EXHIBIT 1.2
GTE CORPORATION
$3,000,000,000
Medium-Term Notes, Series A
Distribution Agreement
_______, 1997
Xxxxxxx, Xxxxx & Co.
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
World Financial Center
Xxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Salomon Brothers Inc
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
GTE Corporation, a New York corporation ("GTE"), proposes to
issue and sell from time to time its Medium-Term Notes, Series A
(the "Securities") in an aggregate amount up to $3,000,000,000
and agrees with each of you (individually, an "Agent", and
collectively, the "Agents") as set forth in this Agreement.
Subject to the terms and conditions stated herein and to the
reservation by GTE of the right to sell Securities directly on
its own behalf, GTE hereby (i) appoints each Agent as an agent of
GTE for the purpose of soliciting and receiving offers to
purchase Securities from GTE pursuant to Section 2(a) hereof and
(ii) agrees that, except as otherwise contemplated herein,
whenever it determines to sell Securities directly to any Agent
as principal, it will enter into a separate agreement (each a
"Terms Agreement"), substantially in the form of Annex I hereto,
relating to such sale in accordance with Section 2(b) hereof.
GTE may appoint, upon three business days prior written notice to
the Agents, additional persons to serve as Agents hereunder, but
only if each of those additional persons agrees to be bound by
all of the terms of this Agreement as an Agent. This
Distribution Agreement shall not be construed to create either an
obligation on the part of GTE to sell any Securities or an
obligation of any of the Agents to purchase Securities as
principal.
GTE reserves the right to sell Securities through one or more
additional agents or directly to certain investment banking firms
as underwriters for resale to the public on terms substantially
identical to the terms contained herein. No commission will be
payable to the Agents on any Securities sold through other agents
or directly by GTE to underwriters. GTE has additionally
reserved the right to sell Securities to investors on its own
behalf in those jurisdictions where it is authorized to do so.
The Securities will be issued under an indenture, dated as of
December 1, 1996, as amended and supplemented (the "Indenture"),
between GTE and The Bank of New York, as Trustee (the "Trustee").
The Securities shall have the maturity ranges, interest rates, if
any, redemption provisions and other terms set forth in the
Prospectus referred to below as it may be amended or
-2-
supplemented from time to time. The Securities will be issued,
and the terms and rights thereof established, from time to time
by GTE in accordance with the Indenture.1. GTE represents and
warrants to, and agrees with, each Agent that:
(a) Two registration statements on Form S-3 (File Nos. 33-
63145 and 333-31333) in respect of the Securities have been
filed with the Securities and Exchange Commission (the
"Commission"); such registration statements and any post-
effective amendment thereto, each in the form heretofore
delivered or to be delivered to such Agent, excluding
exhibits to such registration statements, but including all
documents incorporated by reference in the prospectus
included in the latest registration statement, have been
declared effective by the Commission in such form; no other
document with respect to such registration statements or
document incorporated by reference therein has heretofore
been filed or transmitted for filing with the Commission
(other than the prospectuses filed pursuant to Rule 424(b)
of the rules and regulations of the Commission under the
Act, each in the form heretofore delivered to the Agents);
and no stop order suspending the effectiveness of any of
such registration statements has been issued and no
proceeding for that purpose has been initiated or threatened
by the Commission; the various parts of such registration
statements, including all exhibits thereto and the documents
incorporated by reference in the prospectus contained in the
registration statements at the time such part of the
registration statement became effective but excluding Form T-
1, each as amended at the time such part of the registration
statements became effective, are hereinafter collectively
called the "Registration Statement"; the prospectus
(including, if applicable, any prospectus supplement)
relating to the Securities, in the form in which it has most
recently been filed, or transmitted for filing, with the
Commission on or prior to the date of this Agreement, is
hereinafter called the "Prospectus"; any reference herein to
the Prospectus shall be deemed to refer to and include the
documents incorporated by reference therein pursuant to Item
12 of Form S-3 under the Act, as of the date of such
Prospectus, as the case may be; any reference to any
amendment or supplement to the Prospectus, including any
supplement to the Prospectus that sets forth only the terms
of a particular issue of the Securities (a "Pricing
Supplement"), shall be deemed to refer to and include any
documents filed after the date of such Prospectus, as the
case may be, under the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and incorporated therein by
reference; any reference to any amendment to the
Registration Statement shall be deemed to refer to and
include any annual report of GTE filed pursuant to Section
13(a) or 15(d) of the Exchange Act after the effective date
of the Registration Statement that is incorporated by
reference in the Registration Statement; and any reference
to the Prospectus as amended or supplemented shall be deemed
to refer to and include the Prospectus as amended or
supplemented (including by the applicable Pricing Supplement
filed in accordance with Section 4(a) hereof) in relation to
Securities to be sold pursuant to this Agreement, in the
form filed or transmitted for filing with the Commission
pursuant to Rule 4.24(b) under the Act and in accordance
with Section 4(a) hereof, including any documents
incorporated by reference therein as of the date of such
filing);
(b) The documents incorporated by reference in the
Prospectus, when they became effective or were filed with
the Commission, as the case may be, conformed in all
material respects to the requirements of the Act or the
Exchange Act, as applicable, and the rules and regulations
of the
-3-
Commission thereunder, and none of such documents when they
became effective or were filed with the Commission, as the
case may be, and when read together with other information
in the Prospectus, contained an untrue statement of a
material fact or omitted to state a material fact required
to be stated therein or necessary to make the statements
therein not misleading; and any further documents so filed
and incorporated by reference in the Prospectus, or any
further amendment or supplement thereto, when such documents
become effective or are filed with the Commission, as the
case may be, will conform in all material respects to the
requirements of the Act or the Exchange Act, as applicable,
and the rules and regulations of the Commission thereunder
and, when read together with other information in the
Prospectus, will not contain an 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;
(c) The Registration Statement and the Prospectus conform,
and any further amendments or supplements to the
Registration Statement or the Prospectus will conform, in
all material respects to the requirements of the Act and the
Trust Indenture Act of 1939, as amended (the "Trust
Indenture Act"), and the rules and regulations of the
Commission thereunder, and do not and will not, as of the
applicable effective date as to the Registration Statement
and any amendment thereto and as of the applicable filing
date as to the Prospectus and any amendment or supplement
thereto, contain an 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;
provided, however, that this representation and warranty
shall not apply to any statements or omissions made in
reliance upon and in conformity with information furnished
in writing to GTE by any Agent expressly for use in the
Prospectus as amended or supplemented to relate to a
particular issuance of Securities;
(d) Since the respective dates as of which information is
given in the Registration Statement and Prospectus, except
as stated therein or contemplated thereby, there has been no
material adverse change in the business, business prospects,
properties, financial condition or results of operations of
GTE; and
(e) 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 GTE is a party.
2. (a) On the basis of the representations and warranties
herein contained, and subject to the terms and conditions herein
set forth, each of the Agents hereby severally and not jointly
agrees, as agent of GTE, to use its reasonable best efforts to
solicit and receive offers to purchase the Securities from GTE
upon the terms and conditions set forth in the Prospectus as
amended or supplemented from time to time.
Procedural details relating to the issue and delivery of
Securities, the solicitation of offers to purchase Securities and
the payment in each case therefor shall be as set forth in the
Administrative Procedure attached hereto as Annex II as it may be
amended from time to time by written agreement between the Agents
and GTE (the "Administrative Procedure"). The provisions of the
Administrative Procedure shall apply to all transactions
contemplated hereunder other than those made pursuant to a Terms
Agreement. Each Agent and GTE agree to perform the respective
duties and obligations specifically provided to be performed by
each of them in the Administrative Procedure. GTE
-4-
will furnish to the Trustee a copy of the Administrative
Procedure as from time to time in effect.
GTE reserves the right, in its sole discretion, to instruct
the Agents to suspend at any time, for any period of time or
permanently, the solicitation of offers to purchase the
Securities. As soon as practicable, but in any event not later
than one business day in New York City, after receipt of notice
from GTE, the Agents will suspend solicitation of offers to
purchase Securities from GTE until such time as GTE has advised
the Agents that such solicitation may be resumed. During such
period, GTE shall not be required to comply with the provisions
of Sections 4(d), 4(e), 4(f) and 4(g). Upon advising the Agents
that such solicitation may be resumed, however, GTE shall
simultaneously provide the documents, dated as of such resumption
date required to be delivered by Sections 4(d), 4(e), 4(f) and
4(g), and the Agents shall have no obligation to solicit offers
to purchase the Securities until such documents have been
received by the Agents. In addition, any failure by GTE to
comply with its obligations hereunder, including without
limitation its obligations to deliver the documents required by
Sections 4(d), 4(e), 4(f) and 4(g), shall automatically suspend
the Agents' obligations hereunder, including without limitation
its obligations to solicit offers to purchase the Securities
hereunder as agent or to purchase Securities hereunder as
principal, until such time as GTE shall have cured such failure
to comply.
GTE agrees to pay each Agent a commission, at the time of
settlement of any sale of a Security by GTE as a result of a
solicitation made by such Agent, in an amount equal to the
following applicable percentage of the principal amount of such
Security sold:
Commission
(percentage of
aggregate
principal amount
Range of Maturities of Securities sold
From 9 months to less than 1 year .125%
From 1 year to less than 18 months .150%
From 18 months to less than 2 years .200%
From 2 years to less than 3 years .250%
From 3 years to less than 4 years .350%
From 4 years to less than 5 years .450%
From 5 years to less than 7 years .500%
From 7 years to less than 8 years .550%
From 8 years to less than 10 years .600%
From 10 years to less than 15 years .625%
From 15 years to less than 20 years .675%
From 20 years to 30 years .750%
For Securities with maturities greater than 30 years from
their dates of issue, commissions will be negotiated at the time
of sale and indicated in the applicable Pricing Supplement.
