<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 8, 1997.
REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
------------------------
FORM S-3
REGISTRATION STATEMENT
UNDER THE SECURITIES ACT OF 1933
------------------------
NORDSTROM CREDIT, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C>
COLORADO 91-1181301
(State or other jurisdiction (I.R.S. Employer
of incorporation or organization) Identification Number)
13531 EAST CALEY AVENUE CAROL R. SIMONSON
ENGLEWOOD, COLORADO 80111 13531 EAST CALEY AVENUE
(303) 397-4700 ENGLEWOOD, COLORADO 80111
(Address including zip code, and (303) 397-4780
telephone number, including area code, (Name, address, including zip code,
of registrant's principal executive and telephone number, including area
offices) code, of agent for service)
</TABLE>
--------------------------
COPIES TO:
MICHAEL E. MORGAN
LAWRENCE J. STEELE
LANE POWELL SPEARS LUBERSKY LLP
1420 FIFTH AVENUE, SUITE 4100
SEATTLE, WASHINGTON 98101-2338
--------------------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
FROM TIME TO TIME AFTER THE EFFECTIVE DATE OF THIS REGISTRATION STATEMENT.
--------------------------
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, please check the following box and list the Securities
Act registration statement number of the earlier effective registration
statement for the same offering. / /
If delivery of the prospectus is expected to be made pursuant to Rule 434
under the Securities Act, please check the following box. / /
--------------------------
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
PROPOSED MAXIMUM PROPOSED MAXIMUM
TITLE OF EACH CLASS OF AMOUNT TO BE OFFERING PRICE AGGREGATE AMOUNT OF
SECURITIES TO BE REGISTERED REGISTERED PER UNIT(1) OFFERING PRICE(1) REGISTRATION FEE
<S> <C> <C> <C> <C>
Debt Securities................................ $250,000,000 100% $250,000,000 $75,758
</TABLE>
(1) Exclusive of accrued interest, if any. These figures are estimates made
solely for the purposes of calculating the registration fee.
--------------------------
THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(a) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(a),
MAY DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
NORDSTROM CREDIT, INC.
DEBT SECURITIES
------------------
Nordstrom Credit, Inc., a Colorado corporation (the "Company"), may offer
from time to time up to $250,000,000 aggregate principal amount of its unsecured
Debt Securities consisting of notes, debentures and other evidences of
indebtedness. The Debt Securities may be issued in one or more series of
issuances. The specific title, aggregate principal amounts, maturity, rate or
method of calculation of interest, purchase price, any sinking fund terms, any
terms for redemption and other special terms applicable to the Debt Securities
being offered will be set forth in a supplement to this Prospectus. The Debt
Securities are solely the obligation of the Company and are not guaranteed by
Nordstrom, Inc.
The Debt Securities may be sold directly by the Company or through agents or
to underwriters for public offering pursuant to the plan of distribution
described in the Prospectus and the Prospectus Supplement. If any underwriters
or agents are involved in the sale of the offered Debt Securities, their names
and any applicable fee, commission or discount arrangements with them will be
set forth in the Prospectus Supplement. See "Plan of Distribution."
This Prospectus may not be used to consummate sales of Securities unless
accompanied by a Prospectus Supplement.
No person has been authorized to give any information or to make any
representations other than those contained in or incorporated by reference in
this Prospectus in connection with the offer contained in this Prospectus and,
if given or made, such information or representations must not be relied upon as
having been authorized by the Company or any underwriters, dealers or agents.
This Prospectus does not constitute an offer to sell or the solicitation of an
offer to buy securities in any circumstances in which such offer or solicitation
is unlawful. Neither the delivery of this Prospectus nor any sale made hereunder
shall, under any circumstances, create any implication that there has been no
change in the affairs of the Company since the date hereof or that the
information contained herein is correct at any time subsequent to the date of
such information.
------------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
------------------------
The date of this Prospectus is , 1997.
<PAGE>
AVAILABLE INFORMATION
The Company and Nordstrom, Inc. ("Nordstrom"), a Washington corporation
which owns 100% of the outstanding shares of the Company's common stock, are
subject to the informational requirements of the Securities Exchange Act of
1934, as amended (the "Exchange Act"), and, in accordance therewith, file
reports, proxy statements and other information with the Securities and Exchange
Commission (the "Commission"). Such reports, proxy statements and other
information may be inspected and copied at the public reference room of the
Commission at Room 1024, 450 Fifth Street N.W., Washington, D.C. 20549, and the
public reference facilities in the Northeast Regional Office, Seven World Trade
Center, 13th Floor, New York, New York 10048 and the Midwest Regional Office,
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661.
Copies of such material can be obtained at prescribed rates by writing to the
Commission, Public Reference Section, Washington, D.C. The Commission maintains
a Web site (http://www.sec.gov) that contains reports, proxy and information
statements and other information regarding registrants that file electronically
with the Commission.
The Company has filed with the Commission a registration statement on Form
S-3 under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Securities offered hereby (the "Registration Statement"). This
Prospectus does not contain all of the information set forth in the Registration
Statement, certain parts of which are omitted in accordance with the rules and
regulations of the Commission. Reference is made to the Registration Statement
and to the exhibits relating thereto for further information with respect to the
Company and the Securities offered hereby.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for the fiscal year ended January
31, 1997, which has been filed with the Commission by the Company, is
incorporated into this Prospectus by reference.
All documents filed by the Company pursuant to Section 13(a), 13(c), 14 or
15(d) of the Exchange Act after the date of this Prospectus and prior to the
termination of the offering of the Debt Securities shall be deemed to be
incorporated by reference into this Prospectus and to be a part hereof from the
date of filing such documents.
The Company will provide without charge to each person to whom a copy of
this Prospectus is delivered, upon the written or oral request of any such
person, a copy of any or all of the documents incorporated by reference herein,
other than exhibits to such documents which are not specifically incorporated by
reference in the information that this Prospectus incorporates. Requests for
such copies should be directed to: Nordstrom Credit, Inc., 13531 East Caley
Avenue, Englewood, Colorado 80111, Attention: Carol R. Simonson, telephone (303)
397-4780.
2
<PAGE>
THE COMPANY AND NORDSTROM
The principal executive offices of the Company are located at 13531 East
Caley Avenue, Englewood, Colorado 80111, telephone number (303) 397-4700.
BUSINESS OF THE COMPANY
The Company is a wholly owned subsidiary of Nordstrom. The Company was
incorporated in the state of Washington in 1982 and reincorporated in the state
of Colorado in 1990. The primary business of the Company is to finance customer
accounts receivable arising under revolving charge accounts, contract accounts
and 30-day accounts generated through sales of merchandise in Nordstrom stores
("Accounts") and, until August 15, 1996, under revolving charge accounts
generated through purchases by customers utilizing Nordstrom National Credit
Bank Visa cards ("Visa Accounts"). Accounts consist primarily of balances due
under revolving charge accounts. The contract accounts for major purchases and
30-day accounts represent less than 1% of Accounts. Visa Accounts consist of
balances due under revolving charge accounts.
Nordstrom and Nordstrom National Credit Bank, a national banking association
and a wholly owned subsidiary of Nordstrom (the "Bank"), are parties to a
Merchant Agreement which governs the relationship between the Bank and
Nordstrom, including the origination of Accounts by the Bank. See "Relationship
with Nordstrom." The Company and the Bank are parties to an Operating Agreement
which governs the purchase by the Company of Accounts originated by the Bank and
the servicing of Accounts by the Bank. See "Relationship with Nordstrom."
The Company and Nordstrom are parties to an Investment Agreement which,
among other things, governs ownership of Company stock and the financial
relationships between Nordstrom and the Company. Because Nordstrom owns all of
the Company's common stock, Nordstrom controls the management and policies of
the Company. See "Relationship with Nordstrom."
On August 15, 1996, the Company sold substantially all of its outstanding
VISA receivables to Nordstrom in connection with a securitization of the
receivables. Nordstrom then transferred the receivables to the Bank, which
transferred the receivables to the Nordstrom Credit Card Master Trust (the
"Trust") in return for certificates representing undivided interests in the
Trust. A Class A certificate with a market value of $186.6 million was sold to a
third party, and a Class B certificate was purchased by the Company at an
approximate market value of $9.0 million. The Class B certificate has a stated
principal amount of $9.9 million, bears interest at 6.5%, and is subordinated to
the Class A certificate. The Company also purchased from the Bank a portion of
its investment in the Trust (the "Seller's Interest") at an approximate market
value of $4.1 million. The Bank retains the remaining Seller's Interest, and
will continue to service all of the receivables on behalf of the Trust.
As a result of the securitization of the receivables, the Company no longer
purchases and finances VISA receivables generated through the use of the Bank's
VISA card, except to the extent of its investment in the Class B certificate and
the Seller's Interest. The Bank securitizes all new VISA receivables through the
Trust, and from time to time sells to the Company additional portions of the
Seller's Interest, depending on its cash flow needs.
Pursuant to the terms of operative documents of the Trust, in certain events
the Company may be required to fund certain amounts pursuant to a recourse
obligation for credit losses. Based on current cash flow projections, the
Company does not believe any additional funding will be required.
BUSINESS OF NORDSTROM
Nordstrom is a specialty retailer selling a wide selection of apparel, shoes
and accessories for women, men and children. Most of Nordstrom's merchandise
categories are offered in each of its 62 large fashion specialty stores
currently located in Alaska, California, Colorado, Illinois, Indiana, Maryland,
Michigan,
3
<PAGE>
Minnesota, New Jersey, New York, Oregon, Pennsylvania, Texas, Utah, Virginia and
Washington. In addition, Nordstrom operates 19 clearance stores in California,
Illinois, Maryland, Oregon, Pennsylvania, Utah, Virginia and Washington under
the name "Nordstrom Rack," one clearance store in Arizona, under the name "Last
Chance Shoes and Apparel," one specialty store in New York under the name
"Faconnable," and leased shoe departments in twelve department stores in Hawaii
and Guam. Nordstrom's marketing philosophy is to offer a wide selection of
merchandise, to create customer loyalty by providing a high level of customer
service and to respond rapidly to local market conditions and fashion trends
through decentralized buying and merchandise selection.
The following table sets forth the total store area (exclusive of corporate
and administrative offices in Seattle, Washington) as of January 31, 1997 of all
stores currently operated by Nordstrom:
<TABLE>
<CAPTION>
TOTAL STORE NUMBER OF
DESCRIPTION AREA STORES
- ---------------------------------------- -------------- ----------------
<S> <C> <C>
Southern California Group............... 2,688,000 20
Northern California Group............... 1,772,000 11
Capital Group (Washington D.C. area).... 1,481,000 10
Midwest Group........................... 1,472,000 8
Washington Group........................ 1,383,000 12
Northeast Group......................... 1,139,000 6
Oregon Group............................ 823,000 8
Utah/Colorado Group..................... 602,000 5
Southwest Group......................... 249,000 1
Alaska Group............................ 97,000 1
Arizona Group........................... 48,000 1
--
--------------
Total................................. 11,754,000 83
--
--
--------------
--------------
</TABLE>
Nordstrom currently anticipates opening three large specialty stores in 1997
in Long Island, New York, West Hartford, Connecticut, and Cleveland, Ohio. These
stores will contain a total of approximately 661,000 square feet.
Nordstrom currently anticipates opening three specialty stores in 1998 in
Atlanta, Georgia, Overland Park, Kansas, and Scottsdale, Arizona. These stores
will contain a total of approximately 687,000 square feet. In 1998, Nordstrom
also plans to open a new flagship store in downtown Seattle, Washington, and to
remodel a store in San Diego, California.
Nordstrom is also considering other locations in Texas and the Southwest,
the Midwest, and the Eastern United States for potential store openings. With
respect to any proposed store, it is possible that in one or more instances
store site negotiations may be terminated and the store may not be built, or
delays may occur. Furthermore, environmental and land use regulations and the
difficulties encountered by shopping center developers in securing financing
could make future development of stores more difficult, time-consuming and
expensive.
RELATIONSHIP WITH NORDSTROM
MERCHANT AGREEMENT
Nordstrom and the Bank are parties to a Merchant Agreement and Operating
Procedures dated August 30, 1991 (the "Merchant Agreement") whereby the Bank
issues Accounts through Nordstrom credit cards issued by the Bank for use in
Nordstrom stores. Pursuant to the Merchant Agreement, the Bank pays to Nordstrom
on a daily basis the amount of all charges on Accounts for each such day, less
the amounts of any sales adjustments and less an allowance for amounts to be
written off. The Merchant
4
<PAGE>
Agreement requires that Nordstrom pay a servicing fee to the Bank which may
change from time to time but is currently .25% of the net face amount of each
sale, less any sales adjustments.
OPERATING AGREEMENTS
OPERATING AGREEMENT. Nordstrom Account servicing arrangements are governed
by an Operating Agreement dated August 30, 1991 (the "Operating Agreement")
between the Company and the Bank pursuant to which the Company purchases
Accounts from the Bank for a price equal to the amount of Accounts originated
less an allowance for amounts to be written off. Under the Operating Agreement
the Bank performs the servicing functions for the Accounts and the Company pays
the Bank a servicing fee which may change from time to time but is currently
2.0% of the amount of the Accounts originated. The Bank's servicing
responsibilities include new account processing, authorizing, billing, payment
processing, collection and customer service activities. The Company has
purchased all Accounts originated by the Bank since the Bank's inception.
Prior to August 15, 1996, the Company and the Bank were also parties to an
Operating Agreement for VISA Accounts and Receivables dated May 1, 1994 (the
"VISA Operating Agreement"), under which the Company purchased VISA Accounts
from the Bank under the same terms and conditions as the Operating Agreement
except for the allowance for the amounts to be written off. Amounts written off
were charged to the Company, except amounts written off with respect to sales
occurring at Nordstrom stores, which were indemnified by Nordstrom. Pursuant to
the terms of the VISA Operating Agreement, the Bank performed the servicing
functions for the VISA Accounts and the Company paid the Bank a servicing fee
which was determined on the same basis as the servicing fee for the Accounts.
INVESTMENT AGREEMENT
The Investment Agreement dated October 8, 1984 (the "Investment Agreement")
imposes certain commitments upon Nordstrom, the most stringent of which is to
maintain the Company's ratio of Income Available for Fixed Charges to Fixed
Charges at not less than 1.25:1. "Fixed Charges" are defined in the Investment
Agreement as the interest charges on the aggregate principal amount of all debt
of the Company outstanding during the period. "Income Available for Fixed
Charges" is defined as the net income of the Company determined in accordance
with generally accepted accounting principles, except that the determination is
to be made before any deduction for Fixed Charges or any provisions for taxes in
respect of income. The Investment Agreement requires that Nordstrom retain
ownership of all of the outstanding shares of stock of the Company, and provides
for the subordination of all debt owed by the Company to Nordstrom and its
affiliated companies to debt owed by the Company to unrelated third parties
("Prior Debt"). The Investment Agreement further provides that Nordstrom will
maintain an aggregate amount of investment (including affiliated debt and
shareholder's equity) in the Company of at least $1.00. The Investment Agreement
provides that it may be modified by Nordstrom and the Company provided that if
any modification adversely affects any holders of Prior Debt, the modification
will be effective only upon the consent of 66 2/3% of the holders of Prior Debt.
The Investment Agreement also provides that it may not be terminated until all
of the Company's debt outstanding on the date of the giving of 30 days' notice
of termination has been paid. The Indenture (as defined below) also imposes
limitations on amendments to or termination of the Investment Agreement. See
"Description of Debt Securities-- Certain Covenants of the Company."
The Company has been included in the consolidated income tax returns of
Nordstrom since its formation. Nordstrom prepares and files federal, state and
local income tax returns for and on behalf of the Company. The Company pays to
Nordstrom the amount of income taxes for which the Company would have been
liable if it had filed its own returns. For any year in which the Company has a
loss that reduces the consolidated income tax liability of Nordstrom, the
Company and Nordstrom's other subsidiaries, Nordstrom will pay the Company the
amount of such reduction in tax liability. In the event any adjustment
5
<PAGE>
is made to the federal, state or local tax returns, the liability of Nordstrom
and the Company is to be recomputed and payments will be allocated accordingly.
INTERCOMPANY SERVICES
Nordstrom presently furnishes the following administrative services to the
Company: officer and director liability insurance, and executive, financial,
legal, tax and other corporate staff functions. Nordstrom charges the Company
for the actual costs incurred or a reasonable allocation of Nordstrom's total
cost for such services.
CREDIT ARRANGEMENTS
The Company and Nordstrom do not have any joint borrowing arrangements and
there are no guarantees by Nordstrom of the payment of any debt of the Company.
FINANCING OF THE COMPANY
To finance the purchase of Accounts, the Company has incurred and will incur
indebtedness, including the Debt Securities issued under this Prospectus. The
nature and amount of such indebtedness of the Company will vary from time to
time, depending upon business requirements, market conditions and other factors
of Nordstrom and the Bank. From time to time, Nordstrom has loaned excess funds
to the Company on a short-term basis. The Company has a $300,000,000 unsecured
line of credit with a group of commercial banks with Wells Fargo Bank, N.A., as
agent, which expires on June 30, 2001. Under the terms of this line of credit,
the Company must, among other things, comply with the terms of the Investment
Agreement and the Operating Agreement and maintain a ratio of consolidated total
debt to consolidated tangible net worth at the end of each fiscal quarter no
greater than 7 to 1. This line of credit serves as liquidity support for the
Company's short-term debt. Amounts due to Nordstrom, the Bank, and other
affiliates are subordinated to borrowings under the line of credit agreement.
The Company pays commitment fees for the line in lieu of compensating balance
requirements.
USE OF PROCEEDS
Except as may be set forth in a Prospectus Supplement, the Company intends
to add the net proceeds from the sale of Debt Securities to the general funds of
the Company to be available primarily for the purchase of Accounts. The Company
may also repay short-term borrowings used to purchase Accounts or refinance
portions of outstanding medium-term notes. Pending such uses, the Company may
invest all or a portion of the proceeds in investment grade short-term
instruments.
RATIOS OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges of
the Company and Nordstrom and its subsidiaries for each of the fiscal years
ended 1993 through 1997.
<TABLE>
<CAPTION>
FISCAL YEAR ENDED JANUARY 31,
-----------------------------------------------------
1993 1994 1995 1996 1997
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Company................................................... 1.87 2.09 2.03 1.83 2.14
Nordstrom................................................. 4.41 4.95 6.79 5.14 4.99
</TABLE>
For the purpose of these ratios, earnings consist of earnings before income
taxes plus fixed charges less capitalized interest, as applicable. Fixed charges
consist of interest expense, capitalized interest and the estimated interest
portion of rent expense, as applicable.
6
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The following description sets forth certain general terms and provisions of
the Debt Securities to which any Prospectus Supplement may relate. The
particular terms of the Debt Securities offered by any Prospectus Supplement and
the extent, if any, to which such general provisions may not apply to the Debt
Securities offered will be described in the Prospectus Supplement relating to
such Debt Securities.
The notes, debentures and other evidences of indebtedness (the "Debt
Securities") will be issued under an indenture dated as of , 1997,
(the "Indenture"), between the Company and Norwest Bank Colorado, National
Association, as Trustee (the "Trustee"), and will rank equally with all other
unsecured and unsubordinated indebtedness of the Company. A copy of the
Indenture has been filed as an exhibit to the Registration Statement. The
following description summarizes certain provisions of the Indenture. Whenever
any particular article or section of the Indenture or any term defined therein
is referred to, such article, section or definition is incorporated by
reference, and the statement in connection with which such reference is made is
qualified in its entirety by such reference. Whenever a defined term is
indicated by capital letters, the definition thereof is contained in this
Prospectus or in the Indenture.
GENERAL
The Indenture does not limit the aggregate principal amount of the Debt
Securities which may be issued thereunder and provides that Debt Securities may
be issued from time to time in one or more series. (Section 301) The Debt
Securities will be unsecured obligations of the Company.
A Prospectus Supplement will describe, where applicable, the following terms
of the Debt Securities then being offered: (1) the title of the Debt Securities;
(2) any limit on the aggregate principal amount of the Debt Securities; (3) the
date or dates on which the Debt Securities will mature; (4) the rate or rates or
the method or methods of determining the rate or rates at which the Debt
Securities will bear interest, if any, and the date from which such interest, if
any, will accrue; (5) the dates on which such interest, if any, on the Debt
Securities will be payable and the record dates for such Interest payment dates;
(6) the place or places where principal of (and premium, if any) and interest,
if any, on the Debt Securities shall be payable and, if other than as set forth
in the Indenture, the method or methods of payment; (7) any mandatory or
optional sinking fund or analogous provisions; (8) any redemption terms; (9) any
index or formula used to determine the amount of payments of principal of and
premium, if any, and interest; (10) the portion of the principal amount of the
Debt Securities, if other than the principal amount thereof, payable upon
acceleration of maturity thereof; (11) whether the Debt Securities are to be
issued in whole or in part in the form of one or more Global Security or
Securities, and, if so, the identity of the depositary for such Global Security
or Securities and any special provisions with respect to such Global Security or
Securities; (12) the currency or currencies, including composite currencies, in
which payment of the principal of and any premium and interest on the Securities
of the series shall be payable if other than the currency of the United States
of America; (13) additional events of default, if any; (14) any additional
restrictive covenants included for the benefit of the holders of such Debt
Securities; and (15) any other terms of the Debt Securities not inconsistent
with the provisions of the Indenture. (Section 301)
DENOMINATIONS, REGISTRATION AND TRANSFER
Unless otherwise provided in an applicable Prospectus Supplement with
respect to a series of Debt Securities, Debt Securities will be issued only in
denominations of $1,000 or any integral multiple thereof without coupons. Debt
Securities of any series will be exchangeable for other Debt Securities of the
same series containing identical terms and provisions and of a like aggregate
principal amount and containing identical terms and provisions of different
authorized denominations. Debt Securities may be issuable under the Indenture in
temporary or permanent global form. See "Global Securities."
Unless otherwise indicated in an applicable Prospectus Supplement, the
principal office of the Trustee in the City of Denver will be designated as the
Company's Paying Agent for payments with respect to Debt
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<PAGE>
Securities. Any other Paying Agents in the United States initially designated by
the Company for the Debt Securities will be named in the related Prospectus
Supplement. The Company may at any time designate additional Paying Agents or
rescind the designation of any Paying Agents or approve a change in the office
through which any Paying Agent acts, except that the Company will be required to
maintain a Paying Agent in each Place of Payment for such series. All monies
paid by the Company to a Paying Agent for the payment of principal of and
premium, if any, and interest, if any, on any Debt Security which remains
unclaimed at the end of two years after such principal, premium or interest
shall have become due and payable will be repaid to the Company, and the Holder
of such Debt Security will thereafter look only to the Company for payment
thereof.
GLOBAL SECURITIES
If any Debt Securities are issuable in temporary or permanent global form,
the applicable Prospectus Supplement will describe the circumstances, if any,
under which beneficial owners of interests in any such permanent global Debt
Security may exchange such interests for definitive Debt Securities of such
series and of like tenor and principal amount in any authorized form and
denomination. Principal of and any premium and interest on a permanent global
Debt Security will be payable in the manner described in the applicable
Prospectus Supplement.
