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Registration No. 333-
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.)
1255 Corporate Drive, Irving, Texas 75038
(972) 507-5050
(Address and telephone number of principal executive offices)
_________
DAVID S. KAUFFMAN, ESQ. CHARLES J. SOMES, ESQ.
GTE Northwest Incorporated GTE Northwest Incorporated
1255 Corporate Drive 1255 Corporate Drive
Irving, Texas 75038 Irving, Texas 75038
(972) 507-5328 (972) 507-5297
(Names, addresses and telephone numbers of agents for service)
_________
Copies to: Robert W. Mullen, Jr., Esq., Milbank, Tweed, Hadley &
McCloy, 1 Chase Manhattan Plaza, New York, New York 10005.
Approximate date of commencement of proposed sale to the public: From
time to time after the effective date of the Registration Statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be
offered on a delayed or continuous basis pursuant to Rule 415 under the
Securities Act of 1933, other than securities offered only in connection with
dividend or interest reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an
offering pursuant to Rule 462(b) under the Securities Act, please check the
following box and list the Securities Act registration statement number of the
earlier registration statement for the same offering. [ ] 333-
If this Form is a post-effective amendment filed pursuant to Rule
462(c) under the Securities Act, check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. [ ] 333-
If delivery of the prospectus is expected to be made pursuant to Rule
434, please check the following box. [ ]
_________
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CALCULATION OF REGISTRATION FEE
- ---------------------------------------------------------------------------
Proposed Proposed
Maximum Maximum
Title of Each Class Amount Offering Aggregate Amount of
of Securities To Be Price Per Offering Registration
To Be Registered Registered Unit Price Fee*
- ---------------------------------------------------------------------------
Debentures $300,000,000 100% $300,000,000 $88,500
- ---------------------------------------------------------------------------
* 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, as amended, or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to said Section
8(a), may determine.
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++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+THE INFORMATION IN THIS PROSPECTUS IS NOT COMPLETE AND MAY BE CHANGED. WE MAY +
+NOT SELL THESE SECURITIES UNTIL THE REGISTRATION STATEMENT FILED WITH THE +
+SECURITIES AND EXCHANGE COMMISSION IS EFFECTIVE. THIS PROSPECTUS IS NOT AN +
+OFFER TO SELL THESE SECURITIES AND IT IS NOT SOLICITING AN OFFER TO BUY THESE +
+SECURITIES IN ANY STATE WHERE THE OFFER OR SALE IS NOT PERMITTED. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
SUBJECT TO COMPLETION, DATED SEPTEMBER 18, 1998
PROSPECTUS
$300,000,000
[LOGO] GTE NORTHWEST INCORPORATED
DEBENTURES
----------------------------------
GTE Northwest Incorporated intends to offer at one or more times Debentures
with a total offering price not to exceed $300,000,000. We will provide the
specific terms of these securities in supplements to this prospectus. You
should read this prospectus and the supplements carefully before you invest.
----------------------------------
NEITHER THE SECURITIES AND EXCHANGE COMMISSION NOR ANY STATE SECURITIES
COMMISSION HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF
THIS PROSPECTUS IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
September , 1998
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TABLE OF CONTENTS
About this Prospectus...................................................... 2
Where You Can Find More Information........................................ 2
The Company................................................................ 2
Use of Proceeds............................................................ 3
Consolidated Ratios of Earnings
to Fixed Charges.......................................................... 3
Description of the Debentures.............................................. 3
Experts.................................................................... 7
Certain Legal Matters...................................................... 7
Plan of Distribution....................................................... 7
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission ("SEC") utilizing a "shelf" registration
process. Under this shelf process, we may, from time to time, sell the
Debentures described in this prospectus in one or more offerings with a total
offering price not to exceed $300,000,000. This prospectus provides you with a
general description of the Debentures. Each time we sell Debentures, we will
provide a prospectus supplement that will contain specific information about
the terms of that offering. The prospectus supplement may also add, update or
change information in this prospectus. The information in this prospectus is
accurate as of , 1998. Please carefully read both this prospectus and
any prospectus supplement together with additional information described under
the heading "WHERE YOU CAN FIND MORE INFORMATION."
WHERE YOU CAN FIND MORE INFORMATION
We file annual, quarterly and special reports and other information with the
SEC. You may read and copy any document we file at the SEC's public reference
room at 450 Fifth Street, N.W., Washington, D.C. 20549. Please call the SEC at
1-800-SEC-0330 for further information on the operation of the public reference
rooms. Our SEC filings are also available to the public over the Internet at
the SEC's web site at http://www.sec.gov.
The SEC allows us to "incorporate by reference" the information we file with
them, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
considered to be part of this prospectus, and information that we file later
with the SEC will automatically update and supersede this information. We
incorporate by reference the following documents we filed with the SEC and our
future filings with the SEC under Sections 13(a), 13(c), 14, or 15(d) of the
Securities Exchange Act of 1934 until we or any underwriters sell all of the
Debentures:
. Annual Report on Form 10-K for the year ended December 31, 1997;
. Quarterly Reports on Form 10-Q for the quarters ended March 31 and June 30,
1998; and
. Current Report on Form 8-K filed on May 19, 1998.
You may request a copy of these filings at no cost, by writing or calling us at
the following address:
Treasurer
GTE Northwest Incorporated
1255 Corporate Drive
Mail Code: SVC03A01
Irving, Texas 75038
(972) 507-5030
You should rely only on the information incorporated by reference or provided
in this prospectus and any supplement. We have not authorized anyone else to
provide you with different information.
THE COMPANY
We are a wholly-owned subsidiary of GTE Corporation. Together with our wholly-
owned subsidiary, GTE West Coast Incorporated, we
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provide communication services in the states of Washington, Oregon, Idaho and
California.
Our principal line of business is providing communications services ranging
from local telephone service for the home and office to highly complex voice
and data services. We provide local telephone service within our franchise area
and intraLATA (Local Access Transport Area) toll service between our
facilities. We also provide intraLATA toll services between our facilities and
the facilities of other telephone companies within our LATAs. We provide
network facilities through which long distance companies offer InterLATA
service to other points in and out of the states in which we operate. We charge
these long distance companies access fees for using our network. Business and
residential customers also pay us charges to connect to our local network and
to obtain long distance service. We also earn revenue by providing billing,
collection, operator and other services to long distance companies.
Our principal executive offices are located at 1255 Corporate Drive, Irving,
Texas 75038, telephone (972) 507-5050.
USE OF PROCEEDS
We will use the net proceeds from the sale of the Debentures:
. to repay short-term borrowings used to finance our construction program; and
. for general corporate purposes.
At July 31, 1998, our short-term borrowings (not including current maturities)
were approximately $55,616,000 with an average annual interest rate of 5.68%.
We estimate our construction budget at approximately $269,568,000 for 1998.
Approximately $179,860,000 of that amount already has been spent on central
office equipment, outside plant and land and buildings. Internal sources and
short-term loans will provide the funds needed to complete the 1998
construction program.
CONSOLIDATED RATIOS OF EARNINGS TO FIXED CHARGES
Our consolidated ratios of earnings to fixed charges for the periods indicated
are as follows:
<TABLE>
<CAPTION>
SIX MONTHS
ENDED YEARS ENDED DECEMBER 31,
JUNE 30, 1998 ------------------------
(UNAUDITED) 1997 1996 1995 1994 1993
- ------------- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
6.95 7.59 6.02 4.77 4.15 1.32*
</TABLE>
- --------
* 1993 results include an after-tax restructuring charge of approximately
$77,000,000 to implement a re-engineering plan and a one-time, after-tax
charge of approximately $5,100,000 related to the enhanced early retirement
and voluntary separation programs offered to eligible employees in 1993.
Excluding these items, this ratio would have been 3.46.
For these ratios, "earnings" have been calculated by adding income taxes and
fixed charges to income before extraordinary charges, and "fixed charges"
include interest expense and the portion of rentals representing interest.
DESCRIPTION OF THE DEBENTURES
GENERAL
We will issue the Debentures under an Indenture between us and the Trustee,
U.S. Bank Trust National Association (formerly known as First Trust of
California, National Association), as successor to Bank of America National
Trust and Savings Association, dated as of April 1, 1994, and supplemented as
of April 15, 1996. We have summarized selected provisions of the Indenture
below. This is a summary and is not complete. It does not describe certain
exceptions and qualifications contained in the Indenture or the Debentures. You
should read the Indenture and the form of the Debentures we filed as exhibits
to the registration statement for the Debentures for provisions that may be
important to you. In the summary below, we have included references to article
and section numbers of the Indenture so that you can easily locate these
provisions. Capitalized terms used in the summary have the meanings specified
in the Indenture.
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The Debentures will be unsecured and will rank equally with all our senior
unsecured debt. The Debentures may be issued up to the principal amount that
may be authorized by us. The Indenture does not limit the amount of Debentures
that may be issued and each series of Debentures may differ as to its terms.
A supplement to the Indenture, Board Resolution or Officers' Certificate may
designate the specific terms relating to any new series of Debentures. (ARTICLE
TWO) These terms will be described in a prospectus supplement and will include
the following:
. title of the series;
. total principal amount of the series;
. maturity date or dates;
. interest rate and interest payment dates;
. any redemption dates, prices, obligations and restrictions; and
. any other terms of the series.
FORM AND EXCHANGE
The Debentures will be denominated in U.S. dollars and we will pay principal,
interest and any premium in U.S. dollars. We will normally issue the Debentures
in book-entry only form, which means that they will be represented by one or
more permanent global certificates registered in the name of The Depository
Trust Company, New York, New York ("DTC"), or its nominee. We will refer to
this form here and in the prospectus supplement as "book-entry only."
Alternatively, we may issue the Debentures in certificated form registered in
the name of the Debenture holder. Under these circumstances, holders may
receive certificates representing the Debentures. Debentures in certificated
form will be issued only in increments of $1,000 and will be exchangeable
without charge except for reimbursement of taxes, if any. We will refer to this
form in the prospectus supplement as "certificated." (ARTICLE TWO)
BOOK-ENTRY ONLY PROCEDURES
The following discussion pertains to Debentures that are issued in book-entry
only form.