Notwithstanding the foregoing, with respect to any Security
which is designated on its face as an "Original Issue Discount
Security", the commission shall be a percentage of the initial
offering price thereof.
(b) Each sale of Securities to any Agent as principal shall
be made in accordance with the terms of this Agreement and
(unless GTE and such Agent
-5-
shall otherwise agree) a Terms Agreement which will provide for
the sale of such Securities to, and the purchase thereof by, such
Agent; a Terms Agreement may also specify certain provisions
relating to the reoffering of such Securities by such Agent; the
commitment of any Agent to purchase Securities as principal,
whether pursuant to any Terms Agreement or otherwise, shall be
deemed to have been made on the basis of the representations and
warranties of GTE herein contained and shall be subject to the
terms and conditions herein set forth; each Terms Agreement shall
specify the principal amount of Securities to be purchased by any
Agent pursuant thereto, whether such Agent is an Excluded
Purchaser (as defined below), the price to be paid to GTE for
such Securities, any provisions relating to rights of, and
default by, underwriters acting together with such Agent in the
reoffering of the Securities and the time and date and place of
delivery of and payment for such Securities; and such Terms
Agreement shall also specify any requirements for opinions of
counsel, accountants' letters and officers' certificates pursuant
to Section 4 hereof. Each Agent proposes to offer Securities
purchased by it as principal for sale at prevailing market prices
or prices related thereto at the time of sale, which may be equal
to, greater than or less than the price at which such Securities
are purchased by such Agent from GTE. The provisions of Section
4(b), Section 6(f), Section 7 and Section 9 hereof do not apply
to Agents purchasing Securities pursuant to a Terms Agreement
that have advised GTE of their intention not to resell such
Securities (the "Excluded Purchaser").
For each sale of Securities to an Agent as principal that is
not made pursuant to a Terms Agreement, the procedural details
relating to the issue and delivery of such Securities and payment
therefor shall be as set forth in the Administrative Procedure.
For each such sale of Securities to an Agent as principal that is
not made pursuant to a Terms Agreement, GTE agrees to pay such
Agent a commission (or grant an equivalent discount) as provided
in Section 2(a) hereof and in accordance with the schedule set
forth therein.
Each time and date of delivery of and payment for Securities
to be purchased by an Agent as principal, whether set forth in a
Terms Agreement or in accordance with the Administrative
Procedure, is referred to herein as a "Time of Delivery".
(c) Each Agent agrees, with respect to any Security
denominated in a currency other than U.S. dollars, as agent,
directly or indirectly, not to solicit offers to purchase, and as
principal under any Terms Agreement or otherwise, directly or
indirectly, not to offer, sell or deliver, such Security in, or
to residents of, the country issuing such currency, except as
permitted by applicable law.
3. The documents required to be delivered pursuant to
Section 6 hereof on the Commencement Date (as defined below)
shall be delivered to the Agents at the offices of GTE
Corporation, Stamford, Connecticut, at 11:00 a.m., New York City
time, on the date of this Agreement, which date and time of such
delivery may be postponed by agreement between the Agents and GTE
but in no event shall be later than the day prior to the date on
which solicitation of offers to purchase Securities is commenced
or on which any Terms Agreement is executed (such time and date
being referred to herein as the "Commencement Date").
4. GTE covenants and agrees with each Agent:
(a) (i) To make no amendment or supplement to the
Registration Statement or the Prospectus (A) prior to the
Commencement Date or (B) after the date of any Terms Agreement or
other agreement by the Agent to purchase
-6-
Securities as principal and prior to the related Time of
Delivery, without first furnishing to the Agents, and to counsel
for the Agents, a copy of each such proposed amendment or
supplement; (ii) to prepare, with respect to any Securities to be
sold through or to such Agent pursuant to this Agreement, a
Pricing Supplement with respect to such Securities in a form
previously approved by such Agent and to file such Pricing
Supplement pursuant to Rule 424(b)(3) under the Act not later
than the close of business of the Commission on the fifth
business day after the date on which such Pricing Supplement is
first used; (iii) to make no amendment or supplement to the
Registration Statement or Prospectus (other than an amendment or
supplement which relates to an offering of debt securities of GTE
other than the Securities or through the filing of reports under
the Exchange Act ) without first furnishing to the Agents, and
counsel to the Agents, a copy of each such proposed amendment or
supplement; (iv) to file promptly all reports and any definitive
proxy or information statements required to be filed by GTE with
the Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of
the Exchange Act for so long as the delivery of a prospectus is
required in connection with the offering or sale of the
Securities, and during such same period to advise such Agent,
promptly after GTE receives notice thereof, of the time when any
amendment to the Registration Statement has been filed or has
become effective or any supplement to the Prospectus or any
amended Prospectus (other than any Pricing Supplement that
relates to Securities not purchased through or by such Agent) has
been filed with the Commission, of the issuance by the Commission
of any stop order or of any order preventing or suspending the
use of any prospectus relating to the Securities, of the
suspension of the qualification of the Securities for offering or
sale in any jurisdiction, of the initiation or threatening of any
proceeding for any such purpose, or of any request by the
Commission for the amendment or supplement of the Registration
Statement or Prospectus or for additional information; and (v) in
the event of the issuance of any such stop order or of any such
order preventing or suspending the use of any such prospectus or
suspending any such qualification, to use promptly its reasonable
best efforts to obtain its withdrawal;
(b) To furnish such Agent with copies of the Registration
Statement and each amendment thereto, with copies of the
Prospectus as each time amended or supplemented, other than any
Pricing Supplement (except as provided in the Administrative
Procedure), in the form in which it is filed with the Commission
pursuant to Rule 424 under the Act, and with copies of the
documents incorporated by reference therein, all in such
quantities as such Agent may reasonably request from time to
time; and, if the delivery of a prospectus is required at any
time in connection with the offering or sale of the Securities
(including Securities purchased from GTE by such Agent as
principal) and if at such time any event shall have occurred as a
result of which the Prospectus as then amended or supplemented
would include an untrue statement of a material fact or omit to
state any material fact necessary in order to make the statements
therein, in the light of the circumstances under which they were
made when such Prospectus is delivered, not misleading, or, if
for any other reason it shall be necessary during such same
period to amend or supplement the Prospectus or to file under the
Exchange Act any document incorporated by reference in the
Prospectus in order to comply with the Act, the Exchange Act or
the Trust Indenture Act, to notify such Agent and request such
Agent, in its capacity as agent of GTE, to suspend solicitation
of offers to purchase Securities from GTE (and, if so notified,
such Agent shall cease such solicitations as soon as practicable,
but in any event not later than one business day later); and if
GTE shall decide to amend or supplement the Registration
Statement or the Prospectus as then amended or supplemented, to
so advise such Agent promptly by telephone (with
-7-
confirmation in writing) and to prepare and cause to be filed
promptly with the Commission an amendment or supplement to the
Registration Statement or the Prospectus as then amended or
supplemented that will correct such statement or omission or
effect such compliance, and upon the filing of any such amendment
or supplement, the Agents shall resume solicitations; provided,
however, that if during such same period such Agent continues to
own Securities purchased from GTE by such Agent as principal or
such Agent is otherwise required to deliver a prospectus in
respect of transactions in the Securities, GTE shall promptly
prepare and file with the Commission such an amendment or
supplement;
(c) That each acceptance by GTE of an offer to purchase
Securities hereunder (including any purchase by such Agent as
principal not pursuant to a Terms Agreement), and each execution
and delivery by GTE of a Terms Agreement with such Agent, shall
be deemed to be an affirmation to such Agent that the
representations and warranties of GTE contained in or made
pursuant to this Agreement are true and correct as of the date of
such acceptance or of such Terms Agreement, as the case may be,
as though made at and as of such date, and an undertaking that
such representations and warranties will be true and correct as
of the settlement date for the Securities relating to such
acceptance or as of the Time of Delivery relating to such sale,
as the case may be, as though made at and as of such date (except
that such representations and warranties shall be deemed to
relate to the Registration Statement and the Prospectus as
amended and supplemented relating to such Securities);
(d) That in advance of each time an Annual Report on Form
10-K filed by GTE under the Act or the Exchange Act is
incorporated by reference into the Prospectus and each time GTE
sells Securities to an Agent as principal pursuant to a Terms
Agreement and such Terms Agreement specifies the delivery of an
opinion or opinions of Milbank, Tweed, Xxxxxx & XxXxxx, counsel
to the Agents, as a condition to the purchase of Securities
pursuant to such Terms Agreement, GTE shall furnish to such
counsel such papers and information as they may reasonably
request to enable them to furnish to such Agent the opinion or
opinions referred to in Section 6(b) hereof;
(e) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than (i) by a
Pricing Supplement, (ii) by an amendment or supplement which does
not affect the material terms of the Securities being offered
thereunder, (iii) except as otherwise described in this Section
4(e), by the filing of a document incorporated by reference
therein or (iv) by an amendment or supplement which relates to an
offering of debt securities of GTE other than the Securities),
each time an Annual Report on Form 10-K or a Quarterly Report on
Form 10-Q filed by GTE under the Act or the Exchange Act is
incorporated by reference into the Prospectus, each time a
document filed under the Act or the Exchange Act containing
material financial information is incorporated by reference into
the Prospectus (but only if the Agents request the opinion
referenced by this Section 4(e)) and each time GTE sells
Securities to such Agent as principal pursuant to a Terms
Agreement and such Terms Agreement specifies the delivery of an
opinion under this Section 4(e) as a condition to the purchase of
Securities pursuant to such Terms Agreement, GTE shall furnish or
cause to be furnished forthwith to such Agent a written opinion
of Xxxxxxx X. Xxxx, counsel for GTE, or other counsel for GTE
satisfactory to such Agent, dated the date of such amendment or
supplement, the date such Annual Report on Form 10-K or Quarterly
Report on Form 10-Q is required to be filed, or the date of the