CERTAIN COVENANTS OF THE COMPANY
CERTAIN DEFINITIONS APPLICABLE TO COVENANTS. "Subsidiary" of the Company is
defined as a corporation more than 50% of the outstanding voting stock of which
is owned, directly or indirectly, by the Company or by one or more Subsidiaries
of the Company. "Restricted Subsidiary" is defined as a Subsidiary of the
Company substantially all the assets of which are located within, and operating
substantially entirely within, the present 50 states of the United States,
excluding, however, any Subsidiary of the Company designated by the Board of
Directors, provided that at the time of such designation there exists no Event
of Default which has not been cured or waived, and the Company could issue at
least $1.00 of additional Debt secured by a Mortgage, as more fully described
under "Restrictions on Liens and Encumbrances." "Property" is defined as all
tangible and intangible property of the Company and any Restricted Subsidiary,
including rights in and to any such property and accounts (including installment
payment accounts and accounts receivable) owned by the Company or any Restricted
Subsidiary. "Consolidated Net Earnings" is defined as consolidated net earnings
(or deficit) of the Company and its Restricted Subsidiaries determined on a
consolidated basis in accordance with generally accepted accounting principles
excluding net income or loss (a) of a Restricted Subsidiary for any period
during which it was not a Restricted Subsidiary, and (b) of any acquired
business prior to its acquisition. "Consolidated Assets" is defined as the
aggregate amount of assets (less applicable reserves and other properly
deductible items) after deducting all goodwill and like intangibles, as set
forth on the most recent balance sheet of the Company and its consolidated
Subsidiaries. (Section 101)
RESTRICTIONS ON LIENS AND ENCUMBRANCES. The Indenture provides that the
Company may not, nor may it permit any Restricted Subsidiary to, create, assume
or guarantee any loan or evidence of indebtedness for money borrowed ("Debt")
secured by a pledge, mortgage or lien ("Mortgage") on any Property of the
Company or any Restricted Subsidiary, or on any shares of capital stock or Debt
of any Restricted Subsidiary, without securing or causing the Restricted
Subsidiary to secure the Debt Securities and all other securities issued under
the Indenture equally and ratably with (or, at the Company's option, prior to)
such secured Debt, unless the aggregate amount of all Debt secured by Mortgages
would not exceed 15% of Consolidated Assets. (Section 1005)
This restriction does not apply to, and there is excluded from secured Debt
in any computation under such restriction, Debt secured by (1) Mortgages
existing as of the date of the Indenture and securing Debt existing as of the
date of the Indenture; (2) Mortgages on property of, or on any shares of capital
stock of or Debt of, any corporation existing at the time such corporation
becomes a Restricted Subsidiary;
8
<PAGE>
(3) Mortgages in favor of the Company or a Restricted Subsidiary; (4) Mortgages
in favor of governmental bodies to secure progress or advance payments; (5)
Mortgages on property, shares of stock or Debt existing at the time of
acquisition thereof and the related purchase money and construction Mortgages
which are entered into within specified limits; (6) Mortgages securing certain
tax-free obligations issued by a State, territory or possession of the United
States, or any political subdivision of any of the foregoing, or the District of
Columbia to finance the acquisition or construction of property; and (7) any
extension, renewal or refunding of any Mortgage referred to in the foregoing
clauses (1) through (6), inclusive. (Section 1005)
INVESTMENT AGREEMENT. The Indenture provides that the Company (1) will
observe and perform in all material respects all covenants or agreements of the
Company contained in the Investment Agreement; (2) will use its best efforts to
cause Nordstrom to observe and perform in all material respects all covenants or
agreements of Nordstrom contained in such agreement; and (3) will not waive
compliance under, amend in any material respect or terminate such agreement;
provided, however, that such agreement may be amended if as a result there is no
downgrading or revocation of any credit ratings on the Debt Securities or any
other securities of the Company. (Section 1008)
CONSOLIDATION, MERGER AND SALE OF ASSETS. The Company, without the consent
of any Holders of Outstanding Debt Securities, may consolidate or merge with or
into any Person, or transfer or lease its assets substantially as an entirety to
any Person, or may acquire or lease the assets of any Person, provided that: (a)
the successor formed by such consolidation or into which the Company is merged
or which acquires or leases the assets of the Company substantially as an
entirety is organized under the laws of any United States jurisdiction and
assumes the Company's obligations on the Debt Securities and under the
Indenture; (b) after giving effect to the transaction, no Event of Default (and
no event which, after notice or lapse of time or both, would become an Event of
Default) shall have happened and be continuing; and (c) certain other conditions
are met.
EVENTS OF DEFAULT
The following are Events of Default under the Indenture with respect to Debt
Securities of any series: (1) default in the payment of principal of or any
premium on any Debt Securities of that series when due; (2) default in the
payment of any interest on any Debt Securities of that series when due,
continued for 30 days; (3) default in the deposit of any sinking fund payment,
when due, in respect of any Debt Securities of that series; (4) default in the
performance of any other covenant of the Company in the Indenture (other than a
covenant included in the Indenture solely for the benefit of a series of the
Debt Securities other than that series), continued for 60 days after written
notice as provided in the Indenture; (5) default in payment or acceleration of
the Debt Securities of any other series or any other indebtedness for money
borrowed by the Company or any of its Restricted Subsidiaries in excess of
$5,000,000, or a default under any capitalized lease obligation of the Company
or a Restricted Subsidiary under which the Company or a Restricted Subsidiary is
obligated to pay in excess of $5,000,000, or a default under any mortgage or
indenture under which there may be issued or by which there may be secured or
evidenced any indebtedness for money borrowed in excess of $5,000,000 by the
Company or a Restricted Subsidiary if the default is not cured or such
acceleration is not annulled or such indebtedness is not discharged within 10
days after written notice as provided in the Indenture; (6) the entry against
the Company or a Restricted Subsidiary of a final judgment, decree or order by a
court having jurisdiction in the premises for the payment of money in excess of
$5,000,000 and the continuance of such judgment, decree or order unsatisfied and
in effect for any period of 60 consecutive days without a stay of execution; (7)
any Event of Default under the Indenture dated as of November 15, 1984 as
supplemented by First, Second and Third Supplemental Indentures, dated as of
January 15, 1988, June 1, 1989 and October 19, 1990, respectively, between the
Company and Norwest Bank Colorado National Association, as Successor Trustee;
(8) any Event of Default under the Indenture dated December 15, 1983, as amended
or supplemented from time to time, between Nordstrom and Wells Fargo Bank, N.A.,
as Trustee; and (9) certain events in bankruptcy,
9
<PAGE>
insolvency or reorganization. No Event of Default with respect to the Debt
Securities of a particular series necessarily constitutes an Event of Default
with respect to the Debt Securities of any other series. (Section 501)
If an Event of Default with respect to the Debt Securities of any series at
the time outstanding occurs and is continuing, either the Trustee or the Holders
of at least 25 percent in aggregate principal amount of the Outstanding Debt
Securities of that series may declare the principal amount (or, if the Debt
Securities of that series are Original Issue Discount Debt Securities, such
portion of the principal amount as may be specified in the terms of that series)
of all the Debt Securities of that series to be due and payable immediately. At
any time after a declaration of acceleration with respect to Debt Securities of
any series has been made, but before a judgment or decree based on acceleration
has been obtained, the Holders of a majority in principal amount of the
Outstanding Debt Securities of that series may, under certain circumstances,
rescind and annul such acceleration. (Section 502)
The Indenture provides that, subject to the duty of the Trustee during
default to act with the required standard of care, the Trustee is under no
obligation to exercise any of its rights or powers under the Indenture at the
request or direction of any of the Holders, unless such Holders shall have
offered to the Trustee reasonable indemnity. (Section 603) Subject to such
provisions for the indemnification of the Trustee, the Holders of a majority in
principal amount of the Outstanding Debt Securities of any series have the right
to direct the time, method and place of conducting any proceeding for any remedy
available to the Trustee, or exercising any trust or power conferred on the
Trustee, with respect to the Debt Securities of that series, and to waive
certain defaults. The Trustee, with respect to the direction of the time, method
and place of conducting any proceeding for any remedy available to the Trustee,
or exercising any trust or power conferred on the Trustee, or the Company, with
respect to waiving any default, may set a record date for any Act of the
Holders. (Sections 512 and 513)
The right of a Holder of any Debt Securities to institute a proceeding with
respect to the Indenture is subject to certain conditions precedent, but each
Holder has an absolute right to receive payment of principal or premium and
interest, if any, when due and to institute suit for the enforcement of any such
payment. (Sections 507 and 508) The Indenture provides that the Trustee, within
90 days after the occurrence of a default with respect to the Debt Securities of
any series, is required to give the Holders of such Debt Securities notice of
such default, unless cured or waived; provided that, except in the case of
default in the payment of principal, or premium or interest, if any, or in the
payment of any sinking fund installment, the Trustee may withhold such notice if
it determines it is in the interest of such Holders to do so. (Section 602)
The Company will be required to furnish to the Trustee annually a statement
as to the performance by the Company of certain of its obligations under the
Indenture and as to any default in such performance. (Section 1008)
MODIFICATION OF THE INDENTURE
Modifications and amendments of the Indenture may be made by the Company and
the Trustee, with the consent of the Holders of not less than a majority in
aggregate principal amount of all series of the outstanding Debt Securities
issued under the Indenture which are affected by the modification or amendment,
provided that no such modification or amendment may, without the consent of each
Holder of such Debt Securities affected thereby, (1) change the stated maturity
date of the principal of, or any installment of principal of or interest on, any
such Debt Security; (2) reduce the principal amount of, the rate of interest on,
or any premium payable upon redemption of, any such Debt Security or the
principal amount due upon acceleration of an Original Issue Discount Security;
(3) change the place or currency of payment of principal (or premium, if any) or
interest, if any, on any such Debt Security; (4) impair the right to institute
suit for the enforcement of any such payment on or with respect to any such Debt
Security; (5) reduce the above-stated percentage of Holders necessary to modify
or amend the Indenture; or
10
<PAGE>
(6) modify the foregoing requirements or reduce the percentage of outstanding
Debt Securities necessary to waive compliance with certain provisions of the
Indenture or for waiver of certain defaults. The Company may set a record date
for any Act of the Holders with respect to consenting to any amendment. (Section
902)
SATISFACTION AND DISCHARGE OF INDENTURES
The Indenture generally provides that the Company may terminate certain of
its obligations under the Debt Securities of any series and under the Indenture
(with respect to such series) if (1) all of the Debt Securities of such series
previously authenticated and delivered (other than lost, destroyed or stolen
Debt Securities that have been replaced or paid or for whose payment money has
been deposited in trust) have been delivered to the Trustee for cancellation and
the Company has paid all sums payable by it thereunder, (2) such Debt Securities
of such series have matured or will mature within one year or all of them are to
be called for redemption within one year under arrangements satisfactory to the
Trustee for giving the notice of redemption and the Company irrevocably deposits
with the Trustee money or U.S. Government Obligations sufficient to pay
principal of, premium, if any, and interest on the Outstanding Debt Securities
of such series that are due or will become due upon redemption or maturity, as
the case may be, and to pay all other sums payable by it thereunder or (3) upon
compliance with certain conditions specified in the Indenture, 123 days after
the Company makes the deposit with the Trustee of money or U.S. Government
Obligations specified in clause (2). In such case, Holders of the Debt
Securities must look to the deposited money for payment. (Section 401)
The Indenture further provides that if the Company has made the election
provided by clause (3) above, it may elect either (a) to defease and be
discharged from any and all obligations with respect to the Debt Securities of
such series, except for the obligations to register the transfer or exchange of
such Debt Securities, to replace temporary or mutilated, destroyed, lost or
stolen Debt Securities, to maintain an office or agency in respect of the Debt
Securities, and to hold moneys for payment in trust ("legal defeasance") or (b)
to be released from its obligations with respect to the Debt Securities of such
series under the covenant default (except with respect to the covenant to pay
principal and interest) and cross-acceleration provisions under "Events of
Default" and from the restrictions described under certain covenants in the
Indenture, including "Restrictions on Liens and Encumbrances" and "Investment
Agreement" ("covenant defeasance"). As a condition to legal defeasance or
covenant defeasance, the Company must deliver to the Trustee an opinion of
counsel (as specified in the Indenture) to the effect that the Holders of the
Debt Securities of such series will not recognize income, gain or loss for
United States Federal income tax purposes as a result of such legal defeasance
or covenant defeasance and will be subject to United States Federal income tax
on the same amounts, in the same manner and at the same times as would have been
the case if such legal defeasance or covenant defeasance had not occurred. In
the case of legal defeasance under clause (a) or covenant defeasance under
clause (b) above, a ruling of the Internal Revenue Service may be delivered in
lieu of such opinion. (Section 401)
Under current United States Federal income tax law, legal defeasance would
likely be treated as a taxable exchange of such Debt Securities for interests in
the defeasance trust. As a consequence, a Holder would recognize gain or loss
equal to the difference between the Holder's tax basis for such Debt Securities
and the value of the Holder's interest in the defeasance trust, and thereafter
would be required to include in income its share of the income, gain and loss of
the defeasance trust. Under current Federal income tax law, covenant defeasance
would likely not be treated as a taxable exchange of such Debt Securities.
Purchasers of such Debt Securities should consult their tax advisors with
respect to the more particular tax consequences to them of such legal defeasance
and covenant defeasance, including the applicability and effect of United States
Federal income and other tax law.
The Company may exercise its legal defeasance option with respect to the
Debt Securities of such series, notwithstanding its prior exercise of its
covenant defeasance option. If the Company exercises its legal defeasance
option, payment of such Debt Securities may not be accelerated because of an
Event of
11
<PAGE>
Default. If the Company exercises its covenant defeasance option, payment of
such Debt Securities may not be accelerated because of the covenant default
(except with respect to the covenant to pay principal and interest) and
cross-acceleration provisions or certain of the covenants, including those noted
under clause (b) above. However, if such an acceleration were to occur because
of other defaults, the realizable value at the acceleration date of the money
and U.S. Government Obligations in the defeasance trust could be less than the
principal and interest then due on such Debt Securities, because the required
deposit in the defeasance trust is based upon scheduled cash flows rather than
market value, which will vary depending upon interest rates and other factors.
(Section 401)
The term "U.S. Government Obligations" is defined to mean direct obligations
of the United States for the payment of which its full faith and credit is
pledged, or obligations of a person controlled or supervised by and acting as an
agency or instrumentality of the United States and the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States which, in either case, are not callable or redeemable at the option of
the issuer thereof, and shall also include a depositary receipt issued by a bank
(as defined in Section 3(a)(2) of the Securities Act) as custodian with respect
to any such U.S. Government Obligations or a specific payment of principal of or
interest on any such U.S. Government Obligations held by such custodian for the
account of the holder of such depositary receipt, provided that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depositary receipt from any amount received
by the custodian with respect to the U.S. Government Obligations or the specific
payment of principal of or interest on the U.S. Government Obligations evidenced
by such depositary receipt. (Section 101)
CONCERNING THE TRUSTEE
Under the provisions of the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act"), upon the occurrence and continuance of a default under
an indenture, if a trustee has a conflicting interest (as defined in the Trust
Indenture Act) the trustee must, within 90 days, either eliminate such
conflicting interest or resign. Under the provisions of the Trust Indenture Act,
an indenture trustee shall be deemed to have a conflicting interest if, upon the
occurrence of a default under the indenture, the trustee is a creditor of the
obligor. If the trustee fails either to eliminate the conflicting interest or to
resign within 10 days after the expiration of such 90-day period, the trustee is
required to notify security holders to this effect and any security holder who
has been a bona fide holder for at least six months may petition a court to
remove the trustee and to appoint a successor trustee.
PLAN OF DISTRIBUTION
The Company may sell Debt Securities to or through underwriters, and also
may sell Debt Securities directly to other purchasers or through agents. Such
underwriters may include one or more firms, or may be a group of underwriters
represented by firms including one or more of such firms. Such firms may also
act as agents.
The distribution of the Debt Securities may be effected from time to time in
one or more transactions at a fixed price or prices, which may be changed, or at
market prices prevailing at the time of sale, at prices related to such
prevailing market prices or at negotiated prices.
In connection with the sale of Debt Securities, underwriters may receive
compensation from the Company or from purchasers of Debt Securities for whom
they may act as agents in the form of discounts, concessions or commissions.
Underwriters may sell Debt Securities to or through dealers, and such dealers
may receive compensation in the form of discounts, concessions or commissions
from the underwriters and/or commissions from the purchasers for whom they may
act as agents. Underwriters, dealers and agents that participate in the
distribution of Debt Securities may be deemed to be underwriters, and any
discounts or commissions received by them from the Company and any profit on the
resale of Debt Securities by them may be deemed to be underwriting discounts and
commissions under the Act. Any such
12
<PAGE>
underwriter or agent will be identified, and any such compensation received from
the Company will be described, in the Prospectus Supplement.
Under agreements which may be entered into by the Company, underwriters and
agents who participate in the distribution of Debt Securities may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Act.
If so indicated in the Prospectus Supplement, the Company will authorize
underwriters or other persons acting as the Company's agents to solicit offers
by certain institutions to purchase Debt Securities from the Company pursuant to
contracts providing for payment and delivery on a future date. Institutions with
which such contracts may be made include commercial and savings banks, insurance
companies, pension funds, investment companies, educational and charitable
institutions and others, but in all cases such institutions must be approved by
the Company. The obligations of any purchaser under any such contract will be
subject to the condition that the purchase of the offered Debt Securities shall
not at the time of delivery be prohibited under the laws of the jurisdiction to
which such purchaser is subject. The underwriters and such other agents will not
have any responsibilities in respect of the validity or performance of such
contracts.
Each series of Debt Securities will be a new issue of securities with no
established trading market. Any underwriters or agents to or through whom Debt
Securities are sold by the Company for public offering and sale may make a
market in such Debt Securities, but such underwriters or agents will not be
obligated to do so and may discontinue any market making at any time without
notice. No assurance can be given as to the liquidity of the trading market for
any Debt Securities.
LEGAL OPINIONS
The legality of the Debt Securities will be passed upon by Lane Powell
Spears Lubersky LLP, 1420 Fifth Avenue, Suite 4100, Seattle, Washington
98101-2338. D. Wayne Gittinger, a director of Nordstrom, is a partner in the
firm of Lane Powell Spears Lubersky LLP. At January 31, 1997 members of that
firm owned directly or indirectly an aggregate of approximately 5,300,000 shares
of common stock of Nordstrom.
EXPERTS
The financial statements and related financial statement schedule
incorporated in this Prospectus by reference from the Company's Annual Report on
Form 10-K have been audited by Deloitte & Touche LLP, independent auditors, as
stated in their report, which is incorporated herein by reference, and have been
so incorporated in reliance upon the report of such firm given upon their
authority as experts in accounting and auditing.
13
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION.
Set forth below is an itemized statement of the amounts of all expenses in
connection with the sale and distribution of the Debt Securities registered
hereby. Except for the registration fee, all such amounts are estimates.
<TABLE>
<S> <C>
Registration Fee................................................... $ 75,758
Printing and engraving.............................................
Legal fees and expenses............................................
Accountants' fees and expenses.....................................
Trustee's and authenticating agent's fees and expenses.............
Rating Agencies' fees..............................................
Blue Sky fees and expenses.........................................
Miscellaneous......................................................
---------
Total.......................................................... $
---------
---------
</TABLE>
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS.
Under the provisions of the Company's bylaws, the Company shall indemnify
against liabilities and expenses incurred in any proceeding an individual made a
party to the proceeding because the party is or was a director or officer of the
Company. These indemnification provisions contain certain limitations and
standards, including that (i) the individual conducted himself in good faith,
(ii) he reasonably believed: (a) in the case of conduct in his official capacity
with the Company, that his conduct was in the Company's best interests; or (b)
in all other cases, that his conduct was at least not opposed to the Company's
best interests, and (iii) in the case of any criminal proceedings, he had no
reasonable cause to believe his conduct was unlawful. The Company may not
indemnify a director or officer either (i) in connection with a proceeding by or
in the right of the Company in which the director or officer was adjudged liable
to the Company; or (ii) in connection with any proceeding charging improper
personal benefit to the director or officer, whether or not involving action in
his official capacity, in which he was adjudged liable on the basis that
personal benefit was improperly received by him.
Any indemnification of or advance of expenses to a director or officer
arising out of a proceeding by or on behalf of the Company must be reported in
writing to shareholders with or before notice of the next shareholders' meeting.
These provisions are not exclusive of any other rights of indemnification to
which those seeking indemnification may be entitled under any agreement, vote of
shareholders or directors, or otherwise. Nordstrom carries directors' and
officers' liability insurance which generally insures officers and directors of
the Company against certain liabilities by reason of certain acts and omissions
in connection with their duties for the Company.
Further, the Company's Articles of Incorporation eliminate the personal
liability of a director to the Company or its shareholders for monetary damage
for breach of fiduciary duty as a director, except for (i) breach of the
director's duty of loyalty to the Company or its shareholders; (ii) acts or
omissions not in good faith, or which involve intentional misconduct or a
knowing violation of law; (iii) acts specified under Section 7-5-114 of the
Colorado Corporation Code; or (iv) any transaction from which the director
derived an improper personal benefit.
Any underwriters, dealers or agents referred to in the agreement filed as
Exhibit 1.1 to this Registration Statement will agree to indemnify the Company's
directors, its officers who signed the Registration Statement and its
controlling persons against certain liabilities which might arise under the
Securities Act from information furnished to the Company by or on behalf of any
such indemnifying party.
II-1
<PAGE>
ITEM 16. EXHIBITS.
<TABLE>
<C> <S>
*1.1 Form of Distribution Agreement
4.1 Indenture dated as of , 1997 between Registrant and Norwest Bank Colorado,
National Association, as Trustee
*4.2 Form of Debt Security
*5.1 Opinion of Lane Powell Spears Lubersky LLP, counsel to the Registrant
12.1 Statement regarding computation of ratio of earnings to fixed charges of Nordstrom
12.2 Statement regarding computation of ratio of earnings to fixed charges of Registrant
*23.1 The consent of Lane Powell Spears Lubersky LLP is contained in their opinion filed as
Exhibit 5.1 to this Registration Statement
23.2 Consent of Deloitte & Touche LLP, independent auditors
24.1 A power of attorney is contained on the signature page of this Registration Statement
*25.1 Form T-1, Statement of Eligibility and Qualification of Norwest Bank Colorado,
National Association, as Trustee under the Trust Indenture Act of 1939
</TABLE>
- ------------------------
* To be filed by Amendment
ITEM 17. UNDERTAKINGS.
The undersigned Registrant hereby undertakes:
1. To file, during any period in which offers or sales are being made,
a post-effective amendment to this Registration Statement:
(a) To include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933, unless the information required to be included in
such post-effective amendment is contained in a periodic report filed by
Registrant pursuant to Section 13 or Section 15(d) of the Securities
Exchange Act of 1934 and incorporated herein by reference;
(b) To reflect in the Prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement, unless the information required to be
included in such post-effective amendment is contained in a periodic
report filed by Registrant pursuant to Section 13 or Section 15(d) of the
Securities Exchange Act of 1934 and incorporated herein by reference.
