Agreement shall
be subject to termination in the absolute discretion of any
Reselling Purchaser, by notice given to the Company, if (i)
trading in securities generally on the New York Stock Exchange
shall have been suspended or materially limited, (ii) a general
moratorium on commercial banking activities in New York shall
have been declared by either Federal or New York State
authorities, (iii) minimum prices shall have been established on
the New York Stock Exchange by Federal or New York State
authorities or (iv) any outbreak or material escalation of
hostilities involving the United States or declaration by the
United States of a national emergency or war or other calamity or
crisis shall have occurred, the effect of any of which is such as
to make it impracticable or inadvisable to proceed with the
delivery of the New Debentures on the terms and in the manner
contemplated by the Prospectus.
XI. TERMINATION BY 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
hereto. If any unpurchased New Debentures still remain, the
Company shall have the right either to elect to consummate the
sale except as to any such unpurchased New Debentures so
remaining or, within the next succeeding 24 hours, to make
arrangements satisfactory to the remaining Purchasers for the
purchase of such New Debentures. In any such cases, either the
Purchasers or 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.
NW:S-3:29
EXHIBIT A
LETTERHEAD OF
KENNETH K. OKEL
Area Vice President-General Counsel and Secretary
_____________, 199_
and the other Purchasers named in
the Purchase Agreement dated ____________,
199_, between GTE Northwest Incorporated
and such Purchasers
Re: GTE Northwest Incorporated
___% Debentures, Series _, Due ____
___% Debentures, Series _, Due ____
Dear Sirs:
I have been requested by GTE Northwest Incorporated, a
Washington 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 April 1, 1994 (the
"Indenture"), between the Company and Bank of America National
Trust and Savings Association, as Trustee (the "Trustee"), under
which the New Debentures are being issued, and the resolution of
the Board of Directors of the Company specifically authorizing
the New Debentures, including the issuance and sale of the New
Debentures (the "Board Resolution");
(c) The 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 records of proceedings and orders issued by the
Washington Utilities and Transportation Commission and the Public
Utility Commission of Oregon authorizing the issuance and sale of
the New Debentures; and
(i) Certain documents filed by the Company under the
Securities Exchange Act of 1934, as amended (the "Exchange Act"),
which are incorporated by reference in the Prospectus (the
"Incorporated Documents").
On the basis of my examination of the foregoing and of such
other documents and matters as I have deemed necessary as the
basis for the opinions hereinafter expressed, I am of the opinion
that:
1. The Company is a corporation duly incorporated, validly
existing and in good standing under the laws of the State of
Washington, and has adequate corporate power to carry on the
business in which it is now engaged. There are no states or
jurisdictions in which the qualification or licensing of the
Company as a foreign corporation is necessary.
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. The issuance and sale of the New Debentures, as
contemplated by the Agreement, have been duly authorized by the
Washington Utilities and Transportation Commission and the Public
Utility Commission of Oregon, and such authorization is in full
force and effect and, except as may be required by the Securities
or Blue Sky laws of certain jurisdictions, no other
authorization, approval or consent of any governmental regulatory
authority is required for the issuance and sale of the New
Debentures.
7. The Company holds valid and subsisting franchises,
licenses and permits adequate for the conduct of its business in
the territory served by it, except for limited areas where the
Company operates by sufferance, and none of the franchises,
licenses or permits of the Company contain any unduly burdensome
restrictions.
8. 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 the Incorporated Documents,
considered as a whole on the effective date of the Registration
Statement and on the date hereof, contained or contains any
untrue statement of a material fact or omitted or omits to state
any material fact required to be stated therein or necessary to
make the statements therein not misleading.
Very truly yours,
NW:S-3:32
EXHIBIT B
MILBANK, TWEED, HADLEY & McCLOY
1 Chase Manhattan Plaza
New York, New York 10005
__________, 199_
GTE NORTHWEST 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 Northwest Incorporated
Dear Sirs:
We have been designated by GTE Northwest 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 April 1, 1994,
("Indenture") between the Company and Bank of America National
Trust and Savings Association, as trustee (the "Trustee").
We have reviewed originals, or copies certified to our
satisfaction, of such corporate records of the Company,
agreements and other instruments, certificates of public
officials and of officers and representatives of the Company, and
other documents, as we have deemed necessary as a basis for the
opinions hereinafter expressed. In such examination we have
assumed the genuineness of all signatures, the authenticity of
all documents submitted to us as originals, the conformity with
the original documents of all documents submitted to us as
copies, and the authenticity of the originals of such latter
documents. As to various questions of fact material to such
opinions, we have, when relevant facts were not independently
established, relied upon certifications by officers of the
Company and statements contained in the Registration Statement
hereinafter mentioned.
In addition, we attended the closing held today at the
offices of GTE Service Corporation, One Stamford Forum, Stamford,
Connecticut, at which the Company caused to be delivered to your
representatives for your several accounts $___,000,000 aggregate
principal amount of the New Debentures against payment therefor.
On the basis of the foregoing and having regard to legal
considerations which we deem relevant, we express the following
opinions:
1. The Company is a validly existing corporation, in good
standing, under the laws of the State of Washington.
-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 legal, valid and
binding agreement of the Company enforceable in accordance with
its terms, except as limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws of general
applicability affecting the enforceability of creditors' rights.
The enforceability of the Indenture is subject to the effect of
general principles of equity (regardless of whether considered in
a proceeding in equity or at law), including without limitation
(i) the possible unavailability of specific performance,
injunctive relief or any other equitable remedy and (ii) concepts
of materiality, reasonableness, good faith and fair dealing. The
Indenture has been duly qualified under the Trust Indenture Act
of 1939, as amended.
4. The New Debentures have been duly authorized and conform
as to legal matters in all substantial respects to the
description thereof contained in the Registration Statement and
Prospectus hereinafter mentioned. The New Debentures (assuming
due execution thereof by the Company and due authentication and
delivery by the Trustee) have been duly issued for value by the
Company and (subject to the qualifications stated in paragraph 3
above) constitute legal, valid and binding obligations of the
Company, and are entitled to the benefits afforded by the
Indenture in accordance with the terms of the Indenture and of
the New Debentures.
5. The issuance and sale of the New Debentures, as
contemplated by the Purchase Agreement, have been duly authorized
by the Washington Utilities and Transportation Commission and the
Public Utility Commission of Oregon, and such authorization is in
full force and effect and, except as may be required by the
securities or Blue Sky laws of certain jurisdictions, no
authorization, approval or consent of any governmental regulatory
authority is required for the issuance and sale of the New
Debentures.
6. On the basis of information received by the Company from
the Securities and Exchange Commission (the "Commission") the
Registration Statement with respect to the New Debentures (the
"Registration Statement"), filed with the Commission pursuant to
the Securities Act of 1933, as amended (the "Act"), became
effective under the Act on _________, 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.
7. The Registration Statement and the Prospectus (except
any financial statements or other financial data contained or
incorporated by reference therein, as to which no opinion is
expressed) comply as to form in all material respects with the
relevant requirements of the Act and the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), as applicable, and the
applicable rules and regulations of the Commission thereunder.
We are members of the State of New York bar only and, except
as set forth in the next paragraph, express no opinion as to
matters governed by any laws other than the laws of the State of
New York and the Federal laws of the United States of America.
-3-
The Registration Statement was filed on Form S-3 under the
Act and, accordingly, the Prospectus does not necessarily contain
a current description of the Company's business and affairs,
since Form S-3 provides for the incorporation by reference of
certain documents filed with the Commission which contain
descriptions as of various dates. We participated in conferences
with counsel for, and representatives of, the Company in
connection with the preparation of the Registration Statement and
Prospectus and we have reviewed certain documents filed by the
Company under the Exchange Act, which are incorporated by
reference in the Prospectus (such documents as have been filed
prior to the effective date of the Registration Statement and
listed in the Prospectus as being incorporated by reference are
herein called the "Incorporated Documents"). In connection with
our participation in the preparation of the Registration
Statement and the Prospectus, we have not independently verified
the accuracy, completeness or fairness of the statements
contained therein or in the Incorporated Documents, and the
limitations inherent in the review made by us and the knowledge
available to us are such that we are unable to assume, and we do
not assume, any responsibility for the accuracy, completeness or
fairness of the statements contained in the Registration
Statement, the Prospectus or the Incorporated Documents, except
as otherwise specifically stated herein. None of the foregoing
disclosed to us any information which gave us reason to believe
that the Registration Statement, the Prospectus or the
Incorporated Documents, considered as a whole on the effective
date of the Registration Statement and on the date hereof,
contained or contain any untrue statement of a material fact or
omitted or omit to state a material fact required to be stated
therein or necessary in order to make the statements therein not
misleading. We express no opinion as to any document filed by
the Company under the Exchange Act, whether prior or subsequent
to such effective date, except to the extent that such documents
are Incorporated Documents read together with the Registration
Statement or the Prospectus and considered as a whole, nor do we
express any opinion as to the financial statements or other
financial data included in or omitted from, or incorporated by
reference in the Registration Statement, the Prospectus or the
Incorporated Documents.
Very truly yours,
MILBANK, TWEED, HADLEY &
McCLOY
NW:S-3:35
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, April,
1994 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, dated as of a date not
more than five business days prior to the Closing Date, from
Arthur Andersen & Co., confirming that they are independent
public accountants with respect to the Company within the meaning
of the Act and the applicable published rules and regulations of
the Commission thereunder, specifically Rule 2-01 of Regulation S-
X, and stating in effect(1) that in their opinion, the financial
statements and schedules examined by them and incorporated by
reference in the Prospectus comply as to form in all material
respects with the applicable accounting requirements of the Act,
and the Exchange Act, and the published rules and regulations
thereunder, and (2) that although they have not audited any
financial statements of the Company as of any date or for any
period subsequent to the prior-year audit, and although they have
conducted an audit for that period, the purpose (and therefore
the scope) of the audit was to enable them to express their
opinion on the financial statements as of that date and for the
year then ended, but not on the financial statements for any
interim period within that year; therefore, they are unable to
and do not express any opinion on the unaudited condensed balance
sheet as of the latest available interim date, and the unaudited
condensed statements of income, reinvested earnings, and cash
flows for the latest available interim period subsequent to that
prior-year audit which are included in the Prospectus; they have
performed the procedures specified by the American Institute of
Certified Public Accountants for a review of interim financial
information as described in SAS No. 71, Interim Financial
Information, on the latest available unaudited interim financial
statements prepared by the Company, inquired of certain officials
of the Company responsible for financial and accounting matters,
and read the minutes of the Board of Directors and shareholders
of the Company, all of which procedures have been agreed to by
the 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 was
any change in the capital stock, short-term indebtedness or
long-term debt of the Company or any decrease in net assets as
compared with the amounts shown on the latest balance sheet
incorporated by reference in the Prospectus, (ii) for the period
ended as of the date of the latest available unaudited interim
financial statements prepared by the Company there were any
decreases, as compared with the corresponding period of the prior
year, in operating revenues, net operating income, net income, or
ratio of earnings to fixed
-2-
charges, or (iii) at the date of such letter there was any change
in the capital stock, short-term indebtedness or long-term debt
of the Company or any decrease in net assets as compared with
amounts shown on the latest balance sheet incorporated by
reference in the Prospectus, except in all instances for changes
or decreases which the Prospectus discloses have occurred or may
occur or as disclosed in such letter and except for changes
occasioned by the declaration and payment of dividends on the
stock of the Company or occasioned by sinking fund payments made
on the debt securities of the Company.
NW:S-3:37
_________________________________________________________________
____________
GTE NORTHWEST INCORPORATED
AND
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
AS TRUSTEE
____________
INDENTURE
Dated as of April 1, 1994
____________
Securities
_________________________________________________________________
____________
CROSS-REFERENCE TABLE
Section of
Trust Indenture Act Section of
of 1939, as amended Indenture
310(a)............................. 7.09
310(b)............................. 7.08
7.10
310(c)............................. Inapplicable
311(a)............................. 7.13(a)
311(b)............................. 7.13(b)
311(c)............................. Inapplicable
312(a)............................. 5.01
5.02(a)
312(b)............................. 5.02(b)
312(c)............................. 5.02(c)
313(a)............................. 5.04(a)
313(b)............................. 5.04(b)
313(c)............................. 5.04(a)
5.04(b)
313(d)............................. 5.04(c)
314(a)............................. 5.03
314(b)............................. Inapplicable
314(c)............................. 13.06
314(d)............................. Inapplicable
314(e)............................. 13.06
314(f)............................. Inapplicable
315(a)............................. 7.01(a)
7.02
315(b)............................. 6.07
315(c)............................. 7.01
315(d)............................. 7.01(b)
7.01(c)
315(e)............................. 6.08
316(a)............................. 6.06
8.04
316(b)............................. 6.04
316(c)............................. 8.01
317(a)............................. 6.02
317(b)............................. 4.04
318(a)............................. 13.08
TABLE OF CONTENTS*
__________________
Page
PARTIES..................................................... 1
RECITALS:
Purpose of Indenture........................................ 1
Compliance with legal requirements.......................... 1
Purpose of and consideration for Indenture.................. 1
ARTICLE ONE
DEFINITIONS
SECTION 1.01. Certain terms defined; other terms defined in
Trust Indenture Act of 1939, as amended or by
reference therein in Securities Act of 1933,
as amended, to have meanings therein
assigned...................................... 2
Affiliate............................................... 2
Authenticating Agent.................................... 2
Board of Directors...................................... 2
Board Resolution........................................ 2
Business day............................................ 2
Certificate............................................. 3
Corporate Trust Office.................................. 3
Company................................................. 3
Default................................................. 3
Event of Default........................................ 3
First Mortgage Bonds.................................... 3
Governmental Obligations................................ 3
Indenture............................................... 4
Interest payment date................................... 4
Officers' Certificate................................... 4
Opinion of Counsel...................................... 4
Outstanding............................................. 4
Predecessor Security.................................... 5
Responsible officer..................................... 5
Security or Securities.................................. 5
Securityholder.......................................... 5
Subsidiary.............................................. 5
Trustee................................................. 5
Trust Indenture Act of 1939, as amended................. 5
__________
* This Table of Contents does not constitute part of the
Indenture and should not have any bearing upon the interpretation
of any of its terms or provisions.
i
ARTICLE TWO
ISSUE, DESCRIPTION, TERMS, EXECUTION, REGISTRATION
AND EXCHANGE OF SECURITIES
Page
SECTION 2.01. Designation, terms, amount, authentication
and delivery of Securities.......................
6
SECTION 2.02. Form of Securities and Trustee's certificate.....
7
SECTION 2.03. Date and denominations of Securities, and
provisions for payment of principal, premium
and interest.....................................
7
SECTION 2.04.Execution of
Securities..........................9
SECTION 2.05.Exchange of
Securities...........................10
(a) Registration and transfer of Securities...
10
(b) Securities to be accompanied by proper
instruments of transfer.......................
10
(c) Charges upon exchange, transfer or
registration of Securities....................
10
(d) Restrictions on transfer or exchange at
time of redemption............................
10
SECTION 2.06.Temporary
Securities.............................11
SECTION 2.07. Mutilated, destroyed, lost or stolen
Securities.......................................
11
SECTION 2.08. Cancellation of surrendered Securities...........
12
SECTION 2.09. Provisions of Indenture and Securities for
sole benefit of parties and Securityholders......
12
SECTION 2.10.Appointment of Authenticating
Agent..............12
ARTICLE THREE
REDEMPTION OF SECURITIES AND SINKING FUND PROVISIONS
SECTION 3.01.Redemption of
Securities.........................13
SECTION 3.02. (a) Notice of redemption......................
13
(b) Selection of Securities in case less than
all Securities to be redeemed.................
13
SECTION 3.03. (a) When Securities called for redemption
become due and payable........................
14
.
(b) Receipt of new Security upon partial
payment.......................................
14
ii
Page
SECTION 3.04. Sinking Fund for Securities......................
14
SECTION 3.05. Satisfaction of Sinking Fund Payments with
Securities.......................................
15
SECTION 3.06. Redemption of Securities for Sinking Fund........
15
ARTICLE FOUR
PARTICULAR COVENANTS OF THE COMPANY
SECTION 4.01.Payment of principal of (and premium, if any)
and interest on Securities.......................
15
SECTION 4.02.Maintenance of office or agency for payment
of Securities; designation of office or agency
for payment, registration, transfer-and
exchange of Securities...........................
15
SECTION 4.03. (a) Duties of paying agent....................
16
(b) Company as paying agent...................
16
(c) Holding sums in trust.....................
16
SECTION 4.04. Appointment to fill vacancy in office
of Trustee.......................................
17
SECTION 4.05. Covenant against certain prior
liens.............17
SECTION 4.06. Restriction on consolidation,
merger or sale...................................
18
ARTICLE FIVE
SECURITYHOLDERS' LISTS, AND REPORTS BY THE COMPANY
AND THE TRUSTEE
SECTION 5.01.Company to furnish Trustee information as to
names and addresses of Securityholders...........
18
SECTION 5.02. (a) Trustee to preserve information as to
names and addresses of Securityholders
received by it in capacity of paying agent....
18
(b) Trustee may destroy list of
Securityholders on certain conditions.........
19
(c) Trustee to make information as to names
and addresses of Securityholders available
to "applicants" or mail communications to
Securityholders in certain circumstances......
19
(d) Procedure if Trustee elects not to make
information available to applicants...........
19
iii
Page
(e) Company and Trustee not accountable for
disclosure of information.....................
20
SECTION 5.03. (a) Annual and other reports to be filed by
Company with Trustee..........................
20
(b) Additional information and reports to be
filed with Trustee and Securities and
Exchange Commission...........................
20
(c) Summaries of information and reports to
be transmitted by Company to Securityholders..
20
(d) Annual Certificate to be furnished to
the Trust.....................................
20
SECTION 5.04. (a) Trustee to transmit annual report to
Securityholders...............................
21
(b) Trustee to transmit certain further
reports to Securityholders....................
21
(c) Copies of reports to be filed with stock
exchanges and Securities and Exchange
Commission....................................
22
ARTICLE SIX
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS
UPON EVENT OF DEFAULT
SECTION 6.01. (a) Events of Default defined.................
22
(b) Acceleration of maturity upon Event of
Default.......................................
23
(c) Waiver of default and rescission of
declaration of maturity.......................
23
(d) Restoration of former position and rights
upon curing default...........................
24
SECTION 6.02. (a) Covenant of Company to pay to Trustee
whole amount due on Securities on default in
payment of interest or principal (and
premium, if any)..............................
24
(b) Trustee may recover judgment for whole
amount due on Securities on failure of
Company to pay................................
24
(c) Filing of proof of claim by Trustee in
bankruptcy, reorganization or receivership
proceedings...................................
24
iv
Page
(d) Rights of action and of asserting claims
may be enforced by Trustee without possession
of Securities.................................
25
SECTION 6.03. Application of moneys collected by Trustee.......
25
SECTION 6.04. Limitation on suits by holders of Securities.....
25
SECTION 6.05. (a) Remedies cumulative.......................
26
(b) Delay or omission in exercise of rights
not waiver of default.........................
26
SECTION 6.06. Rights of holders of majority in principal
amount of Securities to direct Trustee and to
waive defaults...................................
26
SECTION 6.07. Trustee to give notice of defaults known to
it, but may withhold in certain
circumstances....................................
27
SECTION 6.08. Requirements of an undertaking to pay costs
in certain suits under Indenture or against
Trustee..........................................
27
ARTICLE SEVEN
CONCERNING THE TRUSTEE
SECTION 7.01. (a) Upon Event of Default occurring and
continuing, Trustee shall exercise powers
vested in it, and use same degree of care and
skill in their exercise, as prudent
individual would use..........................
28
(b) Trustee not relieved from liability for
negligence or willful misconduct except as
provided in this section......................
28
(1) Prior to Event of Default and after the
curing of all Events of Default which may
have occurred.................................
28
(i) Trustee not liable except for performance
of duties specifically set forth..............
28
(ii) In absence of bad faith, Trustee may
conclusively rely on certificates or opinions
furnished it hereunder, subject to duty to
examine the same if specifically required to
be furnished to it............................
28
(2) Trustee not liable for error of judgment
made in good faith by responsible officer
unless Trustee negligent......................
28
v
Page
(3) Trustee not liable for action or
non-action in accordance with direction of
holders of majority in principal amount of
Securities....................................
28
(4) Trustee need not expend own funds without
adequate indemnity............................
29
SECTION 7.02. Subject to provisions of Section 7.01:
(a) Trustee may rely on documents believed
genuine and properly signed or presented......
29
(b) Sufficient evidence by certain
instruments provided for......................
29
(c) Trustee may consult with counsel and act
on advice or Opinion of Counsel...............
29
(d) Trustee may require indemnity from
Securityholders...............................
29
(e) Trustee not liable for actions in good
faith believed to be authorized...............
29
(f) Prior to Event of Default Trustee not
bound to investigate facts or matters stated
in certificates, etc., unless requested in
writing by Securityholders....................
29
(g) Trustee may perform duties directly or
through agents or attorneys...................
30
SECTION 7.03. (a) Trustee not liable for recitals in
Indenture or in Securities....................
30
(b) No representations by Trustee as to
validity or Indenture or of Securities........
30
(c) Trustee not accountable for use of
Securities or proceeds........................
30
SECTION 7.04. Trustee, paying agent or Security Registrar
may own Securities...............................
30
SECTION 7.05. Moneys received by Trustee to be held in
trust without interest...........................
30
SECTION 7.06. (a) Trustee entitled to compensation,
reimbursement and indemnity...................
30
(b) Obligations to Trustee to be secured by
lien prior to Securities......................
30
vi
Page
SECTION 7.07. Right of Trustee to rely on certificate of
officers of Company where no other evidence
specifically prescribed..........................
31
SECTION 7.08. (a) Trustee acquiring conflicting interest
to eliminate conflict or resign...............
31
(b) Notice to Securityholders in case of
failure to comply with subsection (a).........
31
(c) Definition of conflicting interest........
31
(d) Definition of certain terms...............
34
(e) Calculation of percentages of Securities..
35
(f) Trustee resignation not required under
certain circumstances.........................
36
SECTION 7.09. Requirements for eligibility of Trustee..........
36
SECTION 7.10. (a) Resignation of Trustee and appointment
of successor..................................
37
(b) Removal of Trustee by Company or by court
on Securityholders' application...............
37
(c) Removal of Trustee by holders of majority
in principal amount of Securities.............
37
(d) Time when resignation or removal of
Trustee effective.............................
38
(e) One Trustee for each series...............
38
SECTION 7.11. (a) Acceptance by successor to Trustee........