Time of Delivery relating to such sale, as the case may be, in
form satisfactory to such Agent, to the effect that such Agent
may rely on the opinion of such counsel referred to in Section
6(c) hereof which was last furnished to such Agent to
-8-
the same extent as though it were dated the date of such letter
authorizing reliance (except that the statements in such last
opinion shall be deemed to relate to the Registration Statement
and the Prospectus as amended and supplemented to such date) or,
in lieu of such opinion, an opinion of the same tenor as the
opinion of such counsel referred to in Section 6(c) hereof but
modified to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date;
(f) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than (i) by a
Pricing Supplement, (ii) by an amendment or supplement which does
not affect the material terms of the Securities being offered
thereunder, (iii) except as otherwise described in this Section
4(f), by the filing of a document incorporated by reference
therein or (iv) by an amendment or supplement which relates to an
offering of debt securities of GTE other than the Securities),
each time an Annual Report on Form 10-K or a Quarterly Report on
Form 10-Q filed by GTE under the Act or the Exchange Act is
incorporated by reference into the Prospectus and each time a
document filed under the Act or the Exchange Act containing
material financial information is incorporated by reference into
the Prospectus (but only if the Agents request the letter
referenced in this Section 4(f)), in each case to set forth new
or additional financial information included in or derived from
GTE's consolidated financial statements or accounting records,
and each time GTE sells Securities to such Agent as principal
pursuant to a Terms Agreement and such Terms Agreement specifies
the delivery of a letter under this Section 4(f) as a condition
to the purchase of Securities pursuant to such Terms Agreement,
GTE shall cause the independent certified public accountants who
have certified the financial statements of GTE and its
subsidiaries included or incorporated by reference in the
Registration Statement forthwith to furnish such Agent a letter,
dated the date of such amendment or supplement, the date such
Annual Report on Form 10-K or Quarterly Report on Form 10-Q is
required to be filed, or the date of the Time of Delivery
relating to such sale, as the case may be, in form satisfactory
to such Agent, of the same tenor as the letter referred to in
Section 6(d) hereof but modified to relate to the Registration
Statement and the Prospectus as amended or supplemented to the
date of such letter, with such changes as may be necessary to
reflect changes in the financial statements and other information
derived from the accounting records of GTE, to the extent such
financial statements and other information are available as of a
date not more than five business days prior to the date of such
letter; provided, however, that, with respect to any financial
information or other matter, such letter may reconfirm as true
and correct at such date as though made at and as of such date,
rather than repeat, statements with respect to such financial
information or other matter made in the letter referred to in
Section 6(d) hereof which was last furnished to such Agent; and
(g) That each time the Registration Statement or the
Prospectus shall be amended or supplemented (other than (i) by a
Pricing Supplement, (ii) by an amendment or supplement which does
not affect the material terms of the Securities being offered
thereunder, (iii) except as otherwise described in this Section
4(g), by the filing of a document incorporated by reference
therein or (iv) by an amendment or supplement which relates to an
offering of debt securities of GTE other than the Securities),
each time an Annual Report on Form 10-K or a Quarterly Report on
Form 10-Q filed by GTE under the Act or the Exchange Act is
incorporated by reference into the Prospectus, each time a
document filed under the Act or the Exchange Act containing
material financial information is incorporated by reference into
the Prospectus (but only if the Agents request the certificate
referenced in this Section 4(g)) and each time GTE sells
Securities to such Agent as principal and the
-9-
applicable Terms Agreement specifies the delivery of a
certificate under this Section 4(g) as a condition to the
purchase of Securities pursuant to such Terms Agreement, GTE
shall furnish or cause to be furnished forthwith to such Agent a
certificate, dated the date of such amendment or supplement, the
date such Annual Report on Form 10-K or Quarterly Report on Form
10-Q is required to be filed, or the date of the Time of Delivery
relating to such sale, as the case may be, in such form and
executed by such officers of GTE as shall be satisfactory to such
Agent, to the effect that the statements contained in the
certificates referred to in Section 6(g) hereof which was last
furnished to such Agent are true and correct at such date as
though made at and as of such date (except that such statements
shall be deemed to relate to the Registration Statement and the
Prospectus as amended and supplemented to such date) or, in lieu
of such certificate, certificates of the same tenor as the
certificates referred to in said Section 6(g) but modified to
relate to the Registration Statement and the Prospectus as
amended and supplemented to such date.
5. GTE covenants and agrees with each Agent that GTE will
pay or cause to be paid the following: (i) the fees,
disbursements and expenses of GTE's counsel and accountants in
connection with the registration of the Securities under the Act
and all other expenses in connection with the preparation,
printing and filing of the Registration Statement, the Prospectus
and any Pricing Supplements and all other amendments and
supplements thereto and the mailing and delivering of copies
thereof to such Agent; (ii) the fees, disbursements and expenses
of counsel for the Agents in connection with the establishment of
the program contemplated hereby, any opinions to be rendered by
such counsel hereunder and the transactions contemplated
hereunder; (iii) the cost of printing, producing or reproducing
this Agreement, any Terms Agreement, any Indenture, closing
documents (including any compilations thereof) and any other
documents in connection with the offering, purchase, sale and
delivery of the Securities; (iv) any fees charged by securities
rating services for rating the Securities; (v) any filing fees
incident to, and the fees and disbursements of counsel for the
Agents in connection with, any required review by the National
Association of Securities Dealers, Inc. of the terms of the sale
of the Securities; (vi) the cost of preparing the Securities;
(vii) the fees and expenses of any Trustee and any agent of any
Trustee and any transfer or paying agent of GTE and the fees and
disbursements of counsel for any Trustee or such agent in
connection with any Indenture and the Securities; (viii) any
advertising expenses connected with the solicitation of offers to
purchase and the sale of Securities so long as such advertising
expenses have been approved by GTE; and (ix) all other costs and
expenses incident to the performance of its obligations hereunder
which are not otherwise specifically provided for in this
Section. Except as provided in Sections 7 and 8 hereof, each
Agent shall pay all other expenses it incurs.
6. The obligation of any Agent, as agent of GTE, at any
time ("Solicitation Time") to solicit offers to purchase the
Securities and the obligation of any Agent to purchase Securities
as principal, pursuant to any Terms Agreement or otherwise, shall
in each case be subject, in such Agent's discretion, to the
condition that all representations and warranties and other
statements of GTE herein (and, in the case of an obligation of an
Agent under a Terms Agreement, in or incorporated by reference in
such Terms Agreement) are true and correct at and as of the
Commencement Date and any applicable date referred to in Section
4(g) hereof that is prior to such Solicitation Time or Time of
Delivery, as the case may be, and at and as of such Solicitation
Time or Time of Delivery, as the case may be, the condition that
prior to such Solicitation Time or Time of Delivery, as the case
may be, GTE shall have performed all of its obligations hereunder
theretofore to be
-10-
performed, and the following additional conditions:
(a) (i) With respect to any Securities sold at or prior to
such Solicitation Time or Time of Delivery, as the case may be,
the Prospectus as amended or supplemented (including the Pricing
Supplement) with respect to such Securities shall have been filed
with the Commission pursuant to Rule 424(b) under the Act within
the applicable time period prescribed for such filing by the
rules and regulations under the Act and in accordance with
Section 4(a) hereof; and (ii) no stop order suspending the
effectiveness of the Registration Statement shall have been
issued and no proceeding for that purpose shall be pending before
or threatened by the Commission;
(b) Milbank, Tweed, Xxxxxx & XxXxxx, counsel to the Agents,
shall have furnished to such Agent (i) such opinion or opinions,
dated the Commencement Date, with respect to such matters as such
Agent may reasonably request, and (ii) if and to the extent
requested by such Agent, (A) with respect to each Terms Agreement
referred to in Section 4(d) hereof, an opinion or opinions, dated
as of such Time of Delivery, or (B) an opinion or opinions, dated
as of the April 15th following each filing of an Annual Report on
Form 10-K referred to in Section 4(d) hereof, in each case to the
effect that such Agent may rely on the opinion or opinions which
were last furnished to such Agent pursuant to this Section 6(b)
to the same extent as though it or they were dated the date of
such letter authorizing reliance (except that the statements in
such last opinion or opinions shall be deemed to relate to the
Registration Statement and the Prospectus as amended and
supplemented to such date) or, in any case, in lieu of such an
opinion or opinions, an opinion or opinions of the same tenor as
the opinion or opinions referred to in clause (i) but modified to
relate to the Registration Statement and the Prospectus as
amended and supplemented to such date; and in each case such
counsel shall have received such papers and information as they
may reasonably request to enable them to pass upon such matters;
(c) Xxxxxxx X. Xxxx, counsel for GTE, or other counsel for
GTE satisfactory to such Agent, shall have furnished to such
Agent their written opinions, dated the Commencement Date and
each applicable date referred to in Section 4(e) hereof that is
on or prior to such Solicitation Time or Time of Delivery, as the
case may be, in form and substance satisfactory to such Agent, to
the effect that:
(i) GTE is a corporation duly incorporated, validly
existing and in good standing under the laws of New York, is a
duly licensed and qualified foreign corporation in good standing
under the laws of the State of Connecticut, and has adequate
corporate power to carry on the business in which it is now
engaged;
(ii) All legal proceedings necessary to the
authorization, issue and sale of the Securities have
been taken by GTE;
(iii) This Agreement and any applicable Terms
Agreement have been duly and validly authorized,
executed and delivered by GTE;
(iv) The Indenture has been duly authorized by GTE and
has been duly executed and delivered by GTE; the
Indenture constitutes a legal, valid and binding
agreement of GTE 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 Trust
Indenture Act;
-11-
(v) The Securities conform as to legal matters with
the statements concerning them in the Prospectus as
amended or supplemented and have been duly authorized
and, when duly executed by GTE and duly authenticated
and delivered by the Trustee, will have been duly
issued under the Indenture, and (subject to
qualifications set forth in subsection (iv) of this