One or more global securities would be issued to DTC or its nominee. DTC would
keep a computerized record of its participants (for example, your broker) whose
clients have purchased the securities. The participant would then keep a record
of its clients who purchased the securities. A global security may not be
transferred, except that DTC, its nominees and their successors may transfer an
entire global security to one another.
Under book-entry only, we will not issue certificates to individual holders of
the Debentures. Beneficial interests in global securities will be shown on, and
transfers of global securities will be made only through, records maintained by
DTC and its participants.
DTC has provided us with the following information: DTC is a limited-purpose
trust company organized under the New York Banking Law, a "banking
organization" within the meaning of the New York Banking Law, a member of the
United States Federal Reserve System, a "clearing corporation" within the
meaning of the New York Uniform Commercial Code and a "clearing agency"
registered under Section 17A of the Securities Exchange Act of 1934. DTC holds
securities that its participants ("Direct Participants") deposit with DTC. DTC
also facilitates the settlement among Direct Participants of securities
transactions, such as transfers and pledges, in deposited securities through
computerized records for Direct Participants' accounts. This eliminates the
need to exchange certificates. Direct Participants include securities brokers
and dealers, banks, trust companies, clearing corporations and certain other
organizations.
DTC's book-entry system is also used by other organizations such as securities
brokers and dealers, banks and trust companies that work
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through a Direct Participant. The rules that apply to DTC and its participants
are on file with the SEC.
DTC is owned by a number of its Direct Participants and by the New York Stock
Exchange, Inc., The American Stock Exchange, Inc. and the National Association
of Securities Dealers, Inc.
We will wire principal and interest payments to DTC's nominee. We and the
Trustee will treat DTC's nominee as the owner of the global securities for all
purposes. Accordingly, we and the Trustee will have no direct responsibility or
liability to pay amounts due on the securities to owners of beneficial
interests in the global securities.
It is DTC's current practice, upon receipt of any payment of principal or
interest, to credit Direct Participants' accounts on the payment date according
to their respective holdings of beneficial interests in the global securities
as shown on DTC's records. In addition, it is DTC's current practice to assign
any consenting or voting rights to Direct Participants whose accounts are
credited with securities on a record date, by using an omnibus proxy. Payments
by participants to owners of beneficial interests in the global securities, and
voting by participants, will be governed by the customary practices between the
participants and owners of beneficial interests, as is the case with securities
held for the account of customers registered in "street name." However, these
payments will be the responsibility of the participants and not of DTC, the
Trustee, or us.
Debentures represented by a global security would be exchangeable for Debenture
certificates with the same terms in authorized denominations only if:
. DTC notifies us that it is unwilling or unable to continue as depository or
if DTC ceases to be a clearing agency registered under applicable law and a
successor depository is not appointed by us within 90 days; or
. we instruct the Trustee that the global security is now exchangeable.
REDEMPTION PROVISIONS, SINKING FUND AND DEFEASANCE
We may redeem some or all of the Debentures at our option subject to the
conditions stated in the prospectus supplement relating to that series of
Debentures. (ARTICLE THREE) If a series of Debentures is subject to a sinking
fund, the prospectus supplement will describe those terms.
The Indenture permits us to discharge or "defease" certain of our obligations
on any series of Debentures at any time. We may defease by depositing with the
Trustee sufficient cash or government securities to pay all sums due on that
series of Debentures. (SECTION 11.02)
RESTRICTIONS
The Debentures will not be secured. However, if we at any time incur other debt
or obligations secured by a mortgage or pledge on any of our property, the
Indenture requires us to secure the Debentures equally with the other debt or
obligations for as long as the other debt or obligations remain secured.
Exceptions to this requirement include the following:
. purchase money mortgages, conditional sales agreements or pre-existing
mortgages on property acquired after April 1, 1994;
. certain deposits or pledges to secure the performance of bids, tenders,
contracts or leases or in connection with worker's compensation and similar
matters;
. mechanics' and similar liens created in the ordinary course of business;
. our first mortgage bonds outstanding on April 1, 1994, issued and secured by
us and our predecessors, and any replacement or renewals of these first
mortgage bonds which do not increase their amount or extend their final
maturity dates;
. first mortgage bonds which we may issue in connection with our consolidation
or merger with or into our affiliates in exchange or substitution for the
long-term senior debt of those affiliates; or
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. debt that we are required to assume in connection with the merger or
consolidation with or into us of certain of our affiliates. (SECTION 4.05)
We may issue or assume an unlimited amount of debt under the Indenture. As a
result, the Indenture does not prevent us from significantly increasing our
unsecured debt levels, which may negatively affect the resale value of the
Debentures. (SECTION 2.01) However, the issuance of most of our debt
securities, including the Debentures, does require state regulatory approval,
which may or may not be granted. It is unlikely that we or our management would
initiate or support a leveraged buyout, because all of our common stock is
owned by GTE Corporation, which has no current intention of selling its
ownership in us.
CHANGES TO THE INDENTURE
The Indenture may be changed with the consent of holders owning more that 50%
in principal amount of the outstanding Debentures of each series affected by
the change. However, we may not change your principal or interest payment
terms, or the percentage required to change other terms of the Indenture,
without your consent, as well as the consent of others similarly affected.
(SECTION 9.02)
We may enter into supplemental indentures for other specified purposes,
including the creation of any new series of Debentures, without the consent of
any holder of Debentures. (SECTIONS 2.01, 9.01 and 10.01)
CONSOLIDATION, MERGER OR SALE
We may not merge with another company or sell or transfer all or substantially
all of our property to another company unless:
. we are the continuing corporation; or
. the successor corporation expressly assumes:
--payment of principal, interest and any premium on the Debentures; and
--performance and observance of all covenants and conditions in the
Indenture.
(SECTION 10.01 and 10.02)
EVENTS OF DEFAULT
"Event of Default" means, with respect to any series of Debentures, any of the
following:
. failure to pay interest on that series of Debentures for 30 business days
after payment is due;
. failure to pay principal or any premium on that series of Debentures when
due;
. failure to perform any other covenant relating to that series of Debentures
for 90 days after we are given written notice; or
. certain events in bankruptcy, insolvency or reorganization.
An Event of Default for a particular series of Debentures does not necessarily
impact any other series of Debentures issued under the Indenture. (SECTION
6.01)
If an Event of Default for any series of Debentures occurs and continues, the
Trustee or the holders of at least 25% of the principal amount of the
Debentures of the series may declare the entire principal of all the Debentures
of that series to be due and payable immediately. If this happens, subject to
certain conditions, the holders of a majority of the principal amount of the
Debentures of that series can rescind the declaration if we have deposited with
the Trustee a sum sufficient to pay all matured installments of interest,
principal and any premium. (SECTION 6.01)
The holders of more that 50% of the principal amount of any series of the
Debentures may, on behalf of the holders of all the Debentures of that series,
control any proceedings resulting from an Event of Default or waive any past
default except a default in the payment of principal, interest or any premium.
(SECTION 6.06) We are required to file an annual certificate with the Trustee
stating whether we
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are in compliance with all the conditions and covenants under the Indenture.
(SECTION 5.03)
CONCERNING THE TRUSTEE
Within 90 days after a default occurs, the Trustee must notify the holders of
the Debentures of the series of all defaults known to the Trustee if we have
not remedied them (default is defined for this purpose to include the Events of
Default specified above absent any grace periods or notice). The Trustee may
withhold notice to the holders of such Debentures of any default (except in the
payment of principal, interest or any premium) if it in good faith believes
that withholding this notice is in the interest of the holders. (SECTION 6.07)
Prior to an Event of Default, the Trustee is required to perform only the
specific duties stated in the Indenture and, after an Event of Default, must
exercise the same degree of care as a prudent individual would exercise in the
conduct of his or her own affairs. (SECTION 7.01) The Trustee is not required
to take any action permitted by the Indenture at the request of any holders of
Debentures, unless those holders protect the Trustee against costs, expenses
and liabilities. (SECTION 7.02) The Trustee is not required to spend its own
funds or become financially liable when performing its duties if it reasonably
believes that it will not be adequately protected financially. (SECTION 7.01)
U.S. Bank Trust National Association serves as trustee under our first mortgage
bond indenture. GTE Corporation, our parent, has commercial banking
relationships with certain affiliates of U.S. Bank Trust National Association.
EXPERTS
Arthur Andersen LLP, independent public accountants, audited our consolidated
financial statements and schedules incorporated by reference in this prospectus.
We have relied on Arthur Andersen LLP as experts in accounting and auditing in
giving the report. Arthur Andersen LLP's report on our consolidated financial
statements, schedule and exhibit included in our most recent Form 10-K includes
an explanatory paragraph with respect to the discontinuance of the provisions of
Statement of Financial Standards No. 71, "Accounting for the Effects of Certain
Types of Regulation," as discussed in Note 2 to the consolidated financial
statements.
CERTAIN LEGAL MATTERS
William G. Mundy, Esq., our Vice President-General Counsel, or his successor,
will issue an opinion about the validity of the Debentures for us. Milbank,
Tweed, Hadley & McCloy of New York, New York will issue an opinion on certain
legal matters for the agents or underwriters.
PLAN OF DISTRIBUTION
We may sell any series of Debentures:
. through underwriters or dealers;
. through agents; or
. directly to one or more purchasers.
The prospectus supplement will include:
. the initial public offering price;
. the names of any underwriters, dealers or agents;
. the purchase price of the Debentures;
. our proceeds from the sale of the Debentures;
. any underwriting discounts or agency fees and other underwriters' or agents'
compensation; and
. any discounts or concessions allowed or reallowed or paid to dealers.
If underwriters are used in the sale, they will buy the Debentures for their
own account. The underwriters may then resell the Debentures in one or more
transactions, at any time or times, at a fixed public offering price or at
varying prices.
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This prospectus should not be considered an offer of the Debentures in states
where prohibited by law.