38
(b) Trustee with respect to less than all
series........................................
38
(c) Company to confirm Trustee's rights.......
39
(d) Successor Trustee to be qualified.........
39
(e) Notice of succession......................
39
SECTION 7.12. Successor to Trustee by merger, consolidation
or succession to business........................
39
SECTION 7.13. (a) Limitations on rights of Trustee as a
creditor to obtain payment of certain claims
within four months prior to default or during
default, or to realize on property as such
creditor thereafter..........................
39
vii
Page
(b) Certain creditor relationships excluded...
41
(c) Definition of certain terms...............
42
ARTICLE EIGHT
CONCERNING THE SECURITYHOLDERS
SECTION 8.01. Evidence of action by Securityholders............
43
SECTION 8.02. Proof of execution of instruments and of
holding of Securities............................
43
SECTION 8.03. Who may be deemed owners of Securities...........
43
SECTION 8.04. Securities owned by Company or controlled or
controlling companies disregarded for certain
purposes.........................................
44
SECTION 8.05. Instruments executed by Securityholders
bind future holders..............................
44
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 9.01. Purposes for which supplemental indenture may
be entered into without consent of
Securityholders..................................
44
SECTION 9.02. Modification of Indenture with consent of
Securityholders..................................
45
SECTION 9.03. Effect of supplemental indentures................
46
SECTION 9.04. Securities may bear notation of changes by
supplemental indentures..........................
46
SECTION 9.05. Opinion of Counsel...............................
46
ARTICLE TEN
CONSOLIDATION, MERGER AND SALE
SECTION 10.01. Consolidations or mergers of Company and
sales or conveyances of property of
Company permitted...............................
47
SECTION 10.02. (a) Rights and duties of successor
company.... 47
(b) Appropriate changes may be made in
phraseology and form of Securities............
48
viii
Page
(c) Company may consolidate or merge into
itself or acquire properties of other
corporations..................................
48
SECTION 10.03. Opinion of Counsel..............................
48
ARTICLE ELEVEN
SATISFACTION AND DISCHARGE OF INDENTURE;
UNCLAIMED MONEYS
SECTION 11.01. Satisfaction and discharge of Indenture.........
48
SECTION 11.02. Discharge of Company's Obligations..............
49
SECTION 11.03. Application by Trustee of funds deposited
for payment of Securities.......................
49
SECTION 11.04. Repayment of moneys held by paying agent........
49
SECTION 11.05. Repayment of moneys held by Trustee.............
49
ARTICLE TWELVE
IMMUNITY OF INCORPORATORS, STOCKHOLDERS,
OFFICERS AND DIRECTORS
SECTION 12.01. Incorporators, stockholders, officers and
directors of Company exempt from individual
liability.......................................
49
ARTICLE THIRTEEN
SUNDRY PROVISIONS
SECTION 13.01. Successors and assigns of Company bound by
Indenture.......................................
50
SECTION 13.02. Acts of board, committee or officer of
successor company valid.........................
50
SECTION 13.03. Surrender of powers by Company..................
50
SECTION 13.04. Required notices or demands may be served
by mail.........................................
50
SECTION 13.05. Indenture and Securities to be construed in
accordance with laws of the State of
New York........................................
50
SECTION 13.06. (a) Officers' Certificate and Opinion of
Counsel to be furnished upon applications or
demands by Company............................
51
ix
Page
(b) Statements to be included in each
certificate or opinion with respect to
compliance with condition or covenant.........
51
SECTION 13.07. Payments due on Sundays or holidays.............
51
SECTION 13.08. Provisions required by Trust Indenture Act of
1939 to control...............................
51
SECTION 13.09. Indenture may be executed in counterparts.......
51
SECTION 13.10. Separability of Indenture provisions............
51
ACCEPTANCE OF TRUST BY TRUSTEE..................................
52
TESTIMONIUM.....................................................
52
SIGNATURES AND SEALS............................................
52
ACKNOWLEDGMENTS.................................................
53
x
THIS INDENTURE, dated as of the 1st day of April, 1994,
between GTE NORTHWEST INCORPORATED, a corporation duly organized
and existing under the laws of the State of Washington
(hereinafter sometimes referred to as the "Company"), and BANK OF
AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, a national
banking association organized and existing under the laws of the
United States of America, as trustee (hereinafter sometimes
referred to as the "Trustee"):
WHEREAS, for its lawful corporate purposes, the Company has
duly authorized the execution and delivery of this Indenture to
provide for the issuance of unsecured securities, debentures,
notes or other evidences of indebtedness (hereinafter referred to
as the "Securities"), in an unlimited aggregate principal amount
to be issued from time to time in one or more series as in this
Indenture provided as registered Securities without coupons, to
be authenticated by the certificate of the Trustee;
WHEREAS, to provide the terms and conditions upon which the
Securities are to be authenticated, issued and delivered, the
Company has duly authorized the execution of this Indenture;
WHEREAS, the Securities and the certificate of
authentication to be borne by the Securities (the "Certificate of
Authentication") are to be substantially in such forms as may be
approved by the Board of Directors (as defined below) or set
forth in any indenture supplemental to this Indenture;
AND WHEREAS, all acts and things necessary to make the
Securities issued pursuant hereto, when executed by the Company
and authenticated and delivered by the Trustee as in this
Indenture provided, the valid, binding and legal obligations of
the Company, and to constitute these presents a valid indenture
and agreement according to its terms, have been done and
performed or will be done and performed prior to the issuance of
such Securities, and the execution of this Indenture and the
issuance hereunder of the Securities have been or will be prior
to issuance in all respects duly authorized, and the Company, in
the exercise of the legal right and power in it vested, executes
this Indenture and proposes to make, execute, issue and deliver
the Securities;
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which
the Securities are and are to be authenticated, issued and
delivered, and in consideration of the premises, of the purchase
and acceptance of the Securities by the holders thereof and of
the sum of one dollar ($1.00) to it duly paid by the Trustee at
the execution of these presents, the receipt whereof is hereby
acknowledged, the Company covenants and agrees with the Trustee,
for the equal and proportionate benefit (subject to the
provisions of this Indenture) of the respective holders from time
to time of the Securities, without any discrimination, preference
or priority of any one Security over any other by reason of
priority in the time of issue, sale or negotiation thereof, or
otherwise, except as provided herein, as follows:
ARTICLE ONE
Definitions
SECTION 1.01. The terms defined in this Section (except as
in this Indenture otherwise expressly provided or unless the
context otherwise requires) for all purposes of this Indenture,
any resolution of the Board of Directors of the Company and of
any indenture supplemental hereto shall have the respective
meanings specified in this Section. All other terms used in this
Indenture which are defined in the Trust Indenture Act of 1939,
as amended, or which are by reference in such Act defined in the
Securities Act of 1933, as amended (except as herein otherwise
expressly provided or unless the context otherwise requires),
shall have the meanings assigned to such terms in said Trust
Indenture Act and in said Securities Act as in force at the date
of the execution of this instrument.
Affiliate:
The term "Affiliate" of the Company shall mean any company at
least a majority of whose outstanding voting stock shall at the
time be owned by GTE Corporation, a New York corporation, or by
one or more direct or indirect subsidiaries of GTE Corporation or
by GTE Corporation and one or more direct or indirect
subsidiaries of GTE Corporation. For the purposes only of this
definition of the term "Affiliate", the term "voting stock", as
applied to the stock of any company, shall mean stock of any
class or classes having ordinary voting power for the election of
a majority of the directors of such company, other than stock
having such power only by reason of the occurrence of a
contingency.
Authenticating Agent:
The term "Authenticating Agent" means an authenticating agent
with respect to all or any of the series of Securities, as the
case may be, appointed with respect to all or any series of the
Securities, as the case may be, by the Trustee pursuant to
Section 2.10.
Board of Directors:
The term "Board of Directors" shall mean the Board of Directors
of the Company, or an Executive or Special Committee of such
Board.
Board Resolution:
The term "Board Resolution" shall mean a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors and
to be in full force and effect on the date of such certification.
Business day:
The term "business day", with respect to any series of
securities, shall mean any day other than a day on which banking
institutions in the City of San Francisco, State of California or
the Borough of Manhattan, the City and State of New York, as the
case may be (depending on whether an office or agency of the
Company is being maintained in either such city with respect to
any such series), are authorized or obligated by law or executive
order to close.
2
Certificate:
The term "Certificate" shall mean a certificate signed by the
principal executive officer, the principal financial officer or
the principal accounting officer of the Company. The Certificate
need not comply with the provisions of Section 13.06.
Corporate Trust Office:
The term "Corporate Trust Office" shall mean the office of the
Trustee at which at any particular time its corporate trust
business shall be principally administered, which office at the
date of the execution of this Indenture is located at One
Embarcadero, 20th Floor, San Francisco, California 94111,
Attention: Corporate Trust Administration.
Company:
The term "Company" shall mean GTE Northwest Incorporated, a
corporation duly organized and existing under the laws of the
State of Washington, and, subject to the provisions of Article
Ten, shall also include its successors and assigns.
Default:
The term "Default" shall mean any event, act or condition which
with notice or lapse of time, or both, would constitute an Event
of Default.
Event of Default:
The term "Event of Default" with respect to Securities of a
particular series shall mean any event specified in Section 6.01,
continued for the period of time, if any, therein designated.
First Mortgage Bonds:
The term "First Mortgage Bonds" shall mean the bonds outstanding
from time to time issued by the Company under and secured by an
Indenture dated as of March 1, 1939, between the Company
(formerly named General Telephone Company of the Northwest, Inc.
and West Coast Telephone Company), and Bank of America National
Trust and Savings Association and W. J. Keiferdorf, as Trustees
(Peet Saaret being successor individual trustee to W. J.
Kieferdorf), as amended and supplemented.
Governmental Obligations:
The term, "Governmental Obligations" shall mean securities that
are (i) direct obligations of the United States of America for
the payment of which its full faith and credit is pledged or (ii)
obligations of a person controlled or supervised by and acting as
an agency or instrumentality of the United States of America, the
payment of which is unconditionally guaranteed as a full faith
and credit obligation by the United States of America, which, in
either case, are not callable or redeemable at the option of the
issuer thereof, and shall also include a depository receipt
issued by a bank (as defined in Section 3(a)(2) of the Securities
Act of 1933, as amended) as custodian with respect to any such
Governmental Obligation or a specific payment of principal of or
interest on any such Governmental Obligation held by such
custodian for the
3
account of the holder of such depository receipt; provided that
(except as required by law) such custodian is not authorized to
make any deduction from the amount payable to the holder of such
depository receipt from any amount received by the custodian in
respect of the Governmental Obligation or the specific payment of
principal of or interest on the Governmental Obligation evidenced
by such depository receipt.
Indenture:
The term "Indenture" shall mean this instrument as originally
executed, or, if amended or supplemented as herein provided, as
so amended or supplemented.
Interest payment date:
The term "interest payment date" when used with respect to any
installment of interest on a Security of a particular series
shall mean the date specified in such Security or in a Board
Resolution or in an indenture supplemental hereto with respect to
such series as the fixed date on which an installment of interest
with respect to Securities of that series is due and payable.
Officers' Certificate:
The term "Officers' Certificate" shall mean a certificate signed
by the President or a Vice President and by the Treasurer or an
Assistant Treasurer or the Controller or an Assistant Controller
or the Secretary or an Assistant Secretary of the Company. Each
such certificate shall include the statements provided for in
Section 13.06, if and to the extent required by the provisions
thereof.
Opinion of Counsel:
The term "Opinion of Counsel" shall mean an opinion in writing
signed by legal counsel, who may be an employee of or counsel for
the Company. Each such opinion shall include the statements
provided for in Section 13.06, if and to the extent required by
the provisions thereof.
Outstanding:
The term "outstanding", when used with reference to Securities of
any series, shall, subject to the provisions of Section 8.04,
mean, as of any particular time, all Securities of that series
theretofore authenticated and delivered by the Trustee under this
Indenture, except (a) Securities theretofore cancelled by the
Trustee or any paying agent, or delivered to the Trustee or any
paying agent for cancellation or which have previously been
cancelled; (b) Securities or portions thereof for the payment or
redemption of which moneys or Governmental Obligations in the
necessary amount shall have been deposited in trust with the
Trustee or with any paying agent (other than the Company) or
shall have been set aside and segregated in trust by the Company
(if the Company shall act as its own paying agent); provided,
however, that if such Securities or portions of such Securities
are to be redeemed prior to the maturity thereof, notice of such
redemption shall have been given as in Article Three provided, or
provision satisfactory to the Trustee shall have been made for
giving such notice; and (c) Securities in lieu of or in
substitution for which other Securities shall have been
authenticated and delivered pursuant to the terms of Section
2.07.
4
Predecessor Security:
The term "Predecessor Security" of any particular Security shall
mean every previous Security evidencing all or a portion of the
same debt as that evidenced by such particular Security; and, for
the purposes of this definition, any Security authenticated and
delivered under Section 2.07 in lieu of a lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the
lost, destroyed or stolen Security.
Responsible officer:
The term "responsible officer" when used with respect to the
Trustee shall mean the chairman of the board of directors, the
president, any vice president, the secretary, the treasurer, any
trust officer, any corporate trust officer or any other officer
or assistant officer of the Trustee customarily performing
functions similar to those performed by the persons who at the
time shall be such officers, respectively, or to whom any
corporate trust matter is referred because of his or her
knowledge of and familiarity with the particular subject.
Security or Securities:
The term "Security" or "Securities" shall mean any Security or
Securities, as the case may be, authenticated and delivered under
this Indenture.
Securityholder:
The term "Securityholder", "holder of Securities", "registered
holder", or other similar term, shall mean the person or persons
in whose name or names a particular Security shall be registered
on the books of the Company kept for that purpose in accordance
with the terms of this Indenture.
Subsidiary:
The term "Subsidiary" shall mean any corporation at least a
majority of whose outstanding voting stock shall at the time be
owned by the Company or by one or more Subsidiaries or by the
Company and one or more Subsidiaries. For the purposes only of
this definition of the term "Subsidiary", the term "voting
stock", as applied to the stock of any corporation, shall mean
stock of any class or classes having ordinary voting power for
the election of a majority of the directors of such corporation,
other than stock having such power only by reason of the
occurrence of a contingency.
Trustee:
The term "Trustee" shall mean Bank of America National Trust and
Savings Association and, subject to the provisions of Article
Seven, shall also include its successors and assigns, and, if at
any time there is more than one person acting in such capacity
hereunder, "Trustee" shall mean each such person. The term
"Trustee" as used with respect to a particular series of the
Securities shall mean the trustee with respect to that series.
Trust Indenture Act of 1939, as amended:
The term "Trust Indenture Act of 1939, as amended," subject to
the provisions of Sections 9.01, 9.02, and 10.01, shall mean the
Trust Indenture Act of 1939, as amended and in effect at the date
of execution of this Indenture.
5
ARTICLE TWO
Issue, Description, Terms, Execution,
Registration and Exchange of Securities
SECTION 2.01. The aggregate principal amount of Securities
which may be authenticated and delivered under this Indenture is
unlimited.
The Securities may be issued in one or more series up to the
aggregate principal amount of Securities of that series from time
to time authorized by or pursuant to a Board Resolution or
pursuant to one or more indentures supplemental hereto, prior to
the initial issuance of Securities of a particular series. Prior
to the initial issuance of Securities of any series, there shall
be established in or pursuant to a Board Resolution, and set
forth in an Officers' Certificate, or established in one or more
indentures supplemental hereto:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from all other
Securities);
(2) any limit upon the aggregate principal amount of the
Securities of that series which may be authenticated and
delivered under this Indenture (except for Securities
authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities of that series);
(3) the date or dates on which the principal of the
Securities of the series is payable;
(4) the rate or rates at which the Securities of the series
shall bear interest or the manner of calculation of such rate or
rates, if any, the date or dates from which such interest shall
accrue, the interest payment dates on which such interest shall
be payable or the manner of determination of such interest
payment dates;
(5) the period or periods within which, the price or prices
at which and the terms and conditions upon which, Securities of
the series may be redeemed, in whole or in part, at the option of
the Company;
(6) the obligation, if any, of the Company to redeem or
purchase Securities of the series pursuant to any sinking fund or
analogous provisions (including payments made in cash in
anticipation of future sinking fund obligations) or at the option
of a holder thereof and the period or periods within which, the
price or prices at which, and the terms and conditions upon
which, Securities of the series shall be redeemed or purchased,
in whole or in part, pursuant to such obligation;
(7) the form of the Securities of the series including the
form of the Certificate of Authentication for such series;
(8) if other than denominations of $1,000 or any integral
multiple thereof, the denominations in which the Securities of
the series shall be issuable; and
(9) any and all other terms with respect to such series
(which terms shall not be inconsistent with the terms of this
Indenture).
6
All Securities of any one series shall be substantially
identical except as to denomination and except as may otherwise
be provided in or pursuant to any such Board Resolution or in any
indentures supplemental hereto.
If any of the terms of the series are established by action
taken pursuant to a Board Resolution, a copy of an appropriate
record of such action shall be certified by the Secretary or an
Assistant Secretary of the Company and delivered to the Trustee
at or prior to the delivery of the Officers' Certificate setting
forth the terms of the series.
SECTION 2.02. The Securities of any series and the Trustee's
Certificate of Authentication to be borne by such Securities
shall be substantially of the tenor and purport as set forth in
one or more indentures supplemental hereto or as provided in a
Board Resolution and as set forth in an Officers' Certificate,
and may have such letters, numbers or other marks of
identification or designation and such legends or endorsements
printed, lithographed or engraved thereon as the Company may deem
appropriate and as are not inconsistent with the provisions of
this Indenture, or as may be required to comply with any law or
with any rule or regulation made pursuant thereto or with any
rule or regulation of any stock exchange on which Securities of
that series may be listed, or to conform to usage.
SECTION 2.03. The Securities shall be issuable as registered
Securities and in the denominations of $1,000 or any multiple
thereof, subject to Section 2.01(8). The Securities of a
particular series shall bear interest payable on the dates and at
the rate specified with respect to that series. The principal of
and the interest on the Securities of any series, as well as any
premium thereon in case of redemption thereof prior to maturity,
shall be payable in the coin or currency of the United States of
America which at the time is legal tender for public and private
debt, at the office or agency of the Company maintained for that
purpose in either the City of San Francisco, State of California
or the Borough of Manhattan, the City and State of New York. Each
Security shall be dated the date of its authentication. Interest
on the Securities shall be computed on the basis of a 360-day
year composed of twelve 30-day months; provided that interest on
Securities bearing interest of a floating rate shall be computed
on the basis of a year of 365 or 366 days, as appropriate, for
the actual number of days elapsed.
The interest installment on any Security which is payable,
and is punctually paid or duly provided for, on any interest
payment date for Securities of that series shall be paid to the
person in whose name said Security (or one or more Predecessor
Securities) is registered at the close of business on the regular
record date for such interest installment. In the event that any
Security of a particular series or portion thereof is called for
redemption and the redemption date is subsequent to a regular
record date with respect to any interest payment date and prior
to such interest payment date, interest on such Security will be
paid upon presentation and surrender of such Security as provided
in Section 3.03.
Any interest on any Security which is payable, but is not
punctually paid or duly provided for, on any interest payment
date for Securities of the same series (herein called "Defaulted
Interest") shall forthwith cease to be payable to the registered
holder on the relevant regular record date by virtue of having
been such holder; and such Defaulted Interest shall be paid by
the Company, at its election, as provided in clause (1) or clause
(2) below:
7
(1) The Company may make payment of any Defaulted Interest
on Securities to the persons in whose names such Securities (or
their respective Predecessor Securities) are registered at the
close of business on a special record date for the payment of
such Defaulted Interest, which shall be fixed in the following
manner: the Company shall notify the Trustee in writing of the
amount of Defaulted Interest proposed to be paid on each such
Security and the date of the proposed payment, and at the same
time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in
respect of such Defaulted Interest or shall make arrangements
satisfactory to the Trustee for such deposit prior to the date of
the proposed payment, such money when deposited to be held in
trust for the benefit of the persons entitled to such Defaulted
Interest as in this clause provided. Thereupon the Trustee shall
fix a special record date for the payment of such Defaulted
Interest which shall not be more than 15 or less than 10 days
prior to the date of the proposed payment and not less than 10
days after the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify the Company
of such special record date and, in the name and at the expense
of the Company, shall cause notice of the proposed payment of
such Defaulted Interest and the special record date therefor to
be mailed, first class postage prepaid, to each Securityholder at
his or her address as it appears in the Security Register (as
hereinafter defined), not less than 10 days prior to such special
record date. Notice of the proposed payment of such Defaulted
Interest and the special record date therefor having been mailed
as aforesaid, such Defaulted Interest shall be paid to the
persons in whose names such Securities (or their respective
Predecessor Securities) are registered on such special record
date and shall be no longer payable pursuant to the following
clause (2).
(2) The Company may make payment of any Defaulted Interest
on any Securities in any other lawful manner not inconsistent
with the requirements of any securities exchange on which such
Securities may be listed, and upon such notice as may be required
by such exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by the Trustee.
Unless otherwise set forth in a Board Resolution or one or
more indentures supplemental hereto establishing the terms of any
series of Securities pursuant to Section 2.01 hereof, the term
"regular record date" as used in this Section with respect to a
series of Securities with respect to any interest payment date
for such series shall mean either the fifteenth day of the month
immediately preceding the month in which an interest payment date
established for such series pursuant to Section 2.01 hereof shall
occur, if such interest payment date is the first day of a month,
or the last day of the month immediately preceding the month in
which an interest payment date established for such series
pursuant to Section 2.01 hereof shall occur, if such interest
payment date is the fifteenth day of a month, whether or not such
date is a business day.
Subject to the foregoing provisions of this Section, each
Security of a series delivered under this Indenture upon transfer
of or in exchange for or in lieu of any other Security of such
series shall carry the rights to interest accrued and unpaid, and
to accrue, which were carried by such other Security.
8
SECTION 2.04. The Securities shall, subject to the
provisions of Section 2.06, be printed on steel engraved borders
or fully or partially engraved, or legibly typed, as the proper
officers of the Company may determine, and shall be signed on
behalf of the Company by its President or one of its Vice
Presidents, under its corporate seal attested by its Secretary or
one of its Assistant Secretaries. The signature of the President
or a Vice President and/or the signature of the Secretary or an
Assistant Secretary in attestation of the corporate seal, upon
the Securities, may be in the form of a facsimile signature of a
present or any future President or Vice President and of a
present or any future Secretary or Assistant Secretary and may be
imprinted or otherwise reproduced on the Securities and for that
purpose the Company may use the facsimile signature of any person
who shall have been a President or Vice President, or of any
person who shall have been a Secretary or Assistant Secretary,
notwithstanding the fact that at the time the Securities shall be
authenticated and delivered or disposed of such person shall have
ceased to be the President or a Vice President, or the Secretary
or an Assistant Secretary, of the Company, as the case may be.