Section 6(c)) will constitute legal, valid and binding
obligations of GTE enforceable in accordance with their
terms and are entitled to the benefits afforded by the
Indenture;
(vi) No authorization, approval or consent of any
governmental regulatory authority is required for the
issuance and sale of the Securities;
(vii) Registration Statement No. 33-63145 became
effective on October 6, 1995 and Registration Statement
No. 333-31333 became effective on [insert date], and to
the best of such counsel's 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 of such opinion; the
Registration Statement and the Prospectus as amended
and supplemented and any further amendments and
supplements thereto made by GTE prior to the date of
such opinion (other than the financial statements and
related schedules therein, as to which such counsel
need express no
opinion) comply as to form in all material respects
with the requirements of the Act and the Exchange Act
as to documents incorporated by reference into said
Registration Statement and the applicable rules and
regulations of the Securities and Exchange Commission
thereunder; the Prospectus as amended and supplemented
is lawful for use for the purposes specified in the Act
in connection with the offer for sale and sale of the
Securities in the manner specified therein; such
counsel has no reason to believe that the Registration
Statement or any further amendment or supplement
thereto made by GTE prior to the date of such opinion
(other than the financial statements and related
schedules therein, as to which such counsel need
express no opinion), the Prospectus as amended or
supplemented or any further amendment or supplement
thereto made by GTE prior to the date of such opinion
(other than the financial statements and related
schedules therein, as to which such counsel need
express no opinion) and the documents incorporated
therein by reference, considered as a whole on the
effective date of the Registration Statement (or, if an
amendment to the Registration Statement or an Annual
Report on Form 10-K has been filed by GTE with the
Commission subsequent to the effectiveness of the
Registration Statement, then at the time of the most
recent filing) and on the date of such opinion,
contained or contain any untrue statement of a material
fact or omitted or omit to state any material fact
required to be stated therein or necessary to make the
statements therein not misleading;
(d) Not later than 10:00 a.m., New York City time, on the
Commencement Date and on each applicable date referred to in
Section 4(f) hereof that is on or prior to such Solicitation Time
or Time of Delivery, as the case may be, the independent
certified public accountants who have certified the
-12-
financial statements of GTE and its subsidiaries included or
incorporated by reference in the Registration Statement shall
have furnished to such Agent a letter, dated the Commencement
Date or such applicable date, as the case may be, in form and
substance satisfactory to such Agent, to the effect set forth in
Annex III hereto;
(e) There shall have been since the respective dates as of
which information is given in the Prospectus as amended or
supplemented prior to the date of the Pricing Supplement relating
to the Securities to be delivered at the relevant Time of
Delivery, except as stated therein or contemplated thereby, no
material adverse change in the business, business prospects,
properties, financial condition or results of operations of GTE;
(f) On or after the date hereof there shall not have
occurred any of the following: (i) a suspension or material
limitation in trading in securities generally on the New York
Stock Exchange; (ii) a general moratorium on commercial banking
activities in New York declared by either Federal or New York
State authorities; (iii) the establishment of minimum prices on
the New York Stock Exchange by Federal or New York State
authorities; or (iv) the outbreak or material escalation of
hostilities involving the United States or the declaration by the
United States of a national emergency or war or the occurrence of
any other calamity or crisis, if the effect of any such event
specified in this clause (iv) in the judgment of such Agent makes
it impracticable or inadvisable to proceed with the solicitation
of offers to purchase Securities or the purchase of the
Securities from GTE as principal pursuant to the applicable Terms
Agreement or otherwise, as the case may be, on the terms and in
the manner contemplated in the Prospectus;
(g) GTE shall have furnished or caused to be furnished to
such Agent a customary form of compliance certificate dated the
Commencement Date and each applicable date referred to in Section
4(g) hereof that is on or prior to such Solicitation Time or Time
of Delivery, as the case may be, signed by the Chairman, a Vice
Chairman, the President or a Vice President of GTE, as to the
matters set forth in subsections (a)(ii) and (e) of this Section
6. The officer making such certificate may rely upon the best of
his or her knowledge as to proceedings pending or threatened.
7. (a) GTE agrees to indemnify and hold harmless each
Agent and each person, if any, who controls such Agent 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 Prospectus, the Prospectus as amended
or supplemented or any other prospectus relating to the
Securities, or any amendment or supplement 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 GTE by such Agent 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 or the
Prospectus as amended or supplemented, or any other prospectus
relating to the Securities, or any amendment or supplement
thereto, shall not inure to the benefit of any Agent (or to the
benefit of any person controlling such Agent) on account of any
losses, claims, damages or liabilities arising from the sale of
any Securities by said Agent to any person if a copy of the
-13-
Prospectus or the Prospectus as amended or supplemented or any
other prospectus relating to the Securities, or any amendment or
supplement thereto, shall not have been sent or given by or on
behalf of such Agent to such person at or prior to the written
confirmation of the sale of the Securities to such person and
such statement or omission is cured in the Prospectus or the
Prospectus as amended or supplemented or any other prospectus
relating to the Securities, or any amendment or supplement
thereto.
(b) Each Agent agrees to indemnify and hold harmless GTE,
its directors, its officers who sign the Registration Statement
and any person controlling GTE to the same extent as the
foregoing indemnity from GTE to each Agent, but only with
reference to information relating to said Agent furnished in
writing by or on behalf of said Agent expressly for use in the
Registration Statement, the Prospectus, the Prospectus as amended
or supplemented or any other prospectus relating to the
Securities.
(c) In case any proceeding (including any governmental
investigation) shall be instituted involving any person in
respect of which indemnity may be sought pursuant to subsection
(a) or (b) of this Section 7, 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 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.
(d) If the indemnification provided for in this Section 7
is unavailable to an indemnified party under subsection (a) or
(b) or insufficient in respect of any losses, claims, damages or
liabilities referred to therein, then each indemnifying party, in
lieu of indemnifying such indemnified party shall contribute to
the amount paid or payable by such indemnified party as a result
of such losses, claims, damages or liabilities (i) in such
proportion as is appropriate to reflect the relative benefits
received by GTE on the one hand and the Agents on the other from
the offering of the Securities 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 GTE on the one hand and of the Agents 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 GTE on the one hand and the Agents on the other in
connection with the offering of the Securities
-14-
shall be deemed to be in the same proportion as the total net
proceeds from the offering of the Securities received by GTE bear
to the total commissions, if any, received by all of the Agents
in respect thereof. If there are no commissions allowed or paid
by GTE to any Agents in respect of the Securities, the relative
benefits received by the Agents in the preceding sentence shall
be the difference between the price received by such Agents upon
resale of the Securities and the price paid for the Securities
pursuant to the Terms Agreement. The relative fault of GTE on
the one hand and of the Agents 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 GTE or by the Agents and the parties' relative
intent, knowledge, access to information and opportunity to
correct or prevent such statement or omission.
(e) The amount paid or payable by an indemnified party as a
result of the losses, claims, damages and liabilities referred to
in subsection (d) of this Section 7 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.
8. Each Agent, in soliciting offers to purchase Securities
from GTE and in performing the other obligations of such Agent
hereunder (other than in respect of any purchase by an Agent as
principal, pursuant to a Terms Agreement or otherwise), is acting
solely as agent for GTE and not as principal. Each Agent will
make reasonable efforts to assist GTE in obtaining performance by
each purchaser whose offer to purchase Securities from GTE was
solicited by such Agent and has been accepted by GTE, but such
Agent shall not have any liability to GTE in the event such
purchase is not consummated for any reason. If GTE shall default
on its obligation to deliver Securities to a purchaser whose
offer it has accepted, GTE shall (i) hold each Agent harmless
against any loss, claim or damage arising from or as a result of
such default by GTE and (ii) notwithstanding such default, pay to
the Agent that solicited such offer any commission to which it
would be entitled in connection with such sale.
9. The respective indemnities, agreements, representations,
warranties and other statements by any Agent and GTE set forth in
or made pursuant to this Agreement shall remain in full force and
effect regardless of any investigation (or any statement as to
the results thereof) made by or on behalf of any Agent or any
controlling person of any Agent, or GTE, or any officer or
director or any controlling person of GTE, and shall survive each
delivery of and payment for any of the Securities.
10. The provisions of this Agreement relating to the
solicitation of offers to purchase Securities from GTE may be
suspended or terminated at any time by GTE as to any Agent or by
any Agent as to such Agent upon the giving of written notice of
such suspension or termination to such Agent or GTE, as the case
may be. In the event of such suspension or termination with
respect to any Agent, (x) this Agreement shall remain in full
force and effect with respect to any Agent as to which such
suspension or termination has not occurred, (y) this Agreement
shall remain in full force and effect with respect to the rights
and obligations of any party which have previously accrued or
which relate to Securities which are already issued, agreed to be
-15-
issued or the subject of a pending offer at the time of such
suspension or termination and (z) in any event, this Agreement
shall remain in full force and effect insofar as the fourth
paragraph of Section 2(a), and Sections 5, 7, 8 and 9 hereof are
concerned.
11. Except as otherwise specifically provided herein or in
the Administrative Procedure, all statements, requests, notices
and advices hereunder shall be in writing, or by telephone if
promptly confirmed in writing, and if to Xxxxxxx, Xxxxx & Co.
shall be sufficient in all respects when delivered or sent by
facsimile transmission or registered mail to 00 Xxxxx Xxxxxx,
00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Facsimile Transmission No.
