<PAGE>
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON JUNE 27, 1997
POST-EFFECTIVE AMENDMENT NO. 2 TO REGISTRATION STATEMENT NO.
333-13307 REGISTRATION NO. 333-28649
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------
AMENDMENT NO. 1
TO
FORM S-3
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
--------------
NORTHWEST AIRLINES NORTHWEST AIRLINES,
CORPORATION INC.
(Exact name of Registrants as specified in their charters)
DELAWARE MINNESOTA
(State or other jurisdiction of incorporation or organization)
4512 4512
(Primary Standard Industrial Classification Code Number)
95-4205287 41-0449230
(I.R.S. Employer Identification Number)
--------------
2700 LONE OAK PARKWAY
EAGAN, MINNESOTA 55121
(612) 726-2111
(Address, including zip code, and telephone number, including area code, of
Registrants' principal executive offices)
------------------
DOUGLAS M. STEENLAND, ESQ.
SENIOR VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
NORTHWEST AIRLINES CORPORATION
2700 LONE OAK PARKWAY
EAGAN, MINNESOTA 55121
(612) 726-2111
(Name, address, including zip code, and telephone number, including area code,
of agent for service)
------------------
COPY TO:
WILSON S. NEELY, ESQ.
SIMPSON THACHER & BARTLETT
425 LEXINGTON AVENUE
NEW YORK, NEW YORK 10017-3954
(212) 455-2000
--------------
APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC:
From time to time after the effective date of this registration statement.
If the only securities being registered on this Form are being offered
pursuant to dividend or interest reinvestment plans, please check the following
box. / /
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, as amended, other than securities offered only in connection with dividend
or interest reinvestment plans, please check the following box. /X/
If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, 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. / /
(CONTINUED ON FOLLOWING PAGE)
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
(CONTINUED FROM PREVIOUS PAGE)
Pursuant to Rule 429 of the Rules and Regulations of the Securities and
Exchange Commission under the Securities Act of 1933, as amended, the Forms of
Prospectus included in this Registration Statement also relate to an aggregate
remaining amount of $250,000,000 of the classes of Securities covered by such
Forms of Prospectus previously registered under the Registration Statement on
Form S-3 (File No. 333-13307). A filing fee of $86,206.90 was paid on October 2,
1996 and November 12, 1996 in connection with such remaining amount. This
Registration Statement is a new Registration Statement and also constitutes
Post-Effective Amendment No. 2 to Registration Statement No. 333-13307 and such
Post-Effective Amendment shall hereafter become effective concurrently with the
effectiveness of this Registration Statement and in accordance with Section 8(c)
of the Securities Act of 1933, as amended.
--------------
The Registrants hereby amend this Registration Statement on such date or
dates as may be necessary to delay its effective date until the Registrants
shall file a further amendment which specifically states that this Registration
Statement shall thereafter become effective in accordance with Section 8(a) of
the Securities Act of 1933, as amended, or until the Registration Statement
shall become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
--------------
<PAGE>
EXPLANATORY NOTE
This Registration Statement consists of two separate Prospectuses, covering
securities to be registered as follows:
(1) Debt Securities and Warrants to purchase Debt Securities of Northwest
Airlines, Inc. and Guarantees of such Debt Securities by Northwest
Airlines Corporation; and
(2) Pass Through Certificates of Northwest Airlines, Inc. and related
Guarantees of Northwest Airlines Corporation.
Separate financial statements of Northwest Airlines, Inc. are not being
provided because all of the securities being issued by Northwest Airlines, Inc.
under this Registration Statement are fully and unconditionally guaranteed by
Northwest Airlines Corporation and such separate financial statements are
therefore not deemed material.
<PAGE>
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.
<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 27, 1997
PROSPECTUS
$500,000,000
NORTHWEST AIRLINES, INC.
DEBT SECURITIES AND WARRANTS TO PURCHASE DEBT SECURITIES
-------------
PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST FULLY AND UNCONDITIONALLY
GUARANTEED BY
NORTHWEST AIRLINES CORPORATION
Northwest Airlines, Inc. ("Northwest") may from time to time offer, together
or separately, its debt securities, consisting of debentures, notes and/or other
evidences of indebtedness representing unsecured obligations of Northwest (the
"Debt Securities"), and warrants (the "Warrants") to purchase Debt Securities
(collectively, the "Securities"), in amounts, at prices and on terms to be
determined at the time of offering. The Debt Securities offered pursuant to this
Prospectus may be issued as unsecured and unsubordinated Debt Securities
("Senior Debt Securities") or as unsecured and subordinated Debt Securities
("Senior Subordinated Debt Securities"), in one or more series and, together
with any Warrants, will be limited to $500,000,000 aggregate public offering
price and exercise price (or its equivalent (based on the applicable exchange
rate at the time of sale) in one or more foreign currencies or currency units).
The specific terms of the particular Securities in respect of which this
Prospectus is being delivered (the "Offered Securities") will be set forth in a
supplement to this Prospectus (the "Prospectus Supplement") which will be
delivered together with this Prospectus, including, where applicable, in the
case of Debt Securities, the specific designation (including whether the Offered
Securities are Senior Debt Securities or Senior Subordinated Debt Securities),
aggregate principal amount, the denomination, maturity, premium, if any, the
rate (which may be fixed or variable), time and method of calculating payments
of interest, if any, the place or places where principal of, premium, if any,
and interest, if any, on such Debt Securities will be payable, the currency in
which principal of, premium, if any, and interest, if any, on such Debt
Securities will be payable, any terms of redemption at the option of Northwest
or the holder, any sinking fund provisions, the initial public offering price
and other special terms and, in the case of Warrants, the specific designation,
aggregate number, duration, initial public offering price, exercise price,
currency in which the exercise price is payable, detachability of any Warrants,
description of the Debt Securities for which such Warrants are exercisable,
terms of any mandatory or optional call and other special terms, together with
any other terms in connection with the offering and sale of the Offered
Securities, and the net proceeds to Northwest from such offering. This
Prospectus, together with the Prospectus Supplement relating to any Warrants
that have been issued, may also be delivered in connection with the issuance of
the Debt Securities for which such Warrants are exercised.
The Securities may be denominated in United States dollars or, at the option
of Northwest if so specified in the applicable Prospectus Supplement, in one or
more foreign currencies or currency units. The Debt Securities may be issued in
registered form or bearer form, or both. If so specified in the applicable
Prospectus Supplement, Debt Securities of a series may be issued in whole or in
part in the form of one or more temporary or permanent global securities.
The Senior Debt Securities will rank on a parity with all unsecured and
unsubordinated indebtedness of Northwest, and the Senior Subordinated Debt
Securities will be subordinated in right of payment to all Senior Indebtedness
(as hereinafter defined). See "Description of Securities--Subordination of
Senior Subordinated Debt Securities." The Senior Debt Securities and the Senior
Subordinated Debt Securities will be fully and unconditionally guaranteed (the
"Parent Guaranty") by Northwest Airlines Corporation ("NWA Corp." and, together
with its subsidiaries, the "Company"), the indirect parent of Northwest, on a
senior basis and a senior subordinated basis, respectively.
As of March 31, 1997, Northwest had $2,341.4 million of long-term debt and
capital lease obligations which would rank PARI PASSU in right of payment with
the Senior Debt Securities, of which $1,710.8 million was secured by Northwest's
assets, and no long-term debt or capital lease obligations which would rank
senior in right of payment to the Senior Debt Securities. As of the same date,
Northwest had no long-term debt or capital lease obligations which would rank
PARI PASSU in right of payment with the Senior Subordinated Debt Securities and
$2,341.4 million of long-term debt and capital lease obligations which would
rank senior in right of payment to the Senior Subordinated Debt Securities, of
which $1,710.8 million was secured by Northwest's assets. As of the same date,
NWA Corp. had $900.3 million of long-term debt obligations (consisting entirely
of NWA Corp.'s guarantees of the indebtedness of subsidiaries) which would rank
PARI PASSU in right of payment with the Parent Guaranty of the Senior Debt
Securities, none of which was secured by NWA Corp.'s assets, and which would
rank prior in right of payment to the Parent Guaranty of the Senior Subordinated
Debt Securities. As of such date, NWA Corp. had no obligations which would rank
senior in right of payment to the Parent Guaranty of the Senior Debt Securities
and no obligations which would rank PARI PASSU in right of payment with the
Parent Guaranty of the Senior Subordinated Debt Securities.
------------------
Northwest may sell the Securities to or through underwriters, through
dealers or agents or directly to purchasers. See "Plan of Distribution." The
Prospectus Supplement will set forth the names of any underwriters, dealers or
agents involved in the sale of the Offered Securities in respect of which this
Prospectus is being delivered, the proposed amounts, if any, to be purchased by
underwriters and the compensation, if any, of such underwriters or agents.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF DEBT SECURITIES OR
WARRANTS UNLESS ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
------------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
The date of this Prospectus is , 1997.
<PAGE>
AVAILABLE INFORMATION
NWA Corp. and Northwest together have filed with the Securities and Exchange
Commission (the "Commission") Registration Statements on Form S-3 (together with
all amendments and exhibits, the "Registration Statements") under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to the Securities
offered hereby. This Prospectus does not contain all of the information set
forth in the Registration Statements, certain parts of which are omitted in
accordance with the rules and regulations of the Commission, and to which
reference is hereby made. Statements made in this Prospectus as to the contents
of any contract, agreement or other document referred to are not necessarily
complete. With respect to each such contract, agreement or other document filed
as an exhibit to the Registration Statements, reference is made to the exhibit
for a more complete description of the matter involved.
NWA Corp. is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files periodic reports and other information with the Commission. Such
reports and other information, as well as the Registration Statement, including
exhibits and schedules filed therewith, may be inspected at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, Room 1024, and at the regional offices of the Commission located at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661
and at 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of
such materials may be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
The Commission maintains a Web site (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission. Northwest is not required to file
separate reports, proxy statements or other information with the Commission
pursuant to the requirements of the Exchange Act. Instead, information with
respect to Northwest is provided, to the extent required, in filings made by NWA
Corp.
Separate financial statements of Northwest are not being provided because
all of the securities being issued by Northwest under this prospectus are fully
and unconditionally guaranteed by NWA Corp. and such financial statements are
therefore not deemed material.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of NWA Corp., which have been filed with the
Commission, are hereby incorporated by reference in this Prospectus:
(a) NWA Corp.'s Annual Report on Form 10-K for the fiscal year ended
December 31, 1996; and
(b) NWA Corp.'s Quarterly Report on Form 10-Q for the quarter ended March
31, 1997.
All documents filed by NWA Corp. pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Securities offered hereby shall be deemed
to be incorporated by reference into this Prospectus and to be a part hereof
from the respective dates of filing of 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
modifies or supersedes such statement. Any such statement so modified or
superseded shall not be deemed, except as so modified or superseded, to
constitute a part of this Prospectus. The Exchange Act file number is 0-23642.
NWA Corp. will provide without charge to any person to whom a copy of this
Prospectus has been delivered, upon written or oral request, a copy of any or
all of the foregoing documents incorporated herein by reference (other than
exhibits to such documents). Requests should be directed to the Secretary's
Office, NWA Corp., 5101 Northwest Drive, Dept. A1180, St. Paul, Minnesota
55111-3034, telephone number (612) 726-2111.
2
<PAGE>
THE COMPANY
Northwest, the principal wholly-owned indirect subsidiary of NWA Corp.,
operates the world's fourth largest airline (as measured by 1996 revenue
passenger miles ("RPMs")) and is engaged principally in commercial
transportation of passengers and cargo. Northwest's business focuses on the
development of a global airline network through the optimization of its domestic
hubs at Detroit, Minneapolis/St. Paul and Memphis, an extensive Pacific route
system with hubs at Tokyo and Osaka, and a transatlantic alliance with KLM Royal
Dutch Airlines ("KLM"), which operates a hub through Amsterdam.
Northwest operates substantial domestic and international route networks. As
of December 31, 1996, Northwest directly served more than 150 cities in 18
countries on the continents of North America, Asia and Europe. Northwest had
more than 52 million enplanements and flew over 68 billion RPMs in 1996.
IN JUNE 1997, NORTHWEST ENTERED INTO A MEMORANDUM OF UNDERSTANDING WITH
AVSA, S.A.R.L. FOR THE PURCHASE BY NORTHWEST OF 50 FIRM AND UP TO 100 OPTION
AIRBUS INDUSTRIE A319 AIRCRAFT, WITH DELIVERY SCHEDULED FOR 1999 THROUGH 2003. A
PORTION OF THE AIRCRAFT ARE CONVERTIBLE INTO OTHER AIRBUS A320 FAMILY MODEL
AIRCRAFT. THE MEMORANDUM OF UNDERSTANDING IS SUBJECT TO THE RECEIPT OF ALL
NECESSARY CORPORATE APPROVALS (INCLUDING CORPORATE APPROVALS OF NORTHWEST), THE
SELECTION OF THE ENGINE MANUFACTURER FOR SUCH AIRCRAFT AND THE NEGOTIATION AND
EXECUTION OF DEFINITIVE DOCUMENTATION.
--------------
NWA Corp. was originally formed under the name Wings Holdings Inc. The
Company's principal executive offices are located at 2700 Lone Oak Parkway,
Eagan, Minnesota 55121; its mailing address is 5101 Northwest Drive, St. Paul,
Minnesota 55111-3034 and its telephone number is (612) 726-2111.
USE OF PROCEEDS
Unless otherwise indicated in the applicable Prospectus Supplement, the net
proceeds to Northwest from the sale of the Securities offered hereby will be
added to the working capital of Northwest and will be available for general
corporate purposes, among which may be the repayment of outstanding indebtedness
and financing of capital expenditures. The Company does not currently expect to
discharge any such indebtedness or finance any such capital expenditures with
the proceeds of the sale of Securities offered hereby.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
NWA Corp. and its consolidated subsidiaries for the periods indicated. The ratio
of earnings to fixed charges represents the number of times that fixed charges
were covered by earnings. In computing the ratio, earnings represent
consolidated earnings (loss) before income taxes, cumulative effect of
accounting change and fixed charges (excluding capitalized interest). Fixed
charges consist of interest expense (including capitalized interest), one-third
of rental expense, which is considered representative of the interest factor,
and amortization of debt discount and expense.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31 YEAR ENDED DECEMBER 31
- ------------------------------------------ -----------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
--------- --------- --------- --------- --------- --------- ---------
<C> <C> <C> <C> <S> <C> <C> <C> <C> <C>
1.85 1.67 2.74 1.90 1.88 (a) (a)
</TABLE>
- --------------
(a) Earnings did not cover fixed charges by $121.5 million for the year ended
December 31, 1993 and $1,513.5 million for the year ended December 31, 1992.
Excluding non-recurring special charges of $94.3 million for the year ended
December 31, 1993, and $792.7 million for the year ended December 31, 1992,
earnings did not cover fixed charges by $27.2 million and $720.8 million for
the two periods, respectively.
3
<PAGE>
DESCRIPTION OF DEBT SECURITIES
The Senior Debt Securities are to be issued under an Indenture, dated as of
March 1, 1997, among Northwest, as issuer, NWA Corp., as guarantor, and State
Street Bank and Trust Company, as Trustee (the "Senior Indenture"). The Senior
Subordinated Debt Securities are to be issued under an Indenture, dated as of
June 27, 1997, among Northwest, as issuer, NWA Corp., as guarantor, and State
Street Bank and Trust Company, as Trustee (the "Subordinated Indenture"). The
Senior Indenture and the Subordinated Indenture are referred to herein
individually as an "Indenture" and collectively as the "Indentures." A copy of
the form of each Indenture is filed as an exhibit to the Registration Statement
of which this Prospectus is a part.
A series of Debt Securities may be offered contemporaneously with an
offering of Warrants to purchase an additional portion of such or another series
of Debt Securities. Warrants to purchase a series of Debt Securities may also be
offered independently of any offering of Debt Securities. See "Description of
Warrants." The statements herein relating to the Debt Securities and the
Indentures are summaries and reference is made to the detailed provisions of the
Indentures, including the definitions therein of certain terms capitalized in
this Prospectus. Where no distinction is made between the Senior Debt Securities
and the Senior Subordinated Debt Securities or between the Senior Indenture and
the Subordinated Indenture, such summaries refer to any Debt Securities and
either Indenture. Whenever particular defined terms of the Indentures are
referred to herein or in a Prospectus Supplement, such defined terms are
incorporated herein or therein by reference.
The anticipated market for the Debt Securities and the specific use of
proceeds of an offering of such securities will be set forth in the applicable
Prospectus Supplement.
GENERAL
The Indentures do not limit the aggregate principal amount of Debt
Securities which may be issued thereunder and provide that Debt Securities may
be issued from time to time in one or more series. The Senior Debt Securities
will be unsecured and unsubordinated obligations of Northwest and will rank on a
parity with all other unsecured and unsubordinated indebtedness of Northwest.
The Senior Subordinated Debt Securities will be unsecured obligations of
Northwest and, as set forth below under "Subordination of Senior Subordinated
Debt Securities," will be subordinated in right of payment to all Senior
Indebtedness of Northwest.
Reference is made to the Prospectus Supplement which accompanies this
Prospectus for a description of the specific series of Debt Securities being
offered thereby or, if Warrants are being offered thereby, the Debt Securities
to be issued upon exercise of such Warrants, including: (1) the specific
designation of such Debt Securities, including whether the Debt Securities are
Senior Debt Securities or Senior Subordinated Debt Securities; (2) any limit
upon the aggregate principal amount of such Debt Securities; (3) the date or
dates on which the principal of such Debt Securities will mature or the method
of determining such date or dates; (4) the rate or rates (which may be fixed or
variable) at which such Debt Securities will bear interest, if any, or the
method of calculating such rate or rates; (5) the date or dates from which
interest, if any, will accrue or the method by which such date or dates will be
determined; (6) the date or dates on which interest, if any, will be payable and
the record date or dates therefor; (7) the place or places where principal of,
premium, if any, and interest, if any, on such Debt Securities will be payable;
(8) the period or periods within which, the price or prices at which, the
currency or currencies (including currency units) in which, and the terms and
conditions upon which, such Debt Securities may be redeemed, in whole or in
part, at the option of Northwest; (9) the obligation, if any, of Northwest to
redeem or purchase such Debt Securities pursuant to any sinking fund or
analogous provisions, upon the happening of specified events, or at the option
of a holder thereof and the period or periods within which, the price or prices
at which and the terms and conditions upon which, such Debt Securities shall be
redeemed or purchased, in whole or in part, pursuant to such obligations;
4
<PAGE>
(10) the denominations in which such Debt Securities are authorized to be
issued; (11) the currency or currency units for which Debt Securities may be
purchased or in which Debt Securities may be denominated and/or the currency or
currency units in which principal of, premium, if any, and/or interest, if any,
on such Debt Securities will be payable or redeemable and whether Northwest or
the holders of any such Debt Securities may elect to receive payments in respect
of such Debt Securities in a currency or currency units other than that in which
such Debt Securities are stated to be payable or redeemable; (12) if other than
the principal amount thereof, the portion of the principal amount of such Debt
Securities which will be payable upon declaration of the acceleration of the
maturity thereof or the method by which such portion shall be determined; (13)
the person to whom any interest on any such Debt Security shall be payable if
other than the person in whose name such Debt Security is registered on the
applicable record date; (14) any addition to, or modification or deletion of,
any Event of Default or any covenant of Northwest or NWA Corp. specified in the
Indenture with respect to such Debt Securities; (15) the application, if any, of
such means of defeasance or covenant defeasance as may be specified for such
Debt Securities and coupons; (16) whether such Debt Securities are to be issued
in whole or in part in the form of one or more temporary or permanent global
securities and, if so, the identity of the depositary for such global security
or securities; (17) the terms and conditions relating to Warrants issued by
Northwest in connection with or for the purchase of such Debt Securities; (18)
any index used to determine the amount of payments of principal of (and premium,
if any) and interest, if any, on such Debt Securities; (19) any provisions
relating to the exchange of such Debt Securities; and (20) any other special
terms pertaining to such Debt Securities. Unless otherwise specified in the
applicable Prospectus Supplement, the Debt Securities will not be listed on any
securities exchange.
Unless otherwise specified in the applicable Prospectus Supplement, Debt
Securities will be issued in fully registered form without coupons. Where Debt
Securities of any series are issued in bearer form, the special restrictions and
considerations, including special offering restrictions and special Federal
income tax considerations, applicable to any such Debt Securities and to payment
on and transfer and exchange of such Debt Securities will be described in the
applicable Prospectus Supplement. Bearer Debt Securities will be transferable by
delivery.
Debt Securities may be sold at a substantial discount below their stated
principal amount, bearing no interest or interest at a rate which at the time of
issuance is below market rates. Certain Federal income tax consequences and
special considerations applicable to any such Debt Securities will be described
in the applicable Prospectus Supplement.
If the purchase price of any Debt Securities is payable in one or more
foreign currencies or currency units or if any Debt Securities are denominated
in one or more foreign currencies or currency units or if the principal of,
premium, if any, or interest, if any, on any Debt Securities is payable in one
or more foreign currencies or currency units, the restrictions, elections,
certain Federal income tax considerations, specific terms and other information
with respect to such issue of Debt Securities and such foreign currency or
currency units will be set forth in the applicable Prospectus Supplement.
DENOMINATIONS, PAYMENT, REGISTRATION, TRANSFER AND EXCHANGE
Registered Securities will be issuable in denominations of $1,000 and
integral multiples of $1,000, and Bearer Securities will be issuable in the
denomination of $5,000 or, in each case, in such other denominations and
currencies as may be in the terms of the Debt Securities of any particular
series. Unless otherwise provided in the applicable Prospectus Supplement,
payments in respect of the Debt Securities will be made, subject to any
applicable laws and regulations, in the designated currency at the office or
agency of Northwest maintained for that purpose as Northwest may designate from
time to time, except that, at the option of Northwest, interest payments, if
any, on Debt Securities in registered form may be made (i) by checks mailed by
the Trustee to the holders of Debt Securities entitled thereto at their
registered addresses or (ii) by wire transfer to an account maintained by the
Person entitled thereto as specified in the Register. Unless otherwise indicated
in an applicable Prospectus Supplement, payment
5
<PAGE>
of any installment of interest on Debt Securities in registered form will be
made to the Person in whose name such Debt Security is registered at the close
of business on the regular record date for such interest.
Payment in respect of Debt Securities in bearer form will be payable in the
currency and in the manner designated in the applicable Prospectus Supplement,
subject to any applicable laws and regulations, at such paying agencies outside
the United States as Northwest may appoint from time to time. The paying agents
outside the United States, if any, initially appointed by Northwest for a series
of Debt Securities will be named in the applicable Prospectus Supplement.
Northwest may at any time designate additional Paying Agents or rescind the
designation of any paying agents, except that, if Debt Securities of a series
are issuable as Registered Securities, Northwest will be required to maintain at
least one paying agent in each Place of Payment for such series and, if Debt
Securities of a series are issuable as Bearer Securities, Northwest will be
required to maintain a Paying Agent in a Place of Payment outside the United
States where Debt Securities of such series and any coupons appertaining thereto
may be presented and surrendered for payment. Northwest will have the right to
require a holder of any Debt Security, in connection with the payment of the
principal of, premium, if any, and interest, if any, on such Debt Security, to
certify information to Northwest or, in the absence of such certification,
Northwest will be entitled to rely on any legal presumption to enable Northwest
to determine its duties and liabilities, if any, to deduct or withhold taxes,
assessments or governmental charges from such payment.
Unless otherwise provided in the applicable Prospectus Supplement, Debt
Securities in registered form will be transferable or exchangeable at the agency
of Northwest maintained for such purpose as designated by Northwest from time to
time. Debt Securities may be transferred or exchanged without service charge,
other than any tax or other governmental charge imposed in connection therewith.
In the event of any redemption in part, Northwest shall not be required to
(i) issue, register the transfer of or exchange Debt Securities of any series
during a period beginning at the opening of business 15 days before any
selection of Debt Securities of that series to be redeemed and ending at the
close of business on (A) if Debt Securities of the series are issuable only as
Registered Securities, the day of mailing of the relevant notice of redemption
and (B) if Debt Securities of the series are issuable as Bearer Securities, the
day of the first publication of the relevant notice of redemption or, if Debt
Securities of the series are also issuable as Registered Securities and there is
no publication, the mailing of the relevant notice of redemption; (ii) register
the transfer of or exchange any Registered Securities, or portion thereof,
called for redemption or otherwise surrendered for repayment, except the
unredeemed or unrepaid portion of any Registered Security being redeemed or
repaid in part; or (iii) exchange any Bearer Security called for redemption,
except to exchange such Bearer Security for a Registered Security of that series
and like tenor which is immediately surrendered for redemption.
SUBORDINATION OF SENIOR SUBORDINATED DEBT SECURITIES
The obligation of Northwest to make payment on account of the principal of,
premium, if any, and interest, if any, on the Senior Subordinated Debt
Securities will be subordinated and junior in right of payment, as set forth in
the Subordinated Indenture, to the prior payment in full of all Senior
Indebtedness of Northwest. The Senior Subordinated Debt Securities will rank
PARI PASSU with any future Indebtedness of Northwest which by its terms states
that it will rank PARI PASSU with the Senior Subordinated Debt Securities. The
Senior Subordinated Debt Securities will rank senior to all other existing and
future subordinated Indebtedness or other subordinated obligations of Northwest.
Notwithstanding the foregoing, payment from the money or the proceeds of U.S.
Government Obligations held in any defeasance trust described under "Defeasance"
below is not subordinate to any Senior Indebtedness or subject to the
restrictions described herein.
6
<PAGE>
Unless otherwise provided in the applicable Prospectus Supplement with
respect to an issue of Senior Subordinated Debt Securities, in the event of any
insolvency or bankruptcy case or proceeding, or any receivership, liquidation,
reorganization or other similar case or proceeding in connection therewith,
relating to Northwest or its assets, or any liquidation, dissolution or other
winding-up of Northwest, whether voluntary or involuntary, or any assignment for
the benefit of creditors or other marshalling of assets or liabilities of
Northwest, all Senior Indebtedness of Northwest must be paid in full or such
payment must be provided for before any payment or distribution (excluding the
distribution of certain permitted equity or subordinated securities) is made on
account of the principal, premium, if any, sinking fund, if any, or interest, if
any, on any Senior Subordinated Debt Securities.
Unless otherwise provided for in the applicable Prospectus Supplement, for
purposes of the Senior Subordinated Indenture, "Senior Indebtedness" of
Northwest means all Indebtedness of Northwest (other than the Senior
Subordinated Debt Securities) unless such Indebtedness, by its terms or the
terms of the instrument creating or evidencing it, is subordinate in right of
payment to or PARI PASSU with the Senior Subordinated Debt Securities; PROVIDED,
HOWEVER, that such Senior Indebtedness does not include (x) any Indebtedness,
guarantee or other obligation of Northwest that is subordinate or junior in any
respect to any other Indebtedness of Northwest or (y) any Indebtedness of
Northwest to any of its Subsidiaries or to any Person of which Northwest is a
Subsidiary. "Indebtedness" of any Person means, without duplication, the
principal of, premium, if any, and accrued and unpaid interest (including post-
petition interest, whether or not allowable as a claim in bankruptcy) on (i)
indebtedness of such Person for money borrowed, (ii) guarantees by such Person
of indebtedness for money borrowed by any other Person, (iii) indebtedness
evidenced by notes, debentures, bonds or other instruments of indebtedness for
payment of which such Person is responsible or liable, (iv) obligations for the
reimbursement of any obligor on any letter of credit, bankers' acceptance or
similar credit transaction, (v) obligations of such Person under Capital Leases,
(vi) commitment and other bank financing fees under contractual obligations
associated with bank debt, (vii) any indebtedness representing the deferred and
unpaid purchase price of any property or business, and (viii) all deferrals,
renewals, extensions and refundings of any such indebtedness or obligations;
PROVIDED, HOWEVER, that Indebtedness shall not include amounts owed to trade
creditors in the ordinary course of business or nonrecourse indebtedness secured
by real property.
No payment on account of principal of, premium, if any, or interest on the
Senior Subordinated Debt Securities or deposit pursuant to the provisions
described under "Defeasance" below may be made if (i) any Senior Indebtedness is
not paid when due (following the expiration of any applicable grace period) or
(ii) any other default on Senior Indebtedness occurs and the maturity of any
Senior Indebtedness is accelerated in accordance with its terms unless, in
either case, (a) such failure to pay or acceleration relates to Senior
Indebtedness in an aggregate amount equal to or less than $20 million, (b) the
default has been cured or waived or has ceased to exist, (c) such acceleration
has been rescinded, or (d) such Senior Indebtedness has been paid in full. A
failure to make any payment with respect to the Senior Subordinated Debt
Securities as a result of the foregoing provisions or any other provisions
contained in the applicable Prospectus Supplement will not limit the right of
the holders of the Senior Subordinated Debt Securities to accelerate the
maturity thereof as a result of such payment default.
In addition, the applicable Prospectus Supplement may provide that no
payment on account of the Senior Subordinate Debt Securities offered thereby
shall be made during the continuance of certain defaults with respect to the
Senior Indebtedness or certain designated Senior Indebtedness of Northwest.
In the event that, notwithstanding the foregoing, any payment or
distribution of assets (excluding the distribution of certain permitted equity
or subordinated securities) of Northwest is received by the Senior Subordinated
Trustee or the holders of any of the Senior Subordinated Debt Securities, as the
case may be, under the circumstances described above and before all Senior
Indebtedness is paid in
7
<PAGE>
full, such payment or distribution will be paid over to the holders of such
Senior Indebtedness or on their behalf for application to the payment of all
such Senior Indebtedness remaining unpaid until all such Senior Indebtedness has
been paid in full or such payment provided for, after giving effect to any
concurrent payment or distribution to the holders of such Senior Indebtedness.
Upon any distribution of the assets of Northwest upon any dissolution, total
or partial liquidation or reorganization of or similar proceeding relating to
Northwest, the holders of Senior Indebtedness will be entitled to receive
payment in full before the holders of the Senior Subordinated Debt Securities
are entitled to receive any payment. By reason of such subordination, in the
event of insolvency, creditors of Northwest who are holders of Senior
Indebtedness or of other unsubordinated Indebtedness may recover more, ratably,
than the holders of the Senior Subordinated Debt Securities.
If this Prospectus is being delivered in connection with the offering of a
series of Senior Subordinated Debt Securities, the accompanying Prospectus
Supplement or the information incorporated by reference herein will set forth
the definition of Senior Indebtedness applicable thereto and the approximate
amount of such Senior Indebtedness outstanding as of a recent date.
THE PARENT GUARANTY
NWA Corp. will unconditionally guarantee, pursuant to Indentures, the due
and punctual payment of the principal of, premium, if any, and interest on the
Debt Securities when the same shall become due, whether by acceleration or
otherwise. The Parent Guaranty will be enforceable without any need first to
enforce Debt Securities against Northwest. The Parent Guaranty of the Senior
Subordinated Debt Securities will be subordinated and junior in right of
payment, as set forth in the Senior Subordinated Debt Securities Indenture, to
the prior payment in full of all Senior Indebtedness of NWA Corp. The terms of
such subordination will parallel the subordination terms applicable to the
Senior Subordinated Debt Securities as set forth above under "Subordination of
Senior Subordinated Debt Securities," except that, for purposes of the Parent
Guaranty, Senior Indebtedness of NWA Corp. means all Indebtedness of NWA Corp.
(other than the Parent Guaranty) unless such Indebtedness, by its terms or by
the terms of the instrument creating or evidencing it, is subordinate in right
of payment to or PARI PASSU with the Parent Guaranty; PROVIDED, HOWEVER, that
such Senior Indebtedness does not include any Indebtedness of NWA Corp. to any
of its subsidiaries. The Parent Guaranty of the Senior Subordinated Debt
Securities will rank PARI PASSU with any future Indebtedness of NWA Corp. which
by its terms states that it will rank PARI PASSU with the Parent Guaranty of the
Senior Subordinated Debt Securities. The Parent Guaranty of the Senior
Subordinated Debt Securities will rank senior to all other existing and future
subordinated Indebtedness or other subordinated obligations of NWA Corp.
GLOBAL DEBT SECURITIES
The Debt Securities of a series may be issued in whole or in part in the
form of one or more fully registered global securities (a "Registered Global
Security") that will be deposited with a depositary (the "Depositary") or with a
nominee for the Depositary identified in the applicable Prospectus Supplement.
In such a case, one or more Registered Global Securities will be issued in a
denomination or aggregate denominations equal to the portion of the aggregate
principal amount of outstanding Debt Securities of the series to be represented
by such Registered Global Security or Securities. Unless and until it is
exchanged in whole or in part for Debt Securities in definitive certificated
form, a Registered Global Security may not be registered for transfer or
exchange except as a whole by the Depositary for such Registered Global Security
to a nominee of such Depositary or by a nominee of such Depositary to such
Depositary or another nominee of such Depositary or by such Depositary or any
such nominee to a successor Depositary for such series or a nominee of such
successor Depositary and except in the circumstances described in the applicable
Prospectus Supplement.
8
<PAGE>
The specific terms of the depositary arrangement with respect to any portion
of a series of Debt Securities to be represented by a Registered Global Security
will be described in the applicable Prospectus Supplement. Northwest expects
that the following provisions will apply to depositary arrangements.
Upon the issuance of any Registered Global Security, and the deposit of such
Registered Global Security with or on behalf of the Depositary for such
Registered Global Security, the Depositary will credit, on its book-entry
registration and transfer system, the respective principal amounts of the Debt
Securities represented by such Registered Global Security to the accounts of
institutions ("participants") that have accounts with the Depositary or its
nominee. The accounts to be credited will be designated by the underwriters or
agents engaging in the distribution of such Debt Securities or by Northwest, if
such Debt Securities are offered and sold directly by Northwest. Ownership of
beneficial interests in a Registered Global Security will be limited to
participants or persons that may hold interests through participants. Ownership
of beneficial interests by participants in such Registered Global Security will
be shown on, and the transfer of that ownership interest will be effected only
through, records maintained by the Depositary for such Registered Global
Security or by its nominee. Ownership of beneficial interests in such Registered
Global Security by persons that hold through participants will be shown on, and
the transfer of that ownership interest within such participant will be effected
only through, records maintained by such participant. The laws of some
jurisdictions require that certain purchasers of securities take physical
delivery of such securities in certificated form. The foregoing limitations and
such laws may impair the ability to transfer beneficial interests in such
Registered Global Securities.
So long as the Depositary for a Registered Global Security, or its nominee,
is the registered owner of such Registered Global Security, such Depositary or
such nominee, as the case may be, will be considered the sole owner or holder of
the Debt Securities represented by such Registered Global Security for all
purposes under the Indentures. Unless otherwise specified in the applicable
Prospectus Supplement and except as specified below, owners of beneficial
interests in such Registered Global Security will not be entitled to have Debt
Securities of the series represented by such Registered Global Security
registered in their names, will not receive or be entitled to receive physical
delivery of Debt Securities of such series in certificated form and will not be
considered the holders thereof for any purposes under the Indentures.
Accordingly, each person owning a beneficial interest in such Registered Global
Security must rely on the procedures of the Depositary and, if such person is
not a participant, on the procedures of the participant through which such
person owns its interest, to exercise any rights of a holder under the
Indentures. The Depositary may grant proxies and otherwise authorize
participants to give or take any request, demand, authorization, direction,
notice, consent, waiver or other action which a holder is entitled to give or
take under the Indentures. Northwest understands that, under existing industry
practices, if Northwest requests any action of holders or an owner of a
beneficial interest in which Registered Global Security desires to give any
notice or take any action a holder is entitled to give or take under the
Indentures, the Depositary would authorize the participants to give such notice
or take such action, and participants would authorize beneficial owners owning
through such participants to give such notice or take such action or would
otherwise act upon the instructions of beneficial owners owning through them.
Unless otherwise specified in the applicable Prospectus Supplement, payments
with respect to principal, premium, if any, and interest, if any, on Debt
Securities represented by a Registered Global Security registered in the name of
a Depositary or its nominee will be made to such Depositary or its nominee, as
the case may be, as the registered owner of such Registered Global Security.
Northwest expects that the Depositary for any Debt Securities represented by
a Registered Global Security, upon receipt of any payment of principal, premium
or interest, will immediately credit participants' accounts with payments in
amounts proportionate to their respective beneficial interests in the principal
amount of such Registered Global Security as shown on the records of such
Depositary.
9
<PAGE>
Northwest also expects that payments by participants to owners of beneficial
interests in such Registered Global Security held through such participants will
be governed by standing instructions and customary practices, as is now the case
with the securities held for the accounts of customers registered in "street
names," and will be the responsibility of such participants. None of Northwest,
NWA Corp., the Trustee or any agent of Northwest shall have any responsibility
or liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests of a Registered Global Security, or
for maintaining, supervising or reviewing any records relating to such
beneficial ownership interests.
Unless otherwise specified in the applicable Prospectus Supplement, if the
Depositary for any Debt Securities represented by a Registered Global Security
is at any time unwilling or unable to continue as Depositary and a successor
Depositary is not appointed by Northwest within ninety days, Northwest will
issue such Debt Securities in definitive certificated form in exchange for such
Registered Global Security. In addition, Northwest may at any time and in its
sole discretion determine not to have any of the Debt Securities of a series
represented by one or more Registered Global Securities and, in such event, will
issue Debt Securities of such series in definitive certificated form in exchange
for all of the Registered Global Securities representing such Debt Securities.
Further, if Northwest so specifies with respect to the Debt Securities of a
series, an owner of a beneficial interest in a Registered Global Security
representing Debt Securities of such series may, on terms acceptable to
Northwest and the Depositary for such Registered Global Security, receive Debt
Securities of such series in definitive form registered in the name of such
beneficial owner or its designee.
CONSOLIDATION, MERGER OR SALE BY NORTHWEST OR NWA CORP.
Each Indenture provides that neither Northwest nor NWA Corp. may merge or
consolidate with or into any other corporation or sell, convey, transfer, lease
or otherwise dispose of all or substantially all of its assets to any Person,
unless (i) (a) in the case of a merger or consolidation, Northwest or NWA Corp.
is the surviving corporation, as the case may be, or (b) in the case of a merger
or consolidation where Northwest or NWA Corp. is not the surviving corporation
and in the case of such a sale, conveyance or other disposition, the resulting,
successor or acquiring Person is a corporation organized and existing under the
laws of the United States of America or a State thereof or the District of
Columbia and such corporation expressly assumes by supplemental indenture all
the obligations of Northwest under the Debt Securities and any coupons
appertaining thereto (or of NWA Corp. under the Parent Guaranty, as the case may
be) and the obligations of Northwest or NWA Corp., as the case may be, under the
Indentures, (ii) immediately after giving effect to such merger or
consolidation, or such sale, conveyance, transfer, lease or other disposition
(including, without limitation, any Debt directly or indirectly incurred or
anticipated to be incurred in connection with or in respect of such
transaction), no Default or Event of Default shall have occurred and be
continuing and (iii) certain other conditions are met. In the event a successor
corporation assumes the obligations of Northwest or NWA Corp., as the case may
be, such successor corporation shall succeed to and be substituted for Northwest
or NWA Corp. as the case may be, under the Indentures and under the Debt
Securities and any coupons appertaining thereto and all obligations of Northwest
or NWA Corp., as the case may be, shall terminate. In the event of any such
permitted consolidation, merger, sale, conveyance, disposition or other change
of control transaction (including a highly leveraged transaction), the holders
of the Debt Securities will not have the right to require redemption thereof or
similar rights unless otherwise provided in the applicable Prospectus
Supplement.
EVENTS OF DEFAULT, NOTICE AND CERTAIN RIGHTS ON DEFAULT
Events of Default with respect to Debt Securities of any series issued
thereunder are defined in the Indentures as being: default for thirty days in
payment of any interest on any Debt Security of that series or any coupon
appertaining thereto or any additional amount payable with respect to Debt
Securities of
10
<PAGE>
such series as specified in the applicable Prospectus Supplement when due;
default in payment of principal, premium, if any, or on redemption or otherwise,
or in the making of a mandatory sinking fund payment of any Debt Securities of
that series when due; default for sixty days after notice to Northwest and NWA
Corp. by the Trustee, or to Northwest, NWA Corp. and the Trustee by the holders
of 25% in aggregate principal amount of the Debt Securities of such series then
outstanding, in the performance of any other agreement applicable to the Debt
Securities of that series, in the Indenture or in any supplemental indenture or
board resolution referred to therein under which the Debt Securities of that
series may have been issued; and certain events of bankruptcy, insolvency or
reorganization of Northwest or NWA Corp. Any other Events of Default applicable
to a specified series of Debt Securities will be described in the applicable
Prospectus Supplement. An Event of Default with respect to a particular series
of Debt Securities will not necessarily be an Event of Default with respect to
any other series of Debt Securities.
The Indentures provide that, if an Event of Default specified therein occurs
with respect to the Debt Securities of any series issued thereunder and is
continuing, the Trustee for such series or the holders of 25% in aggregate
principal amount of all of the outstanding Debt Securities of that series, by
written notice to Northwest and NWA Corp. (and to the Trustee for such series,
if notice is given by such holders of Debt Securities), may declare the
principal (or, if the Debt Securities of that series are original issue discount
Debt Securities or indexed Debt Securities, such portion of the principal amount
specified in the applicable Prospectus Supplement) of all the Debt Securities of
that series to be due and payable.
The Indentures provide that the Trustee for any series of Debt Securities
shall, within ninety days after the occurrence of a Default known to it with
respect to Debt Securities of that series, give to the holders of the Debt
Securities of that series notice of all such uncured Defaults; PROVIDED, that
such notice shall not be given until 60 days after the occurrence of a Default
with respect to Debt Securities of that series involving a failure to perform a
covenant other than the obligation to pay principal, premium, if any, or
interest or make a mandatory sinking fund payment; and PROVIDED FURTHER, that,
except in the case of default in payment on the Debt Securities of that series,
the Trustee may withhold the notice if and so long as a committee of its
Responsible Officers (as defined therein) in good faith determines that
withholding such notice is in the interest of the holders of the Debt Securities
of that series. "Default" means any event which is, or, after notice or passage
of time or both, would be, an Event of Default.
The Indentures provide that the Trustee will be under no obligation to
exercise any of its rights or powers under such Indenture at the request or
direction of any of the Holders, unless such Holders shall have offered to the
Trustee reasonable indemnity. Subject to such provisions for indemnification of
the Trustee, the Indentures provide that the holders of not less than a majority
in aggregate principal amount of the Debt Securities of each series affected
(with each such series voting as a class) may direct the time, method and place
of conducting any proceeding for any remedy available to the Trustee for such
series, or exercising any trust or power conferred on such Trustee.
The Indentures include a covenant that Northwest will file annually with the
Trustee a certificate as to Northwest's compliance with all conditions and
covenants of the applicable Indenture.
The holders of not less than a majority in aggregate principal amount of any
series of Debt Securities by notice to the Trustee for such series may waive, on
behalf of the holders of all Debt Securities of such series, any past Default or
Event of Default with respect to that series and its consequences, and may
rescind and annul a declaration of acceleration with respect to that series
(unless a judgment or decree based on such acceleration has been obtained and
entered), except a Default or Event of Default in the payment of the principal
of, premium, if any, or interest, if any, on any Debt Security (and any
acceleration resulting therefrom) and certain other defaults.
11
<PAGE>
MODIFICATION OF THE INDENTURES
The Indentures contain provisions permitting Northwest, NWA Corp. and the
Trustee to enter into one or more supplemental indentures without the consent of
the holders of any of the Debt Securities in order (i) to evidence the
succession of another corporation to Northwest or NWA Corp. and the assumption
of the covenants of Northwest or NWA Corp. by a successor; (ii) to add to the
covenants of Northwest or NWA Corp. or surrender any right or power of Northwest
or NWA Corp. and to make the occurrence, or the occurrence and continuance, of a
default in any of such additional covenants, restrictions or conditions a
Default or an Event of Default permitting the enforcement of all or any of the
several remedies provided in this Indenture as herein set forth; provided,
however, that in respect of any such additional covenant, restriction or
condition such supplemental indenture may provide for a particular period of
grace after default (which period may be shorter or longer than that allowed in
the case of other defaults) or may provided for an immediate enforcement upon
such default or may limit the remedies available to the Trustee upon such
default; (iii) to add additional Events of Default with respect to any series;
(iv) to add or change any provisions to such extent as necessary to permit or
facilitate the issuance of Debt Securities in bearer form or in global form; (v)
under certain circumstances to add to, change or eliminate any provision
affecting Debt Securities not yet issued; (vi) to secure the Debt Securities;
(vii) to add to the conditions, limitations and restrictions on the authorized
amount, terms or purposes of issue, authentication and delivery of Securities,
as herein set forth, other conditions, limitations and restrictions thereafter
to be observed; (viii) to establish the form or terms of Debt Securities; (ix)
to evidence and provide for successor Trustees; (x) if allowed without penalty
under applicable laws and regulations, to permit payment in respect of Debt
Securities in bearer form in the United States; (xi) to correct or supplement
any inconsistent provisions or to make any other provisions with respect to
matters or questions arising under the Indentures, PROVIDED that such action
does not adversely affect the interests of any holder of Debt Securities of any
series issued under such Indentures in any material respect; (xii) to cure any
ambiguity or correct any mistake; or (xiii) to supplement any of the provisions
of the Indentures to such extent as shall be necessary to permit or facilitate
the defeasance and discharge of any series of Debt Security; provided that any
such action shall not adversely affect the interests of the Holders of any such
series or any other series of Debt Securities or any related coupons in any
material respect.
The Indentures also contain provisions permitting Northwest, NWA Corp. and
the Trustee, with the consent of the holders of a majority in aggregate
principal amount of the outstanding Debt Securities of each series affected by
such supplemental indenture, to execute supplemental indentures adding any
provisions to or changing or eliminating any of the provisions of the Indentures
or any supplemental indenture or modifying the rights of the holders of Debt
Securities of such series, except that no such supplemental indenture may,
without the consent of the holder of each Debt Security so affected, (i) change
the time for payment of principal or interest on any Debt Security; (ii) reduce
the principal of, or any installment of principal of, or interest on any Debt
Security; (iii) reduce the amount of premium, if any, payable upon the
redemption of any Debt Security; (iv) reduce the amount of principal payable
upon acceleration of the maturity of an Original Issue Discount Debt Security;
(v) change the coin or currency in which any Debt Security or any premium or
interest thereon is payable; (vi) impair the right to institute suit for the
enforcement of any payment on or with respect to any Debt Security; (vii) reduce
the percentage in principal amount of the outstanding Debt Securities of any
series the consent of whose holders is required for modification or amendment of
the Indentures or for waiver of compliance with certain provisions of the
Indentures or for waiver of certain defaults; (viii) change the obligation of
Northwest to maintain an office or agency in the places and for the purposes
specified in the Indentures; (ix) modify the obligations of NWA Corp. to make
payment under the Parent Guaranty; or (x) modify any of the foregoing
provisions.