If there is a default by one or more of the underwriters affecting 10% or less
of the total principal amount of Debentures offered, the non-defaulting
underwriters must purchase the Debentures agreed to be purchased by the
defaulting underwriters. If the default affects more than 10% of the total
principal amount of the Debentures, we may, at our option, sell less than all
the Debentures offered.
Underwriters and agents that participate in the distribution of the Debentures
may be underwriters as defined in the Securities Act of 1933. Any discounts or
commissions that we pay them and any profit they receive when they resell the
Debentures may be treated as underwriting discounts and commissions under that
Act. We may have agreements with underwriters, dealers and agents to indemnify
them against certain civil liabilities, including liabilities under the
Securities Act of 1933, or to contribute with respect to payments which they
may be required to make.
Underwriters and agents may be our customers or may engage in transactions with
us or perform services for us in the ordinary course of business.
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PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses of Issuance and Distribution.
The following is a statement of estimated expenses in connection with the
issuance and distribution of the securities being registered, other than
underwriting discounts and commission.
1. Registration fee......................... $ 88,500
2. Trustee's fees .......................... 7,200
3. Cost of printing......................... 40,000
4. Accounting fees.......................... 16,000
5. Miscellaneous............................ 8,300
________
$ 160,000
========
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 By-laws provide for indemnification
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.
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Item 16. Exhibits.
See Exhibit Index on Page E-1.
Item 17. Undertakings.
The Company hereby undertakes that, for the purpose of determining any
liability under the Securities Act of 1933, as amended (the "Act"), each filing
of the Company's annual report pursuant to Section 13(a) or Section 15(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), that is
incorporated by reference in the registration statement shall be deemed to be a
new registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
Insofar as indemnification for liabilities arising under the Act may be
permitted to officers, directors and controlling persons of the Company pursuant
to any charter provision, by-law or otherwise, the Company has been advised that
in the opinion of the Securities and Exchange Commission such indemnification is
against public policy as expressed in the Act and is, therefore, unenforceable.
In the event that a claim for indemnification against such liabilities (other
than payment by the Company of expenses incurred or paid by an officer, director
or controlling person of the Company in the successful defense of any action,
suit or proceeding) is asserted by such officer, director or controlling person
in connection with the securities being registered, the Company will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question whether such
indemnification by it is against public policy as expressed in the Act and will
be governed by the final adjudication of such issue.
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 Act;
(ii) To reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent post-effective
amendment thereof) which, individually or in the aggregate, represent a
fundamental change in the information set forth in the registration statement.
Notwithstanding the foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not exceed that
which was registered) and any deviation from the low or high and of the
estimated maximum offering range may be reflected in the form of prospectus
filed with the Commission pursuant to Rule 424(b) if, in the aggregate, the
changes in volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective registration statement; and
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(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 Exchange Act that are incorporated by
reference in the registration statement.
(2) That, for the purpose of determining any liability under the Act, 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-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all of the
requirements for filing on Form S-3 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned thereunto duly
authorized, in the City of Irving, State of Texas, on the 18th day of September,
1998.
GTE NORTHWEST INCORPORATED
(Registrant)
By: EILEEN O'NEILL ODUM
-------------------------
Eileen O'Neill Odum
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.
EILEEN O'NEILL ODUM )
___________________________ President )
Eileen O'Neill Odum (Principal Executive Officer) )
)
)
)
)
LAWRENCE R. WHITMAN )
___________________________ Vice President- )
Lawrence R. Whitman Finance and Planning )
(Principal Financial Officer) )
and Director )
)
)
)
STEPHEN L. SHORE )
___________________________ Controller )
Stephen L. Shore (Principal Accounting Officer) ) September 18, 1998
)
)
)
MATELAND L. KEITH, JR. )
___________________________ Director )
Mateland L. Keith, Jr. )
)
)
)
JOHN C. APPEL )
___________________________ Director )
John C. Appel )
II-4
<PAGE>
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 26, 1998, included in GTE Northwest Incorporated's Form
10-K for the year ended December 31, 1997, and to all references to our Firm
included in this Registration Statement.
ARTHUR ANDERSEN LLP
ARTHUR ANDERSEN LLP
Dallas, Texas
September 18, 1998
II-5
<PAGE>
EXHIBIT INDEX
Exhibit
Number
- -------
1.1 - Form of Purchase Agreement, including Standard Purchase Agreement
Provisions (September 1998 Edition).
4.1 - Indenture between GTE Northwest Incorporated and Bank of America
National Trust and Savings Association, as trustee, dated as of April 1,
1994 (incorporated by reference to Exhibit 4.1 of GTE Northwest
Incorporated's Registration Statement on Form S-3, No. 33-52909, filed
with the Securities and Exchange Commission on March 31, 1994).
4.2 - First Supplemental Indenture between GTE Northwest Incorporated and U.S.
Bank Trust National Association (formerly known as First Trust of
California, National Association), as successor trustee to Bank of
America National Trust and Savings Association, dated as of April 15,
1996 (incorporated by reference to Exhibit 4.2 of GTE Northwest
Incorporated's Registration Statement on Form S-3, No. 333-02839 filed
with the Securities and Exchange Commission on April 26, 1996).
4.3 - Form of New Debenture.
5 - Opinion and consent of William G. Mundy, Esq.
12 - Consolidated Statements of the Ratios of Earnings to Fixed Charges
(contained in Exhibit 12 to GTE Northwest Incorporated's Report on Form
10-Q for the quarter ended June 30, 1998 and Exhibit 12 to GTE Northwest
Incorporated's Report on Form 10-K for year ended December 31, 1997).
23.1 - Consent of Arthur Andersen LLP is included on page II-5 of this
Registration Statement.
23.2 - Consent of William G. Mundy, Esq. (contained in opinion filed as
Exhibit 5).
25 - Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939,
as amended, of U.S. Bank Trust National Association (formerly known
as First Trust of California, National Association), as successor
trustee to Bank of America National Trust and Savings Association under
the Indenture incorporated by reference in Exhibit 4.1.
26.1 - Form of Invitation for Bids.
E-1
<PAGE>
Exhibit 1.1
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, Series _, Due ____ (the "New Debentures"). Subject to the terms and
conditions set forth or incorporated by reference herein, the Company agrees to
sell and the purchaser or purchasers named in Schedule A attached hereto (the
"Purchasers") severally agree to purchase the New Debentures at __% of their
principal amount, plus accrued interest from ______________ to the date of
payment for the New Debentures and delivery thereof. Interest on the New
Debentures will be payable semi-annually on ___________ and ___________,
commencing _________. The New Debentures will be reoffered to the public at
____% of their principal amount.
All the provisions contained in the Company's Standard Purchase
Agreement Provisions (September 1998 Edition) (the "Standard Purchase Agreement
Provisions") annexed hereto shall be deemed to be a part of this Purchase
Agreement to the same extent as if such provisions had been set forth in full
herein.
REDEMPTION PROVISIONS:
[The New Debentures will not be redeemable prior to maturity.]
OR
[The New Debentures will not be redeemable prior to _____.
Thereafter, the New Debentures will be redeemable on not less 30 nor more than
60 days' notice given as provided in the Indenture, as a whole or in part, at
the option of the Company at the redemption price set forth below. The "initial
regular redemption price" will be the initial public offering price as defined
below plus the rate of interest on the New Debentures. The redemption price
during the twelve month period beginning ________ and during the twelve month
periods beginning on each ____________ thereafter through the twelve month
period ended ____________ will be determined by reducing the initial regular
redemption price by an amount determined by multiplying (a) 1/_ of the amount by
which such initial regular redemption price exceeds 100% by (b) the number of
such full twelve month periods which shall have elapsed between ___________ and
the date fixed for redemption; and thereafter the redemption prices during the
twelve month periods beginning ____________ shall be 100%; provided, however,
that all such prices will be specified to the nearest 0.01% or if there is no
nearest 0.01%, then to the next higher 0.01%.
For the purpose of determining the redemption prices of the New
Debentures, the initial public offering price of the New Debentures shall be the
price, expressed in percentage of principal amount (exclusive of accrued
interest), at which the New Debentures are to be initially offered for sale to
<PAGE>
-2-
the public; if there is not a public offering of the New Debentures, the
initial public offering price of the New Debentures shall be deemed to be the
price, expressed in percentage of principal amount (exclusive of accrued
interest), to be paid to the Company by the Purchasers.]
CLOSING:
The Purchasers agree to pay for the New Debentures, at the option of
the Company, by certified or official bank check or checks or by wire transfer
in each case in same day funds, upon delivery of such New Debentures at 10:00
A.M. (New York City time) on _____________ (the "Closing Date") or at such other
time, not later than the seventh full business day thereafter, as shall be
agreed upon by the Company and the Purchasers or the firm or firms designated as
the representative or representatives, as the case may be, of the Purchasers
(the "Representative"). The Company shall advise the Representative not later
than the business day immediately preceding the Closing Date of its decision
whether to accept payment for the New Debentures by certified bank check or by
wire transfer and, if the Company chooses to accept payment by wire transfer,
the Company shall provide the Representative on such date immediately preceding
the Closing Date with the appropriate wire transfer instructions.
DENOMINATION OF THE NEW DEBENTURES:
[The New Debentures shall be in the form of temporary or definitive
fully-registered New Debentures in denominations of One Thousand Dollars
($1,000) or any integral multiple thereof, registered in such names as the
Purchasers or the Representative shall request not less than two business days
before the Closing Date. The Company agrees to make the New Debentures
available to the Purchasers or the Representative for inspection at the office
of U.S. Bank Trust National Association (formerly known as First Trust of
California, National Association), San Francisco, California or The Depository
Trust Company, New York, New York, at least twenty-four hours prior to the time
fixed for the delivery of the New Debentures on the Closing Date.]