(000) 000-0000, Attention: Money Market Origination, and if to
Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated shall be
sufficient in all respects when delivered or sent by telex,
facsimile transmission or registered mail to World Financial
Center, Xxxxx Xxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000-0000,
Facsimile Transmission No. (000) 000-0000, Attention: MTN Product
Management, and if to Salomon Brothers Inc shall be sufficient in
all respects when delivered or sent by telex, facsimile
transmission or registered mail to 0 Xxxxx Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, Facsimile Transmission No. (000) 000-0000,
Attention: Medium-Term Note Department and if to GTE shall be
sufficient in all respects when delivered or sent by facsimile
transmission or registered mail to Xxx Xxxxxxxx Xxxxx, Xxxxxxxx,
Xxxxxxxxxxx 00000, Facsimile Transmission No. (000) 000-0000,
Attention: Assistant Treasurer - Capital Markets or such other
address and facsimile number as GTE may provide in writing to the
Agents.
12. This Agreement and any Terms Agreement shall be binding
upon, and inure solely to the benefit of, each Agent and GTE, and
to the extent provided in Sections 7, 8 and 9 hereof, the
officers and directors of GTE and any person who controls any
Agent or GTE, and their respective personal representatives,
successors and assigns, and no other person shall acquire or have
any right under or by virtue of this Agreement or any Terms
Agreement. No purchaser of any of the Securities through or from
any Agent hereunder shall be deemed a successor or assign by
reason merely of such purchase.
13. Time shall be of the essence in this Agreement and any
Terms Agreement. As used herein, the term "business day" shall
mean any day when the Commission's office in Washington, D.C. is
open for business.
14. This Agreement and any Terms Agreement shall be
governed by, and construed in accordance with, the laws of the
State of New York.
15. This Agreement and any Terms Agreement may be executed
by any one or more of the parties hereto and thereto in any
number of counterparts, each of which shall be an original, but
all of such respective counterparts shall together constitute one
and the same instrument.
-16-
If the foregoing is in accordance with your understanding,
please sign and return to us four counterparts hereof, whereupon
this letter and the acceptance by each of you thereof shall
constitute a binding agreement between GTE and each of you in
accordance with its terms.
Very truly yours,
GTE CORPORATION
By:___________________________
_
Name:
Title:
Accepted in New York, New York,
as of the date hereof:
____________________________________
(Xxxxxxx, Xxxxx & Co.)
XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
By:_________________________________
Name:
Title:
SALOMON BROTHERS INC
By:_________________________________
Name:
Title:
91
ANNEX I
GTE CORPORATION
[Title of Security]
Terms Agreement
_________, 19__
[Xxxxxxx, Xxxxx & Co.,
00 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000.]
[Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx Incorporated
World Financial Center
Xxxxx Xxxxx, 00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000]
[Salomon Brothers Inc
0 Xxxxx Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000]
Ladies and Gentlemen:
GTE Corporation ("GTE") proposes, subject to the terms and
conditions stated herein and in the Distribution Agreement, dated
_______, 1997 (the "Distribution Agreement"), between GTE on the
one hand and Xxxxxxx, Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx
& Xxxxx Incorporated and Salomon Brothers Inc (the "Agents") on
the other, to issue and sell to [Xxxxxxx, Xxxxx & Co.] [Xxxxxxx
Lynch, Pierce, Xxxxxx & Xxxxx Incorporated][Salomon Brothers Inc]
(the "Purchaser(s)") the securities specified in the Schedule
hereto (the "Purchased Securities"). Each of the provisions of
the Distribution Agreement not specifically related to the
solicitation by the Agents, as agents of GTE, of offers to
purchase Securities is incorporated herein by reference in its
entirety, and shall be deemed to be part of this Terms Agreement
to the same extent as if such provisions had been set forth in
full herein. Nothing contained herein or in the Distribution
Agreement shall make any party hereto an agent of GTE or make
such party subject to the provisions therein relating to the
solicitation of offers to purchase Securities from GTE, solely by
virtue of its execution of this Terms Agreement. Each of the
representations and warranties set forth therein shall be deemed
to have been made at and as of the date of this Terms Agreement,
except that each representation and warranty in Section 1 of the
Distribution Agreement which makes reference to the Prospectus
shall be deemed to be a representation and warranty as of the
date of the Distribution Agreement in relation to the Prospectus
(as therein defined), and also a representation and warranty as
of the date of this Terms Agreement in relation to the Prospectus
as amended and supplemented to relate to the Purchased
Securities.
An amendment to the Registration Statement, or a supplement to
the Prospectus, as the case may be, relating to the Purchased
Securities, in the form heretofore delivered to you is now
proposed to be filed with the Commission.
Subject to the terms and conditions set forth herein and in the
Distribution Agreement incorporated herein by reference, GTE
agrees to issue and sell to the Purchaser(s) and the Purchaser(s)
agree to purchase from GTE the Purchased Securities, at the time
and place, in the principal amount and at the purchase price set
forth in the Schedule hereto.
-2-
If the foregoing is in accordance with your understanding, please
sign and return to us [ ] counterparts hereof, and upon
acceptance hereof by you this letter and such acceptance hereof,
including those provisions of the Distribution Agreement
incorporated herein by reference, shall constitute a binding
agreement between you and GTE.
GTE CORPORATION
By:___________________________
____
Name:
Title:
Accepted:
By:[______________________________
(Xxxxxxx, Xxxxx & Co.)]
[XXXXXXX LYNCH, PIERCE, XXXXXX & XXXXX INCORPORATED
By:_______________________________
Name:
Title:]
[SALOMON BROTHERS INC
By:________________________________
Name:
Title:]
Schedule to Annex I
Title of Purchased Securities:
% Medium-Term Notes
Aggregate Principal Amount:
$ or units of other Specified
Currency
Price to Public:
Purchase Price by [Xxxxxxx, Xxxxx & Co.][Xxxxxxx Lynch, Pierce,
Xxxxxx & Xxxxx Incorporated][Salomon Brothers Inc] :
% of the principal amount of the Purchased Securities[, plus
accrued interest from to ] [and accrued
amortization, if any, from to
]
Method of and Specified Funds for Payment of Purchase Price:
[By wire transfer to a bank account specified by GTE in
immediately available funds]
[By certified or official bank check or checks, payable to
the order of GTE, in immediately available funds]
Indenture:
Indenture, dated as of December 1, 1996, as amended and
supplemented, between GTE and The Bank of New York as Trustee
Time of Delivery:
Closing Location for Delivery of Securities:
Maturity:
Interest Rate:
%
Interest Payment Dates:
[months and dates]
I-1
Documents to be Delivered:
The following documents referred to in the Distribution
Agreement shall be delivered as a condition to the Closing:
[(1) The opinion or opinions of counsel to the Agents
referred to in Section 4(d).]
[(2) The opinion of counsel to GTE referred to in Section
4(e).]
[(3) The accountants' letter referred to in Section 4(f).]
[(4) The officers' certificate referred to in Section
4(g).]
[Substitution of Purchasers (if applicable):
If for any reason any Purchaser shall not purchase the
Purchased Securities it has agreed to purchase hereunder, the
remaining Purchasers shall have the right within 24 hours to make
arrangements satisfactory to GTE for the purchase of such
Purchased Securities hereunder. If they fail to do so, the
amounts of Purchased Securities that the remaining Purchasers are
obligated, severally, to purchase under this Agreement shall be
increased in the proportions which the total amount of Purchased
Securities which they have respectively agreed to purchase bears
to the total amount of Purchased Securities which all non-
defaulting Purchasers have so agreed to purchase, or in such
other proportions as the Purchasers may specify to absorb such
unpurchased Purchased Securities, provided that such aggregate
increases shall not exceed 10% of the total amount of the
unpurchased Purchased Securities still remain, GTE shall have the
right either to elect to consummate the sale except as to any
such unpurchased Purchased Securities so remaining or, within the
next succeeding 24 hours, to make arrangements satisfactory to
the remaining Purchasers for the purchase of such Purchased
Securities. In any such cases, either the Purchasers or the
Representative or GTE shall have the right to postpone the
Closing Date for not more than seven business days to a mutually
acceptable date. If GTE shall not elect to so consummate the
sale and any unpurchased Purchased Securities 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 GTE for
the purchase or sale of any Purchased Securities under this
Agreement. No provision in this paragraph shall relieve any
defaulting Purchaser of liability to GTE for damages occasioned
by such default.]
Other Provisions (if applicable):
I-2
ANNEX II
GTE CORPORATION
Administrative Procedure
This Administrative Procedure relates to the Securities defined
in the Distribution Agreement, dated ______, 1997 (the
"Distribution Agreement"), between GTE Corporation ("GTE") and
Xxxxxxx, Xxxxx & Co., Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx
Incorporated and Salomon Brothers Inc (together, the "Agents"),
to which this Administrative Procedure is attached as Annex II.
Defined terms used herein and not defined herein shall have the
meanings given such terms in the Distribution Agreement, the
Prospectus as amended or supplemented or the Indenture.
The procedures to be followed with respect to the settlement of
sales of Securities directly by GTE to purchasers solicited by an
Agent, as agent, are set forth below. The terms and settlement
details related to a purchase of Securities by an Agent, as
principal, from GTE will be set forth in a Terms Agreement
pursuant to the Distribution Agreement, unless GTE and such Agent
otherwise agree as provided in Section 2(b) of the Distribution
Agreement, in which case the procedures to be followed in respect
of the settlement of such sale will be as set forth below. An
Agent, in relation to a purchase of a Security by a purchaser
solicited by such Agent, is referred to herein as the "Selling
Agent" and, in relation to a purchase of a Security by such Agent
as principal other than pursuant to a Terms Agreement, as the
"Purchasing Agent".
GTE will advise each Agent in writing of those persons at GTE
with whom such Agent is to communicate regarding offers to
purchase Securities and the related settlement details.
Each Security will be issued only in fully registered form and
will be represented by either a global security (a "Global
Security") delivered to the Trustee, as agent for The Depository
Trust Company (the "Depositary") and recorded in the book-entry
system maintained by the Depositary (a "Book-Entry Security") or
a certificate issued in definitive form (a "Certificated
Security") delivered to a person designated by an Agent, as set
forth in the applicable Pricing Supplement. An owner of a Book-
Entry Security will not be entitled to receive a certificate
representing such a Security, except as provided in the
Indenture.