12
<PAGE>
DEFEASANCE
If indicated in the applicable Prospectus Supplement, Northwest may elect
either (i) to defease and be discharged from any and all obligations with
respect to the Debt Securities of or within any series (except as described
below) ("defeasance") or (ii) to be released from its obligations with respect
to certain covenants applicable to the Debt Securities of or within any series
("covenant defeasance"), upon the deposit with the Trustee for such series (or
other qualifying trustee), in trust for such purpose, of money and/or Government
Obligations which through the payment of principal and interest in accordance
with their terms will provide money in the amount sufficient to pay the
principal of, premium, if any, and interest on such Debt Securities to Maturity
or redemption, as the case may be, and any mandatory sinking fund or analogous
payments thereon. Upon the occurrence of a defeasance, Northwest will be deemed
to have paid and discharged the entire indebtedness represented by such Debt
Securities and any coupons appertaining thereto and to have satisfied all of its
other obligations under such Debt Securities and any coupons appertaining
thereto (except for (i) the rights of holders of such Debt Securities to
receive, solely from the trust funds deposited to defease such Debt Securities,
payments in respect of the principal of, premium, if any, and interest, if any,
on such Debt Securities or any coupons appertaining thereto when such payments
are due and (ii) certain other obligations as provided in the Indentures). Upon
the occurrence of a covenant defeasance, Northwest will be released only from
its obligations to comply with certain covenants contained in the Indenture
relating to such Debt Securities, will continue to be obligated in all other
respects under such Debt Securities and will continue to be contingently liable
with respect to the payment of principal, interest, if any, and premium, if any,
with respect to such Debt Securities.
Unless otherwise specified in the applicable Prospectus Supplement and
except as described below, the conditions to both defeasance and covenant
defeasance are as follows: (i) such defeasance or covenant defeasance must not
result in a breach or violation of, or constitute a Default or Event of Default
under, the applicable Indenture, or result in a breach or violation of, or
constitute a default under, any other material agreement or instrument of
Northwest or NWA Corp.; (ii) certain bankruptcy related Defaults or Events of
Default with respect to Northwest or NWA Corp. must not have occurred and be
continuing during the period commencing on the date of the deposit of the trust
funds to defease such Debt Securities and ending on the 91st day after such
date; (iii) Northwest must deliver to the Trustee an Opinion of Counsel to the
effect that the holders of such Debt Securities will not recognize income, gain
or loss for Federal income tax purposes as a result of such defeasance or
covenant defeasance and will be subject to Federal income tax on the same
amounts and in the same manner and at all the same times as would have been the
case if such defeasance or covenant defeasance had not occurred (such Opinion of
Counsel, in the case of defeasance, must refer to and be based upon a ruling of
the Internal Revenue Service or a change in applicable Federal income tax law
occurring after the date of the Indentures); (iv) Northwest must deliver to the
Trustee an Officers' Certificate and an Opinion of Counsel with respect to
compliance with the conditions precedent to such defeasance or covenant
defeasance and with respect to certain registration requirements under the
Investment Company Act of 1940, as amended; and (v) any additional conditions to
such defeasance or covenant defeasance which may be imposed on Northwest
pursuant to the applicable Indenture. The Indentures require that a nationally
recognized firm of independent public accountants deliver to the Trustee a
written certification as to the sufficiency of the trust funds deposited for the
defeasance or covenant defeasance of such Debt Securities. The Indentures do not
provide the holders of such Debt Securities with recourse against such firm. If
indicated in the applicable Prospectus Supplement, in addition to obligations of
the United States or an agency or instrumentality thereof, Government
Obligations may include obligations of the government or any agency or
instrumentality of the government issuing the currency in which Debt Securities
of such series are payable. In the event that Government Obligations deposited
with the Trustee for the defeasance of such Debt Securities decrease in value or
default subsequent to their being deposited, Northwest will have no further
obligation, and the holders of such Debt Securities will have no additional
recourse against Northwest, as a result of such decrease in value or default. As
described
13
<PAGE>
above, in the event of a covenant defeasance, Northwest remains contingently
liable with respect to the payment of principal, interest, if any, and premium,
if any, with respect to the Debt Securities.
Northwest may exercise its defeasance option with respect to such Debt
Securities notwithstanding its prior exercise of its covenant defeasance option.
If Northwest exercises its defeasance option, payment of such Debt Securities
may not be accelerated because of a Default or an Event of Default. If Northwest
exercises its covenant defeasance option, payment of such Debt Securities may
not be accelerated by reason of a Default or an Event of Default with respect to
the covenants to which such covenant defeasance is applicable. However, if such
acceleration were to occur, the realizable value at the acceleration date of the
money and Government Obligations in the defeasance trust could be less than the
principal and interest then due on such Debt Securities, in that the required
deposit in the defeasance trust is based upon scheduled cash flow rather than
market value, which will vary depending upon interest rates and other factors.
The applicable Prospectus Supplement may further describe the provisions, if
any, applicable to defeasance or covenant defeasance with respect to Debt
Securities of a particular series.
THE TRUSTEE
State Street Bank and Trust Company is the Trustee under the Indentures.
Northwest and NWA Corp. also maintain banking and other commercial relationships
with State Street Bank and Trust Company and its affiliates in the ordinary
course of business and State Street Bank and Trust Company acts as Trustee under
several other indentures for NWA Corp. and Northwest.
DESCRIPTION OF WARRANTS
Northwest may issue Warrants for the purchase of Debt Securities. Warrants
may be issued together with or separately from any Debt Securities offered by
any Prospectus Supplement and, if issued together with Debt Securities, may be
attached to or separate from such Debt Securities. The Warrants are to be issued
under one or more separate Warrant Agreements (a "Warrant Agreement") to be
entered into between Northwest and State Street Bank and Trust Company,
successor to The First National Bank of Boston, as Warrant Agent, all as set
forth in the Prospectus Supplement relating to the particular issue of Warrants.
The Warrant Agent will act solely as an agent of Northwest in connection with
the Warrants and will not assume any obligation or relationship of agency or
trust for or with any holders of Warrants or beneficial owners of Warrants. The
statements herein relating to the Warrants and the Warrant Agreements are
summaries and reference is made to the detailed provisions of the Warrant
Agreements. A form of Warrant Agreement for Warrants Sold Attached to Debt
Securities and a form of Warrant Agreement for Warrants Sold Alone have been
incorporated by reference as exhibits to the Registration Statement.
GENERAL
If Warrants are offered, reference is made to the applicable Prospectus
Supplement which accompanies this Prospectus for a description of the specific
terms of the Warrants being offered thereby, including (i) the specific
designation and aggregate number of such Warrants, (ii) the offering price and
the currency or composite currencies for which Warrants may be purchased, (iii)
the designation (including whether the Debt Securities are Senior Debt
Securities or Senior Subordinated Debt Securities), aggregate principal amount,
currency or composite currencies and terms of the Debt Securities purchasable
upon exercise of the Warrants, (iv) if applicable, the designation and terms of
the Debt Securities with which the Warrants are issued and the number of
Warrants issued with the minimum denomination of each such Debt Security, (v) if
applicable, the date on and after which the Warrants and the related Debt
Securities will be separately transferable, (vi) the principal amount of Debt
Securities purchasable upon exercise of one Warrant and the price or the manner
of determining the price and
14
<PAGE>
currency or composite currencies or other consideration (which may include Debt
Securities) for which such principal amount of Debt Securities may be purchased
upon such exercise, (vii) the date on which the right to exercise the Warrants
shall commence and the date on which such right shall expire (the "Expiration
Date"), (viii) the terms of any mandatory or optional redemption by Northwest,
(ix) certain Federal income tax consequences, (x) whether the certificates for
Warrants will be issued in registered or unregistered form, and (xi) any other
special terms pertaining to such Warrants. Unless otherwise specified in the
applicable Prospectus Supplement, the Warrants will not be listed on any
securities exchange.
Warrant certificates may be exchanged for new Warrant certificates of
different denominations, may (if in registered form) be presented for
registration of transfer and exchange and may be exercised at an office or
agency of the Warrant Agent maintained for that purpose (the "Warrant Agent
Office"). No service charge will be made for any transfer or exchange of Warrant
certificates, but Northwest may require payment of a sum sufficient to cover any
tax or other governmental charge payable in connection therewith. Prior to the
exercise of their Warrants, holders of Warrants will not have any of the rights
of holders of the Debt Securities purchasable upon such exercise, including the
right to receive payments of principal of, premium, if any, or interest, if any,
on the Debt Securities purchasable upon such exercise or to enforce covenants in
the Indenture.
The Warrant Agent will act solely as an agent of Northwest in connection
with the Warrants and will not assume any obligation or relationship of agency
or trust for or with any holders of Warrants or beneficial owners of Warrants.
EXERCISE OF WARRANTS
Each Warrant will entitle the holder to purchase such principal amount of
Debt Securities at such exercise price, for such consideration and during such
period or periods as shall in each case be set forth in, or calculable from, the
Prospectus Supplement relating to the Warrants. Warrants may be exercised at any
time during such period up to 5:00 P.M. New York City time on the Expiration
Date set forth in the Prospectus Supplement relating to such Warrants. After the
close of business on the Expiration Date (or such later date to which such
Expiration Date may be extended by Northwest), unexercised Warrants will become
void.
Warrants may be exercised by delivery to the Warrant Agent of payment as
provided in the applicable Prospectus Supplement of the amount required to
purchase the Debt Securities purchasable upon such exercise together with
certain information set forth on the reverse side of the Warrant certificate.
Unless otherwise provided in the applicable Prospectus Supplement, upon receipt
of such payment and the Warrant certificate properly completed and duly executed
at the Warrant Agent Office or any other office or agency indicated in the
applicable Prospectus Supplement, Northwest will, as soon as practicable, issue
and deliver the Debt Securities purchasable upon such exercise. If fewer than
all of the Warrants represented by such Warrant certificate are exercised, a new
Warrant certificate will be issued for the amount of unexercised Warrants.
MODIFICATION OF WARRANT AGREEMENTS
The Warrant Agreements contain a provision permitting Northwest and the
Warrant Agent, without the consent of any Warrantholder, to supplement or amend
the Warrant Agreement in order to cure any ambiguity, and to correct or
supplement any provision contained therein which may be defective or
inconsistent with any other provisions or to make other provisions in regard to
matters or questions arising thereunder which Northwest and the Warrant Agent
may deem necessary or desirable and which do not adversely affect the interests
of the Warrantholders.
15
<PAGE>
WARRANT AGENT
State Street Bank and Trust Company will act as the Warrant Agent under the
Warrant Agreement. Northwest and NWA Corp. maintain banking and other commercial
relationships with State Street Bank and Trust Company and its affiliates in the
ordinary course of business.
16
<PAGE>
PLAN OF DISTRIBUTION
Northwest may sell Securities to one or more underwriters for public
offering and sale by them or may sell Securities to investors or other persons
directly or through one or more dealers or agents. Any such underwriter, dealer
or agent involved in the offer and sale of the Offered Securities will be named
in an applicable Prospectus Supplement.
The Offered Securities may be sold at a fixed price or prices, which may be
changed, or from time to time at market prices prevailing at the time of sale,
at prices related to such prevailing market prices or at negotiated prices.
Dealer trading may take place in certain of the Offered Securities, including
Offered Securities not listed on any securities exchange. Northwest also may,
from time to time, authorize underwriters acting as Northwest's agents to offer
and sell the Offered Securities upon the terms and conditions as shall be set
forth in any Prospectus Supplement. In connection with the sale of Offered
Securities, underwriters may be deemed to have received compensation from
Northwest in the form of underwriting discounts or commissions and may also
receive commissions from purchasers of Offered Securities for whom they may act
as agent. Underwriters may sell Offered Securities to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions (which may be changed from
time to time) from the purchasers for whom they may act as agent.
If a dealer is used directly by Northwest in the sale of Offered Securities
in respect of which this Prospectus is delivered, Northwest will sell such
Offered Securities to the dealer, as principal. The dealer may then resell such
Offered Securities to the public at varying prices to be determined by such
dealer at the time of resale. Any such dealer and the terms of any such sale
will be set forth in the Prospectus Supplement relating thereto.
Offered Securities may be offered and sold through agents designated by
Northwest from time to time. Any such agent involved in the offer or sale of the
Offered Securities in respect of which this Prospectus is delivered will be
named in, and any commissions payable by Northwest to such agent will be set
forth in, the applicable Prospectus Supplement. Unless otherwise indicated in
the applicable Prospectus Supplement, any such agent will be acting on a best
efforts basis for the period of its appointment.
Offers to purchase Offered Securities may be solicited directly by Northwest
and sales thereof may be made by Northwest directly to institutional investors
or others who may be deemed to be underwriters within the meaning of the
Securities Act with respect to any resale thereof. The terms of any such sales
will be described in the Prospectus Supplement relating thereto. Except as set
forth in the applicable Prospectus Supplement, no director, officer or employee
of Northwest or NWA Corp. will solicit or receive a commission in connection
with direct sales by Northwest of the Offered Securities, although such persons
may respond to inquiries by potential purchasers and perform ministerial and
clerical work in connection with any such direct sales.
Any underwriting compensation paid by Northwest to underwriters, dealers or
agents in connection with the offering of Offered Securities, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in an applicable Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of the Offered Securities may be
deemed to be underwriters, and any discounts and commissions received by them
and any profit realized by them on resale of the Offered Securities may be
deemed to be underwriting discounts and commissions under the Securities Act.
Underwriters, dealers and agents may be entitled, under agreements with
Northwest, to indemnification against and contribution toward certain civil
liabilities, including liabilities under the Securities Act, and to
reimbursement by Northwest for certain expenses.
Underwriters, dealers and agents may engage in transactions with, or perform
services for,
NWA Corp., Northwest and NWA Corp.'s other subsidiaries in the ordinary course
of business.
16
<PAGE>
If so indicated in an applicable Prospectus Supplement and subject to
existing market conditions, Northwest will authorize dealers acting as
Northwest's agents to solicit offers by certain institutions to purchase Offered
Securities from Northwest at the public offering price set forth in such
Prospectus Supplement pursuant to Delayed Delivery Contracts ("Contracts")
providing for payment and delivery on the date or dates stated in such
Prospectus Supplement. Each Contract will be for an amount not less than, and
the aggregate principal amount of Offered Securities sold pursuant to Contracts
shall not be less nor more than, the respective amounts stated in such
Prospectus Supplement. Institutions with whom Contracts, when authorized, may be
made include commercial and savings banks, insurance companies, pension funds,
investment companies, educational and charitable institutions and other
institutions, but will in all cases be subject to the approval of Northwest.
Contracts will not be subject to any conditions except the purchase by an
institution of the Offered Securities covered by its Contracts 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. A commission indicated in the
applicable Prospectus Supplement will be granted to underwriters and agents
soliciting purchases of Offered Securities pursuant to Contracts accepted by
Northwest. Agents and underwriters will have no responsibility in respect of the
delivery or performance of Contracts.
The Offered Securities may or may not be listed on a national securities
exchange or a foreign securities exchange. If an underwriter or underwriters are
utilized in the sale of any Offered Securities, the applicable Prospectus
Supplement will contain a statement as to the intention, if any, of such
underwriters at the date of such Prospectus Supplement to make a market in the
Offered Securities. No assurances can be given that there will be a market for
the Offered Securities.
The place and time of delivery for the Offered Securities in respect of
which this Prospectus is delivered will be set forth in the applicable
Prospectus Supplement. Debt Securities issuable upon exercise of Warrants will
be issued upon payment of the exercise price and otherwise in accordance with
the relevant terms applicable to such Warrants and described in the relevant
Prospectus Supplement.
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of the Debt Securities (and the Parent Guaranty) and Warrants offered
hereby will be passed upon for Northwest and NWA Corp. by Simpson Thacher &
Bartlett (a partnership which includes professional corporations), New York, New
York. In rendering such opinion, Simpson Thacher & Bartlett will be relying as
to matters of Minnesota law on an opinion from the Office of the General Counsel
of NWA Corp. and Northwest Airlines Corporation.
EXPERTS
The consolidated financial statements and schedule of Northwest Airlines
Corporation appearing or incorporated by reference in Northwest Airlines
Corporation's Annual Report (Form 10-K) for the year ended December 31, 1996,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included or incorporated by reference therein and
incorporated herein by reference. Such consolidated financial statements and
schedule are incorporated herein by reference in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.
17
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY RELATED PROSPECTUS
SUPPLEMENT AND/OR PRICING SUPPLEMENT IN CONNECTION WITH THE OFFER CONTAINED IN
THIS PROSPECTUS AND SUCH PROSPECTUS SUPPLEMENT AND/OR PRICING SUPPLEMENT AND, IF
GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY NORTHWEST, NWA CORP. OR ANY UNDERWRITERS, AGENTS OR
DEALERS. THIS PROSPECTUS AND ANY RELATED PROSPECTUS SUPPLEMENT AND/OR PRICING
SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY
SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS AND ANY RELATED
PROSPECTUS SUPPLEMENT AND/OR PRICING SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR
THEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS
BEEN NO CHANGE IN THE AFFAIRS OF NORTHWEST OR NWA CORP. SINCE THE DATE HEREOF OR
THEREOF OR THAT THE INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AT ANY
TIME SUBSEQUENT TO THE DATE HEREOF.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
The Company............................................................... 3
Use of Proceeds........................................................... 3
Ratio of Earnings to Fixed Charges........................................ 3
Description of Debt Securities............................................ 4
Description of Warrants................................................... 14
Plan of Distribution...................................................... 16
Legal Opinions............................................................ 17
Experts................................................................... 17
</TABLE>
$500,000,000
NORTHWEST
AIRLINES, INC.
DEBT SECURITIES AND
WARRANTS TO PURCHASE
DEBT SECURITIES
FULLY AND
UNCONDITIONALLY GUARANTEED BY
NORTHWEST AIRLINES
CORPORATION
---------------------
PROSPECTUS
---------------------
, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
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.
<PAGE>
SUBJECT TO COMPLETION, DATED JUNE 27, 1997
PROSPECTUS
$500,000,000
NORTHWEST AIRLINES, INC.
PASS THROUGH CERTIFICATES
-----------
APPLICABLE UNDERLYING PAYMENTS
FULLY AND UNCONDITIONALLY GUARANTEED BY
NORTHWEST AIRLINES CORPORATION
Up to $500,000,000 aggregate public offering price of Pass Through
Certificates (the "Certificates") (or its equivalent (based on the applicable
exchange rate at the time of sale) in one or more foreign currencies or currency
units) may be offered for sale from time to time pursuant to this Prospectus and
related Prospectus Supplements (as defined below). Certificates may be issued in
one or more series in amounts, at prices and on terms to be determined at the
time of the offering. In respect of each offering of Certificates, a separate
Northwest Airlines Pass Through Trust for each series of Certificates being
offered (each, a "Trust") will be formed pursuant to one or more Pass Through
Trust Agreements (each, a "Basic Agreement") and one or more supplements thereto
(each, a "Trust Supplement") relating to such Trust to be entered into among
Northwest Airlines, Inc. ("Northwest"), Northwest Airlines Corporation ("NWA
Corp." and, together with its subsidiaries, the "Company") and the trustee named
therein (the "Trustee"), as trustee under each Trust. Each Certificate in a
series will represent a fractional undivided interest in the related Trust and
will have no rights, benefits or interests in respect of any other Trust. The
property of the Trusts will consist of equipment notes issued (a) on a
nonrecourse basis by one or more owner trustees pursuant to separate leveraged
lease transactions (the "Leased Aircraft Notes") to finance or refinance a
portion of the equipment cost of aircraft, including engines (each, a "Leased
Aircraft" and, collectively, the "Leased Aircraft"), which have been or will be
leased to Northwest pursuant to a separate lease agreement (each such lease
agreement, a "Lease") for each Leased Aircraft, or (b) with recourse to
Northwest (the "Owned Aircraft Notes" and, together with any Leased Aircraft
Notes, the "Equipment Notes") to finance all or a portion of the equipment cost
of, or to purchase all or a portion of the outstanding debt with respect to,
aircraft, including engines (each, an "Owned Aircraft" and, collectively, the
"Owned Aircraft"; together with Leased Aircraft, the "Aircraft"), which have
been or will be purchased and owned by Northwest. NWA Corp. will fully and
unconditionally guarantee (the "Parent Guaranty") to the holders from time to
time of Certificates (i) with respect to related Owned Aircraft Notes, the full
and prompt payment of principal, premium, if any, and interest thereon when and
as the same shall become due and payable, whether at maturity, upon redemption
or otherwise and (ii) with respect to related Leased Aircraft Notes, the full
and prompt payment of all amounts payable by Northwest under the related Lease
when and as the same shall become due and payable.
The specific terms of the particular Certificates in respect of which this
Prospectus is being delivered will be set forth in a supplement to this
Prospectus (the "Prospectus Supplement") which will be delivered together with
this Prospectus, including, where applicable, the specific designation, form,
aggregate principal amount, initial public offering price and distribution dates
relating to such Certificates, the currency in which such Certificates will be
payable, the Trust or Trusts relating to such Certificates, the Equipment Notes
to be purchased by such Trust or Trusts, the Aircraft relating to such Equipment
Notes, the leveraged lease transactions or financing arrangements, as the case
may be, relating to such Equipment Notes and other special terms relating to
such Certificates and the net proceeds from the offering of such Certificates.
The Certificates shall be issued in registered form only and may, if so
specified in the applicable Prospectus Supplement, be issued in accordance with
a book-entry system.
With respect to one or more Aircraft, Equipment Notes may be issued, each of
which may have a different interest rate, final maturity date and ranking in
respect of priority of payment. For each series of Certificates, the Trustee
will purchase one or more Equipment Notes issued with respect to one or more
Aircraft such that all of the Equipment Notes held in the related Trust will
have identical ranking and identical interest rates (in each case equal to the
rate applicable to the Certificates issued by such Trust), and such that the
latest maturity date for such Equipment Notes will occur on or before the final
distribution date for such Certificates. Interest paid on the Equipment Notes
held in each Trust will be passed through to the holders of the Certificates
relating to such Trust on the dates and at the rate per annum set forth in the
Prospectus Supplement relating to such Certificates until the final distribution
date for such Trust. Principal paid on the Equipment Notes held in each Trust
will be passed through to the holders of the Certificates relating to such Trust
in scheduled amounts on the dates set forth in the Prospectus Supplement
relating to such Certificates until the final distribution date for such Trust.
The Equipment Notes issued with respect to any Aircraft will be secured by a
security interest in such Aircraft and, in the case of the Leased Aircraft, by a
security interest in the Lease relating thereto, including the right to receive
rentals payable in respect of such Leased Aircraft by Northwest. Although
neither the Certificates nor the Leased Aircraft Notes will be direct
obligations of, or guaranteed by, Northwest, the amounts unconditionally payable
by Northwest for lease of Leased Aircraft will be sufficient to pay in full when
due all payments required to be made on the corresponding Leased Aircraft Notes.
The Certificates may be sold to or through underwriters, through dealers or
agents or directly to purchasers. See "Plan of Distribution." The Prospectus
Supplement will set forth the names of any underwriters, dealers or agents
involved in the sale of the Certificates in respect of which this Prospectus is
being delivered, the proposed amounts, if any, to be purchased by underwriters
and the compensation, if any, of such underwriters or agents. See "Plan of
Distribution" for information concerning secondary trading of the Certificates.
THIS PROSPECTUS MAY NOT BE USED TO CONSUMMATE SALES OF CERTIFICATES UNLESS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
------------------
<PAGE>
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY
REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
--------------
The date of this Prospectus is , 1997.
<PAGE>
AVAILABLE INFORMATION
NWA Corp. and Northwest together have filed with the Securities and Exchange
Commission (the "Commission") Registration Statements on Form S-3 (together with
all amendments and exhibits, the "Registration Statements") under the Securities
Act of 1933, as amended (the "Securities Act"), with respect to the Certificates
offered hereby. This Prospectus does not contain all of the information set
forth in the Registration Statements, certain parts of which are omitted in
accordance with the rules and regulations of the Commission, and to which
reference is hereby made. Statements made in this Prospectus as to the contents
of any contract, agreement or other document referred to are not necessarily
complete. With respect to each such contract, agreement or other document filed
as an exhibit to the Registration Statements, reference is made to the exhibit
for a more complete description of the matter involved.
NWA Corp. is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and in accordance
therewith files periodic reports and other information with the Commission. Such
reports and other information, as well as the Registration Statement, including
exhibits and schedules filed therewith, may be inspected at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549, Room 1024, and at the regional offices of the Commission located at
Citicorp Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661
and at 7 World Trade Center, 13th Floor, New York, New York 10048. Copies of
such materials may be obtained from the Public Reference Section of the
Commission, 450 Fifth Street, N.W., Washington, D.C. 20549 at prescribed rates.
The Commission maintains a Web site (http://www.sec.gov) that contains reports,
proxy and information statements and other information regarding registrants
that file electronically with the Commission. Northwest is not required to file
separate reports, proxy statements or other information with the Commission
pursuant to the requirements of the Exchange Act. Instead, information with
respect to Northwest is provided, to the extent required, in filings made by NWA
Corp.
Separate financial statements of Northwest are not being provided because
all of the Certificates being issued by Northwest under this Prospectus will be
supported by full and unconditional guarantees by NWA Corp. and, therefore, such
financial statements are not deemed material.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The following documents of NWA Corp., which have been filed with the
Commission, are hereby incorporated by reference in this Prospectus:
(a) NWA Corp.'s Annual Report on Form 10-K for the fiscal year ended December
31, 1996; and
(b) NWA Corp.'s Quarterly Report on Form 10-Q for the quarter ended March 31,
1997.
All documents filed by NWA Corp. pursuant to Sections 13(a), 13(c), 14 or
15(d) of the Exchange Act subsequent to the date of this Prospectus and prior to
the termination of the offering of the Certificates offered hereby shall be
deemed to be incorporated by reference into this Prospectus and to be a part
hereof from the respective dates of filing of 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 modifies or supersedes such statement. Any such statement so
modified or superseded shall not be deemed, except as so modified or superseded,
to constitute a part of this Prospectus. The Exchange Act file number is
0-23642.
NWA Corp. will provide without charge to any person to whom a copy of this
Prospectus has been delivered, upon written or oral request, a copy of any or
all of the foregoing documents incorporated herein by reference (other than
exhibits to such documents unless such exhibits are specifically incorporated by
reference into such documents). Requests should be directed to the Secretary's
Office,
2
<PAGE>
NWA Corp., 5101 Northwest Drive, Dept. A1180, St. Paul, Minnesota 55111-3034;
telephone number (612) 726-2111.
THE COMPANY
Northwest, the principal wholly-owned indirect subsidiary of NWA Corp.,
operates the world's fourth largest airline (as measured by 1996 revenue
passenger miles ("RPMs")) and is engaged principally in commercial
transportation of passengers and cargo. Northwest's business focuses on the
development of a global airline network through the optimization of its domestic
hubs at Detroit, Minneapolis/St. Paul and Memphis, an extensive Pacific route
system with hubs at Tokyo and Osaka, and a transatlantic alliance with KLM Royal
Dutch Airlines ("KLM"), which operates a hub through Amsterdam.
Northwest operates substantial domestic and international route networks. As
of December 31, 1996, Northwest directly served more than 150 cities in 18
countries on the continents of North America, Asia and Europe. Northwest had
more than 52 million enplanements and flew over 68 billion RPMs in 1996.
IN JUNE 1997, NORTHWEST ENTERED INTO A MEMORANDUM OF UNDERSTANDING WITH
AVSA, S.A.R.L. FOR THE PURCHASE BY NORTHWEST OF 50 FIRM AND UP TO 100 OPTION
AIRBUS INDUSTRIE A319 AIRCRAFT, WITH DELIVERY SCHEDULED FOR 1999 THROUGH 2003. A
PORTION OF THE AIRCRAFT ARE CONVERTIBLE INTO OTHER AIRBUS A320 FAMILY MODEL
AIRCRAFT. THE MEMORANDUM OF UNDERSTANDING IS SUBJECT TO THE RECEIPT OF ALL
NECESSARY CORPORATE APPROVALS (INCLUDING CORPORATE APPROVALS OF NORTHWEST), THE
SELECTION OF THE ENGINE MANUFACTURER FOR SUCH AIRCRAFT AND THE NEGOTIATION AND
EXECUTION OF DEFINITIVE DOCUMENTATION.
--------------
NWA Corp. was originally formed under the name Wings Holdings Inc. The
Company's principal executive offices are located at 2700 Lone Oak Parkway,
Eagan, Minnesota 55121; its mailing address is 5101 Northwest Drive, St. Paul,
Minnesota 55111-3034 and its telephone number is (612) 726-2111.
GENERAL OUTLINE OF TRUST STRUCTURE
In respect of each offering of Certificates, one or more Trusts will be
formed, and the related Certificates issued, pursuant to separate Trust
Supplements to be entered into among the Trustee, NWA Corp. and Northwest in
accordance with the terms of the Basic Agreement. Concurrently with the
execution and delivery of each Trust Supplement, the Trustee, on behalf of the
Trust formed thereby, will enter into one or more purchase or refunding
agreements (each such agreement being herein referred to as a "Note Purchase
Agreement") pursuant to which it will purchase one or more Equipment Notes
relating to one or more of the Aircraft described in the applicable Prospectus
Supplement. Pursuant to the applicable Note Purchase Agreement or Note Purchase
Agreements, the Trustee, on behalf of each Trust, will purchase one or more
Equipment Notes such that the Equipment Notes that constitute the property of
such Trust will have identical interest rates (in each case equal to the rate
applicable to the Certificates issued by such Trust) and identical priority of
payment relative to each of the other Equipment Notes issued under the Related
Indentures (as defined below). The maturity dates of the Equipment Notes
acquired by each Trust will occur on or before the final distribution date
applicable to the Certificates that will be issued by such Trust. The Trustee
will distribute the amount of payments of principal, premium, if any, and
interest received by it as holder of the Equipment Notes to the
Certificateholders of the Trust in which such Equipment Notes are held. See
"Description of the Certificates" and "Description of the Equipment Notes."
USE OF PROCEEDS
Except as set forth in a Prospectus Supplement for a specific offering of
Certificates, the Certificates will be issued in order to facilitate (a) the
financing or refinancing of the debt portion and, in certain cases, the
refinancing of some of the equity portion of one or more separate leveraged
lease
3
<PAGE>
transactions entered into by Northwest, as lessee, with respect to the Leased
Aircraft as described in the applicable Prospectus Supplement, and (b) the
financing or refinancing of the aggregate principal amount of debt to be issued,
or the purchase of the aggregate principal amount of the debt previously issued,
by Northwest in respect of the Owned Aircraft as described in the applicable
Prospectus Supplement. The proceeds from the sale of Certificates in respect of
such Owned or Leased Aircraft is not expected to exceed 80% of the appraised
value of such Owned or Leased Aircraft at the time of financing or refinancing.
Except as set forth in a Prospectus Supplement for a specific offering of
Certificates, the proceeds from the sale of the Certificates will be used by the
Trustee on behalf of the applicable Trust or Trusts to purchase either (a)
Leased Aircraft Notes issued by the respective Owner Trustee or Owner Trustees
to finance or refinance (as specified in the applicable Prospectus Supplement)
the related Leased Aircraft, or (b) Owned Aircraft Notes issued by Northwest to
finance or refinance (as specified in the applicable Prospectus Supplement) the
related Owned Aircraft. Any portion of the proceeds from the sale of
Certificates not used by the Trustee to purchase Equipment Notes on or prior to
the date specified therefor in the applicable Prospectus Supplement will be
distributed on a Special Distribution Date (as defined below) to the applicable
Certificateholders, together with interest, but without premium. See
"Description of Certificates--Special Distribution Upon Unavailability of
Aircraft."
The Leased Aircraft Notes will be issued under separate trust indentures
(the "Leased Aircraft Indentures") between a bank, trust company or other
institution specified in the related Prospectus Supplement, as trustee
thereunder (in such capacity, herein referred to as the "Loan Trustee"), and an
institution specified in the related Prospectus Supplement acting, not in its
individual capacity, but solely as owner trustee (an "Owner Trustee") of a
separate trust for the benefit of one or more institutional investors (each, an
"Owner Participant"). With respect to each Leased Aircraft, the related Owner
Participant will have provided or will provide from sources other than the
Leased Aircraft Notes a portion of the equipment cost of the related Leased
Aircraft. No Owner Participant, however, will be personally liable for any
amount payable under the related Leased Aircraft Indenture or the Leased
Aircraft Notes issued thereunder. Simultaneously with the acquisition of each
Leased Aircraft, the related Owner Trustee leased or will lease such Aircraft to
Northwest pursuant to a separate Lease. The Owned Aircraft Notes will be issued
under separate trust indentures (the "Owned Aircraft Indentures" and, together
with any Leased Aircraft Indentures, the "Indentures") between the applicable
Loan Trustee and Northwest.
RATIO OF EARNINGS TO FIXED CHARGES
The following table sets forth the ratio of earnings to fixed charges for
NWA Corp. and its consolidated subsidiaries for the periods indicated. The ratio
of earnings to fixed charges represents the number of times that fixed charges
were covered by earnings. In computing the ratio, earnings represent
consolidated earnings (loss) before income taxes, cumulative effect of
accounting change and fixed charges (excluding capitalized interest). Fixed
charges consist of interest expense (including capitalized interest), one-third
of rental expense, which is considered representative of the interest factor,
and amortization of debt discount and expense.
<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31 YEAR ENDED DECEMBER 31
- ------------------------------------------ -----------------------------------------------------
1997 1996 1996 1995 1994 1993 1992
--------- --------- --------- --------- --------- --------- ---------
<C> <C> <C> <C> <S> <C> <C> <C> <C> <C>
1.85 1.67 2.74 1.90 1.88 (a) (a)
</TABLE>
- --------------
(a) Earnings did not cover fixed charges by $121.5 million for the year ended
December 31, 1993 and $1,513.5 million for the year ended December 31, 1992.
Excluding non-recurring special charges of $94.3 million for the year ended
December 31, 1993, and $792.7 million for the year ended December 31, 1992,
earnings did not cover fixed charges by $27.2 million and $720.8 million for
the two periods, respectively.
4
<PAGE>
DESCRIPTION OF THE CERTIFICATES
In connection with each offering of Certificates, one or more separate
Trusts will be formed and one or more series of Certificates will be issued
pursuant to the Basic Agreement and one or more separate Trust Supplements to be
entered into among Northwest, NWA Corp. and the Trustee. The statements made
under this caption are summaries and reference is made to the detailed
provisions of the Basic Agreement, the form of which has been filed as an
exhibit to the Registration Statement of which this Prospectus is a part. The
summaries relate to the Basic Agreement and each of the Trust Supplements, the
Trusts to be formed thereby and the Certificates to be issued by each Trust
except to the extent, if any, described in the applicable Prospectus Supplement.
The Prospectus Supplement that accompanies this Prospectus contains a glossary
of the material terms used with respect to the specific series of Certificates
being offered thereby. The Trust Supplement relating to each series of
Certificates and the forms of the related Note Purchase Agreement, Indenture,
Lease, Trust Agreement, Participation Agreement, Refunding Agreement,
Intercreditor Agreement and Revolving Credit Agreement, as applicable, will be
filed as exhibits to a post-effective amendment to the Registration Statement of
which this Prospectus is a part, a Current Report on Form 8-K, a Quarterly
Report on Form 10-Q or an Annual Report on Form 10-K, as applicable, filed by
NWA Corp. with the Commission.
The Certificates offered pursuant to this Prospectus will be limited to
$500,000,000 aggregate public offering price (or its equivalent (based on the
applicable exchange rate at the time of sale) in one or more foreign currencies
or currency units).
Certain provisions of the description of the Certificates in this Prospectus
do not necessarily apply to one Certificate of each Trust which may be issued in
a denomination of less than $1,000.
TO THE EXTENT THAT ANY PROVISION IN ANY PROSPECTUS SUPPLEMENT IS
INCONSISTENT WITH ANY PROVISION IN THIS SUMMARY, THE PROVISION OF SUCH
PROSPECTUS SUPPLEMENT WILL CONTROL.
GENERAL
Each Certificate will represent a fractional undivided interest in the Trust
created by the Trust Supplement pursuant to which such Certificate was issued
and all payments and distributions shall be made only from the related Trust
Property (as defined below). The property of each Trust (the "Trust Property")
will include the Equipment Notes held in such Trust, all monies at any time paid
thereon and all monies due and to become due thereunder and funds from time to
time deposited with the Trustee in accounts relating to such Trust and, if so
specified in the Prospectus Supplement related to a series of Certificates,
rights under intercreditor agreements relating to cross-subordination
arrangements and monies receivable under a liquidity facility. Each Certificate
will represent a pro rata share of the outstanding principal amount of the
Equipment Notes held in the related Trust and, unless otherwise specified in the
applicable Prospectus Supplement, will be issued in minimum denominations of
$1,000 or any integral multiple thereof. The Certificates do not represent an
interest in or obligation of Northwest, NWA Corp., the Trustee, any of the Loan
Trustees or Owner Trustees in their individual capacities, any Owner
Participant, or any affiliate of any thereof. Each Certificateholder by its
acceptance of a Certificate agrees to look solely to the income and proceeds
from the Trust Property as provided in the Basic Agreement and the applicable
Trust Supplement.
The Equipment Notes issued under an Indenture may be held in more than one
Trust and one Trust may hold Equipment Notes issued under more than one
Indenture (each Indenture the Equipment Notes of which are held in a Trust, a
"Related Indenture"). Unless otherwise provided in a Prospectus Supplement, only
Equipment Notes having the same priority of payment (the Equipment Notes of any
such priority, a "Class") may be held in the same Trust.
5
<PAGE>
Interest will be passed through to Certificateholders of each Trust at the
rate per annum payable on the Equipment Notes held in such Trust, as set forth
for such Trust on the cover page of the applicable Prospectus Supplement.
Reference is made to the Prospectus Supplement that accompanies this
Prospectus for a description of the specific series of Certificates being
offered thereby, including: (1) the specific designation and title of such
Certificates; (2) the Regular Distribution Dates (as defined below) and Special
Distribution Dates (as defined below) applicable to such Certificates; (3) the
currency or currencies (including currency units) in which such Certificates may
be denominated; (4) the specific form of such Certificates, including whether or
not such Certificates are to be issued in accordance with a book-entry system;
(5) a description of the Equipment Notes to be purchased by such Trust,
including (a) the period or periods within which, the price or prices at which,
and the terms and conditions upon which such Equipment Notes may or must be
redeemed or defeased in whole or in part, by Northwest or, with respect to
Leased Aircraft Notes, the Owner Trustee, (b) the payment priority of such
Equipment Notes in relation to any other Equipment Notes issued with respect to
the related Aircraft, (c) any additional security or liquidity enhancements
therefor and (d) any intercreditor or other rights or limitations between or
among the holders of Equipment Notes of different priorities issued by the same
Owner Trustee; (6) a description of the related Aircraft, including whether such
Aircraft is a Leased Aircraft or an Owned Aircraft; (7) a description of the
related Note Purchase Agreement and Related Indentures, including a description
of the events of default under the Related Indentures, the remedies exercisable
upon the occurrence of such events of default and any limitations on the
exercise of such remedies with respect to such Equipment Notes; (8) if such
Certificates relate to Leased Aircraft, a description of the related Lease,
Trust Agreement and Participation Agreement, including (a) the names of the
related Owner Trustees, (b) a description of the events of default under the
related Leases, the remedies exercisable upon the occurrence of such events of
default and any limitations on the exercise of such remedies with respect to
such Leased Aircraft Notes, and (c) the rights of the related Owner Trustee, if
any, and/or Owner Participant, if any, to cure failures of Northwest to pay rent
under the related Lease; (9) the extent, if any, to which the provisions of the
operative documents applicable to such Equipment Notes may be amended by the
parties thereto without the consent of the holders of, or only upon the consent
of the holders of a specified percentage of aggregate principal amount of, such
Equipment Notes; (10) cross-default or cross-collateralization provisions in the
Related Indentures; (11) subordination provisions among the holders of
Certificates, including any cross-subordination provisions among the holders of
Certificates in separate Trusts; and (12) any other special terms pertaining to
such Certificates.
If any Certificates are denominated in one or more foreign currencies or
currency units, the restrictions, certain United States federal income tax
considerations, specific terms and other information with respect to such
Certificates and such foreign currency or currency units will be set forth in
the applicable Prospectus Supplement.
BOOK-ENTRY REGISTRATION
GENERAL
If specified in the applicable Prospectus Supplement, the Certificates will
be subject to the provisions described below and under the caption "--Definitive
Certificates." Upon issuance, each series of Certificates will be represented by
one fully registered global certificate. Each global certificate will be
deposited with, or on behalf of, The Depository Trust Company ("DTC") and
registered in the name of Cede & Co. ("Cede"), or its nominee. No person
acquiring an interest in such Certificates ("Certificate Owner") will be
entitled to receive a certificate representing such person's interest in such
Certificates, except as set forth below under "--Definitive Certificates."
Unless and until Definitive Certificates are issued under the limited
circumstances described herein, all references to actions by Certificateholders
shall refer to actions taken by DTC upon instructions from DTC Participants (as
6
<PAGE>
defined below), and all references herein to distributions, notices, reports and
statements to Certificateholders shall refer, as the case may be, to
distributions, notices, reports and statements to DTC or Cede, as the registered
holder of such Certificates, or to DTC Participants for distribution to
Certificate Owners in accordance with DTC procedures.
Northwest has been advised that DTC is a limited purpose trust company
organized under the laws of the State of New York, a member of the Federal
Reserve System, a "clearing corporation" within the meaning of the New York
Uniform Commercial Code and "clearing agency" registered pursuant to section 17A
of the Exchange Act. DTC was created to hold securities for its participants
("DTC Participants") and to facilitate the clearance and settlement of
securities transactions between DTC Participants through electronic
book-entries, thereby eliminating the need for physical transfer of
certificates. DTC Participants include securities brokers and dealers, banks,
trust companies and clearing corporations. Indirect access to the DTC system
also is available to others such as banks, brokers, dealers and trust companies
that clear through or maintain a custodial relationship with a DTC Participant
either directly or indirectly ("Indirect Participants").
Certificate Owners that are not DTC Participants or Indirect Participants
but desire to purchase, sell or otherwise transfer ownership of, or other
interests in, the Certificates may do so only through DTC Participants and
Indirect Participants. In addition, Certificate Owners will receive all
distributions of principal and interest from the Trustee through DTC
Participants or Indirect Participants, as the case may be. Under a book-entry
format, Certificate Owners may experience some delay in their receipt of
payments, because such payments will be forwarded by the Trustee to Cede, as
nominee for DTC. DTC will forward such payments in same-day funds to DTC
Participants who are credited with ownership of the Certificates in amounts
proportionate to the principal amount of each such DTC Participant's respective
holdings of beneficial interests in the Certificates. DTC Participants will
thereafter forward payments to Indirect Participants or Certificate Owners, as
the case may be, in accordance with customary industry practices. The forwarding
of such distributions to the Certificate Owners will be the responsibility of
such DTC Participants. Unless and until the Definitive Certificates are issued
under the limited circumstances described herein, the only "Certificateholder"
will be Cede, as nominee of DTC. Certificate Owners will not be recognized by
the Trustee as Certificateholders, as such term is used in the Basic Agreement,
and Certificate Owners will be permitted to exercise the rights of
Certificateholders only indirectly through DTC and DTC Participants.
Under the rules, regulations and procedures creating and affecting DTC and
its operations (the "Rules"), DTC is required to make book-entry transfers of
the Certificates among DTC Participants on whose behalf it acts with respect to
the Certificates and to receive and transmit distributions of principal,
premium, if any, and interest with respect to the Certificates. DTC Participants
and Indirect Participants with which Certificate Owners have accounts with
respect to the Certificates similarly are required to make book-entry transfers
and receive and transmit such payments on behalf of their respective customers.
Accordingly, although Certificate Owners will not possess the Certificates, the
Rules provide a mechanism by which Certificate Owners will receive payments and
will be able to transfer their interests.
Because DTC can only act on behalf of DTC Participants, who in turn act on
behalf of Indirect Participants, the ability of a Certificate Owner to pledge
the Certificates to persons or entities that do not participate in the DTC
system, or to otherwise act with respect to such Certificates, may be limited
due to the lack of a physical certificate for such Certificates.
DTC has advised Northwest that it will take any action permitted to be taken
by a Certificateholder under the Basic Agreement only at the direction of one or
more DTC Participants to whose accounts with DTC the Certificates are credited.
Additionally, DTC has advised Northwest that in the event any action requires
approval by Certificateholders of a certain percentage of beneficial interest in
each Trust, DTC will take such action only at the direction of and on behalf of
DTC Participants whose holders include
7
<PAGE>
undivided interests that satisfy any such percentage. DTC may take conflicting
actions with respect to other undivided interests to the extent that such
actions are taken on behalf of DTC Participants whose holders include such
undivided interests.
Neither Northwest, NWA Corp. nor the Trustee will have any liability for any
aspect of the records relating to or payments made on account of beneficial
ownership interests in the Certificates held by Cede, as nominee for DTC, or for
maintaining, supervising or reviewing any records relating to such beneficial
ownership interests.
The applicable Prospectus Supplement will specify any additional book-entry
registration procedures applicable to Certificates denominated in a currency
other than United States dollars.
SAME-DAY SETTLEMENT AND PAYMENT
So long as the Certificates are registered in the name of Cede, as nominee
for DTC, all payments made by Northwest to the Loan Trustee under any Lease or
any Owned Aircraft Indentures will be in immediately available funds. Such
payments, including the final distribution of principal with respect to the
Certificates of any Trust, will be passed through to DTC in immediately
available funds.
Secondary trading in long-term notes and debentures of corporate issuers is
generally settled in clearinghouse or next-day funds. In contrast, secondary
trading in pass through certificates is generally settled in immediately
available or same-day funds. Any Certificates registered in the name of Cede, as
nominee for DTC, will trade in DTC's Same-Day Funds Settlement System until
maturity, and secondary market trading activity in the Certificates will
therefore be required by DTC to settle in immediately available funds. No
assurance can be given as to the effect, if any, of settlement in same-day funds
on trading activity in the Certificates.