OR
[The New Debentures shall be in the form of one or more Global
Debentures which shall represent, and shall be denominated in an amount equal to
the aggregate principal amount of, the New Debentures and shall be registered in
the name of The Depository Trust Company or its nominee. The Company agrees to
make the New Debentures available to the Purchasers or the Representative for
inspection at the office of U.S. Bank Trust National Association (formerly known
as First Trust of California, National Association), San Francisco, California
or The Depository Trust Company, New York, New York, at least twenty-four hours
prior to the time fixed for the delivery of the New Debentures on the Closing
Date.]
<PAGE>
-3-
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: ___________________________
Vice President
<PAGE>
SCHEDULE A
The names of the Purchasers and the principal amount of New Debentures
which each respectively offers to purchase are as follows:
Principal
Amount
of New
Name Debentures
____ ____________
$___,000,000
______________
Total........................ $___,000,000
<PAGE>
GTE NORTHWEST INCORPORATED
STANDARD PURCHASE AGREEMENT PROVISIONS
(September 1998 Edition)
<PAGE>
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, as amended
and supplemented by the First Supplemental Indenture dated as of April 15, 1996
(as amended and supplemented, the "Indenture"), between the Company and U.S.
Bank Trust National Association (formerly known as First Trust of California,
National Association), as successor trustee to Bank of America National Trust
and Savings Association (the "Trustee"). In a supplemental indenture to the
Indenture, a resolution of the Board of Directors of the Company or an officers'
certificate pursuant to a supplemental indenture or board resolution
specifically authorizing each new series of debentures, the Company will
designate the title of each new series of debentures, and the aggregate
principal amount, date or dates of maturity, dates for payment and rate of
interest, redemption dates, prices, obligations and restrictions, if any, and
any other terms with respect to each such series.
The Company has filed with the Securities and Exchange Commission (the
"Commission") under the Securities Act of 1933, as amended (the "Act"),
registration statement No. 333-_____ relating to $300,000,000 of the Company's
debentures registered thereunder, (from time to time, is hereinafter referred to
as the "Debentures"), including a prospectus which relates to the Debentures,
and has filed with, or transmitted for filing to, the Commission (or will
promptly after the sale so file or transmit for filing) a prospectus supplement
specifically relating to a particular series of Debentures (such particular
series being hereinafter referred to as the "New Debentures") pursuant to Rule
424(b) under the Act ("Rule 424(b)"). The term "Registration Statement" means
the registration statement referred to herein, as amended to the date of the
Purchase Agreement. The term "Basic Prospectus" means the prospectus relating
to the Debentures included in the Registration Statement. The term "Prospectus"
means the Basic Prospectus together with the prospectus supplement specifically
relating to the New Debentures, as filed with, or transmitted for filing to, the
Commission pursuant to Rule 424(b). As used herein, the terms "Registration
Statement", "Basic Prospectus" and "Prospectus" shall include in each case the
material, if any, incorporated by reference therein.
II. PURCHASERS' REPRESENTATIONS AND RESALE
Each Purchaser represents and warrants that information furnished in
writing to the Company expressly for use with respect to the New Debentures will
not contain any untrue statement of a material fact and will not omit any
material fact in connection with such information necessary to make such
information not misleading.
<PAGE>
-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 C and D of Article VI and Articles
VIII, IX and X of this Agreement apply only to Purchasers that have advised the
Company of their intention to resell the New Debentures ("Reselling
Purchasers"). All other provisions apply to any Purchaser including a Reselling
Purchaser.
III. CLOSING
The closing will be held at the office of Milbank, Tweed, Hadley &
McCloy, 1 Chase Manhattan Plaza, New York, New York on the Closing Date.
Concurrent with the delivery of the New Debentures to the Purchasers or to the
Representative for the account of each Purchaser, payment of the full purchase
price of the New Debentures shall be made, at the option of the Company, by
certified or official bank check or checks in same day funds, payable to the
Company or its order, at The Bank of New York, Attention: Corporate Trust
Department, or by wire transfer in same day funds to The Bank of New York for
the account of the Company. Upon receipt of such check or wire transfer by The
Bank of New York, such check or wire transfer shall be deemed to be delivered at
the closing.
IV. CONDITIONS TO PURCHASERS' OBLIGATIONS
The respective obligations of the Purchasers hereunder are subject to
the following conditions:
(A) The Registration Statement shall have become effective and no
stop order suspending the effectiveness of the Registration Statement shall be
in effect, and no proceedings for such purpose shall be pending before or
threatened by the Commission; since the latest date as of which information is
given in the Registration Statement, there shall have been no material adverse
change in the business, business prospects, properties, financial condition or
results of operations of the Company; and the Purchasers or the Representative
shall have received on the Closing Date the customary form of compliance
certificate, dated the Closing Date and signed by the President or a Vice
President of the Company, including the foregoing. The officer executing such
certificate may rely upon the best of his or her knowledge as to proceedings
pending or threatened.
(B) At the Closing Date, there shall be in full force and effect an
order or orders, satisfactory to counsel for the Purchasers, of the 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.
<PAGE>
-3-
(C) The Purchasers or the Representative shall have received on the
Closing Date an opinion of William G. Mundy, Esq., Vice President-General
Counsel of the Company, or other counsel to the Company satisfactory to the
Purchasers and counsel to the Purchasers, dated the Closing Date, substantially
in the form set forth in Exhibit A hereto.
(D) The Purchasers or the Representative shall have received on the
Closing Date an opinion of Milbank, Tweed, 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 LLP, independent public accountants
for the Company, dated as of 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 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.
(C) The Company shall have received on the Closing Date the full
purchase price of the New Debentures purchased hereunder.
VI. COVENANTS OF THE COMPANY
In further consideration of the agreements contained herein of the
Purchasers, the Company covenants to the several Purchasers as follows:
(A) To furnish to the Purchasers or the Representative a copy of the
Registration Statement including materials, if any, incorporated by reference
therein and, during the period mentioned in (C) below, to supply as many copies
of the Prospectus, any documents incorporated by reference therein and any
supplements and amendments thereto as the Purchasers or the Representative may
reasonably request. The terms "supplement" and "amendment" or "amend" as used
in this Agreement shall include all documents filed by the Company with the
Commission subsequent to the effective date of the Registration Statement, or
the date of the Basic Prospectus, as the case may be, pursuant to the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), which are deemed to be
incorporated by reference therein.
<PAGE>
-4-
(B) Before amending or supplementing the Registration Statement or
the Prospectus with respect to the New Debentures, to furnish to any Purchaser
or the Representative, and to counsel for the Purchasers, a copy of each such
proposed amendment or supplement.
The covenants in Paragraphs (C) and (D) apply only to Reselling
Purchasers:
(C) If in the period after the first date of resale of the New
Debentures during which, in the opinion of counsel for the Reselling Purchasers,
the Prospectus is required by law to be delivered, any event shall occur as a
result of which it is necessary to amend or supplement the Prospectus in order
to make a statement therein, in light of the circumstances when the Prospectus
is delivered to a subsequent purchaser, not materially misleading, or if it is
otherwise necessary to amend or supplement the Prospectus to comply with law,
forthwith to prepare and furnish, at its own expense (unless such amendment
shall relate to information furnished by the Purchasers or the Representative by
or on behalf of the Purchasers in writing expressly for use in the Prospectus),
to the Reselling Purchasers, the number of copies requested by the Reselling
Purchasers or the Representative of either amendments or supplements to the
Prospectus so that the statements in the Prospectus as so amended or
supplemented will not, in light of the circumstances when the Prospectus is
delivered to a subsequent purchaser, be misleading or so that the Prospectus
will comply with law.
(D) To use its best efforts to qualify the New Debentures for offer
and sale under the securities or Blue Sky laws of such jurisdictions as the
Purchasers or the Representative shall reasonably request and to pay all
expenses (including fees and disbursements of counsel) in connection therewith;
provided, however, that the Company, in complying with the foregoing provisions
of this paragraph, shall not be required to qualify as a foreign company or to
register or qualify as a broker or dealer in securities in any jurisdiction or
to consent to service of process in any jurisdiction other than with respect to
claims arising out of the offering or sale of the New Debentures, and provided
further that the Company shall not be required to continue the qualification of
the New Debentures beyond one year from the date of the sale of the New
Debentures.
VII. REPRESENTATIONS AND WARRANTIES OF THE COMPANY
The Company represents and warrants to the several Purchasers that (i)
each document, if any, filed or to be filed pursuant to the Exchange Act and
incorporated by reference in the Basic Prospectus or the Prospectus complied or
will comply when so filed in all material respects with the Exchange Act and the
rules and regulations thereunder, (ii) each part of the Registration Statement
filed with the Commission pursuant to the Act relating to the New Debentures,
when such part became effective, did not contain any untrue statement of a
material fact or omit to state a material fact required to be stated therein or
necessary to make the statements therein not misleading, (iii) on the effective
date of the Registration Statement, the date the Prospectus is filed pursuant to
Rule 424(b) and at all times subsequent to and including the Closing Date, the
<PAGE>
-5-
Registration Statement and the Prospectus, as amended or supplemented, if
applicable, complied or will comply in all material respects with the Act and
the applicable rules and regulations thereunder, (iv) on the effective date of
the Registration Statement, the Registration Statement did not contain, and as
amended or supplemented, if applicable, will not contain, any untrue statement
of a material fact or omit to state a material fact necessary in order to make
the statements therein not misleading, and on the date the Prospectus, or any
amendment or supplement thereto, is filed pursuant to Rule 424(b) and on the
Closing Date, the Prospectus will not contain any untrue statement of a material
fact or omit to state a material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were made, not
misleading; except that these representations and warranties do not apply to
statements or omissions in the Registration Statement or the Prospectus based
upon information furnished to the Company by any Purchaser or the Representative
by or on behalf of any Purchaser in writing expressly for use therein or to
statements or omissions in the Statement of Eligibility of the Trustee under the
Indenture, (v) there are no legal or governmental proceedings required to be
described in the Prospectus which are not described as required, (vi) the
consummation of any transaction herein contemplated will not result in a breach
of any of the terms of any agreement or instrument to which the Company is a
party or any statute or any order, rule or regulation of any court or
governmental agency or body by which the Company is bound, and (vii) the
Indenture has been qualified under the Trust Indenture Act of 1939, as amended.