Notwithstanding the foregoing, any increase or decrease in volume of
securities offered (if the total dollar value of securities offered would
not exceed that which was registered) and any deviation from the low or
high end of the estimated maximum offering range may be reflected in the
form of prospectus filed with the Commission pursuant to Rule 424(b) if,
in the aggregate, the changes in volume and price represent no more than
a 20% change in the maximum aggregate offering price set forth in the
"Calculation of Registration Fee" table in the effective registration
statement; and
(c) To include any material information with respect to the plan of
distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement.
2. That, for the purpose of determining any liability under the
Securities Act of 1933, each such post-effective amendment shall be deemed
to be a new registration statement relating to the securities
II-2
<PAGE>
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof;
3. To remove from registration by means of a post-effective amendment
any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act of 1933, each filing of the
registrant's annual report pursuant to Section 13(a) or 15(d) of the Securities
Exchange Act of 1934 (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Securities Exchange Act of
1934) that is incorporated by reference in the registration statement shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the foregoing provisions referred to in Item 15 above, or
otherwise, the Registrant has been advised that in the opinion of the Securities
and Exchange Commission such indemnification is against public policy as
expressed in the Act and is, therefore, unenforceable. In the event that a claim
for indemnification against such liabilities (other than the payment by the
Registrant of expenses incurred or paid by a director, officer or controlling
person of the Registrant in the successful defense of any action, suit or
proceeding) is asserted by such director, officer or controlling person in
connection with the securities being registered, the Registrant will, unless in
the opinion of its counsel the matter has been settled by controlling precedent,
submit to a court of appropriate jurisdiction the question of whether or not
such indemnification by it is against public policy as expressed in the Act and
will be governed by the final adjudication of such issue.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, the Registrant
certifies that it has reasonable grounds to believe that it meets all the
requirements for filing on Form S-3 and has duly caused this registration
statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in the city of Englewood, state of Colorado on the 7th day of April,
1997.
<TABLE>
<S> <C> <C>
NORDSTROM CREDIT, INC.
By: /s/ JOHN C. WALGAMOTT
-----------------------------------------
John C. Walgamott, PRESIDENT
</TABLE>
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints John C. Walgamott and John A. Goesling, jointly
and severally, his attorneys-in-fact, each with full power of substitution, for
him in any and all capabilities, to such any amendments to this Registration
Statement, and to file the same, with exhibits thereto and other documents in
connection therewith, with the Securities and Exchange Commission, hereby
ratifying and confirming all that each of said attorneys-in-fact, or his
substitute or substitutes, may do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, this
registration statement has been signed on April 7, 1997, by the following
persons in the capacities indicated:
<TABLE>
<CAPTION>
SIGNATURES TITLE
- ------------------------------ --------------------------
<C> <S> <C>
/s/ JOHN C. WALGAMOTT
- ------------------------------ President (Principal
John C. Walgamott Executive Officer)
Executive Vice President
/s/ JOHN A. GOESLING and Treasurer (Principal
- ------------------------------ Financial and Accounting
John A. Goesling Officer)
/s/ JOHN C. WALGAMOTT
- ------------------------------ Director
John C. Walgamott
/s/ JOHN A. GOESLING
- ------------------------------ Director
John A. Goesling
/s/ JOHN J. WHITACRE
- ------------------------------ Director
John J. Whitacre
</TABLE>
II-4
<PAGE>
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
EXHIBIT DESCRIPTION
- ----------- ---------------------------------------------------------------------------------------------------------
<C> <S>
*1.1 Form of Distribution Agreement
4.1 Indenture dated as of , 1997 between Registrant and Norwest Bank Colorado, National
Association, as Trustee
*4.2 Form of Debt Security
*5.1 Opinion of Lane Powell Spears Lubersky LLP, counsel to the Registrant
12.1 Statement regarding computation of ratio of earnings to fixed charges of Nordstrom
12.2 Statement regarding computation of ratio of earnings to fixed charges of Registrant
*23.1 The consent of Lane Powell Spears Lubersky LLP is contained in their opinion filed as Exhibit 5.1 to this
Registration Statement
23.2 Consent of Deloitte & Touche LLP, independent auditors
24.1 A power of attorney is contained on the signature page of this Registration Statement
*25.1 Form T-1, Statement of Eligibility and Qualification of Norwest Bank Colorado, National Association, as
Trustee under the Trust Indenture Act of 1939
</TABLE>
- ------------------------
* To be filed by Amendment
<PAGE>
NORDSTROM CREDIT, INC.
TO
NORWEST BANK COLORADO, NATIONAL ASSOCIATION
TRUSTEE
------------------------------------
INDENTURE
------------------------------------
Dated as of __________________, 1997
<PAGE>
Reconciliation and tie between Trust Indenture Act of 1939 and Indenture,
dated as of __________________, 1997.
Trust Indenture
Act Section Indenture Section
--------------- -----------------
Section 310(a)(1) 609
(a)(2) 609
(a)(3) Not Applicable
(a)(4) Not Applicable
(b) 608
610
Section 311(a) 613(a)
(b) 613(b)
(b)(2) 703(a)(2)
703(b)
Section 312(a) 701
(b) 702(a)
(c) 702(b)
702(c)
Section 313(a) 703(b)
(b) 703(b)
(c) 703(a), 703(b)
(d) 703(c)
Section 314(a) 704
(b) Not Applicable
(c)(1) 102
(c)(2) 102
(c)(3) Not Applicable
(d) Not Applicable
(e) 102
Section 315(a) 601(a)
(b) 602
703(a)(6)
(c) 601(b)
(d) 601(c)
(d)(1) 601(a)(1)
(d)(2) 601(c)(2)
(d)(3) 601(c)(3)
(e) 514
Section 316(a) 101
(a)(1)(A) 502
512
(a)(1)(B) 513
(a)(2) Not Applicable
<PAGE>
Trust Indenture
Act Section Indenture Section
--------------- -----------------
(b) 508
Section 317(a)(1) 503
(a)(2) 504
(b) 1003
Section 318(a) 107
NOTE: This reconciliation and tie shall not, for any purpose, be deemed
to be a part of the Indenture.
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.............................................. 1
SECTION 102. Compliance Certificates and Opinions..................... 7
SECTION 103. Form of Documents Delivered to Trustee................... 8
SECTION 104. Acts of Holders.......................................... 8
SECTION 105. Notices, Etc., to Trustee and Company.................... 9
SECTION 106. Notice to Holders; Waiver................................ 10
SECTION 107. Conflict With Trust Indenture Act........................ 10
SECTION 108. Effect of Headings and Table of Contents................. 10
SECTION 109. Successors and Assigns................................... 10
SECTION 110. Separability Clause...................................... 10
SECTION 111. Benefits of Indenture.................................... 11
SECTION 112. Governing Law............................................ 11
SECTION 113. Legal Holidays........................................... 11
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally. . . . . . . . . . . . . . . . . . . . . .11
SECTION 202. Form of Trustee's Certificate of Authentication. . . . . .12
SECTION 203. Additional Provisions Required in Global Security. . . . .12
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series . . . . . . . . . . .13
SECTION 302. Denominations. . . . . . . . . . . . . . . . . . . . . . .15
SECTION 303. Execution, Authentication, Delivery and Dating . . . . . .15
SECTION 304. Temporary Securities . . . . . . . . . . . . . . . . . . .16
SECTION 305. Registration, Registration of Transfer and Exchange. . . .17
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities . . . . .18
SECTION 307. Payment of Interest; Interest Rights Preserved . . . . . .19
SECTION 308. Persons Deemed Owners. . . . . . . . . . . . . . . . . . .20
SECTION 309. Cancellation . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 310. Computation of Interest. . . . . . . . . . . . . . . . . .21
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ARTICLE FOUR
DISCHARGE OF INDENTURE
SECTION 401. Termination of Company's Obligations . . . . . . . . . . .21
SECTION 402. Application of Trust Money . . . . . . . . . . . . . . . .24
SECTION 403. Repayment to Company . . . . . . . . . . . . . . . . . . .24
SECTION 404. Reinstatement. . . . . . . . . . . . . . . . . . . . . . .24
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default. . . . . . . . . . . . . . . . . . . . .24
SECTION 502. Acceleration of Maturity; Rescission and Annulment . . . .27
SECTION 503. Collection of Indebtedness and Suits for Enforcement by
Trustee. . . . . . . . . . . . . . . . . . . . . . . . . .27
SECTION 504. Trustee May File Proofs of Claim . . . . . . . . . . . . .28
SECTION 505. Trustee May Enforce Claims Without Possession of
Securities . . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 506. Application of Money Collected . . . . . . . . . . . . . .29
SECTION 507. Limitation on Suits. . . . . . . . . . . . . . . . . . . .30
SECTION 508. Unconditional Right of Holders to Receive Principal,
Premium and Interest . . . . . . . . . . . . . . . . . . .31
SECTION 509. Restoration of Rights and Remedies . . . . . . . . . . . .31
SECTION 510. Rights and Remedies Cumulative . . . . . . . . . . . . . .31
SECTION 511. Delay or Omission Not Waiver . . . . . . . . . . . . . . .32
SECTION 512. Control by Holders . . . . . . . . . . . . . . . . . . . .32
SECTION 513. Waiver of Past Defaults. . . . . . . . . . . . . . . . . .33
SECTION 514. Undertaking for Costs. . . . . . . . . . . . . . . . . . .33
SECTION 515. Waiver of Stay or Extension Laws . . . . . . . . . . . . .34
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities. . . . . . . . . . . .34
SECTION 602. Notice of Defaults . . . . . . . . . . . . . . . . . . . .35
SECTION 603. Certain Rights of Trustee. . . . . . . . . . . . . . . . .35
SECTION 604. Not Responsible for Recitals or Issuance of Securities . .36
SECTION 605. May Hold Securities. . . . . . . . . . . . . . . . . . . .37
SECTION 606. Money Held in Trust. . . . . . . . . . . . . . . . . . . .37
SECTION 607. Compensation and Reimbursement . . . . . . . . . . . . . .37
SECTION 608. Disqualification; Conflicting Interests. . . . . . . . . .37
SECTION 609. Corporate Trustee Required; Eligibility. . . . . . . . . .42
SECTION 610. Resignation and Removal; Appointment of Successor. . . . .43
SECTION 611. Acceptance of Appointment by Successor . . . . . . . . . .44
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SECTION 612. Merger, Conversion, Consolidation or Succession to
Business . . . . . . . . . . . . . . . . . . . . . . . . .45
SECTION 613. Preferential Collection of Claims Against Company. . . . .46
SECTION 614. Appointment of Authenticating Agent. . . . . . . . . . . .49
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of
Holders. . . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 702. Preservation of Information; Communications to Holders . .51
SECTION 703. Reports by Trustee . . . . . . . . . . . . . . . . . . . .53
SECTION 704. Reports by Company . . . . . . . . . . . . . . . . . . . .53
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms . . .54
SECTION 802. Successor Corporation Substituted. . . . . . . . . . . . .55
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders . . . .55
SECTION 902. Supplemental Indentures with Consent of Holders. . . . . .56
SECTION 903. Execution of Supplemental Indentures . . . . . . . . . . .57
SECTION 904. Effect of Supplemental Indentures. . . . . . . . . . . . .58
SECTION 905. Conformity with Trust Indenture Act. . . . . . . . . . . .58
SECTION 906. Reference in Securities to Supplemental Indentures . . . .58
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest . . . . . . . .58
SECTION 1002. Maintenance of Office or Agency. . . . . . . . . . . . . .58
SECTION 1003. Money for Securities Payments to be Held in Trust. . . . .59
SECTION 1004. Corporate Existence. . . . . . . . . . . . . . . . . . . .60
SECTION 1005. Restrictions on Liens and Encumbrances . . . . . . . . . .60
SECTION 1006. Investment Agreement . . . . . . . . . . . . . . . . . . .62
SECTION 1007. Statement as to Compliance . . . . . . . . . . . . . . . .62
SECTION 1008. Waiver of Certain Covenants. . . . . . . . . . . . . . . .62
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article . . . . . . . . . . . . . . . . .62
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SECTION 1102. Election to Redeem; Notice to Trustee. . . . . . . . . . .62
SECTION 1103. Selection by Trustee of Securities to be Redeemed. . . . .63
SECTION 1104. Notice of Redemption . . . . . . . . . . . . . . . . . . .63
SECTION 1105. Deposit of Redemption Price. . . . . . . . . . . . . . . .64
SECTION 1106. Securities Payable on Redemption Date. . . . . . . . . . .64
SECTION 1107. Securities Redeemed in Part. . . . . . . . . . . . . . . .65
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article . . . . . . . . . . . . . . . . .65
SECTION 1202. Satisfaction of Sinking Fund Payments with
Securities . . . . . . . . . . . . . . . . . . . . . . . .65
SECTION 1203. Redemption of Securities for Sinking Fund. . . . . . . . .66
iv
<PAGE>
INDENTURE, dated as of ___________________, 1997, between Nordstrom Credit,
Inc., a corporation duly organized and existing under the laws of the State of
Colorado (herein called the "Company"), having its principal office at 13531
East Caley Avenue, Englewood, Colorado 80111, and Norwest Bank Colorado,
National Association, a national banking association duly organized and existing
under the laws of the United States, as Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness (herein called the
"Securities"), to be issued in one or more series as in this Indenture provided.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed, for the equal and
proportionate benefit of all Holders of the Securities or of any series thereof,
as follows:
ARTICLE ONE
DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
SECTION 101. Definitions.
For all purposes of this Indenture, except as otherwise expressly provided
or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined herein have the
meanings assigned to them in this Indenture;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them from time to time in accordance with generally
accepted accounting principles; and
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(4) the words "herein," "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act," when used with respect to any Holder, has the meaning specified in
Section 104.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Authenticating Agent" means any Person authorized by the Trustee to act on
behalf of the Trustee to authenticate Securities.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board.
"Board Resolution" means a copy of a resolution certified by the Secretary
or an Assistant Secretary of the Company to have been duly adopted by the Board
of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and Friday
which is not a day on which banking institutions in that Place of Payment are
authorized or obligated by law to close.
"Commission" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, or, if at
any time after the execution of this instrument such Commission is not existing
and performing the duties now assigned to it under the Trust Indenture Act, then
the body performing such duties on such date.
"Company" means the Person named as the "Company" in the first paragraph of
this Indenture until a successor corporation shall have become such pursuant to
the applicable provisions of this Indenture and thereafter "Company" shall mean
such successor corporation.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board or a Co-Chairman,
its President or a Vice President, and by its Treasurer or an Assistant
Treasurer, its Controller or an Assistant Controller, its Secretary or an
Assistant Secretary, and delivered to the Trustee.
"Consolidated Assets" means the aggregate amount of assets (less applicable
reserves and other properly deductible items) after deducting therefrom all
goodwill, trade names, trademarks,
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patents, organization expenses and other like intangibles, all as set forth on
the most recent balance sheet of the Company and its consolidated Subsidiaries
and computed in accordance with generally accepted accounting principles.
"Corporate Trust Office" means the principal office of the Trustee at which
at any particular time its corporate trust business shall be administered,
except that with respect to the presentation of Securities for payment or for
registration of transfer or exchange and the location of the Security Registrar,
such term means the office or agency of the Trustee at which, at any particular
time, its corporate agency business shall be conducted.
"corporation" includes corporations, associations, companies and business
trusts.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, with respect to the Securities of any series issuable
or issued in whole or in part in the form of one or more Global Securities, the
Person designated as Depositary by the Company pursuant to Section 301.
"Eligible Instruments" means U.S. Government Obligations which are deemed
eligible under Statement of Financial Accounting Standards No. 76,
Extinguishment of Debt, as amended from time to time, or any successor statement
or pronouncement.
"Event of Default" has the meaning specified in Section 501.
"Global Security" and "Global Securities" mean a Security or Securities
evidencing all or part of a series of Securities, issued to the Depositary for
such Series or its nominee, and registered in the name of such Depositary or its
nominee.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may from
time to time be supplemented or amended by one or more indentures supplemental
hereto entered into pursuant to the applicable provisions hereof and shall
include any Officers' Certificates setting forth the form and terms of
particular series of Securities as contemplated by Sections 201 and 301.
"Interest," when used with respect to an Original Issue Discount Security
which by its terms bears interest only after Maturity, means interest payable
after Maturity.
"Interest Payment Date," when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"Maturity," when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or
3
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herein provided, whether at the Stated Maturity or by declaration of
acceleration, call for redemption, exercise of option for repayment or
otherwise.
"Nordstrom" means Nordstrom, Inc., a Washington corporation, and any
successor corporation.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board or a Co-Chairman, the President or a Vice President, and by the Treasurer
or an Assistant Treasurer, the Secretary or an Assistant Secretary, of the
Company, and delivered to the Trustee.
"Opinion of Counsel" means a written opinion of counsel, who may be regular
counsel for the Company, or may be other counsel acceptable to the Trustee.
"Original Issue Discount Security" means any Security which provides for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section 502.
"Outstanding," when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore canceled by the Trustee or delivered
to the Trustee for cancellation;
(ii) Securities or portions thereof for whose payment or
redemption money in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent (other than the Company) in trust or
set aside and segregated in trust by the Company (if the Company shall act
as its own Paying Agent) for the Holders of such Securities; provided that,
if such Securities or portions thereof are to be redeemed, notice of such
redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made; and
(iii) Securities which have been paid pursuant to Section 306 or
in exchange for or in lieu of which other Securities have been
authenticated and delivered pursuant to this Indenture, other than any such
Securities in respect of which there shall have been presented to the
Trustee proof satisfactory to it that such Securities are held by a bona
fide purchaser in whose hands such Securities are valid obligations of the
Company;
provided, however that in determining whether the Holders of the requisite
principal amount of Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder (i) the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding shall be the amount of the principal thereof that would be due and
payable as of the date of such determination upon acceleration of the Maturity
thereof pursuant to Section 502, (ii) the principal amount of a Security
denominated in a foreign currency or a composite currency shall be the U.S.
dollar equivalent, determined on the date of
4
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original issuance of such Security by the Company in good faith, of the
principal amount of such Security (or, in the case of an Original Issue Discount
Security, the U.S. dollar equivalent, determined on the date of original
issuance of such Security by the Company in good faith, of the amount determined
as provided in (i) above), of such Security, and (iii) Securities owned by the
Company or any other obligor upon the Securities or any Affiliate of the Company
or of such other obligor shall be disregarded and deemed not to be Outstanding,
except that, in determining whether the Trustee shall be protected in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Securities which the Trustee knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as Outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company or any other obligor upon the Securities or any
Affiliate of the Company or such other obligor.
"Paying Agent" means any Person authorized by the Company to pay the
principal of (and premium, if any) or interest, if any, on any Security on
behalf of the Company.
"Person" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"Place of Payment," when used with respect to the Securities of any series,
means the place or places where the principal of (and premium, if any) and
interest, if any, on the Securities of that series are payable as specified as
contemplated in Section 301 or, if not so specified, as specified in
Section 1002.
"Predecessor Security" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in lieu of a mutilated, destroyed,
lost or stolen Security shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Security.
"Property" means all tangible and intangible property of the Company and
any Restricted Subsidiary, including all rights in and to any such property and
any accounts (including installment payment accounts and accounts receivable)
owned by the Company or any Restricted Subsidiary.
"Redemption Date," when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"Redemption Price," when used with respect to any Security to be redeemed,
means the price at which it is to be redeemed pursuant to this Indenture.
5
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"Regular Record Date" for the interest payable on any Interest Payment Date
on the Securities of any series means the date specified for that purpose as
contemplated by Section 301.
"Repayment Date," when used with respect to any Security to be repaid upon
exercise of option for repayment by the Holder, means the date fixed for such
repayment pursuant to this Indenture.
"Repayment Price," when used with respect to any Security to be repaid upon
exercise of option for repayment by the Holder, means the price at which it is
to be repaid pursuant to this Indenture.
"Responsible Officer," when used with respect to the Trustee, means the
Chairman or any Vice Chairman of the board of directors, the Chairman or any
Vice Chairman of the executive committee of the board of directors, the Chairman
of the trust committee, the President, any Vice President, the Secretary, any
Assistant Secretary, the Treasurer, any Assistant Treasurer, the Cashier, any
Assistant Cashier, any Trust Officer or Assistant Trust Officer, the Controller
or any Assistant Controller or any other officer of the Trustee customarily
performing functions similar to those performed by any of the above designated
officers and also means, with respect to a particular corporate trust matter,
any other officer to whom such matter is referred because of his knowledge of
and familiarity with the particular subject.
"Restricted Subsidiary" means as to a particular parent corporation, any
Subsidiary organized under the laws of the United States of America or any state
thereof, and having substantially all of its assets located within, and
operating substantially entirely within, the present 50 states of the United
States, except a Subsidiary may be designated as an unrestricted Subsidiary by
the Board of Directors of the Company, provided that at the time of such
designation there exists no Event of Default which has not been cured or waived,
and the Company could incur at least $1.00 of additional Debt under Section 1005
after giving effect to such designation. Notice of such designation shall be
given to the Trustee.
"Securities" has the meaning stated in the first recital of this Indenture
and more particularly means any Securities authenticated and delivered under
this Indenture.
"Security Register" and "Security Registrar" have the respective meanings
specified in Section 305.
"Special Record Date" for the payment of any Defaulted Interest means a
date fixed by the Trustee pursuant to Section 307.
"Stated Maturity," when used with respect to any Security or any
installment of principal thereof or interest thereon, means the date specified
in such Security as the fixed date on which the principal of such Security or
such installment of principal or interest is due and payable.
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"Subsidiary" means a corporation more than 50% of the outstanding voting
stock of which is owned, directly or indirectly, by the Company or by one or
more other Subsidiaries, or by the Company and one or more other Subsidiaries.
For the purposes of this definition, "voting stock" means stock which ordinarily
has voting power for the election of directors, whether at all times or only so
long as no senior class of stock has such voting power by reason of any
contingency.
"Trustee" means the Person named as the "Trustee" in the first paragraph of
this instrument until a successor trustee shall have become such with respect to
one or more series of Securities pursuant to the applicable provisions of this
Indenture, and thereafter "Trustee" shall mean or include each Person who is
then a Trustee hereunder, provided, however, that if at any time there is more
than one such Person, "Trustee" as used with respect to the Securities of any
series shall mean the Trustee with respect to Securities of that series.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in force at
the date as of which this instrument was executed, except as provided in
Section 905.
"U.S. Government Obligations" means direct obligations of the United States
for the payment of which its full faith and credit is pledged, or obligations of
a person controlled or supervised by and acting as an agency or instrumentality
of the United States and payment of which is unconditionally guaranteed by the
United States.
"Vice President," when used with respect to the Company or the Trustee,
means any vice president, whether or not designated by a number of a word or
words added before or after the title "vice president."
SECTION 102. Compliance Certificates and Opinions.