DEFINITIVE CERTIFICATES
Certificates will be issued in certificated form ("Definitive Certificates")
to Certificate Owners or their nominees, rather than to DTC or its nominee, only
if (i) Northwest advises the Trustee in writing that DTC is no longer willing or
able to discharge properly its responsibilities as depository with respect to
such Certificates and Northwest is unable to locate a qualified successor, (ii)
Northwest, at its option, elects to terminate the book-entry system through DTC
or (iii) after the occurrence of certain events of default or other events
specified in the related Prospectus Supplement. Certificate Owners with
fractional undivided interests aggregating not less than a majority in interest
in such Trust advise the Trustee, Northwest and DTC through DTC Participants in
writing that the continuation of a book-entry system through DTC (or a successor
thereto) is no longer in the Certificate Owners' best interest.
Upon the occurrence of any event described in the immediately preceding
paragraph, the Trustee will be required to notify all Certificate Owners through
DTC Participants of the availability of Definitive Certificates. Upon surrender
by DTC of the certificates representing the Certificates and receipt of
instructions for re-registration, the Trustee will reissue the Certificates as
Definitive Certificates to Certificate Owners.
Distributions of principal, premium, if any, and interest with respect to
Certificates will thereafter be made by the Trustee directly in accordance with
the procedures set forth in the Basic Agreement and the applicable Trust
Supplements, to holders in whose names the Definitive Certificates were
registered at the close of business on the applicable record date. Such
distributions will be made by check mailed to the address of such holder as it
appears on the register maintained by the Trustee. The final payment on any
Certificate, however, will be made only upon presentation and surrender of such
Certificate at the office or agency specified in the notice of final
distribution to Certificateholders.
Definitive Certificates will be freely transferable and exchangeable at the
office of the Trustee upon compliance with the requirements set forth in the
Basic Agreement and the applicable Trust Supplements. No service charge will be
imposed for any registration of transfer or exchange, but payment of a sum
sufficient to cover any tax or other governmental charge shall be required.
8
<PAGE>
PAYMENTS AND DISTRIBUTIONS
Subject to the effect of any cross-subordination provisions set forth in the
Prospectus Supplement for a series of Certificates, payments of principal,
premium, if any, and interest with respect to the Equipment Notes held in each
Trust will be distributed by the Trustee, upon receipt, to Certificateholders of
such Trust on the dates and in the currency specified in the applicable
Prospectus Supplement, except in certain cases when some or all of such
Equipment Notes are in default as described in the applicable Prospectus
Supplement. Payments of principal of, and interest on, the unpaid principal
amount of the Equipment Notes held in each Trust will be scheduled to be
received by the Trustee on the dates specified in the applicable Prospectus
Supplement (such scheduled payments of interest and principal on the Equipment
Notes to the Trustee are herein referred to as "Scheduled Payments," and the
dates specified in the applicable Prospectus Supplement for distribution of
Scheduled Payments to the Trustee are herein referred to as "Regular
Distribution Dates"). See "Description of the Equipment Notes General." Subject
to the effect of any cross-subordination provisions set forth in the Prospectus
Supplement for a series of Certificates, each Certificateholder of each Trust
will be entitled to receive a pro rata share of any distribution in respect of
Scheduled Payments of principal and interest made on the Equipment Notes held in
the Trust.
Payments of principal, premium, if any, and interest received by the Trustee
on account of the early redemption, if any, of the Equipment Notes relating to
one or more Aircraft held in a Trust, and payments, other than Scheduled
Payments received on a Regular Distribution Date, received by the Trustee
following default in respect of Equipment Notes held in a Trust relating to one
or more Aircraft ("Special Payments") will be distributed on the date determined
pursuant to the applicable Prospectus Supplement (a "Special Distribution Date")
except that, unless otherwise specified in the applicable Prospectus Supplement,
payments received by the Trustee following default in respect of the Equipment
Notes on a Regular Distribution Date as a result of a drawing under any
liquidity facility specified in the applicable Prospectus Supplement (each, a
"Liquidity Facility"), provided for the benefit of the Certificateholders shall
be distributed on such Regular Distribution Date. The Trustee will mail notice
to the Certificateholders of record of the applicable Trust not less than 20
days prior to the Special Distribution Date on which any Special Payment is
scheduled to be distributed by the Trustee stating such anticipated Special
Distribution Date.
POOL FACTORS
Unless there has been an early redemption, a purchase of an issue of
Equipment Notes by the related Owner Trustee after an Indenture Default (as
defined below), a default in the payment of principal in respect of one or more
issues of the Equipment Notes held in a Trust or certain actions have been taken
following a default thereon, as described in the applicable Prospectus
Supplement, the Pool Factor (as defined below) for the Trusts will decline in
proportion to the scheduled repayments of principal on the Equipment Notes held
in such Trust as described in the applicable Prospectus Supplement. In the event
of such redemption, purchase or default, the Pool Factor and the Pool Balance
(as defined below) of each Trust so affected will be recomputed after giving
effect thereto and notice thereof will be mailed to the Certificateholders of
such Trust. Each Trust will have a separate Pool Factor.
Unless otherwise described in the applicable Prospectus Supplement, the
"Pool Balance" for each Trust or for the Certificates issued by any Trust
indicates, as of any date, the original aggregate face amount of the
Certificates of such Trust less the aggregate amount of all payments made in
respect of the Certificates of such Trust other than payments made in respect of
interest or premium thereon or reimbursement of any costs and expenses in
connection therewith. The Pool Balance for each Trust as of any Regular
Distribution Date or Special Distribution Date shall be computed after giving
effect to the payment of principal, if any, on the Equipment Notes or other
Trust Property held in such Trust and the distribution thereof to be made on
that date.
9
<PAGE>
Unless otherwise described in the applicable Prospectus Supplement, the
"Pool Factor" for each Trust as of any Regular Distribution Date or Special
Distribution Date is the quotient (rounded to the seventh decimal place)
computed by dividing (i) the Pool Balance by (ii) the aggregate original
principal amount of the Equipment Notes held in such Trust. The Pool Factor for
each Trust as of any Regular Distribution Date or Special Distribution Date
shall be computed after giving effect to the payment of principal, if any, on
the Equipment Notes held in such Trust and distribution thereof to be made on
that date. The Pool Factor for each Trust will initially be 1.0000000;
thereafter, the Pool Factor for each Trust will decline as described above to
reflect reductions in the Pool Balance of such Trust. The amount of a
Certificateholder's pro rata share of the Pool Balance of a Trust can be
determined by multiplying the original denomination of the holder's Certificate
of such Trust by the Pool Factor for such Trust as of the applicable Regular
Distribution Date or Special Distribution Date. The Pool Factor and the Pool
Balance for each Trust will be mailed to Certificateholders of such Trust on
each Regular Distribution Date and Special Distribution Date.
REPORTS TO CERTIFICATEHOLDERS
On each Regular Distribution Date and Special Distribution Date, the Trustee
will include with each distribution of a Scheduled Payment or Special Payment to
Certificateholders of the related Trust a statement, giving effect to such
distribution to be made on such Regular Distribution Date or Special
Distribution Date, setting forth the following information (per $1,000 aggregate
principal amount of Certificate for such Trust, as to (i) and (ii) below):
(i) the amount of such distribution allocable to principal and the amount
allocable to premium, if any;
(ii) the amount of such distribution allocable to interest; and
(iii) the Pool Balance and the Pool Factor for such Trust.
So long as the Certificates are registered in the name of Cede, as nominee
for DTC, on the record date prior to each Regular Distribution Date and Special
Distribution Date, the Trustee will request from DTC a Securities Position
Listing setting forth the names of all DTC Participants reflected on DTC's books
as holding interests in the Certificates on such record date. On each Regular
Distribution Date and Special Distribution Date, the Trustee will mail to each
such DTC Participant the statement described above and will make available
additional copies as requested by such DTC Participant for forwarding to
Certificate Owners.
In addition, after the end of each calendar year, the Trustee will prepare
for each Certificateholder of each Trust at any time during the preceding
calendar year a report containing the sum of the amounts determined pursuant to
clauses (i) and (ii) above with respect to the Trust for such calendar year or,
in the event such person was a Certificateholder during only a portion of such
calendar year, for the applicable portion of such calendar year, and such other
items as are readily available to the Trustee and which a Certificateholder
shall reasonably request as necessary for the purpose of such
Certificateholder's preparation of its federal income tax returns. Such report
and such other items shall be prepared on the basis of information supplied to
the Trustee by the DTC Participants and shall be delivered by the Trustee to
such DTC Participants to be available for forwarding by such DTC Participants to
Certificate Owners in the manner described above.
At such time, if any, as the Certificates are issued in the form of
Definitive Certificates, the Trustee will prepare and deliver the information
described above to each Certificateholder of record of each Trust as the name
and period of beneficial ownership of such Certificateholder appears on the
records of the registrar of the Certificates.
VOTING OF EQUIPMENT NOTES
Subject to the effect of any cross-subordination provisions set forth in the
related Prospectus Supplement, the Trustee, as holder of the Equipment Notes
held in each Trust, has the right to vote and
10
<PAGE>
give consents and waivers with respect to such Equipment Notes under the Related
Indentures. The Basic Agreement and related Trust Supplement set forth (i) the
circumstances in which the Trustee may direct any action or cast any vote as the
holder of the Equipment Notes held in the applicable Trust at its own
discretion, (ii) the circumstances in which the Trustee shall seek instructions
from the Certificateholders of such Trust and (iii) the percentage of
Certificateholders required to direct the Trustee to take any such action. If
specified in the related Prospectus Supplement, the right of a Trustee to vote
and give consents and waivers with respect to the Equipment Notes held in the
related Trust may, in the circumstances set forth in an intercreditor agreement
to be executed by such Trustee, be exercisable by another person specified in
such Prospectus Supplement.
EVENTS OF DEFAULT AND CERTAIN RIGHTS UPON AN EVENT OF DEFAULT
The Prospectus Supplement will specify the events of default under the Basic
Agreement (an "Event of Default") and the Related Indentures (an "Indenture
Default"). The Indenture Defaults will include events of default under the
related Leases (a "Lease Event of Default"). With respect to any Equipment Notes
which are supported by a Liquidity Facility the Indenture Defaults or Events of
Default may include events of default under such Liquidity Facility. Unless
otherwise provided in a Prospectus Supplement, all of the Equipment Notes issued
under the same Indenture will relate to a specific Aircraft and there will be no
cross-collateralization or cross-default provisions in the Indentures, and
events resulting in an Indenture Default under any particular Indenture will not
necessarily result in an Indenture Default occurring under any other Indenture.
If an Indenture Default occurs in fewer than all of the Indentures,
notwithstanding the treatment of Equipment Notes issued under any Indenture
under which an Indenture Default has occurred, payments of principal and
interest on the Equipment Notes issued pursuant to Indentures with respect to
which an Indenture Default has not occurred will continue to be made as
originally scheduled. As described below under "--Cross-Subordination Issues," a
Prospectus Supplement may provide the terms of any cross-subordination
provisions among Certificateholders of separate Trusts. If such provisions are
so provided, payments made pursuant to a Related Indenture under which an
Indenture Default has not occurred may be distributed first to the holders of
the Certificates issued under the Trust which holds the most senior Equipment
Notes issued under all Related Indentures.
The ability of the applicable Owner Trustee or Owner Participant under the
Related Indenture to cure Indenture Defaults, including Indenture Defaults that
result from the occurrence of a Lease Event of Default under the related Lease
will be described in the Prospectus Supplement. Unless otherwise provided in a
Prospectus Supplement, with respect to any Certificates or Equipment Notes
entitled to the benefits of a Liquidity Facility, a drawing under any such
Liquidity Facility for the purpose of making a payment of interest as a result
of the failure by Northwest to have made a corresponding payment will not cure
an Indenture Default related to such failure by Northwest.
The Prospectus Supplement related to a series of Certificates will describe
the circumstances under which the Trustee of the related Trust may vote some or
all of the Equipment Notes issued under the applicable Indenture or issued under
any Related Indentures. Such Prospectus Supplement will also set forth (i) the
percentage of Certificateholders of such Trust entitled to direct the Trustee to
take any action with respect to such Equipment Notes and, if applicable,
Equipment Notes issued under any other Related Indenture. If the Equipment Notes
outstanding under an Indenture are held by more than one Trust, then the ability
of the Certificateholders issued with respect to any one Trust to cause the Loan
Trustee with respect to any Equipment Notes held in such Trust to accelerate the
Equipment Notes under the Related Indenture or to direct the exercise of
remedies by the Loan Trustee under the Related Indenture will depend, in part,
upon the proportion between the aggregate principal amount of the Equipment
Notes outstanding under such Indenture and held in such Trust and the aggregate
principal amount of all Equipment Notes outstanding under such Indenture. In
addition, if cross-subordination provisions are applicable to any series of
Certificates, then the ability of the Certificateholders of any one Trust
holding Equipment Notes issued under Related Indentures to cause the Loan
Trustee with respect to any Equipment Notes held in such Trust to accelerate the
Equipment Notes under the Related Indenture or to
11
<PAGE>
direct the exercise of remedies by the Loan Trustee under the Related Indenture
will depend, in part, upon the Class of Notes held in such Trust. If the
Equipment Notes outstanding under an Indenture are held by more than one Trust,
then each Trust will hold Equipment Notes with different terms from the
Equipment Notes held in the other Trusts and therefore the Certificateholders of
a Trust may have divergent or conflicting interests from those of the
Certificateholders of the other Trusts holding Equipment Notes relating to the
same Indenture. In addition, so long as the same institution acts as Trustee of
each Trust, in the absence of instructions from the Certificateholders of any
such Trust, the Trustee for such Trust could for the same reason be faced with a
potential conflict of interest upon an Indenture Default. In such event, the
Trustee has indicated that it would resign as Trustee of one or all such Trusts,
and a successor trustee would be appointed in accordance with the terms of the
Basic Agreement.
The Prospectus Supplement for a series of Certificates will specify whether
and under what circumstances the Trustee may or shall sell for cash to any
person all or part of such Equipment Notes. Any proceeds received by the Trustee
upon any such sale shall be deposited in an account established by the Trustee
for the benefit of the Certificateholders of such Trust for the deposit of such
Special Payments (the "Special Payments Account") and shall be distributed to
the Certificateholders of such Trust on a Special Distribution Date. The market
for Equipment Notes in default may be very limited, and there can be no
assurance that they could be sold for a reasonable price. Furthermore, so long
as the same institution acts as Trustee of multiple Trusts, it may be faced with
a conflict in deciding from which Trust to sell Equipment Notes to available
buyers. If the Trustee sells any such Equipment Notes with respect to which an
Indenture Default exists for less than their outstanding principal amount, the
Certificateholders of such Trust will receive a smaller amount of principal
distributions than anticipated and will not have any claim for the shortfall
against Northwest, any Owner Trustee, Owner Participant or the Trustee.
Furthermore, neither the Trustee nor the Certificateholders of such Trust could
take any action with respect to any remaining Equipment Notes held in such Trust
so long as no Indenture Defaults exist with respect thereto.
Any amount, other than Scheduled Payments received on a Regular Distribution
Date, distributed to the Trustee of any Trust by the Loan Trustee under any
Indenture on account of the Equipment Notes held in such Trust following an
Indenture Default under such Indenture shall be deposited in the Special
Payments Account for such Trust and shall be distributed to the
Certificateholders of such Trust on a Special Distribution Date. In addition, if
a Prospectus Supplement provides that the applicable Owner Trustee may, under
circumstances specified therein, redeem or purchase the outstanding Equipment
Notes issued under the Related Indenture, the price paid by such Owner Trustee
to the Trustee of any Trust for the Equipment Notes issued under such Indenture
and held in such Trust shall be deposited in the Special Payments Account for
such Trust and shall be distributed to the Certificateholders of such Trust on a
Special Distribution Date.
Any funds representing payments received with respect to any Equipment Notes
held in a Trust in default, or the proceeds from the sale by the Trustee of any
such Equipment Notes, held by the Trustee in the Special Payments Account for
such Trust shall, to the extent practicable, be invested and reinvested by the
Trustee in Permitted Investments pending the distribution of such funds on a
Special Distribution Date. "Permitted Investments" will be specified in the
related Prospectus Supplement.
The Basic Agreement provides that the Trustee of each Trust shall, within 90
days after the occurrence of a default in respect of such Trust, give to the
Certificateholders of such Trust notice, transmitted by mail, of all uncured or
unwaived defaults with respect to such Trust known to it, provided that, except
in the case of default in the payment of principal, premium, if any, or interest
on any of the Equipment Notes held in such Trust, the Trustee shall be protected
in withholding such notice if it in good faith determines that the withholding
of such notice is in the interests of such Certificateholders. The term
"default" as used in this paragraph only means the occurrence of an Event of
Default with respect to a Trust as described above, except that in determining
whether any such Event of Default has occurred, any grace period or notice in
connection therewith shall be disregarded.
12
<PAGE>
The Basic Agreement contains a provision entitling the Trustee of each
Trust, subject to the duty of the Trustee during a default to act with the
required standard of care, to be offered reasonable security or indemnity by the
Certificateholders of such Trust before proceeding to exercise any right or
power under the Basic Agreement at the request of such Certificateholders.
The Prospectus Supplement for a series of Certificates will specify the
percentage of Certificateholders entitled to waive, or to instruct the Trustee
to waive, any past Event of Default with respect to such Trust and thereby annul
any direction given with respect thereto. The Prospectus Supplement for a series
of Certificates will also specify the percentage of Certificateholders (and
whether of such Trust or of any other Trust holding Equipment Notes issued under
Related Indentures) entitled to waive, or to instruct the Trustee or the Loan
Trustee to waive, any past Indenture Default with respect to the Equipment Notes
held in such Trust and thereby annul any direction given with respect thereto.
MERGER, CONSOLIDATION AND TRANSFER OF ASSETS
Northwest will be prohibited from consolidating with or merging into any
other corporation or transferring substantially all of its assets as an entirety
to any other corporation unless (i) the surviving successor or transferee
corporation shall (a) be a "citizen of the United States" (as defined in Section
40102(a)(15) of Title 49 of the United States Code) holding a carrier operating
certificate issued by the Secretary of Transportation pursuant to Chapter 447 of
Title 49, United States Code, for aircraft capable of carrying 10 or more
individuals or 6,000 pounds or more of cargo and with respect to which there is
in force an air carrier operating certificate issued pursuant to Part 121 of the
regulations under the sections of Title 49, United States Code, relating to
aviation and (b) expressly assume all of the obligations of Northwest contained
in the Basic Agreement and any Trust Supplement, the Note Purchase Agreements
and the Indentures and, with respect to the Leased Aircraft Notes, the
Participation Agreements and the Leases, and any other operative documents; (ii)
immediately after giving effect to such transaction, no Indenture Default (with
respect to the Owned Aircraft Notes) or Lease Event of Default (with respect to
the Leased Aircraft Notes) shall have occurred and be continuing; and (iii)
Northwest shall have delivered a certificate and an opinion or opinions of
counsel indicating that such transaction, in effect, complies with such
conditions.
MODIFICATIONS OF THE BASIC AGREEMENT
The Basic Agreement contains provisions permitting Northwest, NWA Corp. and
the Trustee of each Trust to enter into a supplemental trust agreement, without
the consent of the holders of any of the Certificates of such Trust, (i) to
provide for the formation of such Trust and the issuance of a series of
Certificates, (ii) to evidence the succession of another corporation to
Northwest or NWA Corp. and the assumption by such corporation of Northwest's or
NWA Corp.'s obligations under the Basic Agreement and the applicable Trust
Supplement, (iii) to add to the covenants of Northwest or NWA Corp. for the
benefit of holders of such Certificates, or to surrender any right or power in
the Basic Agreement conferred upon Northwest or NWA Corp., (iv) to cure any
ambiguity or correct or supplement any defective or inconsistent provision of
the Basic Agreement or the applicable Trust Supplement or to make any other
provisions with respect to matters or questions arising thereunder, provided
such action shall not adversely affect the interests of the holders of such
Certificates, or to cure any ambiguity or correct any mistake, (v) to modify,
eliminate or add to the provisions of the Basic Agreement to the extent as shall
be necessary to continue the qualification of the Basic Agreement (including any
supplemental agreement) under the Trust Indenture Act of 1939, as amended (the
"Trust Indenture Act") and to add to the Basic Agreement such other provisions
as may be expressly permitted by the Trust Indenture Act, (vi) to provide for a
successor Trustee or to add to or change any provision of the Basic Agreement as
shall be necessary to facilitate the administration of the Trusts thereunder by
more than one Trustee, (vii) to add, eliminate or change any provisions under
such Basic Agreement that will not adversely affect the Certificateholders in
any material respect, provided that in each case, such modification does not
cause the corresponding Trust to become taxable as an "association" within the
meaning of Treasury Regulation Section 301.7701-2 or a "publicly traded
13
<PAGE>
partnership" within the meaning of Section 7704 of the Code taxable as a
corporation and (viii) to make any other amendments or modifications to the
Basic Agreement, provided such amendments or modifications shall only apply to
Certificates issued thereafter.
The Basic Agreement also contains provisions permitting Northwest, NWA Corp.
and the Trustee of each Trust, with the consent of the Certificateholders of
such Trust evidencing fractional undivided interests aggregating not less than a
majority in interest of such Trust, and, with respect to any Leased Aircraft,
with the consent of the applicable Owner Trustee (such consent not to be
unreasonably withheld), to execute supplemental trust agreements adding any
provisions to or changing or eliminating any of the provisions of the Basic
Agreement, to the extent relating to such Trust, and the applicable Trust
Supplement, or modifying the rights of the Certificateholders, except that no
such supplemental trust agreement may, without the consent of each
Certificateholder so affected thereby, (a) reduce in any manner the amount of,
or delay the timing of, any receipt by the Trustee of payments on the Equipment
Notes held in such Trust or distributions in respect of any Certificate related
to such Trust, or change the date or place of any payment in respect of any
Certificate, or make distributions payable in coin or currency other than that
provided for in such Certificates, or impair the right of any Certificateholder
of such Trust to institute suit for the enforcement of any such payment when
due, (b) permit the disposition of any Equipment Note held in such Trust, except
as provided in the Basic Agreement or the applicable Trust Supplement, or
otherwise deprive any Certificateholder of the benefit of the ownership of the
applicable Equipment Notes, (c) reduce the percentage of the aggregate
fractional undivided interests of the Trust provided for in the Basic Agreement
or the applicable Trust Supplement, the consent of the holders of which is
required for any such supplemental trust agreement or for any waiver provided
for in the Basic Agreement or such Trust Supplement, (d) modify any of the
provisions relating to the rights of the Certificateholders in respect of the
waiver of events of default or receipt of payment or (e) cause the Trust to
become taxable as an "association" within the meaning of Treasury Regulation
Section 301.7701-2 or a "publicly traded partnership" within the meaning of
Section 7704 of the Code taxable as a corporation.
MODIFICATION OF INDENTURE AND RELATED AGREEMENTS
The Prospectus Supplement will specify the Trustee's obligations in the
event that the Trustee, as the holder of any Equipment Notes held in a Trust,
receives a request for its consent to any amendment, modification or waiver
under the Indenture or other documents relating to such Equipment Notes
(including any Lease with respect to Leased Aircraft Notes or any Liquidity
Facility).
CROSS-SUBORDINATION ISSUES
The Equipment Notes issued under an Indenture may be held in more than one
Trust and one Trust may hold Equipment Notes issued under more than one Related
Indenture. Unless otherwise provided in a Prospectus Supplement, only Equipment
Notes of the same Class may be held in the same Trust. In such event, payments
made on account of a subordinate Class of Equipment Notes issued under a Related
Indenture may, under circumstances described in the related Prospectus
Supplement, be subordinated to the prior payment of all amounts owing to
Certificateholders of a Trust which holds senior Equipment Notes issued under
all Related Indentures. The Prospectus Supplement related to an issuance of
Certificates will describe any such "cross-subordination" provisions and any
related terms, including the percentage of Certificateholders under any Trust
which are permitted to (i) grant waivers of defaults under any Related
Indenture, (ii) consent to the amendment or modification of any Related
Indentures or (iii) direct the exercise of remedial actions under any Related
Indentures.
TERMINATION OF THE TRUSTS
The obligations of Northwest, NWA Corp. and the Trustee with respect to a
Trust will terminate upon the distribution to Certificateholders of such Trust
of all amounts required to be distributed to them pursuant to the Basic
Agreement and the applicable Trust Supplement and the disposition of all
property
14
<PAGE>
held in such Trust. The Trustee will send to each Certificateholder of record of
such Trust notice of the termination of such Trust, the amount of the proposed
final payment and the proposed date for the distribution of such final payment
for such Trust. The final distribution to any Certificateholder of such Trust
will be made only upon surrender of such Certificateholder's Certificates at the
office or agency of the Trustee specified in such notice of termination.
DELAYED PURCHASE
In the event that, on the delivery date of any Certificates, all of the
proceeds from the sale of such Certificates are not used to purchase the
Equipment Notes contemplated to be held in the related Trust, such Equipment
Notes may be purchased by the Trustee at any time on or prior to the date
specified in the applicable Prospectus Supplement. In such event, the Trustee
will hold the proceeds from the sale of such Certificates not used to purchase
Equipment Notes in an escrow account pending the purchase of the Equipment Notes
not so purchased. Such proceeds will be invested at the direction and risk of,
and for the account of, Northwest in certain specified investments, which may
include: (i) obligations of, or guaranteed by, the United States Government or
agencies thereof, (ii) open market commercial paper of any corporation
incorporated under the laws of the United States of America or any State thereof
rated at least P-2 or its equivalent by Moody's Investors Service, Inc. or at
least A-2 or its equivalent by Standard & Poor's Corporation, (iii) certificates
of deposit issued by commercial banks organized under the laws of the United
States or of any political subdivision thereof having a combined capital and
surplus in excess of $500,000,000 which banks or their holding companies have a
rating of A or its equivalent by Moody's Investors Service, Inc. or Standard &
Poor's Corporation, provided, however, that the aggregate amount at any one time
so invested in certificates of deposit issued by any one bank shall not exceed
5% of such bank's capital and surplus, (iv) U.S. dollar denominated offshore
certificates of deposit issued by, or offshore time deposits with, any
commercial bank described in clause (iii) above or any subsidiary thereof and
(v) repurchase agreements with any financial institution having combined capital
and surplus of at least $500,000,000 with any of the obligations described in
(i) through (iv) as collateral; provided that if all of the above investments
are unavailable, the entire amounts to be invested may be used to purchase
federal funds from an entity described in clause (iii) above; and provided
further that no investment shall be eligible as a "specified investment" unless
the final maturity date or date of return of such investment is on or before (x)
the scheduled date for the purchase of such Equipment Notes, or (y) if no date
has been scheduled for the purchase of such Equipment Notes, the next Business
Day, or (z) if Northwest has given notice that such Equipment Notes will not be
purchased, the next applicable Special Distribution Date. Earnings on such
investments in the escrow account for each Trust will be paid to Northwest
periodically, and Northwest will be responsible for any losses.
On the next Regular Distribution Date specified in the applicable Prospectus
Supplement, Northwest will pay to the Trustee an amount equal to the interest
that would have accrued on any Equipment Notes purchased after the date of the
issuance of such Certificates from the date of the issuance of such Certificates
to, but excluding, the date of the purchase of such Equipment Notes by the
Trustee.
SPECIAL DISTRIBUTION UPON UNAVAILABILITY OF AIRCRAFT
To the extent that, due to a casualty to, or other event causing the
unavailability of, one or more Aircraft, the full amount of the proceeds from
the sale of any Certificates held in the escrow account referred to above is not
used to purchase Equipment Notes on or prior to the date specified in the
applicable Prospectus Supplement, an amount equal to the unused proceeds will be
distributed by the Trustee to the holders of record of such Certificates on a
pro rata basis upon not less than 20 days' prior notice to them on a Special
Distribution Date, together with interest thereon at a rate equal to the rate
applicable to such Certificates, but without premium, and Northwest will pay to
the Trustee on such date an amount equal to such interest.
15
<PAGE>
THE PARENT GUARANTY
NWA Corp. will unconditionally guarantee (i) with respect to related Owned
Aircraft Notes, the full and prompt payment of principal, premium, if any, and
interest thereon when and as the same shall become due and payable, whether at
maturity, upon redemption or otherwise, and (ii) with respect to related Leased
Aircraft Notes, the full and prompt payment of all amounts payable by Northwest
under the related Lease when and as the same shall become due and payable. The
Parent Guaranty will be enforceable without any need first to enforce any Owned
Aircraft Note or Lease against Northwest. The Parent Guaranty will be an
unsecured obligation of NWA Corp.
LIQUIDITY FACILITY
The related Prospectus Supplement may provide that one or more payments of
interest on the Certificates of one or more series will be supported by a
Liquidity Facility issued by an institution identified in the related Prospectus
Supplement. The provider of such Liquidity Facility will have a claim senior to
the Certificateholders' as specified in the related Prospectus Supplement.
THE TRUSTEE
The Trustee for each series of Certificates will be identified in the
Prospectus Supplement. With certain exceptions, the Trustee makes no
representations as to the validity or sufficiency of the Basic Agreement, the
Trust Supplements, the Certificates, the Equipment Notes, the Indentures, the
Leases or other related documents. The Trustee shall not be liable with respect
to any series of Certificates, for 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 outstanding Certificates of such series issued under the
Basic Agreement. Subject to such provisions, such Trustee shall be under no
obligation to exercise any of its rights or powers under the Basic Agreement at
the request of any holders of Certificates issued thereunder unless they shall
have offered to the Trustee indemnity satisfactory to it. The Basic Agreement
provides that the Indenture Trustee in its individual or any other capacity may
acquire and hold Certificates issued thereunder and, subject to certain
conditions, may otherwise deal with Northwest and, with respect to the Leased
Aircraft, with any Owner Trustee with the same rights it would have if it were
not the Trustee.
The Trustee may resign with respect to any or all of the Trusts at any time,
in which event Northwest will be obligated to appoint a successor trustee. If
the Trustee ceases to be eligible to continue as Trustee with respect to a Trust
or becomes incapable of acting as Trustee or becomes insolvent, Northwest may
remove such Trustee, or any Certificateholder of such Trust for at least six
months may, on behalf of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of such Trustee and the
appointment of a successor trustee. Any resignation or removal of the Trustee
with respect to a Trust and appointment of a successor trustee for such Trust
does not become effective until acceptance of the appointment by the successor
trustee. Pursuant to such resignation and successor trustee provisions, it is
possible that a different trustee could be appointed to act as the successor
trustee with respect to each Trust. All references in this Prospectus to the
Trustee should be read to take into account the possibility that the Trusts
could have different successor trustees in the event of such a resignation or
removal.
The Basic Agreement provides that Northwest will pay the Trustee's fees and
expenses and indemnify the Trustee against certain liabilities.
16
<PAGE>
DESCRIPTION OF THE EQUIPMENT NOTES
The statements made under this caption are summaries and reference is made
to the entire Prospectus and detailed information appearing in the applicable
Prospectus Supplement. Where no distinction is made between the Leased Aircraft
Notes and the Owned Aircraft Notes or between their respective Indentures, such
statements refer to any Equipment Notes and any Indenture.
TO THE EXTENT THAT ANY PROVISION IN ANY PROSPECTUS SUPPLEMENT IS
INCONSISTENT WITH ANY PROVISION IN THIS SUMMARY, THE PROVISION OF SUCH
PROSPECTUS SUPPLEMENT WILL CONTROL.
GENERAL
All Equipment Notes will be issued under a separate Indenture either (a)
between the related Owner Trustee of a trust for the benefit of the Owner
Participant who is the beneficial owner of the related Aircraft, and the related
Loan Trustee, or (b) between Northwest and the related Loan Trustee. The
Equipment Notes issued pursuant to clause (a) of the preceding sentence will be
nonrecourse obligations of the applicable Owner Trust. Each Equipment Note will
be authenticated under an Indenture by the Loan Trustee. All Equipment Notes
issued under the same Indenture will relate to, and be secured by, one or more
Aircraft identified and described in the related Prospectus Supplement and
which, in the case of Equipment Notes issued as described in such clause (a),
are leased to Northwest pursuant to a Lease between the Owner Trustee under the
applicable Owner Trust and Northwest or, in the case of Equipment Notes issued
as described in clause (b), owned by Northwest.
With respect to each Leased Aircraft, the related Owner Trustee has acquired
or will acquire such Aircraft from Northwest or the manufacturer of such
Aircraft, as the case may be, has granted or will grant a security interest in
such Aircraft to the related Loan Trustee as security for the payments of the
related Leased Aircraft Notes, and has leased or will lease such Aircraft to
Northwest pursuant to the related Lease which has been or will be assigned to
the related Loan Trustee. Pursuant to each such Lease, Northwest will be
obligated to make or cause to be made rental and other payments to the related
Loan Trustee on behalf of the related Owner Trustee in amounts that will be
sufficient to make payments of the principal, interest and premium, if any,
required to be made in respect of such Leased Aircraft Notes when and as due and
payable.
The rental obligations of Northwest under each Lease and the obligations of
Northwest under each Owned Aircraft Indenture and under the Owned Aircraft Notes
will be general obligations of Northwest. Except in certain circumstances
involving Northwest's purchase of a Leased Aircraft and the assumption of the
Leased Aircraft Notes related thereto, the Leased Aircraft Notes are not
obligations of, or guaranteed by, Northwest.
PRINCIPAL AND INTEREST PAYMENTS
Interest received by the Trustee on the Equipment Notes held in each Trust
will be passed through to the Certificateholders of such Trust on the dates and
at the rate per annum set forth in the applicable Prospectus Supplement until
the final distribution for such Trust. Principal received by the Trustee on the
Equipment Notes held in each Trust will be passed through to the
Certificateholders of such Trust in scheduled amounts on the dates set forth in
the applicable Prospectus Supplement until the final distribution date for such
Trust.
If any date scheduled for any payment of principal, premium, if any, or
interest with respect to the Equipment Notes is not a Business Day, such payment
will be made on the next succeeding Business Day without any additional
interest.
17
<PAGE>
REDEMPTION
The applicable Prospectus Supplement will describe the circumstances,
whether voluntary or involuntary, under which the Equipment Notes may be
redeemed or purchased prior to the stated maturity date thereof, in whole or in
part, the premium, if any, applicable upon certain redemptions or purchases and
other terms applying to the redemptions or purchases of such Equipment Notes.
SECURITY
The Leased Aircraft Notes will be secured by (i) an assignment by the
related Owner Trustee to the related Loan Trustee of such Owner Trustee's rights
(except for certain rights, including those described below) under the Lease or
Leases with respect to the related Aircraft, including the right to receive
payments of rent thereunder, (ii) a mortgage granted to such Loan Trustee in
such Aircraft, subject to the rights of Northwest under such Lease or Leases and
(iii) an assignment to such Loan Trustee of certain of such Owner Trustee's
rights with respect to such Aircraft under the purchase agreement between
Northwest and the related manufacturer. Under the terms of each Lease,
Northwest's obligations in respect of each Leased Aircraft will be those of a
lessee under a "net lease." Accordingly, Northwest will be obligated, among
other things and at its expense, to cause each Leased Aircraft to be duly
registered,
to pay all costs of operating such Aircraft and to maintain, service, repair and
overhaul (or cause to be maintained, serviced, repaired and overhauled) such
Aircraft. With respect to the Leased Aircraft, the assignment by the related
Owner Trustee to the related Loan Trustee of its rights under the related Lease
will exclude, among other things, rights of such Owner Trustee and the related
Owner Participant relating to indemnification by Northwest for certain matters,
insurance proceeds payable to such Owner Trustee in its individual capacity and
to such Owner Participant under liability insurance maintained by Northwest
pursuant to such Lease or by such Owner Trustee or such Owner Participant,
insurance proceeds payable to such Owner Trustee in its individual capacity or
to such Owner Participant under certain casualty insurance maintained by such
Owner Trustee or such Owner Participant pursuant to such Lease and any rights of
such Owner Participant or such Owner Trustee to enforce payment of the foregoing
amounts and their respective rights to the proceeds of the foregoing.
The Owned Aircraft Notes will be secured by (i) a mortgage granted to the
related Loan Trustee of all of Northwest's right, title and interest in and to
such Owned Aircraft and (ii) an assignment to such Loan Trustee of certain of
Northwest's rights with respect to such Aircraft under the purchase agreement
between Northwest and the related manufacturer. Under the terms of each Owned
Aircraft Indenture, Northwest will be obligated, among other things and at its
expense, to cause each Owned Aircraft to be duly registered, to pay all costs of
operating such Aircraft and to maintain, service, repair and overhaul (or cause
to be maintained, serviced, repaired and overhauled) such Aircraft.
The Prospectus Supplement will specify the required insurance coverage with
respect to the Aircraft.
Northwest will be required, except under certain circumstances, to keep each
Aircraft registered under the Federal Aviation Act of 1958 (the "Federal
Aviation Act"), and to record the Indenture and the Lease, if applicable, among
other documents, with respect to each Aircraft under the Federal Aviation Act.
Such recordation of the Indenture, the Lease, if applicable, and other documents
with respect to each Aircraft will give the related Loan Trustee a perfected
security interest in the related Aircraft whenever it is located in the United
States or any of its territories and possessions; the Convention on the
International Recognition of Rights in Aircraft (the "Convention") provides that
such security will also be recognized, with certain limited exceptions, in those
jurisdictions that have ratified or adhere to the Convention. Although Northwest
has no current intention to do so, Northwest will have the right, subject to
certain conditions, at its own expense to register each Aircraft in countries
other than the United States. Unless otherwise specified in the applicable
Prospectus Supplement, prior to any such change in the jurisdiction of registry,
the related Loan Trustee shall have received an opinion of Northwest's
18
<PAGE>
counsel that, among other things, confirms the perfected status of the lien of
the Related Indenture and, in the case of Leased Aircraft, confirms the validity
and enforceability of the related Lease in such jurisdiction, in each case
subject, in certain cases, to certain filings, recordations or other actions.
Each Aircraft may also be operated by Northwest or under lease, sublease or
interchange arrangements in countries that are not parties to the Convention.
The extent to which the related Loan Trustee's security interest would be
recognized in an Aircraft located in a country that is not a party to the
Convention, and the extent to which such security interest would be recognized
in a jurisdiction adhering to the Convention if the Aircraft is registered in a
jurisdiction not a party to the Convention, is uncertain. Moreover, in the case
of an Indenture Default, the ability of the related Loan Trustee to realize upon
its security interest in an Aircraft could be adversely affected as a legal or
practical matter if such Aircraft were registered or located outside the United
States.
Unless otherwise specified in the applicable Prospectus Supplement, the
Equipment Notes will not be cross-collateralized and consequently the Equipment
Notes issued in respect of any one Aircraft will not be secured by any other
Aircraft or, in the case of Leased Aircraft Notes, the Lease related thereto.
Unless and until an Indenture Default with respect to a Leased Aircraft has
occurred and is continuing, the related Loan Trustee may exercise only limited
rights of the related Owner Trustee under the related Lease.
Funds, if any, held from time to time by the Loan Trustee with respect to
any Aircraft, prior to the distribution thereof, will be invested and reinvested
by such Loan Trustee. Such investment and reinvestment will be at the direction
of Northwest (except, with respect to a Leased Aircraft, in the case of a Lease
Event of Default under the applicable Lease or, with respect to an Owned
Aircraft, in the case of an Indenture Default under the applicable Indenture),
in certain investments described in the Related Indenture. The net amount of any
loss resulting from any such investments will be paid by Northwest.
Section 1110 of the Bankruptcy Code provides that, in reorganization cases
under Chapter 11 of the Bankruptcy Code, the right of a lessor with respect to,
and of the holder of a security interest in, aircraft capable of carrying 10 or
more individuals or 6,000 pounds or more of cargo (subject to certain
limitations in the case of any such aircraft first placed in service on or prior
to October 22, 1994) leased to or subject to a security interest granted by a
citizen of the United States (as defined in the Federal Aviation Act) holding an
air carrier operating certificate issued by the Secretary of Transportation
pursuant to the Federal Aviation Act for such aircraft (a certificate which
Northwest presently possesses) to take possession of such aircraft in compliance
with the provisions of the lease or security agreement is not affected by (a)
the automatic stay provision of the Bankruptcy Code, which provision generally
enjoins the taking of any action against a debtor by a creditor, (b) the
provision of the Bankruptcy Code allowing the trustee or debtor-in-possession to
use, sell or lease property of the estate and (c) any power of the bankruptcy
court to enjoin a repossession. Section 1110 provides, however, that the right
of a lessor or secured party to take possession of an aircraft in compliance
with the provisions of the lease or security agreement in the event of a default
may not be exercised for 60 days following the date of commencement of the
reorganization proceedings (unless specifically permitted by the bankruptcy
court) and may not be exercised at all if, within such 60-day period, the
trustee or debtor-in-possession agrees to perform the debtor's obligations that
become due on or after such date and cures all existing defaults (other than
defaults resulting solely from the financial condition, bankruptcy, insolvency
or reorganization of the debtor). Section 1110 does not prevent the trustee or
debtor-in-possession from rejecting a lease (including any Lease) or demanding a
renegotiation of such lease as a condition to not rejecting such lease. In
addition, if more than one aircraft are leased pursuant to a master lease and
accompanying lease supplement, the applicability of Section 1110 would be
determined on an aircraft-by-aircraft basis. Assuming Section 1110 is applicable
to all aircraft subject to a master lease, Section 1110 does not prevent the
trustee or debtor-in-possession from complying with the provisions of Section
1110 with respect to some lease supplements, and thereby retaining possession of
the related
19
<PAGE>
aircraft, and not complying with the provisions of Section 1110 with respect to
other lease supplements, and thereby enabling a repossession of other aircraft.
In connection with any issuance of Certificates under this Prospectus and
the applicable Prospectus Supplement, Northwest shall have received an opinion
from its counsel to the effect that (i) with respect to any Leased Aircraft, the
related Owner Trustee, as lessor under the related Lease, and the related Loan
Trustee, upon foreclosure of the Owner Trustee's interest in such Lease as
assignee of such Owner Trustee's rights under such Lease pursuant to the Related
Indenture, would be entitled to the benefits of Section 1110 of the Bankruptcy
Code with respect to the Aircraft initially delivered under such Lease and
subjected to the Related Indenture or (ii) with respect to any Owned Aircraft,
the related Loan Trustee under the Related Indenture would be entitled to the
benefits of Section 1110 of the Bankruptcy Code with respect to the Aircraft
initially subjected to the Related Indenture. Such opinions will not address the
possible replacement of an Aircraft after an Event of Loss (as defined in the
Indenture) in the future.
RANKING OF EQUIPMENT NOTES
Some of the Equipment Notes related to one or more Aircraft, as described in
the related Prospectus Supplement, may be subordinated and junior in right of
payment to other Equipment Notes related to the same Aircraft. The terms of such
subordination, if any, will be described in the related Prospectus Supplement.
PAYMENTS AND LIMITATION OF LIABILITY
Each Leased Aircraft will be leased by the related Owner Trustee to
Northwest for a term commencing on the delivery date thereof to such Owner
Trustee and expiring on a date not earlier than the latest maturity date of the
related Leased Aircraft Notes, unless previously terminated as permitted by the
terms of the related Lease. The basic rent and other payments under each such
Lease will be payable by Northwest in accordance with the terms specified in the
applicable Prospectus Supplement, and will be assigned by the related Owner
Trustee under the Related Indenture to the Loan Trustee to provide the funds
necessary to pay principal of, premium, if any, and interest due from such Owner
Trustee on the Leased Aircraft Notes issued under such Indenture. In certain
cases, the basic rent payments under a Lease may be adjusted, but each Lease
will provide that under no circumstances will rent payments by Northwest be less
than the scheduled payments on the related Leased Aircraft Notes. The balance of
any basic rent payment under each Lease, after payment of amounts due on the
Leased Aircraft Notes issued under the Indenture corresponding to such Lease,
will be paid over to the applicable Owner Participant. Northwest's obligation to
pay rent and to cause other payments to be made under each Lease will be general
obligations of Northwest.
With respect to the Leased Aircraft Notes, except in certain circumstances
involving Northwest's purchase of a Leased Aircraft and the assumption of the
Leased Aircraft Notes related thereto, the Leased Aircraft Notes will not be
obligations of, or guaranteed by, Northwest. With respect to the Leased Aircraft
Notes, none of the Owner Trustees, the Owner Participants or the Loan Trustees
shall be personally liable to any holder of such Leased Aircraft Notes for
amounts payable under such Leased Aircraft Notes, or, except as provided in the
Indentures relating thereto in the case of the Owner Trustees and the Loan
Trustees, for any liability under such Indentures. Except in the circumstances
referred to above, all amounts payable under any Leased Aircraft Notes (other
than payments made in connection with an optional redemption or purchase by the
related Owner Trustee or the related Owner Participant) will be made only from
(i) the assets subject to the lien of the Related Indenture with respect to such
Aircraft or the income and proceeds received by the related Loan Trustee
therefrom (including rent payable by Northwest under the related Lease) or (ii)
if so provided in the related Prospectus Supplement, the applicable Liquidity
Facility.
20
<PAGE>
With respect to the Leased Aircraft Notes, except as otherwise provided in
the Related Indentures, no Owner Trustee shall be personally liable for any
amount payable or for any statements, representations, warranties, agreements or
obligations under such Indentures or under such Leased Aircraft Notes except for
its own willful misconduct or gross negligence. None of the Owner Participants
shall have any duty or responsibility under the Leased Aircraft Indentures or
under such Leased Aircraft Notes to the related Loan Trustee or to any holder of
any such Leased Aircraft Note.
Northwest's obligations under each Owned Aircraft Indenture and under the
Owned Aircraft Notes will be general obligations of Northwest.
DEFEASANCE OF THE INDENTURES AND THE EQUIPMENT NOTES IN CERTAIN CIRCUMSTANCES
Unless otherwise specified in the applicable Prospectus Supplement, the
applicable Indenture provides that the obligations of the related Loan Trustee
and, with respect to any Leased Aircraft Notes, the related Owner Trustee or,
with respect to any Owned Aircraft Notes, Northwest under the applicable
Indenture shall be deemed to have been discharged and paid in full (except for
certain obligations, including the obligations to register the transfer or
exchange of Equipment Notes, to replace stolen, lost, destroyed or mutilated
Equipment Notes and to maintain paying agencies and hold money for payment in
trust) on the 91st day after the date of irrevocable deposit with the related
Loan Trustee of money or certain obligations of the United States or any agency
or instrumentality thereof the payment of which is backed by the full faith and
credit of the United States which, through the payment of principal and interest
in respect thereof in accordance with their terms, will provide money in an
aggregate amount sufficient to pay when due (including as a consequence of
redemption in respect of which notice is given on or prior to the date of such
deposit) principal of, premium, if any, and interest on all Equipment Notes
issued thereunder in accordance with the terms of such Indenture. Such discharge
may occur only if, among other things, there has been published by the Internal
Revenue Service a ruling to the effect that holders of such Equipment Notes will
not recognize income, gain or loss for federal income tax purposes as a result
of such deposit, defeasance and discharge and will be subject to federal income
tax on the same amount and in the same manner and at the same time as would have
been the case if such deposit, defeasance and discharge had not occurred.
