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As filed with the Securities and Exchange Commission on April 10, 1998
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
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THE NEIMAN MARCUS GROUP, INC.
(Exact name of registrant as specified in its charter)
<TABLE>
<S> <C> <C>
DELAWARE 95-4119509
(State or other jurisdiction of 27 BOYLSTON STREET (I.R.S. Employer
incorporation or organization) CHESTNUT HILL, MASSACHUSETTS 02167 Identification Number)
(617) 232-0760
(Address, including zip code, and telephone number,
including area code, of registrant's principal executive offices)
</TABLE>
ERIC P. GELLER, ESQ.
THE NEIMAN MARCUS GROUP, INC.
27 BOYLSTON STREET
CHESTNUT HILL, MASSACHUSETTS 02167
(617) 232-0760
(Name, address, including zip code, and telephone number,
including area code, of agent for service)
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Copies to:
KEITH F. HIGGINS, ESQ. JOHN W. WHITE, ESQ.
ROPES & GRAY CRAVATH, SWAINE & MOORE
ONE INTERNATIONAL PLACE WORLDWIDE PLAZA
BOSTON, MASSACHUSETTS 02110-2624 825 EIGHTH AVENUE
(617) 951-7000 NEW YORK, NEW YORK 10019-7415
(212) 474-1000
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APPROXIMATE DATE OF COMMENCEMENT OF THE PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this Registration Statement, as
determined by market conditions and other factors.
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If the only securities being registered on this Form are to be offered
pursuant to dividend or interest reinvestment plans, please check the following
box. [ ]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or interest
reinvestment plans, check the following box. [X]
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [ ]
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [ ]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [ ]
CALCULATION OF REGISTRATION FEE
<TABLE>
<CAPTION>
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PROPOSED MAXIMUM PROPOSED MAXIMUM
AMOUNT OFFERING AGGREGATE AMOUNT OF
TITLE OF EACH CLASS OF SECURITIES TO BE PRICE PER OFFERING REGISTRATION
TO BE REGISTERED REGISTERED UNIT(1) PRICE(1)(2) FEE
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<S> <C> <C> <C> <C>
Debt Securities ........................ $500,000,000 100% $500,000,000 $147,500
=================================================================================================================
</TABLE>
(1) Estimated solely for the purpose of computing the registration fee.
(2) Indicates issue price in the case of Debt Securities sold with original
issue discount. Principal amount at maturity may be greater.
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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.
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<PAGE> 2
INFORMATION CONTAINED HEREIN IS SUBJECT TO COMPLETION OR AMENDMENT. A
REGISTRATION STATEMENT RELATING TO THESE SECURITIES HAS BEEN FILED WITH THE
SECURITIES AND EXCHANGE COMMISSION. THESE SECURITIES MAY NOT BE SOLD NOR MAY
OFFERS TO BUY BE ACCEPTED PRIOR TO THE TIME THE REGISTRATION STATEMENT BECOMES
EFFECTIVE. THIS PROSPECTUS SHALL NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF AN OFFER TO BUY NOR SHALL THERE BE ANY SALE OF THESE SECURITIES
IN ANY STATE IN WHICH SUCH OFFER, SOLICITATION OR SALE WOULD BE UNLAWFUL PRIOR
TO REGISTRATION OR QUALIFICATION UNDER THE SECURITIES LAWS OF ANY SUCH STATE.
SUBJECT TO COMPLETION, DATED APRIL 10, 1998
PROSPECTUS $500,000,000
THE NEIMAN MARCUS GROUP, INC.
DEBT SECURITIES
The Neiman Marcus Group, Inc. (the "Company") intends to sell from time
to time its senior debt securities, consisting of notes, debentures or other
evidences of indebtedness (the "Debt Securities"). The Debt Securities offered
by the Company hereby will have an aggregate initial public offering price not
to exceed $500,000,000. The Debt Securities may be offered as separate series in
amounts, at prices and on terms to be determined at the time of sale and to be
set forth in Supplements to this Prospectus. The Company may sell securities to
or through underwriters or dealers, directly to other purchasers or through
agents. See "Plan of Distribution."
The Debt Securities will be unsecured and will rank equally with all
other unsecured and unsubordinated indebtedness of the Company. The terms of the
Debt Securities, including where applicable the specific designation; aggregate
principal amount; denominations; maturity; premium; interest rate (which may be
fixed or variable) and time of payment of interest; terms of redemption at the
option of the Company or the holder; terms for sinking fund payments; the
initial public offering price; terms relating to temporary or permanent global
securities; special provisions and restrictions relating to Debt Securities in
bearer form or in registered form with coupons; provisions regarding
registration of transfer or exchange; special provisions and restrictions
relating to Debt Securities; the principal, premium, if any, and interest of
which is denominated and payable in a foreign currency or currency unit; and
other terms in connection with the offering and sale of the Debt Securities in
respect of which this Prospectus is being delivered, will be set forth in an
accompanying Prospectus Supplement (the "Prospectus Supplement").
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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 Debt Securities may be sold directly to purchasers, through agents,
underwriters or dealers as designated from time to time or through a combination
of such methods. See "Plan of Distribution." If agents of the Company or any
dealers or underwriters are involved in the sale of the Debt Securities in
respect of which this Prospectus is being delivered, the names of such agents,
dealers or underwriters and any applicable commission or discounts will be set
forth in the Prospectus Supplement with respect to such Debt Securities.
The date of this Prospectus is ______ __, 1998
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No person is authorized in connection with any offering made hereby to
give any information or to make any representation not contained or incorporated
by reference in this Prospectus, and any information or representation not
contained or incorporated herein must not be relied upon as having been
authorized by the Company or the Underwriters. This Prospectus does not
constitute an offer to sell or the solicitation of an offer to buy any security
other than the securities covered by this Prospectus, nor does it constitute an
offer or solicitation by any person in any jurisdiction in which it is unlawful
for such person to make such an offer or solicitation. Neither the delivery of
this Prospectus at any time nor any sale made hereunder shall under any
circumstance imply that the information herein is correct as of any date
subsequent to the date hereof.
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TABLE OF CONTENTS
Page
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Statement of Available Information..................... 3
Incorporation of Certain Documents by Reference........ 3
The Company............................................ 4
Use of Proceeds........................................ 4
Ratio of Earnings to Fixed Charges..................... 5
Earnings Per Share Data................................ 5
Description of Debt Securities......................... 6
Plan of Distribution................................... 10
Legal Matters.......................................... 10
Experts................................................ 11
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STATEMENT OF AVAILABLE INFORMATION
The Company is subject to the requirements of the Securities Exchange
Act of 1934, as amended (the "Exchange Act"), and in accordance therewith files
reports, proxy and information statements and other information with the
Securities and Exchange Commission (the "Commission"). Such reports, proxy and
information statements and other information filed by the Company can be
inspected and copied at the public reference facilities maintained by the
Commission at 450 Fifth Street, N.W., Washington, D.C. 20549, and at the
following Regional Offices of the Commission: Citicorp Center, 500 West Madison
Street, Suite 1400, Chicago, Illinois 60661 and Seven World Trade Center, Suite
1300, New York, New York 10048. Copies of such material may also be obtained
from the Public Reference Section of the Commission at 450 Fifth Street, N.W.,
Washington, D.C. 20549 at prescribed rates. The Commission maintains a World
Wide Web site (http://www.sec.gov) that contains reports, proxy and information
statements and other information regarding registrants, such as the Company,
that submit electronic filings to the Commission. The Company's Common Stock is
listed on the New York Stock Exchange, and reports, proxy and information
statements and other information concerning the Company may also be inspected at
the offices of the New York Stock Exchange, Inc., 20 Broad Street, New York, New
York 10005.
The Company has filed with the Commission a Registration Statement
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Debt 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 Debt Securities offered hereby.
Statements made in this Prospectus as to the contents of any contract, agreement
or other document referred to are not necessarily complete; and with respect to
each such contract, agreement or other document filed, or incorporated by
reference, as an exhibit to the Registration Statement, reference is made to the
exhibit for a more complete description of the matter involved and each such
statement shall be deemed qualified in its entirety by such reference.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents filed by the Company with the Commission are
incorporated herein by reference:
(1) The Company's Annual Report on Form 10-K for the fiscal year
ended August 2, 1997;
(2) The Company's Quarterly Reports on Form 10-Q for the thirteen
weeks ended November 1, 1997 and January 31, 1998; and
(3) The Company's Current Report on Form 8-K filed March 24, 1998.
All documents filed by the Company with the Commission pursuant to
Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act subsequent to the date of
the initial filing of the Registration Statement of which this Prospectus is a
part 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. Any statement contained in a
document incorporated or deemed to be incorporated by reference herein shall be
deemed to be modified or superseded for purposes of this Prospectus to the
extent that a statement contained herein or in any other subsequently filed
document which also is or is deemed to be incorporated by reference herein or in
the Prospectus Supplement modifies or supersedes such statement. Any statement
so modified or superseded shall not be deemed, except as so modified or
superseded, to constitute a part of this Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM THIS
PROSPECTUS IS DELIVERED, UPON A WRITTEN OR ORAL REQUEST OF SUCH PERSON, A COPY
OF ANY OR ALL OF THE FOREGOING DOCUMENTS INCORPORATED BY REFERENCE INTO THIS
PROSPECTUS (WITHOUT EXHIBITS TO SUCH DOCUMENTS OTHER THAN EXHIBITS SPECIFICALLY
INCORPORATED BY REFERENCE INTO SUCH DOCUMENTS). REQUESTS FOR SUCH COPIES SHOULD
BE DIRECTED TO THE CORPORATE RELATIONS DEPARTMENT OF THE COMPANY, 27 BOYLSTON
STREET, CHESTNUT HILL, MASSACHUSETTS 02167 (TELEPHONE: (617) 232-0760).
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THE COMPANY
The Company, operating through Neiman Marcus Stores, Bergdorf Goodman
and NM Direct, is the preeminent high-end specialty retailer in the United
States.
NEIMAN MARCUS STORES. Neiman Marcus Stores offer women's and men's
apparel, fashion accessories, shoes, cosmetics, furs, precious jewelry,
decorative home accessories, fine china, crystal and silver, gourmet food
products, children's apparel and gift items. As of the date of this Prospectus,
the Company operated 30 Neiman Marcus stores in premier retail locations in
major markets nationwide.
BERGDORF GOODMAN. The Company operates two Bergdorf Goodman stores in
Manhattan at 58th Street and Fifth Avenue. The main Bergdorf Goodman store
offers high-end women's apparel and unique fashion accessories from leading
designers. Bergdorf Goodman also features traditional and contemporary
decorative home accessories, precious jewelry, gifts and gourmet foods. Bergdorf
Goodman Men is dedicated to fine men's apparel and accessories.
NM DIRECT. NM Direct, the Company's direct marketing operation,
primarily offers women's apparel under the Neiman Marcus name and, through its
Horchow catalogues, offers hard goods such as quality home furnishings,
tabletop, linens and decorative accessories to its domestic and international
customers. NM Direct annually publishes the world famous Neiman Marcus Christmas
Catalogue. In January 1998, the Company acquired Chef's Catalog, a direct
marketer of gourmet cookware and high-end kitchenware.
Harcourt General, Inc. ("Harcourt General") currently owns
approximately 53% of the common stock of the Company. Four of Harcourt General's
senior officers, including its Chairman and Chief Executive Officer, its
Presidents and Co-Chief Operating Officers and its Senior Vice President and
Chief Financial Officer, are directors of the Company and virtually all of
Harcourt General's officers and corporate staff occupy similar positions with
the Company.
The Company's corporate headquarters are located at 27 Boylston Street,
Chestnut Hill, Massachusetts 02167 (telephone: (617) 232-0760). The outstanding
shares of the Company are traded on the New York Stock Exchange under the symbol
"NMG."
USE OF PROCEEDS
Unless otherwise indicated in an accompanying Prospectus Supplement,
the Company intends to use the net proceeds from the sale of the Debt Securities
for general corporate purposes, which may include capital expenditures, working
capital requirements, repayment or reduction of indebtedness, acquisitions and
other business ventures. The precise amount and timing of the application of
such proceeds will depend upon the funding requirements of the Company and the
availability and cost of other funds. Pending such application, the net proceeds
will be invested in short-term investment grade securities.
More detailed information concerning the use of the proceeds from any
particular offering of the Debt Securities will be contained in the Prospectus
Supplement relating to such offering.
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RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratios of earnings to fixed charges
for the Company for the periods indicated. These ratios were computed by
dividing earnings from continuing operations, before income taxes and fixed
charges, by fixed charges. Fixed charges consist of interest expense (including
amortization of previously capitalized interest) and approximately 40% of rent
expense (estimated by management to be the interest component of such rent
expense).
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<CAPTION>
Fiscal Year Ended Twenty-Six Weeks Ended
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February 1, January 31,
July 31, 1993 July 30, 1994 July 29, 1995 August 3, 1996 August 2, 1997 1997(1) 1998(1)
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<S> <C> <C> <C> <C> <C> <C> <C>
Ratio of earnings to fixed
charges ................. 3.6 3.4 3.2 3.8 4.5 5.2 6.2
</TABLE>
(1) The Company's businesses are seasonal in nature, and historically the
results of operations for these periods have not been indicative of the results
for the full year.
EARNINGS PER SHARE DATA
As required, the Company has adopted Statement of Financial Accounting
Standards No. 128, "Earnings Per Share," ("SFAS 128") in the twenty-six weeks
ended January 31, 1998 and has restated prior periods' earnings per share
information to conform to SFAS 128.
<TABLE>
<CAPTION>
Fiscal Year Ended Twenty-Six Weeks Ended
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February 1, January 31,
July 31, 1993 July 30, 1994 July 29, 1995 August 3, 1996 August 2, 1997 1997(1) 1998(1)
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<S> <C> <C> <C> <C> <C> <C> <C>
Amounts per share applicable
to common shareholders:
BASIC EARNINGS (LOSS) PER
SHARE:
Earnings from continuing
operations $1.01 $0.96 $1.01 $1.27 $1.33 $0.63 $1.33
Discontinued operations ($0.22) ($1.31) ($0.31)
Accounting change ($0.30) - - - - - -
------ ------ ------ ------ ------ ------ ------
Net earnings (loss) -basic $0.49 ($0.35) $0.70 $1.27 $1.33 $0.63 $1.33
------ ------ ------ ------ ------ ------ ------
DILUTED EARNINGS (LOSS) PER
SHARE:
Earnings from continuing
operations $1.00 $0.96 $1.01 $1.26 $1.32 $0.63 $1.32
Discontinued operations ($0.22) ($1.31) ($0.31)
Accounting change ($0.30) - - - - - -
------ ------ ------ ------ ------ ------ ------
Net earnings (loss) -diluted $0.48 ($0.35) $0.70 $1.26 $1.32 $0.63 $1.32
------ ------ ------ ------ ------ ------ ------
Weighted average shares
outstanding (in thousands):
Basic 37,577 37,946 37,958 38,000 47,162 44,452 49,833
------ ------ ------ ------ ------ ------ ------
Diluted 37,697 38,012 37,999 38,218 47,335 44,627 49,995
------ ------ ------ ------ ------ ------ ------
</TABLE>
(1) The Company's businesses are seasonal in nature, and historically the
results of operations for these periods have not been indicative of the results
for the full year.
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DESCRIPTION OF DEBT SECURITIES
The Debt Securities will constitute senior securities of the Company.
The Debt Securities will be issued under an indenture (the "Indenture"), between
the Company and The Bank of New York, as trustee (the "Trustee").
A copy of the Indenture is incorporated by reference as an exhibit to
the registration statement relating hereto. Certain provisions of the Indenture
are referred to and summarized below. The summaries do not purport to be
complete and are subject to, and are qualified in their entirety by reference
to, all the provisions of the Indenture. Capitalized terms not otherwise defined
herein shall have the meanings given to them in the Indenture. All section
references below are to sections of the Indenture.
GENERAL
The aggregate principal amount of Debt Securities which can be issued
under the Indenture is unlimited (Section 301). The Debt Securities to which
this Prospectus relates will be issued from time to time in amounts the proceeds
of which will aggregate up to $500,000,000 and will be offered to the public on
terms determined by market conditions at the time of sale. The Debt Securities
may be issued in one or more series with the same or various maturities and may
be sold at par or at an original issue discount. Debt Securities sold at an
original issue discount may bear no interest or interest at a rate which is
below market rates. The Debt Securities will be unsecured obligations of the
Company issued in fully registered form without coupons or in bearer form with
coupons. The Debt Securities will rank as to priority of payment with all other
outstanding unsubordinated and unsecured indebtedness of the Company.
Reference is made to the Prospectus Supplement for the following terms
to the extent they are applicable to the Debt Securities: (a) designation and
denomination of and any limit upon the aggregate principal amount of such Debt
Securities, (b) the percentage of principal amount at which such Debt Securities
will be issued, (c) the date on which such Debt Securities will mature, (d) the
rate or rates (which may be fixed or floating) per annum at which such Debt
Securities will bear interest, if any, or the method of determining the same,
(e) the times at which interest will be payable, (f) the terms of any redemption
provisions at the option of the Company or any repayment provisions at the
option of the holder, (g) whether such Debt Securities are to be issued in
book-entry form, and if so, the identity of the depository and information with
respect to book-entry procedures, (h) federal income tax consequences and (i)
other terms of such Debt Securities.
The Debt Securities will be effectively subordinated to all
liabilities, including trade payables, of the Company's subsidiaries. Any right
of the Company to receive assets of any of its subsidiaries upon its liquidation
or reorganization (and the consequent right of the holders of the Debt
Securities to participate in those assets) will be effectively subordinated to
the claims of that subsidiary's creditors (including trade creditors), except to
the extent that the Company is itself recognized as a creditor of such
subsidiary in which case the claims of the Company would still be subordinate to
any security interests in the assets of such subsidiary and any indebtedness of
such subsidiary senior to that held by the Company. The Indenture does not limit
the amount of indebtedness that subsidiaries may incur.
MERGERS AND SALES OF ASSETS BY THE COMPANY
The Company may not consolidate with or merge into any other Person or
convey, transfer or lease all or substantially all of its assets to any other
Person, unless, among other things, (i) the resulting, surviving or transferee
Person (if other than the Company) shall be a corporation, partnership, limited
liability company or trust organized and validly existing under the laws of the
United States or any State thereof or the District of Columbia and shall
expressly assume the Company's obligations under the Debt Securities and the
Indenture, and (ii) the Company or such successor Person shall not immediately
thereafter be in default under the Indenture. Upon the assumption of the
Company's obligations by such a Person in such circumstances, subject to certain
exceptions, the Company shall be discharged from all its obligations under the
Debt Securities and the Indenture (Section 801).
Other than the restrictions on liens and sale and leaseback
transactions set forth in the Indenture and described below under "Certain
Covenants," the Indenture and the Debt Securities do not contain any covenants
or other provisions designed to afford holders of Debt Securities protection in
the event of a highly leveraged transaction involving the Company or any of its
subsidiaries.
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AMENDMENT AND WAIVER
Other than amendments not adverse to holders of the Debt Securities,
amendments of the Indenture or the Debt Securities may be made only with the
consent of the holders of a majority in principal amount of the series of Debt
Securities affected (acting as one class). Waivers of compliance with any
provision of the Indenture or the Debt Securities with respect to any series of
Debt Securities may be made only with the consent of the holders of a majority
in principal amount of the Debt Securities of that series. The consent of all
holders of affected Debt Securities will be required to (a) change the stated
maturity thereof, (b) reduce the principal amount thereof, (c) reduce the rate,
or manner of calculating the same, or change the time or place of payment of
interest thereon, or (d) impair the right to institute suit for the payment of
principal thereof or interest thereon (Section 902). The holders of a majority
in aggregate principal amount of Debt Securities affected may waive any past
default under the applicable Indenture and its consequences, except a default
(1) in the payment of the principal of or interest on such Debt Securities, or
(2) in respect of a provision which cannot be waived or amended without the
consent of all holders of Debt Securities affected (Sections 513 and 902).
GLOBAL SECURITIES
The Debt Securities of a series may be issued in the form of a global
security which is deposited with and registered in the name of the depository
(or a nominee of the depository) specified in the accompanying Prospectus
Supplement. So long as the depository for a global security, or its nominee, is
the registered owner of the global security, the depository or its nominee, as
the case may be, will be considered the sole owner or holder of the Debt
Securities represented by such global security for all purposes under the
Indenture. Except as provided in the Indenture, owners of beneficial interests
in Debt Securities represented by a global security will not (a) be entitled to
have such Debt Securities registered in their names, (b) receive or be entitled
to receive physical delivery of certificates representing such Debt Securities
in definitive form, (c) be considered the owners or holders thereof under the
Indenture or (d) have any rights under the Indenture with respect to such global
security. Unless and until it is exchanged in whole or in part for individual
certificates evidencing the Debt Securities represented thereby, a global
security may not be transferred except as a whole by the depository for such
global security to a nominee of such depository or by a nominee of such
depository to such depository or another nominee of such depository or by the
depository or any nominee to a successor depository or any nominee of such
successor. The Company, in its sole discretion, may at any time determine that
any series of Debt Securities issued or issuable in the form of a global
security shall no longer be represented by such global security and such global
security shall be exchanged for securities in definitive form pursuant to the
Indenture (Section 204).
Upon the issuance of a global security, the depository will credit, on
its book-entry registration and transfer system, the respective principal
amounts of such global security to the accounts of participants. Ownership of
beneficial interests in a global security will be shown on, and the transfer of
that ownership will be effected only through, records maintained by the
depository (with respect to interests of participants in the depository), or by
participants in the depository or persons that may hold interests through such
participants (with respect to persons other than participants in the
depository). Ownership of beneficial interests in a global security will be
limited to participants or persons that hold interests through participants. The
specific terms of the depository arrangement with respect to a series of Debt
Securities, including the manner in which principal, premium, if any, and
interest on a global security will be payable and interests in such global
security may be exchanged, will be described in the Prospectus Supplement
relating to such series.
INFORMATION CONCERNING THE TRUSTEE
The Company may have banking relationships in the ordinary course of
business with The Bank of New York.
CERTAIN COVENANTS
Unless otherwise provided in the Debt Securities, the Company shall not
create, assume or suffer to exist any lien on any Principal Property (described
below) of the Company or any Restricted Subsidiary (described below) or shares
of capital stock or indebtedness of any Subsidiary, or permit any Restricted
Subsidiary to do so, without securing the Debt Securities of any series having
the benefit of the covenant equally and ratably with such debt for so long as
such debt shall be so secured, subject to certain exceptions
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<PAGE> 9
specified in the Indenture. The exceptions are: (a) with respect to any series
of securities, any lien existing on the date of issuance of the series; (b)
liens existing on property owned or leased by, or shares of capital stock or
indebtedness of, an entity at the time it becomes a Restricted Subsidiary; (c)
liens existing on property at the time of the acquisition or lease thereof by
the Company or a Restricted Subsidiary; (d) liens on property of a corporation
existing at the time such corporation is merged or consolidated with the Company
or a Restricted Subsidiary or at the time of a sale, lease or other disposition
of the properties of a corporation as an entirety or substantially as an
entirety to the Company or a Restricted Subsidiary; (e) certain liens incurred
on capital stock, property or assets to finance the purchase price thereof; (f)
certain liens incurred on property or assets to finance the construction,
alteration or improvement thereof; (g) any lien securing debt of a Restricted
Subsidiary owing to the Company or to another Restricted Subsidiary; (h) any
lien in favor of any customer arising in respect of performance deposits and
partial, progress, advance or other payments made by or on behalf of such
customer, for goods produced or to be produced for or services rendered or to be
rendered to such customer in the ordinary course of business, which lien shall
not exceed the amount of such deposits or payments; (i) mechanics', workmen's,
repairmen's and similar liens arising in the ordinary course of business; (j)
liens created or resulting from any litigation or proceedings which are being
contested in good faith; liens arising out of judgments or awards against the
Company or any Restricted Subsidiary with respect to which the Company or such
Restricted Subsidiary is in good faith prosecuting an appeal or proceeding for
review; or liens incurred by the Company or any Restricted Subsidiary for the
purpose of obtaining a stay or discharge in the course of any legal proceeding
to which the Company or such Restricted Subsidiary is a party; (k) any lien for
taxes or assessments or governmental charges or levies not yet due or delinquent
or which can thereafter be paid without penalty or which are being contested in
good faith by appropriate proceedings; any landlord's lien on property held
under lease and tenants' rights under leases; easements and any other liens of a
nature similar to those hereinabove described in this clause (k) which do not,
in the opinion of the Company, materially impair the use of such property in the
operation of the business of the Company or any Restricted Subsidiary or the
value of such property for the purposes of such business; (l) any lien which may
be deemed to result from an agreement or commitment to exchange securities of a
Subsidiary for other securities of the Company, whether or not such securities
of a Subsidiary are placed in escrow for such purpose; (m) certain liens in
favor of or required by contracts with governmental entities; (n) any extension,
renewal or replacement (or successive extensions, renewals or replacements) in
whole or in part of any lien referred to in clauses (a) through (m), so long as
the principal amount of the debt secured thereby does not exceed the principal
amount of debts so secured at the time of the extension, renewal or replacement
(with certain exceptions) and the lien is limited to all or part of the same
property subject to the lien so extended, renewed or replaced (plus improvements
on the property); and (o) any lien otherwise prohibited by such covenant that
secures indebtedness which, together with the aggregate amount of outstanding
indebtedness secured by liens otherwise prohibited by such covenant and the
value of certain sale and leaseback transactions, does not exceed 15% of the
Company's Consolidated Net Assets (Section 1006).
Unless otherwise provided in the Debt Securities, the Company shall
not, and shall not permit any Restricted Subsidiary to, enter into any sale and
leaseback transaction covering any Principal Property of the Company or such
Restricted Subsidiary unless (a) the Company or such Restricted Subsidiary would
be entitled under the provisions described above to incur debt equal to the
value of such sale and leaseback transaction, secured by liens on the facilities
to be leased, without equally and ratably securing the Debt Securities, or (b)
the Company, during the 180 days following the effective date of such sale and
leaseback transaction, applies an amount equal to the value of such sale and
leaseback transaction to the voluntary retirement of long-term indebtedness,
purchases Principal Property having a fair value at least equal to the value of
such sale and leaseback transaction or cancels Debt Securities or Funded Debt
(as defined in the Indenture) in an aggregate principal amount at least equal to
the value of such sale and leaseback transaction (Section 1007).