The seal of the Company may be in the form of a facsimile of the
seal of the Company and may be impressed, affixed, imprinted or
otherwise reproduced on the Securities.
Only such Securities as shall bear thereon a certificate of
authentication substantially in the form established for such
Securities, executed manually by an authorized signatory of the
Trustee, or by any Authenticating Agent with respect to such
Securities, shall be entitled to the benefits of this Indenture
or be valid or obligatory for any purpose. Such certificate
executed by the Trustee, or by any Authenticating Agent appointed
by the Trustee with respect to such Securities, upon any Security
executed by the Company shall be conclusive evidence that the
Security so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the
benefits of this Indenture.
At any time and from time to time after the execution and
delivery of this Indenture, the Company may deliver Securities of
any series executed by the Company to the Trustee for
authentication, together with a written order of the Company for
the authentication and delivery of such Securities, signed by its
President or any Vice President and its Treasurer or any
Assistant Treasurer, and the Trustee in accordance with such
written order shall authenticate and deliver such Securities.
In authenticating such Securities and accepting the
additional responsibilities under this Indenture in relation to
such Securities, the Trustee shall be entitled to receive, and
(subject to Section 7.01) shall be fully protected in relying
upon, an Opinion of Counsel stating that the form and terms
thereof have been established in conformity with the provisions
of this Indenture and that such Securities, when authenticated
and delivered by the Trustee, will be duly authorized, executed
and delivered and will constitute the legal, valid and binding
obligations of the Company, enforceable against it in accordance
with their terms.
The Trustee shall not be required to authenticate such
Securities if the issue of such Securities pursuant to this
Indenture will affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture or otherwise
in a manner which is not reasonably acceptable to the Trustee.
9
SECTION 2.05. (a) Securities of any series may be exchanged
upon presentation thereof at the office or agency of the Company
designated for such purpose in either the City of San Francisco,
State of California, or the Borough of Manhattan, the City and
State of New York, for other Securities of such series of
authorized denominations, and for a like aggregate principal
amount, upon payment of a sum sufficient to cover any tax or
other governmental charge in relation thereto, all as provided in
this Section. In respect of any Securities so surrendered for
exchange, the Company shall execute, the Trustee shall
authenticate and such office or agency shall deliver in exchange
therefor the Security or Securities of the same series which the
Securityholder making the exchange shall be entitled to receive,
bearing numbers not contemporaneously outstanding.
(b) The Company shall keep, or cause to be kept, at its
office or agency designated for such purpose in either the City
of San Francisco, State of California, or the Borough of
Manhattan, the City and State of New York, or such other location
designated by the Company a register or registers (herein
referred to as the "Security Register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall
register the Securities and the transfers of Securities as in
this Article provided and which at all reasonable times shall be
open for inspection by the Trustee. The registrar for the purpose
of registering Securities and transfer of Securities as herein
provided shall be appointed by the Board of Directors by Board
Resolution (the "Security Registrar").
Upon surrender for transfer of any Security at the office or
agency of the Company designated for such purpose in either the
City of San Francisco, State of California, or the Borough of
Manhattan, the City and State of New York, the Company shall
execute, the Trustee shall authenticate and such office or agency
shall deliver in the name of the transferee or transferees a new
Security or Securities of the same series as the Security
presented for a like aggregate principal amount.
All Securities presented or surrendered for exchange or
registration of transfer, as provided in this Section, shall be
accompanied (if so required by the Company or the Security
Registrar) by a written instrument or instruments of transfer, in
form satisfactory to the Company or the Security Registrar, duly
executed by the registered holder or by his duly authorized
attorney in writing.
(c) No service charge shall be made for any exchange or
registration of transfer of Securities, or issue of new
Securities in case of partial redemption of any series, but the
Company may require payment of a sum sufficient to cover any tax
or other governmental charge in relation thereto, other than
exchanges pursuant to Section 2.06, the second paragraph of
Section 3.03 and Section 9.04 not involving any transfer.
(d) The Company shall not be required (a) to issue, exchange
or register the transfer of any Securities during a period
beginning at the opening of business 15 days before the day of
the mailing of a notice of redemption of less than all the
outstanding Securities of the same series and ending at the close
of business on the day of such mailing, nor (b) to register the
transfer of or exchange any Securities of any series or portions
thereof called for redemption.
10
SECTION 2.06. Pending the preparation of definitive
Securities of any series, the Company may execute, and the
Trustee shall authenticate and deliver, temporary Securities
(printed, lithographed or typewritten) of any authorized
denomination, and substantially in the form of the definitive
Securities in lieu of which they are issued, but with such
omissions, insertions and variations as may be appropriate for
temporary Securities, all as may be determined by the Company.
Every temporary Security of any series shall be executed by the
Company and be authenticated by the Trustee upon the same
conditions and in substantially the same manner, and with like
effect, as the definitive Securities of such series. Without
unnecessary delay the Company will execute and will furnish
definitive Securities of such series and thereupon any or all
temporary Securities of such series may be surrendered in
exchange therefor (without charge to the holders), at the office
or agency of the Company designated for the purpose in either the
City of San Francisco, State of California, or the Borough of
Manhattan, the City and State of New York, and the Trustee shall
authenticate and such office or agency shall deliver in exchange
for such temporary Securities an equal aggregate principal amount
of definitive Securities of such series. Until so exchanged, the
temporary Securities of such series shall be entitled to the same
benefits under this Indenture as definitive Securities of such
series authenticated and delivered hereunder.
SECTION 2.07. In case any temporary or definitive Security
shall become mutilated or be destroyed, lost or stolen, the
Company (subject to the next succeeding sentence) shall execute,
and upon its request the Trustee (subject as aforesaid) shall
authenticate and deliver, a new Security of the same series
bearing a number not contemporaneously outstanding, in exchange
and substitution for the mutilated Security, or in lieu of and in
substitution for the Security so destroyed, lost or stolen. In
every case the applicant for a substituted Security shall furnish
to the Company and to the Trustee such security or indemnity as
may be required by them to save each of them harmless, and, in
every case of destruction, loss or theft, the applicant shall
also furnish to the Company and to the Trustee evidence to their
satisfaction of the destruction, loss or theft of the applicant's
Security and of the ownership thereof. The Trustee may
authenticate any such substituted Security and deliver the same
upon the written request or authorization of any officer of the
Company. Upon the issue of any substituted Security, the Company
may require the payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in relation thereto
and any other expenses (including the fees and expenses of the
Trustee) connected therewith. In case any Security which has
matured or is about to mature shall become mutilated or be
destroyed, lost or stolen, the Company may, instead of issuing a
substitute Security, pay or authorize the payment of the same
(without surrender thereof except in the case of a mutilated
Security) if the applicant for such payment shall furnish to the
Company and to the Trustee such security or indemnity as they may
require to save them harmless, and, in case of destruction, loss
or theft, evidence to the satisfaction of the Company and the
Trustee of the destruction, loss or theft of such Security and of
the ownership thereof.
Every Security issued pursuant to the provisions of this
Section in substitution for any Security which is mutilated,
destroyed, lost or stolen shall constitute an additional
contractual obligation of the Company, whether or not the
mutilated, destroyed, lost or stolen Security shall be found at
any time, or be enforceable by anyone, and shall be entitled to
all the benefits of this Indenture equally and proportionately
with any and all other Securities of the same series duly issued
hereunder. All Securities shall be
11
held and owned upon the express condition that the foregoing
provisions are
exclusive with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities, and shall
preclude (to the extent lawful) any and all other rights or
remedies, notwithstanding any law or statute existing or
hereafter enacted to the contrary with respect to the replacement
or payment of negotiable instruments or other securities without
their surrender.
SECTION 2.08. All Securities surrendered for the purpose of
payment, redemption, exchange or registration of transfer shall,
if surrendered to the Company or any paying agent, be delivered
to the Trustee for cancellation, or, if surrendered to the
Trustee, shall be cancelled by it, and no Securities shall be
issued in lieu thereof except as expressly required or permitted
by any of the provisions of this Indenture. On request of the
Company, the Trustee shall deliver to the Company cancelled
Securities held by the Trustee. In the absence of such request
the Trustee may dispose of cancelled Securities in accordance
with its standard procedures and deliver a certificate of
disposition to the Company. If the Company shall otherwise
acquire any of the Securities, however, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness
represented by such Securities unless and until the same are
delivered to the Trustee for cancellation.
SECTION 2.09. Nothing in this Indenture or in the
Securities, express or implied, shall give or be construed to
give to any person, firm or corporation, other than the parties
hereto and the holders of the Securities, any legal or equitable
right, remedy or claim under or in respect of this Indenture, or
under any covenant, condition or provision herein contained; all
such covenants, conditions and provisions being for the sole
benefit of the parties hereto and of the holders of the
Securities.
SECTION 2.10. So long as any of the Securities of any series
remain outstanding there may be an Authenticating Agent for any
or all such series of Securities which the Trustee shall have the
right to appoint. Said Authenticating Agent shall be authorized
to act on behalf of the Trustee to authenticate Securities of
such series issued upon exchange, transfer or partial redemption
thereof, and Securities so authenticated shall be entitled to the
benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. All
references in this Indenture to the authentication of Securities
by the Trustee shall be deemed to include authentication by an
Authenticating Agent for such series except for authentication
upon original issuance or pursuant to Section 2.07 hereof. Each
Authenticating Agent shall be acceptable to the Company and shall
be a corporation which has a combined capital and surplus, as
most recently reported or determined by it, sufficient under the
laws of any jurisdiction under which it is organized or in which
it is doing business to conduct a trust business, and which is
otherwise authorized under such laws to conduct such business and
is subject to supervision or examination by Federal or State
authorities. If at any time any Authenticating Agent shall cease
to be eligible in accordance with these provisions, it shall
resign immediately.
Any Authenticating Agent may at any time resign by giving
written notice of resignation to the Trustee and to the Company.
The Trustee may at any time (and upon request by the Company
shall) terminate the agency of any Authenticating Agent by giving
written notice of termination to such Authenticating Agent and to
the Company. Upon resignation, termination or cessation of
eligibility of any Authenticating Agent, the Trustee may appoint
an eligible successor Authenticating Agent acceptable to the
Company. Any
12
successor Authenticating Agent, upon acceptance of its
appointment hereunder, shall become vested with all the rights,
powers and duties of its predecessor hereunder as if originally
named as an Authenticating Agent pursuant hereto.
ARTICLE THREE
Redemption of Securities and Sinking Fund Provisions
SECTION 3.01. The Company may redeem the Securities of any
series issued hereunder on and after the dates and in accordance
with the terms established for such series pursuant to Section
2.01 hereof.
SECTION 3.02. (a) In case the Company shall desire to
exercise such right to redeem all or, as the case may be, a
portion of the Securities of any series in accordance with the
right reserved so to do, it shall give notice of such redemption
to holders of the Securities of such series to be redeemed by
mailing, first class postage prepaid, a notice of such redemption
not less than 30 days and not more than 60 days before the date
fixed for redemption of that series to such holders at their last
addresses as they shall appear upon the Security Register. Any
notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the
registered holder receives the notice. In any case, failure duly
to give such notice to the holder of any Security of any series
designated for redemption in whole or in part, or any defect in
the notice, shall not affect the validity of the proceedings for
the redemption of any other Securities of such series or any
other series. In the case of any redemption of Securities prior
to the expiration of any restriction on such redemption provided
in the terms of such Securities or elsewhere in this Indenture,
the Company shall furnish the Trustee with an Officers'
Certificate evidencing compliance with any such restriction.
Each such notice of redemption shall specify the date fixed
for redemption and the redemption price at which Securities of
that series are to be redeemed, and shall state that payment of
the redemption price of such Securities to be redeemed will be
made at the office or agency of the Company in either the City of
San Francisco, State of California, or the Borough of Manhattan,
the City and State of New York, upon presentation and surrender
of such Securities, that interest accrued to the date fixed for
redemption will be paid as specified in said notice, that from
and after said date interest will cease to accrue and that the
redemption is for a sinking fund, if such is the case. If less
than all the Securities of a series are to be redeemed, the
notice to the holders of Securities of that series to be redeemed
in whole or in part shall specify the particular Securities to be
so redeemed. In case any Security is to be redeemed in part only,
the notice which relates to such Security shall state the portion
of the principal amount thereof to be redeemed, and shall state
that on and after the redemption date, upon surrender of such
Security, a new Security or Securities of such series in
principal amount equal to the unredeemed portion thereof will be
issued.
(b) If less than all the Securities of a series are to be
redeemed, the Company shall give the Trustee at least 45 days'
notice in advance of the date fixed for redemption as to the
aggregate principal amount of Securities of the series to be
redeemed, and thereupon the Trustee shall select, by lot or in
such other manner as it shall deem appropriate and fair in its
discretion and which may provide for the selection of a portion
or portions (equal to $1,000 or any multiple thereof) of the
principal amount of such Securities of a denomination larger than
$1,000, the Securities to be redeemed and shall thereafter
promptly notify the Company in writing of the numbers of the
Securities to be redeemed, in whole or in part.
13
The Company may, if and whenever it shall so elect, by
delivery of instructions signed on its behalf by its President or
any Vice President, instruct the Trustee or any paying agent to
call all or any part of the Securities of a particular series for
redemption and to give notice of redemption in the manner set
forth in this Section, such notice to be in the name of the
Company or its own name as the Trustee or such paying agent may
deem advisable. In any case in which notice of redemption is to
be given by the Trustee or any such paying agent, the Company
shall deliver or cause to be delivered to, or permit to remain
with, the Trustee or such paying agent, as the case may be, such
Security Register, transfer books or other records, or suitable
copies or extracts therefrom, sufficient to enable the Trustee or
such paying agent to give any notice by mail that may be required
under the provisions of this Section.
SECTION 3.03. (a) If the giving of notice of redemption
shall have been completed as above provided, the Securities or
portions of Securities of the series to be redeemed specified in
such notice shall become due and payable on the date and at the
place stated in such notice at the applicable redemption price,
together with interest accrued to the date fixed for redemption
and interest on such Securities or portions of Securities shall
cease to accrue on and after the date fixed for redemption,
unless the Company shall default in the payment of such
redemption price and accrued interest with respect to any such
Security or portion thereof. On presentation and surrender of
such Securities on or after the date fixed for redemption at the
place of payment specified in the notice, said Securities shall
be paid and redeemed at the applicable redemption price for such
series, together with interest accrued thereon to the date fixed
for redemption (but if the date fixed for redemption is an
interest payment date, the interest installment payable on such
date shall be payable to the registered holder at the close of
business on the applicable record date pursuant to Section 2.03).
(b) Upon presentation of any Security of such series which
is to be redeemed in part only, the Company shall execute and the
Trustee shall authenticate and the office or agency where the
Security is presented shall deliver to the holder thereof, at the
expense of the Company, a new Security or Securities of the same
series, of authorized denominations in principal amount equal to
the unredeemed portion of the Security so presented.
SECTION 3.04. The provisions of Sections 3.04, 3.05 and 3.06
shall be applicable to any sinking fund for the retirement of
Securities of a series, except as otherwise specified as
contemplated by Section 2.01 for Securities of such series.
The minimum amount of any sinking fund payment provided for
by the terms of Securities of any series is herein referred to as
a "mandatory sinking fund payment", and any payment in excess of
such minimum amount provided for by the terms of Securities of
any series is herein referred to as an "optional sinking fund
payment". If provided for by the terms of Securities of any
series, the cash amount of any sinking fund payment may be
subject to reduction as provided in Section 3.05. Each sinking
fund payment shall be applied to the redemption of Securities of
any series as provided for by the terms of Securities of such
series.
14
SECTION 3.05. The Company (1) may deliver Outstanding
Securities of a series (other than any previously called for
redemption) and (2) may apply as a credit Securities of a series
which have been redeemed either at the election of the Company
pursuant to the terms of such Securities or through the
application of permitted optional sinking fund payments pursuant
to the terms of such Securities, in each case in satisfaction of
all or any part of any sinking fund payment with respect to the
Securities of such series required to be made pursuant to the
terms of such Securities as provided for by the terms of such
series; provided that such Securities have not been previously so
credited. Such Securities shall be received and credited for such
purpose by the Trustee at the redemption price specified in such
Securities for redemption through operation of the sinking fund
and the amount of such sinking fund payment shall be reduced
accordingly.
SECTION 3.06. Not less than 45 days prior to each sinking
fund payment date for any series of Securities, the Company will
deliver to the Trustee an Officers' Certificate specifying the
amount of the next ensuing sinking fund payment for that series
pursuant to the terms of that series, the portion thereof, if
any, which is to be satisfied by delivering and crediting
Securities of that series pursuant to Section 3.05 and the basis
for such credit and will also deliver to the Trustee any
Securities to be so delivered. Not less than 30 days before each
such sinking fund payment date the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in
the manner specified in Section 3.02 and cause notice of the
redemption thereof to be given in the name of and at the expense
of the Company in the manner provided in Section 3.02. Such
notice having been duly given, the redemption of such Securities
shall be made upon the terms and in the manner stated in Section
3.03.
ARTICLE FOUR
Particular Covenants of the Company
The Company covenants and agrees for each series of the
Securities as follows:
SECTION 4.01. The Company will duly and punctually pay or
cause to be paid the principal of (and premium, if any) and
interest on the Securities of that series at the time and place
and in the manner provided herein and established with respect to
such Securities.
SECTION 4.02. So long as any series of the Securities remain
outstanding, the Company agrees to maintain an office or agency
in either the City of San Francisco, State of California, or the
Borough of Manhattan, the City and State of New York, with
respect to each such series and at such other location or
locations as may be designated as provided in this Section 4.02,
where (i) Securities of that series may be presented for payment,
(ii) Securities of that series may be presented as hereinabove
authorized for registration of transfer and exchange, and (iii)
notices and demands to or upon the Company in respect of the
Securities of that series and this Indenture may be given or
served. As to such office or agency in either the City of San
Francisco, State of California, or the Borough of Manhattan, the
City and State of New York, the Company shall, designate the
required office or agency to be located in either the City of San
Francisco, State of California, or the Borough of Manhattan, the
City and State of New York, for each Series of Securities, such
designation to continue with respect to such office or agency
until the Company shall, by written notice signed by its
President or a Vice President and delivered to the Trustee,
designate some
15
other office or agency for such purposes or any of them. If at
any time the Company shall fail to maintain any such required
office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, notices and demands may be
made or served at the Corporate Trust Office of the Trustee, and
the Company hereby appoints the Trustee as its agent to receive
all such presentations, notices and demands.
SECTION 4.03. (a) If the Company shall appoint one or more
paying agents for all or any series of the Securities, other than
the Trustee, the Company will cause each such paying agent to
execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of
this Section,
(1) that it will hold all sums held by it as such agent for the
payment of the principal of (and premium, if any) or interest on
the Securities of that series (whether such sums have been paid
to it by the Company or by any other obligor on such securities)
in trust for the benefit of the persons entitled thereto;
(2) that it will give the Trustee notice of any failure by the
Company (or by any other obligor on such Securities) to make any
payment of the principal of (and premium, if any) or interest on
the Securities of that series when the same shall be due and
payable;
(3) that it will, at any time during the continuance of any
failure referred to in the preceding paragraph (a)(2) above, upon
the written request of the Trustee, forthwith pay to the Trustee
all sums so held in trust by such paying agent; and
(4) that it will perform all other duties of paying agent as set
forth in this Indenture.
(b) If the Company shall act as its own paying agent with
respect to any series of the Securities, it will on or before
each due date of the principal of (and premium, if any) or
interest on Securities of that series, set aside, segregate and
hold in trust for the benefit of the persons entitled thereto a
sum sufficient to pay such principal (and premium, if any) or
interest so becoming due on Securities of that series until such
sums shall be paid to such persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of such
action, or any failure (by it or any other obligor on such
Securities) to take such action. Whenever the Company shall have
one or more paying agents for any series of Securities, it will,
prior to each due date of the principal of (and premium, if any)
or interest on any Securities of that series, deposit with a
paying agent a sum sufficient to pay the principal (and premium,
if any) or interest so becoming due, such sum to be held in trust
for the benefit of the persons entitled to such principal,
premium or interest, and (unless such paying agent is the
Trustee) the Company will promptly notify the Trustee of its
action or failure so to act.
(c) Anything in this Section to the contrary
notwithstanding, (i) the agreement to hold sums in trust as
provided in this Section is subject to the provisions of Section
11.05, and (ii) the Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture or for
any other purpose, pay, or direct any paying agent to pay, to the
Trustee all sums held in trust by the Company or such paying
agent, such sums to be held by the Trustee upon the same terms as
those upon which such sums were held by the Company or such
paying agent; and, upon such payment by any paying agent to the
Trustee, such paying agent shall be released from all further
liability with respect to such money.
16
SECTION 4.04. The Company, whenever necessary to avoid or
fill a vacancy in the office of Trustee, will appoint, in the
manner provided in Section 7.10, a Trustee, so that there shall
at all times be a Trustee hereunder.