Upon such defeasance, or upon payment in full of the principal of, premium,
if any, and interest on all Equipment Notes issued under any Indenture on the
maturity date therefor or deposit with the applicable Loan Trustee of money
sufficient therefor no earlier than one year prior to the date of such maturity,
the holders of such Equipment Notes will have no beneficial interest in or other
rights with respect to the related Aircraft or other assets subject to the lien
of such Indenture and such lien shall terminate.
ASSUMPTION OF OBLIGATIONS BY NORTHWEST
Unless otherwise specified in the applicable Prospectus Supplement with
respect to Leased Aircraft, upon the exercise by Northwest of any purchase
options it may have under the related Lease prior to the end of the term of such
Lease, Northwest may assume on a full recourse basis all of the obligations of
the Owner Trustee (other than its obligations in its individual capacity) under
the Indenture with respect to such Aircraft, including the obligations to make
payments in respect of the related Leased Aircraft Notes. In such event, certain
relevant provisions of the related Lease, including (among others) provisions
relating to maintenance, possession and use of the related Aircraft, liens,
insurance and events of default will be incorporated into such Indenture, and
the Leased Aircraft Notes issued under such Indenture will not be redeemed and
will continue to be secured by such Aircraft. It is a condition to such
assumption that, if such Aircraft is registered under the laws of the United
States, an opinion of counsel be delivered at the time of such assumption
substantially to the effect that the related Loan Trustee under such Indenture
should, immediately following such assumption, be entitled to the benefits of
Section 1110 of the Bankruptcy Code with respect to such Aircraft (including the
engines related
21
<PAGE>
thereto), but such opinion need not be delivered to the extent that the benefits
of such Section 1110 are not available to the Loan Trustee with respect to such
Aircraft or any engine related thereto immediately prior to such assumption.
LIQUIDITY FACILITY
The related Prospectus Supplement may provide that one or more payments of
interest on the related Equipment Notes of one or more series or distributions
made by the Trustee of the related Trust will be supported by a Liquidity
Facility issued by an institution identified in the related Prospectus
Supplement. Unless otherwise provided in the related Prospectus Supplement, the
provider of the Liquidity Facility will have a senior claim upon the assets
securing the Equipment Notes.
INTERCREDITOR ISSUES
Equipment Notes may be issued in different Classes, which means that the
Equipment Notes may have different payment priorities even though they are
issued by the same Owner Trustee and relate to the same Aircraft. In such event,
the related Prospectus Supplement will describe the priority of distributions
among such Equipment Notes (and any Liquidity Facilities therefor), the ability
of any Class to exercise and/or enforce any or all remedies with respect to the
related Aircraft (and, if the Equipment Notes are Leased Aircraft Notes, the
Lease related thereto) and certain other intercreditor terms and provisions.
UNITED STATES FEDERAL INCOME TAX CONSEQUENCES
GENERAL
The following discussion describes the principal U.S. federal income tax
consequences to Certificateholders of the purchase, ownership and disposition of
the Certificates and in the opinion of Cadwalader, Wickersham & Taft such
discussion is accurate in all material respects of the matters discussed herein.
Except as otherwise specified, the discussion is addressed to beneficial owners
of Certificates ("U.S. Certificateholders") that are citizens or residents of
the United States, corporations, partnerships or other entities created or
organized in or under the laws of the United States or any State, or estates or
trusts the income of which is subject to U.S. federal income taxation regardless
of its source ("U.S. Persons") that will hold the Certificates as capital
assets. This discussion does not address the tax treatment of U.S.
Certificateholders that may be subject to special tax rules, such as banks,
insurance companies, dealers in securities or commodities, tax-exempt entities,
holders that will hold Certificates as part of a straddle or holders that have a
"functional currency" other than the U.S. Dollar, nor does it address the tax
treatment of U.S. Certificateholders that do not acquire Certificates as part of
the initial offering. This discussion does not describe any tax consequences
arising under the laws of any State, locality or taxing jurisdiction other than
the United States.
This discussion is based upon the tax laws of the United States as in effect
on the date of this Prospectus, as well as judicial and administrative
interpretations thereof (in final or proposed form) available on or before such
date. All of the foregoing are subject to change or differing interpretations,
which could apply retroactively. Prospective investors should note that no
rulings have been or will be sought from the Internal Revenue Service (the
"IRS") with respect to any of the federal income tax consequences discussed
below, and no assurance can be given the IRS will not take contrary positions.
PROSPECTIVE INVESTORS SHOULD CONSULT THEIR OWN TAX ADVISORS WITH RESPECT TO THE
FEDERAL, STATE, LOCAL AND FOREIGN TAX CONSEQUENCES OF THE PURCHASE, OWNERSHIP
AND DISPOSITION OF THE CERTIFICATES.
TAX STATUS OF THE TRUSTS
In the opinion of Cadwalader, Wickersham & Taft, special tax counsel to
Northwest, in the case of each Series of Certificates, each Trust will be
classified as a grantor trust under subpart E, Part I of
22
<PAGE>
Subchapter J of the Internal Revenue Code of 1986, as amended (the "Code") and
not as an association taxable as a corporation for U.S. federal income tax
purposes. Accordingly, each U.S. Certificateholder will be subject to federal
income taxation as if it owned directly a pro rata undivided interest in each
asset owned by the corresponding Trust and paid directly its share of fees and
expenses paid by such Trust.
TAXATION OF CERTIFICATEHOLDERS GENERALLY
A U.S. Certificateholder will be treated as owning its pro rata undivided
interest in each of the Equipment Notes and any other property held by the
related Trust. Accordingly, each U.S. Certificateholder's share of interest paid
on the Equipment Notes will be taxable as ordinary income, as it is paid or
accrued, in accordance with such owner's method of accounting for U.S. federal
income tax purposes and a U.S. Certificateholder's share of premium, if any,
paid on the Equipment Notes will be treated as capital gain. Any amounts
received by a Trust from Interest Drawings under the relevant Liquidity Facility
will be treated for U.S. federal income tax purposes as having the same
characteristics as the payments they replace.
Each U.S. Certificateholder will be entitled to deduct, consistent with its
method of accounting, its pro rata share of fees and expenses paid or incurred
by the corresponding Trust as provided in Section 162 or 212 of the Code.
Certain fees and expenses, including fees paid to the Trustee and the Liquidity
Provider, will be borne by parties other than the Certificateholders. It is
possible that such fees and expenses will be treated as constructively received
by the Trust, in which event a U.S. Certificateholder will be required to
include in income and will be entitled to deduct its pro rata share of such fees
and expenses. If a U.S. Certificateholder is an individual, estate or trust, the
deduction for such holder's share of such fees or expenses will be allowed only
to the extent that all of such holder's miscellaneous itemized deductions,
including such holder's share of such fees and expenses, exceed 2% of such
holder's adjusted gross income. In addition, in the case of U.S.
Certificateholders who are individuals, certain otherwise allowable itemized
deductions will be subject generally to additional limitations on itemized
deductions under the applicable provisions of the Code.
EFFECT OF SUBORDINATION OF SUBORDINATED CERTIFICATEHOLDERS
If any Trust with respect to a Series are subordinated with respect to other
Trusts of the same Series (such Trusts being the "Subordinated Trusts" and the
related Certificates being the "Subordinated Certificates") receives less than
the full amount of the receipts of principal or interest paid with respect to
the Equipment Notes held by it (any shortfall in such receipts being the
"Shortfall Amounts") because of the subordination of the Equipment Notes held by
such Trust under the Intercreditor Agreement, the corresponding owners of
beneficial interests in the Subordinated Certificates (the "Subordinated
Certificateholders") would probably be treated for federal income tax purposes
as if they had (1) received as distributions their full share of such receipts,
(2) paid over to the relevant preferred class of Certificateholders an amount
equal to their share of such Shortfall Amount, and (3) retained the right to
reimbursement of such amounts to the extent of future amounts payable to such
Subordinated Certificateholders with respect to such Shortfall Amount.
Under this analysis, (1) Subordinated Certificateholders incurring a
Shortfall Amount would be required to include as current income any interest or
other income of the corresponding Subordinated Trust that was a component of the
Shortfall Amount, even though such amount was in fact paid to the relevant
preferred class of Certificateholders, (2) a loss would only be allowed to such
Subordinated Certificateholders when their right to receive reimbursement of
such Shortfall Amount became worthless (i.e., when it becomes clear that funds
will not be available from any source to reimburse such loss), and (3)
reimbursement of such Shortfall Amount prior to such a claim of worthlessness
would not be taxable income to Subordinated Certificateholders because such
amount was previously included in income. These results should not significantly
affect the inclusion of income for Subordinated Certificateholders
23
<PAGE>
on the accrual method of accounting, but could accelerate inclusion of income to
Subordinated Certificateholders on the cash method of accounting by, in effect,
placing them on the accrual method.
ORIGINAL ISSUE DISCOUNT
The Equipment Notes may be issued with original issue discount ("OID"),
which may require U.S. Certificateholders to include such OID in gross income in
advance of the receipt or accrual of the stated interest on such Equipment
Notes. The Prospectus Supplement will state whether any Equipment Notes to be
held by the related Trust will be issued with OID. Generally, a holder of a debt
instrument issued with original issue discount that is not DE MINIMIS must
include such original issue discount in income for federal income tax purposes
as it accrues, in advance of the receipt of the cash attributable to such
income, under a method that takes into account the compounding of interest.
MARKET DISCOUNT
Generally, the term "market discount" means the excess of the remaining
principal amount of a Certificate over the holder's tax basis in such
Certificate immediately after its acquisition, subject to a DE MINIMIS
exception.
A holder who acquires a Certificate at a market discount will be required to
treat any gain realized on the disposition of such Certificate, except in
certain nonrecognition transactions, as ordinary income to the extent of the
market discount that accrued during the period that such holder held such
Certificate. Further, a disposition of a Certificate by gift (and in certain
other circumstances) could result in the recognition of market discount income,
computed as if such Certificate had been sold for its fair market value.
In the case of a partial principal payment on indebtedness subject to the
market discount rules, Section 1276 of the Code requires that such payment be
included in gross income as ordinary income to the extent such payment does not
exceed the market discount that has accrued during the period such indebtedness
was held. The amount of any accrued market discount later required to be
included in income upon a disposition, or subsequent partial principal payment,
will be reduced by the amount of accrued market discount previously included in
income.
Until Treasury regulations are issued, the explanatory Conference Committee
Report to the Tax Reform Act of 1986 (the "Conference Report") indicates that
holders of installment obligations (such as the Equipment Notes) with market
discount may elect to accrue market discount either (i) on the basis of a
constant interest rate or (ii) in the ratio to the total amount of remaining
market discount that the amount of stated interest paid in the accrual period
bears to the total amount of stated interest remaining to be paid on the
installment obligation as of the beginning of such period. Under Section 1277 of
the Code, if in any taxable year interest paid or accrued on indebtedness
incurred or continued to purchase or carry indebtedness subject to the market
discount rules exceeds the interest currently includable in income with respect
to such indebtedness, deduction of the excess interest must be deferred to the
extent of the market discount allocable to the taxable year. The deferred
portion of any interest expense will generally be deductible when such market
discount is included in income upon the sale or other disposition (including
repayment) of the indebtedness.
A holder of a Certificate acquired at a market discount may elect under
Section 1278 of the Code, in the manner provided by Revenue Procedure 92-67,
1992-34 I.R.B. 6, to include such discount in income as it accrues. The current
inclusion election applies to all market discount obligations acquired on or
after the first day to which the election applies, and may not be revoked
without the consent of the IRS. If a holder of a Certificate elects to include
market discount in income as it accrues, the foregoing rules of Section 1276 and
1277 of the Code with respect to the recognition of ordinary income on a sale or
other disposition of such Certificate and the deferral of interest deductions on
indebtedness related to such Certificate would not apply.
24
<PAGE>
The IRS is authorized to issue regulations to implement the market discount
provisions of the Code. No such regulations have been issued or proposed. It is
impossible to anticipate what effect, if any, such regulations could have on the
Certificateholders.
AMORTIZABLE BOND PREMIUM
A U.S. Certificateholder should generally be considered to have acquired an
interest in an Equipment Note at a premium to the extent the purchaser's tax
basis allocable to such interest exceeds the remaining principal amount of the
Equipment Note allocable to such interest. In that event, a U.S.
Certificateholder who holds a Certificate as a capital asset may elect to
amortize that premium as an offset to interest income under Section 171 of the
Code with corresponding reductions in the U.S. Certificateholder's tax basis in
its Certificate. In the case of installment obligations (such as the Equipment
Notes), the Conference Report indicates a Congressional intent that amortization
will be in accordance with the same rules that will apply to the accrual of
market discount on installment obligations (see discussion above).
Under certain circumstances, amortizable bond premium may be determined by
reference to any early call date. It is unclear how the amortizable bond premium
rules apply where, as in the case with the Equipment Notes, the amount of
redemption premium payable on an early call date is unknown. In addition, the
treatment of any unamortized bond premium remaining at the time of an early call
is unclear. The U.S. Certificateholders are urged to consult their own tax
advisors as to the treatment of any amortizable bond premiums.
SALE OR OTHER DISPOSITION OF THE CERTIFICATES
Upon the sale, exchange or other disposition of a Certificate, a U.S.
Certificateholder generally will recognize capital gain or loss equal to the
difference between the amount realized on the disposition (other than any amount
attributable to accrued interest which will be taxable as ordinary income) and
the U.S. Certificateholder's adjusted tax basis in the related Equipment Notes
and any other assets held by the corresponding Trust. A U.S. Certificateholder's
adjusted tax basis will equal the holder's cost for its Certificate, plus any
accrued OID or market discount previously included in income or less any
amortized bond premium or any previously recognized losses or prior principal
payments. Any gain or loss generally will be capital gain or loss (other than
accrued market discount not previously included in income) if the Certificate
was held as a capital asset.
FOREIGN CERTIFICATEHOLDERS
Subject to the discussion of backup withholding below, payments of principal
and interest on the Equipment Notes to, or on behalf of, any beneficial owner of
a Certificate that is not a U.S. Person (a "Non-U.S. Certificateholder") will
not be subject to U.S. federal withholding tax; PROVIDED, in the case of
interest, that (i) such Non-U.S. Certificateholder does not actually or
constructively own 10% or more of the total combined voting power of all classes
of the stock of any Owner Participant or any transferee of such interest, (ii)
such Non-U.S. Certificateholder is not a controlled foreign corporation for U.S.
tax purposes that is related to an Owner Participant and (iii) either (A) the
Non-U.S. Certificateholder certifies, under penalties of perjury, that it is not
a U.S. Person and provides its name and address or (B) a securities clearing
organization, bank or other financial institution that holds customers'
securities in the ordinary course of its trade or business (a "financial
institution") and holds the Certificate certifies, under penalties of perjury,
that such statement has been received from the Non-U.S. Certificateholder by it
or by another financial institution and furnishes the payor with a copy thereof.
Any capital gain realized upon the sale, exchange, retirement or other
disposition of a Certificate or upon receipt of premium paid on an Equipment
Note by a Non-U.S. Certificateholder will not be subject to U.S. federal income
or withholding taxes if (i) such gain is not effectively connected with a U.S.
trade or
25
<PAGE>
business of the holder and (ii) in the case of an individual, such holder is not
present in the United States for 183 days or more in the taxable year of the
sale, exchange, retirement or other disposition or receipt.
BACKUP WITHHOLDING
Payments made on the Certificates and proceeds from the sale of Certificates
will not be subject to a backup withholding tax of 31% unless, in general, the
Certificateholder fails to comply with certain reporting procedures or otherwise
fails to establish an exemption from such tax under applicable provisions of the
Code.
ERISA CONSIDERATIONS
Unless otherwise indicated in the applicable Prospectus Supplement, the
Certificates may, subject to certain legal restrictions, be purchased and held
by an employee benefit plan (a "Plan") subject to Title I of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA"), or an individual
retirement account or an employee benefit plan subject to section 4975 of the
Code. A fiduciary of a Plan must determine that the purchase and holding of a
Certificate is consistent with its fiduciary duties under ERISA and does not
result in a non-exempt prohibited transaction as defined in section 406 of ERISA
or section 4975 of the Code. Employee benefit plans which are governmental plans
(as defined in section 3(32) of ERISA) and certain church plans (as defined in
section 3(33) of ERISA) are not subject to Title I of ERISA or section 4975 of
the Code. The Certificates may, subject to certain legal restrictions, be
purchased and held by such plans.
PLAN OF DISTRIBUTION
Certificates may be sold to one or more underwriters for public offering and
sale by them or to investors or other persons directly or through one or more
dealers or agents. Any such underwriter, dealer or agent involved in the offer
and sale of the Certificates will be named in an applicable Prospectus
Supplement.
The Certificates may be sold at a fixed price or prices, which may be
changed, or from time to time at market prices prevailing at the time of sale,
at prices related to such prevailing market prices or at negotiated prices.
Dealer trading may take place in certain of the Certificates, including
Certificates not listed on any securities exchange. Northwest does not intend to
apply for listing of the Certificates on a national securities exchange.
Northwest also may, from time to time, authorize underwriters acting as
Northwest's agents to offer and sell the Certificates upon the terms and
conditions as shall be set forth in any Prospectus Supplement. In connection
with the sale of Certificates, underwriters may be deemed to have received
compensation from Northwest in the form of underwriting discounts or commissions
and may also receive commissions from purchasers of Certificates for whom they
may act as agent. Underwriters may sell Certificates to or through dealers, and
such dealers may receive compensation in the form of discounts, concessions or
commissions from the underwriters and/or commissions (which may be changed from
time to time) from the purchasers for whom they may act as agent.
If a dealer is used directly by Northwest in the sale of Certificates in
respect of which this Prospectus is delivered, such Certificates will be sold to
the dealer, as principal. The dealer may then resell such Certificates to the
public at varying prices to be determined by such dealer at the time of resale.
Any such dealer and the terms of any such sale will be set forth in the
Prospectus Supplement relating thereto.
Certificates may be offered and sold through agents designated by Northwest
from time to time. Any such agent involved in the offer or sale of the
Certificates in respect of which this Prospectus is delivered will be named in,
and any commissions payable by Northwest to such agent will be set forth in, the
applicable Prospectus Supplement. Unless otherwise indicated in the applicable
Prospectus Supplement, any such agent will be acting on a best efforts basis for
the period of its appointment.
26
<PAGE>
Offers to purchase Certificates may be solicited directly by Northwest and
sales thereof may be made by Northwest directly to institutional investors or
others who may be deemed to be underwriters within the meaning of the Securities
Act with respect to any resale thereof. The terms of any such sales will be
described in the Prospectus Supplement relating thereto. Except as set forth in
the applicable Prospectus Supplement, no director, officer or employee of
Northwest or NWA Corp. will solicit or receive a commission in connection with
direct sales by Northwest of the Certificates, although such persons may respond
to inquiries by potential purchasers and perform ministerial and clerical work
in connection with any such direct sales.
Any underwriting compensation paid by Northwest to underwriters, dealers or
agents in connection with the offering of Certificates, and any discounts,
concessions or commissions allowed by underwriters to participating dealers,
will be set forth in an applicable Prospectus Supplement. Underwriters, dealers
and agents participating in the distribution of the Certificates may be deemed
to be underwriters, and any discounts and commissions received by them and any
profit realized by them on resale of the Certificates may be deemed to be
underwriting discounts and commissions under the Securities Act. Underwriters,
dealers and agents may be entitled, under agreements with Northwest, to
indemnification against and contribution toward certain civil liabilities,
including liabilities under the Securities Act, and to reimbursement by
Northwest for certain expenses.
Underwriters, dealers and agents may engage in transactions with, or perform
services for, NWA Corp. and its subsidiaries in the ordinary course of business.
If so indicated in an applicable Prospectus Supplement and subject to
existing market conditions, Northwest will authorize dealers acting as
Northwest's agents to solicit offers by certain institutions to purchase
Certificates at the public offering price set forth in such Prospectus
Supplement pursuant to Delayed Delivery Contracts ("Contracts") providing for
payment and delivery on the date or dates stated in such Prospectus Supplement.
Each Contract will be for an amount not less than, and the aggregate principal
amount of Certificates sold pursuant to Contracts shall not be less nor more
than, the respective amounts stated in such Prospectus Supplement. Institutions
with whom Contracts, when authorized, may be made include commercial and savings
banks, insurance companies, pension funds, investment companies, educational and
charitable institutions and other institutions, but will in all cases be subject
to the approval of Northwest. Contracts will not be subject to any conditions
except the purchase by an institution of the Certificates covered by its
Contracts 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. A
commission indicated in the applicable Prospectus Supplement will be granted to
underwriters and agents soliciting purchases of Certificates pursuant to
Contracts accepted by Northwest. Agents and underwriters will have no
responsibility in respect of the delivery or performance of Contracts.
If an underwriter or underwriters are utilized in the sale of any
Certificates, the applicable Prospectus Supplement will contain a statement as
to the intention, if any, of such underwriters at the date of such Prospectus
Supplement to make a market in the Certificates. No assurances can be given that
there will be a market for the Certificates.
The place and time of delivery for the Certificates in respect of which this
Prospectus is delivered will be set forth in the applicable Prospectus
Supplement.
LEGAL OPINIONS
Unless otherwise indicated in the applicable Prospectus Supplement, the
validity of the Certificates and the Parent Guaranty will be passed upon for
Northwest by Simpson Thacher & Bartlett (a partnership which includes
professional corporations), New York, New York. Unless otherwise indicated in
the applicable Prospectus Supplement, Simpson Thacher & Bartlett will rely on
the opinion of counsel for the Trustee as to certain matters relating to the
authorization, execution and delivery of such Certificates by, and the valid and
binding effect thereof on, such Trustee. Certain federal income tax
27
<PAGE>
matters will be passed upon by Cadwalader, Wickersham & Taft, New York, New
York, special tax counsel to Northwest.
EXPERTS
The consolidated financial statements and schedule of Northwest Airlines
Corporation, appearing or incorporated by reference in Northwest Airlines
Corporation's Annual Report (Form 10-K) for the year ended December 31, 1996,
have been audited by Ernst & Young LLP, independent auditors, as set forth in
their report thereon included or incorporated by reference therein and
incorporated herein by reference. Such consolidated financial statements and
schedule are incorporated herein by reference in reliance upon such report given
upon the authority of such firm as experts in accounting and auditing.
28
<PAGE>
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
NO DEALER, SALESPERSON OR OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED OR
INCORPORATED BY REFERENCE IN THIS PROSPECTUS OR ANY RELATED PROSPECTUS
SUPPLEMENT IN CONNECTION WITH THE OFFER CONTAINED IN THIS PROSPECTUS AND SUCH
PROSPECTUS SUPPLEMENT AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATIONS
MUST NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY NORTHWEST, NWA CORP. OR ANY
UNDERWRITERS, AGENTS OR DEALERS. THIS PROSPECTUS AND ANY RELATED PROSPECTUS
SUPPLEMENT DO NOT CONSTITUTE AN OFFER TO SELL OR SOLICITATION OF AN OFFER TO BUY
SECURITIES IN ANY JURISDICTION TO ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH
OFFER OR SOLICITATION. NEITHER THE DELIVERY OF THIS PROSPECTUS AND ANY RELATED
PROSPECTUS SUPPLEMENT NOR ANY SALE MADE HEREUNDER OR THEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE AN IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE
AFFAIRS OF NORTHWEST OR NWA CORP. SINCE THE DATE HEREOF OR THEREOF OR THAT THE
INFORMATION CONTAINED HEREIN OR THEREIN IS CORRECT AT ANY TIME SUBSEQUENT TO THE
DATE HEREOF.
--------------
TABLE OF CONTENTS
<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Available Information..................................................... 2
Incorporation of Certain Documents by Reference........................... 2
The Company............................................................... 3
General Outline of Trust Structure........................................ 3
Use of Proceeds........................................................... 3
Ratio of Earnings to Fixed Charges........................................ 4
Description of the Certificates........................................... 4
Description of the Equipment Notes........................................ 17
United States Federal Income Tax Consequences............................. 22
ERISA Considerations...................................................... 26
Plan of Distribution...................................................... 26
Legal Opinions............................................................ 27
Experts................................................................... 28
</TABLE>
$500,000,000
NORTHWEST
AIRLINES, INC.
PASS THROUGH CERTIFICATES
-----------
APPLICABLE UNDERLYING PAYMENTS
FULLY AND UNCONDITIONALLY GUARANTEED BY
NORTHWEST AIRLINES
CORPORATION
---------------------
PROSPECTUS
---------------------
, 1997
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
ITEM 14. OTHER EXPENSES OF ISSUANCE AND DISTRIBUTION
The estimated expenses in connection with the issuance and distribution of
the securities being registered, other than underwriting discounts and
commissions, are set forth in the following table.
<TABLE>
<S> <C>
Securities and Exchange Commission fee...................... $ 86,207
Printing and engraving expenses............................. 100,000*
Accountants' fees and expenses.............................. 25,000*
Legal fees and expenses..................................... 200,000*
Blue Sky fees and expenses.................................. 20,000*
Trustees' fees and expenses................................. 10,000*
Rating Agency fees.......................................... 247,000*
Miscellaneous............................................... 91,793*
---------
Total................................................... $ 780,000*
---------
---------
</TABLE>
- --------------
*Estimated and subject to future contingencies.
ITEM 15. INDEMNIFICATION OF DIRECTORS AND OFFICERS
Section 302A.521 of the Minnesota Business Corporation Act (the "Minnesota
Law") requires a Minnesota corporation to indemnify a person made or threatened
to be made a party to a proceeding by reason of the former or present official
capacity of the person against judgments, penalties, fines and reasonable
expenses (including attorneys' fees), provided that the person has not otherwise
been indemnified, was acting in good faith, received no improper personal
benefit as a result of the conduct in question, in the case of a criminal
proceeding, had no reasonable cause to believe the conduct was unlawful and,
depending upon the capacity in which such person was acting, believed that the
conduct was in the best interests of the corporation or was not considered to be
opposed to the best interests of the corporation. Under Minnesota Law, the
termination of a proceeding by judgment, order, settlement, conviction or upon a
pleading of NOLO CONTENDERE or its equivalent does not, of itself, establish
that a person is not eligible for indemnification. Minnesota corporations are
permitted to include provisions in their bylaws or articles of incorporation
that prohibit or limit indemnification otherwise required by Minnesota law.
Section 7 of Northwest Airlines, Inc.'s ("Northwest") bylaws (filed as
Exhibit 4(o)) requires Northwest to indemnify any persons, including officers
and directors as permitted by Section 302A.521 of the Minnesota Law. In
addition, Section 7 also specifies that Northwest shall indemnify its officers
and directors against all costs and expenses incurred in connection with or
arising out of any action, suit or proceeding in which such officer or director
may be involved as a result of being or having been a director or officer of
Northwest. However, Section 7 prohibits indemnification when an action, suit or
proceeding results in an officer or director being adjudicated derelict in the
performance of his or her duties as an officer or director, or when a settlement
or compromise is effected when the total cost of such settlement substantially
exceeds the expense which might reasonably be incurred in litigating the matter
to a final conclusion.
Section 145 of the General Corporation Law of the State of Delaware (the
"Delaware Law") empowers a Delaware corporation to indemnify any persons who
are, or are threatened to be made, parties to any threatened, pending or
completed legal action, suit or proceeding, whether civil, criminal,
administrative or investigative (other than an action by or in the right of such
corporation), by reason of the fact that such person is or was an officer,
director, employee or agent of such corporation, or is or was
II-1
<PAGE>
serving at the request of such corporation as a director, officer, employee or
agent of another corporation, partnership, joint venture, trust or other
enterprise. The indemnity may include 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, provided that
such officer, director, employee or agent acted in good faith and in a manner he
reasonably believed to be in or not opposed to the corporation's best interests,
and, for criminal proceedings, had no reasonable cause to believe his conduct
was unlawful. A Delaware corporation may indemnify officers and directors in an
action by or in the right of the corporation under the same conditions, except
that no indemnification is permitted without judicial approval if the officer or
director is adjudged to be liable to the corporation. Where an officer or
director is successful on the merits or otherwise in the defense of any action
referred to above, the corporation must indemnify him against the expenses which
such officer or director actually and reasonably incurred.
In accordance with Section 102(b)(7) of the Delaware Law, the Second Amended
and Restated Certificate of Incorporation of Northwest Airlines Corporation
("NWA Corp.") provides that the directors of NWA Corp. shall not be personally
liable to NWA Corp. or its stockholders for monetary damages for violations of
their fiduciary duty.
Article VIII of the bylaws, as amended and restated, of NWA Corp. (filed as
Exhibit 4(m)) provides for indemnification of the officers and directors of NWA
Corp. to the full extent permitted by applicable law.
ITEM 16. EXHIBITS
The following Exhibits are filed as part of this Registration Statement:
<TABLE>
<S> <C>
Exhibit 1(a) Form of Underwriting Agreement for Debt Securities or
Warrants to Purchase Debt Securities of Northwest.
Exhibit 1(b) Form of Underwriting Agreement for Pass Through Certificates
of Northwest (filed as Exhibit 1(b) to the Registration
Statement on Form S-3 (file No. 33-74772) (the "S-3") and
incorporated herein by reference).
Exhibit 4(a) Senior Debt Securities Indenture, dated as of March 1, 1997,
among Northwest, NWA Corp. and State Street Bank & Trust
Company, ("State Street"), as Trustee, relating to the
Senior Debt Securities of Northwest.*
Exhibit 4(b) Form of Senior Subordinated Debt Securities Indenture among
Northwest, NWA Corp. and State Street, as Trustee, relating
to the Senior Subordinated Debt Securities of Northwest
(filed as Exhibit 4(b) to the S-3 and incorporated herein by
reference).
Exhibit 4(c) Form of Senior Debt Securities of Northwest.*
Exhibit 4(d) Form of Senior Subordinated Debt Securities of Northwest.*
Exhibit 4(e) Form of Warrant Agreement for Warrants to Purchase Debt
Securities of Northwest that are Sold Attached to Debt
Securities of Northwest (filed as Exhibit 4(g) to the S-3
and incorporated herein by reference).
Exhibit 4(f) Form of Warrant to Purchase Debt Securities of Northwest
that are Sold Attached to Debt Securities of Northwest
(included as part of Exhibit 4(e)).
Exhibit 4(g) Form of Warrant Agreement for Warrants to Purchase Debt
Securities of Northwest that are Sold Alone (filed as
Exhibit 4(i) to the S-3 and incorporated herein by
reference).
</TABLE>
II-2
<PAGE>
<TABLE>
<S> <C>
Exhibit 4(h) Form of Warrant to Purchase Debt Securities of Northwest
that are Sold Alone (included as part of Exhibit 4(g)).
Exhibit 4(i) Pass Through Trust Agreement, dated as of June 3, 1996,
among NWA Corp., Northwest and State Street, as Trustee,
relating to Pass Through Certificates of Northwest.
Exhibit 4(j) Form of Pass Through Certificate (included as part of
Exhibit 4(i)).
Exhibit 4(k) Second Amended and Restated Certificate of Incorporation of
NWA Corp. (filed as Exhibit 3.1 to NWA Corp.'s Registration
Statement on Form S-1, File No. 33-74210 (the "S-1") and
incorporated herein by reference).
Exhibit 4(l) Certificate of Amendment to the Second Amended and Restated
Certificate of Incorporation of NWA Corp. (filed as Exhibit
3.3 to the S-1 and incorporated herein by reference).
Exhibit 4(m) Amended and Restated By-Laws of NWA Corp. (filed as Exhibit
3.2 to the S-1 and incorporated herein by reference).
Exhibit 4(n) Restated Certificate of Incorporation of Northwest (filed as
Exhibit 4(s) to the S-3 and incorporated herein by
reference).
Exhibit 4(o) Bylaws of Northwest (filed as Exhibit 4(t) to the
Registration Statement on Form S-3 (File No. 333-2516) and
incorporated herein by reference).
Exhibit 4(p) Amended and Restated Certificate of Designation of Series A
Preferred Stock of NWA Corp. (included in Exhibit 4(k)).
Exhibit 4(q) Amended and Restated Certificate of Designation of Series B
Preferred Stock of NWA Corp. (included in Exhibit 4(k)).
Exhibit 4(r) Certificate of Designation of Series C Preferred Stock of
NWA Corp. (included in Exhibit 4(k)).
Exhibit 4(s) Certificate of Designation of Series D Junior Participating
Preferred Stock of NWA Corp. (filed as Exhibit A to Exhibit
1 to NWA Corps.'s Current Report on Form 8-K dated November
16, 1995 and incorporated herein by reference).
Exhibit 4(t) The Registrants hereby agree to furnish to the Commission,
upon request, copies of certain instruments defining the
rights of holders of long-term debt of the kind described in
Item 601(b)(4) of Regulation S-K.
Exhibit 5 Opinion of Simpson Thacher & Bartlett as to the legality of
the Securities.*
Exhibit 8 Tax Opinion of Cadwalader, Wickersham & Taft relating to
Pass Through Certificates.
Exhibit 23(a) Consent of Ernst & Young LLP.*
Exhibit 23(b) Consent of Simpson Thacher & Bartlett (included as part of
Exhibit 5).*
Exhibit 23(c) Consent of Cadwalader, Wickersham & Taft (included as part
of Exhibit 8).
Exhibit 24 Powers of Attorney (included in signature pages II-6 and
II-8 of registration statement as initially filed).
</TABLE>
II-3
<PAGE>
<TABLE>
<S> <C>
Exhibit 25(a) Form T-1 Statement of Eligibility under the Trust Indenture
Act of 1939, as amended (the "Trust Indenture Act"), of
State Street, as Trustee under the Senior Debt Securities
Indenture of Northwest and NWA Corp. (filed as Exhibit 25.1
to NWA Corp.'s Current Report on Form 8-K, dated March 6,
1997 and incorporated herein by reference).
Exhibit 25(b) Form T-1 Statement of Eligibility under the Trust Indenture
Act of State Street, as Trustee under the Senior
Subordinated Debt Securities Indenture of Northwest and NWA
Corp. and the Pass Through Trust Agreement of NWA Corp. and
Northwest.
</TABLE>
- --------------
*Filed herewith.
ITEM 17. UNDERTAKINGS
(a) Each of the undersigned registrants 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;
(ii) To reflect in the prospectus any facts or events arising after
the effective date of the Registration Statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set forth in
the Registration Statement. Notwithstanding the foregoing, any increase
or decrease in volume of securities offered (if the total dollar value of
securities offered would not exceed that which was registered) and any
deviation from the low or high end of the estimated maximum offering
range may be reflected in the form of prospectus filed with the
Commission pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20% change in the maximum
aggregate offering price set forth in the "Calculation of Registration
Fee" table in the effective Registration Statement; and
(iii) To include any material information with respect to the plan
of distribution not previously disclosed in the Registration Statement or
any material change to such information in the Registration Statement;
PROVIDED, HOWEVER, that paragraphs (a)(1)(i) and (a)(1)(ii) do not apply if
the Registration Statement is on Form S-3, Form S-8 or Form F-3, and the
information required to be included in a post-effective amendment by those
paragraphs is contained in periodic reports filed with or furnished to the
Commission by NWA Corp. pursuant to Section 13 or Section 15(d) of the
Exchange Act that are incorporated by reference in the Registration
Statement.
(2) That, for the purpose of determining any liability under the
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.
(b) Each of the undersigned registrants hereby undertakes that, for purposes
of determining any liability under the Securities Act, each filing of NWA
Corp.'s annual report pursuant to Section 13(a) or Section 15(d) of 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 the Registration Statement shall be deemed to be a new registration
statement relating to the securities
II-4
<PAGE>
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
(c) Each of the undersigned registrants hereby undertakes if securities are
to be offered pursuant to competitive bidding (1) to use its best efforts to
distribute prior to the opening of bids, to prospective bidders, underwriters
and dealers, a reasonable number of copies of a prospectus which at that time
meets the requirements of section 10(a) of the Securities Act, and relating to
the securities offered at competitive bidding, as contained in this Registration
Statement, together with any supplements thereto, and (2) to file an amendment
to this Registration Statement reflecting the results of bidding, the terms of
the reoffering and related matters to the extent required by the applicable
form, not later than the first use, authorized by the issuer after the opening
of bids, of a prospectus relating to the securities offered at competitive
bidding, unless no further public offering of such securities by the issuer and
no reoffering of such securities by purchasers is proposed to be made.
(d) Insofar as indemnification for liabilities arising under the Securities
Act may be permitted to directors, officers and controlling persons of the
registrants pursuant to the foregoing provisions, or otherwise, the registrants
have been advised that in the opinion of the 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 a registrant of expenses incurred or paid
by a director, officer or controlling person of such 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 applicable 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.
(e) Each of the undersigned registrants hereby undertakes to file an
application for the purpose of determining the eligibility of the trustee to act
under subsection (a) of Section 310 of the Trust Indenture Act in accordance
with the rules and regulations prescribed by the Commission under Section
305(b)(2) of the Trust Indenture Act.
II-5
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, NORTHWEST
AIRLINES, INC. HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON ITS
BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED IN THE CITY OF EAGAN, STATE
OF MINNESOTA, ON JUNE 27, 1997.
NORTHWEST AIRLINES, INC.
By: /s/ DOUGLAS M. STEENLAND
------------------------------------------
Douglas M. Steenland
SENIOR VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- ---------------------------------------- --------------
<C> <S> <C>
* President, Chief Executive Officer and
------------------------------------ Director (Principal Executive Officer) June 27, 1997
John H. Dasburg
* Executive Vice President and Chief
------------------------------------ Financial Officer (Principal Financial June 27, 1997
James A. Lawrence Officer)
* Vice President and Chief Accounting
------------------------------------ Officer (Principal Accounting Officer) June 27, 1997
Mark W. Osterberg
*
------------------------------------ Director June 27, 1997
Alfred A. Checchi
*
------------------------------------ Chairman of the Board of Directors June 27, 1997
Gary L. Wilson
*
------------------------------------ Director June 27, 1997
Richard C. Blum
*
------------------------------------ Director June 27, 1997
Thomas Ducy
*
------------------------------------ Director June 27, 1997
Marvin L. Griswold
*
------------------------------------ Director June 27, 1997
Thomas L. Kempner
</TABLE>
II-6
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- ---------------------------------------- --------------
<C> <S> <C>
*
------------------------------------ Director June 27, 1997
Frederic V. Malek
*
------------------------------------ Director June 27, 1997
Walter F. Mondale
*
------------------------------------ Director June 27, 1997
V.A. Ravindran
*
------------------------------------ Director June 27, 1997
George J. Vojta
*
------------------------------------ Director June 27, 1997
Duane E. Woerth
</TABLE>
<TABLE>
<S> <C> <C> <C>
*By: /s/ DOUGLAS M. STEENLAND June 27, 1997
----------------------------------
Douglas M. Steenland
ATTORNEY-IN-FACT
</TABLE>
II-7
<PAGE>
SIGNATURES
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, NORTHWEST
AIRLINES CORPORATION HAS DULY CAUSED THIS REGISTRATION STATEMENT TO BE SIGNED ON
ITS BEHALF BY THE UNDERSIGNED, THEREUNTO DULY AUTHORIZED IN THE CITY OF EAGAN,
STATE OF MINNESOTA, ON JUNE 27, 1997.
NORTHWEST AIRLINES CORPORATION
By: /s/ DOUGLAS M. STEENLAND
------------------------------------------
Douglas M. Steenland
SENIOR VICE PRESIDENT,
GENERAL COUNSEL AND SECRETARY
PURSUANT TO THE REQUIREMENTS OF THE SECURITIES ACT OF 1933, THIS
REGISTRATION STATEMENT HAS BEEN SIGNED BY THE FOLLOWING PERSONS IN THE
CAPACITIES AND ON THE DATES INDICATED.
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- ---------------------------------------- --------------
<C> <S> <C>
* President, Chief Executive Officer and
------------------------------------ Director (Principal Executive Officer) June 27, 1997
John H. Dasburg
* Executive Vice President and Chief
------------------------------------ Financial Officer (Principal Financial June 27, 1997
James A. Lawrence Officer)
* Vice President and Chief Accounting
------------------------------------ Officer (Principal Accounting Officer) June 27, 1997
Mark W. Osterberg
*
------------------------------------ Director June 27, 1997
Alfred A. Checchi
*
------------------------------------ Chairman of the Board of Directors June 27, 1997
Gary L. Wilson
*
------------------------------------ Director June 27, 1997
Richard C. Blum
*
------------------------------------ Director June 27, 1997
Thomas Ducy
*
------------------------------------ Director June 27, 1997
Marvin L. Griswold
*
------------------------------------ Director June 27, 1997
Thomas L. Kempner
</TABLE>
II-8
<PAGE>
<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
- ---------------------------------------- ---------------------------------------- --------------
<C> <S> <C>
*
------------------------------------ Director June 27, 1997
Frederic V. Malek
*
------------------------------------ Director June 27, 1997
Walter F. Mondale
*
------------------------------------ Director June 27, 1997
V.A. Ravindran
*
------------------------------------ Director June 27, 1997
George J. Vojta
*
------------------------------------ Director June 27, 1997
Duane E. Woerth
</TABLE>
<TABLE>
<S> <C> <C> <C>
*By: /s/ DOUGLAS M. STEENLAND June 27, 1997
----------------------------------
Douglas M. Steenland
ATTORNEY-IN-FACT
</TABLE>
II-9
<PAGE>
EXHIBIT INDEX
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ----------------- --------------------------------------------------------------------------------- -----------------
<S> <C> <C>
Exhibit 1(a) Form of Underwriting Agreement for Debt Securities or Warrants to Purchase Debt
Securities of Northwest Airlines, Inc. ("Northwest").
Exhibit 1(b) Form of Underwriting Agreement for Pass Through Certificates of Northwest (filed
as Exhibit 1(b) to the Registration Statement on Form S-3 (file No. 33-74772)
(the "S-3") and incorporated herein by reference).
Exhibit 4(a) Senior Debt Securities Indenture, dated as of March 1, 1997, among Northwest,
Northwest Airlines Corporation ("NWA Corp.") and State Street Bank and Trust
Company, ("State Street"), as Trustee, relating to the Senior Debt Securities of
Northwest.*
Exhibit 4(b) Senior Subordinated Debt Securities Indenture among Northwest, NWA Corp. and
State Street, as Trustee, relating to the Senior Subordinated Debt Securities of
Northwest.*
Exhibit 4(c) Form of Senior Debt Securities of Northwest.*
Exhibit 4(d) Form of Senior Subordinated Debt Securities of Northwest.*
Exhibit 4(e) Form of Warrant Agreement for Warrants to Purchase Debt Securities of Northwest
that are Sold Attached to Debt Securities of Northwest (filed as Exhibit 4(g) to
the S-3 and incorporated herein by reference).
Exhibit 4(f) Form of Warrant to Purchase Debt Securities of Northwest that are Sold Attached
to Debt Securities of Northwest (included as part of Exhibit 4(e)).
Exhibit 4(g) Form of Warrant Agreement for Warrants to Purchase Debt Securities of Northwest
that are Sold Alone (filed as Exhibit 4(i) to the S-3 and incorporated herein by
reference).
Exhibit 4(h) Form of Warrant to Purchase Debt Securities of Northwest that are Sold Alone
(included as part of Exhibit 4(g)).
Exhibit 4(i) Pass Through Trust Agreement, dated as of June 3, 1996, among NWA Corp.,
Northwest and State Street, as Trustee, relating to Pass Through Certificates of
Northwest.
Exhibit 4(j) Form of Pass Through Certificate (included as part of Exhibit 4(i)).
Exhibit 4(k) Second Amended and Restated Certificate of Incorporation of NWA Corp. (filed as
Exhibit 3.1 to NWA Corp.'s Registration Statement on Form S-1, File No. 33-74210
(the "S-1") and incorporated herein by reference).
Exhibit 4(l) Certificate of Amendment to the Second Amended and Restated Certificate of
Incorporation of NWA Corp. (filed as Exhibit 3.3 to the S-1 and incorporated
herein by reference).
Exhibit 4(m) Amended and Restated By-Laws of NWA Corp. (filed as Exhibit 3.2 to the S-1 and
incorporated herein by reference).
</TABLE>
II-10
<PAGE>
<TABLE>
<CAPTION>
SEQUENTIALLY
EXHIBIT NUMBERED
NUMBER DESCRIPTION PAGE
- ----------------- --------------------------------------------------------------------------------- -----------------
<S> <C> <C>
Exhibit 4(n) Restated Certificate of Incorporation of Northwest (filed as Exhibit 4(s) to the
S-3 and incorporated herein by reference).
Exhibit 4(o) Bylaws of Northwest (filed as Exhibit 4(t) to the Registration Statement on Form
S-3 (File No. 333-2516) and incorporated herein by reference).
Exhibit 4(p) Amended and Restated Certificate of Designation of Series A Preferred Stock of
NWA Corp. (included in Exhibit 4(k)).
Exhibit 4(q) Amended and Restated Certificate of Designation of Series B Preferred Stock of
NWA Corp. (included in Exhibit 4(k)).
Exhibit 4(r) Certificate of Designation of Series C Preferred Stock of NWA Corp. (included in
Exhibit 4(k)).
Exhibit 4(s) Certificate of Designation of Series D Junior Participating Preferred Stock of
NWA Corp. (filed as Exhibit A to Exhibit 1 to NWA Corps.'s Current Report on Form
8-K dated November 16, 1995 and incorporated herein by reference).
Exhibit 4(t) The Registrants hereby agree to furnish to the Commission, upon request, copies
of certain instruments defining the rights of holders of long-term debt of the
kind described in Item 601(b)(4) of Regulation S-K.
Exhibit 5 Opinion of Simpson Thacher & Bartlett as to the legality of the Securities.*
Exhibit 8 Tax Opinion of Cadwalader, Wickersham & Taft relating to Pass Through
Certificates.