The Indenture defines Consolidated Net Assets as the total amount of
all assets appearing on the consolidated balance sheet of the Company and its
Restricted Subsidiaries (calculated as described in the Indenture), less total
current liabilities other than long-term liabilities due within one year.
The Indenture defines Restricted Subsidiary as any Subsidiary of the
Company (which term generally includes majority-owned direct and indirect
subsidiaries) that owns or leases a Principal Property, other than a Subsidiary
that is principally engaged in the business of owning or investing in real
estate (a "Real Estate Subsidiary") finance, credit, leasing, financial services
or other similar operations (although the Company has no such subsidiaries as of
the date of this Prospectus). The Indenture provides, however, that any Real
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<PAGE> 10
Estate Subsidiary will become a Restricted Subsidiary in the event that a
Restricted Subsidiary merges with, consolidates with or transfers substantially
all of its assets to such Real Estate Subsidiary.
The Indenture defines Principal Property as all land, buildings,
machinery and equipment, and leasehold interests and improvements in respect of
the foregoing, that are located in the United States of America and that would
be reflected on the consolidated balance sheet of a Person; provided that such
term shall not include any property which the Board of Directors of the Company
by resolution determines not to be of material importance to the total business
conducted by the Company and its Subsidiaries as an entirety.
There are no other restrictive covenants contained in the Indenture.
EVENTS OF DEFAULT
Events of Default with respect to any series of Debt Securities under
the Indenture include: (a) default in the payment of any principal of, or any
premium on, such series; (b) default in the payment of any installment of
interest on such series and continuance of such default for a period of 30 days;
(c) default in the performance of any other covenant in the Indenture or in the
Debt Securities and continuance of such default for a period of 90 days after
receipt by the Company of notice of such default from the Trustee or by the
Company and the Trustee from the holders of at least 25% in principal amount of
Debt Securities of such series; (d) a default under any bond, debenture, note or
other evidence of indebtedness for money borrowed by the Company or any
Restricted Subsidiary (other than the Securities), or under any mortgage,
indenture or instrument under which there may be secured or evidenced any
indebtedness for money borrowed by the Company or any Restricted Subsidiary
(other than the Securities), whether such indebtedness now exists or shall
hereafter be created, which default shall have resulted in indebtedness in
excess of $15,000,000 becoming due and payable prior to the date on which it
would otherwise have become due and payable, without such indebtedness having
been discharged or such acceleration having been rescinded or annulled within 30
days after the date on which written notice thereof is given to the Company by
the Trustee or to the Company and the Trustee by Holders of at least 25% in
principal amount of the Securities then outstanding; or (e) certain events of
bankruptcy, insolvency or reorganization in respect of the Company (Section
501). The Trustee may withhold notice to the holders of a series of Debt
Securities of any default (except in the payment of principal of, premium on or
interest on such series of Debt Securities) if it considers such withholding to
be in the interest of Holders of the Debt Securities (Section 602). Not all
Events of Default with respect to a particular series of Debt Securities issued
under the Indenture necessarily constitute Events of Default with respect to any
other series of Debt Securities.
On the occurrence of an Event of Default with respect to a series of
Debt Securities, the Trustee or the holders of at least 25% in principal amount
of Debt Securities of such series then outstanding may declare the principal (or
in the case of Debt Securities sold at an original issue discount, the amount
specified in the terms thereof) and accrued interest thereon to be due and
payable immediately (Section 502).
Within 120 days after the end of each fiscal year, an officer of the
Company must inform the Trustee whether such officer knows of any default,
describing any such default and the status thereof (Section 1004). Subject to
provisions relating to its duties in case of default, the Trustee is under no
obligation to exercise any of its rights or powers under the Indenture at the
direction of any holders of Debt Securities unless the Trustee shall have
received a satisfactory indemnity (Section 601).
DEFEASANCE
The Indenture provides that the Company, at the Company's option, (a)
will be discharged from all obligations in respect of the Debt Securities of a
series (except for certain obligations to register the transfer or exchange of
Debt Securities, replace stolen, lost or destroyed Debt Securities, maintain
paying agencies and hold moneys for payment in trust), or (b) need not comply
with the provisions of one or more of Sections 501(5), 1006 and 1007 of the
Indenture (relating to cross-acceleration, the incurrence of liens and sale and
leaseback transactions, respectively), in each case if the Company irrevocably
deposits in trust with the Trustee money or obligations of or guaranteed by the
United States of America which through the payment of interest thereon and
principal thereof in accordance with their terms will provide money, in an
amount sufficient to pay all the principal of (including any mandatory sinking
fund payments) and interest on the Debt Securities of such series on the dates
such payments are due in accordance with the terms of such Debt Securities. To
exercise either option, the Company is required to deliver to the Trustee an
opinion of counsel to the effect that the deposit and related defeasance would
not cause the holders of the Debt Securities of
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<PAGE> 11
such series to recognize income, gain or loss for Federal income tax purposes.
To exercise the option described in clause (a) above, such opinion must be based
on a ruling of the Internal Revenue Service, a regulation of the Treasury
Department or a provision of the Internal Revenue Code (Section 403).
PLAN OF DISTRIBUTION
The Company may sell the Debt Securities (a) directly to purchasers,
(b) through agents, (c) to dealers as principals and (d) through underwriters.
Offers to purchase Debt Securities may be solicited directly by the
Company or by agents designated by the Company from time to time. Any such
agent, who may be deemed to be an underwriter, as that term is defined in the
Securities Act, involved in the offer or sale of the Debt Securities is named,
and any commissions payable by the Company to such agent are set forth, in the
Prospectus Supplement.
If a dealer is utilized in the sale of the Debt Securities, the Company
will sell such Debt Securities to the dealer as principal. The dealer may then
resell such Debt Securities to the public at varying prices to be determined by
such dealer at the time of resale.
If an underwriter or underwriters are utilized in the sale of the Debt
Securities, the Company will enter into an underwriting agreement with such
underwriters at the time of sale to them. The names of the underwriters and the
terms of the transaction are set forth in the Prospectus Supplement, which will
be used by the underwriters to make resales of the Debt Securities.
Agents, dealers or underwriters may be entitled under agreements which
may be entered into with the Company to indemnification by the Company against
certain civil liabilities, including liabilities under the Securities Act, and
may be customers of, engage in transactions with or perform services for the
Company in the ordinary course of business.
If so indicated in the Prospectus Supplement, the Company will
authorize underwriters or agents to solicit offers by certain institutions to
purchase Debt Securities from the Company at the public offering price set forth
in the Prospectus Supplement pursuant to Delayed Delivery Contracts providing
for amounts, payment and delivery as described in the Prospectus Supplement.
Institutions with whom the contracts may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and other institutions, but shall in all cases be
subject to the approval of the Company. A commission described in the Prospectus
Supplement will be paid to underwriters and agents soliciting purchases of Debt
Securities pursuant to contracts accepted by the Company. Such contracts will
not be subject to any conditions except that (a) the purchase by an institution
of the Debt Securities covered by its contract shall not at the time of delivery
be prohibited under the laws of any jurisdiction in the United States to which
such institution is subject and (b) the Company shall have sold and delivered to
any underwriters named in the Prospectus Supplement that portion of the issue of
Debt Securities as is set forth therein. The underwriters and agents will not
have any responsibility in respect of the validity or the performance of the
contracts.
The place and time of delivery for the Debt Securities will be set
forth in the Prospectus Supplement.
Any underwriter may engage in stabilizing and syndicate covering
transactions in accordance with Rule 104 under the Exchange Act. Rule 104
permits stabilizing to purchase the underlying security so long as the
stabilizing bids do not exceed a specified maximum. Syndicate covering
transactions involve purchases of the Debt Securities in the open market after
the distribution has been completed in order to cover syndicate short positions.
Stabilizing and syndicate covering transactions may cause the price of the Debt
Securities to be higher than it would otherwise be in the absence of such
transactions. These transactions, if commenced, may be discontinued at any time.
LEGAL MATTERS
The legality of the Debt Securities will be passed upon for the
Company by Ropes & Gray, Boston, Massachusetts. Certain legal matters will be
passed upon for any agents or underwriters by counsel for such agents or
underwriters identified in the applicable Prospectus Supplement.
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<PAGE> 12
EXPERTS
The consolidated balance sheets of the Company as of August 2, 1997 and
August 3, 1996 and the related consolidated statements of earnings, common
shareholders' equity and cash flows and the related financial statement schedule
for each of the three fiscal years in the period ended August 2, 1997
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 reports, which are incorporated herein by reference, and have
been so incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
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<PAGE> 13
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
Securities and Exchange Commission registration fee..... $147,500
Printing................................................ 100,000*
Legal fees and expenses................................. 250,000*
Accounting fees and expenses............................ 75,000*
Rating agencies' fees................................... 150,000*
Trustee's fees and expenses............................. 25,000*
Miscellaneous........................................... 2,500*
--------
Total.......................................... $750,000
========
- -----------------
* Estimated
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 145 of the Delaware General Corporation Law ("DGCL") makes
provision for the indemnification of officers and directors of corporations in
terms sufficiently broad to indemnify the officers and directors of the
Registrant under certain circumstances from liabilities (including reimbursement
of expenses incurred) arising under the Securities Act of 1933, as amended (the
"Act").
As permitted by the DGCL, the Registrant's Restated Certificate of
Incorporation (the "Charter") provides that, to the fullest extent permitted by
the DGCL, no director shall be liable to the Registrant or to its stockholders
for monetary damages for breach of his or her fiduciary duty as a director.
Delaware law does not permit the elimination of liability (i) for any breach of
the director's duty of loyalty to the Registrant or its stockholders, (ii) for
acts or omissions not in good faith or which involve intentional misconduct or a
knowing violation of law, (iii) in respect of certain unlawful dividend payments
or stock redemptions or repurchases, or (iv) for any transaction from which the
director derives an improper personal benefit. The effect of this provision in
the Charter is to eliminate the rights of the Registrant and its stockholders
(through stockholders' derivative suits on behalf of the Registrant) to recover
monetary damages against a director for breach of fiduciary duty as a director
thereof (including breaches resulting from negligent or grossly negligent
behavior) except in the situations described in clauses (i)-(iv), inclusive,
above. These provisions will not alter the liability of directors under federal
securities laws.
The Registrant's Bylaws (the "Bylaws") provide that the Registrant may
indemnify any person who was or is a party or is threatened to be made a party
to any threatened, pending or completed action, suit or proceeding, whether
civil, criminal, administrative or investigative (other than an action by or in
the right of the Registrant) by reason of the fact that he is or was a director,
officer, employee or agent of the Registrant or is or was serving at the request
of the Registrant as a director, officer employee or agent of another
corporation or enterprise, against expenses (including attorneys' fees),
judgments, fines and amounts paid in settlement actually and reasonably incurred
by such person in connection with such action, suit or proceeding if such person
acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Registrant, and, with respect to any
criminal action or proceeding, had no reasonable cause to believe such person's
conduct was unlawful.
The Bylaws also provide that the Registrant may indemnify any person
who was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the Registrant to
procure a judgment in its favor by reason of the fact that such person acted in
any of the capacities set forth above, against expenses (including attorneys'
fees) actually and reasonably incurred by such person in connection with the
defense or settlement of such action or suit if such person acted under similar
standards, except that no indemnification may be made in respect of any claim,
issue or matter as to which such person shall have been adjudged to be liable to
the Registrant unless and only to the extent that the Court of Chancery of the
State of Delaware or the court in which such action or suit was brought shall
determine that despite the adjudication of liability but in view of all the
circumstances of the case, such person
II-1
<PAGE> 14
is fairly and reasonably entitled to be indemnified for such expenses which the
Court of Chancery of the State of Delaware or the court in which such action was
brought shall deem proper.
The Bylaws also provide that to the extent a director or officer of the
Registrant has been successful in the defense of any action, suit or proceeding
referred to in the previous paragraphs or in the defense of any claim, issue, or
matter therein, he or she shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith; that indemnification provided for in the Bylaws shall not be deemed
exclusive of any other rights to which the indemnified party may be entitled;
and that the Registrant may purchase and maintain insurance on behalf of a
director or officer of the Registrant against any liability asserted against him
or incurred by him in any such capacity or arising out of his status as such
whether or not the Registrant would have the power to indemnify him against such
liabilities under such Bylaws.
ITEM 16. EXHIBITS
Exhibit No. Exhibit
----------- -------
1.1 Form of Underwriting Agreement
4.1 Form of Indenture between the Registrant and The Bank
of New York, as trustee
5.1 Opinion of Ropes & Gray
12.1 Calculation of Ratio of Earnings to Fixed Charges
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Ropes & Gray (included in Exhibit 5.1)
24.1 Power of Attorney (Appears on Page II-4 and II-5)
25.1 Statement on Form T-1 of Eligibility of Trustee
ITEM 17. UNDERTAKINGS
The 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:
(i) To include any prospectus required by
Section 10(a)(3) of the Securities Act of 1933, as amended (the "Securities
Act");
(ii) To reflect in the prospectus any facts or events
arising after the effective date of this 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 this
Registration Statement; and
(iii) To include any material information with respect to
the plan of distribution not previously disclosed in this Registration Statement
or any material change to such information in this Registration Statement.
provided, however, that paragraphs (1)(i) and (1)(ii) do not
apply if the information required to be included in a
post-effective amendment by those paragraphs is contained in
periodic reports filed by the Registrant pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), that are incorporated by reference in
this Registration Statement.
(2) That, for the purpose of determining any liability under the
Securities Act, each such post-effective amendment shall be deemed to be a new
registration statement relating to the securities offered therein, and the
offering of such securities at that time shall be deemed to be the initial bona
fide offering thereof.
(3) To remove from registration by means of a post-effective
amendment any of the securities being registered which remain unsold at the
termination of the offering.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, each filing of the
Registrant's annual report pursuant to Section 13(a) or Section 15(d) of
II-2
<PAGE> 15
the Exchange Act (and, where applicable, each filing of an employee benefit
plan's annual report pursuant to Section 15(d) of the Exchange Act) that is
incorporated by reference in this Registration Statement shall be deemed to be a
new registration statement relating to the securities offered herein, 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 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to the provisions described 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 Securities 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 whether
such indemnification by it is against public policy as expressed in the
Securities Act and will be governed by the final adjudication of such issue.
The undersigned Registrant hereby undertakes that, for purposes of
determining any liability under the Securities Act, the information omitted from
the form of prospectus filed as part of a registration statement in reliance
upon Rule 430A and contained in the form of prospectus filed by the Registrant
pursuant to Rule 424(b)(1) or (4) or 497(h) under the Securities Act shall be
deemed to be part of this Registration Statement as of the time it was declared
effective.
II-3
<PAGE> 16
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended,
the Registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
Registration Statement to be signed on its behalf by the undersigned, thereunto
duly authorized, in Chestnut Hill, Massachusetts on April 10, 1998.
THE NEIMAN MARCUS GROUP, INC.
By: /s/ Richard A. Smith
-----------------------------
Richard A. Smith
Chairman and Chief
Executive Officer
POWER OF ATTORNEY
Each person whose signature appears below constitutes and appoints
Richard A. Smith, John R. Cook and Eric P. Geller and each of them his true and
lawful attorneys-in-fact and agents, with full power of substitution and
resubstitution in each of them, for him and in his name, place and stead, and in
any and all capacities, to sign any and all amendments (including post-effective
amendments) to this Registration Statement on Form S-3 of The Neiman Marcus
Group, Inc. (including any subsequent Registration Statement for the same
offering which may be filed under Rule 462(b)) and to file the same, with all
exhibits thereto, and other documents in connection therewith, with the
Securities and Exchange Commission, granting unto said attorneys-in-fact and
agents, and each of them, full power and authority to do and perform each and
every act requisite or necessary to be done in connection therewith, as fully as
he might or could do in person, hereby ratifying and confirming all that said
attorneys-in-fact and agents or any of them or their or his substitute or
substitutes may lawfully do or cause to be done by virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended,
this Registration Statement has been signed below by the following persons in
the capacities indicated on the 10th day of April, 1998.
Signatures Title
---------- -----
/s/ Richard A. Smith Chairman and Chief
------------------------------- Executive Officer
Richard A. Smith
/s/ John R. Cook Senior Vice President,
------------------------------- Chief Financial Officer
John R. Cook and Director
/s/ Catherine N. Janowski Vice President and Controller
-------------------------------
Catherine N. Janowski
II-4
<PAGE> 17
/s/ Robert A. Smith President and Chief Operating
------------------------------- Officer and Director
Robert A. Smith
/s/ Matina S. Horner Director
-------------------------------
Matina S. Horner
/s/ Brian J. Knez Director
-------------------------------
Brian J. Knez
/s/ Vincent M. O'Reilly Director
-------------------------------
Vincent M. O'Reilly
/s/ Walter J. Salmon Director
-------------------------------
Walter J. Salmon
/s/ Jean Head Sisco Director
-------------------------------
Jean Head Sisco
II-5
<PAGE> 18
EXHIBIT INDEX
Exhibit No. Exhibit
----------- -------
1.1 Form of Underwriting Agreement
4.1 Form of Indenture between the Registrant and The Bank
of New York, as trustee
5.1 Opinion of Ropes & Gray
12.1 Calculation of Ratio of Earnings to Fixed Charges
23.1 Consent of Deloitte & Touche LLP
23.2 Consent of Ropes & Gray (included in Exhibit 5.1)
24.1 Power of Attorney (Appears on Page II-4 and II-5)
25.1 Statement on Form T-1 of Eligibility of Trustee
<PAGE> 1
The Neiman Marcus Group, Inc.
[ ]% Debt Securities Due [ ]
Form of Underwriting Agreement
New York, New York
, 1998
To the Representatives
named in Schedule I
hereto of the Under-
writers named in
Schedule II hereto
Ladies and Gentlemen:
The Neiman Marcus Group, Inc., a Delaware corporation (the
"Company"), proposes to sell to the several underwriters named in Schedule II
hereto (the "Underwriters"), for whom you (the "Representatives") are acting as
representatives, the principal amount of its securities identified in Schedule I
hereto (the "Securities"), to be issued under an indenture (the "Indenture")
dated as of , 1998, between the Company and The Bank of New York, as
trustee (the "Trustee"). To the extent there are no additional Underwriters
listed on Schedule I other than you, the term Representatives as used herein
shall mean you, as Underwriters, and the terms Representatives and Underwriters
shall mean either the singular or plural as the context requires. Any reference
herein to the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to and include
the documents incorporated by reference therein pursuant to Item 12 of Form S-3
which were filed under the Exchange Act on or before the Effective Date of the
Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may be; and
any reference herein to the terms "amend", "amendment" or "supplement" with
respect to the Registration Statement, the Basic Prospectus, any Preliminary
Final Prospectus or the Final Prospectus shall be deemed to refer to and include
the filing of any document under the Exchange Act after the Effective Date of
the Registration Statement or the issue date of the Basic Prospectus, any
Preliminary Final Prospectus or the Final Prospectus, as the case may
<PAGE> 2
2
be, deemed to be incorporated therein by reference. Certain terms used herein
are defined in Section 17 hereof.
1. REPRESENTATIONS AND WARRANTIES. The Company represents and
warrants to, and agrees with, each Underwriter as set forth below in this
Section 1.
(a) The Company meets the requirements for use of Form S-3 under the
Act and has prepared and filed with the Commission a registration
statement (the file number of which is set forth in Schedule I hereto) on
Form S-3, including a related basic prospectus, for registration under the
Act of the offering and sale of the Securities. The Company may have filed
one or more amendments thereto, including a Preliminary Final Prospectus,
each of which has previously been furnished to you. The Company will next
file with the Commission one of the following: (1) after the Effective
Date of such registration statement, a final prospectus supplement
relating to the Securities in accordance with Rules 430A and 424(b), (2)
prior to the Effective Date of such registration statement, an amendment
to such registration statement (including the form of final prospectus
supplement) or (3) a final prospectus in accordance with Rules 415 and
424(b). In the case of clause (1), the Company has included in such
registration statement, as amended at the Effective Date, all information
(other than Rule 430A Information) required by the Act and the rules
thereunder to be included in such registration statement and the Final
Prospectus. As filed, such final prospectus supplement or such amendment
and form of final prospectus supplement shall contain all Rule 430A
Information, together with all other such required information, and,
except to the extent the Representatives shall agree in writing to a
modification, shall be in all substantive respects in the form furnished
to you prior to the Execution Time or, to the extent not completed at the
Execution Time, shall contain only such specific additional information
and other substantive changes (beyond that contained in the Basic
Prospectus and any Preliminary Final Prospectus) as the Company has
advised you, prior to the Execution Time, will be included or made
therein. The Registration Statement, at the Execution Time, meets the
requirements set forth in Rule 415(a)(1)(x).
(b) On the Effective Date, the Registration Statement did or will,
and when the Final Prospectus is first filed (if required) in accordance
with
<PAGE> 3
3
Rule 424(b) and on the Closing Date, the Final Prospectus (and any
supplement thereto) will, comply in all material respects with the
applicable requirements of the Act, the Exchange Act and the Trust
Indenture Act and the respective rules thereunder; on the Effective Date,
the Registration Statement did not or will not contain any untrue
statement of a material fact or omit to state any material fact required
to be stated therein or necessary in order to make the statements therein
not misleading; on the Effective Date and on the Closing Date the
Indenture did or will comply in all material respects with the
requirements of the Trust Indenture Act and the rules thereunder; and, on
the Effective Date, the Final Prospectus, if not filed pursuant to Rule
424(b), will not, and on the date of any filing pursuant to Rule 424(b)
and on the Closing Date, the Final Prospectus (together with any
supplement thereto) will not, include any untrue statement of a material
fact or omit to state a material fact necessary in order to make the
statements therein, in the light of the circumstances under which they
were made, not misleading; PROVIDED, HOWEVER, that the Company makes no
representations or warranties as to (i) that part of the Registration
Statement which shall constitute the Statement of Eligibility and
Qualification (Form T-1) under the Trust Indenture Act of the Trustee or
(ii) the information contained in or omitted from the Registration
Statement or the Final Prospectus (or any supplement thereto) in reliance
upon and in conformity with information furnished herein or in writing to
the Company by or on behalf of any Underwriter through the Representatives
specifically for inclusion in the Registration Statement or the Final
Prospectus (or any supplement thereto).
Any certificate signed by any officer of the Company and delivered to the
Representatives or counsel for the Underwriters in connection with the offering
of the Securities shall be deemed a representation and warranty by the Company,
as to matters covered thereby, to each Underwriter.
2. PURCHASE AND SALE. Subject to the terms and conditions and in
reliance upon the representations and warranties herein set forth, the Company
agrees to sell to each Underwriter, and each Underwriter agrees, severally and
not jointly, to purchase from the Company, at the purchase price set forth in
Schedule I hereto the principal amount of the Securities set forth opposite such
Underwriter's name in Schedule II hereto.
<PAGE> 4
4
3. DELIVERY AND PAYMENT. Delivery of and payment for the Securities
shall be made on the date and at the time specified in Schedule I hereto or at
such time on such later date not more than three Business Days after the
foregoing date as the Representatives shall designate, which date and time may
be postponed by agreement between the Representatives and the Company or as
provided in Section 9 hereof (such date and time of delivery and payment for the
Securities being herein called the "Closing Date"). Delivery of the Securities
shall be made to the Representatives for the respective accounts of the several
Underwriters against payment by the several Underwriters through the
Representatives of the purchase price thereof to or upon the order of the
Company by wire transfer payable in same-day funds to an account specified by
the Company. Delivery of the Securities shall be made through the facilities of
The Depository Trust Company unless the Representatives shall otherwise
instruct.
4. OFFERING BY UNDERWRITERS. It is understood that the several
Underwriters propose to offer the Securities for sale to the public as set forth
in the Final Prospectus.
5. AGREEMENTS. The Company agrees with the several Underwriters
that:
(a) The Company will use its best efforts to cause the Registration
Statement, if not effective at the Execution Time, and any amendment
thereof, to become effective. Prior to the termination of the offering of
the Securities, the Company will not file any amendment of the
Registration Statement or supplement (including the Final Prospectus or
any Preliminary Final Prospectus) to the Basic Prospectus or any Rule
462(b) Registration Statement unless the Company has furnished you a copy
for your review prior to filing and will not file any such proposed
amendment or supplement to which you reasonably object. Subject to the
foregoing sentence, if the Registration Statement has become or becomes
effective pursuant to Rule 430A, or filing of the Final Prospectus is
otherwise required under Rule 424(b), the Company will cause the Final
Prospectus, properly completed, and any supplement thereto to be filed
with the Commission pursuant to the applicable paragraph of Rule 424(b)
within the time period prescribed and will provide evidence satisfactory
to the Representatives of such timely filing. The Company will promptly
advise the Representatives (1) when the Registration Statement, if
<PAGE> 5
5
not effective at the Execution Time, shall have become effective, (2) when
the Final Prospectus, and any supplement thereto, shall have been filed
(if required) with the Commission pursuant to Rule 424(b) or when any Rule
462(b) Registration Statement shall have been filed with the Commission,
(3) when, prior to termination of the offering of the Securities, any
amendment to the Registration Statement shall have been filed or become
effective, (4) of any request by the Commission or its staff for any
amendment of the Registration Statement, or any Rule 462(b) Registration
Statement, or for any supplement to the Final Prospectus or for any
additional information, (5) of the issuance by the Commission of any stop
order suspending the effectiveness of the Registration Statement or the
institution or threatening of any proceeding for that purpose and (6) of
the receipt by the Company of any notification with respect to the
suspension of the qualification of the Securities for sale in any
jurisdiction or the institution or threatening of any proceeding for such
purpose. The Company will use its best efforts to prevent the issuance of
any such stop order and, if issued, to obtain as soon as possible the
withdrawal thereof.