SECTION 4.05. The Company will not, while any of the
Securities remain outstanding, create, or suffer to be created or
to exist, any mortgage, lien, pledge, security interest or other
encumbrance of any kind upon any property of any character of the
Company whether now owned or hereafter acquired or upon any of
the income or profits therefrom unless it shall make effective
provision whereby the Securities then outstanding shall be
secured by such mortgage, lien, pledge, security interest or
other encumbrance equally and ratably with any and all
obligations and indebtedness thereby secured so long as any such
obligations and indebtedness shall be so secured; provided,
however, that nothing in this Section shall be construed to
prevent the Company from creating, or from suffering to be
created or to exist, any mortgages, liens, pledges, security
interests or other encumbrances, or any agreements, with respect
to:
(1) Purchase money mortgages, or other purchase money liens,
pledges or encumbrances of any kind upon property hereafter
acquired by the Company, or mortgages, liens, pledges, security
interests or other encumbrances of any kind existing on such
property at the time of the acquisition thereof, or conditional
sales agreements or other title retention agreements with respect
to any property hereafter acquired; provided, however, that no
such mortgage, lien, pledge, security interest or other
encumbrance, and no such agreement, shall extend to or cover any
other property of the Company;
(2) The replacement, extension or renewal of any such mortgage,
lien, pledge, security interest or other encumbrance, or of any
such agreement, permitted by the foregoing clause (1), or the
replacement or renewal (without increase in principal amount or
extension of final maturity date) of the indebtedness secured
thereby;
(3) Liens for taxes or assessments or governmental charges or
levies; pledges or deposits to secure obligations under worker's
compensation laws or similar legislation; pledges or deposits to
secure performance in connection with bids, tenders, contracts
(other than contracts for the payment of money) or leases to
which the Company is a party; deposits to secure public or
statutory obligations of the Company; materialmen's, mechanics',
carriers', workers', repairmen's or other like liens in the
ordinary course of business, or deposits to obtain the release of
such liens; deposits to secure surety and appeal bonds to which
the Company is a party; other pledges or deposits for similar
purposes in the ordinary course of business; liens created by or
resulting from any litigation or legal proceeding which at the
time is currently being contested in good faith by appropriate
proceedings; leases made, or existing on property acquired, in
the ordinary course of business; landlord's liens under leases to
which the Company is a party; zoning restrictions, easements,
licenses, restrictions on the use of real property or minor
irregularities in title thereto, which do not materially impair
the use of such property in the operation of the business of the
Company or the value of such property for the purpose of such
business; or the lien of the Trustee described in Section 7.06
hereof;
(4) First Mortgage Bonds outstanding on the date hereof and any
replacement or renewal (without increase in principal amount or
extension of final maturity date) of such outstanding First
Mortgage Bonds;
17
(5) First Mortgage Bonds which may be issued by the Company in
connection with a consolidation or merger of the Company with or
into any Affiliate in exchange for or otherwise in substitution
for long-term senior indebtedness of such Affiliate ("Affiliate
Debt") which by its terms (i) is secured by a mortgage on all or
a portion of the property of such Affiliate, (ii) prohibits
long-term senior secured indebtedness from being incurred by such
Affiliate, or a successor thereto, unless the Affiliate Debt
shall be secured equally and ratably with such long-term senior
secured indebtedness or (iii) prohibits long-term senior secured
indebtedness from being incurred by such Affiliate; or
(6) Indebtedness assumed by the Company of the character
specified in clause (a) of the second paragraph of Section 4.06
hereof.
SECTION 4.06. The Company will not, while any of the
Securities remain outstanding, consolidate with, or merge into,
or merge into itself, or sell or convey all or substantially all
of its property to, any other company unless the provisions of
Article Ten hereof are complied with.
If upon any such consolidation or merger, or sale or
conveyance, any of the property of the Company owned by the
Company prior thereto would thereupon become subject to any
mortgage, security interest, pledge or lien, the Company, prior
to such consolidation, merger, sale or conveyance, will secure
the outstanding Securities, or cause the same to be secured,
equally and ratably with the other indebtedness or obligations
secured by such mortgage, security interest, pledge or lien so
long as such other indebtedness or obligations shall be so
secured; provided, however, that (a) the subjection of the
property of the Company to any mortgage, security interest,
pledge or lien securing indebtedness of an Affiliate which is
required to be assumed by the Company in connection with any
merger or consolidation of such Affiliate shall be deemed
excluded from the operation of this Section and shall not require
that any of the Securities be secured; and (b) the subjection of
property of the Company to any mortgage, security interest,
pledge or lien of the character referred to in clauses (1), (2),
(3), (4) and (5) of Section 4.05 shall be deemed excluded from
the operation of this Section and shall not require that any of
the Securities be secured.
ARTICLE FIVE
Securityholders' Lists and Reports by the Company
and the Trustee
SECTION 5.01. The Company will furnish or cause to be
furnished to the Trustee (a) semi-annually, not more than 15 days
after each regular record date (as defined in Section 2.03) a
list, in such form as the Trustee may reasonably require, of the
names and addresses of the holders of each series of Securities
as of such regular record date and (b) at such other times as the
Trustee may request in writing, within 30 days after the receipt
by the Company of any such request, a list of similar form and
content as of a date not more than 15 days prior to the time such
list is furnished; provided, however, no such list need be
furnished for any series for which the Trustee shall be the
Security Registrar.
SECTION 5.02. (a) The Trustee shall preserve, in as current
a form as is reasonably practicable, all information as to the
names and addresses of the holders of Securities contained in the
most recent list furnished to it
18
as provided in Section 5.01 and as to the names and addresses of
holders of Securities received by the Trustee in its capacity as
Security Registrar (if acting in such capacity).
(b) The Trustee may destroy any list furnished to it as
provided in Section 5.01 upon receipt of a new list so furnished.
(c) In case three or more holders of Securities of a series
(hereinafter referred to as "applicants") apply in writing to the
Trustee, and furnish to the Trustee reasonable proof that each
such applicant has owned a Security for a period of at least six
months preceding the date of such application, and such
application states that the applicants desire to communicate with
other holders of Securities of such series or holders of all
Securities with respect to their rights under this Indenture or
under such Securities, and is accompanied by a copy of the form
of proxy or other communication which such applicants propose to
transmit, then the Trustee shall, within five business days after
the receipt of such application, at its election, either
(1) afford to such applicants access to the information preserved
at the time by the Trustee in accordance with the provisions of
subsection (a) of this Section, or
(2) inform such applicants as to the approximate number of
holders of Securities of such series or of all Securities, as the
case may be, whose names and addresses appear in the information
preserved at the time by the Trustee, in accordance with the
provisions of subsection (a) of this Section, and as to the
approximate cost of mailing to such Securityholders the form of
proxy or other communication, if any, specified in such
application.
(d) If the Trustee shall elect not to afford such applicants
access to such information, the Trustee shall, upon the written
request of such applicants, mail to each holder of such series or
of all Securities, as the case may be, whose name and address
appears in the information preserved at the time by the Trustee
in accordance with the provisions of subsection (a) of this
Section, a copy of the form of proxy or other communication which
is specified in such request, with reasonable promptness after a
tender to the Trustee of the material to be mailed and of
payment, or provision for the payment, of the reasonable expenses
of mailing, unless within five days after such tender, the
Trustee shall mail to such applicants and file with the
Securities and Exchange Commission, together with a copy of the
material to be mailed, a written statement to the effect that, in
the opinion of the Trustee, such mailing would be contrary to the
best interests of the holders of Securities of such series or of
all Securities, as the case may be, or would be in violation of
applicable law. Such written statement shall specify the basis of
such opinion. If said Commission, after opportunity for a hearing
upon the objections specified in the written statement so filed,
shall enter an order refusing to sustain any of such objections
or if, after the entry of an order sustaining one or more of such
objections, said Commission shall find, after notice and
opportunity for hearing, that all the objections so sustained
have been met and shall enter an order so declaring, the Trustee
shall mail copies of such material to all such Securityholders
with reasonable promptness after the entry of such order and the
renewal of such tender; otherwise the Trustee shall be relieved
of any obligation or duty to such applicants respecting their
application.
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(e) Each and every holder of the Securities, by receiving
and holding the same, agrees with the Company and the Trustee
that neither the Company nor the Trustee nor any paying agent nor
any Security Registrar shall be held accountable by reason of the
disclosure of any such information as to the names and addresses
of the holders of Securities in accordance with the provisions of
subsection (b) of this Section, regardless of the source from
which such information was derived, and that the Trustee shall
not be held accountable by reason of mailing any material
pursuant to a request made under said subsection (b).
SECTION 5.03. (a) The Company covenants and agrees to file
with the Trustee, within 15 days after the Company is required to
file the same with the Securities and Exchange Commission, copies
of the annual reports and of the information, documents and other
reports (or copies of such portions of any of the foregoing as
said Commission may from time to time by rules and regulations
prescribe) which the Company may be required to file with said
Commission pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934, as amended; or, if the Company
is not required to file information, documents or reports
pursuant to either of such sections, then to file with the
Trustee and said Commission, in accordance with the rules and
regulations prescribed from time to time by said Commission, such
of the supplementary and periodic information, documents and
reports which may be required pursuant to Section 13 of the
Securities Exchange Act of 1934, as amended, in respect of a
security listed and registered on a national securities exchange
as may be prescribed from time to time in such rules and
regulations.
(b) The Company covenants and agrees to file with the
Trustee and the Securities and Exchange Commission, in accordance
with the rules and regulations prescribed from time to time by
said Commission, such additional information, documents and
reports with respect to compliance by the Company with the
conditions and covenants provided for in this Indenture as may be
required from time to time by such rules and regulations.
(c) The Company covenants and agrees to transmit by mail,
first class postage prepaid, or reputable over-night delivery
service which provides for evidence of receipt, to the
Securityholders, as their names and addresses appear upon the
Security Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and
reports required to be filed by the Company pursuant to
subsections (a) and (b) of this Section as may be required by
rules and regulations prescribed from time to time by the
Securities and Exchange Commission.
(d) The Company covenants and agrees to furnish to the
Trustee, on or before May 15 in each calendar year in which any
of the Securities are outstanding, or on or before such other day
in each calendar year as the Company and the Trustee may from
time to time agree upon, a certificate from the principal
executive officer, principal financial officer or principal
accounting officer as to his or her knowledge of the Company's
compliance with all conditions and covenants under this
Indenture. For purposes of this subsection (d), such compliance
shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture.
20
SECTION 5.04. (a) On or before July 15 in each year in which
any Securities are outstanding hereunder, the Trustee shall
transmit by mail, first class postage prepaid, to the
Securityholders, as their names and addresses appear upon the
Security Register, a brief report dated as of the preceding May
15, with respect to any of the following events which may have
occurred within the previous twelve months (but if no such event
has occurred within such period no report need be transmitted):
(1) any change to its eligibility under Section 7.09, and its
qualifications under Section 7.08;
(2) the creation of or any material change to a relationship
specified in paragraphs (1) through (10) of subsection (c) of
Section 7.08;
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making
thereof) made by the Trustee (as such) which remain unpaid on the
date of such report, and for the reimbursement of which it claims
or may claim a lien or charge, prior to that of the Securities,
on any property or funds held or collected by it as Trustee if
such advances so remaining unpaid aggregate more than 1/2 of 1%
of the principal amount of the Securities outstanding on the date
of such report;
(4) any change to the amount, interest rate, and maturity date of
all other indebtedness owing by the Company, or by any other
obligor on the Securities, to the Trustee in its individual
capacity, on the date of such report, with a brief description of
any property held as collateral security therefor, except any
indebtedness based upon a creditor relationship arising in any
manner described in paragraphs (2), (3), (4), or (6) of
subsection (b) of Section 7.13;
(5) any change to the property and funds, if any, physically in
the possession of the Trustee as such on the date of such report;
(6) any release, or release and substitution, of property subject
to the lien of this Indenture (and the consideration thereof, if
any) which it has not previously reported;
(7) any additional issue of Securities which the Trustee has not
previously reported; and
(8) any action taken by the Trustee in the performance of its
duties under this Indenture which it has not previously reported
and which in its opinion materially affects the Securities or the
Securities of any series, except any action in respect of a
default, notice of which has been or is to be withheld by it in
accordance with the provisions of Section 6.07.
(b) The Trustee shall transmit by mail, first class postage
prepaid, to the Securityholders, as their names and addresses
appear upon the Security Register, a brief report with respect to
the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making
thereof) made by the Trustee as such since the date of the last
report transmitted pursuant to the provisions of subsection (a)
of
21
this Section (or if no such report has yet been so transmitted,
since the date of execution of this Indenture), for the
reimbursement of which it claims or may claim a lien or charge
prior to that of the Securities of any series on property or
funds held or collected by it as Trustee, and which it has not
previously reported pursuant to this subsection if such advances
remaining unpaid at any time aggregate more than 10% of the
principal amount of Securities of such series outstanding at such
time, such report to be transmitted within 90 days after such
time.
(c) A copy of each such report shall, at the time of such
transmission to Securityholders, be filed by the Trustee with the
Company, with each stock exchange upon which any Securities are
listed (if so listed) and also with the Securities and Exchange
Commission. The Company agrees to notify the Trustee when any
Securities become listed on any stock exchange.
ARTICLE SIX
Remedies of the Trustee and Securityholders
Upon Event of Default
SECTION 6.01. (a) Whenever used herein with respect to
Securities of a particular series, "Event of Default" means any
one or more of the following events which has occurred and is
continuing:
(1) default in the payment of any installment of interest upon
any of the Securities of that series, as and when the same shall
become due and payable, and continuance of such default for a
period of 30 business days;
(2) default in the payment of the principal of (or premium, if
any, on) any of the Securities of that series as and when the
same shall become due and payable whether at maturity, upon
redemption, by declaration or otherwise, or in any payment
required by any sinking or analogous fund established with
respect to that series;
(3) failure on the part of the Company duly to observe or perform
any other of the covenants or agreements on the part of the
Company with respect to that series contained in such Securities
or otherwise established with respect to that series of
Securities pursuant to Section 2.01 hereof or contained in this
Indenture (other than a covenant or agreement which has been
expressly included in this Indenture solely for the benefit of
one or more series of Securities other than such series) for a
period of 90 days after the date on which written notice of such
failure, requiring the same to be remedied and stating that such
notice is a "Notice of Default" hereunder, shall have been given
to the Company by the Trustee, by registered or certified mail,
or to the Company and the Trustee by the holders of at least 25%
in principal amount of the Securities of that series at the time
outstanding;
(4) a decree or order by a court having jurisdiction in the
premises shall have been entered adjudging the Company a bankrupt
or insolvent, or approving as properly filed a petition seeking
liquidation or reorganization of the Company under the Federal
Bankruptcy Code or any other similar applicable
22
Federal or State law, and such decree or order shall have
continued unvacated and unstayed for a period of 90 days; or an
involuntary case shall be commenced under such Code in respect of
the Company and shall continue undismissed for a period of 90
days or an order for relief in such case shall have been entered;
or a decree or order of a court having jurisdiction in the
premises shall have been entered for the appointment on the
ground of insolvency or bankruptcy of a receiver or custodian or
liquidator or trustee or assignee in bankruptcy or insolvency of
the Company or of its property, or for the winding up or
liquidation of its affairs, and such decree or order shall have
remained in force unvacated and unstayed for a period of 90 days;
or
(5) the Company shall institute proceedings to be adjudicated a
voluntary bankrupt, or shall consent to the filing of a
bankruptcy proceeding against it, or shall file a petition or
answer or consent seeking liquidation or reorganization under the
Federal Bankruptcy Code or any other similar applicable Federal
or State law, or shall consent to the filing of any such
petition, or shall consent to the appointment on the ground of
insolvency or bankruptcy of a receiver or custodian or liquidator
or trustee or assignee in bankruptcy or insolvency of it or of
its property, or shall make an assignment for the benefit of
creditors.
(b) In each and every such case, unless the principal of all
the Securities of that series shall have already become due and
payable, either the Trustee or the holders of not less than 25%
in aggregate principal amount of the Securities of that series
then outstanding hereunder, by notice in writing to the Company
(and to the Trustee if given by such Securityholders), may
declare the principal of all the Securities of that series to be
due and payable immediately, and upon any such declaration the
same shall become and shall be immediately due and payable,
anything contained in this Indenture or in the Securities of that
series or established with respect to that series pursuant to
Section 2.01 hereof to the contrary notwithstanding.
(c) This provision, however, is subject to the condition
that if, at any time after the principal of the Securities of
that series shall have been so declared due and payable, and
before any judgment or decree for the payment of the moneys due
shall have been obtained or entered as hereinafter provided, the
Company shall pay or shall deposit with the Trustee a sum
sufficient to pay all matured installments of interest upon all
the Securities of that series and the principal of (and premium,
if any, on) any and all Securities of that series which shall
have become due otherwise than by acceleration (with interest
upon such principal and premium, if any, and, to the extent that
such payment is enforceable under applicable law, upon overdue
installments of interest, at the rate per annum expressed in the
Securities of that series to the date of such payment or deposit)
and the amount payable to the Trustee under Section 7.06, and any
and all defaults under the Indenture, other than the nonpayment
of principal on Securities of that series which shall not have
become due by their terms, shall have been remedied or waived as
provided in Section 6.06 then and in every such case the holders
of a majority in aggregate principal amount of the Securities of
that series then outstanding, by written notice to the Company
and to the Trustee, may rescind and annul such declaration and
its consequences; but no such rescission and annulment shall
extend to or shall affect any subsequent default, or shall impair
any right consequent thereon.
23
(d) In case the Trustee shall have proceeded to enforce any
right with respect to Securities of that series under this
Indenture and such proceedings shall have been discontinued or
abandoned because of such rescission or annulment or for any
other reason or shall have been determined adversely to the
Trustee, then and in every such case the Company and the Trustee
shall be restored respectively to their former positions and
rights hereunder, and all rights, remedies and powers of the
Company and the Trustee shall continue as though no such
proceedings had been taken.
SECTION 6.02. (a) The Company covenants that (1) in case
default shall be made in the payment of any installment of
interest on any of the Securities of a series, or any payment
required by any sinking or analogous fund established with
respect to that series as and when the same shall become due and
payable, and such default shall have continued for a period of 30
business days, or (2) in case default shall be made in the
payment of the principal of (or premium, if any, on) any of the
Securities of a series when the same shall have become due and
payable, whether upon maturity of the Securities of a series or
upon redemption or upon declaration or otherwise--then, upon
demand of the Trustee, the Company will pay to the Trustee, for
the benefit of the holders of the Securities of that series, the
whole amount that then shall have become due and payable on all
such Securities for principal (and premium, if any) or interest,
or both, as the case may be, with interest upon the overdue
principal (and premium, if any) and (to the extent that payment
of such interest is enforceable under applicable law) upon
overdue installments of interest at the rate per annum expressed
in the Securities of that series; and, in addition thereto, such
further amount as shall be sufficient to cover the costs and
expenses of collection, and the amount payable to the Trustee
under Section 7.06.
(b) In case the Company shall fail forthwith to pay such
amounts upon such demand, the Trustee, in its own name and as
trustee of an express trust, shall be entitled and empowered to
institute any action or proceedings at law or in equity for the
collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may
enforce any such judgment or final decree against the Company or
other obligor upon the Securities of that series and collect in
the manner provided by law out of the property of the Company or
other obligor upon the Securities of that series wherever
situated the moneys adjudged or decreed to be payable.
(c) In case of any receivership, insolvency, liquidation,
bankruptcy, reorganization, readjustment, arrangement,
composition or other judicial proceedings affecting the Company,
any other obligor on such Securities, or the creditors or
property of either, the Trustee shall have power to intervene in
such proceedings and take any action therein that may be
permitted by the court and shall (except as may be otherwise
provided by law) be entitled to file such proofs of claim and
other papers and documents as may be necessary or advisable in
order to have the claims of the Trustee and of the holders of
Securities of such series allowed for the entire amount due and
payable by the Company or such other obligor under the Indenture
at the date of institution of such proceedings and for any
additional amount which may become due and payable by the Company
or such other obligor after such date, and to collect and receive
any moneys or other property payable or deliverable on any such
claim, and to distribute the same after the deduction of the
amount payable to the Trustee under Section 7.06; and any
receiver, assignee or trustee in bankruptcy or reorganization is
hereby authorized by each of the holders of Securities of such
series to make such payments to the Trustee, and, in the event
that the Trustee shall consent to the making of such payments
directly to such Securityholders, to pay to the Trustee any
amount due it under Section 7.06.
24
(d) All rights of action and of asserting claims under this
Indenture, or under any of the terms established with respect to
Securities of that series, may be enforced by the Trustee without
the possession of any of such Securities, or the production
thereof at any trial or other proceeding relative thereto, and
any such suit or proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for payment to the
Trustee of any amounts due under Section 7.06, be for the ratable
benefit of the holders of the Securities of such series.
In case of an Event of Default hereunder the Trustee may in
its discretion proceed to protect and enforce the rights vested
in it by this Indenture by such appropriate judicial proceedings
as the Trustee shall deem most effectual to protect and enforce
any of such rights, either at law or in equity or in bankruptcy
or otherwise, whether for the specific enforcement of any
covenant or agreement contained in the Indenture or in aid of the
exercise of any power granted in this Indenture, or to enforce
any other legal or equitable right vested in the Trustee by this
Indenture or by law.
Nothing herein contained shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf
of any Securityholder any plan of reorganization, arrangement,
adjustment or composition affecting the Securities of that series
or the rights of any holder thereof or to authorize the Trustee
to vote in respect of the claim of any Securityholder in any such
proceeding.
SECTION 6.03. Any moneys collected by the Trustee pursuant
to Section 6.02 with respect to a particular series of Securities
shall be applied in the order following, at the date or dates
fixed by the Trustee and, in case of the distribution of such
moneys on account of principal (or premium, if any) or interest,
upon presentation of the several Securities of that series, and
stamping thereon the payment, if only partially paid, and upon
surrender thereof if fully paid:
FIRST: To the payment of costs and expenses of collection and of
all amounts payable to the Trustee under Section 7.06;
SECOND: To the payment of the amounts then due and unpaid upon
Securities of such series for principal (and premium, if any) and
interest, in respect of which or for the benefit of which such
money has been collected, ratably, without preference or priority
of any kind, according to the amounts due and payable on such
Securities for principal (and premium, if any) and interest,
respectively.
SECTION 6.04. No holder of any Security of any series shall
have any right by virtue or by availing of any provision of this
Indenture to institute any suit, action or proceeding in equity
or at law upon or under or with respect to this Indenture or for
the appointment of a receiver or trustee, or for any other remedy
hereunder, unless such holder previously shall have given to the
Trustee written notice of an Event of Default and of the
continuance thereof with respect to Securities of such series
specifying such Event of Default, as hereinbefore provided, and
unless also the holders of not less than 25% in aggregate
principal amount of the Securities of such series then
outstanding shall have made written request upon the Trustee to
institute such action, suit or proceeding in its own name as
trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs,
expenses and liabilities to be incurred therein or thereby, and
the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity, shall have failed to institute any
25
such action, suit or proceeding; it being understood and
intended, and being expressly covenanted by the taker and holder
of every Security of such series with every other such taker and
holder and the Trustee, that no one or more holders of Securities
of such series shall have any right in any manner whatsoever by
virtue or by availing of any provision of this Indenture to
affect, disturb or prejudice the rights of the holders of any
other of such Securities, or to obtain or seek to obtain priority
over or preference to any other such holder, or to enforce any
right under this Indenture, except in the manner herein provided
and for the equal, ratable and common benefit of all holders of
Securities of such series. For the protection and enforcement of
the provisions of this Section, each and every Securityholder and
the Trustee shall be entitled to such relief as can be given
either at law or in equity.