VIII. INDEMNIFICATION
The Company agrees to indemnify and hold harmless each Reselling
Purchaser and each person, if any, who controls such Reselling Purchaser within
the meaning of either Section 15 of the Act or Section 20 of the Exchange Act,
from and against any and all losses, claims, damages and liabilities based upon
any untrue statement or alleged untrue statement of a material fact contained in
the Registration Statement, the Basic Prospectus or the Prospectus (if used
within the period set forth in Paragraph (C) of Article VI hereof, and as
amended or supplemented if the Company shall have 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.
<PAGE>
-6-
Each Reselling Purchaser agrees to indemnify and hold harmless the
Company, its directors, its officers who sign the Registration Statement and any
person controlling the Company to the same extent as the foregoing indemnity
from the Company to each Reselling Purchaser, but only with reference to
information relating to said Reselling Purchaser furnished to the Company in
writing by the Reselling Purchaser or the Representative by or on behalf of said
Reselling Purchaser expressly for use in the Registration Statement or the
Prospectus.
In case any proceeding (including any governmental investigation)
shall be instituted involving any person in respect of which indemnity may be
sought pursuant to either of the two preceding paragraphs, such person (the
"indemnified party") shall promptly notify the person or persons against whom
such indemnity may be sought (the "indemnifying party") in writing and the
indemnifying party, upon request of the indemnified party, shall retain counsel
reasonably satisfactory to the indemnified party to represent the indemnified
party and any others the indemnifying party may designate in such proceeding
(provided, however, that if such indemnified party shall object to the selection
of counsel after having been advised by such counsel that there may be one or
more legal defenses available to the indemnified party which are different from
or additional to those available to the indemnifying party, the indemnifying
party shall designate other counsel reasonably satisfactory to the indemnified
party) and the indemnifying party shall pay the fees and disbursements of such
counsel related to such proceeding. In any such proceeding, any indemnified
party shall have the right to retain its own counsel, but the fees and expenses
of such counsel shall be at the expense of such indemnified party unless the
indemnifying party and the indemnified party shall have mutually agreed to the
retention of such counsel. The indemnifying party shall not be liable for any
settlement of any proceeding effected without its written consent but if settled
with such consent or if there be a final judgment for the plaintiff, the
indemnifying party agrees to indemnify the indemnified party from and against
any loss or liability by reason of such settlement or judgment.
If the indemnification provided for in this Article VIII is
unavailable to an indemnified party under the first or second paragraph hereof
or insufficient in respect of any losses, claims, damages or liabilities
referred to therein, then each indemnifying party, in lieu of indemnifying such
indemnified party shall severally contribute to the amount paid or payable by
such indemnified party as a result of such losses, claims, damages or
liabilities (i) in such proportion as is appropriate to reflect the relative
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
<PAGE>
-7-
shall be deemed to be in the same proportion as the total net proceeds from the
offering of the New Debentures received by the Company bear to the total
commissions, if any, received by all of the Reselling Purchasers in respect
thereof. If there are no commissions allowed or paid by the Company to the
Reselling Purchasers in respect of the New Debentures, the relative benefits
received by the Reselling Purchasers in the preceding sentence shall be the
difference between the price received by such Reselling Purchasers upon resale
of the New Debentures and the price paid for the New Debentures pursuant to the
Purchase Agreement. The relative fault of the Company on the one hand and of
the Reselling Purchasers on the other shall be determined by reference to, among
other things, whether the untrue or alleged untrue statement of a material fact
or the omission or alleged omission to state a material fact relates to
information supplied by the Company or by the Reselling Purchasers and the
parties' relative intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
The amount paid or payable by an indemnified party as a result of the
losses, claims, damages and liabilities referred to in this Article VIII shall
be deemed to include, subject to the limitations set forth above, any legal or
other expenses reasonably incurred by such indemnified party in connection with
investigating or defending any such action or claim. No person guilty of
fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation.
IX. SURVIVAL
The indemnity and contribution agreements contained in Article VIII
and the representations and warranties of the Company contained in Article VII
of this Agreement shall remain operative and in full force and effect regardless
of (i) any termination of this Agreement, (ii) any investigation made by any
Reselling Purchaser or on behalf of any Reselling Purchaser or any persons
controlling any Reselling Purchaser and (iii) acceptance of and payment for any
of the New Debentures.
X. TERMINATION BY RESELLING PURCHASERS
At any time prior to the Closing Date this Agreement shall be subject
to termination in the absolute discretion of the Reselling Purchasers, by notice
given to the Company, if (i) trading in securities generally on the New York
Stock Exchange shall have been suspended or materially limited, (ii) a general
moratorium on commercial banking activities in New York shall have been declared
by either Federal or New York State authorities, (iii) minimum prices shall have
been established on the New York Stock Exchange by Federal or New York State
authorities or (iv) any outbreak or material escalation of hostilities involving
the United States or declaration by the United States of a national emergency or
war or other calamity or crisis shall have occurred, the effect of any of which
is such as to make it impracticable or inadvisable to proceed with the delivery
of the New Debentures on the terms and in the manner contemplated by the
Prospectus.
<PAGE>
-8-
XI. TERMINATION BY PURCHASERS
If this Agreement shall be terminated by the Purchasers because of any
failure or refusal on the part of the Company to comply with the terms or to
fulfill any of the conditions of this Agreement, or if for any reason (other
than those set forth in Article V) the Company shall be unable to perform its
obligations under this Agreement, the Company will reimburse the Purchasers for
all out-of-pocket expenses (including the fees and disbursements of counsel)
reasonably incurred by such Purchasers in connection with the New Debentures.
Except as provided herein, the Purchasers shall bear all of their expenses,
including the fees and disbursements of counsel.
XII. SUBSTITUTION OF PURCHASERS
If for any reason any Purchaser shall not purchase the New Debentures
it has agreed to purchase hereunder, the remaining Purchasers shall have the
right within 24 hours to make arrangements satisfactory to the Company for the
purchase of such New Debentures hereunder. If they fail to do so, the amounts
of New Debentures that the remaining Purchasers are obligated, severally, to
purchase under this Agreement shall be increased in the proportions which the
total amount of New Debentures which they have respectively agreed to purchase
bears to the total amount of New Debentures which all non-defaulting Purchasers
have so agreed to purchase, or in such other proportions as the Purchasers may
specify to absorb such unpurchased New Debentures, provided that such aggregate
increases shall not exceed 10% of the total amount of the New Debentures set
forth in Schedule A to the Purchase Agreement. If any unpurchased New
Debentures still remain, the Company shall have the right either to elect to
consummate the sale except as to any such unpurchased New Debentures so
remaining or, within the next succeeding 24 hours, to make arrangements
satisfactory to the remaining Purchasers for the purchase of such New
Debentures. In any such cases, either the Purchasers or the Representative or
the Company shall have the right to postpone the Closing Date for not more than
seven business days to a mutually acceptable date. If the Company shall not
elect to so consummate the sale and any unpurchased New Debentures remain for
which no satisfactory substitute Purchaser is obtained in accordance with the
above provisions, then this Agreement shall terminate without liability on the
part of any non-defaulting Purchaser or the Company for the purchase or sale of
any New Debenture under this Agreement. No provision in this paragraph shall
relieve any defaulting Purchaser of liability to the Company for damages
occasioned by such default.
XIII. MISCELLANEOUS
This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument.
This Agreement shall be governed by and construed in accordance with
the substantive laws of the State of New York.
<PAGE>
Exhibit A
[LETTERHEAD OF
WILLIAM G. MUNDY
Vice President-General Counsel]
_____________, 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 ____
Dear Sirs:
I have been requested by GTE Northwest Incorporated, a Washington
corporation (the "Company"), as its Vice President-General Counsel 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, Series _, Due
____ (the "New Debentures").
In this connection I have examined among other things:
(a) The Restated Articles of Incorporation of the Company, as amended, and
the By-laws of the Company, each as presently in effect;
(b) A copy of the Indenture dated as of April 1, 1994, as amended and
supplemented by the First Supplemental Indenture dated as of April 15, 1996 (as
amended and supplemented, the "Indenture"), between the Company and U.S. Bank
Trust National Association (formerly known as First Trust of California,
National Association), as successor trustee to Bank of America National Trust
and Savings Association (the "Trustee"), under which the New Debentures are
being issued;
(c) [The Supplemental Indenture, dated as of ____, 199_ (the "Supplemental
Indenture") between the Company and the Trustee] [The resolutions of the Board
of Directors adopted _____, 199_ (the "Board Resolution")] [The certificate,
dated _____, 199_, of an authorized officer of the Company pursuant to
authorization from the Board of Directors of the Company (the "Officers'
Certificate")] specifically authorizing the New Debentures, including the
issuance and sale of the New Debentures;
(d) The form of the New Debentures set forth in the [Supplemental
Indenture] [Board Resolution] [Officers' Certificate];
(e) The records of the corporate proceedings of the Company relating to the
authorization, execution and delivery of the Indenture and the [Supplemental
Indenture] [Board Resolution] [Officers' Certificate];
(f) The records of the corporate proceedings of the Company relating to the
authorization, execution and delivery of the Agreement;
<PAGE>
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(g) The record of all proceedings taken by the Company relating to the
registration of the New Debentures under the Securities Act of 1933, as amended
(the "Act"), and qualification of the Indenture under the Trust Indenture Act of
1939, as amended (the "TIA"), particularly Registration Statement No. 333- ,
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, are hereinafter called the
"Prospectus");
(h) Statutes, permits and other documents relating to the Company's
franchises;
(i) The records of proceedings and orders issued by the Public Utility
Commission of Oregon authorizing the issuance and sale of the New Debentures;
and
(j) The Registration Statement, the Prospectus and all documents filed by
the Company under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), which are incorporated by reference in the Prospectus (the "Incorporated
Documents").