Exhibit 23(a) Consent of Ernst & Young LLP.*
Exhibit 23(b) Consent of Simpson Thacher & Bartlett (included as part of Exhibit 5(a)).*
Exhibit 23(c) Consent of Cadwalader, Wickersham & Taft (included as part of Exhibit 8).
Exhibit 24 Powers of Attorney (included in signature pages II-6 and II-8 of registration
statement as initially filed).
Exhibit 25(a) Form T-1 Statement of Eligibility under the Trust Indenture Act of 1939 (the
"Trust Indenture Act"), as amended, of State Street, as Trustee under the Senior
Debt Securities Indenture of Northwest and NWA Corp., (filed as Exhibit 25.1 to
NWA Corp.'s Current Report on Form 8-K, dated March 6, 1997 and incorporated
herein by reference).
Exhibit 25(b) Form T-1 Statement of Eligibility under the Trust Indenture Act of State Street,
as Trustee under the Senior Subordinated Debt Securities Indenture of Northwest
and NWA Corp. and the Pass Through Trust Agreement of NWA Corp. and Northwest.
</TABLE>
- --------------
*Filed herewith.
II-11
<PAGE>
NORTHWEST AIRLINES, INC., Issuer
and
NORTHWEST AIRLINES CORPORATION, Guarantor
to
STATE STREET BANK AND TRUST COMPANY, Trustee
INDENTURE
Dated as of March 1, 1997
Providing for Issuance of
Senior Debt Securities in Series
<PAGE>
TABLE OF CONTENTS
Page
----
ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION.....................................1
1.1 Definitions................................................1
1.2 Compliance Certificates and Opinions......................11
1.3 Form of Documents Delivered to Trustee....................11
1.4 Acts of Holders...........................................12
1.5 Notices, etc., to Trustee, Company
and Guarantor.........................................13
1.6 Notice to Holders; Waiver.................................14
1.7 Headings and Table of Contents............................15
1.8 Successors and Assigns....................................15
1.9 Separability..............................................15
1.10 Benefits of Indenture.....................................15
1.11 Governing Law.............................................15
1.12 Legal Holidays............................................15
1.13 Trustee to Establish Record Dates.........................15
1.14 No Security Interest Created..............................16
1.15 Liability Solely Corporate................................16
ARTICLE 2 SECURITY FORMS............................................16
2.1 Forms Generally...........................................16
2.2 Form of Trustee's Certificate of Authentication...........17
2.3 Securities in Global Form.................................17
ARTICLE 3 THE SECURITIES............................................18
3.1 Amount Unlimited; Issuable in Series......................18
3.2 Denominations.............................................22
3.3 Execution, Authentication, Delivery and Dating............22
3.4 Temporary Securities......................................25
3.5 Registration, Registration of Transfer and Exchange.......26
3.6 Replacement Securities....................................30
3.7 Payment of Interest; Interest Rights Preserved............31
3.8 Persons Deemed Owners.....................................32
3.9 Cancellation..............................................33
3.10 Computation of Interest...................................34
3.11 Currency and Manner of Payment in Respect of Securities...34
3.12 Appointment and Resignation of Exchange Rate Agent........38
3.13 CUSIP Numbers.............................................38
<PAGE>
3.14 Judgments.................................................39
ARTICLE 4 SATISFACTION, DISCHARGE AND DEFEASANCE....................39
4.1 Termination of Company's Obligations Under the Indenture..39
4.2 Application of Trust Funds................................41
4.3 Applicability of Defeasance Provisions; Company's Option
to Effect Defeasance or Covenant Defeasance...........41
4.4 Defeasance and Discharge..................................41
4.5 Covenant Defeasance.......................................42
4.6 Conditions to Defeasance or Covenant Defeasance...........42
4.7 Deposited Money and Government Obligations
to Be Held in Trust...................................44
4.8 Transfers and Distribution at Company Request.............44
4.9 Reinstatement.............................................45
ARTICLE 5 DEFAULTS AND REMEDIES.....................................45
5.1 Events of Default.........................................45
5.2 Acceleration; Rescission and Annulment....................46
5.3 Collection of Indebtedness and Suits for Enforcement
by Trustee............................................47
5.4 Trustee May File Proofs of Claim..........................48
5.5 Trustee May Enforce Claims Without Possession of
Securities............................................48
5.6 Delay or Omission Not Waiver..............................49
5.7 Waiver of Past Defaults...................................49
5.8 Control by Majority.......................................49
5.9 Limitation on Suits by Holders............................49
5.10 Rights of Holders to Receive Payment......................50
5.11 Application of Money Collected............................50
5.12 Restoration of Rights and Remedies........................50
5.13 Rights and Remedies Cumulative............................51
5.14 Undertaking for Costs.....................................51
5.15 Waiver of Stay or Extension Laws..........................51
ARTICLE 6 THE TRUSTEE...............................................51
6.1 Certain Duties and Responsibilities.......................51
6.2 Rights of Trustee.........................................51
6.3 Trustee May Hold Securities...............................52
6.4 Money Held in Trust.......................................53
6.5 Trustee's Disclaimer......................................53
6.6 Notice of Defaults........................................53
6.7 Reports by Trustee to Holders.............................53
6.8 Securityholder Lists......................................53
6.9 Compensation and Indemnity................................54
6.10 Replacement of Trustee....................................54
<PAGE>
6.11 Acceptance of Appointment by Successor....................56
6.12 Eligibility; Disqualification.............................57
6.13 Merger, Conversion, Consolidation or Succession to
Business..............................................57
6.14 Appointment of Authenticating Agent.......................57
6.15 Trustee's Application for Instructions from the Company...59
6.16 Preferential Collection of Claims Against Company or
Guarantor.............................................59
ARTICLE 7 CONSOLIDATION, MERGER OR SALE BY THE
COMPANY AND THE GUARANTOR.................................59
7.1 Consolidation, Merger or Sale of Assets by the Company
Permitted.............................................59
7.2 Consolidation, Merger or Sale of Assets by the Guarantor
Permitted.............................................60
ARTICLE 8 SUPPLEMENTAL INDENTURES...................................61
8.1 Supplemental Indentures Without Consent of Holders........61
8.2 Supplemental Indentures with Consent of Holders...........62
8.3 Compliance with Trust Indenture Act.......................63
8.4 Execution of Supplemental Indentures......................63
8.5 Effect of Supplemental Indentures.........................64
8.6 Reference in Securities to Supplemental Indentures........64
8.7 Notice of Supplemental Indenture..........................64
ARTICLE 9 COVENANTS.................................................64
9.1 Payment of Principal, Premium, if Any, and Interest.......64
9.2 Maintenance of Office or Agency...........................65
9.3 Money for Securities to be Held in Trust; Unclaimed Money.66
9.4 Corporate Existence.......................................67
9.5 Insurance.................................................67
9.6 Reports by the Guarantor..................................67
9.7 Annual Review Certificate; Notice of Default..............68
ARTICLE 10 REDEMPTION................................................68
10.1 Applicability of Article..................................68
10.2 Election to Redeem; Notice to Trustee.....................69
10.3 Selection of Securities to be Redeemed....................69
10.4 Notice of Redemption......................................69
10.5 Deposit of Redemption Price...............................70
10.6 Securities Payable on Redemption Date.....................71
10.7 Securities Redeemed in Part...............................71
<PAGE>
ARTICLE 11 SINKING FUNDS.............................................72
11.1 Applicability of Article..................................72
11.2 Satisfaction of Sinking Fund Payments with Securities.....72
11.3 Redemption of Securities for Sinking Fund.................72
ARTICLE 12 GUARANTEE OF SECURITIES...................................73
12.1 Unconditional Guarantee...................................73
SIGNATURES............................................................75
<PAGE>
INDENTURE, dated as of March 1, 1997, among NORTHWEST AIRLINES, INC., a
Minnesota corporation (the "Company"), as issuer, NORTHWEST AIRLINES
CORPORATION, a Delaware corporation, as guarantor (the "Guarantor"), and STATE
STREET BANK AND TRUST COMPANY, a Massachusetts trust company, as Trustee (the
"Trustee").
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
debentures, notes or other evidences of indebtedness ("Securities") to be issued
in one or more series as herein provided.
The Guarantor has duly authorized the execution and delivery of this
Indenture to provide for its guaranty of the Securities.
All things necessary to make this Indenture a valid agreement of the
Company and the Guarantor, in accordance with its terms, have been done.
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed as
follows for the equal and ratable benefit of the Holders of the Securities:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1. DEFINITIONS.
(a) For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles; and
(4) the words "herein", "hereof" and "hereunder" and other words
of similar import refer to this Indenture as a whole and not to any
particular Article, Section or other subdivision.
<PAGE>
2
"AFFILIATE" of any specified Person means any Person directly or
indirectly controlling or controlled by, or under direct or indirect common
control with, such specified Person. For 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.
"AGENT" means any Paying Agent or Registrar.
"AUTHENTICATING AGENT" means, with respect to the Securities of any
series, any authenticating agent appointed by the Trustee pursuant to Section
6.14.
"AUTHORIZED NEWSPAPER" means a newspaper of general circulation, in the
official language of the country of publication or in the English language,
customarily published on each Business Day whether or not published on
Saturdays, Sundays or holidays, and of general circulation in the place in
connection with which the term is used or in the financial community of such
place. Whenever successive publications in an Authorized Newspaper are required
hereunder they may be made (unless otherwise expressly provided herein) on any
Business Day and in the same or different Authorized Newspapers.
"BEARER SECURITY" means any Security in the form (to the extent
applicable thereto) established pursuant to Section 2.1 which is payable to
bearer (including any Security in global form payable to bearer) and title to
which passes by delivery only, but does not include any coupons.
"BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the
Company or the Guarantor, as the case may be, the Executive Committee of the
Company or the Guarantor or any other duly authorized committee of either such
Board of Directors or any directors and officers of the Company to whom such
Board of Directors or such committee shall have duly delegated its authority to
act hereunder.
"BOARD RESOLUTION" means a copy of a resolution of the Board of
Directors, certified by the Secretary or an Assistant Secretary of the Company
or the Guarantor, as the case may be, 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", when used with respect to any Place of Payment or any
other particular location referred to in this Indenture or in the Securities,
means, unless otherwise specified with respect to any Securities pursuant to
Section 3.1, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a
day on which banking institutions in that Place of Payment or particular
location are authorized or obligated by law or executive order to close.
"CAPITAL LEASE" means any lease obligation of a person incurred with
respect to real property or equipment acquired or leased by such person and used
in its business that is required to be recorded on its balance sheet as a
capitalized lease in accordance with generally accepted accounting principles
consistently applied as in effect on the date hereof.
<PAGE>
3
"COMMISSION" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, as
amended, or, if at any time after the execution of this Indenture 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 Indenture until one or more successor corporations shall have become
such pursuant to the applicable provisions of this Indenture, and thereafter
means such successors.
"COMPANY ORDER" and "COMPANY REQUEST" mean, respectively, a written
order or request signed in the name of the Company by the Chairman or a
Co-Chairman of the Board, the President, any Executive Vice President or any
Senior Vice President, signing alone, by any Vice President signing together
with the Treasurer, any Assistant Treasurer, the Secretary or any Assistant
Secretary of the Company, or, with respect to Sections 3.3, 3.4, 3.5 and 6.1,
any other employee of the Company named in an Officers' Certificate delivered to
the Trustee.
"CONVERSION EVENT" means the cessation of use of (i) a Foreign Currency
both by the government of the country which issued such currency and for the
settlement of transactions by a central bank or other public institutions of or
within the international banking community, (ii) the ECU both within the
European Monetary System and for the settlement of transactions by public
institutions of or within the European Communities or (iii) any currency unit
other than the ECU for the purposes for which it was established.
"CORPORATE TRUST OFFICE" means the principal corporate trust office of
the Trustee at which at any particular time its corporate trust business shall
be principally administered, which office at the date hereof is located at Two
International Place, Boston, Massachusetts 02110.
"CORPORATION" includes corporations, associations, companies and
business trusts.
"COUPON" means any interest coupon appertaining to a Bearer Security.
"DEFAULT" means any event which is, or after notice or passage of time,
or both, would be, an Event of Default.
"DEPOSITARY", when used with respect to the Securities of or within any
series issuable or issued in whole or in part in global form, means the Person
designated as Depositary by the Company pursuant to Section 3.1 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter shall mean or include each Person
which is then a Depositary hereunder, and if at any time there is more than one
such Person, shall be a collective reference to such Persons.
"DOLLAR" means the coin or currency of the United States which at the
time of payment is legal tender for the payment of public and private debts.
<PAGE>
4
"ECU" means the European Currency Unit as defined and revised from time
to time by the Council of the European Communities.
"EUROPEAN COMMUNITIES" means the European Economic Community, the
European Coal and Steel Community and the European Atomic Energy Community.
"EUROPEAN MONETARY SYSTEM" means the European Monetary System
established by the Resolution of December 5, 1978 of the Council of the European
Communities.
"EXCHANGE RATE AGENT", when used with respect to Securities of or within
any series, means, unless otherwise specified with respect to any Securities
pursuant to Section 3.1, a New York Clearing House bank designated pursuant to
Section 3.1 or Section 3.12.
"EXCHANGE RATE OFFICER'S CERTIFICATE" means a certificate setting forth
(i) the applicable Market Exchange Rate or the applicable bid quotation and (ii)
the Dollar or Foreign Currency amounts of principal (and premium, if any) and
interest, if any (on an aggregate basis and on the basis of a Security having
the lowest denomination principal amount in the relevant currency or currency
unit), payable with respect to a Security of any series on the basis of such
Market Exchange Rate or the applicable bid quotation, signed by the Treasurer,
any Vice President or any Assistant Treasurer of the Company.
"FLIGHT EQUIPMENT" means:
(a) aircraft of all types and classes used in transportation and
incidental services, together with all aircraft instruments,
appurtenances, parts and fixtures comprising such aircraft;
(b) aircraft engines of all types and classes used in
transportation and incidental services, together with all accessories,
appurtenances, parts and fixtures comprising such aircraft engines;
(c) aircraft communication equipment of all types and classes used
in transportation and incidental services, including radio, radar,
radiophone and other aircraft communication apparatus, together with all
accessories, appurtenances, parts and fixtures comprising such aircraft
communication equipment;
(d) miscellaneous flight equipment of all types and classes
(including miscellaneous crew flight equipment) used in transportation and
incidental services; and
(e) spare parts, accessories and assemblies held for use in or
repair of the items described in (a) through (d) above.
"FOREIGN CURRENCY" means any currency issued by the government of one or
more countries other than the United States or by any recognized confederation
or association of such governments.
<PAGE>
5
"GOVERNMENT OBLIGATIONS" means securities which are (i) direct
obligations of the United States or, if specified as contemplated by Section
3.1, the government which issued the currency in which the Securities of a
particular series are payable, for the payment of which its full faith and
credit is pledged or (ii) obligations of a Person controlled or supervised by
and acting as an agency or instrumentality of the United States or, if specified
as contemplated by Section 3.1, such government which issued the foreign
currency in which the Securities of such series are payable, the payment of
which is unconditionally guaranteed as a full faith and credit obligation by the
United States or such other government, which, in either case, are not callable
or redeemable at the option of the issuer thereof, and shall also include a
depositary receipt issued by a bank or trust company as custodian with respect
to any such Government Obligation or a specific payment of interest on or
principal of any such Government Obligation held by such custodian for the
account of the holder of a depositary receipt, PROVIDED that (except as
required by law) such custodian is not authorized to make any deduction from the
amount payable to the holder of such depositary receipt from any amount received
by the custodian in respect of the Government Obligation evidenced by such
depositary receipt.
"GUARANTEE" means the Guarantor's unconditional guarantee of the payment
of Securities as more fully described in Article Twelve.
"GUARANTOR" means the Person named as the "Guarantor" in the first
paragraph of this instrument until one or more successor corporations shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter means such successors.
"GUARANTOR ORDER" and "GUARANTOR REQUEST" mean, respectively, a
written order or request signed in the name of the Guarantor by the Chairman or
a Co-Chairman of the Board, its President, any Executive Vice President or any
Senior Vice President, signing alone, or by any Vice President signing together
with the Treasurer, any Assistant Treasurer, the Secretary or any Assistant
Secretary of the Guarantor, or with respect to Sections 3.3, 3.4, 3.5 and 6.1,
any other employee of the Guarantor named in an Officers' Certificate delivered
to the Trustee.
"HOLDER" means, with respect to a Bearer Security or coupon, a bearer
thereof and, with respect to a Registered Security, a person in whose name a
Security is registered on the Register.
"INDEBTEDNESS" of any Person means, without duplication, the principal
of, and premium, if any, and accrued and unpaid interest (including
post-petition interest, whether or not allowable as a claim in bankruptcy) on
any obligation, whether outstanding on the date hereof or thereafter created,
incurred or assumed, which is (i) indebtedness of such Person for money
borrowed, (ii) Indebtedness Guarantees by such Person of indebtedness for money
borrowed by any other Person, (iii) indebtedness evidenced by notes, debentures,
bonds or other instruments of indebtedness for payment of which such Person is
responsible or liable, (iv) obligations for the reimbursement of any obligor on
any letter of credit, bankers' acceptance or similar credit transaction, (v)
obligations of such Person under Capital Leases and Flight Equipment leases (the
amount of the Company's obligation under such Flight Equipment leases to be
computed in accordance with Statement of Financial Accounting
<PAGE>
6
Standards No. 13 as if such Flight Equipment leases were Capital Leases), (vi)
obligations under interest rate and currency swaps, caps, collars, options,
forward or spot contracts or similar arrangements or with respect to foreign
currency hedges or aircraft fuel hedges, (vii) commitment and other bank
financing fees under contractual obligations associated with bank debt, (viii)
any indebtedness representing the deferred and unpaid purchase price of any
property or business, and (ix) all deferrals, renewals, extensions and
refundings of any such indebtedness or obligations; PROVIDED, HOWEVER, that
Indebtedness shall not include amounts owed to trade creditors in the ordinary
course of business, nonrecourse indebtedness secured by real property located
outside the United States or operating lease rental payments (other than under
Flight Equipment leases) in the ordinary course of business.
"INDEBTEDNESS GUARANTEE" by any Person means any obligation, contingent
or otherwise, of such Person directly or indirectly guaranteeing any
Indebtedness or other obligation of any other Person and, without limiting the
generality of the foregoing, any obligation, direct or indirect, contingent or
otherwise, of such Person (i) to purchase or pay (or advance or supply funds for
the purchase or payment of) such Indebtedness or other obligation (whether
arising by virtue of partnership arrangements, by agreement to keep-well, to
purchase assets, goods, securities or services, to take-or-pay, or to maintain
financial statement conditions or otherwise) or (ii) entered into for the
purpose of assuring in any other manner the obligee of such Indebtedness or
other obligation of the payment or performance thereof (or payment of damages in
the event of nonperformance) or to protect such obligee against loss in respect
thereof (in whole or in part); PROVIDED, HOWEVER, that the terms
Indebtedness Guarantee shall not include endorsements for collection or deposit
in the ordinary course of business. The term "Indebtedness Guarantee" used as a
verb has a corresponding meaning.
"INDENTURE" means this Indenture as originally executed or as amended or
supplemented from time to time and shall include the forms and terms (but not
defined terms established in an Officers' Certificate or a Board Resolution) of
particular series of Securities established as contemplated by Sections 2.1 and
3.1.
"INDEXED SECURITY" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"INTEREST", when used with respect to an Original Issue Discount
Security which by its terms bears interest only after maturity, means interest
payable after maturity.
"INTEREST PAYMENT DATE", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"MARKET EXCHANGE RATE" means, unless otherwise specified with respect to
any Securities pursuant to Section 3.1, (i) for any conversion involving a
currency unit on the one hand and Dollars or any Foreign Currency on the other,
the exchange rate between the relevant currency unit and Dollars or such Foreign
Currency calculated by the method specified pursuant to Section 3.1 for the
Securities of the relevant series, (ii) for any conversion of Dollars into any
Foreign Currency, the noon buying rate for such Foreign
<PAGE>
7
Currency for cable transfers quoted in New York City as certified for customs
purposes by the Federal Reserve Bank of New York and (iii) for any conversion of
one Foreign Currency into Dollars or another Foreign Currency, the spot rate at
noon local time in the relevant market at which, in accordance with normal
banking procedures, the Dollars or Foreign Currency into which conversion is
being made could be purchased with the Foreign Currency from which conversion is
being made from major banks located in New York City, London or any other
principal market for Dollars or such purchased Foreign Currency, in each case
determined by the Exchange Rate Agent. Unless otherwise specified with respect
to any Securities pursuant to Section 3.1, in the event of the unavailability of
any of the exchange rates provided for in the foregoing clauses (i), (ii) and
(iii), the Exchange Rate Agent shall use, in its sole discretion and without
liability on its part, such quotation of the Federal Reserve Bank of New York as
of the most recent available date, or quotations from one or more major banks in
New York City, London or other principal market for such currency or currency
unit in question (which may include any such bank acting as Trustee under this
Indenture), or such other quotations as the Exchange Rate Agent shall deem
appropriate. Unless otherwise specified by the Exchange Rate Agent, if there is
more than one market for dealing in any currency or currency unit by reason of
foreign exchange regulations or otherwise, the market to be used in respect of
such currency or currency unit shall be that upon which a nonresident issuer of
securities designated in such currency or currency unit would purchase such
currency or currency unit in order to make payments in respect of such
securities.
"MATURITY", when used with respect to any Security, means the date on
which the principal of such Security or an installment of principal becomes due
and payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"OFFICER" means the Chairman or a Co-Chairman of the Board of Directors,
the President, any Executive Vice President, any Senior Vice President, any Vice
President or the Secretary of the Company or the Guarantor, as the case may be.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman or a
Co-Chairman of the Board, the President, any Executive Vice President or any
Senior Vice President of the Company or the Guarantor, as the case may be,
signing alone, or by any Vice President signing together with the Secretary, any
Assistant Secretary, the Treasurer, or any Assistant Treasurer of the Company or
the Guarantor, as the case may be.
"OPINION OF COUNSEL" means a written opinion of legal counsel, who may
be (a) the senior attorney employed by the Company or the Guarantor, (b) Simpson
Thacher & Bartlett or (c) other counsel designated by the Company or the
Guarantor and who shall be acceptable to the Trustee.
"ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which provides for
an amount less than the stated principal amount thereof to be due and payable
upon declaration of acceleration of the Maturity thereof pursuant to Section
5.2.
<PAGE>
8
"OUTSTANDING", when used with respect to Securities, means, as of the
date of determination, all Securities theretofore authenticated and delivered
under this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or
redemption money in the necessary amount has been theretofore deposited
with the Trustee or any Paying Agent (other than the Company) in trust or
set aside and segregated in trust by the Company (if the Company shall act
as its own Paying Agent) for the Holders of such Securities and any
coupons appertaining thereto PROVIDED that, if such Securities are to be
redeemed, notice of such redemption has been duly given pursuant to this
Indenture or provisions therefor satisfactory to the Trustee have been
made;
(iii) Securities, except to the extent provided in Sections 4.4 and
4.5, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article 4; and
(iv) Securities which have been paid pursuant to Section 3.6 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities
in respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, or whether
sufficient funds are available for redemption or for any other purpose, and for
the purpose of making the calculations required by section 313 of the Trust
Indenture Act, (w) the principal amount of any Original Issue Discount
Securities that may be counted in making such determination or calculation and
that shall be deemed to be Outstanding for such purpose shall be equal to the
amount of principal thereof that would be (or shall have been declared to be)
due and payable, at the time of such determination, upon a declaration of
acceleration of the maturity thereof pursuant to Section 5.2, (x) the principal
amount of any Security denominated in a Foreign Currency that may be counted in
making such determination or calculation and that shall be deemed Outstanding
for such purpose shall be equal to the Dollar equivalent, determined as of the
date such Security is originally issued by the Company as set forth in an
Exchange Rate Officer's Certificate delivered to the Trustee, of the principal
amount (or, in the case of an Original Issue Discount Security, the Dollar
equivalent as of such date of original issuance of the amount determined as
provided in clause (w) above) of such Security, (y) the principal amount of any
Indexed Security that may be counted in making such determination or calculation
and that shall be deemed outstanding for such purpose shall be equal to the
principal face amount of such Indexed Security at original issuance, unless
otherwise provided with respect to such Security pursuant to Section 3.1, and
(z) Securities owned by the Company, the Guarantor or any other obligor upon the
Securities or any Affiliate of the Company or the Guarantor or of such other
obligor shall be disregarded and deemed not to be outstanding, except that, in
determining
<PAGE>
9
whether the Trustee shall be protected in making such calculation or in relying
upon any such request, demand, authorization, direction, notice, consent or
waiver, only Securities which the Trustee knows to be so owned shall be so
disregarded. Securities so owned which have been pledged in good faith may be
regarded as outstanding if the pledgee establishes to the satisfaction of the
Trustee the pledgee's right so to act with respect to such Securities and that
the pledgee is not the Company, the Guarantor or any other obligor upon the
Securities or any Affiliate of the Company, the Guarantor or such other obligor.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of, premium, if any, or interest on any Securities on behalf of the
Company.
"PERIODIC OFFERING" means an offering of Securities of a series from
time to time the specific terms of which Securities, including, without
limitation, the rate or rates of interest or formula for determining the rate or
rates of interest thereon, if any, the Stated Maturity or Stated Maturities
thereof, the original issue date or dates thereof, the redemption provisions, if
any, with respect thereto, and any other terms specified as contemplated by
Section 3.1 with respect thereto, are to be determined by the Company upon the
issuance of such Securities.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PLACE OF PAYMENT", when used with respect to the Securities of or
within any series, means the place or places where, subject to the provisions of
Section 9.2, the principal of, premium, if any, and interest on such Securities
are payable as specified as contemplated by Section 3.1.
"PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"REDEMPTION DATE", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"REDEMPTION PRICE", when used with respect to any Security to be
redeemed, in whole or in part, means the price at which it is to be redeemed
pursuant to this Indenture.
"REGISTERED SECURITY" means any Security in the form (to the extent
applicable thereto) established pursuant to Section 2.1 which is registered as
to principal and interest in the Register.
"REGULAR RECORD DATE" for the interest payable on any Interest Payment
Date on the Registered Securities of or within any series means the date
specified for that purpose as contemplated by Section 3.1.
<PAGE>
10
"RESPONSIBLE OFFICER", when used with respect to the Trustee, shall mean
any assistant vice president, any senior trust officer, or any trust officer, in
the Corporate Trust Division of the Trustee or any other officer of the Trustee
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, and also means, with respect
to a particular corporate trust matter, any other officer to whom such corporate
trust matter is referred because of his knowledge of and familiarity with the
particular subject.
"SECURITY" or "SECURITIES" has the meaning stated in the first recital
of this Indenture and more particularly means any Security or Securities of the
Company issued, authenticated and delivered under this Indenture.
"SERIES" or "SERIES" when used with respect to the Securities shall
mean all Securities bearing the same title established pursuant to Section 3.1.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest on the
Registered Securities of any issue means a date fixed by the Trustee pursuant to
Section 3.7.
"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 or in a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"SUBSIDIARY" means any corporation of which the Guarantor at the time
owns or controls, directly or indirectly, more than 50% of the shares of
outstanding stock having general voting power under ordinary circumstances to
elect a majority of the Board of Directors of such corporation (irrespective of
whether or not at the time stock of any other class or classes of such
corporation shall have or might have voting power by reason of the happening of
any contingency).
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended,
as in effect on the date of this Indenture, except as provided in Section 8.3.
"TRUSTEE" means the party named as such in the first paragraph of this
Indenture until a successor Trustee replaces it pursuant to the applicable
provisions of this Indenture, and thereafter means such successor Trustee and
if, at any time, there is more than one Trustee, "Trustee" as used with respect
to the Securities of any series shall mean the Trustee with respect to the
Securities of that series.
"UNITED STATES" means, unless otherwise specified with respect to the
Securities of any series as contemplated by Section 3.1, the United States of
America (including the States and the District of Columbia), its territories,
its possessions and other areas subject to its jurisdiction.
"U.S. PERSON" means, unless otherwise specified with respect to the
Securities of any series as contemplated by Section 3.1, a citizen, national or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the
<PAGE>
11
United States or any political subdivision thereof, or an estate or trust the
income of which is subject to United States federal income taxation regardless
of its source.
"YIELD TO MATURITY" means the yield to maturity, calculated by the
Company at the time of issuance of a series of Securities or, if applicable, at
the most recent determination of interest on such series, in accordance with
accepted financial practice.
(b) The following terms shall have the meanings specified in the Sections
referred to opposite such term below:
Term Section
---- -------
"Act" 1.4(a)
"Bankruptcy Law" 5.1
"Component Currency" 3.11(h)
"Conversion Date" 3.11(d)
"Custodian" 5.1
"Defaulted Interest" 3.7(b)
"Election Date" 3.11(h)
"Event of Default" 5.1
"Register" 3.5
"Registrar" 3.5
"Special Paying Agent" 3.1(b)
"Special Paying Agent Agreement" 6.2(j)
"Specified Amount" 3.11(h)
"Valuation Date" 3.11(c)
Section 1.2. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any application
or request by the Company or the Guarantor to the Trustee to take any action
under any provision of this Indenture, the Company or the Guarantor shall
furnish to the Trustee an Officers' Certificate stating that all conditions
precedent, if any, provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent, if any, have been
complied with, except that in the case of any such application or request as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or request, no
additional certificate or opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition
or covenant provided for in this Indenture (other than pursuant to Sections 2.3,
3.3 and 9.7) shall include:
(1) a statement that each individual signing such certificate or opinion
has read such condition or covenant and the definitions herein relating thereto;
(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;
<PAGE>
12
(3) a statement that, in the opinion of each such individual, he has made
or caused to be made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such condition or
covenant has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
Section 1.3. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company or the Guarantor
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company or the
Guarantor, as the case may be, stating that the information with respect to such
factual matters is in the possession of the Company or the Guarantor, as the
case may be, unless such counsel knows, or in the exercise of reasonable care
should know, that the certificate or opinion or representations as 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 1.4. ACTS OF HOLDERS. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing. 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 and the Guarantor. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Whenever in this
Indenture it is provided that the Holders of a specified percentage in aggregate
principal amount of the Outstanding Securities of any series may take any Act,
the fact that the Holders of such specified percentage have joined therein may
be evidenced (i) by the instrument or instruments executed by Holders in person
or by agent or proxy appointed in writing, or (ii) by the record of Holders
voting in favor thereof at any meeting of such Holders duly called and held in
accordance with the provisions of Article 13, or (iii) by a combination of such
instrument or instruments and any
<PAGE>
13
such record of such a meeting of Holders. 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 conclusive in favor of the Trustee and the Company
and the Guarantor, if made in the manner provided in clause (b) of this Section
1.4.
(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 of such
execution or by a certificate of a notary public or other officer authorized by
law to take acknowledgments of deeds, certifying that the individual signing
such instrument or writing acknowledged to him the execution thereof. Where
such execution is by a signer acting in a capacity other than his individual
capacity, such certificate or affidavit shall also constitute sufficient proof
of his authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other reasonable manner which the Trustee deems sufficient.
(c) The ownership of Bearer Securities may be proved by the production of
such Bearer Securities or by a certificate executed by any trust company, bank,
banker or other depositary, wherever situated, if such certificate shall be
deemed by the Trustee to be satisfactory, showing that at the date therein
mentioned such Person had on deposit with such depositary, or exhibited to it,
the Bearer Securities therein described; or such facts may be proved by the
certificate or affidavit of the Person holding such Bearer Securities, if such
certificate or affidavit is deemed by the Trustee to be satisfactory. The
Trustee, the Guarantor and the Company may assume that such ownership of any
Bearer Security continues until (i) another such certificate or affidavit
bearing a later date issued in respect of the same Bearer Security is produced,
(ii) such Bearer Security is produced to the Trustee by some other Person, (iii)
such Bearer Security is surrendered in exchange for a Registered Security or
(iv) such Bearer Security is no longer outstanding. The ownership of Bearer
Securities may also be proved in any other reasonable manner which the Trustee
deems sufficient.
(d) The ownership of Registered Securities shall be proved by the Register
or by a certificate of the Registrar.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company or
the Guarantor in reliance thereon, whether or not notation of such action is
made upon such Security.
(f) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to an Officers' Certificate delivered to the
Trustee, fix in advance a record date for the determination of Holders entitled
to give such request, demand, authorization, direction, notice, consent, waiver
or other Act, but the Company shall have no obligation to do so. If such a
record date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act may be given before or after such record date, but
only the Holders of record at the close of business on such record date shall be
deemed to be Holders for the
<PAGE>
14
purposes of determining whether Holders of the requisite proportion of
Outstanding Securities have authorized or agreed or consented to such request,
demand, authorization, direction, notice, consent, waiver or other Act, and for
that purpose the Outstanding Securities shall be computed as of such record
date; PROVIDED that no such authorization, agreement or consent by the Holders
on such record date shall be deemed effective unless it shall become effective
pursuant to the provisions of clause (a) of this Section 1.4 not later than six
months after the record date.
(g) At any time prior to (but not after) the evidencing to the Trustee, as
provided in clause (a) of this Section 1.4, of the taking of any Act by the
Holders of the percentage in aggregate principal amount of the Outstanding
Securities specified in this Indenture in connection with such Act, any Holder
of a Security the number, letter or other distinguishing symbol of which is
shown by the evidence to be included in the Securities the Holders of which have
consented to such Act may, by filing written notice with the Trustee at the
Corporate Trust Office and upon proof of ownership as provided in this Section
1.4, revoke such Act so far as it concerns such Security.
(h) The Trustee may in any instance require further proof with respect to
any of the matters referred to in this Section 1.4 so long as its request is a
reasonable one.
Section 1.5. NOTICES, ETC., TO TRUSTEE, COMPANY AND GUARANTOR. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company or the Guarantor
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 Division, or
(2) the Company or the Guarantor by the Trustee or by any Holder
shall be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid,
to the Company or the Guarantor addressed to it at 5101 Northwest Drive,
St. Paul, Minnesota 55111, Attention: Senior Vice President-Finance and
Treasurer or at any other address previously furnished in writing to the
Trustee by the Company or the Guarantor, respectively.
Section 1.6. NOTICE TO HOLDERS; WAIVER. Where this Indenture provides
for notice to Holders of any event, (i) if any of the Securities affected by
such event are Registered Securities, such notice to the Holders thereof shall
be sufficiently given (unless otherwise herein expressly provided or otherwise
agreed to by a Holder) if in writing and mailed, first-class postage prepaid, to
each such Holder affected by such event, at his address as it appears in the
Register, within the time prescribed for the giving of such notice and (ii) if
any of the Securities affected by such event are Bearer Securities, notice to
the Holders thereof shall be sufficiently given (unless otherwise herein or in
the terms of such Bearer Securities expressly provided) if published once in an
Authorized Newspaper in New York, New York, and in such other city or cities, if
any, as may be specified as contemplated by Section 3.1(5).
<PAGE>
15
In any case where notice to Holders is given by mail, neither the failure
to mail such notice, nor any defect in any notice so mailed, to any particular
Holder shall affect the sufficiency of such notice with respect to other Holders
of Registered Securities or the sufficiency of any notice to Holders of Bearer
Securities given as provided herein. In any case where notice is given to
Holders by publication, neither the failure to publish such notice, nor any
defect in any notice so published, shall affect the sufficiency of such notice
with respect to other Holders of Bearer Securities or the sufficiency of any
notice to Holders of Registered Securities given as provided herein. Any notice
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice.
If by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice as provided above,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder. If it is
impossible or, in the opinion of the Trustee, impracticable to give any notice
by publication in the manner herein required, then such publication in lieu
thereof as shall be made with the approval of the Trustee shall constitute a
sufficient publication of such notice.
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be equivalent of such notice. Waivers
of notice by Holders shall be filed with the Trustee, but such filing shall not
be a condition precedent to the validity of any action taken in reliance upon
such waiver.
Section 1.7. 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 1.8. SUCCESSORS AND ASSIGNS. All covenants and agreements in
this Indenture by the Company and the Guarantor shall bind their respective
successors and assigns, whether so expressed or not.
Section 1.9. SEPARABILITY. In case any provision of this Indenture or
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 1.10. BENEFITS OF INDENTURE. Nothing in this Indenture or in the
Securities, expressed or implied, shall give to any Person, other than the
parties hereto, any Registrar, any Paying Agent and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
<PAGE>
16
Section 1.11. GOVERNING LAW. THIS INDENTURE, THE SECURITIES AND ANY
COUPONS APPERTAINING THERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE
WITH THE LAWS OF THE STATE OF NEW YORK. This Indenture is subject to the Trust
Indenture Act and if any provision hereof limits, qualifies or conflicts with
the duties imposed on any person by the provisions of Sections 310 to 317,
inclusive, of the Trust Indenture Act, such imposed duties shall control.
Section 1.12. LEGAL HOLIDAYS. Unless otherwise specified pursuant to
Section 3.1 or in any Security, in any case where any Interest Payment Date,
Redemption Date, sinking fund payment date, Stated Maturity or Maturity of any
Security shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or any Security or coupon
other than a provision in the Securities of any series which specifically states
that such provision shall apply in lieu of this Section) payment of principal,
premium, if any, or interest need not be made at such Place of Payment on such
date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on such date; PROVIDED that
no interest shall accrue on the amount so payable for the period from and after
such Interest Payment Date, Redemption Date, sinking fund payment date, Stated
Maturity or Maturity, as the case may be, to such Business Day if such payment
is made or duly provided for on such Business Day.
Section 1.13. COMPANY TO ESTABLISH RECORD DATES. Except as otherwise
provided in this Indenture the Company may set a record date in the
circumstances permitted by the Trust Indenture Act for the purpose of
determining the holders of Securities of any series entitled to take any action
(including the making of any demand or request, the giving of any notice,
consent or waiver or the taking of any other action), or to vote on any action
authorized or permitted to be given or taken by holders of Securities of such
series; PROVIDED, that if a record date is not set by the Company prior to the
first solicitation of a holder of Securities of such series in respect of any
such action, or, in the case of any such vote, prior to such vote, the record
date for any such action or vote shall be the 30th day prior to such first
solicitation or vote, as the case may be. With regard to any record date for
action to be taken by the holders of one or more series of Securities, only the
holders of Securities of such series on such date (or their duly designated
proxies) shall be entitled to take, or vote on, the relevant action.
Section 1.14. NO SECURITY INTEREST CREATED. Nothing in this Indenture
or in the Securities or coupons, if any, express or implied, shall be construed
to constitute a security interest under the Uniform Commercial Code or similar
legislation, as now or hereafter enacted and in effect in any jurisdiction where
property of the Guarantor or its Subsidiaries is or may be located.
Section 1.15. LIABILITY SOLELY CORPORATE. No recourse shall be had for
the payment of the principal of (or premium, if any) or the interest on any
Securities or coupons, if any, or any part thereof, or of the indebtedness
represented thereby, or upon any obligation, covenant or agreement of this
Indenture, against any incorporator, or against any stockholder, officer or
director, as such, past, present or future, of the Company or the Guarantor (or
any incorporator, stockholder, officer or director of any predecessor or
successor corporation), either directly or through the Company or the Guarantor
(or any such predecessor or
<PAGE>
17
successor corporation), whether by virtue of any constitution, statute or rule
of law, or by the enforcement of any assessment or penalty or otherwise; it
being expressly agreed and understood that this Indenture and all the Securities
and coupons, if any, are solely corporate obligations, and that no personal
liability whatsoever shall attach to, or be incurred by, any such incorporator,
stockholder, officer or director, past, present or future, of the Company or the
Guarantor (or any incorporator, stockholder, officer or director of any such
predecessor or successor corporation), either directly or indirectly through the
Company or the Guarantor or any such predecessor or successor corporation,
because of the indebtedness hereby authorized or under or by reason of any of
the obligations, covenants, promises or agreements contained in this Indenture
or in any of the Securities or coupons, if any, or to be implied herefrom or
therefrom; and that any such personal liability is hereby expressly waived and
released as a condition of, and as part of the consideration for, the execution
of this Indenture and the issue of Securities; PROVIDED, HOWEVER, that
nothing herein or in the Securities or coupons, if any, contained shall be taken
to prevent recourse to and the enforcement of the liability, if any, of any
stockholder or subscriber to capital stock upon or in respect of the shares of
capital stock not fully paid.
ARTICLE 2
SECURITY FORMS
Section 2.1. FORMS GENERALLY. The Securities of each series and the
coupons, if any, to be attached thereto shall be in substantially such form
(including global form) as shall be established by delivery to the Trustee of an
Officers' Certificate or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities and coupons, if any, as evidenced by their
execution of the Securities and coupons, if any. If temporary Securities of any
series are issued as permitted by Section 3.4, the form thereof also shall be
established as provided in the preceding sentence. If the forms of Securities
and coupons, if any, of any series are established by an Officers' Certificate,
such Officers' Certificate shall be delivered to the Trustee at or prior to the
delivery of the Company Order contemplated by Section 3.3 for the authentication
and delivery of such Securities.
Unless otherwise specified as contemplated by Section 3.1, Bearer
Securities shall have interest coupons attached.
The permanent Securities and coupons, if any, shall be printed,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner, all as determined by the officers executing
such Securities and coupons, if any, as evidenced by their execution of such
Securities and coupons, if any.
<PAGE>
18
Section 2.2. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The
Trustee's certificate of authentication shall be in substantially the following
form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of a series issued under the
within-mentioned Indenture.
STATE STREET BANK & TRUST COMPANY,
as Trustee
Dated: By:_________________________________
Authorized Signatory
Section 2.3. SECURITIES IN GLOBAL FORM. If Securities of or within a
series are issuable in whole or in part in temporary or permanent global form,
as specified as contemplated by Section 3.1, then, notwithstanding clause (8) of
Section 3.1(b) and the provisions of Section 3.2, any such Security shall
represent such of the outstanding securities of such series as shall be
specified therein and may provide that it shall represent the aggregate amount
of Outstanding Securities from time to time endorsed thereon and that the
aggregate amount of Outstanding Securities represented thereby may from time to
time be reduced to reflect exchanges. Any endorsement of a Security in global
form to reflect the amount, or any increase or decrease in the amount, or
changes in the rights of Holders, of Outstanding Securities represented thereby,
shall be made by the Trustee in such manner and upon instructions given by such
Person or Persons as shall be specified therein or in the Company Order to be
delivered to the Trustee pursuant to Section 3.3 or 3.4. Subject to the
provisions of Section 3.3 and, if applicable, Section 3.4, the Trustee shall
deliver and redeliver any Security in global form in the manner and upon
instructions given by the Person or Persons specified therein or in the
applicable Company Order. Any instructions by the Company with respect to
endorsement or delivery or redelivery of a Security in global form shall be in
writing but need not comply with Section 1.2 hereof and need not be accompanied
by an Opinion of Counsel.
The provisions of the last paragraph of Section 3.3 shall apply to any
Security in global form if such Security was never issued and sold by the
Company and the Company delivers to the Trustee the Security in global form
together with written instructions (which need not comply with Section 1.2 and
need not be accompanied by an Opinion of Counsel) with regard to the reduction
in the principal amount of Securities represented thereby, together with the
written statement contemplated by the last paragraph of Section 3.3.
Notwithstanding the provisions of Sections 2.1 and 3.7, unless otherwise
specified as contemplated by Section 3.1, payment of principal of, premium, if
any, and interest on any Security in permanent global form shall be made to the
Person or Persons specified therein.
<PAGE>
19
ARTICLE 3
THE SECURITIES
Section 3.1. AMOUNT UNLIMITED; ISSUABLE IN SERIES. (a) The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited. The Securities may be issued from time to time in
one or more series.