Except as otherwise expressly provided by this Indenture, upon any
application or request by the Company to the Trustee to take any action under
any provision of this Indenture, the Company shall furnish to the Trustee an
Officers' Certificate stating that all conditions precedent, if any, provided
for in this Indenture relating to the proposed action have been complied with
and an Opinion of Counsel stating that in the opinion of such counsel all such
conditions precedent, if any, have been complied with, except that in the case
of any such application or request as to which the furnishing of such documents
is specifically required by any provision of this Indenture relating to such
particular application or request, no additional certificate or opinion need be
furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture shall include:
(1) a statement that each individual signing such certificate or
opinion has read such condition or covenant and the definitions herein relating
thereto:
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(2) a brief statement as to the nature and scope of the examination
or investigation upon which the statements or opinions contained in such
certificate or opinion are based:
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to express
an informed opinion as to whether or not such condition or covenant has been
complied with; and
(4) a statement as to whether, in the opinion of each such
individual, such condition or covenant as been complied with.
SECTION 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to be certified by, or
covered by an opinion of, any specified Person, it is not necessary that all
such matters be certified by, or covered by the opinion of, only one such
Person, or that they be so certified or covered by only one document, but one
such Person may certify or give an opinion with respect to some matters and one
or more other such Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several documents.
Any certificate or opinion of an officer of the Company may be based,
insofar as it relates to legal matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or in the exercise of
reasonable care should know, that the certificate or opinion or representations
with respect to the matters upon which his certificate or opinion is based are
erroneous. Any such certificate or Opinion of Counsel may be based, insofar as
it relates to factual matters, upon a certificate or opinion of, or
representations by, an officer or officers of the Company stating that the
information with respect to such factual matters is in the possession of the
Company, unless such counsel knows, or in the exercise of reasonable care should
know, that the certificate or opinion or representations with respect to such
matters are erroneous.
Where any Person is required to make, give or execute two or more
applications, requests, consents, certificates, statements, opinions or other
instruments under this Indenture, they may, but need not, be consolidated and
form one instrument.
SECTION 104. Acts of Holders.
(a) Any request, demand, authorization, direction, notice, consent, waiver
or other action provided by this Indenture to be given or taken by Holders (or
Holders of any series) may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing or by any Person duly authorized by means of
any written certification, proxy or other authorization furnished by a
Depositary; and, except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the
Trustee and, where it is hereby expressly required, to the Company. Such
instrument or instruments (and the action
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embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments or, in the case of
the Depositary, furnishing the written certification, proxy or other
authorization pursuant to which such instrument, or instruments, is signed.
Proof of execution of any such instrument or of a writing appointing any such
agent or authorizing any such Person or any such written certification or proxy
shall be sufficient for any purpose of this Indenture and (subject to
Section 601) conclusive in favor of the Trustee and the Company and any agent of
the Trustee or the Company, if made in the manner provided in this Section.
(b) The fact and date of the execution by any Person of any such
instrument or writing may be proved by a certificate of a notary public or other
officer authorized by law to take acknowledgments of deeds, certifying that the
individual signing such instrument or writing acknowledged to him the execution
thereof. Where such execution is by a signer acting in a capacity other than
his individual capacity, such certificate or affidavit shall also constitute
sufficient proof of his authority. The fact and date of the execution of any
such instrument or writing, or the authority of the Person executing the same,
may also be proved in any other manner which the Trustee deems sufficient and
the Trustee may in any instance require proof with respect to any of the matters
referred to in this Section.
(c) The ownership of Securities shall be proved by the Security Register.
(d) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the Holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee, the Security
Registrar, any Paying Agent or the Company in reliance thereon, whether or not
notation of such action is made upon such Security.
SECTION 105. Notices, Etc., to Trustee and Company.
Except as otherwise specifically provided herein, any request, demand,
authorization, direction, notice, consent, waiver or Act of Holders or other
document provided or permitted by this Indenture to be made upon, given or
furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if made, given, furnished or filed in writing to or
with the Trustee at its Corporate Trust Office, Attention: Corporate Trust and
Escrow Services, or
(2) The Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if in
writing and mailed, first-call postage prepaid, to the Company addressed to the
attention of its Secretary at the address of its principal office specified in
the first paragraph of this instrument or at any other address previously
furnished in writing to the Trustee by the Company.
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SECTION 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if in writing and mailed, first-class postage prepaid, to each Holder affected
by such event, at his address as it appears in the Security Register, not later
than the latest date, and not earlier than the earliest date, prescribed for the
giving of such notice. In any case where notice to Holders is given by mail,
neither the failure to mail such notice, nor any defect in any notice so mailed,
to any particular Holder shall affect the sufficiency of such notice with
respect to other Holders. Any notice mailed in the manner prescribed by this
Indenture shall be conclusively presumed to have been duly given whether or not
received by any particular Holder. Where this Indenture provides for notice in
any manner, such notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and such waiver shall be
the equivalent of such notice. Waivers of notice by Holders shall be filed with
the Trustee, but such filing shall not be a condition precedent to the validity
of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular mail service or by reason of
any other cause it shall be impracticable to give such notice by mail, then such
notification as shall be made with the approval of the Trustee shall constitute
a sufficient notification for every purpose hereunder.
SECTION 107. Conflict With Trust Indenture Act.
If any provision hereof limits, qualifies or conflicts with any of the
duties imposed by operation of Section 318(c) of the Trust Indenture Act, the
imposed duties shall control.
SECTION 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the Table of Contents are for
convenience only and shall not affect the construction hereof.
SECTION 109. Successors and Assigns.
All covenants and agreements in this Indenture by the Company shall bind
its successors and assigns, whether so expressed or not.
SECTION 110. Separability Clause.
In case any provision of this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
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SECTION 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities, express or implied, shall
give to any Person, other than the parties hereto, any Paying Agent, any
Security Registrar, or any Authenticating Agent and their respective successors
hereunder and the Holders, any benefit or any legal or equitable right, remedy
or claim under this Indenture.
SECTION 112. Governing Law.
This Indenture and the Securities shall be governed by and construed in
accordance with the laws of the State of Colorado.
SECTION 113. Legal Holidays.
In any case where any Interest Payment Date, Redemption Date, the Stated
Maturity of any Security or any date upon which any Defaulted Interest is
proposed to be paid shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or of the Securities)
payment of interest, if any, or principal (and premium, if any) need not be made
at such Place of Payment on such date, but may be made on the next succeeding
Business Day at such Place of Payment with the same force and effect as if made
on the Interest Payment Date, Redemption Date, at the Stated Maturity, or on the
date for payment of Defaulted Interest, provided that no interest shall accrue
for the period from and after such Interest Payment Date, Redemption Date or
Stated Maturity, as the case may be.
ARTICLE TWO
SECURITY FORMS
SECTION 201. Forms Generally.
The Securities of each series shall be in substantially the form as shall
be established in or pursuant to a Board Resolution or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture, and may have such letters, numbers or other marks of identification
and such legends or endorsements placed thereon as may be required to comply
with the rules of any securities exchange or as may, consistently herewith, be
determined by the officers executing such Securities, as evidenced by their
execution of the Securities. If the form of Securities of any series is
established by action taken pursuant to a Board Resolution, an appropriate
Officers' Certificate setting forth such form together with a copy of the Board
Resolution shall be delivered to the Trustee at or prior to the delivery of the
Company Order contemplated by Section 303 for the authentication and delivery of
such Securities.
The Trustee's certificate of authentication shall be in substantially the
form set forth in this Article.
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The definitive Securities shall be printed, lithographed or engraved or
produced by any combination of these methods on steel engraved borders or may be
produced in any other manner permitted by the rules of any securities exchange
on which the Securities may be listed, all as determined by the officers
executing such securities, all as determined by their execution of such
Securities.
SECTION 202. Form of Trustee's Certificate of Authentication.
This is one of the Securities of the series designated herein issued under
the within-mentioned Indenture.
[NAME OF TRUSTEE]
as Trustee
By
--------------------------------
Authorized Officer
SECTION 203. Additional Provisions Required in Global Security.
Any Global Security issued hereunder shall bear a legend as follows:
This Security is a Global Security within the meaning of the Indenture
hereinafter referred to and is registered in the name of a Depositary
or a nominee of a Depositary. This Global Security is exchangeable
for Securities registered in the name of a person other than the
Depositary or its nominee only in the limited circumstances
hereinafter described and may not be transferred except as a whole by
the Depositary to a nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary.
In addition, such Global Security shall contain the following provision:
This Security is a Global Security and shall be exchangeable, in whole
but not in part, for Securities registered in the names of Persons
other than the Depositary with respect to this Global Security or its
nominee only if (x) such Depositary notifies the Company that it is
unwilling or unable to continue as Depositary for this Global Security
or at any time ceases to be a clearing agency registered as such under
the Securities Exchange Act of 1934, as amended, (y) the Company
executes and delivers to the Trustee a Company Order that this Global
Security shall be exchangeable or (z) there shall have occurred and be
continuing an Event of Default or an event which, with the giving of
notice or lapse of time, or both, would constitute an Event of Default
with respect to the Securities. If this
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Global Security is exchangeable pursuant to the preceding sentence it
shall be exchangeable for Securities issuable in denominations of
$1,000 and any integral multiple thereof (or such other denominations
and integral multiples thereof specified as contemplated by
Section 301), registered in such names as such Depositary shall
direct.
ARTICLE THREE
THE SECURITIES
SECTION 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which may be authenticated and
delivered under this Indenture is unlimited.
The Securities may be issued in one or more series. There shall be
established in or pursuant to a Board Resolution, and set forth in an Officers'
Certificate, or established in one or more indentures supplemental hereto, prior
to the issuance of Securities of any series:
(1) the title of the Securities of the series (which shall
distinguish the Securities of the series from the Securities of all other
series);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon registration of transfer
of, or in exchange for, or in lieu of, other Securities of the series pursuant
to Section 304, 305, 306, 906 or 1107);
(3) the date or dates on which the principal of (and premium, if any,
on) the Securities of the series is payable;
(4) the rate or rates or the method or methods of determining the
rate or rates at which the Securities of the series shall bear interest,if any,
the date or dates from which any such interest shall accrue, the Interest
Payment Dates on which any such interest shall be payable, the Regular Record
Dates, if any, for the payment of interest on any Interest Payment Date and the
rate or rates of interest, if any, payable on overdue installments of interest
on or principal of (or premium, if any, on) the Securities of the series;
(5) if other than as specified in Section 1002, the place or places
where the principal of (and premium, if any) and interest, if any, on Securities
of the series shall be payable, provided, however, that, at the option of the
Company, any interest on the Securities of any series may be made by check
mailed to the address of the Person entitled thereto as such address shall
appear in the Security Register;
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(6) if the Securities of such series are redeemable, the period or
periods within which, the price or prices at which and the terms and conditions
upon which Securities of the series may be redeemed, in whole or in part, at the
option of the Company;
(7) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous provisions or
at the option of a Holder thereof and the period or periods within which, the
price or prices at which and the terms and conditions upon which Securities of
the series shall be redeemed or purchased, in whole or in part, pursuant to such
obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, the denominations in which Securities of the series shall be issuable;
(9) if the amount of payments of principal of and any premium or
interest on the Securities of the series may be determined with reference to an
index, the manner in which such amounts shall be determined;
(10) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502;
(11) the Events of Default with respect to Securities of such series,
if not set forth herein;
(12) whether the Securities of the series shall be issued in whole or
in part in the form of one or more Global Securities and, in such case, the
Depositary for such Global Security or Securities, which Depositary shall be a
clearing agency registered under the Securities Exchange Act of 1934, as
amended;
(13) the currency or currencies, including composite currencies, in
which payment of the principal of and any premium and interest on the Securities
of the series shall be payable if other than the currency of the United States
of America;
(14) if the principal of and any premium or interest on the Securities
of the series are to be payable, at the election of the Company or a Holder
thereof, in a currency or currencies, including composite currencies, other than
that or those in which the Securities are stated to be payable, the currency or
currencies in which payment of the principal of and any premium and interest on
Securities of such series as to which such election is made shall be payable,
and the periods within which and the terms and conditions upon which such
election is to be made; and
(15) any other terms, conditions, rights and preferences (or
limitations on such rights and preferences) relating to the Securities of such
series and not inconsistent with the terms of this Indenture.
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All Securities of any one series shall be substantially identical except as
to denomination and except as may otherwise be provided in or pursuant to such
Board Resolution and set forth in such Officers' Certificate or in any such
indenture supplemental hereto.
If any of the terms of any series are established by action taken pursuant
to a Board Resolution, a copy of an appropriate record of action shall be
certified by the Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the Officers'
Certificate setting forth the terms of the series.
SECTION 302. Denominations.
The Securities of each series shall be issuable in registered form without
coupons in such denominations as shall be specified as contemplated by Section
301. In the absence of any such provisions with respect to the Securities of
any series, the Securities of such series shall be issuable in denominations of
$1,000 and any integral multiple thereof.
SECTION 303. Execution, Authentication, Delivery and Dating.
The Securities shall be executed on behalf of the Company by its Chairman
of the Board or a Co-Chairman, its President or one of its Vice Presidents,
under its corporate seal reproduced thereon attested by its Secretary or one of
its Assistant Secretaries. The signature of any of these officers on the
Securities may be manual or facsimile.
Securities bearing the manual or facsimile signatures of individuals who
were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of this
Indenture, the Company may deliver to the Trustee or an Authenticating Agent for
authentication Securities of any series executed by the Company, together with a
Company Order for the authentication and delivery of such Securities and the
documents establishing the form and terms of Securities of the series pursuant
to Section 201 or 301, and the Trustee or such Authenticating Agent in
accordance with the Company Order shall authenticate and deliver such
Securities. If the form or terms of the Securities of the series have been
established in or pursuant to one or more Board Resolutions as permitted by
Sections 201 and 301, in authenticating such Securities, and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive, and (subject to Section 601) shall be
fully protected in relying upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been established by or pursuant to
Board Resolution as permitted by Section 201, that such form has been
established in conformity with the provisions of this Indenture;
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(b) if the terms of such Securities have been established by or pursuant
to Board Resolution as permitted by Section 301, that such terms have been
established in conformity with the provisions of this Indenture; and
(c) that such Securities, when authenticated and delivered by the Trustee
and issued by the Company in the manner and subject to any condition specified
in such Opinion of Counsel, will constitute legal, valid and binding obligations
of the Company.
The Trustee or any Authenticating Agent shall have the right to decline to
authenticate and deliver any of such Securities if it, being advised by counsel,
determines that such activity may not lawfully be taken, or if it, its board of
directors, trustees, executive committee, or a trust committee of directors or
trustees and/or Vice President, based upon the advice of its counsel, shall
determine in good faith that such action would expose it to personal liability
to existing Holders.
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or be
valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee or an Authenticating Agent by manual signature, and such
certificate upon any Security shall be conclusive evidence, and the only
evidence, that such Security has been duly authenticated and delivered hereunder
and is entitled to the benefits of this Indenture. Notwithstanding the
foregoing, if any Security shall have been authenticated and delivered hereunder
but never issued and sold by the Company, and the Company shall deliver such
Security to the Trustee for cancellation as provided in Section 309 together
with a written statement (which need not comply with Section 102 and need not be
accompanied by an Opinion of Counsel) stating that such Security has never been
issued and sold by the Company, for all purposes of this Indenture such Security
shall be deemed never to have been authenticated and delivered hereunder and
shall never be entitled to the benefits of this Indenture.
SECTION 304. Temporary Securities.
Pending the preparation of definitive Securities of any series, the Company
may execute, and upon Company Order, the Trustee or an Authenticating Agent,
shall authenticate and deliver, temporary Securities which are printed,
lithographed, typewritten, mimeographed or otherwise produced, in any authorized
denomination, substantially of the tenor of the definitive Securities in lieu of
which they are issued and with such appropriate insertions, omissions,
substitutions and other variations as the officers executing such Securities may
determine, as evidenced by their execution of such Securities.
If temporary Securities of any series are issued, the Company will cause
definitive Securities of that series to be prepared without unreasonable delay.
After the preparation of definitive Securities of such series, the temporary
Securities of such series shall be exchangeable for definitive Securities of
such series upon surrender of the temporary Securities of such series
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at the office or agency established by the Company in a Place of Payment for
that series, without charge to the Holder. Upon surrender for cancellation of
any one or more temporary Securities of any series the Company shall execute and
the Trustee shall authenticate and deliver in exchange therefor a like principal
amount of definitive Securities of the same series of authorized denominations.
Until so exchanged the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as definitive Securities
of such series.
SECTION 305. Registration, Registration of Transfer and Exchange.
The Company shall cause to be kept at the Corporate Trust Office of the
Trustee a register (the register maintained in such office and in any other
office or agency established by the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Securities and of transfers of Securities. The Trustee
is hereby appointed "Security Registrar" for the purpose of registering
Securities and transfers of Securities as herein provided.
Upon surrender for registration of transfer of any Security of any series
at the designated office or agency in a Place of Payment for that series, the
Company shall execute, and the Trustee shall authenticate and deliver, in the
name of the designated transferee or transferees, one or more new Securities of
the same series, of any authorized denominations and of a like tenor, aggregate
principal amount and Stated Maturity.
At the option of the Holder, Securities of any series may be exchanged for
other Securities of the same series, of any authorized denominations and of a
like tenor, aggregate principal amount and Stated Maturity, upon surrender of
the Securities to be exchanged at such office or agency and upon payment, if the
Company shall so require, of the charges hereinafter provided. Whenever any
Securities are so surrendered for exchange, the Company shall execute, and the
Trustee or an Authenticating Agent shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the valid obligations of the Company, evidencing the same
debt, and entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer or
exchange shall (if so required by the Company or the Trustee or the Security
Registrar) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security Registrar (and, if
so required by the Trustee, to the Trustee) duly executed, by the Holder thereof
or his attorney duly authorized in writing.
No service charge to any Holders shall be made for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of
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transfer or exchange of Securities, other than exchanges pursuant to Section
304, 906 or 1107 not involving any transfer.
The Company shall not be required (i) to issue, register the transfer of or
exchange Securities of any series during a period beginning at the opening of
business 15 days before the day of the mailing of a notice of redemption of
Securities of that series selected for redemption under Section 1103 and ending
at the close of business on the day of such mailing, or (ii) to register the
transfer of or exchange any Security so selected for redemption in whole or in
part except the unredeemed portion of any Security being redeemed in part.
Notwithstanding the foregoing, except as otherwise specified as
contemplated by Section 301, the Global Securities of any series shall be
exchangeable, in whole but not in part, pursuant to this Section for Securities
registered in the names of Persons other than the Depositary with respect to
such series or its nominee only as provided in this paragraph. A Global
Security shall be exchangeable pursuant to this Section if (x) such Depositary
notifies the Company that it is unwilling or unable to continue as Depositary
for such series or at any time ceases to be a clearing agency registered as such
under the Securities Exchange Act of 1934, as amended, (y) the Company executes
and delivers to the Trustee a Company Order that such Global Security shall be
so exchangeable or (z) there shall have occurred and be continuing an Event of
Default or an event which, with the giving of notice or lapse of time or both,
would constitute an Event of Default with respect to the Securities. Any Global
Security that is exchangeable pursuant to the preceding sentence shall be
exchangeable for Securities issuable in denominations of $1,000 and any integral
multiple thereof (or such other denominations and integral multiples thereof
specified as contemplated by Section 301), registered in such names as the
Depositary for such Global Security shall direct.
Notwithstanding any other provision of this Section, a Global Security may
not be transferred except as a whole by the Depositary to a nominee of such
Depositary or by a nominee of such Depositary to such Depositary or another
nominee of such Depositary.
SECTION 306. Mutilated, Destroyed, Lost and Stolen Securities.
If there shall be delivered to the Company and the Trustee (and surrendered
to the Trustee in the case of a mutilated Security) (i) a mutilated Security or
evidence to their satisfaction of the destruction, loss or theft of any Security
and (ii) such security or indemnity as may be required by them to save each of
them and any agent of either of them harmless, then, in the absence of notice to
the Company or the Trustee that such Security has been acquired by a bona fide
purchaser, the Company shall execute and upon its request the Trustee or an
Authenticating Agent shall authenticate and deliver, in exchange for or in lieu
of any such mutilated, destroyed, lost or stolen Security, a new Security of the
same series and of like tenor, principal amount and Stated Maturity and bearing
a number not contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security has become
or is about to become due and payable, the Company in its discretion may,
instead of issuing a new Security, pay such Security.
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Upon the issuance of any new Security under this Section, the Company may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee) connected therewith.
Every new Security of any series issued pursuant to this Section in lieu of
any destroyed, lost or stolen Security shall constitute an original additional
contractual obligation of the Company, whether or not the destroyed, lost or
stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this Indenture equally and proportionately with
any and all other Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to the
extent lawful) all other rights and remedies with respect to the replacement or
payment of mutilated, destroyed, lost or stolen Securities.
SECTION 307. Payment of Interest; Interest Rights Preserved.
Interest on any Security which is payable, and is punctually paid or duly
provided for, on any Interest Payment Date shall be paid to the person in whose
name that Security (or one or more Predecessor Securities) is registered at the
close of business on the Regular Record Date for such interest, provided,
however, that, at the option of the Company, any interest on the Securities of
any series may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
Any interest on any Security of any series which is payable, but is not
punctually paid or duly provided for, on any Interest Payment Date (herein
called "Defaulted Interest") shall forthwith cease to be payable to the
registered Holder on the relevant Regular Record Date by virtue of having been
such Holder, and such Defaulted Interest may be paid by the Company, at its
election in each case, as provided in Clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest
to the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a Special Record Date for the payment of such Defaulted Interest, which
shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as in this Clause provided. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special
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Record Date and, in the name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor to be mailed, first-class postage prepaid, to each
Holder of Securities of such series at his address as it appears in the
Security Register, not less than 10 days prior to such Special Record Date.
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such Defaulted Interest shall
be paid to the Persons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of any series in any other lawful manner not inconsistent with
the requirements of any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such exchange, if, after
notice given by the Company to the Trustee of the proposed payment pursuant
to this Clause, such manner of payment shall be deemed practicable by the
Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 308. Persons Deemed Owners.
Prior to due presentment of a Security for registration of transfer, the
Company, the Trustee, any Paying Agent, any Authenticating Agent and any other
agent of the Company or the Trustee may treat the Person in whose name such
Security is registered as the owner of such Security for the purpose of
receiving payment of principal of (and premium, if any) and (subject to
Section 307) interest, if any, on such Security and for all other purposes
whatsoever, whether or not such Security be overdue, and neither the Company,
the Trustee, any Paying Agent, any Authenticating Agent nor any other agent of
the Company or the Trustee shall be affected by notice to the contrary.
No holder of any beneficial interest in any Global Security held on its
behalf by a Depositary shall have any rights under this Indenture with respect
to such Global Security, and such Depositary may be treated by the Company, the
Trustee, and any agent of the Company or the Trustee as the owner of such Global
Security for all purposes whatsoever. Notwithstanding the foregoing, nothing
herein shall impair, as between a Depositary and such holders of beneficial
interests, the operation of customary practices governing the exercise of the
rights of the Depositary as Holder of any Security.