(b) If, at any time when a prospectus relating to the Securities is
required to be delivered under the Act, any event occurs as a result of
which the Final Prospectus as then supplemented would include any untrue
statement of a material fact or omit to state any material fact necessary
to make the statements therein in the light of the circumstances under
which they were made not misleading, or if it shall be necessary to amend
the Registration Statement or supplement the Final Prospectus to comply
with the Act or the Exchange Act or the respective rules thereunder, the
Company promptly will (1) notify the Representatives of such event, (2)
prepare and file with the Commission, subject to the second sentence of
paragraph (a) of this Section 5, an amendment or supplement which will
correct such statement or omission or effect such compliance and (3)
supply any supplemented Final Prospectus to you in such quantities as you
may reasonably request.
(c) As soon as practicable, the Company will make generally
available to its security holders and to the Representatives an earnings
statement or statements of the Company and its subsidiaries which will
satisfy the
<PAGE> 6
6
provisions of Section 11(a) of the Act and Rule 158 under the Act.
(d) The Company will furnish to the Representatives and counsel for
the Underwriters, without charge, signed copies of the Registration
Statement (including exhibits thereto) and to each other Underwriter a
copy of the Registration Statement (without exhibits thereto) and, so long
as delivery of a prospectus by an Underwriter or dealer may be required by
the Act, as many copies of each Preliminary Final Prospectus and the Final
Prospectus and any supplement thereto as the Representatives may
reasonably request. The Company will pay the expenses of printing or other
production of all documents relating to the offering.
(e) The Company will arrange, if necessary, for the qualification of
the Securities for sale under the laws of such jurisdictions as the
Representatives may designate, will maintain such qualifications in effect
so long as required for the distribution of the Securities; PROVIDED that
in no event shall the Company be obligated to qualify to do business in
any jurisdiction where it is not now so qualified or to take any action
that would subject it to service of process in suits, other than those
arising out of the offering or sale of the Securities, in any jurisdiction
where it is not now so subject.
(f) Until the Business Day set forth on Schedule I hereto, the
Company will not, without the prior written consent of the
Representatives, offer, sell or contract to sell, or otherwise dispose of
(or enter into any transaction which is designed to, or might reasonably
be expected to, result in the disposition (whether by actual disposition
or effective economic disposition due to cash settlement or otherwise) by
the Company or any affiliate of the Company or any person in privity with
the Company or any affiliate of the Company) directly or indirectly, or
announce the offering of, any debt securities issued or guaranteed by the
Company and having a maturity of more than one year from their date of
issuance (other than the Securities).
(g) The Company will not take any action designed to or which has
constituted or which might reasonably be expected to cause or result,
under the Exchange Act or otherwise, in stabilization or manipulation of
the
<PAGE> 7
7
price of any security of the Company to facilitate the sale or resale of
the Securities.
6. CONDITIONS TO THE OBLIGATIONS OF THE UNDERWRITERS. The
obligations of the Underwriters to purchase the Securities shall be subject to
the accuracy of the representations and warranties on the part of the Company
contained herein as of the Execution Time and the Closing Date, to the accuracy
of the statements of the Company made in any certificates pursuant to the
provisions hereof, to the performance by the Company of its obligations
hereunder and to the following additional conditions:
(a) If the Registration Statement has not become effective prior to
the Execution Time, unless the Representatives agree in writing to a later
time, the Registration Statement will become effective not later than (i)
6:00 PM New York City time, on the date of determination of the public
offering price, if such determination occurred at or prior to 3:00 PM New
York City time on such date or (ii) 9:30 AM on the Business Day following
the day on which the public offering price was determined, if such
determination occurred after 3:00 PM New York City time on such date; if
filing of the Final Prospectus, or any supplement thereto, is required
pursuant to Rule 424(b), the Final Prospectus, and any such supplement,
will be filed in the manner and within the time period required by Rule
424(b); and no stop order suspending the effectiveness of the Registration
Statement shall have been issued and no proceedings for that purpose shall
have been instituted or threatened.
(b) The Company shall have furnished to the Representatives the
opinion of Eric P. Geller, Senior Vice President and General Counsel of
the Company, dated the Closing Date and addressed to the Representatives
to the effect that:
(i) each of the Company and Neiman Marcus Holdings, Inc. and
Bergdorf Goodman, Inc. (individually a "Subsidiary" and collectively
the "Subsidiaries") has been duly incorporated and is validly
existing as a corporation in good standing under the laws of the
jurisdiction in which it is chartered or organized, with full
corporate power and authority to own or lease, as the case may be,
and to operate its properties and conduct its business as described
in the Final Prospectus, and is duly qualified to do business as a
foreign
<PAGE> 8
8
corporation and is in good standing under the laws of each
jurisdiction which requires such qualification wherein it owns or
leases material properties or conducts material business and where
the failure to be so qualified would, individually or in the
aggregate, have a material adverse effect on the business or
financial condition of the Company and its subsidiaries, taken as a
whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the
Prospectus;
(ii) all the outstanding shares of capital stock of each
Subsidiary have been duly and validly authorized and issued and are
fully paid and nonassessable, and, except as otherwise set forth in
the Final Prospectus, all outstanding shares of capital stock of the
Subsidiaries are owned by the Company either directly or through
wholly owned subsidiaries free and clear of any perfected security
interest and, to the knowledge of such counsel any other security
interest, claim, lien or encumbrance;
(iii) the Company's authorized equity capitalization is as set
forth in the Final Prospectus; the Securities conform in all
material respects to the description thereof contained in the Final
Prospectus;
(iv) the Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust
Indenture Act, and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect and to
equitable principles which may limit the right to obtain the remedy
of specific performance or other injunctive relief); and the
Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will constitute legal, valid and binding obligations of
the Company entitled to the benefits of the Indenture;
<PAGE> 9
9
(v) to the knowledge of such counsel, there is no pending or
threatened action, suit or proceeding by or before any court or
governmental agency, authority or body or any arbitrator involving
the Company or any of its Subsidiaries or its or their property, of
a character required to be disclosed in the Registration Statement
which is not adequately disclosed in the Final Prospectus, and there
is no franchise, contract or other document of a character required
to be described in the Registration Statement or Final Prospectus,
or to be filed as an exhibit thereto, which is not described or
filed as required;
(vi) the Registration Statement has become effective under the
Act; any required filing of the Basic Prospectus, any Preliminary
Final Prospectus and the Final Prospectus, and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the knowledge of
such counsel, no stop order suspending the effectiveness of the
Registration Statement has been issued, no proceedings for that
purpose have been instituted or threatened, and the Registration
Statement and the Final Prospectus (other than the financial
statements and other financial and statistical information contained
therein, as to which such counsel need express no opinion) comply as
to form in all material respects with the applicable requirements of
the Act, the Exchange Act and the Trust Indenture Act and the
respective rules thereunder; and such counsel has no reason to
believe (based on his responsibilities as an officer of the Company
and his participation in the preparation of the Registration
Statement) that on the Effective Date the Registration Statement
contained any untrue statement of a material fact or omitted to
state any material fact required to be stated therein or necessary
to make the statements therein not misleading or that the Final
Prospectus as of its date and on the Closing Date included or
includes any untrue statement of a material fact or omitted or omits
to state a material fact necessary to make the statements therein,
in the light of the circumstances under which they were made, not
misleading (provided that such counsel need make no such statement
regarding any financial or
<PAGE> 10
10
statistical information or any information relating to the
Underwriters or the Trustee);
(vii) this Agreement has been duly authorized, executed and
delivered by the Company;
(viii) no consent, approval, authorization or order of any
court or governmental agency or body is required in connection with
the transactions contemplated herein, except such as have been
obtained under the Act, the Trust Indenture Act and such as may be
required under the blue sky laws of any jurisdiction in connection
with the purchase and distribution of the Securities by the
Underwriters in the manner contemplated in this Agreement and in the
Final Prospectus and such other approvals (specified in such
opinion) as have been obtained;
(ix) neither the issue and sale of the Securities, nor the
consummation of any other of the transactions herein contemplated
nor the fulfillment of the terms hereof will conflict with, result
in a breach or violation of, or constitute a default under any law
or the charter or by-laws of the Company or the terms of any
indenture or other agreement or instrument material to the Company
and known to such counsel and to which the Company or any of its
subsidiaries is a party or bound or any judgment, order or decree
known to such counsel to be applicable to the Company or any of its
subsidiaries of any court, regulatory body, administrative agency,
governmental body or arbitrator having jurisdiction over the Company
or any of its subsidiaries; and
(x) to the best of such counsel's knowledge, no holders of
securities of the Company have rights to the registration of such
securities under the Registration Statement.
In rendering such opinion, such counsel may rely (A) as to matters
involving the application of laws of any jurisdiction other than the
States of Delaware and Massachusetts or the Federal laws of the United
States, to the extent they deem proper and specified in such opinion, upon
the opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters and (B)
as
<PAGE> 11
11
to matters of fact, to the extent they deem proper, on certificates of
responsible officers of the Company and public officials. References to
the Final Prospectus in this paragraph (b) include any supplements thereto
at the Closing Date.
(c) The Company shall have caused Ropes & Gray, counsel for the
Company, to have furnished to the Representatives their opinion, dated the
Closing Date and addressed to the Representatives to the effect that:
(i) the Indenture has been duly authorized, executed and
delivered by the Company, has been duly qualified under the Trust
Indenture Act, and constitutes a legal, valid and binding instrument
enforceable against the Company in accordance with its terms
(subject, as to enforcement of remedies, to applicable bankruptcy,
reorganization, insolvency, moratorium or other laws affecting
creditors' rights generally from time to time in effect and to
equitable principles which may limit the right to obtain the remedy
of specific performance or other injunctive relief); and the
Securities have been duly authorized and, when executed and
authenticated in accordance with the provisions of the Indenture and
delivered to and paid for by the Underwriters pursuant to this
Agreement, will constitute legal, valid and binding obligations of
the Company entitled to the benefits of the Indenture;
(ii) the Registration Statement has become effective under the
Act; any required filing of the Prospectus and any supplements
thereto, pursuant to Rule 424(b) has been made in the manner and
within the time period required by Rule 424(b); to the best
knowledge of such counsel, no stop order suspending the
effectiveness of the Registration Statement has been issued, no
proceedings for that purpose have been instituted or threatened and
the Registration Statement and the Prospectus (other than the
financial statements and other financial and statistical information
contained therein as to which such counsel need express no opinion)
comply as to form in all material respects with the applicable
requirements of the Act, the Exchange Act and the Trust Indenture
Act and the respective rules thereunder; and such counsel has no
reason
<PAGE> 12
12
to believe (based upon such counsel's participation in the
preparation of the Registration Statement) that at the Effective
Date the Registration Statement contained any untrue statement of a
material fact or omitted to state any material fact required to be
stated therein or necessary to make the statements therein not
misleading or that the Prospectus includes any untrue statement of a
material fact or omits to state a material fact necessary to make
the statements therein, in the light of the circumstances under
which they were made, not misleading (provided that such counsel
need make no such statement regarding any financial or statistical
information or any information relating to the Underwriters or the
Trustee); and
(iii) this Agreement has been duly authorized, executed and
delivered by the Company.
In rendering such opinion, such counsel may rely (A) as to matters involving the
application of laws of any jurisdiction other than the State of Massachusetts or
the United States, to the extent they deem proper and specified in such opinion,
upon the opinion of other counsel of good standing whom they believe to be
reliable and who are satisfactory to counsel for the Underwriters and (B) as to
matters of fact, to the extent they deem proper, on certificates of responsible
officers of the Company and public officials. References to the Prospectus in
this paragraph (c) include any supplements thereto at the Closing Date.
(d) The Representatives shall have received from Cravath, Swaine &
Moore, counsel for the Underwriters, such opinion or opinions, dated the
Closing Date and addressed to the Representatives, with respect to the
issuance and sale of the Securities, the Indenture, the Registration
Statement, the Final Prospectus (together with any supplement thereto) and
other related matters as the Representatives may reasonably require, and
the Company shall have furnished to such counsel such documents as they
request for the purpose of enabling them to pass upon such matters.
(e) The Company shall have furnished to the Representatives a
certificate of the Company, signed by the Chairman of the Board or the
President and the principal financial or accounting officer of the
Company, dated the Closing Date, to the effect that the
<PAGE> 13
13
signers of such certificate have carefully examined the Registration
Statement, the Final Prospectus, any supplements to the Final Prospectus
and this Agreement and that:
(i) the representations and warranties of the Company in this
Agreement are true and correct in all material respects on and as of
the Closing Date with the same effect as if made on the Closing Date
and the Company has complied with all the agreements and satisfied
all the conditions on its part to be performed or satisfied at or
prior to the Closing Date;
(ii) no stop order suspending the effectiveness of the
Registration Statement has been issued and no proceedings for that
purpose have been instituted or, to the Company's knowledge,
threatened; and
(iii) since the date of the most recent financial statements
included or incorporated by reference in the Final Prospectus
(exclusive of any supplement thereto), there has been no material
adverse change in the condition (financial or otherwise), earnings,
business or properties of the Company and its subsidiaries, taken as
a whole, whether or not arising from transactions in the ordinary
course of business, except as set forth in or contemplated in the
Prospectus (exclusive of any supplement thereto filed after the Rule
424(b) Prospectus is first filed after the Execution Time).
Such certificates shall be deemed to be representations of the Company and
not of such officers personally.
(f) The Company shall have caused Deloitte & Touche LLP to have
furnished to the Representatives, at the Execution Time and at the Closing
Date, letters (which may refer to letters previously delivered to one or
more of the Representatives), dated respectively as of the Execution Time
and as of the Closing Date, in form and substance satisfactory to the
Representatives, confirming that they are independent accountants within
the meaning of the Act and the Exchange Act and the respective applicable
published rules and regulations thereunder and that they have performed a
review of the unaudited interim financial information of the Company for
the periods listed on Schedule I hereto and as at
<PAGE> 14
14
the last day of such periods, in accordance with Statement on Auditing
Standards No. 71, and stating in effect, except as provided in Schedule I
hereto, that:
(i) in their opinion the audited financial statements and
financial statement schedules included or incorporated by reference
in the Registration Statement and the Final Prospectus and reported
on by them comply as to form in all material respects with the
applicable accounting requirements of the Act and the Exchange Act
and the related published rules and regulations;
(ii) on the basis of a reading of the latest unaudited
financial statements made available by the Company and its
subsidiaries; their limited review, in accordance with standards
established under Statement on Auditing Standards No. 71, of the
unaudited interim financial information for the periods listed on
Schedule I hereto; carrying out certain specified procedures (but
not an examination in accordance with generally accepted auditing
standards) which would not necessarily reveal matters of
significance with respect to the comments set forth in such letter;
a reading of the minutes of the meetings of the stockholders,
directors and the Executive, Audit, Compensation and Special Review
committees of the Company; and inquiries of certain officials of the
Company who have responsibility for financial and accounting matters
of the Company and its subsidiaries as to transactions and events
subsequent to the date of the most recent audited financial
statements included or incorporated by reference in the Registration
Statement and Final Prospectus, nothing came to their attention
which caused them to believe that:
(1) any unaudited financial statements included or
incorporated by reference in the Registration Statement and
the Final Prospectus do not comply as to form in all material
respects with applicable accounting requirements of the Act
and with the published rules and regulations of the Commission
with respect to financial statements included or incorporated
by reference in quarterly reports on Form 10-Q under the
Exchange Act; and said unaudited financial statements are not
in conformity
<PAGE> 15
15
with generally accepted accounting principles applied on a
basis substantially consistent with that of the audited
financial statements included or incorporated by reference in
the Registration Statement and the Final
Prospectus;
(2) with respect to the period subsequent to the date of
the most recent financial statements (other than capsule
information), audited or unaudited, included or incorporated
by reference in the Registration Statement and the Final
Prospectus, there were any changes, at a specified date not
more than five days prior to the date of the letter, in the
long-term liabilities of the Company and its subsidiaries or
capital stock of the Company or decreases in the stockholders'
equity of the Company as compared with the amounts shown on
the most recent consolidated balance sheet included or
incorporated by reference in the Registration Statement and
the Final Prospectus, or for the period from the date of the
most recent financial statements (other than capsule
information), audited or unaudited, included or incorporated
by reference in the Registration Statement and the Final
Prospectus to such specified date there were any decreases, as
compared with the corresponding period in the previous year,
in total revenues or earnings from continuing operations
before income taxes or in total or per share amounts of net
income of the Company and its Subsidiaries, except in all
instances for changes or decreases set forth in such letter,
in which case the letter shall be accompanied by an
explanation by the Company as to the significance thereof
unless said explanation is not deemed necessary by the
Representatives;
(3) the information included or incorporated by
reference in the Registration Statement and Final Prospectus
in response to Regulation S-K, Item 301 (Selected Financial
Data), Item 302 (Supplementary Financial Information) and Item
503(d) (Ratio of Earnings to Fixed Charges) is not in
<PAGE> 16
16
conformity with the applicable disclosure requirements of
Regulation S-K; and
(4) the unaudited amounts included in any capsule
information do not agree with the amounts set forth in the
unaudited financial statements for the same periods or were
not determined on a basis substantially consistent with that
of the corresponding amounts in the audited financial
statements included or incorporated by reference in the
Registration Statement and the Final Prospectus;
(iii) they have performed certain other specified procedures
as a result of which they determined that certain information of an
accounting, financial or statistical nature (which is limited to
accounting, financial or statistical information derived from the
general accounting records of the Company and its subsidiaries) set
forth in the Registration Statement and the Final Prospectus and in
Exhibit 12 to the Registration Statement, including the information
included or incorporated by reference in Items 1, 2, 6, 7 and 11 of
the Company's Annual Report on Form 10-K, incorporated by reference
in the Registration Statement and the Final Prospectus, and the
information included in the "Management's Discussion and Analysis of
Financial Condition and Results of Operations" included or
incorporated by reference in the Company's Quarterly Reports on Form
10-Q, incorporated by reference in the Registration Statement and
the Final Prospectus, agrees with the accounting records of the
Company and its subsidiaries, excluding any questions of legal
interpretation.
References to the Final Prospectus in this paragraph (f) include any
supplement thereto at the date of the letter.
(g) Subsequent to the Execution Time or, if earlier, the dates as of
which information is given in the Registration Statement (exclusive of any
amendment thereof) and the Final Prospectus (exclusive of any supplement
thereto), there shall not have been (i) any change or decrease specified
in the letter or letters referred to in paragraph (f) of this Section 6 or
(ii) any change, or any development involving a
<PAGE> 17
17
prospective change, in or affecting the business or properties of the
Company and its subsidiaries, taken as a whole, the effect of which, in
any case referred to in clause (i) or (ii) above, is, in the judgment of
the Representatives, so material and adverse as to make it impractical or
inadvisable to proceed with the offering or delivery of the Securities as
contemplated by the Registration Statement (exclusive of any amendment
thereof) and the Final Prospectus (exclusive of any supplement thereto).
(h) Subsequent to the Execution Time, there shall not have been
any decrease in the rating of any of the Company's debt securities by any
"nationally recognized statistical rating organization" (as defined for
purposes of Rule 436(g) under the Act) or any notice given of any intended
or potential decrease in any such rating or of a possible change in any
such rating that does not indicate the direction of the possible change.
(i) Prior to the Closing Date, the Company shall have furnished to
the Representatives such further information, certificates and documents
as the Representatives may reasonably request.
If any of the conditions specified in this Section 6 shall not have
been fulfilled in all material respects when and as provided in this Agreement,
or if any of the opinions and certificates mentioned above or elsewhere in this
Agreement shall not be in all material respects reasonably satisfactory in form
and substance to the Representatives and counsel for the Underwriters, this
Agreement and all obligations of the Underwriters hereunder may be canceled at,
or at any time prior to, the Closing Date by the Representatives. Notice of such
cancelation shall be given to the Company in writing or by telephone or
facsimile confirmed in writing.
The documents required to be delivered by this Section 6 shall be
delivered at the office of Ropes & Gray, counsel for the Company, at One
International Place, Boston, Massachusetts, on the Closing Date.
7. REIMBURSEMENT OF UNDERWRITERS' EXPENSES. If the sale of the
Securities provided for herein is not consummated because any condition to the
obligations of the Underwriters set forth in Section 6 hereof is not satisfied
or because of any refusal, inability or failure on the part of the Company to
perform any agreement herein or comply
<PAGE> 18
18
with any provision hereof other than by reason of a default by any of the
Underwriters, the Company will reimburse the Underwriters severally through
Representatives on demand for all out-of-pocket expenses (including reasonable
fees and disbursements of counsel) that shall have been incurred by them in
connection with the proposed purchase and sale of the Securities.
8. INDEMNIFICATION AND CONTRIBUTION. (a) The Company agrees to
indemnify and hold harmless each Underwriter, the directors, officers, employees
and agents of each Underwriter and each person who controls any Underwriter
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state statutory law or regulation, at common law or otherwise, insofar as such
losses, claims, damages or liabilities (or actions in respect thereof) arise out
of or are based upon any untrue statement or alleged untrue statement of a
material fact contained in the registration statement for the registration of
the Securities as originally filed or in any amendment thereof, or in the Basic
Prospectus, any Preliminary Final Prospectus or the Final Prospectus, or in any
amendment thereof or supplement thereto, or arise out of or are based upon the
omission or alleged omission to state therein a material fact required to be
stated therein or necessary to make the statements therein not misleading, and
agrees to reimburse each such indemnified party, as incurred, for any legal or
other expenses reasonably incurred by them in connection with investigating or
defending any such loss, claim, damage, liability or action; PROVIDED, HOWEVER,
that the Company will not be liable in any such case to the extent that any such
loss, claim, damage or liability arises out of or is based upon any such untrue
statement or alleged untrue statement or omission or alleged omission made
therein in reliance upon and in conformity with written information furnished to
the Company by or on behalf of any Underwriter through the Representatives or
their counsel specifically for inclusion therein. This indemnity agreement will
be in addition to any liability which the Company may otherwise have.
(b) Each Underwriter severally and not jointly agrees to indemnify
and hold harmless the Company, each of its directors, each of its officers who
signs the Registration Statement, and each person who controls the Company
within the meaning of either the Act or the Exchange Act, to the same extent as
the foregoing indemnity from the
<PAGE> 19
19
Company to each Underwriter, but only with reference to written information
relating to such Underwriter furnished to the Company by or on behalf of such
Underwriter through the Representatives or their counsel specifically for
inclusion in the documents referred to in the foregoing indemnity. This
indemnity agreement will be in addition to any liability which any Underwriter
may otherwise have. The Company acknowledges that the statements set forth in
the paragraph of the cover page regarding delivery of the Securities, the legend
in block capital letters on page 2 related to stabilization, syndicate covering
transactions and penalty bids and, under the heading "Underwriting", "Plan of
Distribution", or such other heading provided in Schedule I hereto, (i) the
sentences related to concessions and reallowances and (ii) the paragraph related
to stabilization, syndicate covering transactions and penalty bids in any
Preliminary Final Prospectus and the Final Prospectus constitute the only
information furnished in writing by or on behalf of the several Underwriters for
inclusion in any Preliminary Final Prospectus or the Final Prospectus.
(c) Promptly after receipt by an indemnified party under this
Section 8 of notice of the commencement of any action, such indemnified party
will, if a claim in respect thereof is to be made against the indemnifying party
under this Section 8, notify the indemnifying party in writing of the
commencement thereof; but the failure so to notify the indemnifying party (i)
will not relieve it from liability under paragraph (a) or (b) above or (d) below
unless and to the extent it did not otherwise learn of such action and such
failure results in the forfeiture by the indemnifying party of substantial
rights or defenses and (ii) will not, in any event, relieve the indemnifying
party from any obligations to any indemnified party other than the
indemnification obligation provided in paragraph (a) or (b) above or (d) below.
The indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); PROVIDED, HOWEVER, that such counsel shall be reasonably
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying
<PAGE> 20
20
party shall bear the reasonable fees, costs and expenses of such separate
counsel if (i) the use of counsel chosen by the indemnifying party to represent
the indemnified party would present such counsel with a conflict of interest,
(ii) the actual or potential defendants in, or targets of, any such action
include both the indemnified party and the indemnifying party and the
indemnified party shall have reasonably concluded that there may be legal
defenses available to it and/or other indemnified parties which conflict with
those available to the indemnifying party (in which case the indemnifying party
shall only be responsible for the fees, costs and expenses of separate counsel
to the extent they relate to such conflicting legal defenses), (iii) the
indemnifying party shall not have employed counsel reasonably satisfactory to
the indemnified party to represent the indemnified party within a reasonable
time after notice of the institution of such action or (iv) the indemnifying
party shall authorize the indemnified party to employ separate counsel at the
expense of the indemnifying party. An indemnifying party will not, without the
prior written consent of the indemnified parties, settle or compromise or
consent to the entry of any judgment with respect to any pending or threatened
claim, action, suit or proceeding in respect of which indemnification or
contribution may be sought hereunder (whether or not the indemnified parties are
actual or potential parties to such claim or action) unless such settlement,
compromise or consent includes an unconditional release of each indemnified
party from all liability arising out of such claim, action, suit or proceeding.