Notwithstanding any other provisions of this Indenture,
however, the right of any holder of any Security to receive
payment of the principal of (and premium, if any) and interest on
such Security, as therein provided, on or after the respective
due dates expressed in such Security (or in the case of
redemption, on the redemption date), or to institute suit for the
enforcement of any such payment on or after such respective dates
or redemption date, shall not be impaired or affected without the
consent of such holder.
SECTION 6.05. (a) All powers and remedies given by this
Article to the Trustee or to the Securityholders shall, to the
extent permitted by law, be deemed cumulative and not exclusive
of any others thereof or of any other powers and remedies
available to the Trustee or the holders of the Securities, by
judicial proceedings or otherwise, to enforce the performance or
observance of the covenants and agreements contained in this
Indenture or otherwise established with respect to such
Securities.
(b) No delay or omission of the Trustee or of any holder of
any of the Securities to exercise any right or power accruing
upon any Event of Default occurring and continuing as aforesaid
shall impair any such right or power, or shall be construed to be
a waiver of any such default or an acquiescence therein; and,
subject to the provisions of Section 6.04, every power and remedy
given by this Article or by law to the Trustee or to the
Securityholders may be exercised from time to time, and as often
as shall be deemed expedient, by the Trustee or by the
Securityholders.
SECTION 6.06. The holders of a majority in aggregate
principal amount of the Securities of any series at the time
outstanding, determined in accordance with Section 8.04, shall
have the right to direct the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee with
respect to such series; provided, however, that such direction
shall not be in conflict with any rule of law or with this
Indenture or unduly prejudicial to the rights of holders of
Securities of any other series at the time outstanding determined
in accordance with Section 8.04, not parties thereto. Subject to
the provisions of Section 7.01, the Trustee shall have the right
to decline to follow any such direction if the Trustee in good
faith shall, by a responsible officer or officers of the Trustee,
determine that the proceeding so directed would involve the
Trustee in personal liability. The holders of a majority in
aggregate principal amount of the Securities of any series at the
time outstanding, determined in accordance with Section 8.04, may
on behalf of the holders of all of the Securities of that series
waive any past default in the performance of any of the covenants
contained herein
26
or established pursuant to Section 2.01 with respect to such
series and its consequences, except a default in the payment of
the principal of, or premium, if any, or interest on, any of the
Securities of that series as and when the same shall become due
by the terms of such Securities or a call for redemption of
Securities of that series. Upon any such waiver, the default
covered thereby shall be deemed to be cured for all purposes of
this Indenture and the Company, the Trustee and the holders of
the Securities of that series shall be restored to their former
positions and rights hereunder, respectively; but no such waiver
shall extend to any subsequent or other default or impair any
right consequent thereon.
SECTION 6.07. The Trustee shall, within 90 days after the
occurrence of a default with respect to a particular series,
transmit by mail, first class postage prepaid, to the holders of
Securities of that series, as their names and addresses appear
upon the Security Register, notice of all defaults with respect
to that series known to the Trustee, unless such defaults shall
have been cured before the giving of such notice (the term
"defaults" for the purposes of this Section being hereby defined
to be the events specified in subsections (1), (2), (3), (4) and
(5) of Section 6.01(a), not including any periods of grace
provided for therein and irrespective of the giving of notice
provided for by subsection (3) of Section 6.01(a)); provided,
that, except in the case of default in the payment of the
principal of (or premium, if any) or interest on any of the
Securities of that series or in the payment of any sinking fund
installment established with respect to that series, the Trustee
shall be protected in withholding such notice if and so long as
the board of directors, the executive committee, or a trust
committee of directors and/or responsible officers, of the
Trustee in good faith determine that the withholding of such
notice is in the interests of the Securityholders of Securities
of that series; provided further, that in the case of any default
of the character specified in Section 6.01(a)(3) with respect to
Securities of such series no such notice to the holders of the
Securities of that series shall be given until at least 30 days
after the occurrence thereof.
The Trustee shall not be deemed to have knowledge of any
default, except (i) a default under subsections (a)(1) or (a)(2)
of Section 6.01 as long as the Trustee is acting as paying agent
for such series of Securities or (ii) any default as to which the
Trustee shall have received written notice or a responsible
officer charged with the administration of this Indenture shall
have obtained actual knowledge.
SECTION 6.08. All parties to this Indenture agree, and each
holder of any Securities by his or her acceptance thereof shall
be deemed to have agreed, that any court may in its discretion
require, in any suit for the enforcement of any right or remedy
under this Indenture, or in any suit against the Trustee for any
action taken or omitted by it as Trustee, the filing by any party
litigant in such suit of an undertaking to pay the costs of such
suit, and that such court may in its discretion assess reasonable
costs, including reasonable attorneys' fees, against any party
litigant in such suit, having due regard to the merits and good
faith of the claims or defenses made by such party litigant; but
the provisions of this Section shall not apply to any suit
instituted by the Trustee, to any suit instituted by any
Securityholder, or group of Securityholders, holding more than
10% in aggregate principal amount of the outstanding Securities
of any series, or to any suit instituted by any Securityholder
for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security of such series, on
or after the respective due dates expressed in such Security or
established pursuant to this Indenture.
27
ARTICLE SEVEN
Concerning the Trustee
SECTION 7.01. (a) The Trustee, prior to the occurrence of an
Event of Default with respect to Securities of a series and after
the curing of all Events of Default with respect to Securities of
that series which may have occurred, shall undertake to perform
with respect to Securities of such series such duties and only
such duties as are specifically set forth in this Indenture, and
no implied covenants shall be read into this Indenture against
the Trustee. In case an Event of Default with respect to
Securities of a series has occurred (which has not been cured or
waived), the Trustee shall exercise with respect to Securities of
that series such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their
exercise, as a prudent man would exercise or use under the
circumstances in the conduct of his own affairs.
(b) No provision of this Indenture shall be construed to
relieve the Trustee from liability for its own negligent action,
its own negligent failure to act, or its own willful misconduct,
except that
(1) prior to the occurrence of an Event of Default with respect
to Securities of a series and after the curing or waiving of all
such Events of Default with respect to that series which may have
occurred:
(i) the duties and obligations of the Trustee shall with respect
to Securities of such series be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable
with respect to Securities of such series except for the
performance of such duties and obligations as are specifically
set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the
Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may with respect to Securities of such series
conclusively rely, as to the truth of the statements and the
correctness of the opinions expressed therein, upon any
certificates or opinions furnished to the Trustee and conforming
to the requirements of this Indenture; but in the case of any
such certificates or opinions which by any provision hereof are
specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or
not they conform to the requirements of this Indenture;
(2) the Trustee shall not be liable for any error of judgment
made in good faith by a responsible officer or responsible
officers of the Trustee, unless it shall be proved that the
Trustee was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action
taken or omitted to be taken by it in good faith in accordance
with the direction of the holders of not less than a majority in
principal amount of the Securities of any series at the time
outstanding relating to the time, method and place of conducting
any proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred upon the Trustee under
this Indenture with respect to the Securities of that series; and
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(4) None of the provisions contained in this Indenture shall
require the Trustee to expend or risk its own funds or otherwise
incur personal financial liability in the performance of any of
its duties or in the exercise of any of its rights or powers, if
there is reasonable ground for believing that the repayment of
such funds or liability is not reasonably assured to it under the
terms of this Indenture or adequate indemnity against such risk
is not reasonably assured to it.
SECTION 7.02. Except as otherwise provided in Section 7.01:
(a) The Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, security or other paper or document
believed by it to be genuine and to have been signed or presented
by the proper party or parties;
(b) Any request, direction, order or demand of the Company
mentioned herein shall be sufficiently evidenced by a Board
Resolution or an instrument signed in the name of the Company by
the President or any Vice President and by the Secretary or an
Assistant Secretary or the Treasurer or an Assistant Treasurer
(unless other evidence in respect thereof is specifically
prescribed herein);
(c) The Trustee may consult with counsel and the written
advice of such counsel or any Opinion of Counsel shall be full
and complete authorization and protection in respect of any
action taken or suffered or omitted hereunder in good faith and
in reliance thereon;
(d) The Trustee shall be under no obligation to exercise any
of the rights or powers vested in it by this Indenture at the
request, order or direction of any of the Securityholders,
pursuant to the provisions of this Indenture, unless such
Securityholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities
which may be incurred therein or thereby; nothing herein
contained shall, however, relieve the Trustee of the obligation,
upon the occurrence of an Event of Default with respect to a
series of the Securities (which has not been cured or waived) to
exercise with respect to Securities of that series such of the
rights and powers vested in it by this Indenture, and to use the
same degree of care and skill in their exercise, as a prudent man
would exercise or use under the circumstances in the conduct of
his own affairs;
(e) The Trustee shall not be liable for any action taken or
omitted to be taken by it in good faith and believed by it to be
authorized or within the discretion or rights or powers conferred
upon it by this Indenture;
(f) The Trustee shall not be bound to make any investigation
into the facts or matters stated in any resolution, certificate,
statement, instrument, opinion, report, notice, request, consent,
order, approval, bond, security, or other papers or documents,
unless requested in writing so to do by the holders of not less
than a majority in principal amount of the outstanding Securities
of the particular series affected thereby (determined as provided
in Section 8.04); provided, however, that if the payment within a
reasonable time to the Trustee of the costs, expenses or
liabilities likely to be incurred by it in the making of such
investigation is, in the opinion of the Trustee, not reasonably
assured to the Trustee by the security afforded to it by the
terms of this Indenture, the Trustee may require reasonable
indemnity against such costs, expenses or liabilities as a
condition to so proceeding. The reasonable expense of every such
examination shall be paid by the Company or, if paid by the
Trustee, shall be repaid by the Company upon demand; and
29
(g) The Trustee may execute any of the trusts or powers
hereunder or perform any duties hereunder either directly or by
or through agents or attorneys and the Trustee shall not be
responsible for any misconduct or negligence on the part of any
agent or attorney appointed with due care by it hereunder.
SECTION 7.03. (a) The recitals contained herein and in the
Securities (other than the Certificate of Authentication on the
Securities) shall be taken as the statements of the Company, and
the Trustee assumes no responsibility for the correctness of the
same.
(b) The Trustee makes no representations as to the validity
or sufficiency of this Indenture or of the Securities.
(c) The Trustee shall not be accountable for the use or
application by the Company of any of the Securities or of the
proceeds of such Securities, or for the use or application of any
moneys paid over by the Trustee in accordance with any provision
of this Indenture or established pursuant to Section 2.01, or for
the use or application of any moneys received by any paying agent
other than the Trustee.
SECTION 7.04. The Trustee or any paying agent or Security
Registrar, in its individual or any other capacity, may become
the owner or pledgee of Securities with the same rights it would
have if it were not Trustee, paying agent or Security Registrar.
SECTION 7.05. Subject to the provisions of Section 11.05,
all moneys received by the Trustee shall, until used or applied
as herein provided, be held in trust for the purposes for which
they were received, but need not be segregated from other funds
except to the extent required by law. The Trustee shall be under
no liability for interest on any moneys received by it hereunder
except such as it may agree with the Company to pay thereon.
SECTION 7.06. (a) The Company covenants and agrees to pay to
the Trustee from time to time, and the Trustee shall be entitled
to, reasonable compensation (which shall not be limited by any
provision of law in regard to the compensation of a trustee of an
express trust) for all services rendered by it in the execution
of the trusts hereby created and in the exercise and performance
of any of the powers and duties hereunder of the Trustee, and the
Company will pay or reimburse the Trustee upon its request for
all reasonable expenses, disbursements and advances incurred or
made by the Trustee in accordance with any of the provisions of
this Indenture (including the reasonable compensation and the
expenses and disbursements of its counsel (including in-house
counsel) and of all persons not regularly in its employ) except
any such expense, disbursement or advance as may arise from its
negligence or bad faith. The Company also covenants to indemnify
the Trustee (and its officers, agents, directors and employees)
for, and to hold it harmless against, any loss, liability or
expense incurred without negligence or bad faith on the part of
the Trustee and arising out of or in connection with the
acceptance or administration of this trust, including the costs
and expenses of defending itself against any claim of liability
in the premises.
(b) The obligations of the Company under this Section to
compensate and indemnify the Trustee and to pay or reimburse the
Trustee for expenses, disbursements and advances shall constitute
additional indebtedness hereunder. Such additional indebtedness
shall be secured by a lien prior to that of the Securities upon
all property and funds held or collected by the Trustee as such,
except funds held in trust for the benefit of the holders of
particular Securities.
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SECTION 7.07. Except as otherwise provided in Section 7.01,
whenever in the administration of the provisions of this
Indenture the Trustee shall deem it necessary or desirable that a
matter be proved or established prior to taking or suffering or
omitting to take any action hereunder, such matter (unless other
evidence in respect thereof be herein specifically prescribed)
may, in the absence of negligence or bad faith on the part of the
Trustee, be deemed to be conclusively proved and established by
an Officers' Certificate delivered to the Trustee and such
certificate, in the absence of negligence or bad faith on the
part of the Trustee, shall be full warrant to the Trustee for any
action taken, suffered or omitted to be taken by it under the
provisions of this Indenture upon the faith thereof.
SECTION 7.08. (a) If the Trustee has or shall acquire any
conflicting interest, as defined in this Section, with respect to
the Securities of any series and if the Default to which such
conflicting interest relates has not been cured, duly waived or
otherwise eliminated, within 90 days after ascertaining that it
has such conflicting interest, it shall either eliminate such
conflicting interest, except as otherwise provided herein, or
resign with respect to the Securities of that series in the
manner and with the effect specified in Section 7.10 and the
Company shall promptly appoint a successor Trustee in the manner
provided herein.
(b) In the event that the Trustee shall fail to comply with
the provisions of subsection (a) of this Section, with respect to
the Securities of any series the Trustee shall, within ten days
after the expiration of such 90-day period, transmit notice of
such failure by mail, first class postage prepaid, to the
Securityholders of that series as their names and addresses
appear upon the registration books.
(c) For the purposes of this Section the Trustee shall be
deemed to have a conflicting interest with respect to the
Securities of any series if a Default has occurred and is
continuing and:
(1) the Trustee is trustee under this Indenture with respect to
the outstanding Securities of any series other than that series,
or is trustee under another indenture under which any other
securities, or certificates of interest or participation in any
other securities, of the Company are outstanding, unless such
other indenture is a collateral trust indenture under which the
only collateral consists of Securities issued under this
Indenture; provided that there shall be excluded from the
operation of this paragraph the Securities of any series other
than that series and any other indenture or indentures under
which other securities, or certificates of interest or
participation in other securities, of the Company are outstanding
if (i) this Indenture and such other indenture or indentures and
all series of securities issuable thereunder are wholly unsecured
and rank equally and such other indenture or indentures (and such
series) are hereafter qualified under the Trust Indenture Act of
1939, as amended, unless the Securities and Exchange Commission
shall have found and declared by order pursuant to subsection (b)
of Section 305 or subsection (c) of Section 307 of the Trust
Indenture Act of 1939, as amended, that differences exist between
(A) the provisions of this Indenture with respect to Securities
of that series and with respect to one or more other series or
(B) the provisions of this Indenture and the provisions of such
other indenture or indentures (or such series), which are so
likely to involve a material conflict of interest as to make it
necessary in the public interest or for the protection of
investors
31
to disqualify the Trustee from acting as such under this
Indenture with respect to the Securities of that series and such
other series or such other indenture or indentures, or (ii) the
Company shall have sustained the burden of proving, on
application to the Securities and Exchange Commission and after
opportunity for hearing thereon, that the trusteeship under this
Indenture with respect to Securities of that series and such
other series or such other indenture or indentures is not so
likely to involve a material conflict of interest as to make it
necessary in the public interest or for the protection of
investors to disqualify the Trustee from acting as such under
this Indenture with respect to Securities of that series and such
other series or under such other indentures;
(2) the Trustee or any of its directors or executive officers is
an underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common
control with or an underwriter for the Company;
(4) the Trustee or any of its directors or executive officers is
a director, officer, partner, employee, appointee or
representative of the Company, or of an underwriter (other than
the Trustee itself) for the Company who is currently engaged in
the business of underwriting, except that (A) one individual may
be a director and/or an executive officer of the Trustee and a
director and/or an executive officer of the Company, but may not
be at the same time an executive officer of both the Trustee and
the Company; (B) if and so long as the number of directors of the
Trustee in office is more than nine, one additional individual
may be a director and/or an executive officer of the Trustee and
a director of the Company; and (C) the Trustee may be designated
by the Company or by an underwriter for the Company to act in the
capacity of transfer agent, registrar, custodian, paying agent,
fiscal agent, escrow agent, or depository, or in any other
similar capacity, or, subject to the provisions of paragraph (1)
of this subsection (c), to act as trustee whether under an
indenture or otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director,
partner, or executive officer thereof, or 20% or more of such
voting securities is beneficially owned, collectively, by any two
or more of such persons; or 10% or more of the voting securities
of the Trustee is beneficially owned either by an underwriter for
the Company or by any director, partner, or executive officer
thereof, or is beneficially owned, collectively, by any two or
more such persons;
(6) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this subsection (c) defined), (A) 5% or more of
the voting securities, or 10% or more of any other class of
security, of the Company, not including the Securities issued
under this Indenture and securities issued under any other
indenture under which the Trustee is also trustee, or (B) 10% or
more of any class of security of an underwriter for the Company;
32
(7) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this subsection (c) defined), 5% or more of the
voting securities of any person who, to the knowledge of the
Trustee, owns 10% or more of the voting securities of, or
controls directly or indirectly or is under direct or indirect
common control with, the Company;
(8) the Trustee is the beneficial owner of, or holds as
collateral security for an obligation which is in default (as
hereinafter in this subsection (c) defined), 10% or more of any
class of security of any person who, to the knowledge of the
Trustee, owns 50% or more of the voting securities of the
Company;
(9) the Trustee owns, on the date of Default upon the Securities
of any series or any anniversary of such Default while such
Default upon the Securities issued under this Indenture remains
outstanding, in the capacity of executor, administrator,
testamentary or inter vivos trustee, guardian, committee or
conservator, or in any other similar capacity, an aggregate of
25% or more of the voting securities, or of any class of
security, of any person, the beneficial ownership of a specified
percentage of which would have constituted a conflicting interest
under paragraph (6), (7), or (8) of this subsection (d). As to
any such securities of which the Trustee acquired ownership
through becoming executor, administrator or testamentary trustee
of an estate which include them, the provisions of the preceding
sentence shall not apply, for a period of two years from the date
of such acquisition, to the extent that such securities included
in such estate do not exceed 25% of such voting securities or 25%
of any such class of security. Promptly after the dates of any
such Default upon the Securities issued under this Indenture and
annually in each succeeding year that the Securities issued under
this Indenture remain in Default, the Trustee shall make a check
of its holding of such securities in any of the above-mentioned
capacities as of such dates. If the Company fails to make payment
in full of principal of or interest on any of the Securities when
and as the same becomes due and payable, and such failure
continues for 30 days thereafter, the Trustee shall make a prompt
check of its holding of such securities in any of the
above-mentioned capacities as of the date of the expiration of
such 30-day period, and after such date, notwithstanding the
foregoing provisions of this paragraph (9), all such securities
so held by the Trustee, with sole or joint control over such
securities vested in it, shall, but only so long as such failure
shall continue, be considered as though beneficially owned by the
Trustee for the purposes of paragraphs (6), (7) and (8) of this
subsection (c); or (10) except under the circumstances described
in paragraphs (1), (3), (4), (5) or (6) of subsection (b) of
Section 7.13 the Trustee shall be or shall become a creditor of
the Company.
For purposes of paragraph (1) of this subsection (c), and of
Section 6.06, the term "series of Securities" or "series" means a
series, class or group of securities issuable under an indenture
pursuant to whose terms holders of one such series may vote to
direct the indenture trustee, or otherwise take action pursuant
to a vote of such holders, separately from holders of another
such series; provided, that "series of securities" or "series"
shall not include any series of securities issuable under an
indenture if all such series rank equally and are wholly
unsecured.
33
The specification of percentages in paragraphs (5) to (9),
inclusive, of this subsection (c) shall not be construed as
indicating that the ownership of such percentages of the
securities of a person is or is not necessary or sufficient to
constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this subsection (c).
For the purposes of paragraphs (6), (7), (8) and (9) of this
subsection (c) only, (A) the terms "security" and "securities"
shall include only such securities as are generally known as
corporate securities, but shall not include any note or other
evidence of indebtedness issued to evidence an obligation to
repay moneys lent to a person by one or more banks, trust
companies or banking firms, or any certificate of interest or
participation in any such note or evidence of indebtedness; (B)
an obligation shall be deemed to be in "default" when a default
in payment of principal shall have continued for 30 days or more
and shall not have been cured; and (C) the Trustee shall not be
deemed to be the owner or holder of (i) any security which it
holds as collateral security (as trustee or otherwise) for any
obligation which is not in default as defined in clause (B)
above, or (ii) any security which it holds as collateral security
under this Indenture, irrespective of any Default hereunder, or
(iii) any security which it holds as agent for collection, or as
custodian, escrow agent or depositary, or in any similar
representative capacity.
Except as above provided, the word "security" or
"securities" as used in this Indenture shall mean any note,
stock, treasury stock, bond, debenture, evidence of indebtedness,
certificate of interest or participation in any profit-sharing
agreement, collateral-trust certificate, pre-organization
certificate or subscription, transferable share, investment
contract, voting-trust certificate, certificate of deposit for a
security, fractional undivided interest in oil, gas, or other
mineral rights, or, in general, any interest or instrument
commonly known as a "security", or any certificate of interest or
participation in, temporary or interim certificate for, receipt
for, guarantee of, or warrant or right to subscribe to or
purchase, any of the foregoing.
(d) For the purposes of this Section:
(1) The term "underwriter" when used with reference to the
Company shall mean every person, who, within one year prior to
the time as of which the determination is made, has purchased
from the Company with a view to, or has offered or sold for the
Company in connection with, the distribution of any security of
the Company outstanding at such time, or has participated or has
had a direct or indirect participation in any such undertaking,
or has participated or has had a participation in the direct or
indirect underwriting of any such undertaking, but such term
shall not include a person whose interest was limited to a
commission from an underwriter or dealer not in excess of the
usual and customary distributors' or sellers' commission.
(2) The term "director" shall mean any member of the board
of directors of a corporation or any individual performing
similar functions with respect to any organization whether
incorporated or unincorporated.
34
(3) The term "person" shall mean an individual, a
corporation, a partnership, an association, a joint-stock
company, a trust, an unincorporated organization or a government
or political subdivision thereof. As used in this paragraph, the
term "trust" shall include only a trust where the interest or
interests of the beneficiary or beneficiaries are evidenced by a
security.