SECTION 309. Cancellation.
All Securities surrendered for payment, redemption, registration of
transfer or exchange or for credit against any sinking fund payment shall, if
surrendered to any Person other than the
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Trustee, be delivered to the Trustee and shall be promptly canceled by it. The
Company may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be
promptly canceled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities canceled as provided in this Section,
except as expressly permitted by this Indenture. All canceled Securities shall
be destroyed by the Trustee and the Trustee shall deliver a certificate of such
destruction to the Company, unless the Company by Company Order shall direct
that such canceled securities be returned to it, in which case the Trustee shall
comply with such Company Order as to certificates not destroyed prior to receipt
of such Company Order.
SECTION 310. Computation of Interest.
Except as otherwise specified as contemplated by Section 301 for Securities
of any series, interest on the Securities of each series shall be computed on
the basis of a year of twelve 30-day months.
ARTICLE FOUR
DISCHARGE OF INDENTURE
SECTION 401. Termination of Company's Obligations.
(a) The Company may terminate its obligations under the Securities of any
series and this Indenture (with respect to such series) if:
(1) all Securities of such series previously authenticated and
delivered (other than destroyed, lost or stolen Securities which have been
replaced as provided in Section 306 or Securities which have been paid pursuant
to Section 1001, or Securities for whose payment money has theretofore been
deposited in trust or segregated and held in trust by the Company and thereafter
repaid to the Company or discharged from such trust, as provided in
Section 1003) have been delivered to the Trustee for cancellation and the
Company has paid all sums payable by it hereunder; or
(2) all Securities of such series:
(A) have become due and payable, or
(B) will become due and payable at their Stated Maturity within
one year, or
(C) if redeemable at the option of the Company, are to be called
for redemption within one year under arrangements satisfactory to the
Trustee for the giving of notice by the Trustee in the name, and at the
expense, of the Company,
and the Company, in the case of (A), (B) or (C) above, has
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(i) irrevocably deposited or caused to be deposited with the
Trustee or Paying Agent and conveyed all right, title and interest for the
benefit of the Holders of Securities of such series, under the terms of an
irrevocable trust agreement in form and substance satisfactory to the
Trustee, as trust funds in trust solely for the benefit of the Holders of
Securities of such series for that purpose, money or U.S. Government
Obligations (or any combination thereof) maturing as to principal and
interest in such amounts and at such times as are sufficient (in the
opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee)
without consideration of any reinvestment of any interest thereon to pay
principal of, premium, if any, and interest on the Outstanding Securities
of such series to redemption or maturity; PROVIDED, that the Trustee or
Paying Agent shall have been irrevocably instructed to apply such money or
the proceeds of such U.S. Government Obligations to the payment of said
principal, premium, if any, and interest with respect to the Securities of
such series (such funds are referred to in this Section 401 as the
"defeasance trust funds");
(ii) paid or caused to be paid all other sums payable hereunder
by the Company; and
(iii) delivered to the Trustee an Officers' Certificate and an
Opinion of Counsel, each stating that all conditions precedent herein
provided for relating to the satisfaction and discharge of this Indenture
with respect to the Securities of such series have been complied with; or
(3)(A) The Company has irrevocably deposited or caused to be deposited
with the Trustee or Paying Agent and conveyed all right, title and interest
for the benefit of the Holders of Securities of such series the defeasance
trust funds, in accordance with the requirements of clause (2)(i) above;
(B) No Default or Event of Default with respect to the Securities of
such series shall have occurred and be continuing on the date of such
deposit;
(C) 123 days pass after the deposit is made and during the 123-day
period no Default specified in Section 501(7) or 501(8) occurs which is
continuing at end of such period;
(D) such deposit does not constitute a default under any other
agreement binding on the Company or its Subsidiaries;
(E) the Company has paid or caused to be paid all sums then payable
by the Company hereunder and under the Securities of such series;
(F) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
provided for herein relating to the satisfaction and discharge of this
Indenture have been complied with;
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(G) such deposit shall not cause the Trustee to have a conflicting
interest for purposes of the Trust Indenture Act with respect to any
securities of the Company;
(H) the Company shall have delivered to the Trustee an Opinion of
Counsel stating that neither the Trustee nor the trust fund as a result of
such deposit will be an "investment company" required to be registered
under the Investment Company Act of 1940, as amended; and
(I) the Company has elected to be governed by either Section 401(b)
or 401(c) below.
(b) The Company may terminate all of its obligations under this Indenture
("legal defeasance"), with respect to such series of Securities and shall be
discharged from such obligations upon compliance by the Company with all of the
conditions set forth above in items (A)-(H), inclusive, of clause (3) of
Section 401(a) and upon delivery by the Company to the Trustee of (x) a ruling
from the Internal Revenue Service or (y) an Opinion of Counsel, in either case
to the effect that the Holders of the Outstanding Securities of such series will
not recognize income, gain or loss for Federal income tax purposes as a result
of such legal defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such legal defeasance had not occurred; PROVIDED, HOWEVER, that in the case of
either clause (2) or (3) of Section 401(a), (x) the Company's obligations in
Sections 305, 306, 308, 403, 404, 601, 603, 607, 610, 611, 612 and 1003 with
respect to such series of Securities shall survive until the Securities of such
series are no longer outstanding and (y) after the Securities of such series are
no longer outstanding, only the Company's obligations in Sections 607, 403
and 404 with respect to such series of Securities shall survive.
The Company may effect legal defeasance notwithstanding any prior covenant
defeasance as set forth in Section 401(c) below.
(c) The Company may terminate its obligations ("covenant defeasance")
under Sections 801(3) and 1004-1006 in their entireties, Section 501(4), with
respect to violations of Sections 801(3) and 1004-1006, and Section 501(5) in
its entirety, with respect to such series of Securities and shall be discharged
from such obligations upon compliance by the Company with all of the conditions
set forth above in items (A)-(H), inclusive, of clause (3) of Section 401(a) and
upon delivery by the Company to the Trustee of (x) a ruling from the Internal
Revenue Service or (y) an Opinion of Counsel, in either case to the effect that
the Holders of the Outstanding Securities of such series will not recognize
income, gain or loss for Federal income tax purposes as a result of such
covenant defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the case if
such covenant defeasance had not occurred.
(d) After any irrevocable deposit as specified in Section 401(a), and
satisfaction of the applicable conditions set forth in Sections 401(a), (b)
or (c), the Trustee, on demand of and at the expense of the Company, shall
acknowledge in writing the discharge of the Company's obligations or certain
covenants under the Securities of such series, as applicable, and such other
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appropriate documentation as the Company shall request, and this Indenture with
respect thereto except for those surviving obligations specified above.
SECTION 402. Application of Trust Money.
The Trustee or Paying Agent shall hold in trust money or U.S. Government
Obligations deposited with it pursuant to Section 401, and shall apply the
deposited money and the money from U.S. Government Obligations in accordance
with this Indenture to the payment of principal of, premium, if any, and
interest on the Securities of the applicable series.
SECTION 403. Repayment to Company.
Subject to Section 401, the Trustee and the Paying Agent shall promptly pay
to the Company upon request any excess money or securities held by them at any
time including any such excess money as shall result from interest earned on the
money or the U.S. Government Obligations held by the Trustee or Paying Agent.
SECTION 404. Reinstatement.
If the Trustee or Paying Agent is unable to apply any money or U.S.
Government Obligations in accordance with Section 401 by reason of any legal
proceeding or by reason of any order or judgment of any court or governmental
authority enjoining, restraining or otherwise prohibiting such application, the
Company's obligations under this Indenture (with respect to such series) and the
Securities of the applicable series shall be revived and reinstated as though no
deposit had occurred pursuant to Section 401 until such time as the Trustee or
Paying Agent is permitted to apply all such money or U.S. Government Obligations
in accordance with Section 401; PROVIDED, that if the Company has made any
payment of principal of, premium, if any, or interest on any Securities because
of the reinstatement of its obligations, the Company shall be subrogated to the
rights of the Holders of such Securities to receive such payment from the money
or U.S. Government Obligations held by the Trustee or Paying Agent.
ARTICLE FIVE
REMEDIES
SECTION 501. Events of Default.
"Event of Default," wherever used herein with respect to Securities of any
series, means any one of the following events (whatever the reason for such
Event of Default and whether it shall be voluntary or involuntary or be effected
by operation of law or pursuant to any judgment, decree or order of any court or
any order, rule or regulation of any administrative or governmental body):
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(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of (or premium, if any,
on) any Security of that series at its Maturity; or
(3) default in the deposit of any sinking fund payment, when and as
due by the terms of a Security of that series; or
(4) default in the performance, or breach, of any covenant or
warranty of the Company in this Indenture (other than a covenant or
warranty a default in whose performance or whose breach is elsewhere in
this Section specifically dealt with or which has expressly been included
in this Indenture solely for the benefit of series of Securities other than
that series), and continuance of such default or breach for a period of
60 days after there has been given, by registered or certified mail, to the
Company by the Trustee or to the Company and the Trustee by the Holders of
at least 25% in principal amount of the Outstanding Securities of that
series a written notice specifying such default or breach and requiring it
to be remedied and stating that such notice is a "Notice of Default"
hereunder; or
(5) a default under any bond, debenture, note or other evidence of
indebtedness for money borrowed by the Company or any of its Restricted
Subsidiaries (including a default with respect to Securities of any series
other than that series) in excess of $5,000,000 determined at the time of
such default, or under any capitalized lease under which the Company or any
Restricted Subsidiary is obligated to pay in excess of $5,000,000
determined at the time of such default, or under any mortgage, indenture
(including this Indenture) or instrument under which there may be issued or
by which there may be secured or evidenced any indebtedness for money
borrowed in excess of $5,000,000 by the Company or any of its Restricted
Subsidiaries, whether such indebtedness or obligation now exists or shall
hereafter be created, which default shall be a result of a failure to pay
any portion of the principal of such indebtedness, or to pay any portion of
such obligation, when due and payable after the expiration of any
applicable grace period with respect thereto, or shall have resulted in
such indebtedness or obligation becoming or being declared due and payable
prior to the date on which it would otherwise have become due and payable,
without such indebtedness or obligation having been discharged or such
default having been cured or such acceleration having been rescinded or
annulled, within a period of 10 days after there shall have been given, by
registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in principal amount
of the Outstanding Securities of that series a written notice specifying
such default and requiring the Company to cause such indebtedness or
obligation to be discharged or cause such default to be cured or such
acceleration to be rescinded or annulled and stating that such notice is a
"Notice of Default" hereunder; provided, however, that, subject to the
provisions of Sections 601 and 602, the Trustee shall not be deemed to have
knowledge of such default
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unless either (A) a Responsible Officer of the Trustee, as such officer
assigned to its corporate trust department shall have actual knowledge of
such default or (B) the Trustee shall have received written notice thereof
from the Company, from any Holder, from the holder of any such indebtedness
or from the trustee under any such mortgage, indenture or other instrument;
or
(6) the entry against the Company or a Restricted Subsidiary of a
final judgment, decree or order by a court having jurisdiction in the
premises for the payment of money in excess of $5,000,000 and the
continuance of such judgment, decree or order unsatisfied and in effect for
any period of 60 consecutive days without a stay of execution; provided
however, that, subject to the provisions of Sections 601 and 602, the
Trustee shall not be deemed to have knowledge of such default unless either
(i) a Responsible Officer of the Trustee, as such officer assigned to its
corporate trust department shall have actual knowledge of such default or
(ii) the Trustee shall have received written notice thereof from the
Company, from any Holder, from the holder of any such indebtedness or from
the trustee under any such mortgage, indenture or other instrument; or
(7) the entry by a court having jurisdiction in the premises of a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or appointing a custodian, receiver,
liquidator, assignee, trustee, sequestrator or other similar official of
the Company or of any substantial part of its property, or ordering the
winding up or liquidation of its affairs, and the continuance of any such
decree or order for relief or any such other decree or order unstayed and
in effect for a period of 60 consecutive days; or
(8) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or the consent by it to the entry of a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or to the commencement of any
bankruptcy or insolvency case or proceeding against it, or the filing by it
of a petition or answer or consent seeking reorganization or relief under
any applicable Federal or State law, or the consent by it to the filing of
such petition or to the appointment of or taking possession by a custodian,
receiver, liquidator, assignee, trustee, sequestrator or similar official
of the Company or of any substantial part of its property, or the making by
it of an assignment for the benefit of creditors, or the admission by it in
writing of its inability to pay its debts generally as they become due, or
the taking of corporate action by the Company in furtherance of any such
action; or
(9) any other event of Default provided with respect to Securities of
such series or any Event of Default under the Indenture dated as of
December 15, 1983 between Nordstrom and First Interstate Bank of
Washington, N.A., as Trustee.
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SECTION 502. Acceleration of Maturity; Rescission and Annulment.
If an Event of Default with respect to Securities of any series at the time
Outstanding occurs and is continuing, then in every such case the Trustee or the
Holders of not less than 25% in principal amount of the Outstanding Securities
of that series may declare the principal amount (or, if the Securities of that
series are Original Issue Discount Securities, such portion of the principal
amount as may be specified in the terms of that series) of all of the Securities
of that series to be due and payable immediately, by a notice in writing to the
Company (and to the Trustee if given by Holders), and upon any such declaration
such principal amount (or specified portion) shall become immediately due and
payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in principal amount of the
Outstanding Securities of that series, by written notice to the Company and the
Trustee, may rescind and annul such declaration and its consequences if
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest, if any, on all Securities of that
series,
(B) the principal of (and premium, if any, on) any Securities of
that series which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate or rates prescribed
therefor in such Securities,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the rate or rates prescribed
therefor in such Securities, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel; and
(2) all Events of Default with respect to Securities of that series,
other than the nonpayment of the principal of Securities of that series which
have become due solely by such declaration of acceleration, have been cured or
waived as provided in Section 513.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
SECTION 503. Collection of Indebtedness and Suits for Enforcement by Trustee.
The Company covenants that if
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(1) default is made in the payment of any interest on any Security of
any series when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security of any series at the Maturity thereof, the Company
will, upon demand of the Trustee, pay to it, for the benefit of the Holders
of Securities of such series, the whole amount then due and payable on
Securities of such series for principal (and premium, if any) and interest
and, to the extent that payment of such interest shall be legally
enforceable, interest on any overdue principal (and premium, if any) and on
any overdue interest, at the rate or rates prescribed therefor in such
Securities; and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel.
If the Company fails to pay such amounts forthwith upon such demand, the
Trustee, in its own name and as trustee of an express trust, may institute a
judicial proceeding for the collection of the sums so due and unpaid, may
prosecute such proceeding to judgment or final decree and may enforce the same
against the Company or any other obligor upon such Securities and collect the
moneys adjudged or decreed to be payable in the manner provided by law out of
the property of the Company or any other obligor upon such Securities wherever
situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
SECTION 504. Trustee May File Proofs of Claim.
In case of the pendency of any receivership, insolvency, liquidation,
bankruptcy, reorganization, arrangement, adjustment, composition or other
judicial proceeding relative to the Company or any other obligor upon the
Securities or the property of the Company or of such other obligor or their
creditors, the Trustee (irrespective of whether the principal of the Securities
shall then be due and payable as therein expressed or by declaration of
acceleration or otherwise and irrespective of whether the Trustee shall have
made any demand on the Company for the payment of overdue principal or interest)
shall be entitled and empowered, by intervention in such proceeding or
otherwise,
(1) to file and prove a claim for the whole amount of principal (or
with respect to Original Issue Discount Securities, such portion of the
principal amount as may be specified in the terms of such Securities), and
premium, if any, and interest owing and unpaid in respect of the Securities and
to file such other papers or documents as may be necessary or advisable in order
to have the claims of the Trustee (including any claim for the reasonable
compensation,
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expenses, disbursements and advances of the Trustee, its agents and counsel) and
of the Holders allowed in such judicial proceeding, and
(2) to collect and receive any moneys or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 607.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
or the rights of any Holder thereof or to authorize the Trustee to vote in
respect of the claim of any Holder in any such proceeding.
SECTION 505. Trustee May Enforce Claims Without Possession of Securities.
All rights of action and claims under this Indenture or the Securities may
be prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities in respect of which such judgment has been
recovered.
SECTION 506. Application of Money Collected.
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal (or premium,
if any) or interest, upon presentation of the Securities and the notation
thereon of the payment if only partially paid and upon surrender thereof if
fully paid:
FIRST: to the payment of all amounts due the Trustee under
Section 607;
SECOND: To the payment of the amounts then due and unpaid for
principal of (and premium, if any) and interest, if any, on the Securities
in respect of which or for the benefit of which such money has been
collected, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities for principal (and
premium, if any) and interest, if any, respectively; and
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THIRD: The balance, if any, to the Person or Persons entitled
thereto.
In any case where Securities are Outstanding which are denominated in more
than one currency, or in a composite currency and at least one other currency,
and the Trustee is directed to make ratable payments under this Section to
Holders of such Securities, the Trustee shall calculate the amount of such
payments as follows: (i) as of the day the Trustee collects an amount under
this Article, the Trustee shall, as to each Holder of a Security to whom an
amount is due and payable under this Section which is denominated in a foreign
currency or a composite currency, determine that amount of U.S. dollars that
would be obtained for the amount owing such Holder, using the rate of exchange
at which in accordance with its normal banking procedures the Trustee could
purchase in The City of Denver U.S. dollars with such amount owing;
(ii) calculate the sum of all U.S. dollar amounts determined under (i) and add
thereto any amounts due and payable in U.S. dollars; and (iii) using the
individual amounts determined in (i) or any individual amounts due and payable
in U.S. dollars, as the case may be, as a numerator and the sum calculated in
(ii) as a denominator, calculate as to each Holder of a Security to whom an
amount is owed under this Section the fraction of the amount collected under
this Article payable to such Holder. Any expenses incurred by the Trustee in
actually converting amounts owing Holders of Securities denominated in a
currency or composite currency other than that in which any amount is collected
under this Article shall be likewise (in accordance with this paragraph) borne
ratably by all Holders of Securities to whom amounts are payable under this
Section.
To the fullest extent allowed under applicable law, if for the purpose of
obtaining judgment against the Company in any court it is necessary to convert
the sum due in respect of the principal of, or any premium or interest on the
Securities of any series (the "Required Currency") into a currency in which a
judgment will be rendered (the "Judgment Currency"), the rate of exchange used
shall be the rate at which in accordance with its normal banking procedures the
Trustee could purchase in The City of Denver the Required Currency with the
Judgment Currency on the Business Day preceding that on which final judgment is
given. The Company shall not be liable for any shortfall nor shall it benefit
from any windfall in payments to Holders of Securities under this Section caused
by a change in exchange rates between the time the amount of a judgment against
it is calculated as above and the time the Trustee converts the Judgment
Currency into the Required Currency to make payments under this Section to
Holders of Securities, but payment of such judgment shall discharge all amounts
owed by the Company on the claim or claims underlying such judgment.
SECTION 507. Limitation on Suits.
No Holder of any Security of any series shall have any right to institute
any proceeding, judicial or otherwise, with respect to this Indenture, or for
the appointment of a receiver or trustee, or for any other remedy hereunder,
unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that series;
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(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of that series shall have made written request to the
Trustee to institute proceedings in respect of such Event of Default in its own
name as Trustee hereunder;
(3) such Holder or Holders have offered to the Trustee reasonable
indemnity against the costs, expenses and liabilities to be incurred in
compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity has failed to institute any such proceeding; and
(5) no direction inconsistent with such written request has been
given to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more of such Holders shall have
any right in any manner whatever by virtue of, or by availing of, any provision
of this Indenture to affect, disturb or prejudice the rights of any other Holder
or to obtain or to seek to obtain priority or preference over any other Holder
or to enforce any right under this Indenture except in the manner herein
provided and for the equal and ratable benefit of all Holders of Securities of
such series.
SECTION 508. Unconditional Right of Holders to Receive Principal, Premium and
Interest.
Notwithstanding any other provision in this Indenture, the Holder of any
Security shall have the right, which is absolute and unconditional, to receive
payment of the principal of (and premium, if any) and (subject to Section 307)
interest if any, on such Security on the Stated Maturity or Maturities expressed
in such Security (or, in the case of redemption on the Redemption Date) and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
SECTION 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any proceeding to enforce any
right or remedy under this Indenture and such proceeding has been discontinued
or abandoned for any reason, or has been determined adversely to the Trustee or
to such Holder, then and in every such case, subject to any determination in
such proceeding, the Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions hereunder and thereafter
all rights and remedies of the Trustee and the Holders shall continue as though
no such proceeding had been instituted.
SECTION 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities in the last paragraph of
Section 306, no right or remedy
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herein conferred upon or reserved to the Trustee or to the Holders is intended
to be exclusive of any other right or remedy, and every right and remedy shall,
to the extent permitted by law, be cumulative and in addition to every other
right and remedy given hereunder or now or hereafter existing at law or in
equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
SECTION 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any Holder of any Security to
exercise any right or remedy accruing upon any Event of Default shall impair any
such right or remedy or constitute a waiver of any such Event of Default or an
acquiescence therein. Every right and remedy given by this Article or by law to
the Trustee or to the Holders may be exercised from time to time, and as often
as may be deemed expedient, by the Trustee or by the Holders, as the case may
be.
SECTION 512. Control by Holders.
The Holders of a majority in principal amount of the Outstanding Securities
of any series shall have the right to direct the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred on the Trustee, with respect to the Securities of
such series, provided that
(1) such direction shall not be in conflict with any rule of law or
with this Indenture, and
(2) the Trustee may take any other action deemed proper by the
Trustee which is not inconsistent with such direction.
Upon receipt by the Trustee of any written notice directing the time,
method or place of conducting any such proceeding or exercising any such trust
or power, with respect to Securities of a series all or part of which is
represented by a Global Security, a record date shall be established for
determining Holders of Outstanding Securities of such series entitled to join in
such notice, which record date shall be at the close of business on the day the
Trustee receives such notice. The Holder on such record date, or their duly
designated proxies, and only such Persons, shall be entitled to join in such
notice, whether or not such Holders remain Holders after such record date;
PROVIDED, that unless the Holders of a majority in principal amount of the
Outstanding Securities of such series shall have joined in such notice prior to
the day which is 90 days after such record date, such notice shall automatically
and without further action by any Holder be canceled and of no further effect.
Nothing in this paragraph shall prevent a Holder, or a proxy of a Holder, from
giving, after expiration of such 90-day period, a new notice identical to a
notice which has been canceled pursuant to the proviso to the preceding
sentence, in which event a new record date shall be established pursuant to the
provisions of this Section 512.
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SECTION 513. Waiver of Past Defaults.
The Holders of not less than a majority in principal amount of the
Outstanding Securities of any series may on behalf of the Holders of all the
Securities of such series waive any past default hereunder with respect to such
series and its consequences, except a default
(1) in the payment of the principal of (or premium, if any, or
interest, if any, on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of each
Outstanding Security of such series affected.