An indemnifying party shall not be liable for any settlement of any action,
claim, suit or proceeding effected without its consent.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 8 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, the Company and the Underwriters severally
agree to contribute to the aggregate losses, claims, damages and liabilities
(including legal or other expenses reasonably incurred in connection with
investigating or defending same) (collectively "Losses") to which the Company
and one or more of the Underwriters may be subject in such proportion as is
appropriate to reflect the relative benefits received by the Company on the one
hand and by the Underwriters on the other from the offering of the Securities;
PROVIDED, HOWEVER, that in no case shall any Underwriter (except as may be
provided in any agreement among underwriters relating to the offering of the
Securities) be responsible for any amount in excess of the underwriting discount
or commission applicable to the Securities purchased by such Underwriter
hereunder. If the
<PAGE> 21
21
allocation provided by the immediately preceding sentence is unavailable for any
reason, the Company and the Underwriters severally shall contribute in such
proportion as is appropriate to reflect not only such relative benefits but also
the relative fault of the Company on the one hand and of the Underwriters on the
other in connection with the statements or omissions which resulted in such
Losses as well as any other relevant equitable considerations. Benefits received
by the Company shall be deemed to be equal to the total net proceeds from the
offering (before deducting expenses) received by it, and benefits received by
the Underwriters shall be deemed to be equal to the total underwriting discounts
and commissions, in each case as set forth on the cover page of the Final
Prospectus. Relative fault shall be determined by reference to, among other
things, whether any untrue or any alleged untrue statement of a material fact or
the omission or alleged omission to state a material fact relates to information
provided by the Company on the one hand or the Underwriters on the other, the
intent of the parties and their relative knowledge, access to information and
opportunity to correct or prevent such untrue statement or omission. The Company
and the Underwriters agree that it would not be just and equitable if
contribution were determined by pro rata allocation or any other method of
allocation which does not take account of the equitable considerations referred
to above. Notwithstanding the provisions of this paragraph (d), no person guilty
of fraudulent misrepresentation (within the meaning of Section 11(f) of the Act)
shall be entitled to contribution from any person who was not guilty of such
fraudulent misrepresentation. For purposes of this Section 8, each person who
controls an Underwriter within the meaning of either the Act or the Exchange Act
and each director, officer, employee and agent of an Underwriter shall have the
same rights to contribution as such Underwriter, and each person who controls
the Company within the meaning of either the Act or the Exchange Act, each
officer of the Company who shall have signed the Registration Statement and each
director of the Company shall have the same rights to contribution as the
Company, subject in each case to the applicable terms and conditions of this
paragraph (d).
9. DEFAULT BY AN UNDERWRITER. If any one or more Underwriters shall
fail to purchase and pay for any of the Securities agreed to be purchased by
such Underwriter or Underwriters hereunder and such failure to purchase shall
constitute a default in the performance of its or their obligations under this
Agreement, the remaining Underwriters shall be obligated severally to take up
and pay for (in the
<PAGE> 22
22
respective proportions which the principal amount of Securities set forth
opposite their names in Schedule II hereto bears to the aggregate principal
amount of Securities set forth opposite the names of all the remaining
Underwriters) the Securities which the defaulting Underwriter or Underwriters
agreed but failed to purchase; PROVIDED, HOWEVER, that in the event that the
aggregate principal amount of Securities which the defaulting Underwriter or
Underwriters agreed but failed to purchase shall exceed 10% of the aggregate
principal amount of Securities set forth in Schedule II hereto, the remaining
Underwriters shall have the right to purchase all, but shall not be under any
obligation to purchase any, of the Securities, and if such nondefaulting
Underwriters do not purchase all the Securities, this Agreement will terminate
without liability to any nondefaulting Underwriter or the Company. In the event
of a default by any Underwriter as set forth in this Section 9, the Closing Date
shall be postponed for such period, not exceeding five Business Days, as the
Representatives shall determine in order that the required changes in the
Registration Statement and the Final Prospectus or in any other documents or
arrangements may be effected. Nothing contained in this Agreement shall relieve
any defaulting Underwriter of its liability, if any, to the Company and any
nondefaulting Underwriter for damages occasioned by its default hereunder.
10. TERMINATION. This Agreement shall be subject to termination in
the absolute discretion of the Representatives, by notice given to the Company
prior to delivery of and payment for the Securities, if on or after the
Execution Time and prior to such time (i) trading in the Company's Common Stock
shall have been suspended by the Commission or the New York Stock Exchange or
trading in securities generally on the New York Stock Exchange shall have been
suspended or limited or minimum prices shall have been established on such
Exchange, (ii) a banking moratorium shall have been declared either by Federal
or New York State authorities or (iii) there shall have occurred any outbreak or
escalation of hostilities, declaration by the United States of a national
emergency or war or other calamity or crisis the effect of which on financial
markets is such as to make it, in the judgment of the Representatives,
impractical or inadvisable to proceed with the offering or delivery of the
Securities as contemplated by the Final Prospectus (exclusive of any supplement
thereto filed after the Rule 424(b) Prospectus is first filed after the
Execution Time).
<PAGE> 23
23
11. REPRESENTATIONS AND INDEMNITIES TO SURVIVE. The respective
agreements, representations, warranties, indemnities and other statements of the
Company or its officers and of the Underwriters set forth in or made pursuant to
this Agreement will remain in full force and effect, regardless of any
investigation made by or on behalf of any Underwriter or the Company or any of
the officers, directors or controlling persons referred to in Section 8 hereof,
and will survive delivery of and payment for the Securities. The provisions of
Sections 7 and 8 hereof shall survive the termination or cancelation of this
Agreement.
12. NOTICES. All communications hereunder will be in writing and
effective only on receipt, and, if sent to the Representatives, will be mailed,
delivered or telefaxed to them at the address specified on Schedule I hereto;
or, if sent to the Company, will be mailed, delivered or telefaxed and confirmed
to Eric Geller at 27 Boylston Street, Chestnut Hill, Massachusetts 02167,
facsimilie number (617) 278-5567.
13. SUCCESSORS. This Agreement will inure to the benefit of and be
binding upon the parties hereto and their respective successors and the officers
and directors and controlling persons referred to in Section 8 hereof, and no
other person will have any right or obligation hereunder.
14. APPLICABLE LAW. This Agreement will be governed by and construed
in accordance with the laws of the State of New York applicable to contracts
made and to be performed within the State of New York.
15. COUNTERPARTS. This Agreement may be signed in one or more
counterparts, each of which shall constitute an original and all of which
together shall constitute one and the same agreement.
16. HEADINGS. The section headings used herein are for convenience
only and shall not affect the construction hereof.
17. DEFINITIONS. The terms which follow, when used in this
Agreement, shall have the meanings indicated.
"Act" shall mean the Securities Act of 1933, as amended and the
rules and regulations of the Commission promulgated thereunder.
"Basic Prospectus" shall mean the prospectus referred to in
paragraph 1(a) above contained in the
<PAGE> 24
24
Registration Statement at the Effective Date.
"Business Day" shall mean any day other than a Saturday, a Sunday or
a legal holiday or a day on which banking institutions or trust companies
are authorized or obligated by law to close in New York City.
"Commission" shall mean the Securities and Exchange Commission.
"Effective Date" shall mean each date and time that the Registration
Statement, any post-effective amendment or amendments thereto and any Rule
462(b) Registration Statement became or become effective.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended, and the rules and regulations of the Commission promulgated
thereunder.
"Execution Time" shall mean the date and time that this Agreement is
executed and delivered by the parties hereto.
"Final Prospectus" shall mean the prospectus supplement relating to
the Securities that was first filed pursuant to Rule 424(b) after the
Execution Time, together with the Basic Prospectus.
"Preliminary Final Prospectus" shall mean any preliminary prospectus
supplement to the Basic Prospectus which describes the Securities and the
offering thereof and is used prior to filing of the Final Prospectus,
together with the Basic Prospectus.
"Registration Statement" shall mean the registration statement
referred to in paragraph 1(a) above, including exhibits and financial
statements, as amended at the Execution Time (or, if not effective at the
Execution Time, in the form in which it shall become effective) and, in
the event any post-effective amendment thereto or any Rule 462(b)
Registration Statement becomes effective prior to the Closing Date, shall
also mean such registration statement as so amended or such Rule 462(b)
Registration Statement, as the case may be. Such term shall include any
Rule 430A Information deemed to be included therein at the Effective Date
as provided by Rule 430A.
<PAGE> 25
25
"Rule 415", "Rule 424", "Rule 430A" and "Rule 462" refer to such
rules under the Act.
"Rule 430A Information" shall mean information with respect to the
Securities and the offering thereof permitted to be omitted from the
Registration Statement when it becomes effective pursuant to Rule 430A.
"Rule 462(b) Registration Statement" shall mean a registration
statement and any amendments thereto filed pursuant to Rule 462(b)
relating to the offering covered by the initial registration statement.
"Trust Indenture Act" shall mean the Trust Indenture Act of 1939, as
amended and the rules and regulations of the Commission promulgated
thereunder.
If the foregoing is in accordance with your understanding of our
agreement, please sign and return to us the enclosed duplicate hereof, whereupon
this letter and your acceptance shall represent a binding agreement among the
Company and the several Underwriters.
Very truly yours,
The Neiman Marcus Group, Inc.
By:
--------------------------
Name:
Title:
The foregoing Agreement is
hereby confirmed and accepted
as of the date specified in
Schedule I hereto.
By:
By:
------------------------
Name:
Title:
For themselves and the other
several Underwriters, if any,
named in Schedule II to the
foregoing Agreement.
<PAGE> 26
SCHEDULE I
Underwriting Agreement dated
Registration Statement No.
Representative(s):
Title, Purchase Price and Description of Securities:
Title:
Principal amount:
Purchase price (include accrued
interest or amortization, if
any):
Sinking fund provisions:
Redemption provisions:
Other provisions:
Closing Date, Time and Location , 1998 at
10:00 a.m. at Ropes &
Gray, One International
Place, Boston,
Massachusetts 02110
Type of Offering:
Date referred to in Section 5(f) after which the Company may offer or sell debt
securities issued or guaranteed by the Company without the consent of the
Representative(s):
Modification of items to be covered by the letter from
Deloitte & Touche delivered pursuant to
Section 6(f) at the Execution Time:
<PAGE> 27
1
SCHEDULE II
PRINCIPAL AMOUNT
OF SECURITIES TO
UNDERWRITERS BE PURCHASED
- ------------ ----------------
$
$
$
----------------
Total ..................................... $
================
<PAGE> 1
EXHIBIT 4.1
================================================================================
The Neiman Marcus Group, Inc.
and
The Bank of New York
Trustee
---------------------------
INDENTURE
Dated as of _____ __, 1998
---------------------------
Providing for issuance of Securities in Series
================================================================================
<PAGE> 2
TABLE OF CONTENTS
-----------------
<TABLE>
<CAPTION>
Page
----
<S> <C>
Recitals of the Company.........................................................................1
Agreements of the Parties.......................................................................1
ARTICLE 1. Definitions and Other Provisions of General Application.............................1
Section 101. Definitions...................................................................1
Section 102. Compliance Certificates and Opinions..........................................9
Section 103. Form of Documents Delivered to Trustee........................................9
Section 104. Acts of Securityholders......................................................10
Section 105. Notices, etc., to Trustee and Company........................................11
Section 106. Notices to Securityholders; Waiver...........................................11
Section 107. Conflict with Trust Indenture Act............................................12
Section 108. Effect of Headings and Table of Contents.....................................12
Section 109. Successors and Assigns.......................................................12
Section 110. Separability Clause..........................................................12
Section 111. Benefits of Indenture........................................................12
Section 112. Governing Law................................................................12
Section 113. Counterparts.................................................................13
ARTICLE 2. Security Forms.....................................................................13
Section 201. Forms Generally..............................................................13
Section 202. Forms of Securities..........................................................13
Section 203. Form of Trustee's Certificate of Authentication..............................13
Section 204. Securities Issuable in the Form of a Global Security.........................14
ARTICLE 3. The Securities.....................................................................16
Section 301. General Title; General Limitations; Issuable in Series; Terms of
Particular Series..................................................................16
Section 302. Denominations................................................................18
Section 303. Execution, Authentication and Delivery and Dating............................18
Section 304. Temporary Securities.........................................................20
Section 305. Registration, Transfer and Exchange..........................................20
Section 306. Mutilated, Destroyed, Lost and Stolen Securities.............................21
Section 307. Payment of Interest; Interest Rights Preserved...............................22
Section 308. Persons Deemed Owners........................................................23
Section 309. Cancellation.................................................................23
Section 310. Computation of Interest......................................................23
Section 311. Medium-Term..................................................................24
Section 312. CUSIP Numbers................................................................24
</TABLE>
i
<PAGE> 3
<TABLE>
<S> <C>
ARTICLE 4. Satisfaction and Discharge.........................................................24
Section 401. Satisfaction and Discharge of Indenture......................................24
Section 402. Application of Trust Money...................................................26
Section 403. Defeasance Upon Deposit of Funds or Government Obligations...................26
ARTICLE 5. Remedies...........................................................................27
Section 501. Events of Default............................................................27
Section 502. Acceleration of Maturity; Rescission and Annulment...........................29
Section 503. Collection of Indebtedness and Suits for Enforcement by Trustee..............30
Section 504. Trustee May File Proofs of Claim.............................................31
Section 505. Trustee May Enforce Claims Without Possession of Securities..................32
Section 506. Application of Money Collected...............................................32
Section 507. Limitation on Suits..........................................................32
Section 508. Unconditional Right of Securityholders To Receive Principal,
Premium and Interest...............................................................33
Section 509. Restoration of Rights and Remedies...........................................33
Section 510. Rights and Remedies Cumulative...............................................33
Section 511. Delay or Omission Not Waiver.................................................34
Section 512. Control by Securityholders...................................................34
Section 513. Waiver of Past Defaults......................................................34
Section 514. Undertaking for Costs........................................................35
ARTICLE 6. The Trustee........................................................................35
Section 601. Certain Duties and Responsibilities..........................................35
Section 602. Notice of Defaults...........................................................36
Section 603. Certain Rights of Trustee....................................................37
Section 604. Not Responsible for Recitals or Issuance of Securities ......................38
Section 605. May Hold Securities..........................................................38
Section 606. Money Held in Trust..........................................................38
Section 607. Compensation and Reimbursement...............................................38
Section 608. Disqualification; Conflicting Interests......................................39
Section 609. Corporate Trustee Required; Eligibility......................................39
Section 610. Resignation of Successor.....................................................40
Section 611. Acceptance of Appointment by Successor.......................................42
Section 612. Merger, Conversion, Consolidation or Succession to Business..................42
Section 613. Preferential Collection of Claims Against Company............................43
Section 614. Appointment of Authentication Agent..........................................46
ARTICLE 7. Securityholders' Lists and Reports by Trustee and Company..........................48
Section 701. Company To Furnish Trustee Names and Addresses of Securityholders............48
Section 702. Preservation of Information; Communications to Securityholders...............48
</TABLE>
ii
<PAGE> 4
<TABLE>
<S> <C>
Section 703. Reports by Trustee...........................................................50
Section 704. Reports by Company...........................................................51
ARTICLE 8. Consolidation, Merger, Conveyance or Transfer......................................52
Section 801. When Company May Merge or Transfer Assets....................................52
ARTICLE 9. Supplemental Indentures............................................................53
Section 901. Supplemental Indentures Without Consent of Securityholders...................53
Section 902. Supplemental Indentures with Consent of Securityholders .....................54
Section 903. Execution of Supplemental Indentures.........................................55
Section 904. Effect of Supplemental Indentures............................................55
Section 905. Conformity with Trust Indenture Act..........................................55
Section 906. Reference in Securities to Supplemental Indentures...........................55
ARTICLE 10. Covenants..........................................................................56
Section 1001. Payment of Principal, Premium and Interest...................................56
Section 1002. Maintenance of Office or Agency..............................................56
Section 1003. Money for Security Payments To Be Held in Trust..............................56
Section 1004. Statement as to Compliance...................................................57
Section 1005. Legal Existence..............................................................58
Section 1006. Limitation on Liens..........................................................58
Section 1007. Limitation on Sale and Leasebacks............................................60
Section 1008. Waiver of Certain Covenants..................................................61
Section 1009. Calculation of Original Issue Discount.......................................61
ARTICLE 11. Redemption of Securities...........................................................61
Section 1101. Applicability of Article.....................................................61
Section 1102. Election To Redeem; Notice to Trustee........................................61
Section 1103. Selection by Trustee of Securities To Be Redeemed............................62
Section 1104. Notice of Redemption.........................................................62
Section 1105. Deposit of Redemption Price..................................................63
Section 1106. Securities Payable on Redemption Date........................................63
Section 1107. Securities Redeemed in Part..................................................64
Section 1108. Provisions with Respect to any Sinking Funds.................................64
</TABLE>
iii
<PAGE> 5
Table Showing Reflection in Indenture of Certain Provisions of Trust
Indenture Act of 1939, as amended by the Trust Indenture Reform Act of 1990.
Reflected In
Indenture
---------
TIA Section
- --- -------
Section 310(a)(1)........................................... 609
(a)(2)....................................... 609
(a)(3)....................................... Not Applicable
(a)(4)....................................... Not Applicable
(a)(5)....................................... 609
(b).......................................... 608; 610
(c).......................................... Not Applicable
Section 311(a).............................................. 613
(b).......................................... 613
(b)(2)....................................... 703
Section 312(a).............................................. 701; 702
(b).......................................... 702
(c).......................................... 702
Section 313(a).............................................. 703
(b).......................................... 703
(c).......................................... 703
(d).......................................... 703
Section 314(a)(1)........................................... 704
(a)(2)....................................... 704
(a)(3)....................................... 704
(a)(4)....................................... 1004
(b).......................................... Not Applicable
(c)(1)....................................... 102
(c)(2)....................................... 102
(c)(3)....................................... Not Applicable
(d).......................................... Not Applicable
(e).......................................... 102
iv
<PAGE> 6
Section 315(a).............................................. 601
(b).......................................... 602; 703
(c).......................................... 601
(d).......................................... 601
(d)(1)....................................... 601
(d)(2)....................................... 601
(d)(3)....................................... 601
(e).......................................... 514
Section 316(a).............................................. 101
(a)(1)(A).................................... 502; 512
(a)(1)(B).................................... 513
(a)(2)....................................... Not Applicable
(b).......................................... 508
(c).......................................... 104
Section 317(a)(1)........................................... 503
(a)(2)....................................... 504
(b).......................................... 1003
Section 318(a).............................................. 107
v
<PAGE> 7
THIS INDENTURE between THE NEIMAN MARCUS GROUP, INC., a Delaware
corporation (hereinafter called the "Company"), having its principal
office at 27 Boylston Street, Box 1000, Chestnut Hill, MA 02167, and
THE BANK OF NEW YORK, a New York banking corporation, as trustee
(hereinafter called the "Trustee"), is made and entered into as of the
__ day of _____, 1998.
Recitals of the Company
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance of its unsecured and unsubordinated
debentures, notes, bonds or other evidences of indebtedness, to be issued in one
or more fully registered series.
All things necessary to make this Indenture a valid agreement of the
Company, in accordance with its terms, have been done.
Agreements of the Parties
To set forth or to provide for the establishment of the terms and
conditions upon which the Securities are and are to be authenticated, issued and
delivered, and in consideration of the premises and the purchase of Securities
by the Holders thereof, it is mutually covenanted and agreed as follows, for the
equal and proportionate benefit of all Holders of the Securities or of a series
thereof, as the case may be:
ARTICLE 1. DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION
Section 101. DEFINITIONS. For all purposes of this Indenture and of any
indenture supplemental hereto, except as otherwise expressly provided or unless
the context otherwise requires:
(a) the terms defined in this Article have the meanings assigned to
them in this Article, and include the plural as well as the singular;
(b) all other terms used herein which are defined in the Trust
Indenture Act or by Commission rule under the Trust Indenture Act, either
directly or by reference therein, have the meanings assigned to them
therein;
(c) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles and, except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect to any computation
required or permitted hereunder shall mean
<PAGE> 8
such accounting principles as are generally accepted in the United States
of America at the date of such computation; and
(d) all references in this instrument to designated "Articles",
"Sections" and other subdivisions are to the designated Articles, Sections
and other subdivisions of this instrument as originally executed. 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
other subdivision.
Certain terms, used principally in Article Six, are defined in that
Article.
"Act", when used with respect to any Securityholder, 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
authenticate Securities under Section 614.
"Board of Directors" means either the board of directors of the Company or
any duly authorized committee of that board or any officers of the Company
acting pursuant to authority granted by the board of directors of the Company or
any committee of such 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, with respect to any series of Securities, each day
which is neither a Saturday, Sunday or other day on which banking institutions
in the pertinent Place or Places of Payment are authorized or required by law or
executive order to be closed.
"Capital Stock" means, with respect to any corporation, any and all shares,
interests, rights to purchase, warrants, options, participations or other
equivalents of or interests (however designated) in stock issued by that
corporation.
"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
2
<PAGE> 9
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 at such time.
"Company" means the Person named as the "Company" in the first paragraph of
this instrument until a successor shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Company" shall mean
such successor.
"Company Request", "Company Order" and "Company Consent" mean a written
request, order or consent, respectively, signed in the name of the Company by
its Chairman of the Board, a Vice Chairman, its President or a Vice President,
and by its Treasurer, an Assistant Treasurer, its Secretary or an Assistant
Secretary, and delivered to the Trustee.
"Consolidated Net Assets" means the total amount of all assets appearing on
the consolidated balance sheet of the Company and its Restricted Subsidiaries
(at their net book values, after deducting related depreciation, amortization
and all other valuation reserves which have been set aside in connection with
the business conducted and which are reflected on the aforementioned
consolidated balance sheet), less total current liabilities other than long-term
liabilities due within one year.
"Corporate Trust Office" means the office of the Trustee in New York, New
York at which at any particular time its corporate trust business shall be
principally administered, which office at the date hereof is located at 101
Barclay Street, Floor 21 West, New York, New York 10286.
"Defaulted Interest" has the meaning specified in Section 307.
"Depositary" means, unless otherwise specified by the Company pursuant to
either Section 204 or 301, with respect to securities of any series issuable or
issued as a Global Security, The Depository Trust Company, New York, New York,
or any successor thereto registered as a clearing agency under the Securities
Exchange Act of 1934, as amended, or other applicable statute or regulation.
"Event of Default" has the meaning specified in Article Five.
"Funded Debt" means indebtedness of the Company or a Restricted Subsidiary
that matures by its terms one year or more after its creation or that is
extendable or renewable at the option of the obligor to a date one year or more
after the date of the incurrence or assumption of such indebtedness, and
indebtedness classified as long-term debt under generally accepted accounting
principles, in each case ranking in right of payment at least PARI PASSU with
the Securities.
"Global Security", when used with respect to any series of Securities
issued hereunder, means a Security which is executed by the Company and
authenticated and delivered by the Trustee to the Depositary or pursuant to the
Depositary's instruction, all in accordance with this Indenture and an indenture
supplemental hereto, if any, or Board Resolution and pursuant to a
3
<PAGE> 10
Company Request, which shall be registered in the name of the Depositary or its
nominee and which shall represent, and shall be denominated in an amount equal
to the aggregate principal amount of, all of the Outstanding Securities of such
series or any portion thereof, in either case having the same terms, including,
without limitation, the same original issue date, date or dates on which
principal is due, and interest rate or method of determining interest.
"Holder", when used with respect to any Security, means a Securityholder.
"Indenture" or "this 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 the terms of particular series of Securities
established as contemplated by Section 301.
"Independent", when used with respect to any specified Person, means such a
Person who (1) is in fact independent, (2) does not have any direct financial
interest or any material indirect financial interest in the Company or in any
other obligor upon the Securities or in any Affiliate of the Company or of such
other obligor, and (3) is not connected with the Company or such other obligor
or any Affiliate of the Company or of such other obligor, as an officer,
employee, promoter, underwriter, trustee, partner, director or person performing
similar functions. Whenever it is herein provided that any Independent Person's
opinion or certificate shall be furnished to the Trustee, such Person shall be
appointed by a Company Order and approved by the Trustee in the exercise of
reasonable care, and such opinion or certificate shall state that the signer has
read this definition and that the signer is independent within the meaning
hereof.
"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 series of
Securities, means the Stated Maturity of any installment of interest on those
Securities.
"Lien" means any mortgage, pledge, lien, encumbrance, charge or security
interest.
"Maturity", when used with respect to any Securities, means the date on
which the principal of any such Security becomes due and payable as therein or
herein provided, whether on a Repayment Date, at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"Officers' Certificate" means a certificate signed by the Chairman of the
Board, a Vice Chairman, the President or a Vice President, and by the Treasurer,
an Assistant Treasurer, the Secretary or an Assistant Secretary of the Company,
and delivered to the Trustee. Wherever this Indenture requires that an Officers'
Certificate be signed also by an accountant or other expert, such accountant or
other expert (except as otherwise expressly provided in this Indenture) may be
4
<PAGE> 11
in the employ of the Company, and shall be acceptable to the Trustee, which
acceptance shall not be unreasonably withheld.
"Opinion of Counsel" means a written opinion of counsel, who may (except as
otherwise expressly provided in this Indenture) be an employee of or of counsel
to the Company (who shall be at least at the level of senior attorney). Such
counsel shall be acceptable to the Trustee, whose acceptance shall not be
unreasonably withheld.
"Original Issue Discount Security" means (i) 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, and (ii) any other
Security deemed an Original Issue Discount Security for United States Federal
income tax purposes.
"Outstanding", when used with respect to Securities or Securities of any
series, means, as of the date of determination, all such Securities theretofore
authenticated and delivered under this Indenture, except:
(i) such Securities theretofore canceled by the Trustee or
delivered to the Trustee for cancellation;
(ii) such Securities 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 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) such Securities in exchange for or in lieu of which other
Securities have been authenticated and delivered pursuant to this
Indenture, or which shall have been paid pursuant to the terms of
Section 306 (except with respect to any such Security as to which
proof satisfactory to the Trustee is presented that such Security is
held by a person in whose hands such Security is a legal, valid and
binding obligation of the Company).
In determining whether the Holders of the requisite principal amount of
such Securities outstanding have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, (i) the principal amount of any
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 the taking of such action upon a declaration of acceleration of the Maturity
thereof and (ii) 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. In determining whether the Trustee
shall be protected in relying upon any such request, demand,
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authorization, direction, notice, consent or waiver, only Securities which a
Responsible Officer assigned to the corporate trust department of the Trustee
actually knows to be owned by the Company or any other obligor upon the
Securities or any Affiliate of the Company or such other obligor 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 to act as owner 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 on any Securities on behalf of
the Company. The Company initially authorizes the Trustee to act as Paying Agent
for the Securities on its behalf. The Company may at any time and from time to
time authorize one or more Persons, including the Company, to act as Paying
Agent in addition to or in place of the Trustee with respect to any series of
Securities issued under this Indenture.