On the basis of my examination of the foregoing and of such other documents
and matters as I have deemed necessary as the basis for the opinions hereinafter
expressed, I am of the opinion that:
1. The Company is a corporation duly incorporated, validly existing and in
good standing under the laws of the State of Washington, is a duly licensed and
qualified foreign corporation under the laws of the States of Idaho and Oregon,
and has adequate corporate power to own and operate its properties and to carry
on the business in which it is now engaged. GTE West Coast Incorporated, a
wholly-owned subsidiary of the Company, is a corporation duly incorporated under
the laws of the State of California, and has adequate corporate power to own and
operate its properties and carry on the business in which it is now engaged.
There are no other states or jurisdictions in which the qualification or
licensing of the Company as a foreign corporation is necessary where the failure
to be qualified or licensed would have a material adverse effect on the Company.
2. All legal proceedings necessary to the authorization, issue and sale of
the New Debentures to you have been taken by the Company.
3. The Agreement has been duly and validly authorized, executed and
delivered by the Company.
4. The Indenture is in proper form, has been duly authorized 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.
<PAGE>
-3-
6. The issuance and sale of the New Debentures, as contemplated by the
Agreement, have been duly authorized by 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 ________, 1998, and, to
the best of my knowledge, no proceedings under Section 8 of the Act looking
toward the possible issuance of a stop order with respect thereto are pending or
threatened and the Registration Statement remains in effect on the date hereof.
The Registration Statement and the Prospectus comply as to form in all material
respects with the relevant provisions of the Act and of the Exchange Act as to
the Incorporated Documents and the applicable rules and regulations of the
Securities and Exchange Commission thereunder, except that I express no opinion
as to the financial statements or other financial data contained therein. The
Prospectus is lawful for use for the purposes specified in the Act in connection
with the offer for sale and sale of the New Debentures in the manner therein
specified. I have no reason to believe that the Registration Statement or the
Incorporated Documents, considered as a whole on the effective date of the
Registration Statement, contained any untrue statement of a material fact or
omitted to state a material fact required to be stated therein or necessary in
order to make the statements therein not misleading or that the Prospectus and
the Incorporated Documents, considered as a whole on the date hereof, contain
any untrue statement of a material fact or omit to state a material fact
necessary in order to make the statements therein, in the light of the
circumstances under which they were made, not misleading, except that in each
case I express no opinion as to the financial statements or other financial data
contained therein.
Without my prior written consent, this opinion may not be relied upon by
any person or entity other than the addressee, quoted in whole or in part, or
otherwise referred to in any report or document, or furnished to any other
person or entity, except that Milbank, Tweed, Hadley & McCloy may rely upon this
opinion as if this opinion were separately addressed to them.
Very truly yours,
William G. Mundy
Vice President-General Counsel
c: Milbank, Tweed, Hadley & McCloy
<PAGE>
Exhibit B
MILBANK, TWEED, HADLEY & McCLOY
1 Chase Manhattan Plaza
New York, New York 10005
__________, 199_
GTE NORTHWEST INCORPORATED
$___,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, Series _, Due ____ (the "New Debentures"). Pursuant to such
designation and the terms of a Purchase Agreement dated ________, relating to
the New Debentures (the "Purchase Agreement"), entered into by you with the
Company, we have acted as your counsel in connection with your several
purchases this day from the Company of the New Debentures, which are issued
under an Indenture dated as of April 1, 1994, as amended and supplemented by the
First Supplemental Indenture dated as of April 15, 1996 (as amended and
supplemented, the "Indenture"), between the Company and U.S. Bank Trust National
Association (formerly known as First Trust of California, National Association),
as successor trustee to Bank of America National Trust and Savings Association
(the "Trustee").
We have reviewed originals, or copies certified to our satisfaction,
of such corporate records of the Company, indentures, agreements and other
instruments, certificates of public officials and of officers and
representatives of the Company, and other documents, as we have deemed necessary
as a basis for the opinions hereinafter expressed. In such examination we have
assumed the genuineness of all signatures, the authenticity of all documents
submitted to us as originals, the conformity with the original documents of all
documents submitted to us as copies, and the authenticity of the originals of
such latter documents. As to various questions of fact material to such
opinions, we have, when relevant facts were not independently established,
relied upon certifications by officers of the Company and statements contained
in the Registration Statement hereinafter mentioned.
In addition, we attended the closing held today at the offices of
Milbank, Tweed, Hadley & McCloy, 1 Chase Manhattan Plaza, New York, New York at
which the Company caused the New Debentures to be delivered to your
representatives at The Depository Trust Company, 55 Water Street, New York, New
York, for your several accounts, against payment therefor.
On the basis of the foregoing and having regard to legal
considerations which we deem relevant, we are of the opinion that:
<PAGE>
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1. The Company is a validly existing corporation, in good standing, under
the laws of the State of Washington.
2. The Purchase Agreement has been duly authorized, executed and delivered
by and on behalf of the Company.
3. The Indenture has been duly authorized, executed and delivered by the
Company and constitutes a legal, valid and binding agreement of the Company
enforceable in accordance with its terms, except as limited by bankruptcy,
insolvency, reorganization, moratorium or similar laws of general applicability
affecting the enforceability of creditors' rights. The enforceability of the
Indenture is subject to the effect of general principles of equity (regardless
of whether considered in a proceeding in equity or at law), including without
limitation (i) the possible unavailability of specific performance, injunctive
relief or any other equitable remedy and (ii) concepts of materiality,
reasonableness, good faith and fair dealing. The Indenture has been duly
qualified under the Trust Indenture Act of 1939, as amended.
4. The New Debentures have been duly authorized and conform as to legal
matters in all substantial respects to the description thereof contained in the
Registration Statement and Prospectus hereinafter mentioned. The New Debentures
(assuming due execution thereof by the Company and due authentication and
delivery by the Trustee) have been duly issued for value by the Company and
(subject to the qualifications stated in paragraph 3 above) constitute legal,
valid and binding obligations of the Company, and are entitled to the benefits
afforded by the Indenture in accordance with the terms of the Indenture and of
the New Debentures.
5. On the basis of information received by the Company from the Securities
and Exchange Commission (the "Commission"), Registration Statement No. 333-_____
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 ________, 1998 and thereupon the Prospectus
dated ______________ as supplemented by the Prospectus Supplement dated
____________ (collectively, the "Prospectus") became lawful for use for the
purposes specified in the Act, in connection with the offer for sale and sale of
the New Debentures in the manner therein specified, subject to compliance with
the provisions of securities or Blue Sky laws of certain States in connection
with the offer for sale or sale of the New Debentures in such States. To the
best of our knowledge, the Registration Statement remains in effect at this
date.
6. The Registration Statement, as of its effective date, and the
Prospectus, as of the date hereof, together with the documents incorporated by
reference therein (the "Incorporated Documents") (except any financial
statements or other financial data contained or incorporated by reference in the
Registration Statement, the Prospectus or such Incorporated Documents, as to
which no opinion is expressed) appear on their face to be appropriately
responsive, in all material respects relevant to the offering of the New
Debentures, to the requirements of the Act and the Securities Exchange Act of
1934, as amended (the "Exchange Act"), as applicable, and the applicable rules
and regulations of the Commission thereunder.
<PAGE>
-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
the Incorporated Documents. In connection with our participation in the
preparation of the Registration Statement and the Prospectus, we have not
independently verified the accuracy, completeness or fairness of the statements
contained therein or in the Incorporated Documents, and the limitations inherent
in the review made by us and the knowledge available to us are such that we are
unable to assume, and we do not assume, any responsibility for the accuracy,
completeness or fairness of the statements contained in the Registration
Statement, the Prospectus or the Incorporated Documents, except as otherwise
specifically stated herein. None of the foregoing disclosed to us any
information which gave us reason to believe that the Registration Statement or
the Incorporated Documents, considered as a whole on the effective date of the
Registration Statement, contained or contain any untrue statement of a material
fact or omitted or omit to state a material fact required to be stated therein
or necessary in order to make the statements therein not misleading or that the
Prospectus and the Incorporated Documents, considered as a whole on the date
hereof, contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements therein, in light of the
circumstances under which they were made, not misleading. We express no opinion
as to any document filed by the Company under the Exchange Act, whether prior or
subsequent to such effective date, except to the extent that such documents are
Incorporated Documents read together with the Registration Statement or the
Prospectus and considered as a whole, nor do we express any opinion as to the
financial statements or other financial data included in or omitted from, or
incorporated by reference in the Registration Statement, the Prospectus or the
Incorporated Documents.
We express no opinion as to matters governed by any laws other than the
laws of the State of New York, the Federal laws of the United States of America
and, to the extent the foregoing opinions involve the laws of the States of
Washington, California, Idaho and Oregon, in reliance upon the opinion of even
date herewith of William G. Mundy, Esq., Vice President-General Counsel of the
Company, the laws of the States of Washington, California, Idaho and Oregon.
The opinions contained herein are rendered to you and are solely for your
benefit and the benefit of the Purchasers represented by you in connection with
the transaction contemplated by the Purchase Agreement. These opinions may not
be relied upon by you for any other purpose, or furnished to, quoted or relied
upon by any other person, firm or corporation for any purpose, without our prior
written consent.