(b) The Securities may be issued in one or more series, each of which
shall be issued by or pursuant to a Board Resolution of the Company and the
Guarantor or one or more supplemental indentures thereto. With respect to any
particular series of Securities, there shall be established by or pursuant to a
Board Resolution of the Company and the Guarantor and set forth (or the manner
of determination set forth) in an Officers' Certificate of the Company and the
Guarantor:
(1) the title of the Securities of the series (which title shall
distinguish the Securities of the series from all other series of
Securities);
(2) any limit upon the aggregate principal amount of the Securities
of the series which may be authenticated and delivered under this
Indenture (which limit shall not pertain to (i) Securities authenticated
and delivered upon registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to Section 3.4, 3.5, 3.6,
8.6, or 10.7 and (ii) any Securities which, pursuant to the last paragraph
of Section 3.3, are deemed never to have been authenticated and delivered
hereunder);
(3) the date or dates on which or periods during which the
Securities of the series may be issued, and the date or dates (or the
method of determination thereof) on which the principal of (and premium,
if any, on) the Securities of such series are or may be payable (which, if
so provided in such Board Resolution or supplemental indenture, may be
determined by the Company from time to time and set forth in the
Securities of the series issued from time to time);
(4) the rate or rates at which the Securities of the series shall
bear interest, if any, or the method of calculating such rate or rates of
interest, the date or dates from which such interest shall accrue or the
method by which such date or dates shall be determined, the Interest
Payment Dates on which any such interest shall be payable (or the method
of determination thereof) and, with respect to Registered Securities, the
Regular Record Date, if any, for the interest payable on any Registered
Security on any Interest Payment Date;
(5) the place or places where, subject to the provisions of Section
9.2, the principal of, premium, if any, and interest, if any, on
Securities of the series shall be payable; the extent to which, or the
manner in which, any interest payable on any Security in global form on an
Interest Payment Date will be paid, if other than in the manner provided
in Section 3.7; and the manner in which any principal of, or premium, if
any, on, any Security in global form will be paid, if other than as set
forth elsewhere herein;
<PAGE>
20
(6) the period or periods within which, or the date or dates on
which, the price or prices at which, the currency or currencies (including
currency units) in which, and the other terms and conditions upon which,
Securities of the series may be redeemed, in whole or in part, at the
option of the Company and, if other than as provided in Section 10.3, the
manner in which the particular Securities of such series (if less than all
Securities of such series are to be redeemed) are to be selected for
redemption;
(7) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or upon the happening of a specified event or at the option of
a Holder thereof and the period or periods within which, the price or
prices at which, and the other terms and conditions upon which, Securities
of the series shall be redeemed or purchased, in whole or in part,
pursuant to such obligation;
(8) if other than denominations of $1,000 and any integral multiple
thereof, if Registered Securities, and if other than denominations of
$5,000, if Bearer Securities, the denominations in which Securities of the
series shall be issuable;
(9) if other than Dollars, the currency or currencies (including
currency units) in which the principal of, premium, if any, and interest,
if any, on the Securities of the series shall be payable, or in which the
Securities of the series shall be denominated, the particular provisions
applicable thereto in accordance with, in addition to, or in lieu of the
provisions of Section 3.11, and whether the Securities of the series may
be satisfied and discharged other than as provided in Article 4;
(10) if the payments of principal of, premium, if any, or interest,
if any, on the Securities of the series are to be made, at the election of
the Company, the Guarantor or a Holder, in a currency or currencies
(including currency units) other than that in which such Securities are
denominated or designated to be payable, the currency or currencies
(including currency units) in which such payments are to be made, the
terms and conditions of such payments and the manner in which the exchange
rate with respect to such payments shall be determined, the particular
provisions applicable thereto in accordance with, in addition to, or in
lieu of the provisions of Section 3.11, and whether the Securities of the
series may be satisfied and discharged other than as provided in Article
4;
(11) if the amount of payments of principal of, premium, if any, and
interest, if any, on the Securities of the series shall be determined with
reference to an index, formula or other method (which index, formula or
method may be based, without limitation, on a currency or currencies
(including currency units) other than that in which the Securities of the
series are denominated or designated to be payable), the index, formula or
other method by which such amounts shall be determined;
(12) if other than the principal amount thereof, the portion of the
principal amount of such Securities of the series which shall be payable
upon declaration of acceleration thereof pursuant to Section 5.2 or the
method by which such portion shall be determined;
<PAGE>
21
(13) if other than as provided in Section 3.7, the Person to whom
any interest on any Registered Security of the series shall be payable,
the manner in which, or the Person to whom, any interest on any Bearer
Securities of the series shall be payable, and the extent to which, or the
manner in which (including any certification requirement and other terms
and conditions under which), any interest payable on a temporary or
permanent global Security on an Interest Payment Date will be paid if
other than in the manner provided in Section 2.3 and Section 3.4, as
applicable;
(14) provisions, if any, granting special rights to the Holders of
Securities of the series upon the occurrence of such events as may be
specified;
(15) any deletions from, modifications of or additions to the Events
of Default set forth in Section 5.1 or covenants of the Company and/or the
Guarantor set forth in Article 9 pertaining to the Securities of the
series;
(16) under what circumstances, if any, the Company or the Guarantor
will pay additional amounts on the Securities of that series held by a
Person who is not a U.S. Person in respect of taxes or similar charges
withheld or deducted and, if so, whether the Company will have the option
to redeem such Securities rather than pay such additional amounts (and the
terms of any such option);
(17) whether Securities of the series shall be issuable as
Registered Securities or Bearer Securities (with or without interest
coupons), or both, and any restrictions applicable to the offering, sale
or delivery of Bearer Securities and, if other than as provided in Section
3.5, the terms upon which Bearer Securities of a series may be exchanged
for Registered Securities of the same series and vice versa;
(18) the date as of which any Bearer Securities of the series and
any temporary global Security representing outstanding Securities of the
series shall be dated if other than the date of original issuance of the
first Security of the series to be issued;
(19) the applicability, if any, to the Securities of or within the
series of Sections 4.4 and 4.5, or such other means of defeasance or
covenant defeasance as may be specified for the Securities and coupons, if
any, of such series, and whether, for the purpose of such defeasance or
covenant defeasance, the term "Government Obligations" shall include
obligations referred to in the definition of such term which are not
obligations of the United States or an agency or instrumentality of the
United States;
(20) if other than the Trustee, the identity of the Registrar and
any Paying Agent including any offshore Paying Agent (a "Special Paying
Agent") required to act as paying agent and/or exchange agent for a series
of Securities outside of the United States;
<PAGE>
22
(21) any terms which may be related to warrants issued by the
Company in connection with, or for the purchase of, Securities of such
series, including whether and under what circumstances the Securities of
any series may be used toward the exercise price of any such warrants;
(22) the designation of the initial Exchange Rate Agent, if any;
(23) whether Securities of the series shall be issued in whole or in
part in temporary or permanent global form and, if so, (i) the initial
Depositary for such global Securities and (ii) if other than as provided
in Section 3.4 or 3.5, as applicable, whether and the circumstances under
which beneficial owners of interests in any Securities of the series in
temporary or permanent global form may exchange such interests for
Securities of such series and of like tenor of any authorized form and
denomination;
(24) if Bearer Securities of the series are to be issued, (x)
whether interest in respect of any portion of a temporary Security in
global form (representing all of the Outstanding Bearer Securities of the
series) payable in respect of any Interest Payment Date prior to the
exchange of such temporary Security for definitive Securities of the
series shall be paid to any clearing organization with respect to the
portion of such temporary Security held for its account and, in such
event, the terms and conditions (including any certification requirements)
upon which any such interest payment received by a clearing organization
will be credited to the Persons entitled to interest payable on such
Interest Payment Date, and (y) the terms upon which interests in such
temporary Security in global form may be exchanged for interests in a
permanent Security in global form or for definitive Securities of the
series and the terms upon which interests in a permanent Security in
global form, if any, may be exchanged for definitive Securities of the
series; and
(25) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture), including any terms
which may be required by or advisable under United States laws or
regulations or advisable in connection with the marketing of Securities of
the series.
(c) All Securities of any one series and coupons, if any, appertaining to
any Bearer Securities of such series shall be substantially identical except as
to denomination and the rate or rates of interest, if any, and Stated Maturity,
the date from which interest, if any, shall accrue and except as may otherwise
be provided in or pursuant to an Officers' Certificate pursuant to this Section
3.1 or in an indenture supplemental hereto. All Securities of any one series
need not be issued at the same time and, unless otherwise provided, a series may
be reopened, without the consent of the Holders, for issuances of additional
Securities of such series or for the establishment of additional terms with
respect to the Securities of such series.
(d) If any of the terms of the Securities of any series are established by
action taken pursuant to a Board Resolution, a copy of such Board Resolution
shall be certified by the Secretary or an Assistant Secretary of the Company or
the Guarantor, as the case may be, and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate of the Company
<PAGE>
23
or the Guarantor, setting forth, or providing the manner for determining, the
terms of the Securities of such series, and an appropriate record of any action
taken pursuant thereto in connection with the issuance of any Securities of such
series shall be delivered to the Trustee prior to the authentication and
delivery thereof. With respect to Securities of a series subject to a Periodic
Offering, such Board Resolutions or Officers' Certificates may provide general
terms for Securities of such series and provide either that the specific terms
of particular Securities of such series shall be specified in a Company Order
and a Guarantor Order, or that such terms shall be determined by the Company and
the Guarantor, or one or more of their respective agents designated in their
respective Officers' Certificates, in accordance with the Company Order and the
Guarantor Order, as contemplated by the first proviso of the third paragraph of
Section 3.3.
Section 3.2. DENOMINATIONS. Unless otherwise provided as contemplated by
Section 3.1, any Registered Securities of a series shall be issuable in
denominations of $1,000 and any integral multiple thereof and any Bearer
Securities of a series shall be issuable in denominations of $5,000.
Section 3.3. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. Securities
shall be executed on behalf of the Company by the Chairman or one of its
Co-Chairmen or its President and Chief Executive Officer (or any other officer
certified by any of the foregoing officers in an Officer's Certificate to be an
executive officer of the Company) and attested to by its Secretary or an
Assistant Secretary. The Company's seal shall be affixed to the Securities, or a
facsimile of such seal shall be engraved, printed, or otherwise reproduced on
the Securities. The signatures of such officers on the Securities may be manual
or facsimile. The coupons, if any, of Bearer Securities shall bear the
facsimile signature of the Chairman or one of the Co-Chairmen or President and
Chief Executive Officer (or any other officer certified by any of the foregoing
officers in an Officer's Certificate to be an executive officer of the Company)
and shall be attested by the Secretary or an Assistant Secretary of the Company.
Securities and coupons 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, the Company may deliver Securities,
together with any coupons appertaining thereto, of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and make available for delivery such Securities, and the Trustee
in accordance with the Company Order shall authenticate and deliver such
Securities; PROVIDED, HOWEVER, that in the case of Securities offered in a
Periodic Offering, the Trustee shall authenticate and deliver such Securities
from time to time in accordance with such other procedures (including, without
limitation, the receipt by the Trustee of oral or electronic instructions from
the Company or its duly authorized agents, promptly confirmed in writing)
acceptable to the Trustee as may be specified by or pursuant to a Company Order
delivered to the Trustee prior to the time of the first authentication of
Securities of such series; PROVIDED, FURTHER, that, in connection with its
<PAGE>
24
sale during the "restricted period" (as defined in Section
1.163-5(c)(2)(i)(d)(7) of the United States Treasury Regulations), no Bearer
Security shall be mailed or otherwise delivered to any location in the United
States. If any Security shall be represented by a permanent Security in
global form, then, for purposes of this Section and Section 3.4, the notation
of a beneficial owner's interest therein upon original issuance of such
Security or upon exchange of a portion of a temporary Security in global form
shall be deemed to be delivery in connection with the original issuance of
such beneficial owner's interest in such permanent Security in global form.
Except as permitted by Section 3.6 or 3.7, the Trustee shall not authenticate
and deliver any Bearer Security unless all coupons for interest then matured
have been detached and cancelled.
If the form or terms of the Securities of a series have been established
by or pursuant to one or more Officers' Certificates as permitted by Sections
2.1 and 3.1, in authenticating such Securities and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to section 315(a) through (d)
of the Trust Indenture Act) shall be fully protected in relying upon, an Opinion
of Counsel stating,
(1) all instruments furnished by the Company or the Guarantor to the
Trustee in connection with the authentication and delivery of such
Securities and coupons conform to the requirements of this Indenture and
constitute sufficient authority hereunder for the Trustee to authenticate
and deliver such Securities and coupons;
(2) that the forms and terms of such Securities and any coupons have
been established in conformity with the provisions of this Indenture;
(3) the execution and delivery of such Securities and coupons have
been duly authorized by all necessary corporate action of the Company and
such Securities and coupons have been duly executed by the Company, and
that such Securities together with any coupons appertaining thereto, when
authenticated and delivered by the Trustee and issued by the Company in
the manner and subject to any conditions specified in such Opinion of
Counsel, will constitute valid and legally binding obligations of the
Company, enforceable in accordance with their terms, subject to customary
exceptions;
(4) in the event that the forms or terms of such Securities and
coupons have been established in a supplemental indenture, the execution
and delivery of such supplemental indenture has been duly authorized by
all necessary corporate action of the Company, such supplemental indenture
has been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery by the Trustee, is a valid and
binding obligation enforceable against the Company in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and subject, as to enforceability,
to general principles of equity (regardless of whether enforcement is
sought in a proceeding in equity or at law); and
<PAGE>
25
(5) the amount of Securities Outstanding of such series, together
with the amount of such Securities, does not exceed any limit established
under the terms of this Indenture on the amount of Securities of such
series that may be authenticated and delivered;
PROVIDED, HOWEVER, that, with respect to Securities of a series subject to a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel only once at or prior to the time of the first authentication of
Securities of such series and that the Opinion of Counsel above may state:
(x) that the forms of such Securities have been, and the terms of
such Securities (when established in accordance with such procedures as
may be specified from time to time in a Company Order, all as contemplated
by and in accordance with a Board Resolution or an Officers' Certificate
pursuant to Section 3.1, as the case may be) will have been, established
in conformity with the provisions of this Indenture; and
(y) that such Securities, together with the coupons, if any,
appertaining thereto, when (1) executed by the Company, (2) completed,
authenticated and delivered by the Trustee in accordance with this
Indenture, and (3) issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company, enforceable in accordance with
their terms, subject to customary exceptions.
With respect to Securities of a series subject to a Periodic
Offering, the Trustee may conclusively rely, as to the authorization by the
Company of any of such Securities, the form and terms thereof and the legality,
validity, binding effect and enforceability thereof, upon the Opinion of Counsel
and other documents delivered pursuant to Sections 2.1 and 3.1 and this Section,
as applicable, at or prior to the time of the first authentication of Securities
of such series unless and until it has received written notification that such
opinion or other documents have been superseded or revoked. In connection with
the authentication and delivery of Securities of a series subject to a Periodic
Offering, the Trustee shall be entitled to assume that the Company's
instructions to authenticate and deliver such Securities do not violate any
rules, regulations or orders of any governmental agency or commission having
jurisdiction over the Company or the Guarantor.
If the form or terms of the Securities of a series have been established
by or pursuant to one or more Officers' Certificates as permitted by Sections
2.1 and 3.1, the Trustee shall have the right to decline to authenticate such
Securities if the issue of such Securities pursuant to this Indenture will
adversely affect the Trustee's own rights, duties or immunities under this
Indenture or otherwise in a manner which is not reasonably acceptable to the
Trustee. Notwithstanding the generality of the foregoing, the Trustee will not
be required to authenticate Securities denominated in a Foreign Currency if the
Trustee reasonably believes that it would be unable to perform its duties with
respect to such Securities.
<PAGE>
26
Notwithstanding the provisions of Section 3.1 and of the two preceding
paragraphs, if all of the Securities of any series are not to be issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 at or prior to the time of the authentication
of each Security of such series if such Officers' Certificate is delivered at or
prior to the authentication upon original issuance of the first Security of such
series to be issued.
If the Company shall establish pursuant to Section 3.1 that the Securities
of a series are to be issued in whole or in part in global form, then the
Company shall execute and the Trustee shall, in accordance with this Section and
the Company Order with respect to such series, authenticate and deliver one or
more Securities in global form that (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 Security or Securities in
global form, (ii) shall be registered, if a Registered Security, in the name of
the Depositary for such Security or Securities in global form or the nominee of
such Depositary and (iii) shall be delivered by the Trustee to such Depositary
or pursuant to such Depositary's instruction.
Each Depositary designated pursuant to Section 3.1 for a Registered
Security in global form must, at the time of its designation and at all times
while it serves as Depositary, be a clearing agency registered under the
Securities Exchange Act of 1934 and any other applicable statute or regulation.
The Trustee shall have no responsibility to determine if the Depositary is so
registered. Each Depositary shall enter into an agreement with the Trustee
governing the respective duties and rights of such Depositary and the Trustee
with regard to Securities issued in global form.
Each Registered Security shall be dated the date of its authentication and
each Bearer Security (including a Bearer Security represented by a temporary
global Security) shall be dated as of the date specified as contemplated by
Section 3.1.
No Security or coupon appertaining thereto shall be entitled to any
benefits under this Indenture or be valid or obligatory for any purpose until
such Security is authenticated by the manual signature of one of the authorized
signatories of the Trustee or an Authenticating Agent. Such signature upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered under this Indenture and is entitled
to the benefits of this Indenture. Except as permitted by Section 3.6 or 3.7,
the Trustee shall not authenticate and deliver any Bearer Security unless all
appurtenant coupons for interest then matured have been detached and cancelled.
Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 3.9 together with a written statement (which need not comply
with Section 1.2 and need not be accompanied by an Opinion of Counsel) stating
that such Security has never been issued and sold by the Company, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall not be entitled to the benefits
of this Indenture.
<PAGE>
27
Section 3.4. TEMPORARY SECURITIES. Pending the preparation of definitive
Securities of any series, the Company may execute and, upon Company Order, the
Trustee shall authenticate and deliver temporary Securities of such series which
are printed, lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination, substantially of the tenor and form, with or
without coupons, 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
conclusively evidenced by their execution of such Securities and coupons, if
any. In the case of Securities of any series, such temporary Securities may be
in global form.
Except in the case of temporary Securities in global form, each of which
shall be exchanged in accordance with the provisions thereof, if temporary
Securities of any series are issued, the Company will cause permanent Securities
of such series to be prepared without unreasonable delay. After preparation of
such permanent Securities, the temporary Securities shall be exchangeable for
such permanent Securities of like tenor upon surrender of the temporary
Securities of such series at the office or agency of the Company pursuant to
Section 9.2 in a Place of Payment for such series, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities of any
series (accompanied by any unmatured coupons appertaining thereto), the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of permanent Securities of the same series of
authorized denominations and of like tenor; PROVIDED, HOWEVER, that no
permanent Bearer Security shall be delivered in exchange for a temporary
Registered Security; and PROVIDED FURTHER that no permanent Bearer Security
shall be delivered in exchange for a temporary Bearer Security unless the
Trustee shall have received from the person entitled to receive the definitive
Bearer Security a certificate substantially in the form approved in the
Officers' Certificate relating thereto and such delivery shall occur only
outside the United States. Until so exchanged, the temporary Securities of any
series thereon shall in all respects be entitled to the same benefits under this
Indenture as permanent Securities of such series except as otherwise specified
as contemplated by Section 3.1.
Section 3.5. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. (a)
The Company shall cause to be kept at the Corporate Trust Office of the Trustee
or in any office or agency to be maintained by the Company in accordance with
Section 9.2 in a Place of Payment a register (the "Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Registered Securities and the registration of transfers
of Registered Securities. The Register shall be in written form or any other
form capable of being converted into written form within a reasonable time. The
Trustee is hereby appointed "Registrar" for the purpose of registering
Registered Securities and transfers of Registered Securities as herein provided.
Upon surrender for registration of transfer of any Registered Security of
any series at the office or agency maintained pursuant to Section 9.2 in a Place
of Payment for that series, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Registered Securities of the same series, of any
authorized denominations, of a like aggregate principal amount and tenor and
with like terms and conditions.
<PAGE>
28
Bearer Securities or any coupons appertaining thereto shall be
transferable by delivery.
At the option of the Holder, Registered Securities of any series (except a
Registered Security in global form) may be exchanged for other Registered
Securities of the same series, of any authorized denominations and of a like
aggregate principal amount containing identical terms and provisions, upon
surrender of the Registered Securities to be exchanged at such office or agency.
Whenever any Registered Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Registered
Securities which the Holder making the exchange is entitled to receive. Unless
otherwise specified as contemplated by Section 3.1, Bearer Securities may not be
issued in exchange for Registered Securities.
(b) Unless otherwise specified as contemplated by Section 3.1, to the
extent permitted by law, at the option of the Holder, Bearer Securities of such
series may be exchanged for Registered Securities (if the Securities of such
series are issuable in registered form) or Bearer Securities (if Bearer
Securities of such series are issuable in more than one denomination and such
exchanges are permitted by such series) of the same series, of any authorized
denominations and of like tenor and aggregate principal amount, upon surrender
of the Bearer Securities to be exchanged at any such office or agency, with all
unmatured coupons and all matured coupons in default thereto appertaining. If
the Holder of a Bearer Security is unable to produce any such unmatured coupon
or coupons or matured coupon or coupons in default, such exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Company and the Trustee in an amount equal to the face amount of such
missing coupon or coupons, or the surrender of such missing coupon or coupons
may be waived by the Company and the Trustee if there be furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to
any Paying Agent any such missing coupon in respect of which such a payment
shall have been made, such Holder shall be entitled to receive the amount of
such payment; PROVIDED, HOWEVER, that, except as otherwise provided in
Section 9.2, interest represented by coupons shall be payable only upon
presentation and surrender of those coupons at an office or agency located
outside the United States. Notwithstanding the foregoing, in case any Bearer
Security of any series is surrendered at any such office or agency in exchange
for a Registered Security of the same series after the close of business at such
office or agency on (i) any Regular Record Date and before the opening of
business at such office or agency on the relevant Interest Payment Date, or (ii)
any Special Record Date and before the opening of business at such office or
agency on the related date for payment of Defaulted Interest, such Bearer
Security shall be surrendered without the coupon relating to such Interest
Payment Date or proposed date of payment, as the case may be (or, if such coupon
is so surrendered with such Bearer Security, such coupon shall be returned to
the person so surrendering the Bearer Security), and interest or Defaulted
Interest, as the case may be, will not be payable on such Interest Payment Date
or proposed date for payment, as the case may be, in respect of the Registered
Security issued in exchange for such Bearer Security, but will be payable only
to the Holder of such coupon, when due in accordance with the provisions of this
Indenture. The Company shall execute, and the Trustee shall authenticate and
deliver, the Registered Security or Securities which the Holder making the
exchange is entitled to receive.
<PAGE>
29
Notwithstanding the foregoing, the exchange of Bearer Securities for
Registered Securities will be subject to the provisions of United States income
tax laws and regulations applicable to Securities in effect at the time of such
exchange.
(c) Except as otherwise specified pursuant to Section 3.1, in no event
may Registered Securities, including Registered Securities received in exchange
for Bearer Securities, be exchanged for Bearer Securities.
(d) If the Company shall establish pursuant to Section 3.1 that the
Registered Securities of a series are to be issued in whole or in part in the
form of one or more Securities in global form, then the Company shall execute
and the Trustee shall, in accordance with Section 3.3 and the Company Order with
respect to such series, authenticate and deliver one or more Securities in
global form in temporary or permanent form that (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 one or more
Securities in global form, (ii) shall be registered in the name of the
Depositary for such Security or Securities in global form or the nominee of such
depositary, and (iii) shall bear a legend substantially to the following effect:
"This Security may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary, unless and until
this Security is exchanged in whole or in part for Securities in definitive
form."
Notwithstanding any other provision (other than the provisions set forth
in the seventh and eighth paragraphs of this Section) of this Section, unless
and until it is exchanged in whole or in part for Securities in certificated
form, a Security in global form representing all or a portion of the Securities
of a series may not be transferred except as a whole by the Depositary for such
series to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor Depositary for such series or a nominee of such
successor Depositary.
If at any time the Depositary for the Securities of a series notifies the
Company that it is unwilling or unable to continue as Depositary for the
Securities of such series or if at any time the Depositary for the Securities of
such series shall no longer be eligible under Section 3.3, the Company shall
appoint a successor Depositary with respect to the Securities of such series. If
a successor Depositary for the Securities of such series is not appointed by the
Company within 90 days after the issuer receives such notice or becomes aware of
such ineligibility, the Company's election pursuant to Section 3.1 shall no
longer be effective with respect to the Securities of such series and the
Company shall execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of certificated Securities of such series of like
tenor, shall authenticate and deliver Securities of such series of like tenor in
certificated form, in authorized denominations and in an aggregate principal
amount equal to the principal amount of the Security or Securities of such
series of like tenor in global form in exchange for such Security or Securities
in global form.
<PAGE>
30
The Company may at any time in its sole discretion determine that
Securities of a series issued in global form shall no longer be represented by
such a Security or Securities in global form. In such event the Company shall
execute, and the Trustee, upon receipt of a Company Order for the authentication
and delivery of certificated Securities of such series of like tenor, shall
authenticate and deliver, Securities of such series of like tenor in
certificated form, in authorized denominations and in an aggregate principal
amount equal to the principal amount of the Security or Securities of such
series of like tenor in global form in exchange for such Security or Securities
in global form.
If specified by the Company pursuant to Section 3.1 with respect to a
series of Securities, the Depositary for such series may surrender a Security in
global form of such series in exchange in whole or in part for Securities of
such series in certificated form on such terms as are acceptable to the Company
and such Depositary. Thereupon, the Company shall execute, and the Trustee shall
authenticate and deliver, without service charge,
(i) to each Person specified by such Depositary a new certificated
Security or Securities of the same series of like tenor, of any authorized
denomination as requested by such Person in aggregate principal amount
equal to and in exchange for such Person's beneficial interest in the
Security in global form; and
(ii) to such Depositary a new Security in global form of like tenor
in a denomination equal to the difference, if any, between the principal
amount of the surrendered Security in global form and the aggregate
principal amount of certificated Securities delivered to Holders thereof.
Upon the exchange of a Security in global form for Securities in
certificated form, such Security in global form shall be cancelled by the
Trustee. Unless expressly provided with respect to the Securities of any series
that such Security may be exchanged for Bearer Securities, Securities in
certificated form issued in exchange for a Security in global form pursuant to
this Section shall be registered in such names and in such authorized
denominations as the Depositary for such Security in global form, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the Persons
in whose names such Securities are so registered.
Whenever any Securities are surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or upon any
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or exchange.
<PAGE>
31
Every Registered Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company, the Registrar or
the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to those of the Company, the Registrar and the
Trustee requiring such written instrument of transfer duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or for
any exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration or transfer or exchange of Securities, other
than exchanges pursuant to Section 3.4 or 10.7 not involving any transfer.
In the event of any redemption in part, the Company shall not be required
(i) to issue, register the transfer of, or exchange any Securities of any series
for a period beginning at the opening of business 15 days before any selection
for redemption of Securities of like tenor and of the series of which such
Security is a part and ending at the close of business on the earliest date on
which the relevant notice of redemption is deemed to have been given to all
Holders of Securities of like tenor and of such series to be redeemed; (ii) to
register the transfer of or exchange any Registered Security so selected for
redemption, in whole or in part, called for redemption or otherwise surrendered
for repayment, except the unredeemed or unrepaid portion of any Security being
redeemed or repaid in part; or (iii) to exchange any Bearer Security so selected
for redemption, except that such a Bearer Security may be exchanged for a
Registered Security of that series and like tenor; PROVIDED that such
Registered Security shall be simultaneously surrendered for redemption.
Section 3.6. REPLACEMENT SECURITIES. If a mutilated Security or a
Security with a mutilated coupon appertaining to it is surrendered to the
Trustee, together with, in proper cases, such security or indemnity as may be
required by the Company or the Trustee to save each of them harmless, the
Company shall execute and the Trustee shall authenticate and deliver a
replacement Registered Security, if such surrendered Security was a Registered
Security, or a replacement Bearer Security with coupons corresponding to the
coupons appertaining to the surrendered Security, if such surrendered Security
was a Bearer Security, of the same series and date of maturity, if the Trustee's
requirements are met.
If there shall be delivered to the Company, the Guarantor and the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Security or Security with a destroyed, lost or stolen coupon and (ii) such
security or indemnity as may be required by them to save each of them and any
agent of either of them harmless, then, in the absence of notice to the Company,
the Guarantor or the Trustee that such Security or coupon has been acquired by a
bona fide purchaser, the Company shall execute and the Trustee shall
authenticate and deliver in lieu of any such destroyed, lost or stolen Security
or in exchange for the Security to which a destroyed, lost or stolen coupon
appertains (with all appurtenant coupons not destroyed, lost or stolen), a
replacement Registered Security if such Holder's claim appertains to a
Registered Security, or a replacement Bearer Security with coupons corresponding
to the coupons appertaining to the destroyed, lost or stolen Bearer Security or
the Bearer Security to which such lost, destroyed or stolen coupon appertains,
if such Holder's claim appertains to a Bearer Security, of the same series and
principal amount,
<PAGE>
32
containing identical terms and provisions and bearing a number not
contemporaneously outstanding with coupons corresponding to the coupons, if any,
appertaining to the destroyed, lost or stolen Security.
In case any such mutilated, destroyed, lost or stolen Security or coupon
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security or coupon, pay such Security or coupon;
PROVIDED, HOWEVER, that payment of principal of and any premium or interest
on Bearer Securities shall, except as otherwise provided in Section 9.2, be
payable only at an office or agency located outside the United States and,
unless otherwise specified as contemplated by Section 3.1, any interest on
Bearer Securities shall be payable only upon presentation and surrender of the
coupons appertaining thereto.
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 counsel of the Company and of the Trustee) connected
therewith.
Every new Security of any series with its coupons, if any, issued pursuant
to this Section in lieu of any destroyed, lost or stolen Security, or in
exchange for a Security to which a destroyed, lost or stolen coupon appertains,
shall constitute an original additional contractual obligation of the Company
guaranteed by the Guarantor, whether or not the destroyed, lost or stolen
Security and its coupon, if any, or the destroyed, lost or stolen coupon, shall
be at any time enforceable by anyone, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Securities
of that series and their coupons, if any, 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 or coupons.
Section 3.7. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. (a) Unless
otherwise provided as contemplated by Section 3.1, interest, if any, on any
Registered 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 at the office or agency
maintained for such purpose pursuant to Section 9.2; PROVIDED, HOWEVER,
that, at the option of the Company or the Guarantor, as the case may be,
interest on any series of Registered Securities that bear interest may be paid
(i) by check mailed to the address of the Person entitled thereto as it shall
appear on the Register of Holders of Securities of such series or (ii) to the
extent specified as contemplated by Section 3.1, by wire transfer to an account
maintained by the Person entitled thereto as specified in the Register of
Holders of Securities of such series.
Unless otherwise provided as contemplated by Section 3.1, (i) interest, if
any, on Bearer Securities shall be paid only against presentation and surrender
of the coupons for such interest installments as are evidenced thereby as they
mature and (ii) original issue
<PAGE>
33
discount, if any, on Bearer Securities shall be paid only against presentation
and surrender of such Securities; in either case at the office of a Paying Agent
located outside the United States, unless the Company or the Guarantor, as the
case may be, shall have otherwise instructed the Trustee in writing provided
that any such instruction for payment in the United States does not cause any
Bearer Security to be treated as a "registration-required obligation" under the
United States law and regulations. The interest, if any, on any temporary Bearer
Security shall be paid, as to any installment of interest evidenced by a coupon
attached thereto, only upon presentation and surrender of such coupon and, as to
other installments of interest, only upon presentation of such Security for
notation thereon of the payment of such interest. If at the time a payment of
principal of or interest, if any, on a Bearer Security or coupon shall become
due, the payment of the full amount so payable at the office or offices of all
the Paying Agents outside the United States is illegal or effectively precluded
because of the imposition of exchange controls or other similar restrictions on
the payment of such amount in Dollars, then the Company or the Guarantor, as the
case may be, may instruct the Trustee to make such payments at a Paying Agent
located in the United States, provided that provision for such payment in the
United States would not cause such Bearer Security to be treated as a
"registration-required obligation" under the United States law and regulations.
(b) Unless otherwise provided as contemplated by Section 3.1, any interest
on any Registered Security of any series which is payable, but is not punctually
paid or duly provided for, on any interest payment date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company or the Guarantor, at its election
in each case, as provided in clause (1) or (2) below:
(1) The Company or the Guarantor may elect to make payment of any
Defaulted Interest to the Persons in whose names the Registered Securities
of such series (or their respective Predecessor Securities) are registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company or the Guarantor 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 (1) provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company or the Guarantor of such Special
Record Date and, in the name and at the expense of the Company or the
Guarantor, as the case may be, shall cause notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Registered
Securities of such series at his address as it appears in the Register,
not less than 10 days prior to such Special Record Date.
<PAGE>
34
Notice of the proposed payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such Defaulted Interest shall
be paid to the Persons in whose names the Securities of such series (or
their respective Predecessor Securities) are registered at the close of
business on such Special Record Date and shall no longer be payable
pursuant to the following clause (2).
(2) The Company or the Guarantor may make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of such
series (or their respective Predecessor Securities) are registered at the
close of business on a specified date 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 or the Guarantor to
the Trustee of the proposed payment pursuant to this clause (2), such
manner of payment shall be deemed practicable by the Trustee.
(c) Subject to the foregoing provisions of this Section and Section 3.5,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
(d) Any Defaulted Interest payable in respect of Bearer Securities of any
series shall be payable pursuant to such procedures as may be satisfactory to
the Trustee in such manner that there is no discrimination between the Holders
of Registered Securities (if any) and Bearer Securities of such series, and
notice of the payment date therefor shall be given by the Trustee, in the name
and at the expense of the Company, in the manner provided in Section 1.6 not
more than 25 days and not less than 20 days prior to the date of the proposed
payment.
Section 3.8. PERSONS DEEMED OWNERS. Prior to due presentment of any
Registered Security for registration of transfer, the Company, the Guarantor,
the Trustee and any agent of the Company, the Guarantor or the Trustee may treat
the Person in whose name such Registered Security is registered as the owner of
such Registered Security for the purpose of receiving payment of principal of,
premium, if any, and (subject to Section 3.7) interest on such Registered
Security and for all other purposes whatsoever, whether or not such Registered
Security be overdue, and neither the Company, the Guarantor, the Trustee nor any
agent of the Company, the Guarantor or the Trustee shall be affected by notice
to the contrary.
The Company, the Guarantor, the Trustee and any agent of the Company, the
Guarantor or the Trustee may treat the bearer of any Bearer Security and the
bearer of any coupon as the absolute owner of such Bearer Security or coupon for
the purpose of receiving payment thereof or on account thereof and for all other
purposes whatsoever, whether or not such Bearer Security or coupon be overdue,
and neither the Company, the Guarantor, the Trustee nor any agent of the
Company, the Guarantor or the Trustee shall be affected by notice to the
contrary. All payments made to any Holder, or upon his order, shall be valid,
and, to the extent of the sum or sums paid, effectual to satisfy and discharge
the liability for moneys payable upon such Security or coupon.
<PAGE>
35
None of the Company, the Guarantor, the Trustee or any agent of the
Company, the Guarantor or the Trustee shall have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of a Security in global form, or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests. Notwithstanding the foregoing, with respect to any Security in
global form, nothing herein shall prevent the Company, the Guarantor or the
Trustee, or any agent of the Company, the Guarantor or the Trustee, from giving
effect to any written certification, proxy or other authorization furnished by
any Depositary (or its nominee), as a Holder, with respect to such Security in
global form or impair, as between such Depositary and owners of beneficial
interests in such Security in global form, the operation of customary practices
governing the exercise of the rights of such Depositary (or its nominee) as
Holder of such Security in global form.
The Company or the Guarantor, as the case may be, shall have the right to
require a Holder, in connection with the payment of the principal of, premium,
if any, and interest, if any, on any Security, to certify information to the
Company or the Guarantor, as the case may be, or, in the absence of such
certification, the Company or the Guarantor, as the case may be, will be
entitled to rely on any legal presumption to enable the Company or the
Guarantor, as the case may be, to determine its duties and liabilities, if any,
to deduct or withhold taxes, assessments or governmental charges for such
payment.
Section 3.9. CANCELLATION. The Company at any time may deliver to the
Trustee for cancellation any Securities or coupons previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued, and all Securities or coupons so
delivered shall be promptly cancelled by the Trustee. The Registrar and any
Paying Agent shall forward to the Trustee any Securities and coupons surrendered
to them for replacement, for registration of transfer, or for exchange or
payment. The Trustee shall cancel all Registered Securities and matured coupons
surrendered for replacement, for registration of transfer, or for exchange,
payment, redemption or cancellation and may dispose of cancelled Securities and
coupons and issue a certificate of destruction to the Company. All Bearer
Securities and unmatured coupons so delivered shall be held by the Trustee and,
upon instruction by the Company Order, shall be cancelled or held for
reissuance. Bearer Securities and unmatured coupons held for reissuance may be
reissued only in exchange for Bearer Securities of the same series and of like
Stated Maturity and with like terms and conditions pursuant to Section 3.5 or in
replacement of mutilated, lost, stolen or destroyed Bearer Securities of the
same series and of like Stated Maturity and with like terms and conditions or
the related coupons pursuant to Section 3.6. All Bearer Securities and
unmatured coupons held by the Trustee pending such cancellation or reissuance
shall be deemed to be delivered for cancellation for all purposes of this
Indenture and the Securities. The Company may not issue new Securities to
replace Securities that it has paid or delivered to the Trustee for
cancellation, except as expressly permitted in the terms of Securities for any
particular series or as permitted pursuant to the terms of this Indenture. All
cancelled Securities and coupons held by the Trustee shall be delivered to the
Company upon Company
<PAGE>
36
Request. The acquisition of any Securities or coupons by the Company shall not
operate as a redemption or satisfaction of the indebtedness represented thereby
unless and until such Securities or coupons are surrendered to the Trustee for
cancellation. Permanent Securities in global form shall not be destroyed until
exchanged in full for definitive Securities or until payment thereon is made in
full.
Section 3.10. COMPUTATION OF INTEREST. Except as otherwise specified as
contemplated by Section 3.1, (i) interest on any Securities that bear interest
at a fixed rate shall be computed on the basis of a 360-day year of twelve
30-day months and (ii) interest on any Securities that bear interest at a
variable rate shall be computed on the basis of the actual number of days in an
interest period divided by 360.
Section 3.11. CURRENCY AND MANNER OF PAYMENT IN RESPECT OF SECURITIES.
(a) Unless otherwise specified with respect to any Securities pursuant to
Section 3.1, with respect to Registered Securities of any series not permitting
the election provided for in paragraph (b) below or the Holders of which have
not made the election provided for in paragraph (b) below, and with respect to
Bearer Securities of any series, except as provided in paragraph (d) below,
payment of the principal of, premium, if any, and interest, if any, on any
Registered or Bearer Security of such series will be made in the currency or
currencies or currency unit or units in which such Registered Security or Bearer
Security, as the case may be, is payable. The provisions of this Section 3.11
may be modified or superseded pursuant to Section 3.1 with respect to any
Securities. For all purposes of this Indenture, currency units shall include
any composite currency.
(b) It may be provided pursuant to Section 3.1, with respect to Registered
Securities of any series, that Holders shall have the option, subject to
paragraphs (d) and (e) below, to receive payments of principal of, premium, if
any, or interest, if any, on such Registered Securities in any of the currencies
or currency units which may be designated for such election by delivering to the
Trustee (or the applicable Paying Agent) a written election with signature
guarantees and in the applicable form established pursuant to Section 3.1, not
later than the close of business on the Election Date immediately preceding the
applicable payment date. If a Holder so elects to receive such payments in any
such currency or currency unit, such election will remain in effect for such
Holder or any transferee of such Holder until changed by such Holder or such
transferee by written notice to the Trustee (or any applicable Paying Agent) for
such series of Registered Securities (but any such change must be made not later
than the close of business on the Election Date immediately preceding the next
payment date to be effective for the payment to be made on such payment date,
and no such change of election may be made with respect to payments to be made
on any Registered Security of such series with respect to which an Event of
Default has occurred or with respect to which the Company has deposited funds
pursuant to Article 4 or with respect to which a notice of redemption has been
given by the Company). Any Holder of any such Registered Security who shall not
have delivered any such election to the Trustee (or any applicable Paying Agent)
not later than the close of business on the applicable Election Date will be
<PAGE>
37
paid the amount due on the applicable payment date in the relevant currency or
currency unit as provided in Section 3.11(a). The Trustee (or the applicable
Paying Agent) shall notify the Exchange Rate Agent as soon as practicable after
the Election Date of the aggregate principal amount of Registered Securities for
which Holders have made such written election.
(c) If the election referred to in paragraph (b) above has been provided
for with respect to any Registered Securities of a series pursuant to Section
3.1, then, unless otherwise specified pursuant to Section 3.1 with respect to
any such Registered Securities, not later than the fourth Business Day after the
Election Date for each payment date for such Registered Securities, the Exchange
Rate Agent will deliver to the Company a written notice specifying, in the
currency or currencies or currency unit or units in which Registered Securities
of such series are payable, the respective aggregate amounts of principal of,
premium, if any, and interest, if any, on such Registered Securities to be paid
on such payment date, and specifying the amounts in such currency or currencies
or currency unit or units so payable in respect of such Registered Securities as
to which the Holders of Registered Securities denominated in any currency or
currencies or currency unit or units shall have elected to be paid in another
currency or currency unit as provided in paragraph (b) above. If the election
referred to in paragraph (b) above has been provided for with respect to any
Registered Securities of a series pursuant to Section 3.1, and if at least one
Holder has made such election, then, unless otherwise specified pursuant to
Section 3.1, on the second Business Day preceding such payment date the Company
will deliver to the Trustee (or the applicable Paying Agent) an Exchange Rate
Officer's Certificate in respect of the Dollar, Foreign Currency or Currencies,
ECU or other currency unit payments to be made on such payment date. Unless
otherwise specified pursuant to Section 3.1, the Dollar, Foreign Currency or
Currencies, ECU or other currency unit amount receivable by Holders of
Registered Securities who have elected payment in a currency or currency unit as
provided in paragraph (b) above shall be determined by the Company or the
Guarantor, as the case may be, on the basis of the applicable Market Exchange
Rate in effect on the second Business Day (the "Valuation Date") immediately
preceding each payment date, and such determination shall be conclusive and
binding for all purposes, absent manifest error.
(d) If a Conversion Event occurs with respect to a Foreign Currency, ECU
or any other currency unit in which any of the Securities are denominated or
payable otherwise than pursuant to an election provided for pursuant to
paragraph (b) above, then, with respect to each date for the payment of
principal of, premium, if any, and interest, if any, on the applicable
Securities denominated or payable in such Foreign Currency, ECU or such other
currency unit occurring after the last date on which such Foreign Currency, ECU
or such other currency unit was used (the "Conversion Date"), the Dollar shall
be the currency of payment for use on each such payment date (but such Foreign
Currency, ECU or such other currency unit that was previously the currency of
payment shall, at the Company's election, resume being the currency of payment
on the first such payment date preceded by 15 Business Days during which the
circumstances which gave rise to the Dollar becoming such currency no longer
prevail). Unless otherwise specified pursuant to Section 3.1, the Dollar amount
to be paid by the Company to the Trustee or any applicable Paying Agent and by
the Trustee or any applicable Paying Agent to the Holders of such Securities
with respect to such
<PAGE>
38
payment date shall be, in the case of a Foreign Currency other than a currency
unit, the Dollar Equivalent of the Foreign Currency or, in the case of a Foreign
Currency that is a currency unit, the Dollar Equivalent of the Currency Unit, in
each case as determined by the Exchange Rate Agent in the manner provided in
paragraph (f) or (g) below.
(e) Unless otherwise specified pursuant to Section 3.1, if the Holder of a
Registered Security denominated in any currency or currency unit shall have
elected to be paid in another currency or currency unit or in other currencies
as provided in paragraph (b) above, and (i) a Conversion Event occurs with
respect to any such elected currency or currency unit, such Holder shall receive
payment in the currency or currency unit in which payment would have been made
in the absence of such election and (ii) if a Conversion Event occurs with
respect to the currency or currency unit in which payment would have been made
in the absence of such election, such Holder shall receive payment in Dollars as
provided in paragraph (d) of this Section 3.11 (but, subject to any contravening
valid election pursuant to paragraph (b) above, the elected payment currency or
currency unit, in the case of the circumstances described in clause (i) above,
or the payment currency or currency unit in the absence of such election, in the
case of the circumstances described in clause (ii) above, shall, at the
Company's or the Guarantor's election, as the case may be, resume being the
currency or currency unit of payment with respect to Holders who have so
elected, but only with respect to payments on payment dates preceded by 15
Business Days during which the circumstances which gave rise to such currency or
currency unit, in the case of the circumstances described in clause (i) above,
or the Dollar, in the case of the circumstances described in clause (ii) above,
becoming the currency or currency unit, as applicable, of payment, no longer
prevail).
(f) The "Dollar Equivalent of the Foreign Currency" shall be determined by
the Exchange Rate Agent and shall be obtained for each subsequent payment date
by the Exchange Rate Agent by converting the specified Foreign Currency into
Dollars at the Market Exchange Rate on the Conversion Date.
(g) The "Dollar Equivalent of the Currency Unit" shall be determined by
the Exchange Rate Agent and, subject to the provisions of paragraph (h) below,
shall be the sum of each amount obtained by converting the Specified Amount of
each Component Currency (as each such term is defined in paragraph (h) below)
into Dollars at the Market Exchange Rate for such Component Currency on the
Valuation Date with respect to each payment.
(h) For purposes of this Section 3.11 the following terms shall have the
following meanings:
A "Component Currency" shall mean any currency which, on the Conversion
Date, was a component currency of the relevant currency unit, including, but not
limited to, ECU.
"Election Date" shall mean the Regular Record Date for the applicable
series of Registered Securities as specified pursuant to Section 3.1 by which
the written election referred to in Section 3.11(b) may be made.
<PAGE>
39
A "Specified Amount" of a Component Currency shall mean the number of
units of such Component Currency or fractions thereof which such Component
Currency represented in the relevant currency unit, including, but not limited
to, ECU, on the Conversion Date. If after the Conversion Date the official unit
of any Component Currency is altered by way of combination or subdivision, the
Specified Amount of such Component Currency shall be divided or multiplied in
the same proportion. If after the Conversion Date two or more Component
Currencies are consolidated into a single currency, the respective Specified
Amounts of such Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the respective Specified Amounts of such
consolidated Component Currencies expressed in such single currency, and such
amount shall thereafter be a Specified Amount and such single currency shall
thereafter be a Component Currency. If after the Conversion Date any Component
Currency shall be divided into two or more currencies, the Specified Amount of
such Component Currency shall be replaced by specified amounts of such two or
more currencies, the sum of which, at the Market Exchange Rate of such two or
more currencies on the date of such replacement, shall be equal to the Specified
Amount of such former Component Currency and such amounts shall thereafter be
Specified Amounts and such currencies shall thereafter be Component Currencies.
If, after the Conversion Date of the relevant currency unit, including, but not
limited to, ECU, a Conversion Event (other than any event referred to above in
this definition of "Specified Amount") occurs with respect to any Component
Currency of such currency unit and is continuing on the applicable Valuation
Date, the Specified Amount of such Component Currency shall, for purposes of
calculating the Dollar Equivalent of the Currency Unit, be converted into
Dollars at the Market Exchange Rate in effect on the Conversion Date of such
Component Currency.
All decisions and determinations of the Exchange Rate Agent regarding the
Dollar Equivalent of the Foreign Currency, the Dollar Equivalent of the Currency
Unit, the Market Exchange Rate and changes in the Specified Amounts as specified
above shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive for all purposes and irrevocably binding upon the Company,
the Guarantor, the Trustee (and any applicable Paying Agent) and all Holders of
Securities denominated or payable in the relevant currency, currencies or
currency units. The Exchange Rate Agent shall promptly give written notice to
the Company, the Guarantor and the Trustee of any such decision or
determination.
In the event that the Company or the Guarantor, as the case may be,
determines in good faith that a Conversion Event has occurred with respect to a
Foreign Currency, the Company or the Guarantor, as the case may be, will
promptly give written notice thereof to the Trustee (or any applicable Paying
Agent) and to the Exchange Rate Agent (and the Trustee (or such Paying Agent)
will promptly thereafter give notice in the manner provided in Section 1.6 to
the affected Holders) specifying the Conversion Date. In the event the Company
or the Guarantor, as the case may be, so determines that a Conversion Event has
occurred with respect to ECU or any other currency unit in which Securities are
denominated or payable, the Company or the Guarantor, as the case may be, will
promptly give written notice thereof to the Trustee (or any applicable Paying
Agent) and to the Exchange Rate Agent (and the Trustee (or such Paying Agent)
will promptly thereafter give notice in the manner provided in Section 1.6 to
the affected Holders) specifying the Conversion Date and the Specified Amount of
each Component Currency on the Conversion Date. In the event the
<PAGE>
40
Company or the Guarantor, as the case may be, determines in good faith that any
subsequent change in any Component Currency as set forth in the definition of
Specified Amount above has occurred, the Company or the Guarantor, as the case
may be, will similarly give written notice to the Trustee (or any applicable
Paying Agent) and to the Exchange Rate Agent.