Book-Entry Securities will be issued in accordance with the
Administrative Procedure set forth in Part I hereof, and
Certificated Securities will be issued in accordance with the
Administrative Procedure set forth in Part II hereof.
PART I: ADMINISTRATIVE PROCEDURE FOR BOOK-ENTRY SECURITIES
In connection with the qualification of the Book-Entry Securities
for eligibility in the book-entry system maintained by the
Depositary, the Trustee will perform the custodial, document
control and administrative functions described below, in
accordance with its respective obligations under a Letter of
Representation from GTE and the Trustee to the Depositary, dated
the date hereof, and a Medium-Term Note Certificate Agreement
between the Trustee and the Depositary, dated as of August 17,
1989, (the "Certificate Agreement"), and its obligations as a
participant in the Depositary, including the Depositary's Same-
Day Funds Settlement System ("SDFS").
II-1
Posting Rates by GTE:
GTE and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of Book-Entry
Securities that may be sold as a result of the solicitation of
offers by an Agent. GTE may establish a fixed set of interest
rates and maturities for an offering period ("posting"). If GTE
decides to change already posted rates, it will promptly advise
the Agents to suspend solicitation of offers until the new posted
rates have been established with the Agents.
Acceptance of Offers by GTE:
Each Agent will promptly advise GTE by telephone or other
appropriate means of all reasonable offers to purchase Book-Entry
Securities, other than those rejected by such Agent. Each Agent
may, in its discretion reasonably exercised, reject any offer
received by it in whole or in part. Each Agent also may make
offers to GTE to purchase Book-Entry Securities as a Purchasing
Agent. GTE will have the sole right to accept offers to purchase
Book-Entry Securities and may reject any such offer in whole or
in part.
GTE will promptly notify the Selling Agent or Purchasing Agent,
as the case may be, of its acceptance or rejection of an offer to
purchase Book-Entry Securities. If GTE accepts an offer to
purchase Book-Entry Securities, it will confirm such acceptance
in writing to the Selling Agent or Purchasing Agent, as the case
may be, and the Trustee.
Communication of Sale Information to GTE by Agent and Settlement
Procedures:
A. After the acceptance of an offer by GTE, the Selling
Agent or Purchasing Agent, as the case may be, will communicate
promptly, but in no event later than the time set forth under
"Settlement Procedure Timetable" below, the following details of
the terms of such offer (the "Sale Information") to GTE by
telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means:
(1) Principal Amount of Book-Entry Securities to be
purchased;
(2) Original Issue Date;
(3) If a Fixed Rate Book-Entry Security, the interest rate;
(4) Stated Maturity;
(5) Interest Payment Date(s);
(6) Default Rate;
(7) Record Date(s);
(8) If a redeemable Book-Entry Security, such of the
following as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Percentage, and
(iii) Annual Redemption Percentage Reduction;
(9) Optional Repayment Dates, if any;
(10) If such Securities are to be issued as Original Issue
Discount Securities, the Issue Price;
(11) Specified Currency and, if the Specified Currency is
other than U.S. dollars, the Exchange Rate Agent (it
being understood that currently the Depositary accepts
deposits of Global Securities denominated in U.S.
dollars only);
II-2
(12) Authorized Denominations;
(13) If a Floating Rate Book-Entry Security, such of the
following as are applicable:
(i) Minimum Interest Rate,
(ii) Maximum Interest Rate,
(iii) Initial Interest Reset Date,
(iv) Interest Reset Period,
(v) Interest Determination Date,
(vi) Interest Reset Date(s),
(vii) Initial Interest Rate,
(viii)Spread and/or Spread Multiplier,
(ix) Calculation Agent,
(x) Interest Category, indicating whether such
Securities are:
(a) Regular Floating Rate Securities,
(b) Floating Rate/Fixed Rate
Securities (in which case, the Fixed Rate
Commencement Date and the Fixed Interest Rate
shall be specified, or
(c) Inverse Floating Rate
Securities (in which case the Fixed Interest
Rate shall be specified);
(xi) Day Count Convention, indicating one of
the following (including the applicable period):
(a) Actual/360,
(b) Actual/Actual, or
(c) 30/360;
(xii) Interest Rate Basis or Bases, which may
include:
(a) CD Rate,
(b) Prime Rate,
(c) Federal Funds Rate,
(d) Commercial Paper Rate,
(e) LIBOR, in which case either
Reuters Page or Telerate Page shall be
indicated, as well as the Index Currency,
(f) Treasury Rate,
(g) CMT Rate, in which case the
Designated CMT Telerate Page or the
Designated CMT Maturity Index shall be
indicated, or
(h) Other;
(14)Name, address and taxpayer identification number of the
registered owner(s);
(15) Denomination of certificates to be delivered at
settlement;
(16) Selling Agent or Purchasing Agent;
(17) Selling Agent's commission or Purchasing Agent's
discount, as the case may be; and
(18) Net Proceeds to the Company.
II-3
B. After receiving the Sale Information from the Selling
Agent or Purchasing Agent, as the case may be, GTE will
communicate such Sale Information to the Trustee by facsimile
transmission or other acceptable written means. GTE will assign
a CUSIP number to the Global Security from a list of CUSIP
numbers previously delivered to the Trustee by GTE representing
such Book-Entry Security and then advise the Trustee and the
Selling Agent or Purchasing Agent, as the case may be, of such
CUSIP number.
C. The Trustee will enter a pending deposit message through
the Depositary's Participant Terminal System, providing the
following settlement information to the Depositary, and the
Depositary shall forward such information to such Agent and
Standard & Poor's Corporation's CUSIP Service Bureau:
(1) The applicable Sale Information;
(2) CUSIP number of the Global Security representing
such Book-Entry Security;
(3) Whether such Global Security will represent any
other Book-Entry Security (to the extent known at such
time);
(4) Number of the participant account maintained by
the Depositary on behalf of the Selling Agent or
Purchasing Agent, as the case may be;
(5) The interest payment period; and
(6) Initial Interest Payment Date for such Book-Entry
Security, number of days by which such date succeeds
the record date for the Depositary's purposes (which in
the case of Floating Rate Securities which reset weekly
shall be the date five calendar days immediately
preceding the applicable Interest Payment Date and in
the case of all other Book-Entry Securities shall be
the Regular Record Date, as defined in the Security)
and, if calculable at that time, the amount of interest
payable on such Interest Payment Date.
D. The Trustee will complete and authenticate the Global
Security previously delivered by GTE representing such Book-Entry
Security.
E. The Depositary will credit such Book-Entry Security to
the Trustee's participant account at the Depositary.
F. The Trustee will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the
Depositary to (i) debit such Book-Entry Security to the Trustee's
participant account and credit such Book-Entry Security to such
Agent's participant account and (ii) debit such Agent's
settlement account and credit the Trustee's settlement account
for an amount equal to the price of such Book-Entry Security less
such Agent's commission. The entry of such a deliver order shall
constitute a representation and warranty by the Trustee to the
Depositary that (a) the Global Security representing such Book-
Entry Security has been issued and authenticated and (b) the
Trustee is holding such Global Security pursuant to the
Certificate Agreement.
G. Such Agent will enter an SDFS deliver order through the
Depositary's Participant Terminal System instructing the
Depositary (i) to debit such Book-Entry Security to such Agent's
participant account and credit such Book-Entry Security to the
participant accounts of the Participants with respect to such
Book-Entry Security and (ii) to debit the settlement accounts of
such Participants and credit the settlement account of such Agent
for an amount equal to the price of such Book-Entry Security.
II-4
H. Transfers of funds in accordance with SDFS deliver
orders described in Settlement Procedures "F" and "G" will be
settled in accordance with SDFS operating procedures in effect on
the settlement date.
I. Upon confirmation of receipt of funds, the Trustee will
transfer to the account of GTE maintained at [Name of Bank], New
York, New York, [Account No.; ABA No.; Reference] or such other
account as GTE may have previously specified to the Trustee, in
funds available for immediate use in the amount transferred to
the Trustee in accordance with Settlement Procedure "F".
J. Upon request, the Trustee will send to GTE a statement
setting forth the principal amount of Book-Entry Securities
outstanding as of that date under the Indenture.
K. Such Agent will confirm the purchase of such Book-Entry
Security to the purchaser either by transmitting to the
Participants with respect to such Book-Entry Security a
confirmation order or orders through the Depositary's
institutional delivery system or by mailing a written
confirmation to such purchaser.
L. The Depositary will, at any time, upon request of GTE or
the Trustee, promptly furnish to GTE or the Trustee a list of the
names and addresses of the participants for whom the Depositary
has credited Book-Entry Securities.
Preparation of Pricing Supplement by GTE:
If GTE accepts an offer to purchase a Book-Entry Security, it
will prepare a Pricing Supplement reflecting the terms of such
Book-Entry Security and arrange to have such Pricing Supplement
delivered to the Selling Agent or Purchasing Agent, as the case
may be, not later than 2:00 p.m., New York City time, on the
Business Day following the Trade Date (as defined below), or if
GTE and the purchaser agree to settlement on the Business Day
following the date of acceptance of such offer, not later than
noon, New York City time, on such date, at the following
applicable addresses in addition to the addresses specified in
the Distribution Agreement: if to Xxxxxxx Xxxxx & Co., to 00
Xxxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention:
Medium-Term Note Trading, (000) 000-0000, facsimile transmission
no.: (000) 000-0000; if to Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx,
Incorporated, to Tritech Services, 00 Xxxxxxxx Xxxxx, Xxxxxxxxxx,
Xxx Xxxxxx 00000, Attention: Prospectus Operations, Xxxxxxx
Xxxxxxxxx, (000) 000-0000, facsimile transmission no: (908) 885-
2774; and if to Salomon Brothers Inc, to 0000 Xxxxxx Xxxxx
Xxxxxxx, Xxxxx, Xxxxxxx 00000, Attention: Xxxxxxx Xxxxxx, (813)
558-7165, facsimile transmission no. (000) 000-0000. GTE will
arrange to have the Pricing Supplement filed with the Commission
not later than the close of business of the Commission on the
fifth Business Day following the date on which such Pricing
Supplement is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling
Agent:
The Selling Agent will deliver to the purchaser of a Book-Entry
Security a written confirmation of the sale and delivery and
payment instructions. In addition, the Selling Agent will
deliver to such purchaser or its agent the Prospectus as amended
or supplemented (including the Pricing Supplement) in relation to
such Book-Entry Security prior to or together with the earlier of
the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Book-Entry Security.