(4) The term "voting security" shall mean any security
presently entitling the owner or holder thereof to vote in the
direction or management of the affairs of a person, or any
security issued under or pursuant to any trust, agreement or
arrangement whereby a trustee or trustees or agent or agents for
the owner or holder of such security are presently entitled to
vote in the direction or management of the affairs of a person.
(5) The term "Company" shall mean any obligor upon the
Securities.
(6) The term "executive officer" shall mean the president,
every vice president, every assistant vice president, every trust
officer, the cashier, the secretary, and the treasurer of a
corporation, and any individual customarily performing similar
functions with respect to any organization whether incorporated
or unincorporated, but shall not include the chairman of the
board of directors.
(e) The percentages of voting securities and other
securities specified in this Section shall be calculated in
accordance with the following provisions:
(1) A specified percentage of the voting securities of the
Trustee, the Company or any other person referred to in this
Section (each of whom is referred to as a "person" in this
paragraph) means such amount of the outstanding voting securities
of such person as entitles the holder or holders thereof to cast
such specified percentage of the aggregate votes which the
holders of all the outstanding voting securities of such person
are entitled to cast in the direction or management of the
affairs of such person.
(2) A specified percentage of a class of securities of a
person means such percentage of the aggregate amount of
securities of the class outstanding.
(3) The term "amount", when used in regard to securities,
means the principal amount if relating to evidences of
indebtedness, the number of shares if relating to capital shares,
and the number of units if relating to any other kind of
security.
(4) The term "outstanding" means issued and not held by or
for the account of the issuer. The following securities shall not
be deemed outstanding within the meaning of this definition:
(i) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class,
(ii) securities of an issuer held in a sinking fund relating to
another class of securities of the issuer, if the obligation
evidenced by such other class of securities is not in default as
to principal or interest or otherwise,
35
(iii) securities pledged by the issuer thereof as security for an
obligation of the issuer not in default as to principal or
interest or otherwise,
(iv) securities held in escrow if placed in escrow by the issuer
thereof.
Provided, however, that any voting securities of an issuer shall
be deemed outstanding if any person other than the issuer is
entitled to exercise the voting rights thereof.
(5) A security shall be deemed to be of the same class as
another security if both securities confer upon the holder or
holders thereof substantially the same rights and privileges;
provided, however, that, in the case of secured evidences of
indebtedness, all of which are issued under a single indenture,
differences in the interest rates or maturity dates of various
series thereof shall not be deemed sufficient to constitute such
series different classes; and provided, further, that, in the
case of unsecured evidences of indebtedness, differences in the
interest rates or maturity dates thereof shall not be deemed
sufficient to constitute them securities of different classes,
whether or not they are issued under a single indenture.
(f) Except in the case of a default in the payment of the
principal of (or premium, if any) or interest on any Securities
issued under this Indenture, or in the payment of any sinking or
analogous fund installment, the Trustee shall not be required to
resign as provided by this Section 7.08 if such Trustee shall
have sustained the burden of proving, on application to the
Securities and Exchange Commission and after opportunity for
hearing thereon, that (i) the default under the Indenture may be
cured or waived during a reasonable period and under the
procedures described in such application and (ii) a stay of the
Trustee's duty to resign will not be inconsistent with the
interests of Securityholders. The filing of such an application
shall automatically stay the performance of the duty to resign
until the Securities and Exchange Commission orders otherwise.
Any resignation of the Trustee shall become effective only
upon the appointment of a successor trustee and such successor's
acceptance of such an appointment.
SECTION 7.09. There shall at all times be a Trustee with
respect to the Securities issued hereunder which shall at all
times be a corporation organized and doing business under the
laws of the United States of America or any State or Territory
thereof or of the District of Columbia, or a corporation or other
person permitted to act as trustee by the Securities and Exchange
Commission, authorized under such laws to exercise corporate
trust powers, having a combined capital and surplus of at least
50 million dollars, and subject to supervision or examination by
Federal, State, Territorial, or District of Columbia authority.
If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid
supervising or examining authority, then for the purposes of this
Section, the combined capital and surplus of such corporation
shall be deemed to be its combined capital and surplus as set
forth in its most recent report of condition so published. The
Company may not, nor may any person directly or indirectly
controlling, controlled by, or under common control with the
Company, serve as Trustee. In case at any time the Trustee shall
cease to be eligible in accordance with the provisions of this
Section, the Trustee shall resign immediately in the manner and
with the effect specified in Section 7.10.
36
SECTION 7.10. (a) The Trustee or any successor hereafter
appointed, may at any time resign with respect to the Securities
of one or more series by giving written notice thereof to the
Company and by transmitting notice of resignation by mail, first
class postage prepaid, to the Securityholders of such series, as
their names and addresses appear upon the Security Register. Upon
receiving such notice of resignation, the Company shall promptly
appoint a successor trustee with respect to Securities of such
series by written instrument, in duplicate, executed by order of
the Board of Directors, one copy of which instrument shall be
delivered to the resigning Trustee and one copy to the successor
trustee. If no successor trustee shall have been so appointed and
have accepted appointment within 30 days after the mailing of
such notice of resignation, the resigning Trustee may petition
any court of competent jurisdiction for the appointment of a
successor trustee with respect to Securities of such series, or
any Securityholder of that series who has been a bona fide holder
of a Security or Securities for at least six months may, subject
to the provisions of Section 6.08, on behalf of himself and all
others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon
after such notice, if any, as it may deem proper and prescribe,
appoint a successor trustee.
(b) In case at any time any of the following shall occur--
(1) the Trustee shall fail to comply with the provisions of
subsection (a) of Section 7.08 after written request therefor by
the Company or by any Securityholder who has been a bona fide
holder of a Security or Securities for at least six months, or
(2) the Trustee shall cease to be eligible in accordance
with the provisions of Section 7.09 and shall fail to resign
after written request therefor by the Company or by any such
Securityholder of Securities, or
(3) the Trustee shall become incapable of acting, or shall
be adjudged a bankrupt or insolvent, or a receiver of the Trustee
or of its property shall be appointed, or any public officer
shall take charge or control of the Trustee or of its property or
affairs for the purpose of rehabilitation, conservation or
liquidation,
then, in any such case, the Company may remove the Trustee with
respect to all Securities and appoint a successor trustee by
written instrument, in duplicate, executed by order of the Board
of Directors, one copy of which instrument shall be delivered to
the Trustee so removed and one copy to the successor trustee, or,
subject to the provisions of Section 6.08, unless the Trustee's
duty to resign is stayed as provided herein, any Securityholder
who has been a bona fide holder of a Security or Securities for
at least six months may, on behalf of himself and all others
similarly situated, petition any court of competent jurisdiction
for the removal of the Trustee and the appointment of a successor
trustee. Such court may thereupon after such notice, if any, as
it may deem proper and prescribe, remove the Trustee and appoint
a successor trustee.
(c) The holders of a majority in aggregate principal amount
of the Securities of any series at the time outstanding may at
any time remove the Trustee with respect to such series and
appoint a successor trustee.
37
(d) Any resignation or removal of the Trustee and
appointment of a successor trustee with respect to the Securities
of a series pursuant to any of the provisions of this Section
shall become effective upon acceptance of appointment by the
successor trustee as provided in Section 7.11.
(e) Any successor trustee appointed pursuant to this Section
may be appointed with respect to the Securities of one or more
series or all of such series, and at any time there shall be only
one Trustee with respect to the Securities of any particular
series.
SECTION 7.11. (a) In case of the appointment hereunder of a
successor trustee with respect to all Securities, every such
successor trustee so appointed shall execute, acknowledge and
deliver to the Company and to the retiring Trustee an instrument
accepting such appointment, and thereupon the resignation or
removal of the retiring Trustee shall become effective and such
successor trustee, without any further act, deed or conveyance,
shall become vested with all the rights, powers, trusts and
duties of the retiring Trustee; but, on the request of the
Company or the successor trustee, such retiring Trustee shall,
upon payment of its charges, execute and deliver an instrument
transferring to such successor trustee all the rights, powers,
and trusts of the retiring Trustee and shall duly assign,
transfer and deliver to such successor trustee all property and
money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor
trustee with respect to the Securities of one or more (but not
all) series, the Company, the retiring Trustee and each successor
trustee with respect to the Securities of one or more series
shall execute and deliver an indenture supplemental hereto
wherein each successor trustee shall accept such appointment and
which (1) shall contain such provisions as shall be necessary or
desirable to transfer and confirm to, and to vest in, each
successor trustee all the rights, powers, trusts and duties of
the retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor trustee
relates, (2) shall contain such provisions as shall be deemed
necessary or desirable to confirm that all the rights, powers,
trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the
provisions of this Indenture as shall be necessary to provide for
or facilitate the administration of the trusts hereunder by more
than one Trustee, it being understood that nothing herein or in
such supplemental indenture shall constitute such Trustees co-
trustees of the same trust, that each such Trustee shall be
trustee of a trust or trusts hereunder separate and apart from
any trust or trusts hereunder administered by any other such
Trustee and that no Trustee shall be responsible for any act or
failure to act on the part of any other Trustee hereunder; and
upon the execution and delivery of such supplemental indenture
the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein, such retiring Trustee
shall with respect to the Securities of that or those series to
which the appointment of such successor trustee relates have no
further responsibility for the exercise of rights and powers or
for the performance of the duties and obligations vested in the
Trustee under this Indenture, and each such successor trustee,
without any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the retiring
Trustee with respect to the
38
Securities of that or those series to which the appointment of
such successor trustee relates; but, on request of the Company or
any successor trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor trustee, to the extent
contemplated by such supplemental indenture, the property and
money held by such retiring Trustee hereunder with respect to the
Securities of that or those series to which the appointment of
such successor trustee relates.
(c) Upon request of any such successor trustee, the Company
shall execute any and all instruments for more fully and
certainly vesting in and confirming to such successor trustee all
such rights, powers and trusts referred to in paragraph (a) or
(b) of this Section, as the case may be.
(d) No successor trustee shall accept its appointment unless
at the time of such acceptance such successor trustee shall be
qualified and eligible under this Article.
(e) Upon acceptance of appointment by a successor trustee as
provided in this Section, the Company shall transmit notice of
the succession of such trustee hereunder by mail, first class
postage prepaid, to the Securityholders, as their names and
addresses appear upon the Security Register. If the Company fails
to transmit such notice within ten days after acceptance of
appointment by the successor trustee, the successor trustee shall
cause such notice to be transmitted at the expense of the
Company.
SECTION 7.12. Any corporation into which the Trustee may be
merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder,
provided such corporation shall be qualified under the provisions
of Section 7.08 and eligible under the provisions of Section
7.09, without the execution or filing of any paper or any further
act on the part of any of the parties hereto, anything herein to
the contrary notwithstanding. In case any Securities shall have
been authenticated, but not delivered, by the Trustee then in
office, any successor by merger, conversion or consolidation to
such authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated with the same effect as
if such successor Trustee had itself authenticated such
Securities.
SECTION 7.13. (a) Subject to the provisions of subsection
(b) of this Section, if the Trustee shall be or shall become a
creditor, directly or indirectly, secured or unsecured, of the
Company within three months prior to a default, as defined in
subsection (c) of this Section, or subsequent to such a default,
then, unless and until such default shall be cured, the Trustee
shall set apart and hold in a special account for the benefit of
the Trustee individually, the holders of the Securities and the
holders of other indenture securities (as defined in subsection
(c) of this Section)
(1) an amount equal to any and all reductions in the amount
due and owing upon any claim as such creditor in respect of
principal or interest, effected after the beginning of such three
months' period and valid as against the Company and its other
creditors, except any such reduction resulting from the receipt
or disposition of any property described in paragraph (2) of this
subsection, or from the exercise of any right of set-off which
the Trustee could have exercised if a petition in bankruptcy had
been filed by or against the Company upon the date of such
default; and
39
(2) all property received by the Trustee in respect of any
claim as such creditor, either as security therefor, or in
satisfaction or composition thereof, or otherwise, after the
beginning of such three months' period, or an amount equal to the
proceeds of any such property, if disposed of, subject, however,
to the rights, if any, of the Company and its other creditors in
such property or such proceeds.
Nothing herein contained, however, shall affect the right of
the Trustee
(A) to retain for its own account (i) payments made on
account of any such claim by any person (other than the Company)
who is liable thereon, and (ii) the proceeds of the bona fide
sale of any such claim by the Trustee to a third person, and
(iii) distributions made in cash, securities, or other property
in respect of claims filed against the Company in bankruptcy or
receivership or in a case for reorganization pursuant to the
Federal Bankruptcy Code or applicable State law;
(B) to realize, for its own account, upon any property held
by it as security for any such claim, if such property was so
held prior to the beginning of such three months' period;
(C) to realize, for its own account, but only to the extent
of the claim hereinafter mentioned, upon any property held by it
as security for any such claim, if such claim was created after
the beginning of such three months' period and such property was
received as security therefor simultaneously with the creation
thereof, and if the Trustee shall sustain the burden of proving
that at the time such property was so received the Trustee had no
reasonable cause to believe that a default, as defined in
subsection (c) of this Section, would occur within three months;
or
(D) to receive payment on any claim referred to in paragraph
(B) or (C), against the release of any property held as security
for such claim as provided in such paragraph (B) or (C), as the
case may be, to the extent of the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property
substituted after the beginning of such three months' period for
property held as security at the time of such substitution shall,
to the extent of the fair value of the property released, have
the same status as the property released, and, to the extent that
any claim referred to in any of such paragraphs is created in
renewal of or in substitution for or for the purpose of repaying
or refunding any pre-existing claim of the Trustee as such
creditor, such claim shall have the same status as such pre-
existing claim.
If the Trustee shall be required to account, the funds and
property held in such special account and the proceeds thereof
shall be apportioned between the Trustee, the Securityholders and
the holders of other indenture securities in such manner that the
Trustee, the Securityholders and the holders of other indenture
securities realize, as a result of payments from such special
account and payments of dividends on claims filed against the
Company in bankruptcy or receivership or in a case for
reorganization pursuant to the Federal Bankruptcy Code or
applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee
anything on account of the receipt by it from the Company of the
funds and property in such special account and before crediting
to the respective claims of the Trustee, the Securityholders and
the holders of other indenture securities dividends on claims
filed against the Company in
40
bankruptcy or receivership or in a case for reorganization
pursuant to the Federal Bankruptcy Code or applicable State law,
but after crediting thereon receipts on account of the
indebtedness represented by their respective claims from all
sources other than from such dividends and from the funds and
property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends" shall
include any distribution with respect to such claim, in
bankruptcy or receivership or in a case for reorganization
pursuant to the Federal Bankruptcy Code or applicable State law,
whether such distribution is made in cash, securities, or other
property, but shall not include any such distribution with
respect to the secured portion, if any, of such claim. The court
in which such bankruptcy, receivership or a case for
reorganization is pending shall have jurisdiction (i) to
apportion between the Trustee, the Securityholders and the
holders of other indenture securities, in accordance with the
provisions of this paragraph, the funds and property held in such
special account and the proceeds thereof, or (ii) in lieu of such
apportionment, in whole or in part, to give to the provisions of
this paragraph due consideration in determining the fairness of
the distributions to be made to the Trustee, the Securityholders
and the holders of other indenture securities with respect to
their respective claims, in which event it shall not be necessary
to liquidate or to appraise the value of any securities or other
property held in such special account or as security for any such
claim, or to make a specific allocation of such distributions as
between the secured and unsecured portions of such claims, or
otherwise to apply the provisions of this paragraph as a
mathematical formula.
Any Trustee who has resigned or been removed after the
beginning of such three months' period shall be subject to the
provisions of this subsection (a) as though such resignation or
removal had not occurred. If any Trustee has resigned or been
removed prior to the beginning of such three months' period, it
shall be subject to the provisions of this subsection (a) if and
only if the following conditions exist:
(i) the receipt of property or reduction of claim which
would have given rise to the obligation to account, if such
Trustee had continued as trustee, occurred after the beginning of
such three months' period; and
(ii) such receipt of property or reduction of claim occurred
within three months after such resignation or removal.
(b) There shall be excluded from the operation of subsection
(a) of this Section a creditor relationship arising from
(1) the ownership or acquisition of securities issued under
any indenture, or any security or securities having a maturity of
one year or more at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy
court of competent jurisdiction, or by this Indenture, for the
purpose of preserving any property other than cash which shall at
any time be subject to the lien, if any, of this Indenture or of
discharging tax liens or other prior liens or encumbrances
thereon, if notice of such advance and of the circumstances
surrounding the making thereof is given to the Securityholders at
the time and in the manner provided in this Indenture;
41
(3) disbursements made in the ordinary course of business in
the capacity of trustee under an indenture, transfer agent,
registrar, custodian, paying agent, subscription agent, fiscal
agent or depositary, or other similar capacity;
(4) an indebtedness created as a result of services rendered
or premises rented; or an indebtedness created as a result of
goods or securities sold in a cash transaction as defined in
subsection (c) of this Section;
(5) the ownership of stock or of other securities of a
Company organized under the provisions of Section 25(a) of the
Federal Reserve Act, as amended, which is directly or indirectly
a creditor of the Company; or
(6) the acquisition, ownership, acceptance or negotiation of
any drafts, bills of exchange, acceptances or obligations which
fall within the classification of self-liquidating paper as
defined in subsection (c) of this Section.
(c) As used in this Section:
(1) The term "default" shall mean any failure to make
payment in full of the principal of (or premium, if any) or
interest upon any of the Securities or upon the other indenture
securities when and as such principal (or premium, if any) or
interest becomes due and payable.
(2) The term "other indenture securities" shall mean
securities upon which the Company is an obligor (as defined in
the Trust Indenture Act of 1939, as amended) outstanding under
any other indenture (A) under which the Trustee is also trustee,
(B) which contains provisions substantially similar to the
provisions of subsection (a) of this Section, and (C) under which
a default exists at the time of the apportionment of the funds
and property held in said special account.
(3) The term "cash transaction" shall mean any transaction
in which full payment for goods or securities sold is made within
seven days after delivery of the goods or securities in currency
or in checks or other orders drawn upon banks or bankers and
payable upon demand.
(4) The term "self-liquidating paper" shall mean any draft,
bill of exchange, acceptance or obligation which is made, drawn,
negotiated or incurred by the Company for the purpose of
financing the purchase, processing, manufacture, shipment,
storage or sale of goods, wares or merchandise and which is
secured by documents evidencing title to, possession of, or a
lien upon, the goods, wares or merchandise or the receivables or
proceeds arising from the sale of the goods, wares or merchandise
previously constituting the security, provided the security is
received by the Trustee simultaneously with the creation of the
creditor relationship with the Company arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange,
acceptance or obligation.
(5) The term "Company" shall mean any obligor upon any of
the Securities.
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ARTICLE EIGHT
Concerning the Securityholders
SECTION 8.01. Whenever in this Indenture it is provided that
the holders of a majority or specified percentage in aggregate
principal amount of the Securities of a particular series may
take any action (including the making of any demand or request,
the giving of any notice, consent or waiver or the taking of any
other action), the fact that at the time of taking any such
action the holders of such majority or specified percentage of
that series have joined therein may be evidenced by any
instrument or any number of instruments of similar tenor executed
by such holders of Securities of that series in person or by
agent or proxy appointed in writing.
If the Company shall solicit from the Securityholders of any
series any request, demand, authorization, direction, notice,
consent, waiver or other action, the Company may, at its option,
as evidenced by an Officers' Certificate, fix in advance a record
date for such series for the determination of Securityholders
entitled to give such request, demand, authorization, direction,
notice, consent, waiver or other action, but the Company shall
have no obligation to do so. If such a record date is fixed, such
request, demand, authorization, direction, notice, consent,
waiver or other action may be given before or after the record
date, but only the Securityholders of record at the close of
business on the record date shall be deemed to be Securityholders
for the purposes of determining whether Securityholders of the
requisite proportion of outstanding Securities of that series
have authorized or agreed or consented to such request, demand,
authorization, direction, notice, consent, waiver or other
action, and for that purpose the outstanding Securities of that
series shall be computed as of the record date; provided that no
such authorization, agreement or consent by such Securityholders
on the record date shall be deemed effective unless it shall
become effective pursuant to the provisions of this Indenture not
later than six months after the record date.
SECTION 8.02. Subject to the provisions of Section 7.01,
proof of the execution of any instrument by a Securityholder
(such proof will not require notarization) or his agent or proxy
and proof of the holding by any person of any of the Securities
shall be sufficient if made in the following manner:
(a) The fact and date of the execution by any such person of
any instrument may be proved in any reasonable manner acceptable
to the Trustee.
(b) The ownership of Securities shall be proved by the
Security Register of such Securities or by a certificate of the
Security Registrar thereof.
(c) The Trustee may require such additional proof of any
matter referred to in this Section as it shall deem necessary.
SECTION 8.03. Prior to the due presentment for registration
of transfer of any Security, the Company, the Trustee, any paying
agent and any Security Registrar may deem and treat the person in
whose name such Security shall be registered upon the books of
the Company as the absolute owner of such Security (whether or
not such Security shall be overdue and notwithstanding any notice
of ownership or writing thereon made by anyone other than the
Security Registrar) for the purpose of receiving payment of or on
account of the principal of, premium, if any, and (subject to
Section 2.03) interest on such Security and for all other
purposes; and neither the Company nor the Trustee nor any paying
agent nor any Security Registrar shall be affected by any notice
to the contrary.
43
SECTION 8.04. In determining whether the holders of the
requisite aggregate principal amount of Securities of a
particular series have concurred in any direction, consent or
waiver under this Indenture, Securities of that series which are
owned by the Company or any other obligor on the Securities of
that series or by any person directly or indirectly controlling
or controlled by or under common control with the Company or any
other obligor on the Securities of that series shall be
disregarded and deemed not to be outstanding for the purpose of
any such determination, except that for the purpose of
determining whether the Trustee shall be protected in relying on
any such direction, consent or waiver only Securities of such
series which the Trustee actually knows are so owned shall be so
disregarded. Securities so owned which have been pledged in good
faith may be regarded as outstanding for the purposes of this
Section, if the pledgee shall establish to the satisfaction of
the Trustee the pledgee's right so to act with respect to such
Securities and that the pledgee is not a person directly or
indirectly controlling or controlled by or under direct or
indirect common control with the Company or any such other
obligor. In case of a dispute as to such right, any decision by
the Trustee taken upon the advice of counsel shall be full
protection to the Trustee.