"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" means with respect to any series of Securities issued
hereunder the city or political subdivision so designated with respect to the
series of Securities in question in accordance with the provisions of Section
301.
"Predecessor Securities" 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 lost, destroyed or
stolen Security shall be deemed to evidence the same debt as the lost, destroyed
or stolen Security.
"Preferred Stock" means, as to any Person, capital stock of such Person
that has a preference as to dividends or upon liquidation over the common stock
of such Person.
"Principal Property" of a Person means all land, buildings, machinery and
equipment, and leasehold interests and improvements in respect of the foregoing,
that are located in the United States of America and that would be reflected on
a consolidated balance sheet of such Person PROVIDED that the term "Principal
Property" shall not include any land, building, machinery, equipment, leasehold
interest or improvements which the Board of Directors of the Company by
resolution determines not to be of material importance to the total business
conducted by the Company and its Subsidiaries as an entirety.
"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.
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"Redemption Price", when used with respect to any Security to be redeemed,
means the price specified in the Security at which it is to be redeemed pursuant
to this Indenture.
"Regular Record Date" for the interest payable on any Security on any
Interest Payment Date means the date specified in such Security as the Regular
Record Date.
"Repayment Date", when used with respect to any Security to be repaid,
means the date fixed for such repayment pursuant to such Security.
"Repayment Price", when used with respect to any Security to be repaid,
means the price at which it is to be repaid pursuant to such Security.
"Responsible Officer", when used with respect to the Trustee, means any
vice president, any assistant secretary, any assistant treasurer, any senior
trust officer or trust officer 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 any Subsidiary of the Company (other than a
Subsidiary that is principally engaged in the business of owning or investing in
real estate (a 'Real Estate Subsidiary'), finance, credit, leasing, financial
services or other similar operations, or any combination thereof), which itself,
or with one or more other Restricted Subsidiaries, owns or leases a Principal
Property; PROVIDED, HOWEVER, that in the event that any Restricted Subsidiary,
in a single transaction or through a series of related transactions, shall (i)
be consolidated with or merge with or into a Real Estate Subsidiary or any of
its subsidiaries or (ii) transfer (by lease, assignment, sale or otherwise) all
or substantially all of its properties and assets to a Real Estate Subsidiary,
then the term 'Restricted Subsidiary' shall include such Real Estate Subsidiary.
"Sale and Leaseback Transaction" means any arrangement with any Person
pursuant to which the Company or any Restricted Subsidiary leases any Principal
Property that has been or is to be sold or transferred by the Company or the
Restricted Subsidiary to such Person, other than (1) temporary leases for a
term, including renewals at the option of the lessee, of not more than three
years, (2) leases between the Company and a Restricted Subsidiary or between
Restricted Subsidiaries and (3) arrangements pursuant to any provision of law
with an effect similar to the former Section 168(f)(8) of the Internal Revenue
Code of 1954.
"Security" or "Securities" means any note or notes, bond or bonds,
debenture or debentures, or any other evidences of indebtedness, as the case may
be, of any series authenticated and delivered from time to time under this
Indenture.
"Security Register" shall have the meaning specified in Section 305.
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"Security Registrar" means the Person who keeps the Security Register
specified in Section 305. The Company initially appoints the Trustee to act as
Security Registrar for the Securities on its behalf. The Company may at any time
and from time to time authorize any Person, including the Company, to act as
Security Registrar in place of the Trustee with respect to any series of
Securities issued under this Indenture.
"Securityholder" means a Person in whose name a Security is registered in
the Security Register.
"Special Record Date" for the payment of any Defaulted Interest (as defined
in Section 307) 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.
"Subsidiary" of any corporation means a corporation, a majority of whose
Capital Stock with voting power (other than Capital Stock having such power only
by reason of the happening of a contingency) to elect a majority of the
directors of such corporation is, at the date of determination, directly or
indirectly owned by such corporation, by one or more Subsidiaries of such
corporation or by such corporation and one or more Subsidiaries of such
corporation.
"Trust Indenture Act" or "TIA" means the Trust Indenture Act of 1939, as
amended by the Trust Indenture Reform Act of 1990, and as in force at the date
as of which this instrument was executed except as provided in Section 905.
"Trustee" means the Person named as the Trustee in the first paragraph of
this instrument until a successor Trustee shall have become such pursuant to the
applicable provisions of this Indenture, and thereafter "Trustee" shall mean and
include each Person who is then a Trustee hereunder. 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.
"U.S. Government Obligations" shall have the meaning specified in Section
403.
"Value" means, with respect to a Sale and Leaseback Transaction, as of any
particular time, an amount equal to the greater of (i) the net proceeds of the
sale or transfer of the property leased pursuant to such Sale and Leaseback
Transaction or (ii) the fair value, as determined by the Company, of such
property at the time of entering into such Sale and Leaseback Transaction, in
either case divided by the number of full years of the term of the lease and
then multiplied by the number of full years of such term remaining at the time
of determination, without regard to any renewal or extension options contained
in the lease.
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"Vice President" when used with respect to the Company or the Trustee means
any vice president, whether or not designated by a number or a word or words
added before or after the title "vice president", including, without limitation,
an assistant vice president.
Section 102. COMPLIANCE CERTIFICATES AND OPINIONS. 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 (including any
covenants compliance with which constitutes a condition precedent), provided for
in this Indenture relating to the proposed action have been complied with and an
opinion of Counsel stating that in the opinion of such Counsel all such
conditions precedent, if any (including any covenants compliance with which
constitutes a condition precedent), 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 (other than annual statements of
compliance provided pursuant to Section 1004) shall include:
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(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 covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has 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 may
certify or give an opinion as to the 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
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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 SECURITYHOLDERS.
(a) Any request, demand, authorization, direction, notice, consent,
waiver or other action provided by this Indenture to be given or taken by
Securityholders or Securityholders of any series may be embodied in and
evidenced by one or more instruments of substantially similar tenor signed
by such Securityholders in person or by an agent duly appointed in writing;
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 embodied therein and evidenced
thereby) are herein sometimes referred to as the "Act" of the
Securityholders signing such instrument or instruments. Proof of execution
of any such instrument or of a writing appointing any such agent shall be
sufficient for any purpose of this Indenture and (subject to Section 601)
conclusive in favor of the Trustee and 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 the affidavit of a witness to such
execution or by the certificate of any 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 an officer of a corporation
or a member of a partnership, on behalf of such corporation or partnership,
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.
(c) The ownership of Securities shall be proved by the Security
Register.
(d) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other action, the
Company may, at its option, by Board Resolution, fix in advance a record
date for the determination of Holders
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entitled to give such request, demand, authorization, direction, notice,
consent, waiver or other action, but the Company shall have no obligation
to do so. Such record date shall be not more than 30 days prior to the date
of its determination. If such a record date is fixed, such request, demand,
authorization, direction, notice, consent, waiver or other action may be
given before or after the record date, but only the Holders of record at
the close of business on the record date shall be deemed to be Holders for
the purposes of determining whether Holders of the requisite proportion of
Securities Outstanding have authorized or agreed or consented to such
request, demand, authorization, direction, notice, consent, waiver or other
action, and for that purpose the Securities Outstanding shall be computed
as of the record date; provided that no such authorization, agreement or
consent by the Holders on the record date shall be deemed effective unless
it shall become effective pursuant to the provisions of this Indenture not
later than six months after the record date, and that no such
authorization, agreement or consent may be amended, withdrawn or revoked
once given by a Holder, unless the Company shall provide for such
amendment, withdrawal or revocation in conjunction with such solicitation
of authorizations, agreements or consents or unless and to the extent
required by applicable law.
(e) Any request, demand, authorization, direction, notice, consent,
waiver or other action by the Holder of any Security shall bind the Holder
of every Security issued upon the transfer thereof or in exchange therefor
or in lieu thereof, in respect of anything done or suffered to be done by
the Trustee 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. Any request, demand,
authorization, direction, notice, consent, waiver or Act of Securityholders 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 Securityholder 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 Trustee Administration, or
(2) the Company by the Trustee or by any Securityholder shall be
sufficient for every purpose hereunder (except as provided in Section
501(4) or, in the case of a request for repayment, as specified in the
Security carrying the right to repayment) if in writing and mailed,
first-class postage prepaid, to the Company addressed to it at the address
of its principal office specified in the first paragraph of this
instrument, Attention: General Counsel, or at any other address previously
furnished in writing to the Trustee by the Company.
Section 106. NOTICES TO SECURITYHOLDERS; WAIVER. Where this Indenture or
any Security provides for notice to Securityholders of any event, such notice
shall be sufficiently given (unless otherwise herein or in such Security
expressly provided) if in writing and mailed, first-class
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postage prepaid, to each Securityholder 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 Securityholders is given by mail, neither the failure to
mail such notice, nor any defect in any notice so mailed, to any particular
Security holder shall affect the sufficiency of such notice with respect to
other Securityholders. Where this Indenture or any Security 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 Securityholders 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 as a result of
a strike, work stoppage or otherwise, it shall be impractical to mail notice of
any event to any Securityholder when such notice is required to be given
pursuant to any provision of this Indenture, then any method of notification as
shall be satisfactory to the Trustee and the Company shall be deemed to be a
sufficient giving of such notice.
Section 107. CONFLICT WITH TRUST INDENTURE ACT. If any provision hereof
limits, qualifies or conflicts with the duties imposed by any of Sections 310 to
317, inclusive, of the Trust Indenture Act through operation of Section 318(c)
thereof, such 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 in 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.
Section 111. BENEFITS OF INDENTURE. Nothing in this Indenture or in any
Securities, express or implied, shall give to any Person, other than the parties
hereto and their successors hereunder, any Authenticating Agent or Paying Agent,
the Security Registrar and the Holders of Securities (or such of them as may be
affected thereby), 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
construed in accordance with and governed by the laws of the State of New York,
without regard to conflicts of laws principles thereof.
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Section 113. COUNTERPARTS. 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.
ARTICLE 2. SECURITY FORMS.
Section 201. FORMS GENERALLY. The Securities shall have 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 officer executing such Securities,
as evidenced by such officer's execution of the Securities. Any portion of the
text of any Security may be set forth on the reverse thereof, with an
appropriate reference thereto on the face of the Security.
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, all as determined by the officer executing such
Securities, as evidenced by such officer's execution of such Securities,
subject, with respect to the Securities of any series, to the rules of any
securities exchange on which such Securities are listed.
Section 202. FORMS OF SECURITIES. Each Security shall be in one of the
forms approved from time to time by or pursuant to a Board Resolution, or
established in one or more indentures supplemental hereto. Prior to the delivery
of a Security to the Trustee for authentication in any form approved by or
pursuant to a Board Resolution, the Company shall deliver to the Trustee the
Board Resolution by or pursuant to which such form of Security has been
approved, which Board Resolution shall have attached thereto a true and correct
copy of the form of Security which has been approved thereby or, if a Board
Resolution authorizes a specific officer or officers to approve a form of
Security, a certificate of such officer or officers approving the form of
Security attached thereto. Any form of Security approved by or pursuant to a
Board Resolution must be acceptable as to form to the Trustee, such acceptance
to be evidenced by the Trustee's authentication of Securities in that form.
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Section 203. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The form of
Trustee's Certificate of Authentication for any Security issued pursuant to this
Indenture shall be substantially as follows:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities referred to in the within-mentioned
Indenture.
THE BANK OF NEW YORK,
as Trustee,
By:
------------------------------------
Authorized Signatory
Section 204. SECURITIES ISSUABLE IN THE FORM OF A GLOBAL SECURITY.
(a) If the Company shall establish pursuant to Sections 202 and 301
that the Securities of a particular series are to be issued in whole or in
part in the form of one or more Global Securities, then the Company shall
execute and the Trustee or its agent shall, in accordance with Section 303
and the Company Order delivered to the Trustee or its agent thereunder,
authenticate and make available for delivery, such Global Security or
Securities, which (i) shall represent, and shall be denominated in an
amount equal to the aggregate principal amount of, the Outstanding
Securities of such series to be represented by such Global Security or
Securities, or such portion thereof as the Company shall specify in a
Company Order, (ii) shall be registered in the name of the Depositary for
such Global Security or Securities or its nominee, (iii) shall be delivered
by the Trustee or its agent to the Depositary or pursuant to the
Depositary's instruction and (iv) shall bear a legend substantially to the
following effect: "Unless this certificate is presented by an authorized
representative of the Depositary to Issuer or its agent for registration of
transfer, exchange, or payment, and any certificate issued is registered in
the name of the nominee of the Depositary or in such other name as is
requested by an authorized representative of the Depositary (and any
payment is made to the nominee of the Depositary or to such other entity as
is requested by an authorized representative of the Depositary), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL inasmuch as the registered owner hereof, the nominee of
the Depositary, has an interest herein."
(b) Notwithstanding any other provision of this Section 204 or of
Section 305, and subject to the provisions of paragraph (c) below, unless
the terms of a Global Security expressly permit such Global Security to be
exchanged in whole or in part for individual Securities, a Global Security
may be transferred, in whole but not in part and in the manner provided in
Section 305, only to a nominee of the Depositary for such Global
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Security, or to the Depositary, or a successor Depositary for such Global
Security selected or approved by the Company, or to a nominee of such
successor Depositary.
(c)
(i) If at any time the Depositary for a Global Security notifies
the Company that it is unwilling or unable to continue as Depositary
for such Global Security or if at any time the Depositary for the
Securities for such series shall no longer be eligible or in good
standing under the Securities Exchange Act of 1934, as amended, or
other applicable statute or regulation, the Company shall appoint a
successor Depositary with respect to such Global Security. If a
successor Depositary for such Global Security is not appointed by the
Company within 90 days after the Company receives such notice or
becomes aware of such ineligibility, the Company will execute, and the
Trustee or its agent, upon receipt of a Company Request for the
authentication and delivery of individual Securities of such series in
exchange for such Global Security, will authenticate and make
available for delivery individual Securities of such series of like
tenor and terms in an aggregate principal amount equal to the
principal amount of the Global Security in exchange for such Global
Security.
(ii) The Company may at any time and in its sole discretion
determine that the Securities of any series or portion thereof issued
or issuable in the form of one or more Global Securities shall no
longer be represented by such Global Security or Securities. In such
event the Company will execute, and the Trustee, upon receipt of a
Company Request for the authentication and delivery of individual
Securities of such series in exchange in whole or in part for such
Global Security, will authenticate and make available for delivery
individual Securities of such series of like tenor and terms in
definitive form in an aggregate principal amount equal to the
principal amount of such Global Security or Securities representing
such series or portion thereof in exchange for such Global Security or
Securities.
(iii) If specified by the Company pursuant to Sections 202 and
301 with respect to Securities issued or issuable in the form of a
Global Security, the Depositary for such Global Security may surrender
such Global Security in exchange in whole or in part for individual
Securities of such series of like tenor and terms in definitive form
on such terms as are acceptable to the Company and such Depositary.
Thereupon the Company shall execute, and the Trustee or its agent
shall authenticate and make available for delivery, without service
charge, (1) to each Person specified by such Depositary a new Security
or Securities of the same series of like tenor and terms and of any
authorized denomination as requested by such Person in aggregate
principal amount equal to and in exchange for such Person's beneficial
interest as specified by such Depositary in the Global Security; and
(2) to such Depositary a new Global Security of like tenor and terms
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and in an authorized denomination equal to the difference, if any,
between the principal amount of the surrendered Global Security and
the aggregate principal amount of Securities delivered to Holders
thereof.
(iv) In any exchange provided for in any of the preceding three
paragraphs, the Company will execute and the Trustee or its agent will
authenticate and make available for delivery individual Securities in
definitive registered form in authorized denominations. Upon the
exchange of the entire principal amount of a Global Security for
individual Securities, such Global Security shall be canceled by the
Trustee or its agent. Except as provided in the preceding paragraph,
Securities issued in exchange for a Global Security pursuant to this
Section shall be registered in such names and in such authorized
denominations as the Depositary for such Global Security, pursuant to
instructions from its direct or indirect participants or otherwise,
shall instruct the Trustee or the Security Registrar. The Trustee
shall deliver at its Corporate Trust Office such Securities to the
Persons in whose names such Securities are so registered.
ARTICLE 3. THE SECURITIES.
Section 301. GENERAL TITLE; GENERAL LIMITATIONS; ISSUABLE IN SERIES; TERMS
OF PARTICULAR SERIES. The aggregate principal amount of Securities which may be
authenticated and delivered and Outstanding under this Indenture is not limited.
The Securities may be issued in one or more series up to an aggregate
principal amount of Securities as from time to time may be authorized by the
Board of Directors. All Securities of each series under this Indenture shall in
all respects be equally and ratably entitled to the benefits hereof with respect
to such series without preference, priority or distinction on account of the
actual time of the authentication and delivery or Stated Maturity of the
Securities of such series.
Each series of Securities shall be created either by or pursuant to a Board
Resolution or by an indenture supplemental hereto. The Securities of each such
series may bear such date or dates, be payable at such place or places, have
such Stated Maturity or Maturities, be issuable at such premium over or discount
from their face value, bear interest at such rate or rates, from such date or
dates, payable in such installments and on such dates and at such place or
places to the Holders of Securities registered as such on such Regular Record
Dates, or may bear no interest, and may be redeemable or repayable at such
Redemption Price or Prices or Repayment Price or Prices, as the case may be,
whether at the option of the Holder or otherwise, and upon such terms, all as
shall be provided for in or pursuant to the Board Resolution or in the
supplemental indenture creating that series. There may also be established in or
pursuant to a Board Resolution or in a supplemental indenture prior to the
issuance of Securities of each such series, provision for:
(1) the exchange or conversion of the Securities of that series, at
the option of the Holders thereof, for or into new Securities of a
different series or other securities
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except shares of capital stock of the Company or any subsidiary of the
Company or securities directly or indirectly convertible into or
exchangeable for any such shares;
(2) a sinking or purchase fund or other analogous obligation;
(3) a limitation on the aggregate principal amount of the Securities
of that series;
(4) the exchange or conversion of Securities of that series, at the
option of the Holders thereof, for or into other Securities of a different
series or other securities;
(5) the appointment by the Trustee of an Authenticating Agent in one
or more places other than the location of the office of the Trustee with
power to act on behalf of the Trustee and subject to its direction in the
authentication and delivery of the Securities of any one or more series in
connection with such transactions as shall be specified in the provisions
of this Indenture or in or pursuant to the Board Resolution or the
supplemental indenture creating such series;
(6) the portion of the principal amount of Securities of the series,
if other than the principal amount thereof, which shall be payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 502
or provable in bankruptcy pursuant to Section 504;
(7) any Event of Default with respect to the Securities of such
series, if not set forth herein, and any additions, deletions or other
changes to the Events of Default set forth herein that shall be applicable
to the Securities of such series;
(8) any covenant solely for the benefit of the Securities of such
series and any additions, deletions or other changes to the provisions of
Sections 1006 and 1007 that shall be applicable to the Securities of that
series;
(9) the inapplicability of Section 403 of this Indenture to the
Securities of such series and any covenant with respect to Section 403(b)
established in or pursuant to a Board Resolution or in a supplemental
indenture as described above that has not already been established herein;
(10) if the Securities of the series shall be issued in whole or in
part in the form of a Global Security or Securities, the terms and
conditions, if any, upon which such Global Security or Securities may be
exchanged in whole or in part for other individual Securities; and the
Depositary for such Global Security or Securities; and
(11) any other terms of the series,
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all upon such terms as may be determined in or pursuant to a Board Resolution or
in a supplemental indenture with respect to such series. All Securities of the
same series shall be substantially identical in tenor and effect except as to
denomination and except if issued pursuant to Section 311.
The form of the Securities of each series shall be established pursuant to
the provisions of this Indenture in or pursuant to the Board Resolution or in
the supplemental indenture creating such series. The Securities of each series
shall be distinguished from the Securities of each other series in such manner,
reasonably satisfactory to the Trustee, as the Board of Directors may determine.
Unless otherwise provided with respect to Securities of a particular
series, the Securities of any series may only be issuable in registered form,
without coupons.
Any terms or provisions in respect of the Securities of any series issued
under this Indenture may be determined pursuant to this Section by providing for
the method by which such terms or provisions shall be determined.
Section 302. DENOMINATIONS. The Securities of each series shall be issuable
in such denominations as shall be provided in the provisions of this Indenture
or in or pursuant to the Board Resolution or the supplemental indenture creating
such series. In the absence of any such provisions with respect to the
Securities of any series, the Securities of that series shall be issuable only
in fully registered form in denominations of $1,000 and any integral multiple
thereof.
Section 303. EXECUTION, AUTHENTICATION AND DELIVERY AND DATING. The
Securities shall be executed on behalf of the Company by its Chairman of the
Board, its Vice Chairman, its President or one of its Vice Presidents. 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 Securities executed by the Company to the
Trustee for authentication; and the Trustee shall, upon Company Order,
authenticate and make available for delivery such Securities as in this
Indenture provided and not otherwise.
Prior to any such authentication and delivery, the Trustee shall be
entitled to receive, in addition to any Officers' Certificate and Opinion of
Counsel required to be furnished to the Trustee pursuant to Section 102, and the
Board Resolution and any certificate relating to the
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issuance of the series of Securities required to be furnished pursuant to
Section 202, an Opinion of Counsel stating that:
(1) all instruments furnished to the Trustee conform to the
requirements of the Indenture and constitute sufficient authority hereunder
for the Trustee to authenticate and deliver such Securities;
(2) the form and terms of such Securities have been established in
conformity with the provisions of this Indenture;
(3) such Securities, when completed by appropriate insertions and
executed by the Company and delivered to the Trustee for authentication in
accordance with this Indenture, authenticated and delivered by the Trustee
in accordance with this Indenture and issued by the Company in the manner
and subject to any conditions specified in such Opinion of Counsel, will
constitute legal, valid and binding obligations of the Company enforceable
in accordance with their terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other laws
and legal principles affecting creditors' rights generally from time to
time in effect and to general equitable principles, whether applied in an
action at law or in equity); and
(4) the Indenture is qualified under the Trust Indenture Act;
and, if the authentication and delivery relates to a new series of
Securities created by an indenture supplemental hereto, also stating that
the Company has corporate power to execute and deliver any such
supplemental indenture and has taken all necessary corporate action for
those purposes and any such supplemental indenture has been executed and
delivered and constitutes the legal, valid and binding obligation of the
Company enforceable in accordance with its terms (subject, as to
enforcement of remedies, to applicable bankruptcy, reorganization,
insolvency, moratorium or other laws and legal principles affecting
creditors' rights generally from time to time in effect and to general
equitable principles, whether applied in an action at law or in equity)
and, if the authentication and delivery relates to Securities of a series
issued pursuant to Section 311, paragraphs (2) and (3) of the foregoing
opinion shall read as follows:
"(2) the form of such Securities and the procedures for determining
the terms of such Securities as set forth in the procedures relating
thereto referred to in Section 311 have been established in conformity with
the provisions of this Indenture; and
(3) such Securities, when completed by appropriate insertions and
executed by the Company and delivered to the Trustee for authentication in
accordance with this Indenture, authenticated and delivered by the Trustee
in accordance with this Indenture and issued, delivered and paid for in
accordance with the applicable selling agency or distribution agreement,
will have been duly issued under the Indenture and will constitute
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the legal, valid and binding obligations of the Company enforceable in
accordance with their terms (subject, as to enforcement of remedies, to
applicable bankruptcy, reorganization, insolvency, moratorium or other laws
and legal principles affecting creditors' rights generally from time to
time in effect and to general equitable principles, whether applied in an
action at law or in equity)."
The Trustee shall not be required to authenticate such Securities if the
issue thereof will adversely affect the Trustee's own rights, duties or
immunities under the Securities and this Indenture.
Unless otherwise provided in the form of Security for any series, all
Securities shall be dated the date of their 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 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.
Section 304. TEMPORARY SECURITIES. Pending the preparation of definitive
Securities of any series, the Company may execute, and, upon receipt of the
documents required by Section 303, together with a Company Order, the Trustee
shall authenticate and make available for delivery, 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 such series to be prepared without unreasonable delay.
After the preparation of definitive Securities, the temporary Securities of such
series shall be exchangeable for definitive Securities of such series upon
surrender of the temporary Securities of such series at the office or agency of
the Company in a Place of Payment, without charge to the Holder; and upon
surrender for cancellation of any one or more temporary Securities the Company
shall execute and the Trustee shall authenticate and make available for delivery
in exchange therefor a like principal amount of definitive Securities of such
series of authorized denominations and of like tenor and terms. Until so
exchanged the temporary Securities of such series shall in all respects be
entitled to the same benefits under this Indenture as definitive Securities of
such series.
Section 305. REGISTRATION, TRANSFER AND EXCHANGE. The Company shall keep or
cause to be kept a register or registers (herein sometimes 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, or of
Securities of a particular series, and for transfers of Securities or
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of Securities of such series. Any such register shall be in written form or in
any other form capable of being converted into written form within a reasonable
time. At all reasonable times the information contained in such register or
registers shall be available for inspection by the Trustee at the office or
agency to be maintained by the Company as provided in Section 1002. There shall
be only one Security Register per series of Securities.
Subject to Section 204, upon surrender for transfer of any Security of any
series at the office or agency of the Company in a Place of Payment, the Company
shall execute, and the Trustee shall authenticate and make available for
delivery, in the name of the designated transferee or transferees, one or more
new Securities of such series of any authorized denominations, of a like
aggregate principal amount and Stated Maturity and of like tenor and terms.
Subject to Section 204, at the option of the Holder, Securities of any
series may be exchanged for other Securities of such series of any authorized
denominations, of a like aggregate principal amount and Stated Maturity and of
like tenor and terms, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and make available for
delivery, the Securities which the Securityholder making the exchange is
entitled to receive.
All Securities issued upon any 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
transfer or exchange.
Every Security presented or surrendered for transfer or exchange shall (if
so required by the Company or the Trustee) be duly endorsed, or be accompanied
by a written instrument of transfer in form satisfactory to the Company and the
Security Registrar duly executed, by the Holder thereof or his attorney duly
authorized in writing.