II-5
Date of Settlement:
The receipt by GTE of immediately available funds in payment for
a Book-Entry Security and the authentication and issuance of the
Global Security representing such Book-Entry Security shall
constitute "settlement" with respect to such Book-Entry Security.
All offers of Book-Entry Securities solicited by a Selling Agent
or made by a Purchasing Agent and accepted by GTE on a particular
date (the "Trade Date") will be settled on a date (the
"Settlement Date") which is the third Business Day after the
Trade Date pursuant to the "Settlement Procedure Timetable" set
forth below, unless GTE and the purchaser agree to settlement (a)
on another Business Day after the acceptance of such offer or (b)
with respect to an offer accepted by GTE prior to 10:00 a.m., New
York City time, on the date of such acceptance.
Settlement Procedure Timetable:
For orders of Book-Entry Securities solicited by a Selling Agent
and accepted by GTE for settlement on the third Business Day
after the Trade Date, Settlement Procedures "A" through "I" set
forth above shall be completed as soon as possible but not later
than the respective times (New York City time) set forth below:
Settlement
Procedure Time
A 10:00 a.m. on the Business Day following the Trade
Date
or 10:00a.m. on the Business Day prior to
the
Settlement Date, whichever is earlier
B 12:00 noon on the second Business Day immediately
preceding
the Settlement Date
C 2:00 p.m. on the second Business Day immediately
preceding
the Settlement Date
D 9:00 a.m. on the Settlement Date
E 10:00 a.m. on the Settlement Date
F-G 2:00 p.m. on the Settlement Date
H 4:45 p.m. on the Settlement Date
I 5:00 p.m. on the Settlement Date
If the initial interest rate for a Floating Rate Book-Entry
Security has not been determined at the time that Settlement
Procedure "A" is completed, Settlement Procedures "B" and "C"
shall be completed as soon as such rate has been determined but
no later than 2:00 p.m. on the second Business Day immediately
preceding the Settlement Date. Settlement Procedure "H" is
subject to extension in accordance with any extension of Fedwire
closing deadlines and in the other events specified in the SDFS
operating procedures in effect on the Settlement Date.
If settlement of a Book-Entry Security is rescheduled or
canceled, the Trustee, upon obtaining knowledge thereof, will
deliver to the Depositary, through the Depositary's Participation
Terminal System, a cancellation message to such effect by no
later than 2:00 p.m. on the Business Day immediately preceding
the scheduled Settlement Date.
Failure to Settle:
If the Trustee fails to enter an SDFS deliver order with respect
to a Book-Entry Security pursuant to Settlement Procedure "F",
the Trustee may deliver to the Depositary, through the
Depositary's Participant Terminal System, as
II-6
soon as practicable a withdrawal message instructing the
Depositary to debit such Book-Entry Security to the Trustee's
participant account, provided that the Trustee's participant
account contains a principal amount of the Global Security
representing such Book-Entry Security that is at least equal to
the principal amount to be debited. If a withdrawal message is
processed with respect to all the Book-Entry Securities
represented by a Global Security, the Trustee will xxxx such
Global Security "canceled", make appropriate entries in the
Trustee's records and send such canceled Global Security to GTE.
The CUSIP number assigned to such Global Security shall, in
accordance with CUSIP Service Bureau procedures, be canceled and
not immediately reassigned. If a withdrawal message is processed
with respect to one or more, but not all, of the Book-Entry
Securities represented by a Global Security, the Trustee will
exchange such Global Security for two Global Securities, one of
which shall represent such Book-Entry Security or Securities and
shall be canceled immediately after issuance and the other of
which shall represent the remaining Book-Entry Securities
previously represented by the surrendered Global Security and
shall bear the CUSIP number of the surrendered Global Security.
If the purchase price for any Book-Entry Security is not timely
paid to the participants with respect to such Book-Entry Security
by the beneficial purchaser thereof (or a person, including an
indirect participant in the Depositary, acting on behalf of such
purchaser), such participants and, in turn, the Agent for such
Book-Entry Security may enter deliver orders through the
Depositary's Participant Terminal System debiting such Book-Entry
Security to such participant's account and crediting such Book-
Entry Security to such Agent's account and then debiting such
Book-Entry Security to such Agent's participant account and
crediting such Book-Entry Security to the Trustee's participant
account and shall notify GTE and the Trustee thereof.
Thereafter, the Trustee will (i) immediately notify GTE of such
order and GTE shall transfer to such Agent funds available for
immediate use in an amount equal to the price of such Book-Entry
Security which was credited to the account of GTE maintained at
the Trustee in accordance with Settlement Procedure I, and (ii)
deliver the withdrawal message and take the related actions
described in the preceding paragraph. If such failure shall have
occurred for any reason other than default by the applicable
Agent to perform its obligations hereunder or under the
Distribution Agreement, GTE will reimburse such Agent on an
equitable basis for the loss of its use of funds during the
period when the funds were credited to the account of GTE.
Notwithstanding the foregoing, upon any failure to settle with
respect to a Book-Entry Security, the Depositary may take any
actions in accordance with its SDFS operating procedures then in
effect. In the event of a failure to settle with respect to one
or more, but not all, of the Book-Entry Securities to have been
represented by a Global Security, the Trustee will provide, in
accordance with Settlement Procedure "D", for the authentication
and issuance of a Global Security representing the other Book-
Entry Securities to have been represented by such Global Security
and will make appropriate entries in its records. GTE will, from
time to time, furnish the Trustee with a sufficient quantity of
Securities.
Nothing herein shall be deemed to require the Trustee to risk or
expend its own funds in connection with any payments to GTE, the
Agents or the Depositary or any noteholder, it being understood
by all parties that payments made by the Trustee to GTE or the
Agents, or the Depositary, or any noteholder shall be made only
to the extend that funds are provided to the Trustee for such
purposes.
II-7
PART II: ADMINISTRATIVE PROCEDURE FOR CERTIFICATED SECURITIES
Posting Rates by GTE:
GTE and the Agents will discuss from time to time the rates of
interest per annum to be borne by and the maturity of
Certificated Securities that may be sold as a result of the
solicitation of offers by an Agent. GTE may establish a fixed
set of interest rates and maturities for an offering period
("posting"). If GTE decides to change already posted rates, it
will promptly advise the Agents to suspend solicitation of offers
until the new posted rates have been established with the Agents.
Acceptance of Offers by GTE:
Each Agent will promptly advise GTE by telephone or other
appropriate means of all reasonable offers to purchase
Certificated Securities, other than those rejected by such Agent.
Each Agent may, in its discretion reasonably exercised, reject
any offer received by it in whole or in part. Each Agent also
may make offers to GTE to purchase Certificated Securities as a
Purchasing Agent. GTE will have the sole right to accept offers
to purchase Certificated Securities and may reject any such offer
in whole or in part. GTE will promptly notify the Selling Agent
or Purchasing Agent, as the case may be, of its acceptance or
rejection of an offer to purchase Certificated Securities. If
GTE accepts an offer to purchase Certificated Securities, it will
confirm such acceptance in writing to the Selling Agent or
Purchasing Agent, as the case may be, and the Trustee.
Communication of Sale Information to GTE by Agent:
After the acceptance of an offer by GTE, the Selling Agent or
Purchasing Agent, as the case may be, will communicate the
following details of the terms of such offer (the "Sale
Information") to GTE by telephone (confirmed in writing) or by
facsimile transmission or other acceptable written means:
(1) Principal Amount of Certificated Securities to be
purchased;
(2) Original Issue Date;
(3) If a Fixed Rate Certificated Security, the interest
rate;
(4) Stated Maturity;
(5) Interest Payment Date(s);
(6) Default Rate;
(7) Record Date(s);
(8) If a redeemable Certificated Security, such of
the following as are applicable:
(i) Redemption Commencement Date,
(ii) Initial Redemption Percentage, and
(iii) Annual Redemption Percentage Reduction;
(9) Optional Repayment Dates, if any;
(10) If such Securities are to be issued as Original
Issue Discount Securities, the Issue Price;
(11) Specified Currency and, if the Specified
Currency is other than U.S. dollars, the Exchange
Rate Agent (it being understood that currently the
Depositary accepts deposits of Global Securities
denominated in U.S. dollars only);
(12) Authorized Denominations;
(13) If a Floating Rate Certificated Security, such
of the following as are applicable:
II-8
(i) Minimum Interest Rate,
(ii) Maximum Interest Rate,
(iii) Initial Interest Reset Date,
(iv) Interest Reset Period,
(v) Interest Determination Date,
(vi) Interest Reset Date(s),
(vii) Initial Interest Rate,
(viii) Spread and/or Spread Multiplier,
(ix) Calculation Agent,
(x) Interest Category, indicating whether such
Securities are:
(a) Regular Floating Rate Securities,
(b) Floating Rate/Fixed Rate
Securities (in which case, the Fixed Rate
Commencement Date and the Fixed Interest Rate
shall be specified, or
(c) Inverse Floating Rate
Securities (in which case the Fixed Interest
Rate shall be specified);
(xi) Day Count Convention, indicating one of
the following (including the applicable period):
(a) Actual/360,
(b) Actual/Actual, or
(c) 30/360;
(xii) Interest Rate Basis or Bases, which may
include:
(a) CD Rate,
(b) Prime Rate,
(c) Federal Funds Rate,
(d) Commercial Paper Rate,
(e) LIBOR, in which case either
Reuters Page or Telerate Page shall be
indicated, as well as the Index Currency,
(f) Treasury Rate,
(g) CMT Rate, in which case the
Designated CMT Telerate Page or the
Designated CMT Maturity Index shall be
indicated, or
(h) Other;
(14) Name, address and taxpayer identification
number of the registered owner(s);
(15) Denomination of certificates to be delivered at
settlement;
(16) Selling Agent or Purchasing Agent.