The Trustee of the appropriate series of Securities shall be fully
justified and protected in relying and acting upon information received by it
from the Company, the Guarantor and the Exchange Rate Agent and shall not
otherwise have any duty or obligation to determine the accuracy or validity of
such information independent of the Company, the Guarantor or the Exchange Rate
Agent.
Section 3.12. APPOINTMENT AND RESIGNATION OF EXCHANGE RATE AGENT.
(a) Unless otherwise specified pursuant to Section 3.1, if and so long as
the Securities of any series (i) are denominated in a currency other than
Dollars or (ii) may be payable in a currency other than Dollars, or so long as
it is required under any other provision of this Indenture, then the Company and
the Guarantor will maintain with respect to each such series of Securities, or
as so required, at least one Exchange Rate Agent. The Company and the Guarantor
will cause the Exchange Rate Agent to make the necessary foreign exchange
determinations at the time and in the manner specified pursuant to Section 3.11
for the purpose of determining the applicable rate of exchange and, if
applicable, for the purpose of converting the issued currency or currencies or
currency unit or units into the applicable payment currency or currency unit for
the payment of principal, premium, if any, and interest, if any, pursuant to
Section 3.11.
(b) No resignation of the Exchange Rate Agent and no appointment of a
successor Exchange Rate Agent pursuant to this Section shall become effective
until the acceptance of appointment by the successor Exchange Rate Agent as
evidenced by a written instrument delivered to the Company, the Guarantor and
the Trustee of the appropriate series of Securities accepting such appointment
executed by the successor Exchange Rate Agent.
(c) If the Exchange Rate Agent shall resign, be removed or become
incapable of acting, or if a vacancy shall occur in the office of the Exchange
Rate Agency for any cause, with respect to the Securities of one or more series,
the Company and the Guarantor shall promptly appoint a successor Exchange Rate
Agent or Exchange Rate Agents with respect to the Securities of that or those
series (it being understood that any such successor Exchange Rate Agent may be
appointed with respect to the Securities of one or more or all of such series
and that, unless otherwise specified pursuant to Section 3.1, at any time there
shall only be one Exchange Rate Agent with respect to the Securities of any
particular series that are originally issued by the Company on the same date and
that are initially denominated and/or payable in the same currency or currencies
or currency unit or units).
Section 3.13. 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 addition to the other identification numbers printed on
the Securities) in notices of redemption as a convenience to Holders; PROVIDED
that any such notice may state that no
<PAGE>
41
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 any defect in or
omission of such numbers.
Section 3.14. JUDGMENTS. If for the purpose of obtaining a judgment in
any court with respect to any obligation of the Company or the Guarantor, as the
case may be, hereunder or under any Security, it shall become necessary to
convert into any other currency any amount in the currency due hereunder or
under such Security, then such conversion shall be made at the Market Exchange
Rate as in effect on the date the Company or the Guarantor, as the case may be,
shall make payment to any Person in satisfaction of such judgment. If pursuant
to any such judgment, conversion shall be made on a date other than the date
payment is made and there shall occur a change between such Market Exchange Rate
and the Market Exchange Rate as in effect on the date of payment, the Company or
the Guarantor, as the case may be, agrees to pay such additional amounts (if
any) as may be necessary to ensure that the amount paid is equal to the amount
in such other currency which, when converted at the Market Exchange Rate as in
effect on the date of payment or distribution, is the amount then due hereunder
or under such Security. Any amount due from the Company or the Guarantor, as
the case may be, under this Section 3.14 shall be due as a separate debt and is
not to be affected by or merged into any judgment being obtained for any other
sums due hereunder or in respect of any Security. In no event, however, shall
the Company or the Guarantor, as the case may be, be required to pay more in the
currency or currency unit due hereunder or under such Security at the Market
Exchange Rate as in effect when payment is made than the amount of currency
stated to be due hereunder or under such Security so that in any event the
Company's or the Guarantor's, as the case may be, obligations hereunder or under
such Security will be effectively maintained as obligations in such currency,
and the Company or the Guarantor, as the case may be, shall be entitled to
withhold (or be reimbursed for, as the case may be) any excess of the amount
actually realized upon any such conversion over the amount due and payable on
the date of payment or distribution.
ARTICLE 4
SATISFACTION, DISCHARGE AND DEFEASANCE
Section 4.1. TERMINATION OF COMPANY'S OBLIGATIONS UNDER THE INDENTURE.
Except as otherwise provided as contemplated by Section 3.1, this Indenture
shall upon Company Request or Guarantor Request, as the case may be, cease to be
of further effect with respect to Securities of or within any series and any
coupons appertaining thereto (except as to any surviving rights of registration
of transfer or exchange of such Securities and replacement of such Securities
which may have been lost, stolen or mutilated as herein expressly provided for)
and the Trustee, at the expense of the Company or the Guarantor, as the case may
be, shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture with respect to such Securities and any coupons appertaining
thereto when
<PAGE>
42
(1) either
(A) all such Securities previously authenticated and delivered and
all coupons appertaining thereto (other than (i) such coupons appertaining
to Bearer Securities surrendered in exchange for Registered Securities and
maturing after such exchange, surrender of which is not required or has
been waived as provided in Section 3.5, (ii) such Securities and coupons
which have been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 3.6, (iii) such coupons appertaining to Bearer
Securities called for redemption and maturing after the relevant
Redemption Date, surrender of which has been waived as provided in Section
10.6 and (iv) such Securities and coupons 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 9.3) have been delivered to the Trustee for
cancellation; or
(B) all Securities of such series and, in the case of (i) or (ii)
below, any coupons appertaining thereto not theretofore 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) if redeemable at the option of the Company, are to be
called for redemption within one year under arrangements
satisfactory to the Trustee for the giving of notice of redemption
by the Trustee in the name, and at the expense, of, the Company or
the Guarantor, as the case may be,
and the Company or the Guarantor, in the case of (i), (ii) or (iii) above,
has irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose an amount in the currency or
currencies or currency unit or units in which the Securities of such
series are payable, sufficient to pay and discharge the entire
indebtedness on such Securities and such coupons not theretofore delivered
to the Trustee for cancellation, for principal, premium, if any, and
interest, with respect thereto, 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;
(2) the Company or the Guarantor has paid or caused to be paid all
other sums payable hereunder by the Company and the Guarantor; and
(3) the Company and the Guarantor have 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 as to such series have been complied with.
<PAGE>
43
Notwithstanding the satisfaction and discharge of this Indenture, the obligation
of the Company to the Trustee and any predecessor Trustee under Section 6.9, the
obligations of the Company to any Authenticating Agent under Section 6.14 and,
if money shall have been deposited with the Trustee pursuant to subclause (B) of
clause (1) of this Section, the obligations of the Trustee under Section 4.2 and
the last paragraph of Section 9.3 shall survive. If, after the deposit referred
to in Section 4.1 has been made, (x) the Holder of a Security is entitled to,
and does, elect pursuant to Section 3.11(b), to receive payment in a currency
other than that in which the deposit pursuant to Section 4.1 was made, or (y) if
a Conversion Event occurs with respect to the currency in which the deposit was
made or elected to be received by the Holder pursuant to Section 3.11(b), then
the indebtedness represented by such Security shall be fully discharged to the
extent that the deposit made with respect to such Security shall be converted
into the currency in which such payment is made.
Section 4.2. APPLICATION OF TRUST FUNDS. Subject to the provisions of
the last paragraph of Section 9.3, all money deposited with the Trustee pursuant
to Section 4.1 shall be held in trust and applied by it, in accordance with the
provisions of the Securities, the coupons 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, premium, if any, and any interest for whose payment such money
has been deposited with or received by the Trustee, but such money need not be
segregated from other funds except to the extent required by law.
Section 4.3. APPLICABILITY OF DEFEASANCE PROVISIONS; COMPANY'S OPTION TO
EFFECT DEFEASANCE OR COVENANT DEFEASANCE. If pursuant to Section 3.1 provision
is made for either or both of (i) defeasance of the Securities of or within a
series under Section 4.4 or (ii) covenant defeasance of the Securities of or
within a series under Section 4.5, then the provisions of such Section or
Sections, as the case may be, together with the provisions of Sections 4.6
through 4.9 inclusive, with such modifications thereto as may be specified
pursuant to Section 3.1 with respect to any Securities, shall be applicable to
such Securities and any coupons appertaining thereto, and the Company may at its
option, at any time, with respect to such Securities and any coupons
appertaining thereto, elect to have Section 4.4 (if applicable) or Section 4.5
(if applicable) be applied to such Outstanding Securities and any coupons
appertaining thereto upon compliance with the conditions set forth below in this
Article.
Section 4.4. DEFEASANCE AND DISCHARGE. Upon the Company's exercise of
the option specified in Section 4.3 applicable to this Section with respect to
the Securities of or within a series, the Company and the Guarantor shall be
deemed to have been discharged from their obligations with respect to such
Securities and any coupons appertaining thereto on the date the conditions set
forth in Section 4.6 are satisfied (hereinafter "defeasance"). For this
purpose, such defeasance means that the Company shall be deemed to have paid and
discharged the entire indebtedness represented by such Securities and any
coupons appertaining thereto which shall thereafter be deemed to be
"Outstanding" only for the purposes of Section 4.7 and the other Sections of
this Indenture referred to in clause (ii) of this Section, and to have satisfied
all its other obligations under such Securities and any coupons appertaining
thereto and this Indenture insofar as such Securities and any coupons
appertaining thereto are concerned (and the Trustee, at the expense of the
Company, shall on Company Order execute proper instruments acknowledging the
same), except the following
<PAGE>
44
which shall survive until otherwise terminated or discharged hereunder: (i) the
rights of Holders of such Securities and any coupons appertaining thereto to
receive, solely from the trust funds described in Section 4.6(a) and as more
fully set forth in such Section, payments in respect of the principal of,
premium, if any, and interest, if any, on such Securities or any coupons
appertaining thereto when such payments are due; (ii) the Company's and the
Guarantor's obligations with respect to such Securities under Sections 3.5, 3.6,
9.2 and 9.3 and with respect to the payment of additional amounts, if any,
payable with respect to such Securities as specified pursuant to Section
3.1(b)(16); (iii) the rights, powers, trusts, duties and immunities of the
Trustee hereunder; and (iv) this Article 4. Subject to compliance with this
Article 4, the Company may exercise its option under this Section
notwithstanding the prior exercise of its option under Section 4.5 with respect
to such Securities and any coupons appertaining thereto. Following a defeasance,
payment of such Securities may not be accelerated because of a Default or an
Event of Default.
Section 4.5. COVENANT DEFEASANCE. Upon the Company's exercise of the
option specified in Section 4.3 applicable to this Section with respect to any
Securities of or within a series, the Company and the Guarantor shall be
released from their obligations under Sections 7.1, 7.2, 9.4 and 9.5, and, if
specified pursuant to Section 3.1, its obligations under any other covenant,
with respect to such Securities and any coupons appertaining thereto on and
after the date the conditions set forth in Section 4.6 are satisfied
(hereinafter, "covenant defeasance"), and such Securities and any coupons
appertaining thereto shall thereafter be deemed to be not "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with Sections 7.1, 7.2, 9.4 and
9.5, or such other covenant, but shall continue to be deemed "Outstanding" for
all other purposes hereunder. For this purpose, such covenant defeasance means
that, with respect to such Securities and any coupons appertaining thereto, the
Company and the Guarantor may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such Section or
such other covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such Section or such other covenant or by reason of
reference in any such Section or such other covenant to any other provision
herein or in any other document and such omission to comply shall not constitute
a Default or an Event of Default under Section 5.1(3) or 5.1(6) or otherwise, as
the case may be, but, except as specified above, the remainder of this Indenture
and such Securities and any coupons appertaining thereto shall be unaffected
thereby.
Section 4.6. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE. The
following shall be the conditions to application of Section 4.4 or Section 4.5
to any Securities of or within a series and any coupons appertaining thereto:
(a) The Company or the Guarantor shall have deposited or caused to be
deposited irrevocably with the Trustee (or another trustee satisfying the
requirements of Section 6.12 who shall agree to comply with, and shall be
entitled to the benefits of, the provisions of Sections 4.3 through 4.9
inclusive and the last paragraph of Section 9.3 applicable to the Trustee, for
purposes of such Sections also a "Trustee") as trust funds in trust for the
purpose of making the payments referred to in clauses (x) and (y) of this
Section 4.6(a), specifically pledged as security for, and dedicated solely to,
the benefit of the Holders of such Securities and any coupons appertaining
thereto, with instructions to the Trustee as to the application
<PAGE>
45
thereof, (A) money in an amount (in such currency, currencies or currency unit
in which such Securities and any coupons appertaining thereto are then specified
as payable at Maturity), or (B) if Securities of such series are not subject to
repayment at the option of Holders, 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
referred to in clause (x) or (y) of this Section 4.6(a), money in an amount or
(C) a combination thereof in an amount, sufficient, in the opinion of a
nationally recognized firm of independent certified public accountants expressed
in a written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee to pay and discharge, (x)
the principal of, premium, if any, and interest, if any, on such Securities and
any coupons appertaining thereto on the Maturity of such principal or
installment of principal or interest and (y) any mandatory sinking fund payments
applicable to such Securities on the day on which such payments are due and
payable in accordance with the terms of this Indenture and such Securities and
any coupons appertaining thereto. Before such a deposit the Company may make
arrangements satisfactory to the Trustee for the redemption of Securities at a
future date or dates in accordance with Article 10 which shall be given effect
in applying the foregoing.
(b) Such defeasance or covenant defeasance shall not result in a breach or
violation of, or constitute a Default or Event of Default under, this Indenture
or result in a breach or violation of, or constitute a default under, any other
material agreement or instrument to which the Company or the Guarantor is a
party or by which it is bound.
(c) No Default or Event of Default under Section 5.1(4) or 5.1(5) with
respect to such Securities and any coupons appertaining thereto shall have
occurred and be continuing during the period commencing on the date of such
deposit and ending on the 91st day after such date (it being understood that
this condition shall not be deemed satisfied until the expiration of such
period).
(d) In the case of an election under Section 4.4, the Company shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel to
the effect that (i) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling, or (ii) since the date of execution
of this Indenture, there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such opinion shall
confirm that, the Holders of such Securities and any coupons appertaining
thereto will not recognize income, gain or loss for Federal income tax purposes
as a result of such defeasance 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 deposit, defeasance and discharge had not occurred.
(e) In the case of an election under Section 4.5, the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that the Holders of
such Securities and any coupons appertaining thereto will not recognize income,
gain or loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such covenant
defeasance had not occurred.
<PAGE>
46
(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 4.4 or the covenant defeasance under
Section 4.5 (as the case may be) have been complied with and an Opinion of
Counsel to the effect that either (i) as a result of a deposit pursuant to
subsection (a) above and the related exercise of the Company's option under
Section 4.4 or Section 4.5 (as the case may be), registration is not required
under the Investment Company Act of 1940, as amended, by the Company, with
respect to the trust funds representing such deposit or by the trustee for such
trust funds or (ii) all necessary registrations under said act have been
effected.
(g) Such defeasance or covenant defeasance shall be effected in compliance
with any additional or substitute terms, conditions or limitations which may be
imposed on the Company or the Guarantor in connection therewith as contemplated
by Section 3.1.
Section 4.7. DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST. Subject to the provisions of the last paragraph of Section 9.3, all
money and Government Obligations (or other property as may be provided pursuant
to Section 3.1, including the proceeds thereof) deposited with the Trustee
pursuant to Section 4.6 in respect of any Securities of any series and any
coupons appertaining thereto shall be held in trust and applied by the Trustee,
in accordance with the provisions of such Securities and any coupons
appertaining thereto 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 Holders of such Securities and any coupons
appertaining thereto of all sums due and to become due thereon in respect of
principal, premium, if any, and interest, if any, but such money need not be
segregated from other funds except to the extent required by law.
Unless otherwise specified with respect to any Security pursuant to
Section 3.1, if, after a deposit referred to in Section 4.6(a) has been made,
(i) the Holder of a Security in respect of which such deposit was made is
entitled to, and does, elect pursuant to Section 3.11(b) or the terms of such
Security to receive payment in a currency or currency unit other than that in
which the deposit pursuant to Section 4.6(a) has been made in respect of such
Security, or (ii) a Conversion Event occurs as contemplated in Section 3.11(d)
or 3.11(e) or by the terms of any Security in respect of which the deposit
pursuant to Section 4.6(a) has been made, the indebtedness represented by such
Security and any coupons appertaining thereto shall be deemed to have been, and
will be, fully discharged and satisfied through the payment of the principal of,
premium, if any, and interest, if any, on such Security as the same becomes due
out of the proceeds yielded by converting (from time to time as specified below
in the case of any such election) the amount or other property deposited in
respect of such Security into the currency or currency unit in which such
Security becomes payable as a result of such election or Conversion Event based
on the applicable Market Exchange Rate for such currency or currency unit in
effect on the second Business Day prior to each payment date, except in the case
of a Conversion Event with respect to such currency or currency unit which is in
effect (as nearly as feasible) at the time of the Conversion Event.
<PAGE>
47
Section 4.8. TRANSFERS AND DISTRIBUTION AT COMPANY REQUEST. To the
extent permitted by the Financial Accounting Standards Board Statement of
Financial Accounting Standards No. 76, as amended or interpreted by the
Financial Accounting Standards Board from time to time, or any successor thereto
("Standard No. 76"), or to the extent permitted by the Commission, the Trustee
shall, from time to time, take one or more of the following actions as specified
in a Company Request:
(a) Retransfer, reassign and deliver to the Company or the Guarantor any
securities deposited with the Trustee pursuant to Section 4.6(a), provided that
the Company or the Guarantor, as the case may be, shall in substitution
therefor, simultaneously transfer, assign and deliver to the Trustee other
Government Obligations appropriate to satisfy the Company's or the Guarantor's
obligations, as the case may be, in respect of the relevant Securities; and
(b) The Trustee (and any Paying Agent) shall promptly pay to the Company
or the Guarantor, as the case may be, upon Company Request or Guarantor Request,
as applicable, any excess money or securities held by them at any time,
including, without limitation, any assets deposited with the Trustee pursuant to
Section 4.6(a) exceeding those necessary for the purposes of Section 4.6(a).
The Trustee shall not take the actions described in subsections (a) and (b) of
this Section 4.8 unless it shall have first received a written report of Ernst &
Young, or another nationally recognized independent public accounting firm (i)
expressing their opinion that the contemplated action is permitted by Standard
No. 76 or the Commission, for transactions accounted for as extinguishment of
debt under the circumstances described in paragraph 3.c of Standard No. 76 or
any successor provision and (ii) verifying the accuracy, after giving effect to
such action or actions, of the computations which demonstrate that the amounts
remaining to be earned on the Government Obligations deposited with the Trustee
pursuant to Section 4.6(a) will be sufficient for purposes of Section 4.6(a).
Section 4.9. REINSTATEMENT. If the Trustee or the Paying Agent is
unable to apply any money in accordance with Section 4.7 by reason of any order
or judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's or the Guarantor's,
as the case may be, obligations under this Indenture and the Securities of the
series with respect to which such money was deposited shall be revived and
reinstated as though no deposit had occurred pursuant to this Article 4 until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 4.7; PROVIDED, however, that if the Company or the
Guarantor, as the case may be, makes any payment of principal of (or premium, if
any, on) or interest on any Securities of any series following the reinstatement
of the Company's or the Guarantor's, as the case may be, obligations, the
Company or the Guarantor, as the case may be, shall be subrogated to the rights
of the Holders of such Securities to receive such payment from the money held by
the Trustee or the Paying Agent with respect to the Securities of such series.
<PAGE>
48
ARTICLE 5
DEFAULTS AND REMEDIES
Section 5.1. EVENTS OF DEFAULT. An "Event of Default" occurs with
respect to the Securities of any series if (regardless of 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):
(1) the Company defaults in the payment of interest on any Security
of that series or any coupon appertaining thereto or any additional amount
payable with respect to any Security of that series as specified pursuant
to Section 3.1(b)(16) when the same becomes due and payable and such
default continues for a period of 30 days;
(2) the Company defaults in the payment of the principal of or any
premium on any Security of that series when the same becomes due and
payable at its Maturity or on redemption or otherwise, or in the payment
of a mandatory sinking fund payment when and as due by the terms of the
Securities of that series;
(3) the Company or the Guarantor defaults in the performance of, or
breaches, any covenant or agreement of the Company or the Guarantor
contained in this Indenture, any supplement indenture, and any board
resolution referred to therein under which the Securities of any series
may have been issued (other than a covenant a default in whose performance
or whose breach is elsewhere in this Section specifically dealt with), and
such default or breach continues for a period of 60 days after there has
been given, by registered or certified mail, to the Company and the
Guarantor by the Trustee or to the Company, the Guarantor and the Trustee
by the Holders of at least 25% in principal amount of the Outstanding
Securities of that series, a written notice specifying such default or
breach and requiring it to be remedied and stating that such notice is a
"Notice of Default" hereunder;
(4) the Company or the Guarantor pursuant to or within the meaning
of any Bankruptcy Law (A) commences a voluntary case, (B) consents to the
entry of an order for relief against it in an involuntary case, (C)
consents to the appointment of a Custodian of it or for all or
substantially all of its property, or (D) makes a general assignment for
the benefit of its creditors;
(5) a court of competent jurisdiction enters an order or decree
under any Bankruptcy Law that (A) is for relief against the Company or the
Guarantor in an involuntary case, (B) appoints a Custodian of the Company
or the Guarantor for all or substantially all of its property, or (C)
orders the liquidation of the Company or the Guarantor; and the order or
decree remains unstayed and in effect for 90 days; or
(6) any other Event of Default provided as contemplated by Section
3.1 with respect to Securities of that series.
<PAGE>
49
The term "Bankruptcy Law" means Title 11, U.S. Code, or any similar
federal or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
Section 5.2. ACCELERATION; RESCISSION AND ANNULMENT. If an Event of
Default with respect to the Securities of any series at the time Outstanding
occurs and is continuing, the Trustee or the Holders of at least 25% in
aggregate principal amount of all of the outstanding Securities of that series,
by written notice to the Company and the Guarantor (and, if given by the
Holders, to the Trustee), may declare the principal (or, if the Securities of
that series are Original Issue Discount Securities or Indexed Securities, such
portion of the principal amount as may be specified in the terms of that series)
of all the Securities of that series to be due and payable and upon any such
declaration such principal (or, in the case of Original Issue Discount
Securities or Indexed Securities, such specified amount) shall be immediately
due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in aggregate principal amount of the
outstanding Securities of that series, by written notice to the Trustee, may
rescind and annul such declaration and its consequences if all existing Defaults
and Events of Default with respect to Securities of that series, other than the
non-payment of the principal of Securities of that series which have become due
solely by such declaration of acceleration, have been cured or waived as
provided in Section 5.7. No such rescission shall affect any subsequent default
or impair any right consequent thereon.
Section 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE. The Company covenants that if
(1) default is made in the payment of any interest on any Security
or coupon, if any, when such interest becomes due and payable and such
default continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium,
if any, on) any Security at the Maturity thereof and such default
continues for a period of 10 days, or
(3) default is made in the making or satisfaction of any sinking
fund payment or analogous obligation when the same becomes due pursuant to
the terms of the Securities of any series,
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities or coupons, if any, the whole amount then due and
payable on such Securities for principal, premium, if any, and interest and, to
the extent that payment of such interest shall be legally enforceable, interest
on any overdue principal, premium, if any, and on any
<PAGE>
50
overdue interest, at the rate or rates prescribed therefor in such Securities or
coupons, if any, and, in addition thereto, such further amount as shall be
sufficient to cover the costs and expenses of collection, including the
reasonable compensation, expenses, disbursements and advances of the Trustee,
its agents and counsel.
If the Company fails to pay such amount 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 such Securities and coupons, if
any, and collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Company or any other obligor upon
such Securities and coupons, if any, wherever situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
Section 5.4. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency
of any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceedings, or any
voluntary or involuntary case under the Federal bankruptcy laws, as now or
hereafter constituted, relative to the Company, the Guarantor or any other
obligor upon the Securities and coupons, if any, of a particular series or the
property of the Company, the Guarantor or of such other obligor, the Trustee
(irrespective of whether the principal of such Securities shall then be due and
payable as therein expressed or by declaration of acceleration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (or,
if the Securities of such series are Original Issue Discount Securities,
such portion of the principal amount as may be due and payable with
respect to such series pursuant to a declaration in accordance with
Section 5.2) (and premium, if any) and interest owing and unpaid in
respect of the Securities and any coupons of such series and to file such
other papers or documents as may be necessary or advisable in order to
have the claims of the Trustee (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Trustee, its
agents and counsel) and of the Holders of such Securities and any coupons
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;
<PAGE>
51
and any receiver, assignee, trustee, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each such
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to such Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.9.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
and any coupons of such series or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 5.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF
SECURITIES. All rights of action and claims under this Indenture or the
Securities may be prosecuted and enforced by the Trustee without the possession
of any of the Securities or the production thereof in any proceeding relating
thereto, and any such proceeding instituted by the Trustee shall be brought in
its own name, as trustee of an express trust, and any recovery of judgment
shall, after provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities or any coupons in respect of
which such judgment has been recovered.
Section 5.6. DELAY OR OMISSION NOT WAIVER. No delay or omission by the
Trustee or any Holder of any Securities to exercise any right or remedy accruing
upon an Event of Default shall impair any such right or remedy or constitute a
waiver of or acquiescence in any such Event of Default. Every right and remedy
given by this Indenture or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
Section 5.7. WAIVER OF PAST DEFAULTS. The Holders of not less than a
majority in aggregate principal amount of Outstanding Securities of any series
by notice to the Trustee may waive on behalf of the Holders of all Securities of
such series a past Default or Event of Default with respect to that series and
its consequences and may rescind and annul a declaration of acceleration with
respect to that series except (i) a Default or Event of Default in the payment
of the principal of, premium, if any, or interest on any Security of such series
or any coupon appertaining thereto or (ii) in respect of a covenant or provision
hereof which pursuant to Section 8.2 cannot be amended or modified without the
consent of the Holder of each outstanding Security of such series adversely
affected. 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 5.8. CONTROL BY MAJORITY. The Holders of not less than a
majority in aggregate principal amount of the Outstanding Securities of each
series affected (with each such series voting as a class) 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 it with
respect to Securities of that series; PROVIDED, HOWEVER, that (i) the
Trustee may
<PAGE>
52
refuse to follow any direction that conflicts with law or this Indenture, (ii)
subject to Section 6.1, the Trustee may refuse to follow any direction that is
unduly prejudicial to the rights of the Holders of Securities of such series not
consenting, or that would in the good faith judgment of the Trustee have a
substantial likelihood of involving the Trustee in personal liability and (iii)
the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
Section 5.9. LIMITATION ON SUITS BY HOLDERS. No Holder of any Security
of any series or any related coupons 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) the Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series have made a 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 indemnity
satisfactory to the Trustee against any loss, liability or expense to be,
or which may be, incurred by the Trustee in pursuing the remedy;
(4) the Trustee for 60 days after its receipt of such notice,
request and the offer of indemnity has failed to institute any such
proceedings; and
(5) during such 60-day period, the Holders of a majority in
aggregate principal amount of the Outstanding Securities of that series
have not given to the Trustee a direction inconsistent with such written
request.
No one or more Holders shall have any right in any manner whatever by
virtue of, or by availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other of such Holders, or to obtain or to seek to
obtain priority or preference over any other of such Holders or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all of such Holders. For the protection and
enforcement of the provisions of this Section 5.9, each and every Holder of
Securities or any coupons of any series and the Trustee for such series shall be
entitled to such relief as can be given at law or in equity.
Section 5.10. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, but subject to Section 9.2, the right of any
Holder of a Security or coupon to receive payment of principal of, premium, if
any, and, subject to Sections 3.5 and 3.7, interest on the Security, on or after
the respective due dates expressed in the Security (or,
<PAGE>
53
in case of redemption, on the redemption dates) and the right of any Holder of a
coupon to receive payment of interest due as provided in such coupon, or,
subject to Section 5.9, to bring suit for the enforcement of any such payment on
or after such respective dates, shall not be impaired or affected without the
consent of such Holder.
Section 5.11. APPLICATION OF MONEY COLLECTED. If the Trustee collects
any money pursuant to this Article, it shall pay out the money 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, premium, if any, or
interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: to the Trustee for amounts due under Section 6.9;
SECOND: to Holders of Securities and coupons in respect of which
or for the benefit of which such money has been collected for amounts due
and unpaid on such Securities for principal of, premium, if any, and
interest, ratably, without preference or priority of any kind, according
to the amounts due and payable on such Securities for principal, premium,
if any, and interest, respectively; and
THIRD: to the Person or Persons entitled thereto.
Section 5.12. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every such case, subject to any determination in such proceeding, the Company,
the Guarantor, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
Section 5.13. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise
provided with respect to the replacement or payment of mutilated, destroyed,
lost or stolen Securities in the last paragraph of Section 3.6, no right or
remedy herein conferred upon or reserved to the Trustee or the Holders is
intended to be exclusive of any other right or remedy, and every right and
remedy shall, to the extent permitted by law, be cumulative and in addition to
every other right and remedy given hereunder or now or hereafter existing at law
or in equity or otherwise. The assertion or employment of any right or remedy
hereunder, or otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 5.14. UNDERTAKING FOR COSTS. In any suit for the enforcement
of any right or remedy under this Indenture, or in any suit against the Trustee
for any action taken, suffered or omitted by it as Trustee, a court may require
any party litigant in such suit to file an undertaking to pay the costs of such
suit, and may assess costs against any such party litigant, in the manner and to
the extent provided in the Trust Indenture Act; PROVIDED that neither this
Section nor the Trust Indenture Act shall be deemed to authorize any court to
require such an undertaking or to make such an assessment in any suit instituted
by the Company or the Guarantor.
<PAGE>
54
Section 5.15. WAIVER OF STAY OR EXTENSION LAWS. Each of the Company
and the Guarantor covenants (to the extent that it may lawfully do so) that it
will not at any time insist upon, or plead, or in any manner whatsoever claim or
take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and each of the Company and the Guarantor (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
ARTICLE 6
THE TRUSTEE
Section 6.1. CERTAIN DUTIES AND RESPONSIBILITIES. The duties and
responsibilities of the Trustee shall be as provided by the Trust Indenture Act.
Notwithstanding the foregoing, 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. 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 6.2. RIGHTS OF TRUSTEE. Subject to the provisions of the Trust
Indenture Act:
(a) The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note 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 or the Guarantor mentioned
herein shall be sufficiently evidenced by a Company Request or Company Order or
a Guarantor Request or Guarantor Order, as the case may be (other than delivery
of any Security, together with any coupons appertaining thereto, to the Trustee
for authentication and delivery pursuant to Section 3.3, which shall be
sufficiently evidenced as provided therein), 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.
<PAGE>
55
(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 Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction.
(f) The Trustee shall not be bound to make any investigation into the
facts or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note 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 and the Guarantor, personally or by agent or attorney.
(g) The Trustee may act through agents or attorneys and shall not be
responsible for the misconduct or negligence of any agent or attorney appointed
with due care.
(h) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
(i) Except during the continuance of an Event of Default, the Trustee
undertakes and shall be responsible to perform only such duties as are
specifically set forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture or be enforceable against Trustee. The
Trustee shall be liable only for its negligence, willful misconduct or bad
faith. In case an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(j) In the event the Company shall appoint a Special Paying Agent in
connection with a series of Securities, the Company and the Trustee shall enter
into a special paying agent agreement (a "Special Paying Agent Agreement") with
such person on terms as may be mutually agreed by the Company, the Trustee and
such Special Paying Agent. Notwithstanding any other provision contained
herein, such Special Paying Agent so appointed shall be a third party
beneficiary of this Agreement, and all of the benefits and protections of the
Trustee provided for herein (including, but not limited to all of the provisions
for the benefit of the trustee contained in this Article 6) shall also apply to
the Special Paying Agent, in addition to, and not as a substitute for, such
other benefits and protections as may be provided for in the related Special
Paying Agent Agreement.
<PAGE>
56
Section 6.3. TRUSTEE MAY HOLD SECURITIES. The Trustee, any Paying
Agent, any Registrar or any other agent of the Company or the Guarantor, in its
individual or any other capacity, may become the owner or pledgee of Securities
and coupons and, subject to Sections 310(b) and 311 of the Trust Indenture Act,
may otherwise deal with the Company, an Affiliate or Subsidiary and the
Guarantor with the same rights it would have if it were not Trustee, Paying
Agent, Registrar or such other agent.
Section 6.4. MONEY HELD IN TRUST. Money held by the Trustee or any
Paying Agent in trust hereunder need not be segregated from other funds except
to the extent required by law. Neither the Trustee nor any Paying Agent shall
be under any liability for interest on any money received by it hereunder except
as otherwise set forth in this Indenture or as otherwise agreed with the Company
or the Guarantor.
Section 6.5. TRUSTEE'S DISCLAIMER. The recitals contained herein and in
the Securities, except the Trustee's certificate of authentication, shall be
taken as the statements of the Company and the Guarantor, and the Trustee
assumes no responsibility for their correctness. The Trustee makes no
representation as to the validity or adequacy of this Indenture, the Securities
or any coupon. The Trustee shall not be accountable for the Company's use of
the proceeds from the Securities or for monies paid over to the Company or the
Guarantor pursuant to the Indenture.
Section 6.6. NOTICE OF DEFAULTS. (a) If a Default occurs and is
continuing with respect to the Securities of any series and if it is known to
the Trustee, the Trustee shall, within 90 days after it occurs, transmit, in the
manner and to the extent provided in Section 313(c) of the Trust Indenture Act,
notice of all uncured Defaults known to it; PROVIDED, HOWEVER, that, in the
case of a Default in payment on the Securities of any series, the Trustee may
withhold the notice if and so long as the board of directors, the executive
committee or a committee of its Responsible Officers in good faith determines
that withholding such notice is in the interests of Holders of Securities of
that series; PROVIDED FURTHER that, in the case of any default or breach of
the character specified in Section 5.1(3) with respect to the Securities and
coupons of such series, no such notice to Holders shall be given until at least
60 days after the occurrence thereof.
(b) The Trustee shall not be charged with knowledge of any Default
or Event of Default under this Indenture (except default in the payment of
moneys to the Trustee that the Company is required to pay or cause to be paid to
the Trustee on or before a specified date), unless either (i) an officer of the
Trustee assigned to its corporate trust department shall have actual knowledge
of such Default or Event of Default or (ii) written notice of such Default or
Event of Default shall have been given to the Trustee in the manner contemplated
by Section 1.5.
Section 6.7. REPORTS BY TRUSTEE TO HOLDERS. (a) Within 60 days after
each May 15 of each year commencing with the first May 15 after the first
issuance of Securities pursuant to this Indenture, the Trustee shall transmit by
mail to all Holders of Securities as provided in Section 313(c) of the Trust
Indenture Act a brief report dated as of such May 15 if required
<PAGE>
57
by Section 313(a) of the Trust Indenture Act. The Trustee also shall comply
with Section 313(b) and (d) of the Trust Indenture Act and shall transmit to
Holders, in the manner and to the extent provided in said Section 313(c) of the
Trust Indenture Act, such other reports, if any, as may be required pursuant to
the Trust Indenture Act.
(b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
Section 6.8. SECURITYHOLDER LISTS. The Trustee shall preserve in as
current a form as is reasonably practicable the most recent list available to it
of the names and addresses of Holders of Securities of each series. If the
Trustee is not the Registrar, the Company shall furnish to the Trustee
semiannually on or before the last day of June and December in each year, and at
such other times as the Trustee may request in writing, a list, in such form and
as of such date as the Trustee may reasonably require, containing all the
information in the possession of the Registrar, the Company or any of its Paying
Agents other than the Trustee as to the names and addresses of Holders of
Securities of each such series. If there are Bearer Securities of any series
outstanding, even if the Trustee is the Registrar, the Company shall furnish to
the Trustee such a list containing such information with respect to Holders of
such Bearer Securities only.
Section 6.9. COMPENSATION AND INDEMNITY.
(a) The Company shall pay to the Trustee from time to time such
compensation as shall be agreed between the Company and the Trustee for all
services rendered by it hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred by it in connection with the performance of its
duties under this Indenture, except any such expense as may be attributable to
its negligence or bad faith. Such expenses shall include the reasonable
compensation and expenses of the Trustee's agents and counsel.
(b) The Company shall indemnify the Trustee for, and hold it harmless
against, any loss, liability or expense incurred by it without negligence or bad
faith on its part arising out of or in connection with its acceptance or
administration of the trust or trusts hereunder. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made
without its consent.
(c) The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through the Trustee's own negligence
or bad faith.
<PAGE>
58
(d) To secure the payment obligations of the Company pursuant to this
Section, the Trustee shall have a lien prior to the Securities of any series on
all money or property held or collected by the Trustee, except that held in
trust to pay principal, premium, if any, and interest on particular Securities.
(e) When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.1(4) or Section 5.1(5), 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.
(f) The provisions of this Section shall survive the termination of this
Indenture.
Section 6.10. REPLACEMENT OF TRUSTEE.
(a) The resignation or removal of the Trustee and the appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities of
any series by giving written notice thereof to the Company and the Guarantor.
If the instrument of acceptance by a successor Trustee required by Section 6.11
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(c) The Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series may remove the Trustee with respect to that
series by so notifying the Trustee and the Company and the Guarantor and may
appoint a successor Trustee for such series with the Company's and the
Guarantor's consent.
(d) If at any time:
(1) the Trustee fails to comply with Section 310(b) of the Trust
Indenture Act after written request therefor by the Company or the
Guarantor or by any Holder who has been a bona fide Holder of a Security
for at least six months, or
(2) the Trustee shall cease to be eligible under Section 310(a) of
the Trust Indenture Act and shall fail to resign after written request
therefor by the Company, the Guarantor or by any Holder of a Security who
has been a bona fide Holder of a Security for at least six months; or
(3) the Trustee becomes incapable of acting, is adjudged a bankrupt
or an insolvent or a receiver or public officer takes charge of the
Trustee or its property or affairs for the purpose of rehabilitation,
conservation or liquidation, then, in any such case, (i) the Company or
the Guarantor may remove the Trustee with respect to all Securities, or
(ii) subject to Section 315(e) of the Trust Indenture Act, any Holder who
<PAGE>
59
has been a bona fide Holder of a Security for at least six months may, on
behalf of himself and all other similarly situated, petition any court of
competent jurisdiction for the removal of the Trustee with respect to all
Securities and the appointment of a successor Trustee or Trustees.
(e) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, with respect to Securities of one or more
series, the Company or the Guarantor shall promptly appoint a successor Trustee
with respect to the Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Securities of
one or more or all of such series and that at any time there shall be only one
Trustee with respect to the Securities of any particular series) and shall
comply with the applicable requirements of Section 6.11. If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
6.11, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company or
the Guarantor. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Guarantor or the
Holders and accepted appointment in the manner required by Section 6.11, the
resigning or retiring Trustee, or any Holder who has been a bona fide Holder of
a Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
Section 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee shall execute,
acknowledge and deliver to the Company, the Guarantor and to the retiring
Trustee an instrument accepting such appointment. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee, without further act, deed or conveyance, shall become vested with all
the rights, powers and duties of the retiring Trustee; but, on the request of
the Company, the Guarantor or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
Guarantor, the retiring Trustee and such successor Trustee shall execute and
deliver an indenture supplemental hereto wherein such successor Trustee shall
accept such appointment and which (i) shall contain such provisions as shall be
necessary or desirable to transfer and confirm to, and to vest in, such
successor Trustee all the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (ii) if the retiring Trustee is
not retiring with respect to all Securities, shall
<PAGE>
60
contain such provisions as shall be deemed necessary or desirable to confirm
that all the rights, powers, trusts and duties of the retiring Trustee with
respect to the Securities of that or those series as to which the retiring
Trustee is not retiring shall continue to be vested in the retiring Trustee, and
(iii) shall add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein or
in such supplemental indenture shall constitute such Trustees co-trustees of the
same trust and that each such Trustee shall be trustee of a trust or trusts
hereunder separate and apart from any trust or trusts hereunder administered by
any other such Trustee and upon the execution and delivery of such supplemental
indenture the resignation or removal of the retiring Trustee shall become
effective to the extent provided therein and each such successor Trustee,
without any further act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series to which the appointment of such successor
Trustee relates; but, on request of the Company, the Guarantor or any successor
Trustee, such retiring Trustee shall duly assign, transfer and deliver to such
successor Trustee all property and money held by such retiring Trustee hereunder
with respect to the Securities of that or those series to which the appointment
of such successor Trustee relates.
(c) Upon request of any such successor Trustee, the Company and the
Guarantor shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
the Trust Indenture Act.
(e) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series in the manner
provided for notices to the Holders of Securities in Section 1.6. Each notice
shall include the name of the successor Trustee with respect to the securities
of such series and the address of its Corporate Trust office.
Section 6.12. ELIGIBILITY; DISQUALIFICATION. There shall at all times
be a Trustee hereunder which shall be eligible to act as Trustee under Section
310(a)(1) of the Trust Indenture Act and shall have a combined capital and
surplus of at least $75,000,000 (or having a combined capital and surplus in
excess of $5,000,000 and the obligations of which, whether now in existence or
hereafter incurred, are fully and unconditionally guaranteed by a corporation
organized and doing business under the laws of the United States, any State or
Territory thereof or of the District of Columbia and having a combined capital
and surplus of at least $75,000,000). If such corporation publishes reports of
condition at least annually, pursuant to law or the requirements of Federal,
State, Territorial or District of Columbia 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. If at any time the Trustee
shall
<PAGE>
61
cease to be eligible in accordance with the provisions of this Section, it shall
resign immediately in the manner and with the effect hereinafter specified in
this Article. If the Trustee has or shall acquire any conflicting interest
within the meaning of the Trust Indenture Act, the Trustee shall comply with the
relevant provisions thereof.
Section 6.13. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO
BUSINESS. Any corporation into which the Trustee may be merged or converted or
with which it may be consolidated, or any corporation resulting from any merger,
conversion or consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the corporate trust business
of the Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
Section 6.14. APPOINTMENT OF AUTHENTICATING AGENT. The Trustee may
appoint an Authenticating Agent or Agents with respect to one or more series of
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon original issue, exchange,
registration of transfer or partial redemption thereof, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Any such appointment shall be evidenced by an instrument in writing
signed by a Responsible Officer of the Trustee, a copy of which instrument shall
be promptly furnished to the Company and the Guarantor. 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 the Guarantor and, except as may otherwise be
provided pursuant to Section 3.1, shall at all times be a bank or trust company
or corporation organized and doing business and in good standing under the laws
of the United States of America or of any State or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less that $1,500,000 and subject to supervision or
examination by Federal or State authorities. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or the
requirements of the aforesaid 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. In case 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.
<PAGE>
62
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 further act
on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time
resign by giving written notice of resignation to the Trustee for such series
and to the Company and the Guarantor. The Trustee for any series of Securities
may at any time terminate the agency of an Authenticating Agent by giving
written notice of termination to such Authenticating Agent and to the Company
and the Guarantor. 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 for such
series may appoint a successor Authenticating Agent which shall be acceptable to
the Company and shall give notice of such appointment to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve in the manner set forth in Section 1.6. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent herein. 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 including reimbursement of its reasonable expenses 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 or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
This is one of the Securities of a series issued under the
within-mentioned Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: [Authenticating Agent's Name],
as Authenticating Agent
Dated: By:_______________________________
Authorized Signatory
Sections 6.2, 6.3, 6.5 and 6.9 shall be applicable to any Authenticating Agent.
<PAGE>
63
Section 6.15. TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE COMPANY.
Any application by the Trustee for written instructions from the Company or the
Guarantor may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
fifteen Business Days after the date any officer of the Company or the
Guarantor, as the case may be, actually receives such application, unless any
such officer shall have consented in writing to any earlier date) unless prior
to taking any such action (or the effective date in the case of an omission),
the Trustee shall have received written instructions in response to such
application specifying the action to be taken or omitted.
Section 6.16. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY OR
GUARANTOR. If and when the Trustee shall be or become a creditor of the
Company or the Guarantor (or any other obligor upon the Securities or the
coupons, if any), the Trustee shall be subject to the provisions of the Trust
Indenture Act regarding the collection of claims against the Company or the
Guarantor (or any such other obligor).
ARTICLE 7
CONSOLIDATION, MERGER OR SALE BY
THE COMPANY AND THE GUARANTOR
Section 7.1. CONSOLIDATION, MERGER OR SALE OF ASSETS BY THE COMPANY
PERMITTED. The Company may merge or consolidate with or into any other
corporation or sell, convey, transfer, lease or otherwise dispose of all or
substantially all of its assets to any Person, if (i)(A) in the case of a merger
or consolidation, the Company is the surviving corporation or (B) in the case of
a merger or consolidation where the Company is not the surviving corporation and
in the case of any such sale, conveyance or other disposition, the resulting,
successor or acquiring Person is a corporation organized and existing under the
laws of the United States or a State thereof or the District of Columbia and
such corporation expressly assumes by supplemental indenture all the obligations
of the Company under the Securities and any coupons appertaining thereto and the
obligations of the Company under this Indenture, (ii) immediately thereafter,
giving effect to such merger or consolidation, or such sale, conveyance,
transfer, lease or other disposition (including, without limitation, any
Indebtedness directly or indirectly incurred or anticipated to be incurred in
connection with or in respect of such transactions), no Default or Event of
Default shall have occurred and be continuing, (iii) the Company has delivered
to the Trustee an Officers' Certificate and an Opinion of Counsel each stating
that such merger or consolidation, or such sale, conveyance, transfer, lease or
other disposition, complies with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with and
(iv) the Guarantor has (A) delivered to the Trustee an Officers' Certificate and
an Opinion of Counsel, each stating that the obligations of the Guarantor under
this Indenture remain in full force and effect or (B) in the case of
consolidation or a merger by the Company with, or conveyance, transfer or lease
of the Company's properties and assets substantially as an
<PAGE>
64
entirety to the Guarantor, stating that the Guarantor has directly assumed as
obligor the obligations of the Company under this Indenture. In the event of the
assumption by a successor corporation of the obligations of the Company as
provided in clause (i)(B) of the immediately preceding sentence, such successor
corporation shall succeed to and be substituted for the Company hereunder and
under the Securities and any coupons appertaining thereto and all such
obligations of the Company shall terminate.