Very truly yours,
MILBANK, TWEED, HADLEY & McCLOY
<PAGE>
Exhibit C
LETTER OF INDEPENDENT PUBLIC ACCOUNTANTS
The letter of independent public accountants for the Company to be
delivered pursuant to Article IV, paragraph (E) of the document entitled
Standard Purchase Agreement Provisions, September 1998 Edition, shall be to the
effect that:
At the closing, the Purchasers shall have received such number of
copies as are necessary to provide one for each Purchaser of a letter addressed
to the Company and satisfactory to the Purchasers or the Representative and
counsel to the Purchasers, dated as of the Closing Date and encompassing the
performance of certain procedures described in the letter as of a date not more
than five business days prior to the Closing Date (the "Cutoff Date"), from
Arthur Andersen LLP, confirming that they are independent public accountants
with respect to the Company within the meaning of the Securities Act of 1933, as
amended (the "Act") and the applicable published rules and regulations of the
Commission thereunder, specifically Rule 2-01 of Regulation S-X, and stating in
effect (1) that in their opinion, the consolidated financial statements and
schedules audited by them and incorporated by reference in the Prospectus comply
as to form in all material respects with the applicable accounting requirements
of the Act, and the Securities Exchange Act of 1934, as amended the ("Exchange
Act") and the published rules and regulations thereunder, (2) that although they
have not audited any consolidated 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 consolidated
financial statements as of that date and for the year then ended, but not on the
consolidated financial statements for any interim period within that year;
therefore, they are unable to and do not express any opinion on the unaudited
condensed consolidated balance sheet as of the latest available interim date,
and the unaudited condensed consolidated statements of income, reinvested
earnings, and cash flows for the latest available interim period subsequent to
that prior-year audit which are included in the Prospectus and for the
comparable period of the preceding year; they have performed the procedures
specified by the American Institute of Certified Public Accountants for a review
of interim financial information as described in SAS No. 71, Interim Financial
Information, on the latest available unaudited interim condensed consolidated
financial statements prepared by the Company, inquired of certain officials of
the Company responsible for financial and accounting matters, and read the
minutes of the Board of Directors and shareholders of the Company, all of which
procedures have been agreed to by the Purchasers, nothing has come to their
attention which caused them to believe that: (a) any unaudited interim condensed
consolidated financial statements incorporated by reference in the Prospectus
(i) do not comply as to form in all material respects with the applicable
accounting requirements of the Exchange Act as it applies to Form 10-Q and the
related published rules and regulations thereunder or (ii) have not been
presented in conformity with generally accepted accounting principles applied on
a basis substantially consistent with that of the audited consolidated financial
statements incorporated by reference in the Prospectus; or (b) (i) as of the
date of the latest available unaudited condensed consolidated interim financial
statements prepared by the Company, there have been any changes in the capital
stock or any increase in the short-term indebtedness or long-term debt of the
Company or any decrease in net assets, in each case as compared with the amounts
shown on the latest consolidated balance sheet incorporated by reference in the
Prospectus, (ii) for the period from the date of the latest consolidated
financial statements included or incorporated by reference in the Prospectus to
the specified date referred to in the preceding clause (i), there were any
decreases in operating revenues, net operating income, net income or the
Company's consolidated ratio of earnings to fixed charges, in each case as
<PAGE>
-2-
compared with the comparable period of the preceding year, or (iii) as of the
Cutoff Date there have been any material changes in the capital stock or any
material increase in the debt of the Company, or any material decreases in net
assets, in each case as compared with amounts shown in the latest consolidated
balance sheet included or incorporated by reference in the Prospectus, and (iv)
for the period from the date of the latest available interim consolidated
financial statements referred to in clause (b)(i) above to the Cutoff Date,
there were any material decreases in operating revenues, net operating income or
net income, in each case as compared with the comparable period of the preceding
year, except in all instances for changes or decreases which the Prospectus
discloses have occurred or may occur or as disclosed in such letter and except
for changes occasioned by the declaration and payment of dividends on the stock
of the Company or occasioned by sinking fund payments made on the debt
securities of the Company, and (3) that they have performed the following
additional procedures with respect to the consolidated ratios of earnings to
fixed charges included or incorporated by reference in the Prospectus: (i)
compared the amounts used in the computation of such ratios with the amounts
included in the consolidated financial statements incorporated by reference in
the Prospectus and noted agreement in all material respects, and (ii) recomputed
the ratios and noted agreement in all material respects.
<PAGE>
Exhibit 4.3
FORM OF NEW DEBENTURE
(FORM OF FACE OF DEBENTURE)
[If Debenture is a Global Debenture, insert the following:
EXCEPT AS OTHERWISE PROVIDED IN SECTION 2.11 OF THE INDENTURE, THIS GLOBAL
DEBENTURE MAY BE TRANSFERRED, IN WHOLE BUT NOT IN PART, ONLY TO ANOTHER NOMINEE
OF THE DEPOSITORY OR TO A SUCCESSOR DEPOSITORY OR TO A NOMINEE OF SUCH SUCCESSOR
DEPOSITORY.]
[If The Depository Trust Company is the Depository, insert the following:
Unless this certificate is presented by an authorized representative of The
Depository Trust Company, a New York corporation ("DTC"), to the Company or its
agent for registration of transfer, exchange, or payment, and any certificate
issued is registered in the name of DTC (and any payment is made to Cede & Co.
or to such other entity as is requested by an authorized representative of DTC),
ANY TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, Cede & Co., has an
interest herein.]
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
<PAGE>
-2-
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.
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 herein referred to in the
within-mentioned Indenture.
U.S. Bank Trust National Association
as Trustee, Authenticating Agent and
Security Registrar
By __________________________
Authorized Signatory
<PAGE>
-3-
(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 U.S. Bank Trust
National Association (formerly known as First Trust of California, National
Association), a national banking association organized and existing under the
laws of the United States of America, as successor trustee to Bank of America
National Trust and Savings Association (hereinafter referred to as the
"Trustee") (said Indenture, as amended and supplemented by the First
Supplemental Indenture dated as of April 15, 1996, is hereinafter referred to as
the "Indenture"), to which Indenture reference is hereby made for a description
of the rights, limitation of rights, obligations, duties and immunities
thereunder of the Trustee, the Company and the holders of the Securities. By the
terms of the Indenture, the Securities are issuable in series which may vary as
to amount, date of maturity, rate of interest and in other respects as in the
Indenture provided. This Debenture is one of the series designated on the face
hereof (herein called the "Debentures") limited in aggregate principal amount to
$___,000,000.
[INSERT IF GLOBAL DEBENTURE - This Global Debenture shall be exchangeable for
Debentures in definitive form registered in the names of persons other than the
Depository or its nominee only if (i) the Depository notifies the Company that
it is unwilling or unable to continue as the Depository or if at any time such
Depository is no longer registered or in good standing under the Securities
Exchange Act of 1934 or other applicable statute and a successor depository is
not appointed by the Company within 90 days or (ii) the Company executes and
delivers to the Trustee an Officer's Certificate that the Global Debenture shall
be so exchangeable. To the extent that the Global Debenture is exchangeable
pursuant to the preceding sentence, it shall be exchangeable for Debentures
registered in such names as the Depository shall direct.
Notwithstanding any other provision herein, this Global Debenture may not be
transferred except as a whole by the Depository to a nominee of such Depository
or by a nominee of such Depository to such Depository or another nominee of such
Depository.]
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,
<PAGE>
-4-
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:
Year Redemption Price
____ ________________
%
<PAGE>
-5-
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.
[INSERT IF GLOBAL DEBENTURE - The Depository by acceptance of this Global
Debenture agrees that it will not sell, assign, transfer or otherwise convey any
beneficial interest in this Global Debenture unless such beneficial interest is
in an amount equal to an authorized denomination for Debentures of this series.]
Capitalized terms used herein and not otherwise defined herein shall have the
respective meanings set forth in the Indenture.
<PAGE>
Exhibit 5
WILLIAM G. MUNDY, ESQ.
Vice President-General Counsel
GTE Northwest Incorporated
600 Hidden Ridge
Irving, Texas 75038
(972) 718-6304
September 18, 1998
GTE Northwest Incorporated
1255 Corporate Drive
Irving, Texas 75038
Gentlemen:
I have examined a copy of the Registration Statement of GTE Northwest
Incorporated (the "Company") on Form S-3 under the Securities Act of 1933, as
amended, and accompanying Prospectus pertaining to the issuance and sale of
$300,000,000 aggregate principal amount of debentures (the "Debentures"). I
have also examined a copy of the Company's Restated Articles of Incorporation,
as amended, and such corporate records and other documents as I have deemed to
be requisite in the premises. I am familiar with the proceedings taken and
proposed to be taken by you under my supervision as your counsel in connection
with the proposed authorization, issuance, and sale of the Debentures.
It is my opinion that, subject to any applicable regulatory approvals, the
Debentures, upon the issuance and sale thereof in the manner contemplated in
said Registration Statement, will be legally and validly issued and will be
binding obligations of the Company.
I hereby consent to the reference to me under the caption "Certain Legal
Matters" in the Prospectus forming a part of the Registration Statement and to
the filing of this opinion as an exhibit to the Registration Statement.
Yours truly,
WILLIAM G. MUNDY
William G. Mundy
<PAGE>
Exhibit 25
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
____________________
FORM T-1
Statement of Eligibility and Qualification under the
Trust Indenture Act of 1939 of a Corporation
Designated to Act as Trustee
____________________
U.S. Bank Trust National Association
(Exact name of trustee as specified in its charter)
United States 94-3160100
(State of Incorporation) (IRS Employer Identification No.)
1 California Street, Suite 400
San Francisco, California 94111
(Address of principal executive offices and zip code)
____________________
GTE NORTHWEST INCORPORATED
(Exact name of obligor as specified in its charter)
WASHINGTON
(State or other jurisdiction of Incorporation or organization)
91-0466810
(IRS Employer Identification No.)
1255 Corporate Drive
Irving Texas 75038
(972) 507-5050
(Address of principal executive offices and Zip code)
David S. Kauffman, Esq. Charles J. Somes, Esq.
GTE Northwest Incorporated GTE Northwest Incorporated
1255 Corporate Drive 1255 Corporate Drive
Irving, Texas 75038 Irving, Texas 75038
(972) 507-5328 (972) 507-5297
(Names, addresses and telephone numbers of agents for service)
Debt Securities
(Title of the indenture securities)
<PAGE>
GENERAL
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 DC
(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
such affiliation.
None
See Note following Item 16.
Items 3-15 are not applicable because to the best of the Trustee's knowledge
----------------------------------------------------------------------------
the obligor is not in default under any Indenture for which the Trustee acts
----------------------------------------------------------------------------
as Trustee.
-----------
16. LIST OF EXHIBITS List below all exhibits filed as a part of this statement
----------------
of eligibility and qualification.