(17) Selling Agent's commission or Purchasing
Agent's discount, as the case may be;
(18) Net Proceeds to the Company.
Preparation of Pricing Supplement by GTE:
If GTE accepts an offer to purchase a Certificated Security, it
will prepare a Pricing Supplement reflecting the terms of such
Certificated Security and arrange to have such Pricing Supplement
delivered to the Selling Agent or Purchasing Agent, as the case
may be, not later than 2:00 p.m., New York City time, on the
Business Day following the Trade Date, or if GTE and the
purchaser agree to settlement on the date of acceptance of such
offer, not later than noon, New York City time, on such date, at
the following applicable addresses in addition to the addresses
specified in the Distribution
II-9
Agreement: if to Xxxxxxx Xxxxx & Co., to 00 Xxxxx Xxxxxx, 00xx
Xxxxx, Xxx Xxxx, Xxx Xxxx 00000, Attention: Medium-Term Note
Trading, (000) 000-0000, facsimile transmission no.: (212) 902-
0658; if to Xxxxxxx Lynch, Pierce, Xxxxxx & Xxxxx, Incorporated,
to Tritech Services, 00 Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxx Xxxxxx
00000, Attention: Prospectus Operations, Xxxxxxx Xxxxxxxxx, (908)
885-2768, facsimile transmission no: (000) 000-0000; and if to
Salomon Brothers Inc, to 0000 Xxxxxx Xxxxx Xxxxxxx, Xxxxx,
Xxxxxxx 00000, Attention: Xxxxxxx Xxxxxx, (000) 000-0000,
facsimile transmission no. (000) 000-0000. GTE will arrange to
have the Pricing Supplement filed with the Commission not later
than the close of business of the Commission on the fifth
Business Day following the date on which such Pricing Supplement
is first used.
Delivery of Confirmation and Prospectus to Purchaser by Selling
Agent:
The Selling Agent will deliver to the purchaser of a Certificated
Security a written confirmation of the sale and delivery and
payment instructions. In addition, the Selling Agent will
deliver to such purchaser or its agent the Prospectus as amended
or supplemented (including the Pricing Supplement) in relation to
such Certificated Security prior to or together with the earlier
of the delivery to such purchaser or its agent of (a) the
confirmation of sale or (b) the Certificated Security.
Date of Settlement:
All offers of Certificated Securities solicited by a Selling
Agent or made by a Purchasing Agent and accepted by GTE will be
settled on a date (the "Settlement Date") which is the third
Business Day after the date of acceptance of such offer, unless
GTE and the purchaser agree to settlement (a) on another Business
Day after the acceptance of such offer or (b) with respect to an
offer accepted by GTE prior to 10:00 a.m., New York City time, on
the date of such acceptance.
Instruction from GTE to Trustee for Preparation of Certificated
Securities:
After receiving the Sale Information from the Selling Agent or
Purchasing Agent, as the case may be, GTE will communicate such
Sale Information to the Trustee by telephone (confirmed in
writing) or by facsimile transmission or other acceptable written
means.
GTE will instruct the Trustee by facsimile transmission or other
acceptable written means to authenticate and deliver the
Certificated Securities no later than 2:15 p.m., New York City
time, on the Settlement Date. Such instruction will be given by
GTE prior to 3:00 p.m., New York City time, on the Business Day
immediately preceding the Settlement Date unless the Settlement
Date is the date of acceptance by GTE of the offer to purchase
Certificated Securities in which case such instruction will be
given by GTE by 11:00 a.m., New York City time.
Preparation and Delivery of Certificated Securities by Trustee
and Receipt of Payment Therefor:
The Trustee will prepare each Certificated Security and
appropriate receipts that will serve as the documentary control
of the transaction.
In the case of a sale of Certificated Securities to a purchaser
solicited by a Selling Agent, the Trustee will, by 2:15 p.m., New
York City time, on the Settlement Date, deliver the Certificated
Securities to the Selling Agent for
II-10
the benefit of the purchaser of such Certificated Securities
against delivery by the Selling Agent of a receipt therefor. On
the Settlement Date, the Selling Agent will deliver payment for
such Certificated Securities in immediately available funds to
GTE in an amount equal to the issue price of the Certificated
Securities less the Selling Agent's commission; provided that the
Selling Agent reserves the right to withhold payment for which it
has not received funds from the purchaser. GTE shall not use any
proceeds advanced by a Selling Agent to acquire securities.
In the case of a sale of Certificated Securities to a Purchasing
Agent, the Trustee will, by 2:15 p.m., New York City time, on the
Settlement Date, deliver the Certificated Securities to the
Purchasing Agent against delivery of payment for such
Certificated Securities in immediately available funds to GTE in
an amount equal to the issue price of the Certificated Securities
less the Purchasing Agent's discount.
Failure of Purchaser to Pay Selling Agent:
If a purchaser (other than a Purchasing Agent) fails to make
payment to the Selling Agent for a Certificated Security, the
Selling Agent will promptly notify the Trustee and GTE thereof by
telephone (confirmed in writing) or by facsimile transmission or
other acceptable written means. The Selling Agent will
immediately return the Certificated Security to the Trustee.
Immediately upon receipt of such Certificated Security by the
Trustee, GTE will return to the Selling Agent an amount equal to
the amount previously paid to GTE in respect of such Certificated
Security. GTE will reimburse the Selling Agent on an equitable
basis for its loss of the use of funds during the period when
they were credited to the account of GTE.
The Trustee will cancel the Certificated Security in respect of
which the failure occurred, make appropriate entries in its
records and the Certificated Security to GTE.
II-11
ANNEX III
Accountants' Letter
Pursuant to Sections 4(f) and 6(d), as the case may be, of the
Distribution Agreement, GTE's independent certified public
accountants shall furnish letters to the effect that:
They are independent public accountants with respect to GTE
within the meaning of the Act and the applicable published
rules and regulations of the Commission thereunder,
specifically Rule 2-01 of Regulation S-X, and stating in
effect (1) that in their opinion, the financial statements
and schedules examined by them and incorporated by reference
in the Prospectus comply as to form in all material respects
with the applicable accounting requirements of the Act, and
the Exchange Act, and the published rules and regulations
thereunder, and (2) that although they have not audited any
financial statements of GTE as of any date or for any period
subsequent to the prior-year audit, and although they have
conducted an audit for that period, the purpose (and
therefore the scope) of the audit was to enable them to
express their opinion on the financial statements as of that
date and for the year then ended, but not on the financial
statements for any interim period within that year;
therefore, they are unable to and do not express any opinion
on the unaudited condensed balance sheet as of the latest
available interim date, and the unaudited condensed
statements of income, reinvested earnings, and cash flows for
the latest available interim period subsequent to that prior-
year audit which are included in the Prospectus; to the
extent required, they have performed the procedures specified
by the American Institute of Certified Public Accountants for
a review of interim financial information as described in SAS
No. 71, Interim Financial Information, on the latest
available unaudited interim financial statements prepared by
GTE, inquired of certain officials of GTE responsible for
financial and accounting matters, and read the minutes of the
Board of Directors and shareholders of GTE, 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 financial statements incorporated by reference in the
Prospectus; or (b) (i) as of the date of the latest available
unaudited interim financial data of GTE and the latest
available unaudited condensed summary of consolidated results
of operations prepared by GTE, there have been any changes in
the capital stock, or any material increase in the short-term
indebtedness or long-term debt of GTE or any material
decreases in net assets, in each case as compared with
amounts shown on the latest balance sheet included or
incorporated by reference in the Prospectus, or any material
decreases, as compared with the corresponding period of the
prior year, in consolidated revenues and sales, net income
from continuing operations, or net income from continuing
operations applicable to common stock and per share of common
stock, or (ii) for the period from the date of the latest
financial statements included or incorporated by reference in
the Prospectus to the specified date referred to in the
preceding clause (i), there were any material decreases in
operating revenues, net operating income, net income or
III-1
GTE's ratio of earnings to fixed charges, in each case as
compared with the comparable period of the preceding year,
(iii) as of a specified date no more than five days prior to
the date of such letter (the "Cutoff Date"), there have been
any changes in the capital stock or any material increase in
the debt of GTE, or any material decreases in net assets, in
each case as compared with amounts shown in the latest
balance sheet included or incorporated by reference in the
Prospectus, and (iv) for the period from the date of the
latest available unaudited interim 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 GTE or occasioned by
sinking fund payments made on the debt securities of GTE, or
by the issuance of common stock of GTE in connection with any
employee benefit plan or dividend reinvestment plan of GTE or
for the conversion of convertible preferred stock.
All references in this Annex III to the Prospectus shall be
deemed to refer to the Prospectus (including the documents
incorporated by reference therein) as defined in the Distribution
Agreement as of the Commencement Date referred to in Section 6(d)
thereof and to the Prospectus as amended or supplemented
(including the documents incorporated by reference therein) as of
the date of the amendment, supplement, incorporation by reference
or the Time of Delivery relating to the Terms Agreement requiring
the delivery of such letter under Section 4(f) thereof.
III-2