With respect to any series of Securities, the Company may, but shall not be
obligated to, fix a record date for the purpose of determining the Persons
entitled to waive any past default hereunder. If a record date is fixed, the
Holders on such record date, or their duly designated proxies, and only such
Persons, shall be entitled to waive any default hereunder, or to retract (prior
to the requisite percentage for such waiver to become effective having been
obtained) any such waiver previously given, whether or not such Holders remain
Holders after such record date; provided, that such waiver shall be effected no
later than the 90th day after such record date.
Upon any such waiver, such default shall cease to exist, and any Event of
Default arising therefrom shall be deemed to have been cured, for every purpose
of the Securities of such series under this Indenture; but no such waiver shall
extend to any subsequent or other default or impair any right consequent
thereon.
SECTION 514. Undertaking for Costs.
All parties to this Indenture agree, and each Holder of any Security by his
acceptance thereof shall be deemed to have agreed, that any court may in its
discretion require in any suit for the enforcement of any right or remedy under
this Indenture, or in any suit against the Trustee for any action taken,
suffered or omitted by it as Trustee, the filing by any party litigant in such
suit of an undertaking to pay the costs of such suit, and that such court may in
its discretion assess reasonable costs, including reasonable attorneys' fees at
trial and on appeal, against any party litigant in such suit having due regard
to the merits and good faith of the claims or defenses made by such party
litigant; but the provisions of this Section shall not apply to any suit
instituted by the Company, to any suit instituted by the Trustee, to any suit
instituted by any Holder, or group of Holders, holding in the aggregate more
than 10% in principal amount of the Outstanding Securities of any series, or to
any suit instituted by any Holder for the enforcement of the payment of the
principal of (or premium, if any) or interest on any Security on or after the
Stated Maturity or Maturities expressed in such Security (or, in the case of
redemption, on or after the Redemption Date).
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SECTION 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted now
or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
THE TRUSTEE
SECTION 601. Certain Duties and Responsibilities.
(a) Except during the continuance of an Event of Default,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture, and no implied covenants
or obligations shall be read into this Indenture against the Trustee; and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of the
opinions expressed therein, upon certificates or opinions furnished to the
Trustee and conforming to the requirements of this Indenture; but in the case of
any such certificate or opinion which by any provision hereof is specifically
required to be furnished to the Trustee, the Trustee shall be under a duty to
examine the same to determine whether or not it conforms to the requirements of
this Indenture.
(b) In case an Event of Default has occurred and is continuing, the
Trustee shall exercise such of the rights and powers vested in it by this
Indenture, and use the same degree of care and skill in their exercise, as a
prudent man would exercise or use under the circumstances in the conduct of his
own affairs.
(c) No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act, or its own wilful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
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(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it shall be proved that the Trustee
was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action taken,
suffered or omitted to be taken by it in good faith in accordance with the
direction of the Holders of a majority in principal amount of the Outstanding
Securities of any series, as provided in Section 512, relating to the time,
method and place of conducting any proceeding for any remedy available to the
Trustee, or exercising any trust or power conferred upon the Trustee, under this
Indenture with respect to the Securities of such series; and
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in the
performance of any of its duties hereunder, or in the exercise of any of its
rights or powers, if it shall have reasonable grounds for believing that
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
(d) Whether or not therein expressly so provided, every provision of this
Indenture relating to the conduct or affecting the liability of or affording
protection to the Trustee shall be subject to the provisions of this Section.
SECTION 602. Notice of Defaults.
Within 90 days after the occurrence of any default hereunder with respect
to the Securities of any series the Trustee shall transmit by mail to all
Holders of Securities of such series, as their names and addresses appear in the
Security Register, notice of such default hereunder known to the Trustee, unless
such default shall have been cured or waived; provided, however, that except in
the case of a default in the payment of the principal of (or premium, if any) or
interest, if any, on any Security of such series or in the payment of any
sinking fund installment with respect to Securities of such series, the Trustee
shall be protected in withholding such notice if and so long as the board of
directors, the executive committee or a trust committee of directors or
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interest of the Holders of Securities of such series;
and provided, further, that in the case of any default of the character
specified in Section 501(4) with respect to Securities of such series, no such
notice to Holders shall be given until at least 60 days after the occurrence
thereof. For the purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would become, an Event of
Default with respect to Securities of such series.
SECTION 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request,
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direction, consent, order, bond, debenture, note, other evidence of indebtedness
or other paper or document believed by it to be genuine and to have been signed
and presented by the proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or Company Order and any resolution
of the Board of Directors may be sufficiently evidenced by a Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other evidence
be herein specifically prescribed) may, in the absence of bad faith on its part,
rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel and the written advice of such
counsel or any Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or omitted by it hereunder
in good faith and in reliance thereon;
(e) the Trustee shall be under no obligation to exercise any of the rights
or powers vested in it by this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction;
(f) the Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note, other evidence of indebtedness or other paper or document but the Trustee,
in its discretion, may make such further inquiry or investigation into such
facts or matters as it may see fit, and, if the Trustee shall determine to make
such further inquiry or investigation, it shall be entitled to examine the
books, records and premises of the Company, personally or by agent or attorney;
and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney, including any Authenticating
Agent, appointed with due care by it hereunder.
SECTION 604. Not Responsible for Recitals or Issuance of Securities.
The recitals contained herein and in the Securities, except certificates of
authentication, shall be taken as the statements of the Company, and neither the
Trustee nor any Authenticating Agent assumes any responsibility for their
correctness. The Trustee makes no representations as to the validity or
sufficiency of this Indenture or of the Securities. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or application by the
Company of Securities or the proceeds thereof.
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SECTION 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying Agent, the Security
Registrar or any other agent of the Company or the Trustee, in their individual
or any other capacity, may become the owner or pledgee of Securities and,
subject to Sections 608 and 613, may otherwise deal with the Company with the
same rights it would have if it were not Trustee, Authenticating Agent, Paying
Agent, Security Registrar or such other agent.
SECTION 606. Money Held in Trust.
Money held by the Trustee or any Paying Agent in the trust hereunder need
not be segregated from other funds except to the extent required by law.
Neither the Trustee nor any Paying Agent shall have any liability for interest
on any money received by it hereunder except as otherwise agreed with the
Company.
SECTION 607. Compensation and Reimbursement.
The Company agrees
(1) to pay to the Trustee from time to time reasonable compensation
for all services rendered by it hereunder (which compensation shall not be
limited by any provision of law in regard to the compensation of a trustee of an
express trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and advances
incurred or made by the Trustee in accordance with any provision of this
Indenture (including the reasonable compensation and the expenses and
disbursements of its agents and counsel), except any such expense, disbursement
or advance as may be attributable to its negligence or bad faith; and
(3) to indemnify the Trustee and its agents for, and to hold them
harmless against, any loss, liability or expense incurred without negligence or
bad faith on their part, arising out of or in connection with the acceptance or
administration of the trust or trusts hereunder, including the costs and
expenses of defending themselves against any claim or liability in connection
with the exercise or performance of any of their powers or duties hereunder.
SECTION 608. Disqualification; Conflicting Interests.
(a) If the Trustee has or shall acquire any conflicting interest, as
defined in this Section, with respect to the Securities of any series, it shall,
within 90 days after ascertaining that it has such conflicting interest, either
eliminate such conflicting interest or resign with respect to the Securities of
that series in the manner and with the effect hereinafter specified in this
Article.
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(b) In the event that the Trustee shall fail to comply with the provisions
of Subsection (a) of this Section with respect to the Securities of any series,
the Trustee shall, within 10 days after the expiration of such 90-day period,
transmit by mail to all Holders of Securities of that series, as their names and
addresses appear in the Security Register, notice of such failure.
(c) For the purposes of this Section, the Trustee shall be deemed to have
a conflicting interest with respect to the Securities of any series if
(1) the Trustee is trustee under this Indenture with respect to the
Outstanding Securities of any series other than that series or is trustee under
another indenture under which any other securities or certificates of interest
or participation in any other securities of the Company are outstanding, unless
such other indenture is a collateral trust indenture under which the only
collateral consists of Securities issued under this Indenture, provided that
there shall be excluded from the operation of this paragraph this Indenture with
respect to the Securities of any series other than that series or any indenture
or indentures under which other securities, or certificates of interest or
participation in other securities, of the Company are outstanding, if
(i) this Indenture and such other indenture or indentures are
wholly unsecured and such other indenture or indentures are hereafter
qualified under the Trust Indenture Act, unless the Commission shall have
found and declared by order pursuant to Section 305(b) or Section 307(c) of
the Trust Indenture Act that differences exist between the provisions of
this Indenture with respect to Securities of that series and one or more
other series or the provisions of such other indenture or indentures which
are so likely to involve a material conflict of interest as to make it
necessary in the public interest or for the protection of investors to
disqualify the Trustee from acting as such under this Indenture with
respect to the Securities of that series and such other series or under
such other indenture or indentures, or
(ii) the Company shall have sustained the burden of proving, on
application to the Commission and after opportunity for hearing thereon,
that trusteeship under this Indenture with respect to the Securities of
that series and such other series or such other indenture or indentures is
not so likely to involve a material conflict of interest as to make it
necessary in the public interest or for the protection of investors to
disqualify the Trustee from acting as such under this Indenture with
respect to the Securities of that series and such other series or under
such other indenture or indentures;
(2) the Trustee or any of its directors or executive officers is an
underwriter for the Company;
(3) the Trustee directly or indirectly controls or is directly or
indirectly controlled by or is under direct or indirect common control with the
Company;
(4) the Trustee or any of its directors or executive officers is a
director, officer, partner, employee, appointee or representative of the
Company, or of an underwriter
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(other than the Trustee itself) for the Company who is currently engaged in the
business of underwriting, except that (i) one individual may be a director or an
executive officer, or both, of the Trustee and a director or an executive
officer, or both, of the Company but may not be at the same time an executive
officer of both the Trustee and the Company; (ii) if and so long as the number
of directors of the Trustee in office is more than nine, one additional
individual may be a director or an executive officer, or both, of the Trustee
and a director of the Company; and (iii) the Trustee may be designated by the
Company or by any underwriter for the Company to act in the capacity of transfer
agent, registrar, custodian, paying agent, fiscal agent, escrow agent or
depositary, or in any other similar capacity, or, subject to the provisions of
paragraph (1) of this Subsection, to act as trustee, whether under an indenture
or otherwise;
(5) 10% or more of the voting securities of the Trustee is
beneficially owned either by the Company or by any director, partner or
executive officer thereof, or 20% or more of such voting securities is
beneficially owned, collectively, by any two or more of such persons; or 10% or
more of the voting securities of the Trustee is beneficially owned either by an
underwriter for the Company or by any director, partner or executive officer
thereof, or is beneficially owned, collectively, by any two or more such
persons;
(6) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
Subsection defined), (i) 5% or more of the voting securities, or 10% or more of
any other class of security, of the Company not including the Securities issued
under this Indenture and securities issued under any other indenture under which
the Trustee is also trustee, or (ii) 10% or more of any class of security of an
underwriter for the Company;
(7) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
Subsection defined), 5% or more of the voting securities of any person who, to
the knowledge of the Trustee, owns 10% or more of the voting securities of, or
controls directly or indirectly or is under direct or indirect common control
with, the Company;
(8) the Trustee is the beneficial owner of, or holds as collateral
security for an obligation which is in default (as hereinafter in this
Subsection defined), 10% or more of any class of security of any person who, to
the knowledge of the Trustee, owns 50% or more of the voting securities of the
Company; or
(9) the Trustee owns, on the date of default with respect to the
Securities of any series or any anniversary of such default while such default
remains outstanding in the capacity of executor, administrator, testamentary or
inter vivos trustee, guardian, committee or conservator, or in any other similar
capacity, an aggregate of 25% or more of the voting securities, or of any class
of security, of any person, the beneficial ownership of a specified percentage
of which would have constituted a conflicting interest under paragraph (6), (7)
or (8) of this Subsection. As to any such securities of which the Trustee
acquired ownership through becoming executor, administrator or testamentary
trustee of an estate which included them, the provisions of the preceding
sentence shall not apply, for a period of two years from the date of
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such acquisition, to the extent that such securities included in such estate do
not exceed 25% of such voting securities or 25% of any such class of security.
Promptly after the dates of any such default with respect to the Securities of
any series and annually each succeeding year that such default continues, the
Trustee shall make a check of its holdings of such securities in any of the
above-mentioned capacities as of such dates. If the Company fails to make
payment in full of the principal of (or premium, if any) or interest, if any, on
any of the Securities when and as the same becomes due and payable, and such
failure continues for 30 days thereafter, the Trustee shall make a prompt check
of its holdings of such securities in any of the above-mentioned capacities as
of the date of the expiration of such 30-day period, and after such date,
notwithstanding the foregoing provisions of this paragraph, all such securities
so held by the Trustee, with sole or joint control over such securities vested
in it, shall be considered as though beneficially owned by the Trustee for the
purposes of paragraphs (6), (7) and (8) of this Subsection with respect to
Securities of such series; or
(10) except under the circumstances described in paragraphs (1), (3),
(4), (5) or (6) of Section 311(b) of the Trust Indenture Act, the Trustee shall
be or shall become a creditor of the Company.
In determining whether the Trustee has a conflicting interest with respect
to any series of Securities under this Subsection, each other series of
Securities will be treated as having been issued under an indenture other than
this Indenture.
The specification of percentages in paragraphs (5) through (9), inclusive,
of this Subsection shall not be construed as indicating that the ownership of
such percentages of the securities of a person is or is not necessary or
sufficient to constitute direct or indirect control for the purposes of
paragraph (3) or (7) of this Subsection.
For the purposes of paragraph (1) of this Subsection, the term "series of
securities" or "series" means a series, class or group of securities issuable
under an indenture pursuant to whose terms holders of one such series may vote
to direct the indenture trustee, or otherwise take action pursuant to a vote of
such holders, separately from holders of another such series; provided that
"series of securities" or "series" shall not include any series of securities
issuable under an indenture if all such series rank equally and are wholly
unsecured.
For the purposes of paragraphs (6), (7), (8) and (9) of this Subsection
only, (i) the terms "security" and "securities" shall include only such
securities as are generally known as corporate securities, but shall not include
any note or other evidence of indebtedness issued to evidence an obligation to
repay moneys lent to a person by one or more banks, trust companies or banking
firms, or any certificate of interest or participation in any such note or
evidence of indebtedness; (ii) an obligation shall be deemed to be "in default"
when a default in payment of principal shall have continued for 30 days or more
and shall not have been cured; and (iii) the Trustee shall not be deemed to be
the owner or holder of (A) any security which it holds as collateral security,
as trustee or otherwise, for an obligation which is not in default as defined in
clause (ii) above, or (B) any security which it holds as collateral security
under this Indenture,
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irrespective of any default hereunder, or (C) any security which it holds as
agent for collection, or as custodian, escrow agent or depositary, or in any
similar representative capacity.
(d) For the purposes of this Section:
(1) The term "underwriter," when used with reference to the Company,
means every person who, within one year prior to the time as of which the
determination is made, has purchased from the Company with a view to, or has
offered or sold for the Company in connection with, the distribution of any
security of the Company outstanding at such time, or has participated or has had
a direct or indirect participation in any such undertaking, or has participated
or has had a participation in the direct or indirect underwriting of any such
undertaking, but such term shall not include a person whose interest was limited
to a commission from an underwriter or dealer not in excess of the usual and
customary distributors' or sellers' commission.
(2) The term "director" means any director of a corporation or any
individual performing similar functions with respect to any organization,
whether incorporated or unincorporated.
(3) The term "person" means an individual, a corporation, a
partnership, an association, a joint-stock company, a trust, an unincorporated
organization or a government or political subdivision thereof. As used in this
paragraph, the term "trust" shall include only a trust where the interest or
interests of the beneficiary or beneficiaries are evidenced by a security.
(4) The term "voting security" means any security presently entitling
the owner or holder thereof to vote in the direction or management of the
affairs of a person, or any security issued under or pursuant to any trust,
agreement or arrangement whereby a trustee or trustees or agent or agents for
the owner or holder of such security are presently entitled to vote in the
direction or management of the affairs of a person.
(5) The term "Company" means any obligor upon the Securities.
(6) The term "executive officer" means the president, every vice
president, every trust officer, the cashier, the secretary and the treasurer of
a corporation, and any individual customarily performing similar functions with
respect to any organization whether incorporated or unincorporated, but shall
not include the chairman of the board of directors.
(e) The percentages of voting securities and other securities specified in
this Section shall be calculated in accordance with the following provisions:
(1) A specified percentage of the voting securities of the Trustee,
the Company or any other person referred to in this Section (each of whom is
referred to as a "person" in this paragraph) means such amount of the
outstanding voting securities of such person as entitles the holder or holders
thereof to cast such specified percentage of the aggregate votes which the
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holders of all the outstanding voting securities of such person are entitled to
cast in the direction or management of the affairs of such person.
(2) A specified percentage of a class of securities of a person means
such percentage of the aggregate amount of securities of the class outstanding.
(3) The term "amount," when used in regard to securities, means the
principal amount if relating to evidences of indebtedness, the number of shares
if relating to capital shares and the number of units if relating to any other
kind of security.
(4) The term "outstanding" means issued and not held by or for the
account of the issuer. The following securities shall not be deemed outstanding
within the meaning of this definition:
(i) securities of an issuer held in a sinking fund relating to
securities of the issuer of the same class;
(ii) securities of an issuer held in a sinking fund relating to
another class of securities of the issuer, if the obligation evidenced by
such other class of securities is not in default as to principal or
interest or otherwise;
(iii) securities pledged by the issuer thereof as security
for an obligation of the issuer not in default as to principal or interest
or otherwise; and
(iv) securities held in escrow if placed in escrow by the issuer
thereof; provided, however, that any voting securities of an issuer shall
be deemed outstanding if any Person other than the issuer is entitled to
exercise the voting rights thereof.
(5) A security shall be deemed to be of the same class as another
security if both securities confer upon the holder or holders thereof
substantially the same rights and privileges; provided, however, that, in the
case of secured evidences of indebtedness, all of which are issued under a
single indenture, differences in the interest rates or maturity dates of various
series thereof shall not be deemed sufficient to constitute such series
different classes; and provided, further, that, in the case of unsecured
evidences of indebtedness, differences in the interest rates or maturity dates
thereof shall not be deemed sufficient to constitute them securities of
different classes, whether or not they are issued under a single indenture.
SECTION 609. Corporate Trustee Required; Eligibility.
There shall at all times be a Trustee hereunder which shall be a
corporation organized and doing business under the laws of the United States,
any State thereof or the District of Columbia, authorized under such laws to
exercise corporate trust powers, having a combined capital and surplus of at
least $50,000,000 subject to supervision or examination by Federal, State or
District of Columbia authority. If such corporation publishes reports of
condition at least annually, pursuant to law or to the requirements of said
supervising or examining authority,
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then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. If at any time the Trustee
shall cease to be eligible in accordance with the provisions of this Section, it
shall resign immediately in the manner and with the effect hereinafter specified
in this Article.
SECTION 610. Resignation and Removal; Appointment of Successor.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee or Trustees pursuant to this Article shall become effective
until the acceptance of appointment by the successor Trustee or Trustees in
accordance with the applicable requirements of Section 611.
(b) The Trustee may resign at any time with respect to the Securities of
one or more series by giving written notice thereof to the Company. If the
instrument of acceptance by a successor Trustee required by Section 611 shall
not have been delivered to the Trustee within 30 days after the giving of such
notice of resignation the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with respect to the Securities
of any series by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series, delivered to the Trustee and to the
Company.
(d) If at any time the Trustee shall fail to comply with Section 608(a)
after written request therefor by the Company or by any Holder who has been a
bona fide Holder of a Security for at least six months, the Company by a Board
Resolution may remove the Trustee with respect to the Securities of such series
or, subject to Section 514, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the removal of the Trustee with respect to the Securities of such series and the
appointment of a successor Trustee.
(e) If at any time:
(1) the Trustee shall cease to be eligible under Section 609 and
shall fail to resign after written request therefor by the Company or by any
Holder who has been a bona fide Holder of a Security for at least six months, or
(2) the Trustee shall become incapable of acting or shall be adjudged
a bankrupt or insolvent or a receiver of the Trustee or of its property shall be
appointed or any public officer shall take charge or control of the Trustee or
of its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, (i) the Company by a Board Resolution may
remove the Trustee with respect to all Securities, or (ii) subject to
Section 514, any Holder who has been a bona fide Holder of a Security for at
least six months
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may, on behalf of himself and all others similarly situated, petition any court
of competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(f) If the Trustee shall resign, be removed or become incapable of acting,
or if a vacancy shall occur in the office of Trustee for any cause, with respect
to the Securities of one or more series, the Company, by a Board Resolution,
shall promptly appoint a successor Trustee or Trustees with respect to the
Securities of that or those series (it being understood that any such successor
Trustee may be appointed with respect to the Securities of one or more or all of
such series and that at any time there shall be only one Trustee with respect to
the Securities of any particular series) and shall comply with the applicable
requirements of Section 611. If, within one year after such resignation,
removal or incapability, or the occurrence of such vacancy, a successor Trustee
with respect to the Securities of any series shall be appointed by Act of the
Holders of a majority in principal amount of the Outstanding Securities of such
series delivered to the Company and the retiring Trustee, the successor Trustee
so appointed shall, forthwith upon its acceptance of such appointment in
accordance with the applicable requirements of Section 611, become the successor
Trustee with respect to the Securities of such series and to that extent
supersede the successor Trustee appointed by the Company with respect to such
series. If no successor Trustee with respect to the Securities of any series
shall have been so appointed by the Company or the Holders of the Securities of
such series and accepted appointment in the manner required by Section 611, any
Holder who has been a bona fide Holder of a Security of such series for at least
six months may, on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the appointment of a successor Trustee
with respect to the Securities of such series.
(g) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series by mailing
written notice of such event by first-class mail, postage prepaid, to all
holders of Securities of such series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor Trustee
with respect to the Securities of such series and the address of its Corporate
Trust Office.
SECTION 611. Acceptance of Appointment by Successor.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all series of Securities, every such successor Trustee so appointed
shall execute, acknowledge and deliver to the Company and to the retiring
Trustee an instrument accepting such appointment, and thereupon the resignation
or removal of the retiring Trustee shall become effective and such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee; but, on the
request of the Company or the successor Trustee, such retiring Trustee shall,
upon payment of its charges due hereunder, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder subject
to the lien provided in Section 607.
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(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
retiring Trustee and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture supplemental hereto
wherein each successor Trustee shall accept such appointment and which (1) shall
contain such provisions as shall be necessary or desirable to transfer and
confirm to, and to vest in, each successor Trustee all the rights, powers,
trusts and duties of the retiring Trustee with respect to the Securities of that
or those series to which the appointment of such successor Trustee relates,
(2) if the retiring Trustee is not retiring with respect to all series of
Securities, shall contain such provisions as shall be deemed necessary or
desirable to confirm that all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or those series as to
which the retiring Trustee is not retiring shall continue to be vested in the
retiring Trustee, and (3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the administration
of the trusts hereunder by more than one Trustee, it being understood that
nothing herein or in such supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee shall be trustee of a
trust or trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring Trustee
shall become effective to the extent provided therein and each such successor
Trustee, without any further act, deed or conveyance, shall become vested with
all the rights, powers, trusts and duties of the retiring Trustee with respect
to the Securities of that or those series to which the appointment of such
successor Trustee relates; but, on request of the Company or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company shall execute
any and all instruments for more fully and certainly vesting in and confirming
to such successor Trustee all such rights, powers and trusts referred to in
paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 612. Merger, Conversion, Consolidation or Succession to Business.