Unless otherwise provided in the Security to be transferred or exchanged,
no service charge shall be made on any Securityholder for any transfer or
exchange of Securities, but the Company may (unless otherwise provided in such
Security) require payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in connection with any transfer or
exchange of Securities, other than exchanges pursuant to Section 304 or 906 not
involving any transfer.
The Company shall not be required (i) to issue, transfer or exchange any
Security 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
such series selected for redemption under Section 1103 and ending at the close
of business on the date of such mailing, or (ii) to transfer or exchange any
Security so selected for redemption in whole or in part.
None of the Company, the Trustee, any agent of the Trustee, any Paying
Agent or the Security Registrar will have any responsibility or liability for
any aspect of the records relating
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to or payments made on account of beneficial ownership interests of a Global
Security or for maintaining, supervising or reviewing any records relating to
such beneficial ownership interests.
Section 306. MUTILATED, DESTROYED, LOST AND STOLEN SECURITIES. If (i) any
mutilated Security is surrendered to the Trustee, or the Company and the Trustee
receive evidence to their satisfaction of the destruction, loss or theft of any
Security, and (ii) there is delivered to the Company and the Trustee such
security or indemnity as may be required by them to save each 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 shall authenticate and make available for delivery, in
exchange for or in lieu of any such mutilated, destroyed, lost or stolen
Security, a new Security of like tenor, series, stated maturity and principal
amount, 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.
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 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 the same 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. Unless
otherwise provided with respect to such Security pursuant to Section 301,
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.
Any interest on any Security 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 his having been such Holder; and,
except as hereinafter provided, such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in Clause (1) or Clause (2)
below:
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(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names any such Securities (or their respective
Predecessor Securities) are registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest, which shall
be fixed in the following manner. The Company shall notify the Trustee in
writing of the amount of Defaulted Interest proposed to be paid on each
such Security and the date of the proposed payment, and at the same time
the Company shall deposit with the Trustee an amount of money equal to the
aggregate amount proposed to be paid in respect of such Defaulted Interest
or shall make arrangements satisfactory to the Trustee for such deposit
prior to the date of the proposed payment, such money when deposited to be
held in trust for the benefit of the Persons entitled to such Defaulted
Interest as in this Clause provided. Thereupon the Trustee shall fix a
Special Record Date for the payment of such Defaulted Interest which shall
be not more than 15 nor less than 10 days prior to the date of the proposed
payment and not less than 10 days after the receipt by the Trustee of the
notice of the proposed payment. The Trustee shall promptly notify the
Company of such Special Record Date and, in the name and at the expense of
the Company, shall cause notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be mailed, first class
postage prepaid, to the Holder of each such Security 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 mailed as
aforesaid, such Defaulted Interest shall be paid to the Persons in whose
names such Securities (or their respective Predecessor Securities) are
registered on such Special Record Date and shall no longer be payable
pursuant to the following Clause (2).
(2) The Company may make payment of any Defaulted Interest 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 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. The Company, the Trustee and any agent
of the Company or the Trustee may treat the Person in whose name any 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 on,
such Security and for all other purposes whatsoever, whether or not such
Security be overdue, and neither the Company, the Trustee nor any agent of the
Company or the Trustee shall be affected by notice to the contrary.
Section 309. CANCELLATION. All Securities surrendered for payment,
redemption, transfer, or exchange or credit against a sinking fund shall, if
surrendered to any Person other than the
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Trustee, be delivered to the Trustee and, if not already canceled, 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 Security 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. The Trustee
shall deliver all canceled Securities to the Company.
Section 310. COMPUTATION OF INTEREST. Unless otherwise provided as
contemplated in Section 301, interest on the Securities shall be calculated on
the basis of a 360-day year of twelve 30-day months.
Section 311. MEDIUM-TERM. Notwithstanding any contrary provision herein, if
all Securities of a series are not to be originally issued at one time, it shall
not be necessary for the Company to deliver to the Trustee an Officers'
Certificate, Board Resolution, supplemental indenture, Opinion of Counsel or
Company Order otherwise required pursuant to Sections 102, 202, 301 and 303 at
or prior to the time of authentication of each Security of such series if such
documents are delivered to the Trustee or its agent at or prior to the
authentication upon original issuance of the first Security of such series to be
issued; provided that any subsequent request by the Company to the Trustee to
authenticate Securities of such series upon original issuance shall constitute a
representation and warranty by the Company that as of the date of such request,
the statements made in the Officers' Certificate or other certificates delivered
pursuant to Sections 102 and 202 shall be true and correct as if made on such
date.
A Company Order, Officers' Certificate or Board Resolution or supplemental
indenture delivered by the Company to the Trustee in the circumstances set forth
in the preceding paragraph may provide that Securities which are the subject
thereof will be authenticated and delivered by the Trustee or its agent on
original issue from time to time in the aggregate principal amount established
for such series pursuant to such procedures acceptable to the Trustee as may be
specified from time to time by Company Order upon the telephonic, electronic or
written order of persons designated in such Company Order, Officers'
Certificate, supplemental indenture or Board Resolution (any such telephonic or
electronic instructions to be promptly confirmed in writing by such persons) and
that such persons are authorized to determine, consistent with such Company
Order, Officers' Certificate, supplemental indenture or Board Resolution, such
terms and conditions of said Securities as are specified in such Company Order,
Officers' Certificate, supplemental indenture or Board Resolution.
Section 312. CUSIP NUMBERS. The Company in issuing the Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the Trustee shall use
"CUSIP" numbers in notices of redemption as a convenience to Holders; provided
that any such notice may state that no representation is made as to the
correctness of such numbers either as printed on the Securities or as contained
in any notice of a redemption and that reliance may be placed only on the other
identification numbers printed on the Securities, and any such redemption shall
not be affected by
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any defect in or omission of such numbers. The Company will promptly notify the
Trustee of any change in the "CUSIP" numbers.
ARTICLE 4. SATISFACTION AND DISCHARGE.
Section 401. SATISFACTION AND DISCHARGE OF INDENTURE. This Indenture shall
cease to be of further effect with respect to any series of Securities (except
as to any surviving rights of conversion or transfer or exchange of Securities
of such series expressly provided for herein or in the form of Security for such
series), and the Trustee, on demand of and at the expense of the Company, shall
execute proper instruments acknowledging satisfaction and discharge of this
Indenture as to such series when
(1) either
(A) all Securities of that series theretofore authenticated and
delivered (other than (i) Securities of such series which have been
destroyed, lost or stolen and which have been replaced or paid as provided
in Section 306, and (ii) Securities of such series 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
canceled or for cancellation; or
(B) all such Securities of that series not theretofore canceled
or delivered to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their Stated Maturity
within one year, or
(iii) are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice
of redemption by the Trustee in the name, and at the expense, of
the Company,
and the Company, in the case of (i), (ii) or (iii) above, has deposited or
caused to be deposited with the Trustee as trust funds in trust for the
purpose an amount, which shall be immediately due and payable, sufficient
to pay and discharge the entire indebtedness on such Securities not
therefore canceled or delivered to the Trustee for cancellation, for
principal (and premium, if any) and interest to the date of such deposit
(in the case of Securities which have become due and payable), or to the
Stated Maturity or Redemption Date, as the case may be;
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(2) the Company has paid or caused to be paid all other sums
payable hereunder by the Company with respect to the Securities of
such series; and
(3) the Company has 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.
Notwithstanding the satisfaction and discharge of this Indenture with respect to
any series of Securities, the obligations of the Company to the Trustee with
respect to that series under Section 607 shall survive and the obligations of
the Trustee under Sections 402 and 1003 shall survive.
Section 402. APPLICATION OF TRUST MONEY. All money and U.S. Government
Obligations (as defined below) deposited with the Trustee pursuant to Section
401 or Section 403 shall be held in trust and the deposited money and the money
from the U.S. Government Obligations shall be applied by it, in accordance with
the provisions of the series of Securities in respect of which it was deposited
and this Indenture, to the payment, either directly or through any Paying Agent
(including the Company acting as its own Paying Agent) as the Trustee may
determine, to the Persons entitled thereto, of the principal (and premium, if
any) and interest for whose payment such money or U.S. Government Obligations
has been deposited with the Trustee; but such money and U.S. Government
Obligations need not be segregated from other funds except to the extent
required by law. Any money received from principal or interest payments on any
U.S. Government Obligations in excess of the amount needed or to be needed to
pay the Securities with respect to which such U.S. Government Obligations were
deposited as provided in Section 4.01 or 4.03 shall be paid over to the Company
upon receipt of a Company Request together with the opinion of a nationally
recognized firm of independent public accountants expressed in a written
certification thereof delivered to the Trustee to the effect that such money is
in excess of the amount needed or to be needed to pay such Securities.
Section 403. DEFEASANCE UPON DEPOSIT OF FUNDS OR GOVERNMENT OBLIGATIONS.
Unless pursuant to Section 301 provision is made that this Section shall not be
applicable to the Securities of any series, at the Company's option, either (a)
the Company shall be deemed to have been Discharged (as defined below) from its
obligations with respect to any series of Securities after the applicable
conditions set forth below have been satisfied or (b) the Company shall cease to
be under any obligation to comply with any term, provision or condition set
forth in, at the election of the Company, any or all of Sections 1006, 1007 and
subsection (5) of Section 501 (and any other Sections applicable to such
Securities that are determined pursuant to Section 301 to be subject to this
provision) with respect to any series of Securities at any time after the
applicable conditions set forth below have been satisfied:
(1) the Company shall have deposited or caused to be deposited
irrevocably with the Trustee as trust funds in trust, specifically pledged
as security for, and dedicated solely to, the benefit of the Holders of the
Securities of such series (i) money in an amount,
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or (ii) the equivalent in direct obligations of, or obligations the
principal of and interest on which are fully guaranteed by, the United
States of America ("U.S. Government Obligations") which through the payment
of interest and principal in respect thereof in accordance with their terms
will provide, not later than one day before the due date of any payment,
money in an amount, or (iii) a combination of (i) and (ii), sufficient, in
the opinion (with respect to (ii) and (iii)) of a nationally recognized
firm of independent public accountants expressed in a written certification
thereof delivered to the Trustee, to pay and discharge each installment of
principal (including mandatory sinking fund payments) and any premium of,
interest on and any repurchase obligations with respect to the outstanding
Securities of such series on the dates such installments of interest or
principal or repurchase obligations are due;
(2) no Event of Default or event (including such deposit) which with
notice or lapse of time would become an Event of Default with respect to
the Securities of such series shall have occurred and be continuing on the
date of such deposit; and
(3) the Company shall have delivered to the Trustee an Opinion of
Counsel to the effect that Holders of the Securities of such series will
not recognize income, gain or loss for Federal income tax purposes as a
result of the Company's exercise of its option under this Section 403 and
will be subject to Federal income tax on the same amount and in the same
manner and at the same times as would have been the case if such option had
not been exercised, and, in the case of Securities being Discharged, such
opinion shall be based upon at least one of the following authorities
(issued, enacted or promulgated after the date of this Indenture),
substantially on point and to the foregoing effect: (i) a public ruling of
the Internal Revenue service, (ii) a private ruling of the Internal Revenue
Service issued to the Company with respect to the securities, (iii) a
provision of the Internal Revenue Code, or (iv) a final regulation
promulgated by the Department of the Treasury.
"DISCHARGED" means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by, and obligations under, the
Securities of such series and to have satisfied all the obligations under this
Indenture relating to the Securities of such series (and the Trustee, at the
expense of the Company, shall execute proper instruments acknowledging the
same), except (A) the rights of Holders of Securities to receive, from the trust
fund described in clause (1) above, payment of the principal and any premium of
and any interest on such Securities when such payments are due; (B) the
Company's obligations with respect to such Securities under Sections 305, 306,
402, 1002 and 1003; and (C) the rights, powers, trusts, duties and immunities of
the Trustee hereunder.
The Company shall pay and indemnify the Trustee against any tax, fee or
other charge imposed on or assessed against the U.S. Government Obligations
deposited pursuant to this Article or the principal and interest received in
respect thereof other than any such tax, fee or other charge which by law is for
the account of the Holders of Outstanding Securities.
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ARTICLE 5. REMEDIES.
Section 501. EVENTS OF DEFAULT. "Event of Default", wherever used herein,
means with respect to any series of Securities 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), unless such event is either inapplicable
to a particular series or it is specifically deleted or modified in or pursuant
to the supplemental indenture or Board Resolution creating such series of
Securities or in the form of Security for such series:
(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 payment of any sinking or purchase fund or
analogous obligation when the same becomes due by the terms of the
Securities of such series; or
(4) default in the performance, or breach, of any covenant, warranty
or agreement of the Company in this Indenture in respect of the Securities
of such series (other than a covenant, warranty or agreement in respect of
the Securities of such series a default in the performance of which or the
breach of which is elsewhere in this Section specifically dealt with), all
of such covenants, warranties and agreements in the Indenture which are not
expressly stated to be for the benefit of a particular series of Securities
being deemed in respect of the Securities of all series for this purpose,
and continuance of such default or breach for a period of 90 days after
receipt by the Company from the Trustee or by the Company and the Trustee
from the Holders of at least 25% in principal amount of the Outstanding
Securities of such series, a written notice, by registered or certified
mail, 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 Restricted Subsidiary
(other than the Securities), or under any mortgage, indenture or instrument
under which there may be secured or evidenced any indebtedness for money
borrowed by the Company or any Restricted Subsidiary (other than the
Securities), whether such indebtedness now exists or shall hereafter be
created, which default shall have resulted in indebtedness in excess of
$15,000,000 becoming due and payable prior to the date on which it would
otherwise have become due and payable, without such indebtedness having
been discharged or such acceleration having been rescinded, annulled or
stayed within 30 days after the date on which written notice thereof is
given to the Company by the Trustee or to the Company
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and the Trustee by Holders of at least 25% in principal amount of the
Securities then outstanding hereunder; or
(6) the entry of an order for relief against the Company under the
Federal Bankruptcy Act by a court having jurisdiction in the premises or a
decree or order by a court having jurisdiction in the premises adjudging
the Company a bankrupt or insolvent under any other applicable Federal or
State law, or the entry of a decree or order approving as properly filed a
petition seeking reorganization, arrangement, adjustment or composition of
or in respect of the Company under the Federal Bankruptcy Code or any other
applicable Federal or State law, or appointing a 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
unstayed and in effect for a period of 90 consecutive days; or
(7) the consent by the Company to the institution of bankruptcy or
insolvency proceedings against it, or the filing by it of a petition or
answer or consent seeking reorganization or relief under the Federal
Bankruptcy Code or any other applicable Federal or State law, or the
consent by it to the filing of any such petition or to the appointment of a
receiver, liquidator, assignee, trustee, sequestrator (or other similar
official) of the Company or of any substantial part of its property, or the
making by it of a general 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
(8) any other Event of Default provided in or pursuant to the
supplemental indenture or Board Resolution under which such series of
Securities is issued or in the form of Security for such series.
Section 502. ACCELERATION OF MATURITY; RESCISSION AND ANNULMENT. If an
Event of Default described in paragraph (1), (2), (3), (4) or (8) (if the Event
of Default under paragraph (4) or (8) is with respect to less than all series of
Securities then outstanding) of Section 501 occurs and is continuing with
respect to any series, then and in each and every such case, unless the
principal of all the Securities of such series shall have already become due and
payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Securities of such series then Outstanding hereunder
(each such series acting as a separate class), by notice in writing to the
Company (and to the Trustee if given by Holders), may declare the principal
amount (or, if the Securities of such series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of that series) of all the Securities of such series and all accrued
interest thereon to be due and payable immediately, and upon any such
declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Securities of such series contained to the
contrary notwithstanding. If an Event of Default described in paragraph (4) or
(8) (if the Event of Default under paragraph (4) or (8) is with respect to all
series of Securities then Outstanding), (5), (6) or (7) of Section 501 occurs
and is continuing, then and in each and every such case, unless the principal of
all the Securities shall have already
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become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate principal amount of all the Securities then Outstanding hereunder
(treated as one class), by notice in writing to the Company (and to the Trustee
if given by Holders), may declare the principal amount (or, if any Securities
are Original Issue Discount Securities, such portion of the principal amount as
may be specified in the terms thereof) of all the Securities then Outstanding
and all accrued interest thereon to be due and payable immediately, and upon any
such declaration the same shall become and shall be immediately due and payable,
anything in this Indenture or in the Securities contained to the contrary
notwithstanding.
At any time after such a declaration of acceleration has been made with
respect to the Securities of any or all series, as the case may be, 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 such series, by written notice to the
Company and the Trustee, shall 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 installments of interest on the Securities of
such series,
(B) the principal of (and premium, if any, on) any Securities of
such series which have become due otherwise than by such declaration
of acceleration, and interest thereon at the rate or rates prescribed
therefor by the terms of the Securities of such series, to the extent
that payment of such interest is lawful,
(C) interest upon overdue installments of interest at the rate or
rates prescribed therefor by the terms of the Securities of such
series to the extent that payment of such interest is lawful, 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 all other amounts due the Trustee
under Section 607;
and
(2) all Events of Default with respect to such series of Securities,
other than the nonpayment of the principal of the Securities of such series
which have become due solely by such 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 installment of interest on
any Security of any series when such interest becomes due and payable, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof, or
(3) default is made in the payment of any sinking or purchase fund or
analogous obligation when the same becomes due by the terms of the
Securities of any series,
and any such default continues for any period of grace provided with
respect to the Securities of such series, the Company will, upon demand of
the Trustee, pay to it, for the benefit of the Holder of any such Security
(or the Holders of any such series in the case of Clause (3) above), the
whole amount then due and payable on any such Security (or on the
Securities of any such series in the case of Clause (3) above) for
principal (and premium, if any) and interest, with interest, to the extent
that payment of such interest shall be legally enforceable, upon the
overdue principal (and premium, if any) and upon overdue installments of
interest, at such rate or rates as may be prescribed therefor by the terms
of any such Security (or of Securities of any such series in the case of
Clause (3) above); 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 and all other amounts due the Trustee under
Section 607.
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, and may
prosecute such proceeding to judgment or final decree, and may enforce the same
against the Company or any other obligor upon the Securities of such series and
collect the money 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 any series of Securities 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
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expressed or by declaration 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
proceedings or otherwise,
(i) to file and prove a claim for the whole amount of principal
(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 and advisable in order to have the claims of the Trustee
(including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel and
all other amounts due the Trustee under Section 607) and of the
Securityholders allowed in such judicial proceeding, and
(ii) to collect and receive any moneys or other property payable
or deliverable on any such claims and to distribute the same;
and any receiver, assignee, trustee, liquidator, sequestrator (or other similar
official) in any such judicial proceeding is hereby authorized by each
Securityholder to make such payment to the Trustee and in the event that the
Trustee shall consent to the making of such payments directly to the
Securityholders, to pay to the Trustee any amount due to 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 Securityholder 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 Securityholder 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 of any
series may be prosecuted and enforced by the Trustee without the possession of
any of the Securities of such series 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 agent and counsel and
any other amounts due the Trustee under Section 607, be for the ratable benefit
of the Holders of the Securities of the series in respect of which such judgment
has been recovered.
Section 506. APPLICATION OF MONEY COLLECTED. Any money collected by the
Trustee with respect to a series of Securities 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 of such series and the
notation thereon of the payment if only partially paid and upon surrender
thereof if fully paid:
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FIRST: To the payment of all amounts due the Trustee under Section 607.
SECOND: To the payment of the amounts then due and unpaid upon the
Securities of that series for principal (and premium, if any) and interest, in
respect of which or for the benefit of which such money has been collected,
ratably, without preference or priority of any kind, according to the amounts
due and payable on such Securities for principal (and premium, if any) and
interest, respectively.
THIRD: If any, to the Company.
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 Securities of such series;
(2) the Holders of not less than 25% in principal amount of the
Outstanding Securities of such 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 such series;
it being understood and intended that no one or more Holders of Securities of
such series 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 Holders of Securities of such series, or to obtain or to
seek to obtain priority or preference over any other such Holders or to enforce
any right under this Indenture, except in the manner herein provided and for the
equal and proportionate benefit of all the Holders of all Securities of such
series.
Section 508. UNCONDITIONAL RIGHT OF SECURITYHOLDERS TO RECEIVE PRINCIPAL,
PREMIUM AND INTEREST. Notwithstanding any other provisions 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 on such Security on the respective Stated
Maturities expressed in such Security (or, in the case of redemption or
repayment, on the Redemption Date or Repayment Date, as the case may be) and to
institute suit for the enforcement of any such payment, and such right shall not
be impaired without the consent of such Holder.
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Section 509. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any
Securityholder has instituted any proceeding to enforce any right or remedy
under this Indenture and such proceeding has been discontinued or abandoned for
any reason, then and in every such case the Company, the Trustee and the
Securityholders shall, subject to any determination in such proceeding, be
restored severally and respectively to their former positions hereunder, and
thereafter all rights and remedies of the Trustee and the Securityholders shall
continue as though no such proceeding had been instituted.
Section 510. RIGHTS AND REMEDIES CUMULATIVE. No right or remedy herein
conferred upon or reserved to the Trustee or to the Securityholders 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 (except as provided in the last sentence of Section 306).
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
Securityholders may be exercised from time to time, and as often as may be
deemed expedient, by the Trustee or by the Securityholders, as the case may be.
Section 512. CONTROL BY SECURITYHOLDERS. 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) the Trustee shall have the right to decline to follow any such
direction if the Trustee, being advised by counsel, determines that the
action so directed may not lawfully be taken or would conflict with this
Indenture or if the Trustee in good faith shall, by a Responsible Officer,
determine that the proceedings so directed would involve it in personal
liability or be unjustly prejudicial to the Holders not taking part in such
direction, and
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction.
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 not theretofore cured
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(1) in the payment of the principal of (or premium, if any) or
interest on any Security of such series, or in the payment of any sinking
or purchase fund or analogous obligation with respect to the Securities 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.
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 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 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 and expenses, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by such party litigant; but the provisions of this Section shall not apply
to any suit instituted by the Trustee, or to any suit instituted by any
Securityholder for the enforcement of the payment of the principal of (or
premium, if any) or interest on any Security on or after the respective Stated
Maturities expressed in such Security (or, in the case of redemption or
repayment, on or after the Redemption Date or Repayment Date, as the case may
be).
ARTICLE 6. THE TRUSTEE.
Section 601. CERTAIN DUTIES AND RESPONSIBILITIES.
(a) Except during the continuance of an Event of Default with respect
to any series of Securities,
(1) the Trustee undertakes to perform such duties and only such
duties as are specifically set forth in this Indenture with respect to
the Securities of such series, 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,
with respect to Securities of such series conclusively rely, as to the
truth of the statements and the correctness of the opinions expressed
therein, upon certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture, but in the case of
any such certificates or opinions which by any provision hereof are
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specifically required to be furnished to the Trustee, the Trustee
shall be under a duty to examine the same to determine whether or not
they conform to the requirements of this Indenture (but need not
confirm or investigate the accuracy of mathematical calculations or
other facts stated therein).
(b) In case an Event of Default with respect to any series of
Securities has occurred and is continuing, the Trustee shall exercise with
respect to the Securities of such series such of the rights and powers
vested in it by this Indenture, and use the same degree of care and skill
in their exercise, as a prudent person would exercise or use under the
circumstances in the conduct of such person's 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 willful misconduct, except that
(1) this Subsection shall not be construed to limit the effect of
Subsection (a) of this Section;
(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
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 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 Securities of any series, the Trustee shall
transmit by mail to all Securityholders of such series, as their names and
addresses appear in the Security Register, notice of such default hereunder
actually known to the Trustee, unless such default shall have been cured or
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waived; PROVIDED, HOWEVER, that, except in the case of a default in the payment
of the principal of (or premium, if any) or interest on any Security of such
series or in the payment of any sinking or purchase fund installment or
analogous obligation 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 and/or
Responsible Officers of the Trustee in good faith determine that the withholding
of such notice is in the interests of the Securityholders of 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
Securityholders of such series shall be given until at least 90 days after the
occurrence thereof. For the purpose of this Section, the term "default", with
respect to Securities of any series, 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. Except as otherwise provided in
Section 601:
(a) the Trustee may conclusively rely and shall be protected in acting
or refraining from acting upon any resolution, certificate, statement,
instrument, opinion, report, notice, request, 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 or 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 of its selection and the
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 Securityholders pursuant to this Indenture, unless such
Securityholders 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,
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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 (which shall be at the sole cost of the Company in the event that
such inquiry or investigation was undertaken by the Trustee in the exercise
of its reasonable discretion on behalf of the Holders) and shall incur no
liability or additional liability of any kind by reason of such inquiry or
investigation;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(h) the Trustee shall not be liable for any action taken, suffered, or
omitted to be taken by it in good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers conferred upon it
by this Indenture; and
(i) the Trustee shall not be deemed to have notice of any default or
Event of Default unless a Responsible Officer of the Trustee has actual
knowledge thereof or unless written notice of any event which is in fact
such a default is received by the Trustee at the Corporate Trust Office of
the Trustee, and such notice references the Securities and this Indenture.
Section 604. NOT RESPONSIBLE FOR RECITALS OR ISSUANCE OF SECURITIES. The
recitals contained herein and in the Securities, except the certificates of
authentication, shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Securities. The Trustee shall not be accountable for the use or application by
the Company of Securities or the proceeds thereof.
Section 605. MAY HOLD SECURITIES. The Trustee, any Paying Agent, the
Security Registrar or any other agent of the Company, in its 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, Paying Agent, Security Registrar or such
other agent.
Section 606. MONEY HELD IN TRUST. Subject to the provisions of Section 1003
hereof, all moneys received by the Trustee shall, until used or applied as
herein provided, be held in trust for the purposes for which they were received,
but need not be segregated from other funds except to the extent required by
law. The Trustee shall be under no liability for interest on any money received
by it hereunder except as otherwise agreed in writing with the Company.