SECTION 8.05. At any time prior to (but not after) the
evidencing to the Trustee, as provided in Section 8.01, of the
taking of any action by the holders of the majority or percentage
in aggregate principal amount of the Securities of a particular
series specified in this Indenture in connection with such
action, any holder of a Security of that series which is shown by
the evidence to be included in the Securities the holders of
which have consented to such action may, by filing written notice
with the Trustee, and upon proof of holding as provided in
Section 8.02, revoke such action so far as concerns such
Security. Except as aforesaid any such action taken by the holder
of any Security shall be conclusive and binding upon such holder
and upon all future holders and owners of such Security, and of
any Security issued in exchange therefor, on registration of
transfer thereof or in place thereof, irrespective of whether or
not any notation in regard thereto is made upon such Security.
Any action taken by the holders of the majority or percentage in
aggregate principal amount of the Securities of a particular
series specified in this Indenture in connection with such action
shall be conclusively binding upon the Company, the Trustee and
the holders of all the Securities of that series.
ARTICLE NINE
Supplemental Indentures
SECTION 9.01. In addition to any supplemental indenture
otherwise authorized by this Indenture, the Company, when
authorized by a Board Resolution, and the Trustee may from time
to time and at any time enter into an indenture or indentures
supplemental hereto (which shall conform to the provisions of the
Trust Indenture Act of 1939 as then in effect), without the
consent of the Securityholders, for one or more of the following
purposes:
(a) to evidence the succession of another corporation to the
Company, and the assumption by any such successor of the
covenants of the Company contained herein or otherwise
established with respect to the Securities; or
44
(b) to add to the covenants of the Company such further
covenants, restrictions, conditions or provisions for the
protection of the holders of the Securities of all or any series
as the Board of Directors and the Trustee shall consider to be
for the protection of the holders of Securities of all or any
series, and to make the occurrence, or the occurrence and
continuance, of a default in any of such additional covenants,
restrictions, conditions or provisions a default or an Event of
Default with respect to such series permitting the enforcement of
all or any of the several remedies provided in this Indenture as
herein set forth; provided, however, that in respect of any such
additional covenant, restriction, condition or provision such
supplemental indenture may provide for a particular period of
grace after default (which period may be shorter or longer than
that allowed in the case of other defaults) or may provide for an
immediate enforcement upon such default or may limit the remedies
available to the Trustee upon such default or may limit the right
of the holders of a majority in aggregate principal amount of the
Securities of such series to waive such default; or
(c) to cure any ambiguity or to correct or supplement any
provision contained herein or in any supplemental indenture which
may be defective or inconsistent with any other provision
contained herein or in any supplemental indenture, or to make
such other provisions in regard to matters or questions arising
under this Indenture as shall not be inconsistent with the
provisions of this Indenture and shall not adversely affect the
interests of the holders of the Securities of any series; or
(d) to change or eliminate any of the provisions of this
Indenture, provided that any such change or elimination shall
become effective only when there is no Security outstanding of
any series created prior to the execution of such supplemental
indenture which is entitled to the benefit of such provision.
The Trustee is hereby authorized to join with the Company in
the execution of any such supplemental indenture, and to make any
further appropriate agreements and stipulations which may be
therein contained, but the Trustee shall not be obligated to
enter into any such supplemental indenture which affects the
Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provisions of
this Section may be executed by the Company and the Trustee
without the consent of the holders of any of the Securities at
the time outstanding, notwithstanding any of the provisions of
Section 9.02.
SECTION 9.02. With the consent (evidenced as provided in
Section 8.01) of the holders of not less than a majority in
aggregate principal amount of the Securities of each series
affected by such supplemental indenture or indentures at the time
outstanding, the Company, when authorized by a Board Resolution,
and the Trustee may from time to time and at any time enter into
an indenture or indentures supplemental hereto (which shall
conform to the provisions of the Trust Indenture Act of 1939 as
then in effect) for the purpose of adding any provisions to or
changing in any manner or eliminating any of the provisions of
this Indenture or of any supplemental indenture or of modifying
in any manner the rights of the holders of the Securities of such
series under this Indenture; provided, however, that no such
supplemental indenture shall (i) extend the fixed maturity of any
Securities of any series, or reduce the principal amount thereof,
or reduce the rate or
45
extend the time of payment of interest thereon, or reduce any
premium payable upon the redemption thereof, without the consent
of the holder of each Security so affected, or (ii) reduce the
aforesaid percentage of Securities, the holders of which are
required to consent to any such supplemental indenture, without
the consent of the holders of each Security then outstanding and
affected thereby.
Upon the request of the Company, accompanied by a Board
Resolution authorizing the execution of any such supplemental
indenture, and upon the filing with the Trustee of evidence of
the consent of Securityholders required to consent thereto as
aforesaid, the Trustee shall join with the Company in the
execution of such supplemental indenture unless such supplemental
indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may
in its discretion but shall not be obligated to enter into such
supplemental indenture.
It shall not be necessary for the consent of the
Securityholders of any series affected thereby under this Section
to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall
approve the substance thereof.
Promptly after the execution by the Company and the Trustee
of any supplemental indenture pursuant to the provisions of this
Section, the Trustee shall transmit by mail, first class postage
prepaid, a notice, setting forth in general terms the substance
of such supplemental indenture, to the Securityholders of all
series affected thereby as their names and addresses appear upon
the Security Register. Any failure of the Trustee to mail such
notice, or any defect therein, shall not, however, in any way
impair or affect the validity of any such supplemental indenture.
SECTION 9.03. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article or of
Section 10.01, this Indenture shall, with respect to such series,
be and be deemed to be modified and amended in accordance
therewith and the respective rights, limitations of rights,
obligations, duties and immunities under this Indenture of the
Trustee, the Company and the holders of Securities of the series
affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications
and amendments, and all the terms and conditions of any such
supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
SECTION 9.04. Securities of any series, affected by a
supplemental indenture, authenticated and delivered after the
execution of such supplemental indenture pursuant to the
provisions of this Article or of Section 10.01, may bear a
notation in form approved by the Company, provided such form
meets the requirements of any exchange upon which such series may
be listed, as to any matter provided for in such supplemental
indenture. If the Company shall so determine, new Securities of
that series so modified as to conform, in the opinion of the
Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by
the Company, authenticated by the Trustee and delivered in
exchange for the Securities of that series then outstanding.
SECTION 9.05. The Trustee, subject to the provisions of
Section 7.01, may receive an Opinion of Counsel as conclusive
evidence that any supplemental indenture executed pursuant to
this Article is authorized or permitted by, and conforms to, the
terms of this Article and that it is proper for the Trustee under
the provisions of this Article to join in the execution thereof.
46
ARTICLE TEN
Consolidation, Merger and Sale
SECTION 10.01. Nothing contained in this Indenture or in any
of the Securities shall prevent any consolidation or merger of
the Company with or into any other corporation or corporations
(whether or not affiliated with the Company), or successive
consolidations or mergers in which the Company or its successor
or successors shall be a party or parties, or shall prevent any
sale, conveyance, transfer or other disposition of the property
of the Company or its successor or successors as an entirety, or
substantially as an entirety, to any other corporation (whether
or not affiliated with the Company or its successor or
successors) authorized to acquire and operate the same; provided,
however, the Company hereby covenants and agrees that, upon any
such consolidation, merger, sale, conveyance, transfer or other
disposition, the due and punctual payment of the principal of
(premium, if any) and interest on all of the Securities of all
series in accordance with the terms of each series, according to
their tenor, and the due and punctual performance and observance
of all the covenants and conditions of this Indenture with
respect to each series or established with respect to such series
pursuant to Section 2.01 to be kept or performed by the Company,
shall be expressly assumed, by supplemental indenture (which
shall conform to the provisions of the Trust Indenture Act of
1939 as then in effect) satisfactory in form to the Trustee
executed and delivered to the Trustee by the Company formed by
such consolidation, or into which the Company shall have been
merged, or by the corporation which shall have acquired such
property.
SECTION 10.02. (a) In case of any such consolidation,
merger, sale, conveyance, transfer or other disposition and upon
the assumption by the successor corporation, by supplemental
indenture, executed and delivered to the Trustee and satisfactory
in form to the Trustee, of the due and punctual payment of the
principal of, premium, if any, and interest on all of the
Securities of all series outstanding and the due and punctual
performance of all of the covenants and conditions of this
Indenture or established with respect to each series of the
Securities pursuant to Section 2.01 to be performed by the
Company with respect to each series, such successor corporation
shall succeed to and be substituted for the Company, with the
same effect as if it had been named herein as the party of the
first part, and thereupon the predecessor corporation shall be
relieved of all obligations and covenants under this Indenture
and the Securities. Such successor corporation thereupon may
cause to be signed, and may issue either in its own name or in
the name of the Company or any other predecessor obligor on the
Securities, any or all of the Securities issuable hereunder which
theretofore shall not have been signed by the Company and
delivered to the Trustee; and, upon the order of such successor
company, instead of the Company, and subject to all the terms,
conditions and limitations in this Indenture prescribed, the
Trustee shall authenticate and shall deliver any Securities which
previously shall have been signed and delivered by the officers
of the predecessor Company to the Trustee for authentication, and
any Securities which such successor corporation thereafter shall
cause to be signed and delivered to the Trustee for that purpose.
All the Securities so issued shall in all respects have the same
legal rank and benefit under this Indenture as the Securities
theretofore or thereafter issued in accordance with the terms of
this Indenture as though all of such Securities had been issued
at the date of the execution hereof.
47
(b) In case of any such consolidation, merger, sale,
conveyance, transfer or other disposition such changes in
phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
(c) Nothing contained in this Indenture or in any of the
Securities shall prevent the Company from merging into itself or
acquiring by purchase or otherwise all or any part of the
property of any other corporation (whether or not affiliated with
the Company).
SECTION 10.03. The Trustee, subject to the provisions of
Section 7.01, may receive an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance,
transfer or other disposition, and any such assumption, comply
with the provisions of this Article.
ARTICLE ELEVEN
Satisfaction and Discharge of Indenture;
Unclaimed Moneys
SECTION 11.01. If at any time: (a) the Company shall have
delivered to the Trustee for cancellation all Securities of a
series theretofore authenticated (other than any Securities which
shall have been destroyed, lost or stolen and which shall have
been replaced or paid as provided in Section 2.07) and Securities
for whose payment money or Governmental Obligations has
theretofore been deposited in trust or segregated and held in
trust by the Company (and thereupon repaid to the Company or
discharged from such trust, as provided in Section 11.05); (b)
all such Securities of a particular series not theretofore
delivered to the Trustee for cancellation shall have become due
and payable, or are by their terms to become due and payable
within one year or are to be called for redemption within one
year under arrangements satisfactory to the Trustee for the
giving of notice of redemption, and the Company shall deposit or
cause to be deposited with the Trustee as trust funds the entire
amount in moneys or Governmental Obligations sufficient; or (c) a
combination thereof, sufficient, without reinvestment, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof
delivered to the Trustee, to pay at maturity or upon redemption
all Securities of that series not theretofore delivered to the
Trustee for cancellation, including principal (and premium, if
any) and interest due or to become due to such date of maturity
or date fixed for redemption, as the case may be, and if the
Company shall also pay or cause to be paid all other sums payable
hereunder with respect to such series by the Company, then this
Indenture shall thereupon cease to be of further effect with
respect to such series except for the provisions of Sections
2.05, 2.07, 4.02 and 7.10, which shall survive until the date of
maturity or redemption date, as the case may be, and Sections
7.06 and 11.05 which shall survive to such date and thereafter,
and the Trustee, on demand of the Company and at the cost and
expense of the Company, shall execute proper instruments
acknowledging satisfaction of and discharging this Indenture with
respect to such series.
48
SECTION 11.02. If at any time all such Securities of a
particular series not heretofore delivered to the Trustee for
cancellation or which have not become due and payable as
described in Section 11.01 shall have been paid by the Company by
depositing irrevocably with the Trustee as trust funds moneys or
an amount of Governmental Obligations sufficient to pay at
maturity or upon redemption all such Securities of that series
not theretofore delivered to the Trustee for cancellation,
including principal (and premium, if any) and interest due or to
become due to such date of maturity or date fixed for redemption,
as the case may be, and if the Company shall also pay or cause to
be paid all other sums payable hereunder by the Company with
respect to such series, then after the date such moneys or
Governmental Obligations, as the case may be, are deposited with
the Trustee the obligations of the Company under this Indenture
with respect to such series shall cease to be of further effect
except for the provisions of Sections 2.05, 2.07, 4.02, 7.06,
7.10 and 11.05 hereof which shall survive until such Securities
shall mature and be paid. Thereafter, Sections 7.06 and 11.05
shall survive.
SECTION 11.03. All moneys or Governmental Obligations
deposited with the Trustee pursuant to Sections 11.01 or 11.02
shall be held in trust and shall be available for payment as due,
either directly or through any paying agent (including the
Company acting as its own paying agent), to the holders of the
particular series of Securities for the payment or redemption of
which such moneys or Governmental Obligations have been deposited
with the Trustee.
SECTION 11.04. In connection with the satisfaction and
discharge of this Indenture all moneys or Governmental
Obligations then held by any paying agent under the provisions of
this Indenture shall, upon demand of the Company, be paid to the
Trustee and thereupon such paying agent shall be released from
all further liability with respect to such moneys or Governmental
Obligations.
SECTION 11.05. Any moneys or Governmental Obligations
deposited with any paying agent or the Trustee, or then held by
the Company, in trust for payment of principal of or premium or
interest on the Securities of a particular series that are not
applied but remain unclaimed by the holders of such Securities
for at least two years after the date upon which the principal of
(and premium, if any) or interest on such Securities shall have
respectively become due and payable, shall be repaid to the
Company on May 31 of each year or (if then held by the Company)
shall be discharged from such trust; and thereupon the paying
agent and the Trustee shall be released from all further
liability with respect to such moneys or Governmental
Obligations, and the holder of any of the Securities entitled to
receive such payment shall thereafter, as an unsecured general
creditor, look only to the Company for the payment thereof.
ARTICLE TWELVE
Immunity of Incorporators, Stockholders, Officers
and Directors
SECTION 12.01. No recourse under or upon any obligation,
covenant or agreement of this Indenture, or of any Security, or
for any claim based thereon or otherwise in respect thereof,
shall be had against any incorporator, stockholder, officer or
director, past, present or future as such, of the Company or of
any predecessor or successor corporation, either directly or
through the Company or any such predecessor or successor
corporation, whether by virtue of any constitution, statute or
rule of law,
49
or by the enforcement of any assessment or penalty or otherwise;
it being expressly understood that this Indenture and the
obligations issued hereunder are solely corporate obligations,
and that no such personal liability whatever shall attach to, or
is or shall be incurred by, the incorporators, stockholders,
officers or directors as such, of the Company or of any
predecessor or successor corporation, or any of them, because of
the creation of the indebtedness hereby authorized, or under or
by reason of the obligations, covenants or agreements contained
in this Indenture or in any of the Securities or implied
therefrom; and that any and all such personal liability of every
name and nature, either at common law or in equity or by
constitution or statute, of, and any and all such rights and
claims against, every such incorporator, stockholder, officer or
director as such, because of the creation of the indebtedness
hereby authorized, or under or by reason of the obligations,
covenants or agreements contained in this Indenture or in any of
the Securities or implied therefrom, are hereby expressly waived
and released as a condition of, and as a consideration for, the
execution of this Indenture and the issuance of such Securities.
ARTICLE THIRTEEN
Sundry Provisions
SECTION 13.01. All the covenants, stipulations, promises and
agreements in this Indenture contained by or on behalf of the
Company shall bind its successors and assigns, whether so
expressed or not.
SECTION 13.02. Any act or proceeding by any provision of
this Indenture authorized or required to be done or performed by
any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the
corresponding board, committee or officer of any corporation that
shall at the time be the lawful sole successor of the Company.
SECTION 13.03. The Company by instrument in writing executed
by authority of two-thirds of its Board of Directors and
delivered to the Trustee may surrender any of the powers reserved
to the Company and thereupon such power so surrendered shall
terminate both as to the Company and as to any successor
corporation.
SECTION 13.04. Except as otherwise expressly provided herein
any notice or demand which by any provision of this Indenture is
required or permitted to be given or served by the Trustee or by
the holders of Securities to or on the Company may be given or
served by being deposited first class postage prepaid in a post-
office letterbox addressed (until another address is filed in
writing by the Company with the Trustee), as follows: GTE
Northwest Incorporated, 1800 41st Street, Everett, Washington
98201, Attention: Assistant Secretary. Any notice, election,
request or demand by the Company or any Securityholder to or upon
the Trustee shall be deemed to have been sufficiently given or
made, for all purposes, if given or made in writing at the
Corporate Trust Office of the Trustee, Attention: Corporate Trust
Administration.
SECTION 13.05. This Indenture and each Security shall be
deemed to be a contract made under the laws of the State of New
York, and for all purposes shall be construed in accordance with
the laws of said State.
50
SECTION 13.06. (a) Upon any application or demand by the
Company to the Trustee to take any action under any of the
provisions of this Indenture, the Company shall furnish to the
Trustee an Officers' Certificate stating that all conditions
precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent
have been complied with, except that in the case of any such
application or demand as to which the furnishing of such
documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
(b) Each certificate or opinion provided for in this
Indenture and delivered to the Trustee with respect to compliance
with a condition or covenant in this Indenture (other than the
certificate provided pursuant to Section 5.03(d) of this
Indenture) shall include (1) a statement that the person making
such certificate or opinion has read such covenant or condition;
(2) a brief statement as to the nature and scope of the
examination or investigation upon which the statements or
opinions contained in such certificate or opinion are based; (3)
a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or
condition has been complied with; and (4) a statement as to
whether or not, in the opinion of such person, such condition or
covenant has been complied with.
SECTION 13.07. In any case where the date of maturity of
interest or principal of any Security or the date of redemption
of any Security shall not be a business day then payment of
interest or principal (and premium, if any) may be made on the
next succeeding business day with the same force and effect as if
made on the nominal date of maturity or redemption, and no
interest shall accrue for the period after such nominal date.
SECTION 13.08. If and to the extent that any provision of
this Indenture limits, qualifies or conflicts with the duties
imposed by Sections 310 to 317, inclusive, of the Trust Indenture
Act of 1939, as amended, such imposed duties shall control.
SECTION 13.09. This Indenture may be executed in any number
of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same
instrument.
SECTION 13.10. In case any one or more of the provisions
contained in this Indenture or in the Securities of any series
shall for any reason be held to be invalid, illegal or
unenforceable in any respect, such invalidity, illegality or
unenforceability shall not affect any other provisions of this
Indenture or of such Securities, but this Indenture and such
Securities shall be construed as if such invalid or illegal or
unenforceable provision had never been contained herein or
therein.
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
hereby accepts the trusts in this Indenture declared and
provided, upon the terms and conditions hereinabove set forth.
51
IN WITNESS WHEREOF, the parties hereto have caused this
Indenture to be duly executed, and their respective corporate
seals to be hereunto affixed and attested, all as of the day and
year first above written.
GTE NORTHWEST INCORPORATED
By ___________________________
Attest:
By _____________________________
Secretary
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
as Trustee
By ___________________________
52
STATE OF WASHINGTON
COUNTY OF SNOHOMISH ss:
On this __ day of March, 1994, before me, the undersigned, a
Notary Public in the State of Washington, in and for the said
County of Snohomish, residing therein and duly commissioned and
sworn, personally appeared _______________, known to me to be a
Vice President of GTE NORTHWEST INCORPORATED and _______________,
known to me to be the Assistant Secretary of GTE NORTHWEST
INCORPORATED, the corporation of that name that executed the
within and foregoing Indenture and also known to me to be the
persons who executed said Indenture on behalf of said
corporation, and acknowledged said instrument to be the free and
voluntary act and deed of said corporation, for the uses and
purposes therein mentioned, and on oath stated that they were
authorized to execute said instrument by authority of its Board
of Directors, and that one of the seals affixed to said
instrument is the corporate seal of said corporation, and
acknowledged to me that such corporation executed the same.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed
my seal at my office in the City of Everett, County of Snohomish,
State of Washington, the day and year first above written.
53
STATE OF CALIFORNIA )
ss.:
COUNTY OF _________ )
On March __, 1994 before me, ____________, Notary Public,
personally appeared ___________________ .
/X/ personally known to me - OR -
/ / proved to me on the basis of satisfactory evidence to be the
person(s) whose name(s) is/are subscribed to the within
instrument and acknowledged to me that he/she/they executed the
same in his/her/their authorized capacity(ies), and that by
his/her/their signature(s) on the instrument the person(s), or
the entity upon behalf of which the person(s) acted, executed the
instrument.
Witness my hand and official seal.
_____________________________
Signature of Notary
CAPACITY CLAIMED BY SIGNER
/ / INDIVIDUAL(S) _____________________
/X/ CORPORATE OFFICER(S) TRUST OFFICER
/ / PARTNER(S)
/ / ATTORNEY-IN-FACT
/X/ TRUSTEE(S)
/ / GUARDIAN/CONSERVATOR
/ / OTHER:
SIGNER IS REPRESENTING:
NAME OF PERSON(S) OR ENTITY(IES)
BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
54
NW:S-3:105
Exhibit
4.2
GTE NORTHWEST INCORPORATED
RESOLUTIONS ADOPTED BY
THE SPECIAL COMMITTEE OF THE BOARD OF DIRECTORS
RESOLVED:
(1) GTE Northwest 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 Northwest
Incorporated _____% Debentures, Series _, Due ____" and
$___,000,000 aggregate principal amount of debentures designated
as the "GTE Northwest 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 April 1, 1994 ("Indenture"), between the Company and
Bank of America National Trust and Savings Association, as
Trustee ("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 with respect to
the Series _ Debentures and at the rate of __% per annum
with respect to the Series _ Debentures, 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 City of San Francisco, and State of
California; 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 redemption price applicable to redemptions to and
including ________________ (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%.
-2-
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.
None of the New Debentures may be called for redemption at
the option of the Company prior to _____________ if such
redemption is for the purpose or in anticipation of refunding any
New Debentures by the application, directly or indirectly, of
funds borrowed by the Company at an annual cost of money
(calculated in accordance with generally accepted financial
practice) less than the annual cost of money to the Company
resulting from the sale of the New Debentures to the Purchasers.
(If Applicable)]
(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 Northwest Incorporated
____% Debentures, Series _, Due ____
GTE Northwest Incorporated, a corporation duly organized and
existing under the laws of the State of Washington (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 City of San Francisco, State of California 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 NORTHWEST 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.