Any corporation into which the Trustee may be merged or converted or with
which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been
authenticated, but not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such authenticating Trustee may
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adopt such authentication and deliver the Securities so authenticated with the
same effect as if such successor Trustee had itself authenticated such
Securities.
SECTION 613. Preferential Collection of Claims Against Company.
(a) Subject to Subsection (b) of this Section, if the Trustee shall be or
shall become a creditor, directly or indirectly, secured or unsecured, of the
Company within three months prior to a default, as defined in Subsection (c) of
this Section, or subsequent to such a default, then, unless and until such
default shall be cured, the Trustee shall set apart and hold in a special
account for the benefit of the Trustee individually, the Holders of the
Securities and the holders of other indenture securities, as defined in
Subsection (c) of this Section:
(1) an amount equal to any and all reductions in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such three month period and valid as against the
Company and its other creditors, except any such reduction resulting from the
receipt or disposition of any property described in paragraph (2) of this
Subsection, or from the exercise of any right of set-off which the Trustee could
have exercised if a petition in bankruptcy had been filed by or against the
Company upon the date of such default; and
(2) all property received by the Trustee in respect of any claims as
such creditor, either as security therefor, or in satisfaction or composition
thereof, or otherwise, after the beginning of such three month period, or an
amount equal to the proceeds of any such property, if disposed of, subject,
however, to the rights, if any, of the Company and its other creditors in such
property or such proceeds.
Nothing herein contained, however, shall affect the right of the Trustee:
(A) to retain for its own account (i) payments made on account
of any such claim by any Person (other than the Company) who is liable
thereon, and (ii) the proceeds of the bona fide sale of any such claim by
the Trustee to a third Person, and (iii) distributions made in cash,
securities or other property in respect of claims filed against the Company
in bankruptcy or receivership or in proceedings for reorganization pursuant
to the Federal Bankruptcy Code or applicable State law;
(B) to realize, for its own account, upon any property held by
it as security for any such claim, if such property was so held prior to
the beginning of such three month period;
(C) to realize, for its own account, but only to the extent of
the claim hereinafter mentioned, upon any property held by it as security
for any such claim, if such claim was created after the beginning of such
three month period and such property was received as security therefor
simultaneously with the creation thereof, and if the Trustee shall sustain
the burden of proving that at the time such property was so received
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the Trustee had no reasonable cause to believe that a default, as defined
in Subsection (c) of this Section, would occur within three months; or
(D) to receive payment on any claim referred to in paragraph (B)
or (C), against the release of any property held as security for such claim
as provided in paragraph (B) or (C), as the case may be, to the extent of
the fair value of such property.
For the purposes of paragraphs (B), (C) and (D), property substituted after
the beginning of such three month period for property held as security at the
time of such substitution shall, to the extent of the fair value of the property
released, have the same status as the property released, and, to the extent that
any claim referred to in any of such paragraphs is created in renewal of or in
substitution for or for the purpose of repaying or refunding any pre-existing
claim of the Trustee as such creditor, such claim shall have the same status as
such pre-existing claim.
If the Trustee shall be required to account, the funds and property held in
such special account and the proceeds thereof shall be apportioned among the
Trustee, the Holders and the holders of other indenture securities in such
manner that the Trustee, the Holders and the holders of other indenture
securities realize, as a result of payments from such special account and
payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Code or applicable State law, the same percentage of their respective
claims, figured before crediting to the claim of the Trustee anything on account
of the receipt by it from the Company of the funds and property in such special
account and before crediting to the respective claims of the Trustee and the
Holders and the holders of other indenture securities dividends on claims filed
against the Company in bankruptcy or receivership or in proceedings for
reorganization pursuant to the Federal Bankruptcy Code or applicable State law,
but after crediting thereon receipts on account of the indebtedness represented
by their respective claims from all sources other than from such dividends and
from the funds and property so held in such special account. As used in this
paragraph, with respect to any claim, the term "dividends" shall include any
distribution with respect to such claim, in bankruptcy or receivership or
proceedings for reorganization pursuant to the Federal Bankruptcy Code or
applicable State law, whether such distribution is made in cash, securities or
other property, but shall not include any such distribution with respect to the
secured portion, if any, of such claim. The court in which such bankruptcy,
receivership or proceeding for reorganization is pending shall have jurisdiction
(i) to apportion among the Trustee, the Holders and the holders of other
indenture securities, in accordance with the provisions of this paragraph, the
funds and property held in such special account and proceeds thereof, or (ii) in
lieu of such apportionment, in whole or in part, to give to the provisions of
this paragraph due consideration in determining the fairness of the
distributions to be made to the Trustee and the Holders and the holders of other
indenture securities with respect to their respective claims, in which event it
shall not be necessary to liquidate or to appraise the value of any securities
or other property held in such special account or as security for any such
claim, or to make a specific allocation of such distributions as between the
secured and unsecured
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portions of such claims, or otherwise to apply the provisions of this paragraph
as a mathematical formula.
Any Trustee which has resigned or been removed after the beginning of such
three month period shall be subject to the provisions of this Subsection as
though such resignation or removal had not occurred. If any Trustee has
resigned or been removed prior to the beginning of such three month period it
shall be subject to the provisions of this Subsection if and only if the
following conditions exist:
(i) the receipt of property or reduction of claim which would
have given rise to the obligation to account, if such Trustee had continued
as Trustee, occurred after the beginning of such three month period; and
(ii) such receipt of property or reduction of claim occurred
within three months after such resignation or removal.
(b) There shall be excluded from the operation of Subsection (a) of this
Section a creditor relationship arising from:
(1) the ownership or acquisition of securities issued under any
indenture, or any security or securities having a maturity of one year or more
at the time of acquisition by the Trustee;
(2) advances authorized by a receivership or bankruptcy court of
competent jurisdiction or by this Indenture, for the purpose of preserving any
property which shall at any time be subject to the lien of this Indenture or of
discharging tax liens or other prior liens or encumbrances thereon, if notice of
such advances and of the circumstances surrounding the making thereof is given
to the Holders at the time and in the manner provided in this Indenture;
(3) disbursements made in the ordinary course of business in the
capacity of trustee under an indenture, transfer agent, registrar, custodian,
escrow agent, paying agent, fiscal agent or depositary, or other similar
capacity;
(4) an indebtedness created as a result of services rendered or
premises rented; or an indebtedness created as a result of goods or securities
sold in a cash transaction, as defined in Subsection (c) of this Section;
(5) the ownership of stock or of other securities of a corporation
organized under the provisions of Section 25(a) of the Federal Reserve Act, as
amended, which is directly or indirectly a creditor of the Company; and
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper, as defined in Subsection (c) of this
Section.
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(c) For the purposes of this Section only;
(1) the term "default" means any failure to make payment in full of
the principal of (or premium, if any) or interest, if any, on any of the
Securities or upon the other indenture securities when and as such principal (or
premium, if any) or interest, if any, becomes due and payable;
(2) the term "other indenture securities" means securities upon which
the Company is an obligor outstanding under any other indenture (i) under which
the Trustee is also trustee, (ii) which contains provisions substantially
similar to the provisions of this Section, and (iii) under which a default
exists at the time of the apportionment of the funds and property held in the
special account provided for in this Section;
(3) the term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within seven days after delivery of
the goods or securities in currency or in checks or other orders drawn upon
banks or bankers and payable upon demand;
(4) the term "self-liquidating paper" means any draft, bill of
exchange, acceptance or obligation which is made, drawn, negotiated or incurred
by the Company for the purpose of financing the purchase, processing,
manufacture, shipment, storage or sale of goods, wares or merchandise and which
is secured by documents evidencing title to, possession of, or a lien upon, the
goods, wares or merchandise or the receivables or proceeds arising from the sale
of the goods, wares or merchandise previously constituting the security,
provided the security is received by the Trustee simultaneously with the
creation of the creditor relationship with the Company arising from the making,
drawing, negotiating or incurring of the draft, bill of exchange, acceptance or
obligation;
(5) the term "Company" means any obligor upon the Securities; and
(6) the term "Federal Bankruptcy Code" means the United States
Bankruptcy Code or Title 11 of the United States Code.
SECTION 614. Appointment of Authenticating Agent.
At any time from and after the execution of this Indenture the Trustee may
appoint an Authenticating Agent or Agents with respect to one or more series of
Securities which shall be authorized to act on behalf of the Trustee to
authenticate and deliver Securities of such series with respect to which it has
been so designated, and Securities so authenticated and delivered shall be
entitled to the benefits of this Indenture and shall be valid and obligatory for
all purposes as if authenticated by the Trustee hereunder. Wherever reference
is made in this Indenture to the authentication and delivery of Securities by
the Trustee or the Trustee's certificate of authentication, such reference shall
be deemed to include authentication and delivery on behalf of the Trustee by an
Authenticating Agent and a certificate of authentication executed on behalf of
the Trustee by the Authenticating Agent. Each Authenticating Agent shall
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be acceptable to the Company and shall at all times be a bank or trust company
or corporation organized and doing business and in good standing under the laws
of the United States, any State thereof or the District of Columbia, authorized
under such laws to act as Authenticating Agent, having a combined capital and
surplus of not less than $50,000,000 and subject to supervision or examination
by Federal, State or District of Columbia authority. If such Authenticating
Agent publishes reports of condition at least annually, pursuant to law or to
the requirements of said supervising or examining authority, then for the
purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time
an Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party, or any corporation succeeding to the corporate agency or
corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign with respect to one or more series of
Securities at any time by giving written notice thereof to the Trustee and to
the Company. The Trustee may at any time terminate the agency of an
Authenticating Agent with respect to one or more series of Securities by giving
written notice thereof to such Authenticating Agent and to the Company. Upon
receiving such a notice of resignation or upon such a termination, or in case at
any time such Authenticating Agent shall cease to be eligible in accordance with
the provisions of this Section, the Trustee may appoint a successor
Authenticating Agent which shall be acceptable to the Company and shall mail
written notice of such appointment by first-class mail, postage prepaid, to all
Holders of Securities of the series with respect to which such Authenticating
Agent will serve, as their names and addresses appear in the Security Register.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Trustee agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section, and the Trustee
shall be entitled to be reimbursed for such payments, in accordance with the
provisions of Section 607. The provisions of Section 104, 111, 603 and 604
shall be applicable to any Authenticating Agent.
Pursuant to each appointment made under this Section, the Securities of
each series covered by such appointment may have endorsed thereon, in lieu of
the Trustee's certificate of authentication, an alternate certificate of
authentication in substantially the following form:
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This is one of the Securities, of the series designated herein, issued
under the within-mentioned Indenture.
[NAME OF TRUSTEE]
as Trustee
By (Print Name)
---------------------------------------
as Authenticating Agent for the Trustee
Its
-------------------------------------
By
---------------------------------------
Authorized Officer
ARTICLE SEVEN
HOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY
SECTION 701. Company to Furnish Trustee Names and Addresses of Holders.
The Company will furnish or cause to be furnished to the Trustee with
respect to the Securities of each series (a) semi-annually, either (i) not later
than June 30 and December 31 in each year in the case of Original Issue Discount
Securities which by their terms bear interest only after Maturity, or (ii) not
later than 15 days after each Regular Record Date in the case of Securities of
any other series, if and so long as Securities of such series are Outstanding,
and (b) at such other times as the Trustee may request in writing within 30 days
after receipt by the Company of such request, a list in such form as the Trustee
may reasonably require containing all the information in the possession or
control of the Company, or any of its Paying Agents other than the Trustee as to
the names and addresses of the Holders obtained since the date as of which the
next previous list, if any was furnished; provided, however, that any such list
may exclude names and addresses received by the Trustee in its capacity as
Security Registrar if it shall be so acting. Any such list may be dated as of a
date not more than 15 days prior to the time such information is furnished or
caused to be furnished and need not include information received after such
date.
SECTION 702. Preservation of Information; Communications to Holders.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar or Paying Agent, if so acting.
The Trustee may (i) destroy any list furnished to it as provided in
Section 701 upon receipt of a new complete list so furnished, (ii) destroy any
information received by it as Paying
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Agent or Security Registrar (if so acting) hereunder upon delivering to itself
as Trustee, not earlier than 45 days after June 30 and December 31 of each year,
a list containing the names and addresses of the Holders obtained from such
information since the delivery of the next previous list, if any, and
(iii) destroy any list delivered to itself as Trustee which was compiled from
information received by it as Paying Agent or Security Registrar (if so acting)
hereunder upon the receipt of a new complete list so delivered.
(b) If three of more Holders of Securities of a series (herein referred to
as "applicants") apply in writing to the Trustee, and furnish to the Trustee
reasonable proof that each such applicant has owned a Security of such series
for a period of at least six months preceding the date of such application, and
such application states that the applicants desire to communicate with other
Holders of Securities of such series or with Holders of all Securities with
respect to their rights under this Indenture or under such Securities and is
accompanied by a copy of the form of proxy or other communication which such
applicants propose to transmit, then the Trustee shall, within five business
days after the receipt of such application, at its election, either
(i) afford such applicants access to the information preserved
at the time by the Trustee in accordance with Section 702(a), or
(ii) inform such applicants as to the approximate number of
Holders of Securities of such series or all Securities as the case may be
whose names and addresses appear in the information preserved at the time
by the Trustee in accordance with Section 702(a), and as to the approximate
cost of mailing to such Holders the form of proxy or other communication,
if any, specified in such application.
If the Trustee shall elect not to afford such applicants access to such
information, the Trustee shall upon the written request of such applicants mail
to each Holder of Securities of such series or all Securities as the case may be
whose name and address appear in the information preserved at the time by the
Trustee in accordance with Section 702(a), a copy of the form of proxy or other
communication which is specified in such request, with reasonable promptness
after a tender to the Trustee of the material to be mailed and of payment, or
provision for the payment, of the reasonable expenses of mailing, unless within
five days after such tender the Trustee shall mail to such applicants and file
with the Commission, together with a copy of the material to be mailed a written
statement to the effect that, in the opinion of the Trustee, such mailing would
be contrary to the best interest of the Holders of Securities of such series or
all Securities as the case may be or would be in violation of applicable law.
Such written statement shall specify the basis of such opinion. If the
Commission, after opportunity for a hearing upon the objections specified in the
written statement so filed, shall enter an order refusing to sustain any of such
objections or if, after the entry of an order sustaining one or more of such
objections, the Commission shall find, after notice and opportunity for hearing,
that all the objections so sustained have been met and shall enter an order so
declaring the Trustee shall mail copies of such material to all such Holders
with reasonable promptness after the entry of such order and the renewal of such
tender; otherwise the Trustee shall be relieved of any obligation or duty to
such applicants respecting their application.
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(c) Every Holder of Securities, by receiving and holding the same, agrees
with the Company and the Trustee that neither the Company nor the Trustee nor
any Paying Agent nor the Security Registrar nor any agent of any of them shall
be held accountable by reason of the disclosure of any such information as to
the names and addresses of Holders in accordance with Section 702(b), regardless
of the source from which such information was derived, and that the Trustee
shall not be held accountable by reason of mailing any material pursuant to a
request made under Section 702(b).
SECTION 703. Reports by Trustee.
Within 60 days after each May 15, beginning with May 15, 1997, the Trustee
shall mail to each Holder as provided in Section 313(c) of the Trust Indenture
Act a brief report that complies with 313(a) of the Trust Indenture Act dated as
of such May 15, if required by Section 313(a) of the Trust Indenture Act.
SECTION 704. Reports by Company.
The Company shall:
(1) file with the Trustee, within 15 days after the Company is
required to file the same with the Commission, copies of the annual reports and
of the information, documents and other reports (or copies of such portions of
any of the foregoing as the Commission may from time to time by rules and
regulations prescribe) which the Company may be required to file with the
Commission pursuant to Section 13 or Section 15(d) of the Securities Exchange
Act of 1934; or, if the Company is not required to file information, documents
or reports pursuant to either of said Sections, then it shall file with the
Trustee and the Commission, in accordance with rules and regulations prescribed
from time to time by the Commission, such of the supplementary and periodic
information, documents and reports which may be required pursuant to Section 13
of the Securities Exchange Act of 1934 in respect of a security listed and
registered on a national securities exchange as may be prescribed from time to
time in such rules and regulations;
(2) file with the Trustee and the Commission, in accordance with
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by the
Company with the conditions and covenants of this Indenture as may be required
from time to time by such rules and regulations;
(3) transmit by mail to all Holders, as their names and addresses
appear in the Security Register, within 30 days after the filing thereof with
the Trustee, such summaries of any information, documents and reports required
to be filed by the Company pursuant to paragraphs (1) and (2) of this Section as
may be required to be so transmitted by rules and regulations prescribed from
time to time hereafter by the Commission; and
(4) furnish to the Trustee, not less often than annually, a brief
certificate from the principal executive officer, principal financial officer or
principal accounting officer of the
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Company as to his or her knowledge of the Company's compliance with all
conditions and covenants under this Indenture. For purposes of this paragraph,
such compliance shall be determined without regard to any period of grace or
requirement of notice provided under this Indenture.
ARTICLE EIGHT
CONSOLIDATION, MERGER, CONVEYANCE, TRANSFER OR LEASE
SECTION 801. Company May Consolidate, Etc., Only on Certain Terms.
The Company shall not consolidate with or merge into any other corporation
or convey, transfer or lease its properties and assets substantially as an
entirety to any Person, and the Company shall not permit any Person to
consolidate with or merge into the Company or to convey, transfer or lease its
properties and assets substantially as an entirety to the Company, unless:
(1) in case the Company shall consolidate with or merge into another
corporation or convey, transfer or lease its properties and asserts
substantially as an entirety to any Person, the corporation formed by such
consolidation or into which the Company is merged or the Person which acquires
by conveyance or transfer, or which leases, the properties and assets of the
Company substantially as an entirety shall be a corporation organized and
existing under the laws of the United States, any State thereof or the District
of Columbia and shall expressly assume, by an indenture supplemental hereto,
executed and delivered to the Trustee, in form satisfactory to the Trustee, the
due and punctual payment of the principal of (and premium, if any) and interest,
if any, on all the Securities and the performance of every covenant of this
Indenture on the part of the Company to be performed or observed;
(2) immediately after giving effect to such transaction and treating
any indebtedness which becomes an obligation of the Company or a Subsidiary as a
result of such transaction as having been incurred by the Company or the
Subsidiary at the time of such transaction, no Event of Default, and no event
which, after notice or lapse of time or both, would become an Event of Default,
shall have happened and be continuing;
(3) if, as a result of any such consolidation or merger or such
conveyance, transfer or lease, properties or assets of the Company would become
subject to a mortgage, pledge, lien, security interest or other encumbrance
which would not be permitted by Section 1005, the Company or such successor
corporation or Person, as the case may be, shall take such steps as shall be
necessary effectively to secure the Securities equally and ratably with (or
prior to) all indebtedness secured thereby; and
(4) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that such consolidation, merger,
conveyance, transfer or lease and, if a supplemental indenture is required in
connection with such transaction, such
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supplemental indenture complies with this Article and that all conditions
precedent herein provided for relating to such transaction have been complied
with.
SECTION 802. Successor Corporation Substituted.
Upon any consolidation by the Company with or merger by the Company into any
other corporation or any conveyance, transfer or lease of the properties and
assets of the Company substantially as an entirety in accordance with
Section 801, the successor corporation formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor corporation had been named as the Company herein, and thereafter,
except in the case of a lease, the Company (which term for this purpose shall
mean the Person named as the "Company" in the first paragraph of this Indenture
or any successor corporation which shall theretofore have become such in the
manner prescribed in this Article) shall be relieved of all obligations and
covenants under this Indenture and the Securities and may be dissolved and
liquidated.
ARTICLE NINE
SUPPLEMENTAL INDENTURES
SECTION 901. Supplemental Indentures Without Consent of Holders.
Without the consent of any Holder, the Company, when authorized by a Board
Resolution, and the Trustee, at any time and from time to time, may enter into
one or more indentures supplemental hereto, in form satisfactory to the Trustee,
for any of the following purposes:
(1) to evidence the succession of another corporation to the Company
and the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of all or any series of Securities (and if such covenants are to be for
the benefit of less than all series of Securities, stating that such covenants
are expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default; or
(4) to add to or change or eliminate any of the provisions of this
Indenture to such extent as shall be necessary to permit or facilitate the
issuance of Securities in bearer form, registrable or not registrable as to
principal, and with or without interest coupons; or
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(5) to change or eliminate any of the provisions of this Indenture,
provided that any such change or elimination shall become effective only when
there is no Security Outstanding of any series created prior to the execution of
such supplemental indenture which is entitled to the benefit of such provision;
or
(6) to secure the Securities pursuant to the requirements of
Section 1005 or otherwise; or
(7) to establish the form or terms of Securities of any series as
permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to the requirements of
Section 611(b); or
(9) to cure any ambiguity, to correct or supplement any provision
herein which may be inconsistent with any other provision herein, or to make any
other provisions with respect to matters or questions arising under this
Indenture, provided such action shall not adversely affect the interests of the
Holders of Securities or any series in any material respect.
SECTION 902. Supplemental Indentures with Consent of Holders.
With the consent of the Holders of not less than a majority in principal
amount of the Outstanding Securities of all series affected by such supplemental
indenture, by Act of said Holders delivered to the Company and the Trustee, the
Company, when authorized by a Board Resolution, and the Trustee may enter into
an indenture or indentures supplemental hereto for the purpose of adding any
provisions to or changing in any manner or eliminating any of the provisions of
this Indenture or of modifying in any manner the rights of the Holders of
Securities of such series under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the Holder of each
Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium payable
upon the redemption thereof, or modify the manner of determination of the rate
of interest thereon so as to affect adversely the interest of such Holder or
reduce the amount of the principal of the Original Issue Discount Security that
would be due and payable upon a declaration of acceleration of the Maturity
thereof pursuant to Section 502, or change any Place of Payment where, or the
coin or currency in which, any Security or any premium or the interest thereon
is payable, or impair the right to institute suit for the enforcement of any
such payment on or after the Stated Maturity thereof (or, in the case of
redemption or repayment, on or after the Redemption Date or Repayment Date), or
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<PAGE>
(2) reduce the percentage in principal amount of the Outstanding
Securities of any series, the consent of whose Holders is required for any such
supplemental indenture, or the consent of whose Holders is required for any
waiver (of compliance with certain provisions of this Indenture or certain
defaults hereunder and their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section, Section 513 or
Section 1007, except to increase any such percentage or to provide that certain
other provisions of this Indenture cannot be modified or waived without the
consent of the Holder of each Outstanding Security affected thereby; provided,
however, that this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to the "Trustee" and
concomitant changes in this Section and Section 1007, or the deletion of this
proviso, in accordance with the requirements of Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any covenant or other
provision of this Indenture which has expressly been included solely for the
benefit of one or more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with respect to such covenant
or other provision, shall be deemed not to affect the rights under this
Indenture of the Holders of Securities of any other series.