Section 607. COMPENSATION AND REIMBURSEMENT. The Company agrees
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(1) to pay to the Trustee from time to time such compensation as the
Company and the Trustee shall from time to time agree in writing 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 each of the Trustee or any predecessor Trustee for,
and to hold it harmless against, any and all losses, damages, claims,
liabilities or expenses, including taxes (other than taxes based upon,
measured by, or determined by the income of the Trustee), incurred without
negligence or bad faith on its part, arising out of or in connection with
the acceptance or administration of this trust, including the costs and
expenses of defending itself against any claim or liability in connection
with the exercise or performance of any of its powers or duties hereunder.
As security for the performance of the obligations of the Company under
this Section the Trustee shall have a lien prior to the Securities upon all
property and funds held or collected by the Trustee as such, except funds held
in trust for the payment of principal of (and premium, if any) or interest on
particular Securities.
When the Trustee incurs expenses or renders services in connection with an
Event of Default specified in Section 501(6) or Section 501(7), the expenses
(including the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute expenses of
administration under any applicable Federal or State bankruptcy, insolvency or
other similar law.
The provisions of this Section shall survive the termination of this
Indenture.
Section 608. DISQUALIFICATION; CONFLICTING INTERESTS. The Trustee for the
Securities of any series issued hereunder shall be subject to the provisions of
Section 310(b) of the Trust Indenture Act during the period of time provided for
therein. In determining whether the Trustee has a conflicting interest as
defined in Section 310(b) of the Trust Indenture Act with respect to the
Securities of any series, there shall be excluded this Indenture with respect to
Securities of any particular series of Securities other than that series.
Nothing herein shall prevent the Trustee from filing with the Commission the
application referred to in the second to last paragraph of Section 310(b) of the
Trust Indenture Act.
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Section 609. CORPORATE TRUSTEE REQUIRED; ELIGIBILITY. There shall at all
times be a Trustee hereunder with respect to each series of Securities, which
shall be either
(i) a corporation organized and doing business under the laws of
the United States of America or of any State, authorized under such
laws to exercise corporate trust powers and subject to supervision or
examination by Federal or State authority, or
(ii) a corporation or other Person organized and doing business
under the laws of a foreign government that is permitted to act as
Trustee pursuant to a rule, regulation or order of the Commission,
authorized under such laws to exercise corporate trust powers, and
subject to supervision or examination by authority of such foreign
government or a political subdivision thereof substantially equivalent
to supervision or examination applicable to United States
institutional trustees,
in either case having a combined capital and surplus of at least $50,000,000. If
such corporation publishes reports of condition at least annually, pursuant to
law or to the requirements of the aforesaid supervising or examining authority,
then for the purposes of this Section, the combined capital and surplus of such
corporation shall be deemed to be its combined capital and surplus as set forth
in its most recent report of condition so published. Neither the Company nor any
person directly or indirectly controlling, controlled by, or under common
control with the Company shall serve as trustee for the Securities of any series
issued hereunder. If at any time the Trustee with respect to any series of
Securities shall cease to be eligible in accordance with the provisions of this
Section, it shall resign immediately in the manner and with the effect specified
in Section 610.
Section 610. RESIGNATION OF SUCCESSOR.
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 611.
(b) The Trustee may resign with respect to any series of Securities at
any time by giving written notice thereof to the Company. If an instrument
of acceptance by a successor Trustee shall not have been delivered to the
Trustee within 30 days after the giving of such notice of resignation, the
resigning Trustee may petition, at the expense of the Company, any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed with respect to any series of
Securities at any time by Act of the Holders of a majority in principal
amount of the Outstanding Securities of that series, delivered to the
Trustee and to the Company. If an instrument of acceptance by a successor
Trustee shall not have been delivered to the Trustee within 30 days after
the
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giving of such notice of removal, the Trustee subject to removal may
petition any court of competent jurisdiction for the appointment of a
successor Trustee.
(d) If at any time:
(1) the Trustee shall fail to comply with Section 310(b) of the Trust
Indenture Act pursuant to Section 608 with respect to any series of
Securities after written request therefor by the Company or by any
Securityholder who has been a bona fide Holder of a Security of that series
for at least 6 months, or
(2) the Trustee shall cease to be eligible under Section 609 with
respect to any series of Securities and shall fail to resign after written
request therefor by the Company or by any such Securityholder, or
(3) the Trustee shall become incapable of acting with respect to any
series of Securities, or
(4) the Trustee 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 the series, or in the case of Clause (4), with respect
to all series, or (ii) subject to Section 514, any Securityholder who has been a
bona fide Holder of a Security of such series for at least 6 months may, on
behalf of himself and all others similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee and the appointment of a
successor Trustee with respect to the series, or, in the case of Clause (4),
with respect to all series.
(e) If the Trustee shall resign, be removed or become incapable of
acting with respect to any series of Securities, or if a vacancy shall
occur in the office of the Trustee with respect to any series of Securities
for any cause, the Company, by a Board Resolution, shall promptly appoint a
successor Trustee for that series of Securities. If, within one year after
such resignation, removal or incapacity, or the occurrence of such vacancy,
a successor Trustee with respect to such series of Securities 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, become the successor Trustee with
respect to such series and supersede the successor Trustee appointed by the
Company with respect to such series. If no successor Trustee with respect
to such series shall have been so appointed by the Company or the
Securityholders of such series and accepted appointment in the manner
hereinafter provided, subject to Section 514, any Securityholder who has
been a bona fide Holder of a Security of that series for at least 6
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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 such series.
(f) The Company shall give notice of each resignation and each removal
of the Trustee with respect to any series and each appointment of a
successor Trustee with respect to any series by mailing written notice of
such event by first-class mail, postage prepaid, to the Holders of
Securities of that series as their names and addresses appear in the
Security Register. Each notice shall include the name of the successor
Trustee and the address of its principal Corporate Trust office.
Section 611. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR. Every successor
Trustee appointed hereunder shall execute, acknowledge and deliver to the
Company and to the predecessor Trustee an instrument accepting such appointment,
and thereupon the resignation or removal of the predecessor Trustee shall become
effective with respect to any series as to which it is resigning or being
removed as Trustee, and such successor Trustee, without any further act, deed or
conveyance, shall become vested with all the rights, powers, trusts and duties
of the predecessor Trustee with respect to any such series; but, on request of
the Company or the successor Trustee, such predecessor Trustee shall, upon
payment of its reasonable charges, if any, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
predecessor Trustee, and shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such predecessor Trustee
hereunder with respect to all or any such series, subject nevertheless to its
lien, if any, provided for in Section 607. 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.
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 predecessor
Trustee and each successor Trustee with respect to the Securities of any
applicable series shall execute and deliver an indenture supplemental hereto
which shall contain such provisions as shall be deemed necessary or desirable to
confirm that all the rights, powers, trusts and duties of the predecessor
Trustee with respect to the Securities of any series as to which the predecessor
Trustee is not being succeeded shall continue to be vested in the predecessor
Trustee, and 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.
No successor Trustee with respect to any series of Securities shall accept
its appointment unless at the time of such acceptance such successor Trustee
shall be qualified and eligible with respect to that series under this Article.
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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 of 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 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 3 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 reduction in the amount due and
owing upon any claim as such creditor in respect of principal or interest,
effected after the beginning of such 3-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 claim as
such creditor, either as security therefor, or in satisfaction or
composition thereof, or otherwise, after the beginning of such 3-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
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against the Company in bankruptcy or receivership or in proceedings
for reorganization pursuant to the Federal Bankruptcy Act 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 3-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
3-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 the Trustee had no reasonable cause to believe that a default
as defined in Subsection (c) of this Section would occur within 3
months; or
(D) to receive payment on any claim referred to in paragraph (B) or
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 3-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 between the
Trustee, the Securityholders and the holders of other indenture securities in
such manner that the Trustee, the Securityholders and the holders of other
indenture securities realize, as a result of payments from such special account
and payments of dividends on claims filed against the Company in bankruptcy or
receivership or in proceedings for reorganization pursuant to the Federal
Bankruptcy Act 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
Securityholders 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 Act 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 Act or applicable State law, whether such distribution is made in
cash,
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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 proceedings for reorganization is pending shall have
jurisdiction (i) to apportion between the Trustee and the Securityholders and
the holders of other indenture securities, in accordance with the provisions-of
this paragraph, the funds and property held in such special account and 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 Securityholders and the
holders of other indenture securities with respect to their respective claims,
in which event it shall not be necessary to liquidate or to appraise the value
of any securities or other property held in such special account or as security
for any such claim, or to make a specific allocation of such distributions as
between the secured and unsecured portions of such claims, or otherwise to apply
the provisions of this paragraph as a mathematical formula.
Any Trustee which has resigned or been removed after the beginning of such
3-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 3- 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 3-month
period; and
(ii) such receipt of property or reduction of claim occurred
within 3 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 Securityholders 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, paying agent, fiscal agent or depository, or other similar
capacity;
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(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; or
(6) the acquisition, ownership, acceptance or negotiation of any
drafts, bills of exchange, acceptances or obligations which fall within the
classification of self-liquidating paper as defined in Subsection (c) of
this Section.
(c) For the purposes of this Section only:
(1) The term "default" means any failure to make payment in full of
the principal of or interest on any of the Securities or upon the other
indenture securities when and as such principal or interest 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 such special account.
(3) The term "cash transaction" means any transaction in which full
payment for goods or securities sold is made within 7 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, manufacturing, 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.
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Section 614. APPOINTMENT OF AUTHENTICATION AGENT. At any time when any of
the Securities remain Outstanding the Trustee, with the approval of the Company,
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 Securities of such series issued upon exchange, registration of
transfer or partial redemption thereof or pursuant to Section 306, and
Securities so authenticated shall be entitled to the benefits of this Indenture
and shall be valid and obligatory for all purposes as if authenticated by the
Trustee hereunder. 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 an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as an Authenticating
Agent, having a combined capital and surplus of not less than $50,000,000 and,
if other than the Company itself, subject to supervision or examination by
Federal or State 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 at any time by giving written notice
thereof to the Trustee and, if other than the Company, to the Company. The
Trustee may at any time terminate the agency of an Authenticating Agent by
giving written notice thereof to such Authenticating Agent and, if other than
the Company, 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,
with the approval of the Company, 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
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as an Authenticating Agent. No successor Authenticating Agent shall be appointed
unless eligible under the provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to time
reasonable compensation for its services under this Section.
If an appointment with respect to one or more series is made pursuant to
this Section, the Securities of such series may have endorsed thereon, in
addition to the Trustee's certificate of authentication, an alternate
certificate of authentication in the following form:
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This is one of the Securities referred to in the within-mentioned
Indenture.
THE BANK OF NEW YORK
as Trustee,
By:
------------------------------------
As Authenticating Agent
By:
------------------------------------
Authorized Officer
ARTICLE 7. SECURITYHOLDERS' LISTS AND REPORTS BY TRUSTEE AND COMPANY.
Section 701. COMPANY TO FURNISH TRUSTEE NAMES AND ADDRESSES OF
SECURITYHOLDERS. The Company will furnish or cause to be furnished to the
Trustee
(1) semi-annually, not later than December 1 and June 1 in each year
in such form as the Trustee may reasonably require, a list of the names and
addresses of the Holders of Securities of each series as of a date not more
than 15 days prior to the date such list is furnished, and
(2) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
date such list is furnished.
except that no such list need be furnished so long as the Trustee is acting as
Security Registrar.
Section 702. PRESERVATION OF INFORMATION; COMMUNICATIONS TO
SECURITYHOLDERS.
(a) The Trustee shall preserve in as current a form as is reasonably
practicable, the names and addresses of Holders of Securities contained in
the most recent list furnished to the Trustee as provided in Section 701
and the names and addresses of Holders of Securities received by the
Trustee in its capacity as Security Registrar. The Trustee may destroy any
list furnished to it as provided in Section 701 upon receipt of a new list
so furnished.
(b) If 3 or more Holders of Securities of any series (hereinafter
referred to as "applicants") apply in writing to the Trustee, and furnish
to the Trustee reasonable proof that each such applicant has owned a
Security of such series for a period of at least 6 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 the 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
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which such applicants propose to transmit, then the Trustee shall, within 5
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 Securityholders 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 a Security of such series or to all Securityholders, 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), 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 5 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 interests of the Holders of
Securities of such series or all Securityholders, 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 Securityholders of such series or all Securityholders, as
the case may be, 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.
(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 shall be held accountable by reason of the disclosure of any such
information as to the names and addresses of the Holders of Securities in
accordance with 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).
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Section 703. REPORTS BY TRUSTEE.
(a) The term "reporting date" as used in this Section means April 1.
Within 60 days after the reporting date in each year, beginning in 1999,
the Trustee shall transmit by mail to all Securityholders, as their names
and addresses appear in the Security Register, a brief report dated as of
such reporting date with respect to any of the following events which may
have occurred during the twelve months preceding the date of such report
(but if no such event has occurred within such period, no report need be
transmitted):
(1) any change to its eligibility under Section 609 and its
qualifications under Section 608;
(2) the creation of or any material change to a relationship specified
in Section 310(b)(1) through Section 310(b)(10) of the Trust Indenture Act;
(3) the character and amount of any advances (and if the Trustee
elects so to state, the circumstances surrounding the making thereof) made
by the Trustee (as such) which remain unpaid on the date of such report,
and for the reimbursement of which it claims or may claim a lien or charge,
prior to that of Securities of any series, on any property or funds held or
collected by it as Trustee, except that the Trustee shall not be required
(but may elect) to report such advances if such advances so remaining
unpaid aggregate not more than 1/2 of 1% of the principal amount of the
Securities of such series outstanding on the date of such report;
(4) any change to the amount, interest rate and maturity date of all
other indebtedness owing by the Company (or by any other obligor on the
Securities) to the Trustee in its individual capacity, on the date of such
report, with a brief description of any property held as collateral
security therefor, except an indebtedness based upon a creditor
relationship arising in any manner described in Section 613(b)(2), (3),
(4), or (6);
(5) any change to the property and funds, if any, physically in the
possession of the Trustee as such on the date of such report;
(6) any additional issue of Securities which the Trustee has not
previously reported; and
(7) any action taken by the Trustee in the performance of its duties
hereunder which it has not previously reported and which in its opinion
materially affects the Securities, except action in respect of a default,
notice of which has been or is to be withheld by the Trustee in accordance
with Section 602.
(b) The Trustee shall transmit by mail to all Securityholders, as
their names and addresses appear in the Security Register, a brief report
with respect to the character and
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amount of any advances (and if the Trustee elects so to state, the
circumstances surrounding the making thereof) made by the Trustee (as such)
since the date of the last report transmitted pursuant to Subsection (a) of
this Section (or if no such report has yet been so transmitted, since the
date of execution of this instrument) for the reimbursement of which it
claims or may claim a lien or charge, prior to that of the Securities of
any series, on property or funds held or collected by it as Trustee, and
which it has not previously reported pursuant to this Subsection, except
that the Trustee shall not be required (but may elect) to report such
advances if such advances remaining unpaid at any time aggregate 10% or
less of the principal amount of the Securities outstanding of such series
at such time, such report to be transmitted within 90 days after such time.
(c) A copy of each such report shall, at the time of such transmission
to Securityholders, be furnished to the Company and be filed by the Trustee
with each stock exchange upon which the Securities are listed, and also
with the Commission. The Company will promptly notify the Trustee when the
Securities are listed on any stock exchange, or any delisting thereof.
Section 704. REPORTS BY COMPANY. The Company will
(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
will 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 covenant of this Indenture as may be
required from time to time by such rules and regulations; and
(3) transmit by mail to all Securityholders, 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 by rules and regulations prescribed
from time to time by the Commission.
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Delivery of such reports, information and documents to the Trustee is for
informational purposes only and the Trustee's receipt of such shall not
constitute constructive notice of any information contained therein or
determinable from information contained therein, including the Company's
compliance with any of its covenants hereunder (as to which the Trustee is
entitled to rely exclusively on Officers' Certificates).
ARTICLE 8. CONSOLIDATION, MERGER, CONVEYANCE OR TRANSFER.
Section 801. WHEN COMPANY MAY MERGE OR TRANSFER ASSETS. The Company, in a
single transaction or through a series of related transactions, shall not
consolidate with or merge with or into any other Person or transfer (by lease,
assignment, sale or otherwise) all or substantially all of its properties and
assets to another Person or group of affiliated Persons, unless:
(a) either (1) the Company shall be the continuing corporation or (2)
the Person (if other than the Company) formed by such consolidation or into
which the Company is merged or to which all or substantially all of the
properties and assets of the Company are transferred (i) shall be a
corporation, partnership, limited liability company or trust organized and
validly existing under the laws of the United States or any State thereof
or the District of Columbia and (ii) shall expressly assume, by an
indenture supplemental hereto, executed and delivered to the Trustee, in
form reasonably satisfactory to the Trustee, all of the obligations of the
Company under the Securities and this Indenture and the performance of
every covenant of this Indenture on the part of the Company to be performed
or observed;
(b) immediately after giving effect to such transaction, and the
assumption contemplated by clause (a) above, no Event of Default, and no
event which, after notice or lapse of time, or both, would become an Event
of Default, shall have occurred and be continuing; and
(c) the Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that such
consolidation, merger or transfer and, if a supplemental indenture is
required in connection with such transaction, such supplemental indenture,
comply with this Article 8 and that all conditions precedent herein
provided for relating to such transaction have been satisfied.
For purposes of the foregoing, the transfer (by lease, assignment, sale or
otherwise) of the properties and assets of one or more Restricted Subsidiaries
(other than to the Company or another direct or indirect wholly owned
Subsidiary) in a single transaction or through a series of related transactions,
which, if such assets were owned by the Company, would constitute all or
substantially all of the properties and assets of the Company, shall be deemed
to be the transfer of all or substantially all of the properties and assets of
the Company.
The successor Person formed by such consolidation or into which the Company
is merged or the successor Person to which such conveyance, transfer or lease is
made shall succeed to, and
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be substituted for, and may exercise every right and power of, the Company under
this Indenture with the same effect as if such successor had been named as the
Company herein, and thereafter, except in the case of a lease of its properties
and assets substantially as an entirety, the Company shall be discharged and
released from all obligations and covenants under this Indenture and the
Securities. The Trustee shall enter into a supplemental indenture to evidence
the succession and substitution of such successor Person and such discharge and
release of the Company.
ARTICLE 9. SUPPLEMENTAL INDENTURES.
Section 901. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF SECURITYHOLDERS.
Without the consent of the Holders of any Securities, 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 contained; or
(2) to add to the covenants of the Company, or to surrender any right
or power herein conferred upon the Company, for the benefit of the Holders
of the Securities of any or all series (and if such covenants or the
surrender of such right or power are to be for the benefit of less than all
series of Securities, stating that such covenants are expressly being
included or such surrenders are expressly being made solely for the benefit
of one or more specified series); or
(3) 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; or
(4) to add to this Indenture such provisions as may be expressly
permitted by the TIA, excluding, however, the provisions referred to in
Section 316(a)(2) of the TIA as in effect at the date as of which this
instrument was executed or any corresponding provision in any similar
Federal statute hereafter enacted; or
(5) to establish any form of Security, as provided in Article Two, and
to provide for the issuance of any series of Securities as provided in
Article Three and to set forth the terms thereof, and/or to add to the
rights of the Holders of the Securities of any series; or
(6) to evidence and provide for the acceptance of appointment by
another corporation as a successor Trustee hereunder with respect to one or
more series of Securities and to add to or change any of the provisions of
this Indenture as shall be
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necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, pursuant to Section 611; or
(7) to add any additional Events of Default in respect of the
Securities of any or all series (and if such additional Events of Default
are to be in respect of less than all series of Securities, stating that
such Events of Default are expressly being included solely for the benefit
of one or more specified series); or
(8) to provide for the issuance of Securities in coupon as well as
fully registered form.
No supplemental indenture for the purposes identified in Clauses (2), (3)
or (7) above may be entered into if to do so would adversely affect the interest
of the Holders of Securities of any series.
Section 902. SUPPLEMENTAL INDENTURES WITH CONSENT OF SECURITYHOLDERS. With
the consent of the Holders of not less than a majority in principal amount of
the Outstanding Securities of each series affected by such supplemental
indenture or indentures, 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 the Securities of each 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 Maturity of the principal of, or the Stated Maturity of
any premium on, or any installment of interest on, any Security, or reduce
the principal amount thereof or the interest or any premium thereon, or
change the method of computing the amount of principal thereof or interest
thereon on any date or change any Place of Payment where any Security or
any premium or interest thereon is payable, or impair the right to
institute suit for the enforcement of any such payment on or after the
Maturity or the Stated Maturity, as the case may be, thereof (or, in the
case of redemption or repayment, on or after the Redemption Date or the
Repayment Date as the case may be); or
(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 1008, except to increase any such percentage or to provide that
certain other provisions of this
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Indenture cannot be modified or waived without the consent of the Holder of
each Outstanding Security affected thereby.
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.
It shall not be necessary for any Act of Securityholders 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.
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 six months 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.
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. 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.
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 to the
extent provided therein.
Section 905. CONFORMITY WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article shall conform to the requirements of
the TIA as then in effect.
Section 906. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES. Securities
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
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provided for in such supplemental indenture. If the Company shall so determine,
new Securities 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 in
exchange for Outstanding Securities.
ARTICLE 10. COVENANTS.
Section 1001. PAYMENT OF PRINCIPAL, PREMIUM AND INTEREST. With respect to
each series of Securities, the Company will duly and punctually pay the
principal of (and premium, if any) and interest on such Securities in accordance
with their terms and this Indenture, and will duly comply with all the other
terms, agreements and conditions contained in, or made in the Indenture for the
benefit of, the Securities of such series.
Section 1002. MAINTENANCE OF OFFICE OR AGENCY. The Company will maintain an
office or agency in each Place of Payment where Securities may be presented or
surrendered for payment, where Securities may be surrendered for transfer or
exchange and where notices and demands to or upon the Company in respect of the
Securities and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and of any change in the
location, of such office or agency. If at any time the Company shall fail to
maintain such 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 principal Corporate Trust Office of the Trustee, Attention:
Corporate Trust Trustee Administration, and the Company hereby appoints the
Trustee its agent to receive all such presentations, surrenders, notices and
demands.
Section 1003. MONEY FOR SECURITY PAYMENTS TO BE HELD IN TRUST. If the
Company shall at any time act as its own Paying Agent for any series of
Securities, it will, on or before each due date of the principal of (and
premium, if any) or interest on, any of the Securities of such 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 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 action or failure
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 on, any Securities of such series, deposit with a Paying Agent
a sum sufficient to pay the principal (and premium, if any) or interest so
becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal (and premium, if any) 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
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(1) hold all sums held by it for the payment of principal of (and
premium, if any) or interest on Securities of such 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 such series) in the making of any such
payment of principal (and premium, if any) or interest on the Securities of
such 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.
The Company may at any time, for the purpose of obtaining the satisfaction
and discharge of this Indenture with respect to any series of Securities 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 in
respect of each and every series of Securities as to which it seeks to discharge
this Indenture or, if for any other purpose, all sums so held in trust by the
Company in respect of all Securities, 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 or any Paying Agent, or then held by
the Company, in trust for the payment of the principal of (and premium, if any)
or interest on any Security of any series and remaining unclaimed for two years
after such principal (and premium, if any) or interest has become due and
payable shall 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 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. The Trustee or such Paying Agent, before being
required to make any such repayment, may at the expense of the Company mail to
the Holders of the Securities as to which the money to be repaid was held in
trust, as their names and addresses appear in the Security Register, a notice
that such moneys remain unclaimed and that, after a date specified in the
notice, which shall not be less than 30 days from the date on which the notice
was first mailed to the Holders of the Securities as to which the money to be
repaid was held in trust, any unclaimed balance of such moneys then remaining
will be paid to the Company free of the trust formerly impressed upon it.
Section 1004. STATEMENT AS TO COMPLIANCE. The Company will deliver to the
Trustee, within 120 days of the end of each fiscal year, a written statement
signed by the principal executive officer, principal financial officer or
principal accounting officer of the Company stating that
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(1) in the course of the performance of his duties as an officer of
the Company he would normally have knowledge of the Company's performance
under this Indenture and under the terms of the Securities; and
(2) to the best of his knowledge, the Company has fulfilled all its
obligations under this Indenture and has complied with all conditions and
covenants on its part contained in this Indenture through such year, or, if
there has been a default in the fulfillment of any such obligation,
covenant or condition, specifying each such default known to him and the
nature and status thereof.
For the purpose of this Section 1004, default and compliance shall be
determined without regard to any grace period or requirement of notice
provided pursuant to the terms of this Indenture.
Section 1005. LEGAL 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 legal existence.