Bank of America National Trust and Savings Association
as Trustee, Authenticating Agent and
Security Registrar
By __________________________
Authorized Officer
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Securities
of the Company (herein sometimes referred to as the
"Securities"), all issued or to be issued in one or more series
under and pursuant to an Indenture dated as of April 1, 1994,
duly executed and delivered between the Company and Bank of
America National Trust and Savings Association, a national
banking association organized and existing under the laws of the
United States of America, as Trustee (herein referred to as the
"Trustee") (said Indenture hereinafter referred to as the
"Indenture"), to which Indenture reference is hereby made for a
description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and
the holders of the Securities. By the terms of the Indenture, the
Securities are issuable in series which may vary as to amount,
date of maturity, rate of interest and in other respects as in
the Indenture provided. This Debenture is one of the series
designated on the face hereof (herein called the "Debentures")
limited in aggregate principal amount to $___,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
City of San Francisco, State of California, 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 City of San Francisco,
State of California 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 Northwest Incorporated
____% Debentures, Series _, Due ____
GTE Northwest Incorporated, a corporation duly organized and
existing under the laws of the State of Washington (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 City of San Francisco, State
of California 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 NORTHWEST 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.
Bank of America National Trust and Savings Association
as Trustee, Authenticating Agent and
Security Registrar
By __________________________
Authorized Officer
(FORM OF REVERSE OF DEBENTURE)
This Debenture is one of a duly authorized series of Securities
of the Company (herein sometimes referred to as the
"Securities"), all issued or to be issued in one or more series
under and pursuant to an Indenture dated as of April 1, 1994,
duly executed and delivered between the Company and Bank of
America National Trust and Savings Association, a national
banking association organized and existing under the laws of the
United States of America, as Trustee (herein referred to as the
"Trustee") (said Indenture hereinafter referred to as the
"Indenture"), to which Indenture reference is hereby made for a
description of the rights, limitation of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and
the holders of the Securities. By the terms of the Indenture, the
Securities are issuable in series which may vary as to amount,
date of maturity, rate of interest and in other respects as in
the Indenture provided. This Debenture is one of the series
designated on the face hereof (herein called the "Debentures")
limited in aggregate principal amount to $___,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
City of San Francisco, State of California, 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 City of San Francisco,
State of California 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 Bank of America National Trust and
Savings Association is hereby designated and created as the
agency of the Company in the City of San Francisco, State of
California 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 Bank of America National Trust and
Savings Association is hereby designated and created as Security
Registrar of the Company in the City of San Francisco, State of
California 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 Larry J. Sparrow, President, and the
facsimile signature of Richard Potter, Assistant 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.
NW:S-3:117
Exhibit 5
KENNETH K. OKEL
Area Vice President-General Counsel and Secretary
GTE Northwest Incorporated
1800 41st Street
Everett, Washington 98201
(206) 258-5321
March 30, 1994
GTE Northwest Incorporated
1800 41st Street
Everett, Washington 98201
Gentlemen:
I have examined a copy of the Registration Statement of GTE
Northwest 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 the execution and delivery of
the Indenture dated as of April 1, 1994 with respect to the
Debentures by the Company and the trustee thereof and 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
"Experts and Legal Opinions" in the Prospectus forming a part of
the Registration Statement and to the filing of this opinion as
an exhibit to the Registration Statement.
Yours truly,
Kenneth K. Okel
NW:S-3:119
Exhibit 12
GTE NORTHWEST INCORPORATED
STATEMENT OF RATIO OF EARNINGS TO FIXED CHARGES
(Thousands of Dollars)
Years Ended December 31
1993(a) 1993 1992 1991 1990
1989
_______ ____ ____ ____ ____
____
Net earnings available for fixed charges:
Income from continuing operations (b)$106,174$14,330$126,780$1
09,171 $122,316$115,756
Add - Income taxes 62,095 5,581 66,586 44,106 42,73851,805
- Fixed charges 61,95561,955 58,319 64,067 51,37247,124
_________________________________________
Adjusted earnings: $230,224$81,866$251,685$217,344$216,426$2
14,685
Fixed charges:
Interest expense $58,185$58,185$54,352$59,867$48,140$44,433
Portion of rent expense
representing interest 3,770 3,770 3,967 4,200 3,232 2,691
____________ ______ ______ ____________
Adjusted fixed charges:$61,955$61,955$58,319$64,067$51,372$47,124
RATIO OF EARNINGS TO FIXED CHARGES: 3.72 1.32 4.32 3.39
4.21 4.56
____________
(a) Excludes increased operating expenses related to a one-time
restructuring charge for the implementation of a re-engineering
plan, the adoption, effective January 1, 1993, of Statement of
Financial Accounting Standards (SFAS) No. 106 "Employers'
Accounting for Postretirement Benefits Other than Pensions" on a
delayed recognition basis and a one-time charge associated with
enhanced early retirement and voluntary separation programs
completed during the second quarter of 1993.
(b) Includes allowance for funds used during construction
(credits).
NW:S-3:121
Exhibit 25
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_______________
FORM T-1
STATEMENT OF ELIGIBILITY AND QUALIFICATION UNDER THE
TRUST INDENTURE ACT OF 1939, AS AMENDED, OF A CORPORATION
DESIGNATED TO ACT AS TRUSTEE
_______________
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
(Exact name of trustee as specified in its charter)
94-1687665
(State of Incorporation (I.R.S.
employer
if not a national bank) identification
no.)
Los Angeles Office:
333 South Beaudry Avenue
25th Floor 90017
Los Angeles, California (Zip Code)
Head Office:
555 California Street 94120
San Francisco, California (Zip Code)
_____________________________
GTE NORTHWEST INCORPORATED
(Exact name of obligor as specified in its charter)
WASHINGTON 91-0466810
(State or other jurisdiction of (I.R.S.
employer
incorporation or organization) identification
no.)
1800 41st Street, Everett, Washington 98201
(206) 261-5321
(Address and telephone number of principal executive offices)
DAVID S. KAUFFMAN, ESQ. RICHARD E.
POTTER, ESQ.
GTE Service Corporation GTE Northwest
Incorporated
One Stamford Forum 1800 41st
Street
Stamford, Connecticut 06904 Everett, Washington
98201
(203) 965-2986 (206) 261-
5321
(Names, addresses and telephone numbers of agents for service)
__________________________________________
DEBENTURES
(Title of the indenture securities)
________________________________________________________________
1. General information.
Furnish the following information as to the trustee:
(a) Name and address of each examining or supervising
authority to which it is subject.
Comptroller of the Currency
Washington, D.C.
Federal Deposit Insurance Corporation
Washington, D.C.
Federal Reserve Bank of San Francisco (Twelfth District)
San Francisco, California
Board of Governors of the Federal Reserve System
Washington, D.C.
(b) Whether it is authorized to exercise corporate trust
powers.
Yes.
2. Affiliations with obligor and underwriters.
If the obligor or any underwriter for the obligor is an
affiliate of the trustee, describe each affiliation.
None.
In answering this item the trustee has relied in part on
information furnished by the obligor and the underwriters, and
the trustee disclaims responsibility for the accuracy or
completeness of such information. Trustee has also examined its
own books and records for the purpose of answering this item.
Item 3 through Item 15 - Not Applicable
There is no existing default under any indenture of the
obligors for which the trustee is the indenture trustee.
16. List of Exhibits.
List below all exhibits filed as a part of this statement of
eligibility and qualification.
Exhibit A
Articles of Association of Bank of America National Trust
and Savings Association (formerly Bank of Italy).
Incorporated by reference to Exhibit A with Form T-1
Statement, Registration No. 33-47386. By-Laws of Bank of
America National Trust and Savings Association.
Incorporated by reference to Exhibit A with Form T-1
Statement, Registration No. 2-50369.
-2-
*Exhibit B
Copy of Charter under date of March 1, 1927 authorizing Bank
of Italy National Trust and Savings Association to commence
business of banking.
*Exhibit C
Copy of authorization of the Federal Reserve Board issued
under date of November 1, 1930, granting Bank of America
National Trust and Savings Association the right to act in a
fiduciary capacity.
*Exhibit D
Certificate issued by the Comptroller of the Currency under
date of November 1, 1930 evidencing consolidation of Bank of
Italy National Trust and Savings Association and Bank of
America of California under the corporate title of Bank of
America National Trust and Savings Association.
*Exhibit E
Copy of Charter under date of March 31, 1969, authorizing B.
A. National Bank to commence business of banking.
*Exhibit F
Copy of certificate issued by the Comptroller of the Currency
under date of April 1, 1969, evidencing the merger of Bank of
America National Trust and Savings Association into B. A.
National Bank under the title "Bank of America National Trust
and Savings Association."
*Exhibit G
A copy of the approval for "Bank of America National Trust
and Savings Association" to operate the presently existing
branches of Bank of America National Trust and Savings
Association.
*Exhibit H
Consent of Bank of America National Trust and Savings
Association required by Section 321(b) of the Act.
Exhibit I
Copy of the latest Report of Condition at the close of
business on June 30, 1993 of the Trustee published in
response to call made by Comptroller of Currency.
Exhibit J
A copy of any order pursuant to which the foreign trustee is
authorized to act as sole trustee under indentures qualified
or to be qualified under the Act. (Not applicable)
Exhibit K
Foreign trustees are required to furnish a consent to service
of process (see Rule 10a-4 under the Act). (Not applicable)
* Exhibits prefaced by this designation are filed with Securities
and Exchange Commission as exhibits to Statement of Eligibility
and Qualification under the Trust Indenture Act of 1939, as
amended, in connection with the Registration Statement of Border,
Inc., File No. 2-50369, under the same exhibit number and are
incorporated herein by reference.
-3-
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of
1939, as amended, the Trustee, Bank of America National Trust and
Savings Association, a corporation organized and existing under
the laws of the United States of America, has duly caused this
statement of eligibility and qualification to be signed on its
behalf by the undersigned, thereunto duly authorized, and its
seal to be hereunto affixed and attested, all in the City and
County of San Francisco, State of California, on the 25th day of
March, 1994.
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By: F. Rockett
F. Rockett
Assistant Vice President
Attest: A. Catania
A. Catania
Vice President
-4-
EXHIBIT I
REPORT OF CONDITION
Consolidating domestic and foreign subsidiaries of the BANK OF
AMERICA NT&SA of San Francisco in the State of California, at the
close of business on June 30, 1993 published in response to call
made by Comptroller of the Currency, under Title 12, United
States Code, Section 161.
Charter number 13044 - National Bank Region Number 14.
Dollar Amounts
STATEMENT OF RESOURCES AND LIABILITIES in
Thousands
Cash and balances due from depository institutions:
Noninterest-bearing balances and currency and coin...
$ 8,400,000
Interest-bearing balances............................
2,514,000
Securities.............................................
7,493,000
Federal funds sold and securities purchased under
agreements to resell in domestic offices of the
bank and of its Edge and Agreement subsidiaries,
and in IBFs:
Federal funds sold...................................
4,557,000
Securities purchased under agreements to resell......
5,000
Loans and Lease financing receivables:
Loans and Leases, net of unearned income.............$95,753,0
00
Less: Allowance for loan and lease losses............2,594,000
Less: Allocated transfer risk reserve................ 77,000
Loans and Leases, net of unearned income,
allowance, and reserve...............................
93,082,000
Assets held in trading accounts........................
5,000,000
Premises and fixed assets (including capitalized leases)
2,719,000
Other real estate owned................................
1,741,000
Investments in unconsolidated subsidiaries and
associated companies.................................
330,000
Customers' liability to this bank on acceptances
outstanding..........................................
612,000
Intangible assets......................................
2,556,000
Other assets...........................................
4,961,000
Total assets...........................................
133,970,000
-5-
STATEMENT OF RESOURCES AND LIABILITIES cont'd.
Deposits:
In domestic offices................................. $86,241,000
Noninterest-bearing................................$24,948,000
Interest-bearing...................................61,293,000
In foreign offices, Edge and Agreement subsidiaries,
and IBFs.............................................. 19,667,000
Noninterest-bearing................................$ 1,416,000
Interest-bearing...................................18,251,000
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.............................
2,615,000
Securities sold under agreements to repurchase......
162,000
Demand notes issued to the U.S. Treasury...............
1,000
Other borrowed money...................................
3,677,000
Mortgage indebtedness and obligations under
capitalized leases..................................
59,000
Bank's liability on acceptances executed and
outstanding.........................................
612,000
Subordinated notes and debentures......................
4,166,000
Other liabilities......................................
5,120,000
Total liabilities......................................
122,320,000
Common stock...........................................
616,000
Surplus (exclude all surplus related to preferred stock)
5,340,000
Undivided profits and capital reserves.................
5,783,000
Less: Net unrealized loss on marketable equity
securities..........................................
0
Cumulative foreign currency translation adjustments....
(89,000)
Total equity capital...................................
11,650,000
Total liabilities and equity capital...................
$133,970,000
I, Joseph B. Tharp, Executive Vice President and Financial
Controller of the above-named bank do hereby declare that this
Report of Condition is true and correct to the best of my
knowledge and belief.
Joseph B. Tharp
August 12, 1993
We, the undersigned directors, attest to the correctness of this
statement of resources and liabilities. We 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 and is
true and correct.
Richard M. Rosenberg )
C. R. Dahl ) Directors
Lewis W. Coleman )
-6-
NW:S-3:128
Exhibit 26
GTE NORTHWEST INCORPORATED
Invitation For Bids For the Purchase of
$____,000,000 _____% Debentures, Series _, Due ____
GTE NORTHWEST 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
Assistant Secretary of the Company, 1800 41st Street, Everett,
Washington 98201, 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 April 1, 1994
(herein called the "Indenture") under which the Debentures are to
be issued, together with the resolution of the Board of Directors
of the Company specifically authorizing the issuance of the
Debentures;
(d) the form of Purchase Agreement (including the Standard
Purchase Agreement Provisions (April, 1994 Edition)) to be used
in submitting bids for the purchase of the Debentures;
(e) the form of questionnaire to be provided by prospective
bidders; and
(f) memoranda prepared by counsel to the Company with
respect to the status of the Debentures under securities or blue
sky laws of certain jurisdictions.
Copies of said documents in reasonable quantities (except
the 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 Everett and
Stamford.
2. Information Respecting the Bidders to be Furnished to the
Company.
In the case of a bid by a group of bidders, the several
bidders in the group shall act through a duly authorized
representative or representatives (the "Representative"), who may
be included in such group, and who shall be designated and
authorized as such in the questionnaires filed by members of such
group.
-2-
No bid will be considered unless the bidder, or in the case
of a group of bidders, each member of the group, shall have
furnished to the Company, and the Company shall have received,
two signed copies of the form of questionnaire referred to above,
properly filled out (the Company reserving, however, the right to
waive the form of the questionnaire or any irregularity which it
deems to be immaterial in any such questionnaire and to extend
either generally or in specific instances the time for furnishing
questionnaires, and specifically reserving the right to obtain
all required bidder information by telegraph or other means of
communication). Such copies shall be furnished to the Company at
the office of GTE Service Corporation, 10th Floor, One Stamford
Forum, Stamford, CT 06904, Attention: David S. Kauffman, Esq.,
before 5:00 P.M., New York City time on ____________________ (or
on such later date as may be determined pursuant to Section 4
hereof). Notwithstanding the furnishing of such questionnaires
to the Company, any prospective bidder or group of prospective
bidders thereafter may determine, without liability to the
Company, not to bid, or any of the several members of a group may
withdraw therefrom and additional members may be added thereto if
a questionnaire properly filled out and signed by each additional
member is filed at or before the time of submission of the bid of
such group. Without the consent of the Company not more than
three additional members may be so included in such group after
the time or any extended time for filing questionnaires shall
have expired.
3. Form and Contents of Bids.
Each bid shall be for the purchase of all of the Debentures.
Each bid may be made by a single bidder or by a group of
bidders. In case the bid of a group of bidders is accepted, the
obligations of the members of the group to purchase the
respective principal amounts of Debentures indicated in the bid
shall be several and not joint. Such bidders shall act through a
duly authorized Representative who may be included in the group
and said Representative shall be empowered to bind the bidders in
the group. No bidder may submit or participate in more than one
bid.
4. Submission of Bids and Delivery of Confirmation of Bids.
All bids must be submitted by telephone and confirmed in
writing in the manner set forth in Exhibit A, Confirmation of
Bid, attached, signed by the Representative on behalf of the
members of a group of bidders, or in the case of a single bidder,
by such bidder. Each bid must specify: (a) the interest rate,
which shall be a multiple of 1/8 of 1%; and (b) the price to be
paid to the Company for the Debentures, which shall be expressed
as a percentage of the principal amount of the Debentures and
shall not be less than 98% thereof nor more than 101% thereof.
The Confirmation of Bid shall specify the same interest rate and
price specified in the telephonic bid.
The Company reserves the right in its discretion from time
to time to postpone the time and the date for submission of bids
for an aggregate period
of not exceeding thirty days, and will give notice of any such
postponement to each prospective bidder, or the Representative of
each group of prospective bidders, who have filed questionnaires
as provided in Section 2 hereof, specifying in such notice the
changes in the times and dates set forth in the Purchase
Agreement occasioned by such postponement. In the event that any
such postponement should be for a period of more than three full
business days after the date of sending or delivering such
notice, the time for filing of questionnaires by prospective
bidders under Section 2 hereof shall by such notice be postponed
to 5:00 P.M., New York City time, at the place of delivery
specified in Section 2 hereof, on the third full business day
prior to the postponed date for presentation and opening of bids.
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5. Acceptance or Rejection of Bids.
The Company may reject all bids, but if any bid for the
Debentures is accepted the Company will accept that bid which
shall result in the lowest "annual cost of money" to the Company
for the Debentures, and any bid not so accepted by the Company
shall, unless such bid shall be involved in rebidding as
hereinafter provided, be deemed to have been rejected. The
lowest annual cost of money to the Company for the Debentures
shall be determined by the Company and such determination shall
be final. In case the lowest annual cost of money to the Company
is provided by two or more such bids, the Company (unless it
shall reject all bids) will give the makers of such identical
bids an opportunity (the duration of which the Company may in its
sole discretion determine) to improve their bids. The Company
will accept, unless it shall reject all bids, the improved bid
providing the Company with the lowest annual cost of money for
the Debentures. If no improved bid is made within the time fixed
by the Company, or if upon such rebidding the lowest annual cost
of money to the Company is again provided by two or more bids,
the Company may without liability to the maker of any other bid
accept any one of such bids in its sole discretion, or may reject
all bids.
The Company further reserves the right to reject the bid of
any bidder or group of bidders if the Company, in the opinion of
its counsel, may not lawfully sell the Debentures to such bidder
or to any member of such group, and to reject the bid of any
bidder or group of bidders if such bidder or any member of such
group is in such relationship with the Trustee under the
Indenture or the trustees under the Company's first mortgage
indenture as would disqualify it under Section 310(b) of the
Trust Indenture Act of 1939, as amended, from acting as such
trustee if the bid of such bidder or group of bidders should be
accepted, unless, in the case of a group of bidders, prior to
1:00 P.M., New York City time, on the date on which the bids are
opened, the member or members to which, in the opinion of the
Company's counsel, the Debentures may not be lawfully sold or
which would cause such disqualifi-cation have withdrawn from the
group and the remaining members have agreed to purchase the
Debentures which such withdrawing member or members had offered
to purchase.
6. Purchase Agreement and Completion of Registration Statement.
The Company will signify its acceptance of a bid by signing
the Purchase Agreement. The Company shall, upon request, execute
the acceptance on additional copies of the Purchase Agreement
furnished by the Representative of the successful bidders. Upon
the acceptance of a bid, the successful bidder, or, in the case
of a bid by a group of bidders, the Representative on behalf of
the successful bidders, shall furnish to the Company, in writing,
all information regarding the bidder or bidders and the public
offering, if any, of the Debentures required in connection with
the post-effective amendment to the Registration Statement, any
further information regarding the bidders and the public
offering, if any, to be made by them, which may be required to
complete the applications filed by the Company with public
authorities having jurisdiction, and other information required
by law in respect of the purchase or sale of the Debentures as
herein contemplated.
7. Delivery of the Debentures.
The Debentures will be delivered in temporary or definitive
form, at the election of the Company, to the purchasers of the
Debentures at the place, at the time and in the manner indicated
in the Purchase Agreement, against payment of the purchase price
therefor as provided in the Purchase Agreement.
-4-
8. Opinion of Counsel for the Purchasers.
Messrs. Milbank, Tweed, Hadley & McCloy, 1 Chase Manhattan
Plaza, New York, N.Y. 10005, have been requested by the Company
to act as counsel for the successful bidder or bidders of the
Debentures and to give to the purchasers an opinion as outlined
in the Purchase Agreement. Such counsel have reviewed or will
review, from the standpoint of possible purchasers of the
Debentures, the form of the Registration Statement and the
Prospectus and competitive bidding papers, including the Purchase
Agreement, and have reviewed or will review the corporate
proceedings with respect to the issue and sale of the Debentures.
Prospective bidders may confer with Messrs. Milbank, Tweed,
Hadley & McCloy with respect to any of the foregoing matters at
the offices of said firm, 1 Chase Manhattan Plaza, New York, N.Y.
10005, Attn.: George J. Forsyth, Esq. The successful bidders are
to pay the compensation and disbursements of such counsel, except
as otherwise provided in the Purchase Agreement. Such counsel
will, on request, advise any prospective bidder who has, or the
Representative of any group of prospective bidders who have,
furnished questionnaires as provided in Section 2 hereof, of the
amount of such compensation and of the estimated amount of such
disbursements.
GTE NORTHWEST INCORPORATED
President
_____________, 199_
NW:S-3:133
EXHIBIT A
GTE NORTHWEST 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 redemption price applicable to redemptions to and
including _______ (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.
None of the Debentures may be called for redemption at the
option of the Company prior to _____________ if such redemption
is for the purpose or in anticipation of refunding any Debentures
by the application, directly or indirectly, of funds borrowed by
the Company at an annual cost of money (calculated in accordance
with generally accepted financial practice) less than the annual
cost of money to the Company resulting from the sale of the
Debentures to the Purchasers (If Applicable)]
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 203-965-3209 or 203-965-2830.
o If this bid is accepted, upon acceptance the undersigned
agrees to promptly furnish to the Company a signed copy of the
Purchase Agreement relating to the Debentures and a copy of all
information required to be included in the Prospectus relating to
the Debentures.
o Closing Date: __________________ at 10:00 A.M., New York City
time.
-3-
BID:
Interest Rate ________________ %
Price to be paid to the Company
________________ %
For an annual cost of money to the
Company of ________________ % *
(6 places beyond
decimal point)
_______
* subject to verification by
the Company
___________________________________
(Name of Bidder)
__________________________________
(Authorized Signature)
NW:S-3:136