Exhibit 1 - Articles of Association of U.S. Bank Trust National Association
dated June 5, 1992. Incorporated herein by reference to Exhibit 1 filed with
Form T-1 statement, Registration No. 33-50826
Exhibit 2 - Certificate of the Comptroller of Currency as to authority of
U.S. Bank Trust National Association to commence the business of banking.
Incorporated herein by reference to Exhibit 2 filed with Form T-1 Statement,
Registration No.33-50826
Exhibit 3 - Authorization of the Comptroller of Currency granting U.S. Bank
Trust National Association the right to exercise corporate trust powers.
Incorporated herein by reference to Exhibit 3 filed with Form T-1 Statement,
Registration No.33-50826
Exhibit 4 - By-Laws of U.S. Bank National Association, dated June 15, 1992.
Incorporated herein by reference to Exhibit 4 filed with Form T-1 Statement,
Registration No.33-50826
Exhibit 5 - Not Applicable
Exhibit 6 - Consent of U.S. Bank Trust National Association required by
Section 321(b) of the Act. Incorporated herein by reference to Exhibit 6
filed with Form T-1 Statement, Registration No.33-50826
<PAGE>
Exhibit 7 -Report of Condition of U.S. Bank Trust National Association, as
of the close of business on June 30, 1998 published pursuant to law or the
requirements of its supervising or examining authority.
NOTE
The answers to this statement insofar as such answers relate to what persons
have been underwriters for any securities of the obligor within three years
prior to the date of filing this statement, or what persons are owners of
10% or more of the voting securities of the obligor, or affiliates, are
based upon information furnished to the trustee by the obligor. While the
trustee has no reason to doubt the accuracy of any such information, it
cannot accept any responsibility therefor.
SIGNATURE
Pursuant to the requirements of the Trust Indenture Act of 1939, the
Trustee, U.S. Bank Trust National Association, an Association organized and
existing under the laws of the United States, 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 of Los Angeles and State of California on the
14th day of September 1998.
U.S. BANK TRUST NATIONAL ASSOCIATION
By: FONDA J. HALL
--------------------------------
Fonda J. Hall
Assistant Vice-President
Attest: SHERI B. BALL
---------------------
Sheri B. Ball
Vice President
<PAGE>
EXHIBIT 6
C O N S E N T
In accordance with Section 321(b) of the Trust Indenture Act of 1939, the
undersigned, U.S. Bank Trust National Association, hereby consents that reports
of examination of the undersigned by Federal, State, Territorial or District
authorities may be furnished by such authorities to the Securities and Exchange
Commission upon its request therefor.
Dated: September 14, 1998
U.S. TRUST BANK NATIONAL ASSOCIATION
By FONDA J. HALL
------------------------------------
Fonda J. Hall
Assistant Vice-President
<PAGE>
ASSETS
Cash and Due From Depository Institutions: 32,433
Federal Reserve Stock: 3,317
Fixed Assets: 117
Intangible Assets: 88,792
Other Assets: 5,290
-------
TOTAL ASSETS: 129,949
-------
LIABILITIES
Other Borrowed Money: 147
Other Liabilities: 7,193
-------
TOTAL LIABILITIES: 7,340
-------
EQUITY
Common and Preferred Stock: 1,000
Surplus: 121,200
Undivided Profits: 409
-------
TOTAL EQUITY CAPITAL: 122,609
-------
TOTAL LIABILITIES AND EQUITY CAPITAL: 129,949
-------
<PAGE>
Exhibit 26.1
GTE NORTHWEST INCORPORATED
Invitation For Bids For the Purchase of
$____,000,000 ____% Debentures, Series _, Due____
GTE NORTHWEST INCORPORATED (the "Company") is inviting bids from
certain investment banks ("Invited Bidders"), each of whom may bid either
individually (a "Sole Bidder") or as part of a group of bidders for which the
Invited Bidder serves as the representative of such group (the
"Representative"), 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.
Invited Bidders may examine, at the office of the Assistant Secretary
of the Company, 1255 Corporate Drive, Irving, Texas 75038, (972)507-5328, on any
business day between 10:00 A.M. and 4:00 P.M., Central time, 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 Articles of Incorporation of the Company, as
amended;
(c) a copy of the Indenture dated as of April 1, 1994 and the
First Supplemental Indenture dated as of April 15, 1996 (the Indenture as
so supplemented is herein called the "Indenture") under which the
Debentures are to be issued, together with the Form of New Debenture;
(d) the form of Purchase Agreement (including the Standard
Purchase Agreement Provisions (September 1998 Edition)) to be used in
submitting bids for the purchase of the Debentures;
(e) the form of questionnaire to be provided by each of the
bidders; and
(f) memoranda prepared by counsel to the Purchasers 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
Articles of Incorporation of the Company, the Indenture, and other exhibits to
the Registration Statement) will be supplied upon request, so long as available,
to Invited 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 office in Irving, Texas.
<PAGE>
-2-
2. Information Regarding the Bidders to be Furnished to the Company.
In the case of a bid by a group of bidders, the Representative shall
be designated and authorized as the representative of the several bidders in
such group in the questionnaires filed by the members of the group.
In the case of a bid by a group of bidders, the Representative shall
provide to the Company in writing a list of the names of any potential bidder in
its group no later than 10:00 A.M., Central time, on the business day
immediately preceding the date scheduled for the submission of bids. No bid by a
group of bidders will be accepted by the Company if such group contains a member
to which the Company has objected prior to 5:00 P.M., Central time, on the
business day immediately preceding the date scheduled for the submission of
bids. Additional members may be added to a group of bidders after 10:00 A.M.,
Central time, on the business day immediately preceding the date scheduled for
the submission of bids only with the consent of the Company.
No bid will be considered unless the Sole Bidder, or in the case of a
group of bidders, each member of the group through the Representative, shall
have furnished to the Company, and the Company shall have received, a signed
copy of the form of questionnaire referred to above, properly filled out by
the Sole Bidder or by each member of the group of bidders (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 telecopy or other means of communication). Such copy
shall be furnished to the Company by telecopy at (972) 507-5343 or by hand
delivery or by mail to 1255 Corporate Drive, Mail Code: SVC04C08, Irving, Texas
75038, Attention: David S. Kauffman, Esq., to be received no later than 5:00
P.M., Central time, on the business day immediately preceding the date scheduled
for the submission of bids (or on such later date as may be determined pursuant
to Section 5 hereof). Notwithstanding the furnishing of such questionnaires to
the Company, any Sole Bidder, or the Representative on behalf of a group of
bidders, thereafter may determine, without liability to the Company, not to bid,
or any of the several members of a group (other than the Representative) may
withdraw therefrom at or before the time of submission of the bid of such group.
3. Obligations of a Representative to a Group of Bidders.
In the case of a group of bidders, the Representative shall (i) make
available to the members of the group any due diligence materials received by it
from the Company and (ii) upon the request of any member of such group, request
from the Company and deliver to such member of the group copies of the documents
listed in Section 1 hereof.
4. Form and Contents of Bids.
Each bid shall be for the purchase of all of the Debentures.
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 the Representative, who shall be empowered to bind the bidders
in the group. No bidder may submit or participate in more than one bid.
<PAGE>
-3-
5. 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
Sole Bidder or the Representative on behalf of the members of a group of
bidders. Each bid must specify: (a) the interest rate, which shall be a multiple
of 1/8 of 1% or 1/100 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 100%
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
Invited Bidder, 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., Central time, at the place of delivery
specified in Section 2 hereof, on the business day immediately preceding the
newly scheduled date for the submission of bids.
6. 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 upon such rebidding the lowest annual cost
of money to the Company is again provided by two or more improved bids, the
Company may without liability to the maker of any other bid accept any one of
such improved bids in its sole discretion, or may reject all bids. If no
improved bid is made within the time fixed by the Company, the Company may
without liability to the maker of any other bid accept any one of the initially
submitted bids providing the lowest annual cost of money to the Company, or may
reject all bids.
The Company further reserves the right to reject the bid of any Sole
Bidder or group of bidders if the Company, in the opinion of its counsel, may
not lawfully sell the Debentures to such bidder or to any member of such group,
unless, in the case of a group of bidders, prior to 1:00 P.M., Central time, on
the date on which the bids are submitted, the member or members to which, in the
opinion of the Company's counsel, the Debentures may not be lawfully sold have
withdrawn from the group and the remaining members have agreed to purchase the
Debentures which such withdrawing member or members had offered to purchase.
<PAGE>
-4-
7. 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 number of copies of the Purchase Agreement as shall be reasonably
requested by the Representative of the successful bidders. Upon the acceptance
of a bid, the successful Sole 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
prospectus supplement 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 over the Company, and other information required
by law in respect of the purchase or sale of the Debentures as herein
contemplated.
8. 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.
9. 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 has 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 has reviewed or will review the
corporate proceedings with respect to the issue and sale of the Debentures.
Invited Bidders may confer with Messrs. Milbank, Tweed, Hadley & McCloy with
respect to any of the foregoing matters at the offices of said firm, 1 Chase
Manhattan Plaza, New York, N.Y. 10005, Attn.: Robert W. Mullen, Jr., Esq. The
successful bidders are to pay the compensation and disbursements of such
counsel, except as otherwise provided in the Purchase Agreement. Such counsel
will, on request, advise any Sole Bidder who has, or the Representative of any
group of 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
_________, 199_
<PAGE>
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 New Debentures will not be redeemable prior to ________. The "initial
regular redemption price" of the New Debentures 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 beginning ______, 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.]
NAME OF BIDDER: _________________________________________________________
TELEPHONE NUMBER TO BE USED TO CALL IN BID: _____________________________
TIME AND DATE BID RECEIVED: _____________________________________________
(to be completed by the Company)
<PAGE>
-2-
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% or 0.01%;
- 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 100% 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 9:15 A.M., Central 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 telecopy to the Company at
(972) 507-5343, Attn: David S. Kauffman.
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.
<PAGE>
-3-
BID:
Interest Rate ________________ %
Price to be paid to the Company ________________ %
___________________________________
(Name of Bidder)
__________________________________
(Authorized Signature)