Section 1006. LIMITATION ON LIENS. The Company shall not create, assume or
suffer to exist any Lien upon any Principal Property of the Company or any
Restricted Subsidiary or shares of Capital Stock or indebtedness of any
Subsidiary to secure any debt of any Person, or permit any Restricted Subsidiary
so to do, without making effective provision whereby the Securities then
outstanding and having the benefit of this Section shall be secured by the Lien
equally and ratably with such debt for so long as such debt shall be so secured,
except that the foregoing shall not prevent the Company or any Restricted
Subsidiary from creating, assuming or suffering to exist Liens of the following
character:
(1) with respect to any series of Securities, any Lien existing on the
date of issuance of the series;
(2) any Lien existing on property owned or leased by, or shares of
capital stock or indebtedness of, a Person at the time it becomes a
Restricted Subsidiary;
(3) any Lien existing on property at the time of the acquisition or
lease thereof by the Company or a Restricted Subsidiary;
(4) any Lien on property of a corporation existing at the time such
corporation is merged or consolidated with the Company or a Restricted
Subsidiary or at the time of a sale, lease or other disposition of the
properties of a corporation as an entirety or substantially as an entirety
to the Company or a Restricted Subsidiary;
(5) any Lien to secure any debt on capital stock, property or assets
incurred prior to, at the time of, or within 180 days after, or pursuant to
financing arrangements for
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which a firm commitment is made by a bank, insurance company or other
lender or investor (not including the Company or any Restricted Subsidiary)
within 180 days after, the acquisition of capital stock, property or assets
for the purpose of financing all or any part of the purchase price thereof;
(6) any Lien to secure any debt incurred prior to, at the time of, or
within 180 days after, or pursuant to financing arrangements for which a
firm commitment is made by a bank, insurance company or other lender or
investor (not including the Company or any Restricted Subsidiary) within
180 days after, the completion of the construction and commencement of
commercial operation, alteration, repair or improvement of property or
assets for the purpose of financing all or any part of the cost thereof;
(7) any Lien securing debt of a Restricted Subsidiary owing to the
Company or to another Restricted Subsidiary;
(8) any Lien in favor of any customer arising in respect of
performance deposits and partial, progress, advance or other payments made
by or on behalf of such customer for goods produced or to be produced for
or services rendered or to be rendered to such customer in the ordinary
course of business, which Lien shall not exceed the amount of such deposits
or payments;
(9) mechanics', workmen's, repairmen's, materialmen's, carriers' and
other similar Liens arising in the ordinary course of business;
(10) any Lien created by or resulting from any litigation or
proceedings which are being contested in good faith by appropriate
proceedings; any Lien arising out of a judgment or award against the
Company and/or one or more Restricted Subsidiaries with respect to which
the Company and/or such Restricted Subsidiary or Subsidiaries are in good
faith prosecuting an appeal or proceedings for review; or any Lien incurred
by the Company and/or Restricted Subsidiaries for the purpose of attaining
a stay or discharge in the course of any legal proceedings to which the
Company and/or Restricted Subsidiary or Subsidiaries are a party; or
(11) any Lien for taxes or assessments or governmental charges or
levies not yet due or delinquent, or which can thereafter be paid without
penalty or which are being contested in good faith by appropriate
proceedings; any landlord's Lien on property held under lease and tenants'
rights under leases; easements and any other liens of a nature similar to
those hereinabove described in this clause (11) which do not, in the
opinion of the Company, materially impair the use of such property in the
operation of the business of the Company or any Restricted Subsidiary or
the value of such property for the purposes of such business;
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(12) any Lien which may be deemed to result from an agreement or
commitment to exchange securities of a Subsidiary for other securities of
the Company, whether or not such securities of a Subsidiary are placed in
escrow for such purpose;
(13) any Lien in favor of the United States of America or any State
thereof or any other country, or any agency, instrumentality or political
subdivision or any of the foregoing, to secure partial, progress, advance
or other payments or performance pursuant to the provisions of any contract
or statute, or any Liens securing industrial development, pollution
control, or similar revenue bonds;
(14) any extension, renewal or replacement (or successive extensions,
renewals or replacements) in whole or in part of any Lien referred to in
clauses (1) through (13) above, so long as the principal amount of the debt
secured thereby does not exceed the principal amount of debt so secured at
the time of the extension, renewal or replacement (except that, where an
additional principal amount of debt is incurred to provide funds for the
completion of a specific project, the additional principal amount, and any
related financing costs, may be secured by the Lien as well) and the Lien
is limited to all or part of the same property subject to the Lien so
extended, renewed or replaced (plus improvements on the property); and
(15) any Lien not permitted by clauses (1) through (14) above securing
debt which, together with the aggregate outstanding principal amount of all
other debt of the Company and its Restricted Subsidiaries which would
otherwise be subject to the foregoing restrictions and the aggregate Value
of existing Sale and Leaseback Transactions which would be subject to the
restrictions of Section 1007 but for this clause (15), does not at any time
exceed 15% of Consolidated Net Assets.
Section 1007. LIMITATION ON SALE AND LEASEBACKS. The Company shall not
enter into any Sale and Leaseback Transaction involving a Principal Property of
the Company or any Restricted Subsidiary, nor permit any Restricted Subsidiary
so to do, unless either:
(1) the Company or such Restricted Subsidiary would be entitled to
incur debt, in a principal amount at least equal to the Value of such Sale
and Leaseback Transaction, which is secured by Liens on the property to be
leased (without equally and ratably securing the outstanding Securities)
because such Liens would be of such character that no violation of any of
the provisions of Section 1006 would result, or
(2) the Company during the 180 days immediately following the
effective date of such Sale and Leaseback Transaction causes to be applied
to either (i) the voluntary retirement of Funded Debt (whether by
redemption, defeasance, repurchase, or otherwise) an amount equal to the
Value of such Sale and Leaseback Transaction, or (ii) the purchase of other
property which will constitute "Principal Property" having a fair value, as
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determined by the Company, at least equal to the Value of such Sale and
Leaseback Transaction; or
(3) the Company or a Restricted Subsidiary shall deliver to the
Trustee or other applicable trustee for cancellation Securities or Funded
Debt in an aggregate principal amount at least equal to the Value of such
Sale and Leaseback Transaction.
Section 1008. WAIVER OF CERTAIN COVENANTS. The Company may omit in respect
of any series of Securities, in any particular instance, to comply with any
covenant or condition set forth in Sections 1006 and 1007, if before or after
the time for such compliance the Holders of at least a majority in principal
amount of the Securities at the time Outstanding of such series shall, by Act of
such Securityholders, 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 in respect of any such covenant or
condition shall remain in full force and effect.
Section 1009. CALCULATION OF ORIGINAL ISSUE DISCOUNT. The Company shall
file with the Trustee promptly at the end of each calendar year (i) a written
notice specifying the amount of original issue discount (including daily rates
and accrual periods) accrued on Outstanding Securities as of the end of such
year and (ii) such other specific information relating to such original issue
discount as may then be relevant under the Internal Revenue Code of 1986, as
amended from time to time.
ARTICLE 11. REDEMPTION OF SECURITIES.
Section 1101. APPLICABILITY OF ARTICLE. The Company may reserve the right
to redeem and pay before Stated Maturity all or any part of the Securities of
any series, either by optional redemption, sinking or purchase fund or analogous
obligation or otherwise, by provision therefor in the form of Security for such
series established and approved pursuant to Section 202 and on such terms as are
specified in such form or in the indenture supplemental hereto with respect to
Securities of such series as provided in Section 301. Redemption of Securities
of any series shall be made in accordance with the terms of such Securities and,
to the extent that this Article does not conflict with such terms, the
succeeding Sections of this Article.
Section 1102. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of the
Company to redeem any Securities redeemable at the election of the Company shall
be evidenced by, or pursuant to authority granted by, a Board Resolution. In
case of any redemption at the election of the Company, the Company shall, at
least 60 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 the
Tranche (as defined in Section 1103) to be redeemed.
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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 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, 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 of like tenor and terms of any series (a "Tranche") 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 of such Tranche not previously called for redemption, by
such method as the Trustee shall deem fair and appropriate (other than pro rata
selection) and which may include provision for the election for redemption of
portions of the principal of Securities of such Tranche of a denomination larger
than the minimum authorized denomination for Securities of that series. Unless
otherwise provided in the terms of a particular series of Securities, the
portions of the principal of Securities so selected for partial redemption shall
be equal to the minimum authorized denomination of the Securities of such
series, or an integral multiple thereof, and the principal amount which remains
outstanding shall not be less than the minimum authorized denomination for
Securities of such series. If less than all the Securities of unlike tenor and
terms of a series are to be redeemed, the particular Tranche of Securities to be
redeemed shall be selected by the Company.
The Trustee shall promptly notify the Company in writing of the Securities
selected for redemption and, in the case of any Security 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 Security redeemed or to be redeemed only in part, to the portion of
the principal of such Security which has been or is to be redeemed.
Section 1104. NOTICE OF REDEMPTION. Notice of redemption shall be given
by first-class mail, postage prepaid, mailed not less than 30 nor more than 60
days prior to the Redemption Date, to each holder of Securities to be redeemed,
at his address appearing in the Security Register.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) the CUSIP number;
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(4) if less than all Outstanding Securities of any series are to be
redeemed, the identification (and, in the case of partial redemption, the
respective principal amounts) of the Securities to be redeemed, from the
Holder to whom the notice is given;
(5) that on the Redemption Date the Redemption Price will become due
and payable upon each such Security, and that interest, if any, thereon
shall cease to accrue from and after said date;
(6) the place where such Securities are to be surrendered for payment
of the Redemption Price, which shall be the office or agency of the Company
in the Place of Payment;
(7) that the redemption is on account of a sinking or purchase fund,
or other analogous obligation, if that be the case; and
(8) that, if less than the entire principal amount of any Security is
being redeemed, a replacement Security for the remaining principal balance
shall be issued to the Holder.
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.
Section 1105. DEPOSIT OF REDEMPTION PRICE. On or prior to 10:00 a.m., New
York City time, on 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 all the Securities which are to
be redeemed on that date; PROVIDED that such amount shall be so deposited with
the Trustee or Paying Agent in time for the Trustee or Paying Agent, as the case
may be, to pay such Redemption Price in accordance with its normal procedures.
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) such Securities shall cease to bear interest.
Upon surrender of such Securities for redemption in accordance with the notice,
such Securities shall be paid by the Company at the Redemption Price. Unless
otherwise provided with respect to such Securities pursuant to Section 301,
installments of interest the Stated Maturity of which is on or prior to the
Redemption Date shall be payable to the Holders of such securities registered as
such on the relevant Regular 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 shall, until paid, bear interest from the
Redemption Date at the rate borne by the Security, or as otherwise provided in
such Security.
64
<PAGE> 71
Section 1107. SECURITIES REDEEMED IN PART. Any Security which is to be
redeemed only in part shall be surrendered at the office or agency of the
Company in the Place of Payment with respect to that series (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 shall authenticate and make available for
delivery to the Holder of such Security without service charge, a new Security
or Securities of the same series and Stated Maturity and of like tenor and
terms, 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.
Section 1108. PROVISIONS WITH RESPECT TO ANY SINKING FUNDS. Unless the form
or terms of any series of Securities shall provide otherwise, in lieu of making
all or any part of any mandatory sinking fund payment with respect to such
series of Securities in cash, the Company may at its option (1) deliver to the
Trustee for cancellation any Securities of such series theretofore acquired by
the Company, or (2) receive credit for any Securities of such series (not
previously so credited) acquired by the Company (including by way of optional
redemption (pursuant to the sinking fund or otherwise) but not by way of
mandatory sinking fund redemption) and theretofore delivered to the Trustee for
cancellation, and if it does so then (i) Securities so delivered or credited
shall be credited at the applicable sinking fund Redemption Price with respect
to Securities of such series, and (ii) on or before the 60th day next preceding
each sinking fund Redemption Date with respect to such series of Securities, the
Company will deliver to the Trustee (A) an Officers' Certificate specifying the
portions of such sinking fund payment to be satisfied by payment of cash and by
delivery or credit of Securities of such series acquired by the Company, and (B)
such Securities, to the extent not previously surrendered. Such Officers'
Certificate shall also state the basis for such credit and that the Securities
for which the Company elects to receive credit have not been previously so
credited and were not acquired by the Company through operation of the mandatory
sinking fund, if any, provided with respect to such Securities and shall also
state that no Event of Default with respect to Securities of such series has
occurred and is continuing. All Securities so delivered to the Trustee shall be
canceled by the Trustee and no Securities shall be authenticated in lieu
thereof.
If the sinking fund payment or payments (mandatory or optional) with
respect to any series of Securities made in cash plus any unused balance of any
preceding sinking fund payments with respect to Securities of such series made
in cash shall exceed $50,000 (or a lesser sum if the Company shall so request),
unless otherwise provided by the terms of such series of Securities, that cash
shall be applied by the Trustee on the sinking fund Redemption Date with respect
to Securities of such series next following the date of such payment to the
redemption of Securities of such series at the applicable sinking fund
Redemption Price with respect to Securities of such series, together with
accrued interest, if any, to the date fixed for redemption, with the effect
provided in Section 1106. The Trustee shall select, in the manner provided in
Section 1103, for redemption on such sinking fund Redemption Date a sufficient
principal amount of Securities of such series to utilize that cash and shall
thereupon cause notice of redemption of the Securities of
65
<PAGE> 72
such series for the sinking fund to be given in the manner provided in section
1104 (and with the effect provided in Section 1106) for the redemption of
Securities in part at the option of the Company. Any sinking fund moneys not so
applied or allocated by the Trustee to the redemption of Securities of such
series shall be added to the next cash sinking fund payment with respect to
Securities of such series received by the Trustee and, together with such
payment, shall be applied in accordance with the provisions of this Section
1108. Any and all sinking fund moneys with respect to Securities of any series
held by the Trustee at the Maturity of Securities of such series, and not held
for the payment or redemption of particular Securities of such series, shall be
applied by the Trustee, together with other moneys, if necessary, to be
deposited sufficient for the purpose, to the payment of the principal of the
Securities of such series at Maturity.
Prior to each sinking fund Redemption Date provided with respect to
Securities of any series, the Company shall deposit with the Trustee cash in a
sum equal to all accrued interest, if any, to the date fixed for redemption on
Securities to be redeemed on such sinking fund Redemption Date pursuant to this
Section 1108; PROVIDED that such cash shall be so deposited with the Trustee in
time for the Trustee to make the payment of such accrued interest in accordance
with its normal procedures.
66
<PAGE> 73
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed as of the day and year first above written.
THE NEIMAN MARCUS GROUP, INC.
By:
------------------------------------
Name:
Title:
THE BANK OF NEW YORK
as Trustee,
By:
------------------------------------
Name:
Title:
67
<PAGE> 1
Exhibit 5.1
April 10, 1998
The Neiman Marcus Group, Inc.
27 Boylston Street
Chestnut Hill, Massachusetts 02167
Ladies and Gentlemen:
This opinion is furnished to you in connection with a registration
statement on Form S-3 (the "Registration Statement"), filed with the Securities
and Exchange Commission under the Securities Act of 1933, as amended, for the
registration of debt securities (the "Debt Securities") of The Neiman Marcus
Group, Inc., a Delaware corporation (the "Company"), that may be offered and
sold by the Company.
The Registration Statement registers the offer and sale of Debt
Securities having an aggregate public offering price of up to $500 million. The
Debt Securities are to be issued under an Indenture (the "Indenture") between
the Company and The Bank of New York, as trustee (the "Trustee"). Certain terms
of the Debt Securities remain to be fixed in accordance with the resolutions of
the Board of Directors of the Company.
We have acted as counsel for the Company in connection with the
proposed issue and sale of the Debt Securities, and the preparation and filing
of the Registration Statement. For purposes of this opinion, we have examined
and relied upon the information set forth in the Registration Statement and such
other documents, records, certificates and other instruments as we have deemed
necessary.
We express no opinion as to the applicability of, compliance with or
effect of federal law or the law of any jurisdiction other than The Commonwealth
of Massachusetts and the General Corporation Law of the State of Delaware.
Based upon the foregoing, we are of the opinion that:
When the definitive terms of each Debt Security have been determined
and approved by authorized officers of the Company in accordance with the
Indenture and the due authorization thereof by the Board of Directors of the
Company, and such Debt Security has been duly executed and authenticated as
provided in the Indenture and delivered against payment therefor, then, assuming
that the Indenture has been duly authorized, executed and delivered by the
Company and the Trustee thereunder and is the valid and binding obligation of
the Company, such Debt Security will be the valid and legally binding obligation
of the Company and will be entitled to the benefits of the Indenture, subject to
(i) bankruptcy, insolvency, reorganization, moratorium and similar laws
affecting the rights and remedies of creditors and (ii) general principles of
equity, regardless of whether applied in proceedings in equity or law.
<PAGE> 2
We understand that this opinion is to be used in connection with the
Registration Statement. We hereby consent to the filing of this opinion as part
of the Registration Statement and to the use of our name in each related
prospectus under the caption "Legal Matters" or under a similar caption.
It is understood that this opinion is to be used only in connection
with the offer and sale of the Debt Securities while the Registration Statement
is in effect.
Very truly yours,
/s/ Ropes & Gray
Ropes & Gray
<PAGE> 1
EXHIBIT 12.1
COMPUTATION OF RATIO EARNINGS TO FIXED CHARGES
(IN THOUSANDS, EXCEPT RATIOS)
<TABLE>
<CAPTION>
FISCAL YEAR ENDED TWENTY-SIX WEEKS ENDED
JULY 31, JULY 30, JULY 29, AUGUST 3, AUGUST 2, FEB 1, JAN.31,
-------- -------- -------- --------- --------- ---------- -----------
1993 1994 1995 1996 1997 1997(2) 1998(2)
-------- -------- -------- -------- -------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C>
EXCESS OF EARNINGS AVAILABLE TO COVER
FIXED CHARGES
Earnings from continuing operations
before income taxes $115,474 $113,243 $116,094 $131,227 $154,652 $ 95,791 $110,205
Add: Fixed charges 44,519 47,588 51,129 45,845 43,711 22,588 21,025
Less: Capitalized interest (130) (630) (2,091) (1,657) (261) (91) (525)
-------- -------- -------- -------- -------- -------- --------
Earnings, as adjusted 159,863 160,201 165,132 175,415 198,102 118,288 130,705
-------- -------- -------- -------- -------- -------- --------
FIXED CHARGES
Interest expense 29,589 31,878 33,958 28,228 26,330 14,353 11,816
Capitalized interest 130 630 2,091 1,657 261 91 525
Portion of rents representative of the
interest factor (1) 14,800 15,080 15,080 15,960 17,120 8,144 8,684
-------- -------- -------- -------- -------- -------- --------
Fixed charges 44,519 47,588 51,129 45,845 43,711 22,588 21,025
-------- -------- -------- -------- -------- -------- --------
Excess of earnings to fixed charges $115,344 $112,613 $114,003 $129,570 $154,391 $ 95,700 $109,680
======== ======== ======== ======== ======== ======== ========
Ratio of earnings to fixed charges 3.6 3.4 3.2 3.8 4.5 5.2 6.2
</TABLE>
(1) This represents approximately 40% of total rent expense, which
management estimates to be the interest component of such rent expense.
(2) The Company's businesses are seasonal in nature, and historically the
results of operations for these periods have not been indicative of the
results for the full year.
<PAGE> 1
EXHIBIT 23.1
INDEPENDENT AUDITORS' CONSENT
We consent to the incorporation by reference in this Registration
Statement of The Neiman Marcus Group, Inc. on Form S-3 of our reports dated
August 28, 1997, appearing in and incorporated by reference into the Annual
Report on Form 10-K of The Neiman Marcus Group, Inc. for the year ended August
2, 1997 and to the reference to us under the heading "Experts" in the
Prospectus, which is part of this Registration Statement.
Deloitte & Touche LLP
Boston, Massachusetts
April 6, 1998
<PAGE> 1
CONFORMED COPY
================================================================================
FORM T-1
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
STATEMENT OF ELIGIBILITY
UNDER THE TRUST INDENTURE ACT OF 1939 OF A
CORPORATION DESIGNATED TO ACT AS TRUSTEE
CHECK IF AN APPLICATION TO DETERMINE
ELIGIBILITY OF A TRUSTEE PURSUANT TO
SECTION 305(b)(2) |__|
----------------------
THE BANK OF NEW YORK
(Exact name of trustee as specified in its charter)
New York 13-5160382
(State of incorporation (I.R.S. employer
if not a U.S. national bank) identification no.)
48 Wall Street, New York, N.Y. 10286
(Address of principal executive offices) (Zip code)
----------------------
THE NEIMAN MARCUS GROUP, INC.
(Exact name of obligor as specified in its charter)
Delaware 95-4119509
(State or other jurisdiction of (I.R.S. employer
incorporation or organization) identification no.)
27 Boylston Street
Chestnut Hill, Massachusetts 02167
(Address of principal executive offices) (Zip code)
----------------------
Debt Securities
(Title of the indenture securities)
================================================================================
<PAGE> 2
1. GENERAL INFORMATION. FURNISH THE FOLLOWING INFORMATION AS TO THE TRUSTEE:
(A) NAME AND ADDRESS OF EACH EXAMINING OR SUPERVISING AUTHORITY TO WHICH
IT IS SUBJECT.
- --------------------------------------------------------------------------------
Name Address
- --------------------------------------------------------------------------------
Superintendent of Banks of the 2 Rector Street, New York,
State of New York N.Y. 10006, and Albany, N.Y.
12203
Federal Reserve Bank of New York 33 Liberty Plaza, New York,
N.Y. 10045
Federal Deposit Insurance Corporation Washington, D.C. 20429
New York Clearing House Association New York, New York 10005
(B) WHETHER IT IS AUTHORIZED TO EXERCISE CORPORATE TRUST POWERS.
Yes.
2. AFFILIATIONS WITH OBLIGOR.
IF THE OBLIGOR IS AN AFFILIATE OF THE TRUSTEE, DESCRIBE EACH SUCH
AFFILIATION.
None.
16. LIST OF EXHIBITS.
EXHIBITS IDENTIFIED IN PARENTHESES BELOW, ON FILE WITH THE COMMISSION, ARE
INCORPORATED HEREIN BY REFERENCE AS AN EXHIBIT HERETO, PURSUANT TO RULE
7A-29 UNDER THE TRUST INDENTURE ACT OF 1939 (THE "ACT") AND 17 C.F.R.
229.10(D).
1. A copy of the Organization Certificate of The Bank of New York
(formerly Irving Trust Company) as now in effect, which contains the
authority to commence business and a grant of powers to exercise
corporate trust powers. (Exhibit 1 to Amendment No. 1 to Form T-1
filed with Registration Statement No. 33-6215, Exhibits 1a and 1b to
Form T-1 filed with Registration Statement No. 33-21672 and Exhibit
1 to Form T-1 filed with Registration Statement No. 33-29637.)
4. A copy of the existing By-laws of the Trustee. (Exhibit 4 to Form
T-1 filed with Registration Statement No. 33-31019.)
-2-
<PAGE> 3
6. The consent of the Trustee required by Section 321(b) of the Act.
(Exhibit 6 to Form T-1 filed with Registration Statement No.
33-44051.)
7. A copy of the latest report of condition of the Trustee published
pursuant to law or to the requirements of its supervising or
examining authority.
-3-
<PAGE> 4
SIGNATURE
Pursuant to the requirements of the Act, the Trustee, The Bank of New
York, a corporation organized and existing under the laws of the State of New
York, has duly caused this statement of eligibility to be signed on its behalf
by the undersigned, thereunto duly authorized, all in The City of New York, and
State of New York, on the 1st day of April, 1998.
THE BANK OF NEW YORK
By: /s/JAMES W.P. HALL
---------------------------
Name: JAMES W.P. HALL
Title: VICE PRESIDENT
-4-
<PAGE> 5
EXHIBIT 7
- --------------------------------------------------------------------------------
Consolidated Report of Condition of
THE BANK OF NEW YORK
of 48 Wall Street, New York, N.Y. 10286
And Foreign and Domestic Subsidiaries,
a member of the Federal Reserve System, at the close of business September 30,
1997, published in accordance with a call made by the Federal Reserve Bank of
this District pursuant to the provisions of the Federal Reserve Act.
<TABLE>
<CAPTION>
Dollar Amounts
in Thousands
<S> <C>
ASSETS
Cash and balances due from depos-
itory institutions:
Noninterest-bearing balances and
currency and coin ...................................... $ 5,004,638
Interest-bearing balances ................................ 1,271,514
Securities:
Held-to-maturity securities .............................. 1,105,782
Available-for-sale securities ............................ 3,164,271
Federal funds sold and Securities pur-
chased under agreements to
resell ................................................... 5,723,829
Loans and lease financing
receivables:
Loans and leases, net of unearned
income ................................................. 34,916,196
LESS: Allowance for loan and
lease losses ........................................... 581,177
LESS: Allocated transfer risk
reserve ................................................ 429
Loans and leases, net of unearned
income, allowance, and reserve ......................... 34,334,590
Assets held in trading accounts ............................ 2,035,284
Premises and fixed assets (including
capitalized leases) ...................................... 671,664
Other real estate owned .................................... 13,306
Investments in unconsolidated
subsidiaries and associated
companies ................................................ 210,685
Customers' liability to this bank on
acceptances outstanding .................................. 1,463,446
Intangible assets .......................................... 753,190
Other assets ............................................... 1,784,796
-----------
Total assets ............................................... $57,536,995
===========
LIABILITIES
Deposits:
In domestic offices ...................................... $27,270,824
Noninterest-bearing ...................................... 12,160,977
Interest-bearing ......................................... 15,109,847
In foreign offices, Edge and
Agreement subsidiaries, and IBFs ......................... 14,687,806
Noninterest-bearing ...................................... 657,479
Interest-bearing ......................................... 14,030,327
</TABLE>
<PAGE> 6
<TABLE>
<S> <C>
Federal funds purchased and Securities
sold under agreements to repurchase ...................... 1,946,099
Demand notes issued to the U.S. ............................
Treasury ................................................. 283,793
Trading liabilities ........................................ 1,553,539
Other borrowed money:
With remaining maturity of one year
or less ................................................ 2,245,014
With remaining maturity of more than
one year through three years ........................... 0
With remaining maturity of more than
three years ............................................ 45,664
Bank's liability on acceptances exe-
cuted and outstanding .................................... 1,473,588
Subordinated notes and debentures .......................... 1,018,940
Other liabilities .......................................... 2,193,031
-----------
Total liabilities .......................................... 52,718,298
-----------
EQUITY CAPITAL
Common stock ............................................... 1,135,284
Surplus .................................................... 731,319
Undivided profits and capital
reserves ................................................. 2,943,008
Net unrealized holding gains
(losses) on available-for-sale
securities ............................................... 25,428
Cumulative foreign currency transla-
tion adjustments ......................................... (16,342)
-----------
Total equity capital ....................................... 4,818,697
-----------
Total liabilities and equity
capital .................................................. $57,536,995
===========
</TABLE>
I, Robert E. Keilman, Senior Vice President and Comptroller of the
above-named bank do hereby declare that this Report of Condition has been
prepared in conformance with the instructions issued by the Board of Governors
of the Federal Reserve System and is true to the best of my knowledge and
belief.
Robert E. Keilman
We, the undersigned directors, attest to the correctness of this
Report of Condition and declare that it has been examined by us and to the best
of our knowledge and belief has been prepared in conformance with the
instructions issued by the Board of Governors of the Federal Reserve System and
is true and correct.
J. Carter Bacot
Thomas A. Renyi
Alan R. Griffith Directors
- --------------------------------------------------------------------------------