The Company may, but shall not be obligated to, fix a record date for the
purpose of determining the Persons entitled to consent to any indenture
supplemental hereto. If a record date is fixed, the Holders on such record
date, or their duly designated proxies, and only such Persons, shall be entitled
to consent to such supplemental indenture, whether or not such Holders remain
Holders after such record date; PROVIDED, that unless such consent shall have
become effective by virtue of the requisite percentage having been obtained
prior to the date which is 90 days after such record date, any such consent
previously given shall automatically and without further action by any Holder be
canceled and of no further effect.
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 903. Execution of Supplemental Indentures.
In executing or accepting the additional trusts created by any supplemental
indenture permitted by this Article or the modifications thereby of the trusts
created by this Indenture, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying upon, an Opinion of
Counsel stating that the execution of such supplemental indenture is authorized
or permitted by this Indenture and that such supplemental indenture, when
executed and delivered by the Company, will constitute a valid and binding
obligation of the Company in accordance with its terms. The Trustee may, but
shall not be obligated to, enter into any such supplemental indenture which
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise.
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SECTION 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture under this Article, this
Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act as then in effect.
SECTION 906. Reference in Securities to Supplemental Indentures.
Securities of any series authenticated and delivered after the execution of
any supplemental indenture pursuant to this Article may, and shall if required
by the Trustee, bear a notation in form approved by the Trustee as to any matter
provided for in such supplemental indenture. If the Company shall so determine,
new Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any such supplemental indenture may be
prepared and executed by the Company and authenticated and delivered by the
Trustee or any Authenticating Agent in exchange for Outstanding Securities of
such series.
ARTICLE TEN
COVENANTS
SECTION 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees that it will duly and punctually pay the
principal of (and premium, if any) and interest, if any, on the Securities of
each series in accordance with the terms of the Securities of such series and
this Indenture.
SECTION 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment for any series of
Securities an office or agency where Securities of that series may be presented
or surrendered for payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices and demands to or
upon the Company in respect of the Securities of that series and this Indenture
may be served, provided, however, that at the option of the Company, payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register. The Company will
give prompt written notice to the Trustee of the location, and any change in the
location, of such office or agency. With respect to the Securities of any
series such office or agency and each Place of Payment shall be as specified as
contemplated in Section 301. If at any time the Company shall fail to maintain
any such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the
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Corporate Trust Office of the Trustee, and the Company hereby appoints the
Trustee as its agent to receive all such presentations, surrenders, notices and
demands.
The Company may also from time to time designate one or more other offices
or agencies where the Securities of one or more series may be presented or
surrendered for any or all such purposes and may from time to time rescind such
designations; provided, however, that no such designation or rescission shall in
any manner relieve the Company of its obligation to maintain an office or agency
in each Place of Payment for Securities of any series for such purposes. The
Company will give prompt written notice to the Trustee of any such designation
or rescission and of any change in the location of any such office or agency.
SECTION 1003. Money for Securities Payments to be Held in Trust.
If the Company shall at any time act as its own Paying Agent with respect
to any series of Securities, it will, on or before each due date of the
principal of (and premium, if any) or interest, if any, on any of the Securities
of that series, segregate and hold in trust for the benefit of the Persons
entitled thereto a sum sufficient to pay the principal (and premium, if any) or
interest, if any, so becoming due until such sums shall be paid to such Persons
or otherwise disposed of as herein provided and will promptly notify the Trustee
of its actions or failure so to act.
Whenever the Company shall have one or more Paying Agents for any series of
Securities, it will, prior to each due date of the principal of (and premium, if
any) or interest, if any, on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal (and premium, if any) or
interest, if any, so becoming due, such sum to be held in trust for the benefit
of the Persons entitled to such principal, premium or interest, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee of its
action or failure so to act.
The Company will cause each Paying Agent other than the Trustee for any
series of Securities to execute and deliver to the Trustee an instrument in
which such Paying Agent shall agree with the Trustee, subject to the provisions
of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of (and
premium, if any) or interest, if any, on Securities of that series in trust for
the benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company (or any
other obligor upon the Securities of that series) in the making of any payment
of principal (and premium, if any) or interest, if any, on the Securities of
that series; and
(3) at any time during the continuance of any such default, upon the
written request of the Trustee, forthwith pay to the Trustee all sums so held in
trust by such Paying Agent.
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The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture or for any other purpose, pay, or by Company
Order direct any Paying Agent to pay, to the Trustee all sums held in trust by
the Company or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or such
Paying Agent; and upon such payment by any Paying Agent to the Trustee, such
Paying Agent shall be released from all further liability with respect to such
money.
Any money deposited with the Trustee and the principal and interest
received on Eligible Instruments deposited with the Trustee, or any money
deposited with any Paying Agent, or then held by the Company, in trust for the
payment of the principal of (and premium, if any) or interest, if any, on any
Security of any series and remaining unclaimed for three years after such
principal (and premium, if any) or interest, if any, has become due and payable
shall, unless otherwise required by mandatory provisions of applicable escheat
or abandoned or unclaimed property law, be paid to the Company on Company
Request, or (if then held by the Company) shall be discharged from such trust;
and the Holder of such Security shall, unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property law,
thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such Paying Agent with
respect to such trust money, and all liability of the Company as trustee
thereof, shall thereupon cease; provided, however, that the Trustee or such
Paying Agent, before being required to make any such repayment, may at the
expense of the Company cause to be published once, in a newspaper published in
the English language, customarily published on each Business Day and of general
circulation in each Place of Payment with respect to Securities of such series,
notice that such money remains unclaimed and that, after a date specified
therein, which shall not be less than 30 days from the date of such publication,
any unclaimed balance of such money then remaining will, unless otherwise
required by mandatory provisions of applicable escheat or abandoned or unclaimed
property law, be repaid to the Company.
SECTION 1004. Corporate Existence.
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence.
SECTION 1005. Restrictions on Liens and Encumbrances.
After the date hereof, the Company will not itself, and will not permit any
Restricted Subsidiary to, create, incur, issue, assume, become liable for,
directly or indirectly, absolutely or contingently, or guarantee any loans,
including obligations created or arising under any conditional sale, financing
lease or other title retention agreement and obligations to pay for property,
whether or not evidenced by negotiable instruments or securities, or any notes,
bonds, debentures or other similar evidences of indebtedness for money borrowed
(such loans, and such notes, bonds, debentures or other similar evidences of
indebtedness for money borrowed being hereinafter in this Section 1005 called
"Debt"), secured by pledge of, or mortgage or lien on, any Property of the
Company of any Restricted Subsidiary or any shares of capital stock or of
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Debt of any Restricted Subsidiary (such mortgages, pledges and liens being
hereinafter in this Section 1005 called "Mortgage" or "Mortgages"), without
effectively providing that the Securities (together with, if the Company shall
so determine, any other Debt of the Company or such Restricted Subsidiary then
existing or thereafter created which is not subordinate to the Securities) shall
be secured equally and ratably with (or, at the option of the Company, prior to)
such secured Debt, so long as such secured Debt shall be so secured, unless,
after giving effect thereto, the aggregate amount of all Debt secured by
Mortgages of the Company and its Restricted Subsidiaries would not exceed 15% of
Consolidated Assets; provided, however, that this Section 1005 shall not apply
to, and there shall be excluded from Debt secured by Mortgages in any
computation under this Section 1005, Debt secured by:
(1) Mortgages existing as of the date of this Indenture and securing
indebtedness for money borrowed existing as of the date of this Indenture;
(2) Mortgages on property of, or on any shares of capital stock of or
Debt of, any corporation existing at the time such corporation becomes a
Restricted Subsidiary;
(3) Mortgages in favor of the Company or any Restricted Subsidiary;
(4) Mortgages in favor of any governmental body to secure progress,
advance or other payments pursuant to any contract or provision of any statute;
(5) Mortgages on property, shares of capital stock or Debt existing
at the time of acquisition thereof, or to secure the payment of all or any part
of the purchase price thereof or construction thereon or to secure any Debt
incurred prior to, at the time of, or within 180 days after the later of the
acquisition of such property, shares of capital stock or Debt or the completion
of construction for the purpose of financing all or any part of the purchase
price thereof or construction thereon;
(6) Mortgages securing obligations issued by a State, territory or
possession of the United States, or any political subdivision of any of the
foregoing, or the District of Columbia, to finance the acquisition or
construction of property, and on which the interest is not, in the opinion of
tax counsel of recognized standing or in accordance with a ruling issued by the
Internal Revenue Service, includable in gross income of the holder by reason of
Section 103(a)(1) of the Internal Revenue Code of 1986, as amended (or any
successor to such provision) as in effect at the time of the issuance of such
obligations; or
(7) Any extension, renewal or replacement (or successive extensions,
renewals or replacements), as a whole or in part, of any Mortgage referred to in
the foregoing clauses (1) through (6), inclusive; provided, however, that such
extension, renewal or replacement Mortgage shall be limited to all or part of
the same property, shares of capital stock or Debt that secured the Mortgage
extended, renewed or replaced (plus improvements on such property).
For purposes of this Section 1005, an "acquisition" of property (including
real, personal or intangible property or shares or series of capital stock or
Debt) shall include any transaction
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or series of transactions by which the Company or a Subsidiary acquires,
directly or indirectly, an interest or an additional interest (to the extent
thereof), in such property, including without limitation an acquisition through
merger or consolidation with, or an acquisition of an interest in, a Person
owning an interest in such property.
SECTION 1006. Investment Agreement.
After the date hereof, the Company (1) will observe and perform in all
material respects all covenants or agreements of the Company contained in
the Investment Agreement, (2) will use its best efforts to cause Nordstrom to
observe and perform in all material respects all covenants or agreements of
Nordstrom contained in the Investment Agreement, and (3) will not waive
compliance under, amend in any material respect or terminate the Investment
Agreement; provided, however, that the Investment Agreement may be amended if
as a result thereof there is not a downgrading or revocation of any credit
rating on Outstanding Securities of any series or any other securities of the
Company.
SECTION 1007. Statement as to Compliance.
The Company will deliver to the Trustee, within 120 days after the end of
each fiscal year of the Company ending after the date hereof, an Officers
Certificate, stating as to each signer thereof that to the best of his
knowledge, the Company is not in default in the fulfillment of any of its
obligations under Sections 1001 to 1005 hereof, or specifying each such default
known to him and the nature and status thereof.
SECTION 1008. Waiver of Certain Covenants.
The Company may omit in any particular instance to comply with any covenant
or condition set forth in Sections 1002 to 1006, inclusive, with respect to the
Securities of any series, if before the time for such compliance the Holders of
at least a majority in principal amount of the Outstanding Securities of such
series, or with respect to the Securities of all series if the omission is being
sought with respect to the Securities of all series, a majority in principal
amount of the Outstanding Securities of all series (voting as a single class),
shall, by Act of such Holders, either waive such compliance in such instance or
generally waive compliance with such covenant or condition, but no such waiver
shall extend to or affect such covenant or condition except to the extent so
expressly waived, and, until such waiver shall become effective, the obligations
of the Company and the duties of the Trustee with respect to any such covenant
or condition shall remain in full force and effect.
ARTICLE ELEVEN
REDEMPTION OF SECURITIES
SECTION 1101. Applicability of Article.
Securities of any series which are redeemable before their Stated Maturity
shall be redeemable in accordance with their terms and (except as otherwise
specified as contemplated by Section 301 for Securities of any series) in
accordance with this Article.
SECTION 1102. Election to Redeem; Notice to Trustee.
The election of the Company to redeem any Securities shall be evidenced by
a Board Resolution. In the case of any redemption at the election of the
Company of less than all the Securities of any series with the same (i) Stated
Maturity, (ii) period or periods within which, price or prices at which and
terms and conditions upon which such Securities may or shall be redeemed or
purchased, in whole or in part, at the option of the Company or pursuant to any
sinking fund or analogous provision or at the option of the Holder and
(iii) rate or rates or
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method or methods of determining the rate or rates at which the Securities bear
interest, if any (collectively, the "Equivalent Principal Terms"), the Company
shall, at least 45 days prior to the Redemption Date fixed by the Company
(unless a shorter notice shall be satisfactory to the Trustee), notify the
Trustee of such Redemption Date and of the principal amount of Securities of
such series and with such Equivalent Principal Terms to be redeemed. In the
case of any redemption of Securities (i) prior to the expiration of any
restriction on such redemption provided in the terms of such Securities with
Equivalent Principal Terms or elsewhere in this Indenture, or (ii) pursuant to
an election of the Company which is subject to a condition specified in the
terms of such Securities with Equivalent Principal Terms, the Company shall
furnish the Trustee with an Officers' Certificate evidencing compliance with
such restriction or condition.
SECTION 1103. Selection by Trustee of Securities to be Redeemed.
If less than all the Securities with Equivalent Principal Terms of any
series are to be redeemed, the particular Securities to be redeemed shall be
selected not more than 60 days prior to the Redemption Date by the Trustee, from
the Outstanding Securities with Equivalent Principal Terms of such series not
previously called for redemption, by such method as the Trustee shall deem fair
and appropriate and which may provide for the selection for redemption of
portions (equal to the minimum authorized denomination for Securities with
Equivalent Principal Terms of that series or any integral multiple thereof) of
the principal amount of Securities with Equivalent Principal Terms of such
series of a denomination larger than the minimum authorized denomination for
Securities with Equivalent Principal Terms of that series.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For all purposes of this Indenture, unless the context otherwise requires,
all provisions relating to the redemption of Securities shall relate, in the
case of any Securities redeemed or to be redeemed only in part, to the portion
of the principal amount of such Securities which has been or is to be redeemed.
SECTION 1104. Notice of Redemption.
Notice of redemption shall be given in the manner provided in Section 106
to the Holders of Securities to be redeemed not less than 30 nor more than
60 days prior to the Redemption Date.
All notices of redemption shall state:
(1) the Redemption Date,
(2) the Redemption Price,
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(3) if less than all the Outstanding Securities with Equivalent
Principal Terms of any series are to be redeemed, the identification (and, in
the case of partial redemption, the principal amounts) of the particular
Securities to be redeemed,
(4) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security to be redeemed and, if applicable, that
interest thereon will cease to accrue on and after said date,
(5) the place or places where such Securities are to be surrendered
for payment of the Redemption Price, and
(6) that the redemption is for a sinking fund, if such is the case.
Notice of redemption of Securities to be redeemed at the election of the
Company shall be given by the Company or, at the Company's request, by the
Trustee in the name and at the expense of the Company in which event the Company
shall provide the Trustee with the information required by clauses (1)
through (6) above.
SECTION 1105. Deposit of Redemption Price.
Prior to any Redemption Date, the Company shall deposit with the Trustee or
with a Paying Agent (or, if the Company is acting as its own Paying Agent,
segregate and hold in trust as provided in Section 1003) an amount of money
sufficient to pay the Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest, if any, on, all the
Securities which are to be redeemed on that date.
SECTION 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as aforesaid, the Securities so to
be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price and accrued
interest, if any) such Securities shall cease to bear interest. Upon surrender
of any such Security for redemption in accordance with said notice, such
Security shall be paid by the Company at the Redemption Price, together with
accrued interest, if any, to the Redemption Date; provided, however, that
installments of interest whose Stated Maturity is on or prior to the Redemption
Date shall be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of business on the
relevant Record Dates according to their terms and the provisions of
Section 307.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate or rates prescribed therefor
in the Security.
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SECTION 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part shall be surrendered at a
Place of Payment therefor (with, if the Company or the Trustee so requires, due
endorsement by, or a written instrument of transfer in form satisfactory to the
Company and the Trustee duly executed by, the Holder thereof or his attorney
duly authorized in writing), and the Company shall execute, and the Trustee or
an Authenticating Agent shall authenticate and deliver to the Holder of such
Security without service charge, a new Security or Securities of the same series
of like tenor and of any authorized denomination as requested by such Holder, in
aggregate principal amount equal to and in exchange for the unredeemed portion
of the principal of the Security so surrendered. If a Global Security is so
surrendered, such new Security so issued shall be a new Global Security.
ARTICLE TWELVE
SINKING FUNDS
SECTION 1201. Applicability of Article.
The provisions of this Article shall be applicable to any sinking fund for
the retirement of Securities of a series except as otherwise specified as
contemplated by Section 301 for Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 1202. Each sinking fund payment shall be applied to the redemption
of Securities of any series as provided for by the terms of Securities of such
series.
SECTION 1202. Satisfaction of Sinking Fund Payments with Securities.
The Company (1) may deliver Outstanding Securities of a series (other than
any previously called for redemption) and (2) may apply as a credit Securities
of a series which have been redeemed other than through operation of a mandatory
sinking fund (or called for redemption and for which the Redemption Price,
together with accrued interest, if any, has been deposited pursuant to
Section 1105), either at the election of the Company pursuant to the terms of
such Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities, in each case in satisfaction
of all or any part of any mandatory sinking fund payment with respect to the
Securities of such series as provided for by the terms of such series; provided
that such Securities have not been previously so credited. Such Securities
shall be received and credited for such purpose by the Trustee at the Redemption
Price specified in such Securities for redemption through operation of the
sinking fund and the amount of such sinking fund payment shall be reduced
accordingly.
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SECTION 1203. Redemption of Securities for Sinking Fund.
Not less than 60 days prior to each sinking fund payment date for any
series of Securities, the Company will deliver to the Trustee an Officers'
Certificate specifying the amount of the next ensuing mandatory sinking fund
payment for that series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash and the portion
thereof, if any, which is to be satisfied by delivering and crediting Securities
of that series pursuant to Section 1202 and the optional amount, if any, to be
added in cash to the next ensuing mandatory sinking fund payment, and will also
deliver to the Trustee any Securities to be so delivered. If such Officers'
Certificate shall specify an optional amount to be added in cash to the next
ensuing mandatory sinking fund payment, the Company shall thereupon be obligated
to pay the amount therein specified. Not less than 45 days before each such
sinking fund payment date the Trustee shall select the Securities to be redeemed
upon such sinking fund payment date in the manner specified in Section 1103 and
cause notice of the redemption thereof to be given in the name of and at the
expense of the Company in the manner provided in Section 1104. The Company
shall deposit the amount of cash, if any, required for such sinking fund payment
in the manner provided in Section 1105. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms and in the manner
stated in Sections 1106 and 1107.
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
NORDSTROM CREDIT, INC.
-----------------------------------
[Seal]
Attest:
- ---------------------------
NORWEST BANK COLORADO,
NATIONAL ASSOCIATION, Trustee
-----------------------------------
[Seal]
Attest:
- ---------------------------
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State of Washington )
) ss:
County of King )
On the _____ day of ____________ , 1997, before me, _____________________,
a notary public of the State of Washington, duly commissioned and sworn,
personally appeared _________________________________________ , known to be to
be a __________________ of NORDSTROM CREDIT, INC., one of the corporations that
executed the within instrument and also known to me to be the persons who
executed the within instrument on behalf of such corporation, and they
acknowledged to me that such corporation executed the within instrument pursuant
to its bylaws or a resolution of this board of directors.
IN WITNESS WHEREOF, I have hereunto set my hand and affixed my official
seal the day and year in this certificate first above written.
-----------------------------------
NOTARY PUBLIC for the State of
Washington, residing at:
-----------------------------------
My appointment expires:
-----------------------------------
[Seal]
STATE OF COLORADO )
) ss:
CITY AND COUNTY OF DENVER )
The foregoing instrument was acknowledged before me this ____ day of
___________________ , 1997 by __________________________ and
_________________________ , as Senior Vice President and Vice President,
respectively, of Norwest Bank Colorado, National Association, a national banking
association.
Witness my hand and official seal.
-----------------------------------
Notary Public for the State of
Colorado
My commission expires:
- ------------------------------
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Exhibit 12.1
NORDSTROM, INC. AND SUBSIDIARIES
EARNINGS TO FIXED CHARGES
($ in Thousands)
<TABLE>
<CAPTION>
Year Ended January 31,
------------------------------------------------------------------------
1993 1994 1995 1996 1997
------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C>
EARNINGS PER
FINANCIAL STATEMENTS: $ 136,619 $ 140,418 $ 202,958 $ 165,112 $ 147,505
Add (Deduct):
Provision for Income
Taxes 85,500 90,500 132,600 107,200 96,000
Fixed Charges 64,389 58,118 56,917 64,517 59,822
Capitalized Interest (2,292) (1,510) (6,015) (5,177) (4,823)
------------ ------------ ------------ ------------ ------------
Earnings for Computation $ 284,216 $ 287,526 $ 386,460 $ 331,652 $ 298,504
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
FIXED CHARGES:
Interest Expense:
Debt and Capitalized
Leases $ 48,263 $ 40,780 $ 39,095 $ 46,676 $ 43,653
Equipment Leases
Component 4,125 4,043 3,567 3,057 1,901
Operating Leases
Component 12,001 13,295 14,255 14,784 14,268
------------ ------------ ------------ ------------ ------------
Total Fixed Charges $ 64,389 $ 58,118 $ 56,917 $ 64,517 $ 59,822
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
RATIO OF EARNINGS
TO FIXED CHARGES 4.41 4.95 6.79 5.14 4.99
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
</TABLE>
<PAGE>
Exhibit 12.2
NORDSTROM CREDIT, INC.
EARNINGS TO FIXED CHARGES
($ in Thousands)
<TABLE>
<CAPTION>
Year Ended January 31,
------------------------------------------------------------------------
1993 1994 1995 1996 1997
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
EARNINGS PER
FINANCIAL STATEMENTS: $18,921 $20,672 $20,445 $22,486 $30,124
Add:
Provision for Income
Taxes 10,400 11,700 11,600 12,600 16,900
Fixed Charges 33,841 29,600 31,187 42,245 41,089
------------ ------------ ------------ ------------ ------------
Earnings for Computation $ 63,162 $ 61,972 $ 63,232 $ 77,331 $ 88,113
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
FIXED CHARGES:
Interest expense on Debt $ 33,841 $ 29,600 $ 31,187 $ 42,245 $ 41,089
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
Ratio of Earnings to Fixed
Charges 1.87 2.09 2.03 1.83 2.14
------------ ------------ ------------ ------------ ------------
------------ ------------ ------------ ------------ ------------
</TABLE>
Page 1
<PAGE>
INDEPENDENT AUDITORS' CONSENT
- -------------------------------------------------------------------------------
We consent to the incorporation by reference in this Registration Statement
of Nordstrom Credit, Inc. on Form S-3 of the report of Deloitte & Touche LLP
dated March 7, 1997, appearing in the Annual Report on Form 10-K of Nordstrom
Credit, Inc. for the year ended January 31, 1997, and to the reference to us
under the heading "Experts" in the Prospectus, which is part of this
Registration Statement.
/s/ DELOITTE & TOUCHE LLP
DELOITTE & TOUCHE LLP
April 7, 1997
Seattle, Washington