Section 7.2. CONSOLIDATION, MERGER OR SALE OF ASSETS BY THE GUARANTOR
Permitted. The Guarantor may merge or consolidate with or into any other
corporation or sell, convey, transfer, lease or otherwise dispose of all or
substantially all of its assets to any Person, if (i)(A) in the case of a merger
or consolidation, the Guarantor is the surviving corporation or (B) in the case
of merger or consolidation where the Guarantor is not the surviving corporation
and in the case of any such sale, conveyance or other disposition, the
resulting, successor or acquiring Person is a corporation organized and existing
under the laws of the United States or a State thereof or the District of
Columbia thereof and such corporation expressly assumes by supplemental
indenture all the obligations of the Guarantor under this Indenture, (ii)
immediately thereafter, giving effect to such merger or consolidation, or such
sale, conveyance, transfer, lease or other disposition (including without
limitation, any Indebtedness directly or indirectly incurred or anticipated to
be incurred in connection with or in respect of such transaction), no Default or
Event of Default shall have occurred and be continuing and (iii) the Guarantor
has delivered to the Trustee an Officers' Certificate and an Opinion of Counsel
each stating that such merger or consolidation, or such sale, conveyance,
transfer, lease or other disposition, complies with this Article and that all
conditions precedent herein provided for relating to such transaction have been
complied with. In the event of the assumption by a successor corporation of the
obligations of the Guarantor as provided in clause (i)(B) of the immediately
preceding sentence, such successor corporation shall succeed to and be
substituted for the Guarantor hereunder and all such obligations of the
Guarantor shall terminate.
ARTICLE 8
SUPPLEMENTAL INDENTURES
Section 8.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. Without
the consent of any Holders, the Company and the Guarantor, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into indentures supplemental hereto, in form reasonably satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the Company
or the Guarantor and the assumption by any such successor of the covenants
of the Company or the Guarantor herein and in the Securities or the
Guarantees; or
(2) to add to the covenants of the Company or the Guarantor for the
benefit of the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein
conferred upon the Company or the Guarantor and to make the occurrence, or
<PAGE>
65
the occurrence and continuance, of a default in any of such additional
covenants, restrictions or conditions a Default or an Event of Default
permitting the enforcement of all or any of the several remedies provided
in this Indenture as herein set forth; PROVIDED, HOWEVER, that in
respect of any such additional covenant, restriction or condition such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the
case of other defaults) or may provide for an immediate enforcement upon
such default or may limit the remedies available to the Trustee upon such
default; or
(3) to add any additional Events of Default with respect to all or
any series of Securities; or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to facilitate the issuance of Bearer
Securities (including, without limitation, to provide that Bearer
Securities may be registrable as to principal only) or to facilitate the
issuance of Securities in global form, PROVIDED that any such action
shall not adversely affect the interests of the Holders of Securities of
any series or any related coupons in any material respect; or
(5) to add to, change or eliminate any of the provisions of this
Indenture, PROVIDED that any such addition, change or elimination shall
become effective only when there is no Security Outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision and as to which such
supplemental indenture would apply; or
(6) to secure the Securities; or
(7) to add to the conditions, limitations and restrictions on the
authorized amount, terms or purposes of issue, authentication and delivery
of Securities, as herein set forth, other conditions, limitations and
restrictions thereafter to be observed; or
(8) to establish the form or terms of Securities of any series as
permitted by Sections 2.1 and 3.1; or
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate the
administration of the trusts hereunder by more than one Trustee, pursuant
to the requirements of Section 6.10; or
(10) if allowed without penalty under applicable laws and
regulations, to permit payment in the United States (including any of the
states and the District of Columbia), its territories, its possessions and
other areas subject to its jurisdiction of principal, premium, if any, or
interest, if any, on Bearer Securities or coupons, if any; or
<PAGE>
66
(11) to correct or supplement any provision herein which may be
inconsistent with any other provision herein or to make any other
provisions with respect to matters or questions arising under this
Indenture, provided such action shall not adversely affect the interests
of the Holders of Securities of any series in any material respect, or to
cure any ambiguity or correct any mistake; or
(12) to cure any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provision contained herein or in any supplemental indenture, or to make
any other provision in regard to matters or questions arising under this
Indenture which the Board of Directors of the Company may deem necessary
or desirable and which shall not adversely affect the interests of the
holders of the Securities in any material respect; or
(13) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Article 4, PROVIDED
that any such action shall not adversely affect the interests of the
Holders of Securities of such series or any other series of Securities or
any related coupons in any material respect.
Section 8.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. With the
written consent of the Holders of not less than a majority of the aggregate
principal amount of the Outstanding Securities of each series adversely affected
by such supplemental indenture, the Company, the Guarantor and the Trustee may
enter into an indenture or indentures supplemental hereto to add any provisions
to or to change or eliminate any provisions of this Indenture or of any other
indenture supplemental hereto or to modify the rights of the Holders of
Securities of each such series; PROVIDED, HOWEVER, that without the consent
of the Holder of each Outstanding Security affected thereby, an amendment under
this Section may not:
(1) change the Stated Maturity of the principal of, or any
installment of principal of or interest on, any Security, or reduce the
principal amount thereof or the rate of interest thereon or any premium
payable upon the redemption thereof, or reduce the amount of the principal
of an Original Issue Discount Security that would be due and payable upon
a declaration of acceleration of the Maturity thereof pursuant to Section
5.2, or change the coin or currency in which any Securities or any premium
or the interest thereon is payable, or impair the right to institute suit
for the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption Date);
(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;
(3) change any obligation of the Company to maintain an office or
agency in the places and for the purposes specified in Section 9.2;
<PAGE>
67
(4) make any change in Section 5.7 or this Section 8.2 except to
increase any percentage or to provide that certain other provisions of
this Indenture cannot be modified or waived with the consent of the
Holders of each Outstanding Security affected thereby; or
(5) modify the obligations of the Guarantor to make payment under
the Guarantee contained in Article XII of this Indenture.
For the purposes of this Section 8.2, if the Securities of any series are
issuable upon the exercise of warrants, any holder of an unexercised and
unexpired warrant with respect to such series shall not be deemed to be a Holder
of Outstanding Securities of such series in the amount issuable upon the
exercise of such warrants.
A supplemental indenture that 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 that 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 is not necessary under this Section 8.2 for the Holders to consent to
the particular form of any proposed supplemental indenture, but it is sufficient
if they consent to the substance thereof.
Section 8.3. COMPLIANCE WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article shall comply with the requirements
of the Trust Indenture Act as then in effect.
Section 8.4. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and 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 8.5. 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 and of any coupon appertaining
thereto shall be bound thereby.
Section 8.6. REFERENCE LN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities, including any coupons, of any series authenticated and delivered
after the execution of any supplemental indenture pursuant to this Article may,
and shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities including any
<PAGE>
68
coupons of any series so modified as to conform, in the opinion of the Trustee
and the Company, 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 including any coupons of such series.
Section 8.7. NOTICE OF SUPPLEMENTAL INDENTURE. Promptly after the
execution by the Company, the Guarantor and the appropriate Trustee of any
supplemental indenture pursuant to Section 8.2, the Company shall transmit, in
the manner and to the extent provided in Section 1.6, to all Holders of any
series of the Securities affected thereby, a notice setting forth in general
terms the substance of such supplemental indenture.
ARTICLE 9
COVENANTS
Section 9.1. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST. The
Company covenants and agrees for the benefit of the Holders of each series of
Securities that it will duly and punctually pay the principal of, premium, if
any, and interest on the Securities of that series in accordance with the terms
of the Securities of such series, any coupons appertaining thereto and this
Indenture. An installment of principal or interest shall be considered paid on
the date it is due if the Trustee or Paying Agent holds on that date money
designated for and sufficient to pay the installment. Unless otherwise
specified as contemplated by Section 3.1 with respect to any series of
Securities or except as otherwise provided in Section 3.7, any interest due on
Bearer Securities on or before Maturity shall be payable only upon presentation
and surrender of the several coupons for such interest installments as are
evidenced thereby as they severally mature. If so provided in the terms of any
series of Securities established as provided in Section 3.1, the interest, if
any, due in respect of any temporary Security in global form or permanent
Security in global form, together with any additional amounts payable in respect
thereof, as provided in the terms and conditions of such Security, shall be
payable only upon presentation of such Security to the Trustee for notation
thereon of the payment of such interest.
The Company shall have the right to require a Holder, in connection with
the payment of the principal of (and premium, if any) or interest, if any, on a
Security, to present at the office or agency of the Company at which such
payment is made a certificate concerning the nationality or residence of the
Holder (such as Internal Revenue Service Forms 1001, 4224, W-8d, W-9, any
successor forms or any other substantially similar documents), to enable the
Company to determine its duties and liabilities with respect to any taxes,
assessments or governmental charges which it may be required to deduct or
withhold therefrom under any present or future law of the United States of
America or of any State, County, Municipality or taxing authority therein, and
the Company shall be entitled to determine its duties and liabilities with
respect to such deduction or withholding on the basis of information contained
in such certificate or, if no such certificate shall be so presented, on the
basis of any presumption created by any such law, and shall be entitled to act
in accordance with such determination.
<PAGE>
69
Section 9.2. MAINTENANCE OF OFFICE OR AGENCY. If Securities of a series
are issued as Registered Securities, the Company or the Guarantor will maintain
in each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment, where
Securities of that series may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company or the Guarantor
in respect of the Securities of that series and this Indenture may be served.
If Securities of a series are issuable as Bearer Securities, the Company or the
Guarantor will maintain, (i) subject to any laws or regulations applicable
thereto, an office or agency in a Place of Payment for that series which is
located outside the United States, where Securities of that series and related
coupons may be presented and surrendered for payment; PROVIDED, HOWEVER,
that if the Securities of that series are listed on The International Stock
Exchange of the United Kingdom and the Republic of Ireland Limited, the
Luxembourg Stock Exchange or any other stock exchange located outside the United
States and such stock exchange shall so require, the Company or the Guarantor
will maintain a Paying Agent for the Securities of that series in London,
Luxembourg or any other required city located outside the United States, as the
case may be, so long as the Securities of that series are listed on such
exchange, and (ii) subject to any laws or regulations applicable thereto, in a
Place of Payment for that series located outside the United States, where
Securities of that series may be surrendered for exchange and where notices and
demands to or upon the Company in respect of the Securities of that series and
this Indenture may be served. The Company or the Guarantor will give prompt
written notice to the Trustee of the location, and any change in the location,
of any such office or agency. If at any time the Company or the Guarantor shall
fail to maintain any such required office or agency or shall fail to furnish the
Trustee with the address thereof, such presentations, surrenders, notices and
demands may be made or served at the Corporate Trust Office of the Trustee, and
the Company and the Guarantor hereby appoint the Trustee as its agent to receive
all such presentations, surrenders, notices and demands.
Unless otherwise specified as contemplated by Section 3.1, no payment of
principal, premium or interest on Bearer Securities shall be made at any office
or agency of the Company in the United States, by check mailed to any address in
the United States, by transfer to an account located in the United States or
upon presentation or surrender in the United States of a Bearer Security or
coupon for payment, even if the payment would be credited to an account located
outside the United States; provided, however, that, if the Securities of a
series are denominated and payable in Dollars, payment of principal of and any
premium or interest on any such Bearer Security shall be made at the office of
the Company's or the Guarantor's Paying Agent in the Borough of Manhattan, The
City of New York, if (but only if) payment in Dollars of the full amount of such
principal, premium or interest, as the case may be, at all offices or agencies
outside the United States maintained for the purpose by the Company or the
Guarantor in accordance with this Indenture is illegal or effectively precluded
by exchange controls or other similar restrictions.
The Company or the Guarantor may also from time to time designate one or
more other offices or agencies where the Securities (including any coupons, if
any) of one or more series may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; PROVIDED,
HOWEVER, that no such designation or rescission shall in any manner relieve
the Company or the Guarantor of their obligation to maintain an office or agency
in each Place of Payment for Securities (including any coupons, if any) of any
<PAGE>
70
series for such purposes. The Company or the Guarantor will give prompt written
notice to the Trustee of any such designation or rescission and of any change in
the location of any such other office or agency.
Unless otherwise specified as contemplated by Section 3.1, the Trustee
shall initially serve as Paying Agent.
Section 9.3. MONEY FOR SECURITIES TO BE HELD IN TRUST; UNCLAIMED MONEY.
If the Company or the Guarantor shall at any time act as its own Paying Agent
with respect to any series of Securities, it will, on or before each due date of
the principal of, premium, if any, or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal, 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 in writing of its
action or failure so to act.
The Company or the Guarantor will cause each Paying Agent for any series
of Securities other than the Trustee to execute and deliver to the Trustee an
instrument in which such Paying Agent shall agree with the Trustee, subject to
the provisions of this Section, that such Paying Agent will:
(1) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Securities of that series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company or the
Guarantor (or any other obligor upon the Securities of that series) in the
making of any payment of principal, premium, if any, or interest on the
Securities; 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 or the Guarantor may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose, pay,
or by Company Order or by Guarantor Order, as the case may be, direct any Paying
Agent to pay, to the Trustee all sums held in trust by the Company or the
Guarantor or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or the
Guarantor 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 or the Guarantor, in trust for the payment of any principal,
premium, if any, or interest on any Security of any series and remaining
unclaimed for two years after such principal, premium, if any, or interest has
become due and payable shall be paid to the
<PAGE>
71
Company on Company Request (or, if deposited by the Guarantor, paid to the
Guarantor on Guarantor Request), or (if then held by the Company or the
Guarantor) shall be discharged from such trust; and the Holder of such Security
and coupon, if any, shall thereafter, as an unsecured general creditor, look
only to the Company or the Guarantor 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 or the Guarantor as trustee thereof, shall thereupon
cease; PROVIDED, HOWEVER, that the Trustee or such Paying Agent, before
being required to make any such repayment, may at the expense of the Company or
the Guarantor, as the case may be, cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in The City of New York, or cause to be mailed to
such Holder, notice that such money remains unclaimed and that, after a date
specified therein, which shall not be less than 30 days from the date of such
publication, any unclaimed balance of such money then remaining will be repaid
to the Company or the Guarantor, as the case may be.
Section 9.4. CORPORATE EXISTENCE. Subject to Article 7, each of the
Company and the Guarantor will at all times do or cause to be done all things
necessary to preserve and keep in full force and effect its corporate existence
and its rights and franchises; PROVIDED that nothing in this Section 9.4 shall
prevent the abandonment or termination of any right or franchise of the Company
or the Guarantor, if, in the opinion of the Company or the Guarantor, as the
case may be, such abandonment or termination is in the best interests of the
Company or the Guarantor, as the case may be, and does not materially adversely
affect the ability of the Company or the Guarantor, as the case may be, to
operate its business or to fulfill its obligations hereunder.
Section 9.5. INSURANCE. Each of the Company and the Guarantor covenants
and agrees that it will maintain, and cause each of its Subsidiaries to
maintain, insurance with responsible and reputable insurance companies or
associations or through a program of self-insurance in such amounts and covering
such risks as are consistent with sound business practice for corporations
engaged in the same or a similar business similarly situated.
Section 9.6. REPORTS BY THE GUARANTOR. The Guarantor covenants:
(a) to file with the Trustee, within 30 days after the Guarantor 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 it may be required to file with the Commission
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934,
as amended; or, if it is not required to file information, documents or reports
pursuant to either of such sections, then to 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, as amended, in respect of a security listed and
registered on a national securities exchange as may be prescribed from time to
time in such rules and regulations;
<PAGE>
72
(b) to file with the Trustee and the Commission, in accordance with the
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by it
with the conditions and covenants provided for in this Indenture, as may be
required from time to time by such rules and regulations; and
(c) to transmit to all Holders of Securities, within 30 days after the
filing thereof with the Trustee, in the manner and to the extent provided in
Section 313(c) of the Trust Indenture Act, such summaries of any information,
documents and reports required to be filed by it pursuant to subsections (a) and
(b) of this Section 9.6, as may be required by rules and regulations prescribed
from time to time by the Commission.
Section 9.7. ANNUAL REVIEW CERTIFICATE; NOTICE OF DEFAULT.
(a) The Company covenants and agrees to deliver to the Trustee, within 120
days after the end of each fiscal year of the Company, a brief certificate from
the principal executive officer, principal financial officer, or principal
accounting officer as to his or her knowledge of the Company's compliance with
all conditions and covenants under this Indenture. For purposes of this Section
9.7, such compliance shall be determined without regard to any period of grace
or requirement of notice provided under this Indenture. The Company shall file
with the Trustee written notice of occurrence of any Event of Default within
thirty Business Days of its becoming aware of any such Event of Default.
(b) The Guarantor covenants and agrees to deliver to the Trustee, within
120 days after the end of each fiscal year of the Guarantor, a brief certificate
from the principal executive officer, principal financial officer, or principal
accounting officer as to his or her knowledge of the Company's compliance with
all conditions and covenants under this Indenture. For purposes of this Section
9.7, such compliance shall be determined without regard to any period of grace
or requirement of notice provided under this Indenture. The Guarantor shall file
with the Trustee written notice of occurrence of any Event of Default within 30
Business Days of its becoming aware of any such Event of Default.
ARTICLE 10
REDEMPTION
Section 10.1. APPLICABILITY OF ARTICLE. Securities (including coupons,
if any) of any series which are redeemable whether by operation of a sinking
fund or otherwise before their Stated Maturity shall be redeemable in accordance
with their terms and (except as otherwise specified as contemplated by Section
3.1 for Securities of any series) in accordance with this Article; PROVIDED,
HOWEVER, that if any provision of any such form of Security shall conflict
with any provision of this Article, the provision of such form of Security shall
govern. Except as otherwise set forth in the form of Security for such series,
each Security shall be subject to partial redemption only in the amount of
$1,000 or integral multiples of $1,000.
<PAGE>
73
Section 10.2. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of the
Company to redeem any Securities, including coupons, if any, shall be evidenced
by or pursuant to a Board Resolution or an Officers' Certificate. In the case
of any redemption at the election of the Company of less than all the Securities
or coupons, if any, of any series, 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, of the
principal amount of Securities of such series to be redeemed and, if applicable,
of the tenor of the Securities to be redeemed. In the case of any redemption of
Securities (i) prior to the expiration of any restriction on such redemption
provided in the terms of such Securities 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 10.3. SELECTION OF SECURITIES TO BE REDEEMED. Unless otherwise
specified as contemplated by Section 3.1, if less than all the Securities
(including coupons, if any) of a series with the same original issue date,
interest rate and Stated Maturity are to be redeemed, the Trustee, not more than
45 days prior to the redemption date, shall select the Securities of the series
to be redeemed in such manner as the Trustee shall deem fair and appropriate.
The Trustee shall make the selection from Securities of the series that are
Outstanding and that have not previously been called for redemption and may
provide for the selection for redemption of portions (equal to the minimum
authorized denomination for Securities, including coupons, if any, of that
series or any integral multiple thereof) of the principal amount of Securities,
including coupons, if any, of such series of a denomination larger than the
minimum authorized denomination for Securities of that series. The Trustee
shall promptly notify the Company in writing of the Securities selected by the
Trustee for redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities (including coupons, if any)
shall relate, in the case of any Securities (including coupons, if any) redeemed
or to be redeemed only in part, to the portion of the principal amount of such
Securities (including coupons, if any) which has been or is to be redeemed.
Section 10.4. NOTICE OF REDEMPTION. Unless otherwise specified as
contemplated by Section 3.1, notice of redemption shall be given in the manner
provided in Section 1.6 not less than 30 days nor more than 60 days prior to the
Redemption Date to the Holders of the Securities to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price and the amount of interest payable thereon;
<PAGE>
74
(3) if fewer than all the Outstanding Securities of a series are to
be redeemed, the identification (and, in the case of partial redemption,
the principal amounts) of the particular Security or Securities to be
redeemed;
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the
Redemption Date, upon surrender of such Security, the holder will receive,
without a charge, a new Security or Securities of authorized denominations
for the principal amount thereof remaining unredeemed;
(5) the Place or Places of Payment where such Securities, together
in the case of Bearer Securities with all coupons appertaining thereto, if
any, maturing after the Redemption Date, are to be surrendered for payment
for the Redemption Price;
(6) that Securities of the series called for redemption and all
unmatured coupons, if any, appertaining thereto must be surrendered to the
Paying Agent to collect the redemption price;
(7) that, on the Redemption Date, the Redemption Price and any
accrued interest will become due and payable upon each such Security, or
the portion thereof, to be redeemed and, if applicable, that interest
thereon will cease to accrue on and after said date;
(8) that the redemption is for a sinking fund, if such is the case;
(9) that, unless otherwise specified in such notice, Bearer
Securities of any series, if any, surrendered for redemption must be
accompanied by all coupons maturing subsequent to the Redemption Date or
the amount of any such missing coupon or coupons will be deducted from the
Redemption Price, unless security or indemnity satisfactory to the
Company, the Trustee and any Paying Agent is furnished; and
(10) CUSIP number (if any).
Notice of redemption of Securities to be redeemed 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 10.5. DEPOSIT OF REDEMPTION PRICE. On or prior to 12:00 noon 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 9.3) an amount of
money in the currency or currencies (including currency units or composite
currencies) in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 3.1 for the Securities of such series)
sufficient to pay on the Redemption Date the Redemption Price of, and (unless
the Redemption Date shall be an Interest Payment Date) interest accrued to the
Redemption Date on, all Securities or portions thereof which are to be redeemed
on that date.
<PAGE>
75
Unless any Security by its terms prohibits any sinking fund payment
obligation from being satisfied by delivering and crediting Securities
(including Securities redeemed otherwise than through a sinking fund), the
Company may deliver such Securities to the Trustee for crediting against such
payment obligation in accordance with the terms of such Securities and this
Indenture.
Section 10.6. 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
together with interest accrued to the Redemption Date therein specified, and
from and after such date (unless the Company and the Guarantor shall default in
the payment of the Redemption Price and accrued interest) such Securities shall
cease to bear interest and the coupons for any such interest appertaining to any
Bearer Security so to be redeemed, except to the extent provided below, shall be
void. Except as provided in the next succeeding paragraph, upon surrender of
any such Security, including coupons, if any, for redemption in accordance with
said notice, such Security shall be paid by the Company at the Redemption Price,
together with accrued interest to the Redemption Date; PROVIDED, HOWEVER,
that installments of interest on Bearer Securities whose Stated Maturity is
prior to the Redemption Date shall be payable only at an office or agency
located outside the United States and its possessions (except as otherwise
provided in Section 9.2) and, unless otherwise specified as contemplated by
Section 3.1, only upon presentation and surrender of coupons for such interest;
and PROVIDED FURTHER that, unless otherwise specified as contemplated by
Section 3.1, installments of interest on Registered Securities whose Stated
Maturity is prior to the Redemption Date shall be payable to the Holders of such
Securities, or one or more Predecessor Securities, registered as such at the
close of business on the relevant Record Dates according to their terms and the
provisions of Section 3.7.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant coupons maturing after the Redemption Date, such Bearer
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Bearer
Security shall surrender to the Trustee or any Paying Agent any such missing
coupon in respect of which a deduction shall have been made from the Redemption
Price, such Holder shall be entitled to receive the amount so deducted;
PROVIDED, HOWEVER, that interest represented by coupons shall be payable
only at an office or agency located outside of the United States (except as
otherwise provided pursuant to Section 9.2) and, unless otherwise specified as
contemplated by Section 3.1, only upon presentation and surrender of those
coupons.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate prescribed therefor in the
Security.
<PAGE>
76
Section 10.7. SECURITIES REDEEMED IN PART. Upon surrender of a Security
that is redeemed in part at any Place of Payment therefor (with, if the Company
or the Trustee so required, 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), the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
that Security, without service charge, a new Security or Securities of the same
series with the same form and the same Maturity in any authorized denomination
equal in aggregate principal amount to the unredeemed portion of the principal
of the Security surrendered.
ARTICLE 11
SINKING FUNDS
Section 11.1. APPLICABILITY OF ARTICLE. The provisions of this Article
shall be applicable to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 3.1 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms
of Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to reduction as provided
in Section 11.2. Each sinking fund payment shall be applied to the redemption
of Securities of any series as provided for by the terms of Securities of such
series.
Section 11.2. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES.
The Company or the Guarantor (i) may deliver Outstanding Securities of a series
(other than any previously called for redemption) together, in the case of
Bearer Securities of such series, with all unmatured coupons appertaining
thereto and (ii) may apply as a credit Securities of a series which have been
redeemed either at the election of the Company pursuant to the terms of such
Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities, in each case in satisfaction
of all or any part of any sinking fund payment with respect to the Securities of
such series required to be made pursuant to the terms of such Securities as
provided for by the terms of such series; PROVIDED that such Securities have
not been previously so credited. Such Securities shall be received and credited
for such purpose by the Trustee at the Redemption Price specified in such
Securities for redemption through operation of the sinking fund and the amount
of such sinking fund payment shall be reduced accordingly.
Section 11.3. REDEMPTION OF SECURITIES FOR SINKING FUND. Not less than
60 days prior to each sinking fund payment date for any series of Securities
(unless a shorter period shall be satisfactory to the Trustee), the Company will
deliver to the Trustee an Officers' Certificate specifying the amount of the
next ensuing sinking fund payment for that series pursuant to the terms of that
series, the portion thereof, if any, which is to be satisfied by
<PAGE>
77
payment of cash and the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities of that series pursuant to Section 11.2 and
will also deliver to the Trustee any Securities to be so delivered. Not less
than 30 days before each such sinking fund payment date, the Trustee shall
select the Securities to be redeemed upon such sinking fund payment date in the
manner specified in Section 10.3 and cause notice of the redemption thereof to
be given in the name of and at the expense of the Company in the manner provided
in Section 10.4. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
10.6 and 10.7.
ARTICLE 12
GUARANTEE OF SECURITIES
Section 12.1. UNCONDITIONAL GUARANTEE. The Guarantor hereby
unconditionally guarantees to each Holder of a Security of any series
authenticated and delivered by the Trustee or Authenticating Agent, the due and
punctual payment of the principal of and premium, if any, and interest on, and
any Redemption Price with respect to, such Security, when and as the same shall
become due and payable, whether at maturity, by acceleration or redemption or
otherwise, in accordance with the terms of such Security and of this Indenture.
In case of the failure of the Company punctually to pay any such principal,
premium or interest payment or Redemption Price, the Guarantor hereby agrees to
cause any such payment to be made punctually when and as the same shall become
due and payable, whether at maturity, upon acceleration or redemption or
otherwise, and as if such payment were made by the Company.
The Guarantor hereby agrees that its obligations hereunder shall be as
principal and not merely as surety, and shall be absolute and unconditional,
irrespective of, and shall be unaffected by, any invalidity, irregularity or
failure to enforce the provisions of any such Security or this Indenture, or any
waiver, modification, consent or indulgence granted to the Company with respect
thereto (unless the same shall also be provided the Guarantor), by the Holder of
such Security or the Trustee, the recovery of any judgment against the Company
or any action to enforce the same, or any other circumstances which may
otherwise constitute a legal or equitable discharge of a surety or guarantor.
The Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of merger, insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company, protest or
notice with respect to any such Security or the indebtedness evidenced thereby
and all demands whatsoever, and covenants that this Guarantee will not be
discharged except by payment in full of the principal, premium, if any, and
interest on, and any Redemption Price in respect of, the Securities and the
complete performance of all other obligations contained in the Securities.
<PAGE>
78
The Guarantor hereby irrevocably agrees that any claim or other rights
that it may now or hereafter acquire against the Company that arise from the
existence, payment, performance or enforcement of the Company's obligations
under the Securities or this Indenture, including, without limitation, any right
of subrogation, reimbursement, exoneration, contribution, indemnification, any
right to participate in any claim or remedy of the Holder of any Securities
against the Company, whether or not such claim, remedy or right arises in
equity, or under contract, statute or common law, including, without limitation,
the right to take or receive from the Company, directly or indirectly, in cash
or other property or by setoff or in any other manner, payment or security on
account of such claim or other rights, shall be subordinated and postponed in
right of payment to the prior payment and performance in full of all of the
Company's obligations under the Securities or this Indenture. If any amount
shall be paid to the Guarantor in violation of the preceding sentence and the
obligations of the Company guaranteed by the Guarantor pursuant hereto shall not
have been paid in full, such amount shall be deemed to have been paid to the
Guarantor for the benefit of, and held in trust for the benefit of, the Holders
of Securities entitled to the benefit of this Guarantee, and shall forthwith be
paid to the Trustee. The Guarantor acknowledges that it will receive direct and
indirect benefits from the issuance of the Securities and that the agreement set
forth in this paragraph is knowingly made in contemplation of such benefits.
_____________________________________________
<PAGE>
79
This Indenture may be executed in any number of counterparts, each of
which shall be an original, but such counterparts shall together constitute but
one instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
NORTHWEST AIRLINES, INC., as Issuer
By: /s/ James A. Lawrence
------------------------------------
Name: James A. Lawrence
Title: Executive Vice President
and Chief Financial Officer
Attest:
/s/ Michael L. Miller
__________________________________
Name: Michael L. Miller
Title: Assistant Secretary
NORTHWEST AIRLINES CORPORATION, as
Guarantor
By: /s/ James A. Lawrence
------------------------------------
Name: James A. Lawrence
Title: Executive Vice President
and Chief Financial Officer
Attest:
/s/ Michael L. Miller
__________________________________
Name: Michael L. Miller
Title: Assistant Secretary
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By: /s/ Donald E. Smith
-----------------------------------
Name: Donald E. Smith
Title: Vice President
Attest:
/s/ Alison Della Bella
__________________________________
Name: Alison Della Bella
Title: Assistant Secretary
<PAGE>
NORTHWEST AIRLINES, INC., Issuer
and
NORTHWEST AIRLINES CORPORATION, Guarantor
to
STATE STREET BANK AND TRUST COMPANY, Trustee
INDENTURE
Dated as of June 27, 1997
Providing for Issuance of
Senior Subordinated Debt Securities in Series
<PAGE>
TABLE OF CONTENTS
PAGE
----
ARTICLE 1 DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION . . . . . . . . . . . . . . . . . . . . . . .1
1.1 Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
1.2 Compliance Certificates and Opinions . . . . . . . . . . . . . . . 12
1.3 Form of Documents Delivered to Trustee . . . . . . . . . . . . . . 12
1.4 Acts of Holders. . . . . . . . . . . . . . . . . . . . . . . . . . 13
1.5 Notices, etc., to Trustee, Company and Guarantor . . . . . . . . . 15
1.6 Notice to Holders; Waiver. . . . . . . . . . . . . . . . . . . . . 15
1.7 Headings and Table of Contents . . . . . . . . . . . . . . . . . . 16
1.8 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . 16
1.9 Separability . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.10 Benefits of Indenture. . . . . . . . . . . . . . . . . . . . . . . 16
1.11 Governing Law. . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.12 Legal Holidays . . . . . . . . . . . . . . . . . . . . . . . . . . 16
1.13 Trustee to Establish Record Dates. . . . . . . . . . . . . . . . . 17
1.14 No Security Interest Created . . . . . . . . . . . . . . . . . . . 17
1.15 Liability Solely Corporate . . . . . . . . . . . . . . . . . . . . 17
ARTICLE 2 SECURITY FORMS . . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.1 Forms Generally. . . . . . . . . . . . . . . . . . . . . . . . . . 18
2.2 Form of Trustee's Certificate of Authentication. . . . . . . . . . 18
2.3 Securities in Global Form. . . . . . . . . . . . . . . . . . . . . 18
ARTICLE 3 THE SECURITIES . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.1 Amount Unlimited; Issuable in Series . . . . . . . . . . . . . . . 19
3.2 Denominations. . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.3 Execution, Authentication, Delivery and Dating . . . . . . . . . . 24
3.4 Temporary Securities . . . . . . . . . . . . . . . . . . . . . . . 27
3.5 Registration, Registration of Transfer and Exchange. . . . . . . . 28
3.6 Replacement Securities . . . . . . . . . . . . . . . . . . . . . . 32
3.7 Payment of Interest; Interest Rights Preserved . . . . . . . . . . 33
3.8 Persons Deemed Owners. . . . . . . . . . . . . . . . . . . . . . . 35
3.9 Cancellation . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
3.10 Computation of Interest. . . . . . . . . . . . . . . . . . . . . . 37
3.11 Currency and Manner of Payment in Respect of Securities. . . . . . 37
3.12 Appointment and Resignation of Exchange Rate Agent . . . . . . . . 41
3.13 CUSIP Numbers. . . . . . . . . . . . . . . . . . . . . . . . . . . 42
3.14 Judgments. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
ARTICLE 4 SATISFACTION, DISCHARGE AND DEFEASANCE . . . . . . . . . . . . . . 42
4.1 Termination of Company's Obligations Under the Indenture . . . . . 42
4.2 Application of Trust Funds . . . . . . . . . . . . . . . . . . . . 44
-i-
<PAGE>
PAGE
----
4.3 Applicability of Defeasance Provisions;
Company's Option to Effect Defeasance or
Covenant Defeasance . . . . . . . . . . . . . . . . . . . . . . . 44
4.4 Defeasance and Discharge . . . . . . . . . . . . . . . . . . . . . 44
4.5 Covenant Defeasance. . . . . . . . . . . . . . . . . . . . . . . . 45
4.6 Conditions to Defeasance or Covenant Defeasance. . . . . . . . . . 46
4.7 Deposited Money and Government Obligations
to be Held in Trust . . . . . . . . . . . . . . . . . . . . . . . 47
4.8 Transfers and Distribution at Company Request. . . . . . . . . . . 48
4.9 Reinstatement. . . . . . . . . . . . . . . . . . . . . . . . . . . 48
ARTICLE 5 DEFAULTS AND REMEDIES. . . . . . . . . . . . . . . . . . . . . . . 49
5.1 Events of Default. . . . . . . . . . . . . . . . . . . . . . . . . 49
5.2 Acceleration; Rescission and Annulment . . . . . . . . . . . . . . 50
5.3 Collection of Indebtedness
and Suits for Enforcement by Trustee. . . . . . . . . . . . . . . 50
5.4 Trustee May File Proofs of Claim . . . . . . . . . . . . . . . . . 51
5.5 Trustee May Enforce Claims Without Possession
of Securities . . . . . . . . . . . . . . . . . . . . . . . . . . 52
5.6 Delay or Omission Not Waiver . . . . . . . . . . . . . . . . . . . 52
5.7 Waiver of Past Defaults. . . . . . . . . . . . . . . . . . . . . . 52
5.8 Control by Majority. . . . . . . . . . . . . . . . . . . . . . . . 53
5.9 Limitation on Suits by Holders . . . . . . . . . . . . . . . . . . 53
5.10 Rights of Holders to Receive Payment . . . . . . . . . . . . . . . 54
5.11 Application of Money Collected . . . . . . . . . . . . . . . . . . 54
5.12 Restoration of Rights and Remedies . . . . . . . . . . . . . . . . 54
5.13 Rights and Remedies Cumulative . . . . . . . . . . . . . . . . . . 54
5.14 Undertaking for Costs. . . . . . . . . . . . . . . . . . . . . . . 55
5.15 Waiver of Stay or Extension Laws . . . . . . . . . . . . . . . . . 55
ARTICLE 6 THE TRUSTEE. . . . . . . . . . . . . . . . . . . . . . . . . . . . 55
6.1 Certain Duties and Responsibilities. . . . . . . . . . . . . . . . 55
6.2 Rights of Trustee. . . . . . . . . . . . . . . . . . . . . . . . . 55
6.3 Trustee May Hold Securities. . . . . . . . . . . . . . . . . . . . 56
6.4 Money Held in Trust. . . . . . . . . . . . . . . . . . . . . . . . 57
6.5 Trustee's Disclaimer . . . . . . . . . . . . . . . . . . . . . . . 57
6.6 Notice of Defaults . . . . . . . . . . . . . . . . . . . . . . . . 57
6.7 Reports by Trustee to Holders. . . . . . . . . . . . . . . . . . . 57
6.8 Securityholder Lists . . . . . . . . . . . . . . . . . . . . . . . 57
6.9 Compensation and Indemnity . . . . . . . . . . . . . . . . . . . . 58
6.10 Replacement of Trustee . . . . . . . . . . . . . . . . . . . . . . 58
6.11 Acceptance of Appointment by Successor . . . . . . . . . . . . . . 60
6.12 Eligibility; Disqualification. . . . . . . . . . . . . . . . . . . 61
6.13 Merger, Conversion, Consolidation or
Succession to Business. . . . . . . . . . . . . . . . . . . . . . 61
6.14 Appointment of Authenticating Agent. . . . . . . . . . . . . . . . 62
6.15 Trustee's Application for Instructions from the Company. . . . . . 63
-ii-
<PAGE>
PAGE
----
6.16 Preferential Collection of Claims Against
Company or Guarantor. . . . . . . . . . . . . . . . . . . . . . . 64
ARTICLE 7 CONSOLIDATION, MERGER OR SALE BY THE
COMPANY AND THE GUARANTOR. . . . . . . . . . . . . . . . . . . . . 64
7.1 Consolidation, Merger or Sale of Assets
by the Company Permitted. . . . . . . . . . . . . . . . . . . . . 64
7.2 Consolidation, Merger or Sale of Assets
by the Guarantor Permitted. . . . . . . . . . . . . . . . . . . . 64
ARTICLE 8 SUPPLEMENTAL INDENTURES. . . . . . . . . . . . . . . . . . . . . . 65
8.1 Supplemental Indentures Without Consent of Holders . . . . . . . . 65
8.2 Supplemental Indentures With Consent of Holders. . . . . . . . . . 66
8.3 Compliance with Trust Indenture Act. . . . . . . . . . . . . . . . 67
8.4 Execution of Supplemental Indentures . . . . . . . . . . . . . . . 68
8.5 Effect of Supplemental Indentures. . . . . . . . . . . . . . . . . 68
8.6 Reference in Securities to Supplemental Indentures . . . . . . . . 68
8.7 Notice of Supplemental Indenture . . . . . . . . . . . . . . . . . 68
ARTICLE 9 COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
9.1 Payment of Principal, Premium, if Any, and Interest. . . . . . . . 68
9.2 Maintenance of Office or Agency. . . . . . . . . . . . . . . . . . 69
9.3 Money for Securities to be Held in Trust;
Unclaimed Money . . . . . . . . . . . . . . . . . . . . . . . . . 70
9.4 Corporate Existence. . . . . . . . . . . . . . . . . . . . . . . . 71
9.5 Insurance. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
9.6 Reports by the Guarantor . . . . . . . . . . . . . . . . . . . . . 71
9.7 Annual Review Certificate; Notice of Default . . . . . . . . . . . 72
ARTICLE 10 REDEMPTION . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
10.1 Applicability of Article . . . . . . . . . . . . . . . . . . . . . 73
10.2 Election to Redeem; Notice to Trustee. . . . . . . . . . . . . . . 73
10.3 Selection of Securities to be Redeemed . . . . . . . . . . . . . . 73
10.4 Notice of Redemption . . . . . . . . . . . . . . . . . . . . . . . 73
10.5 Deposit of Redemption Price. . . . . . . . . . . . . . . . . . . . 74
10.6 Securities Payable on Redemption Date. . . . . . . . . . . . . . . 75
10.7 Securities Redeemed in Part. . . . . . . . . . . . . . . . . . . . 76
ARTICLE 11 SINKING FUNDS. . . . . . . . . . . . . . . . . . . . . . . . . . 76
11.1 Applicability of Article . . . . . . . . . . . . . . . . . . . . . 76
11.2 Satisfaction of Sinking Fund Payments with Securities. . . . . . . 76
11.3 Redemption of Securities for Sinking Fund. . . . . . . . . . . . . 77
-iii-
<PAGE>
PAGE
----
ARTICLE 12 GUARANTEE OF SECURITIES. . . . . . . . . . . . . . . . . . . . . 77
12.1 Unconditional Guarantee. . . . . . . . . . . . . . . . . . . . . . 77
ARTICLE 13 SUBORDINATION OF SECURITIES AND GUARANTEE. . . . . . . . . . . . 78
13.1 Securities and Guarantee Subordinated to Senior Indebtedness . . . 78
13.2 Company and Guarantor Not to Make Payments with Respect to
Securities and Guarantee in Certain Circumstances. . . . . . . . . 78
13.3 Securities and Guarantee Subordinated to Prior Payment of All
Senior Indebtedness on Dissolution, Liquidation or Reorganization
of the Company or the Guarantor. . . . . . . . . . . . . . . . . . 80
13.4 Holders to be Subrogated to Rights of Holders
of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . 81
13.5 Obligation of the Company and Guarantor Unconditional. . . . . . . 82
13.6 Knowledge of Trustee . . . . . . . . . . . . . . . . . . . . . . . 83
13.7 Application by Trustee of Moneys Deposited with It . . . . . . . . 83
13.8 Subordination Rights Not Impaired by Acts or
Omissions of Company, Guarantor or Holders
of Senior Indebtedness . . . . . . . . . . . . . . . . . . . . . . 84
13.9 Holders Authorize Trustee to Effectuate Subordination
of Securities and Guarantee. . . . . . . . . . . . . . . . . . . . 84
13.10 Right of Trustee to Hold Senior Indebtedness . . . . . . . . . . . 85
13.11 Article 13 Not to Prevent Events of Default. . . . . . . . . . . . 85
13.12 Paying Agents Other Than the Trustee . . . . . . . . . . . . . . . 85
13.13 Trustee's Compensation Not Prejudiced. . . . . . . . . . . . . . . 85
13.14 Trust Moneys Not Subordinated. . . . . . . . . . . . . . . . . . . 85
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
-iv-
<PAGE>
INDENTURE, dated as of June 27, 1997, among NORTHWEST AIRLINES, INC., a
Minnesota corporation (the "Company"), as issuer, NORTHWEST AIRLINES
CORPORATION, a Delaware corporation, as guarantor (the "Guarantor"), and STATE
STREET BANK AND TRUST COMPANY, a Massachusetts trust company, as Trustee (the
"Trustee").
RECITALS
The Company has duly authorized the execution and delivery of this
Indenture to provide for the issuance from time to time of its unsecured
subordinated debentures, notes or other evidences of indebtedness ("Securities")
to be issued in one or more series as herein provided.
The Guarantor has duly authorized the execution and delivery of this
Indenture to provide for its guaranty of the Securities.
All things necessary to make this Indenture a valid agreement of the
Company and the Guarantor, in accordance with its terms, have been done.
For and in consideration of the premises and the purchase of the Securities
by the Holders thereof, it is mutually covenanted and agreed as follows for the
equal and ratable benefit of the Holders of the Securities:
ARTICLE 1
DEFINITIONS AND OTHER PROVISIONS
OF GENERAL APPLICATION
Section 1.1. DEFINITIONS.
(a) For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
(2) all other terms used herein which are defined in the Trust
Indenture Act, either directly or by reference therein, have the meanings
assigned to them therein;
(3) all accounting terms not otherwise defined herein have the
meanings assigned to them in accordance with generally accepted accounting
principles; and
(4) the words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision.
<PAGE>
2
"AFFILIATE" of any specified Person means any Person directly or indirectly
controlling or controlled by, or under direct or indirect common control with,
such specified Person. For 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.
"AGENT" means any Paying Agent or Registrar.
"AUTHENTICATING AGENT" means, with respect to the Securities of any series,
any authenticating agent appointed by the Trustee pursuant to Section 6.14.
"AUTHORIZED NEWSPAPER" means a newspaper of general circulation, in the
official language of the country of publication or in the English language,
customarily published on each Business Day whether or not published on
Saturdays, Sundays or holidays, and of general circulation in the place in
connection with which the term is used or in the financial community of such
place. Whenever successive publications in an Authorized Newspaper are required
hereunder they may be made (unless otherwise expressly provided herein) on any
Business Day and in the same or different Authorized Newspapers.
"BEARER SECURITY" means any Security in the form (to the extent applicable
thereto) established pursuant to Section 2.1 which is payable to bearer
(including any Security in global form payable to bearer) and title to which
passes by delivery only, but does not include any coupons.
"BOARD" or "BOARD OF DIRECTORS" means the Board of Directors of the Company
or the Guarantor, as the case may be, the Executive Committee of the Company or
the Guarantor or any other duly authorized committee of either such Board of
Directors or any directors and officers of the Company to whom such Board of
Directors or such committee shall have duly delegated its authority to act
hereunder.
"BOARD RESOLUTION" means a copy of a resolution of the Board of Directors,
certified by the Secretary or an Assistant Secretary of the Company or the
Guarantor, as the case may be, 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", when used with respect to any Place of Payment or any other
particular location referred to in this Indenture or in the Securities, means,
unless otherwise specified with respect to any Securities pursuant to Section
3.1, each Monday, Tuesday, Wednesday, Thursday and Friday which is not a day on
which banking institutions in that Place of Payment or particular location are
authorized or obligated by law or executive order to close.
"CAPITAL LEASE" means any lease obligation of a person incurred with
respect to real property or equipment acquired or leased by such person and used
in its business that is
<PAGE>
3
required to be recorded on its balance sheet as a capitalized lease in
accordance with generally accepted accounting principles consistently applied
as in effect on the date hereof.
"COMMISSION" means the Securities and Exchange Commission, as from time to
time constituted, created under the Securities Exchange Act of 1934, as amended,
or, if at any time after the execution of this Indenture 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 Indenture until one or more successor corporations shall have become such
pursuant to the applicable provisions of this Indenture, and thereafter means
such successors.
"COMPANY ORDER" and "COMPANY REQUEST" mean, respectively, a written order
or request signed in the name of the Company by the Chairman of the Board, the
President, any Executive Vice President or any Senior Vice President, signing
alone, by any Vice President signing together with the Treasurer, any Assistant
Treasurer, the Secretary or any Assistant Secretary of the Company, or, with
respect to Sections 3.3, 3.4, 3.5 and 6.1, any other employee of the Company
named in an Officers' Certificate delivered to the Trustee.
"CONVERSION EVENT" means the cessation of use of (i) a Foreign Currency
both by the government of the country which issued such currency and for the
settlement of transactions by a central bank or other public institutions of or
within the international banking community, (ii) the ECU both within the
European Monetary System and for the settlement of transactions by public
institutions of or within the European Communities or (iii) any currency unit
other than the ECU for the purposes for which it was established.
"CORPORATE TRUST OFFICE" means the principal corporate trust office of the
Trustee at which at any particular time its corporate trust business shall be
principally administered, which office at the date hereof is located at Two
International Place, Boston, Massachusetts 02110.
"CORPORATION" includes corporations, associations, companies and business
trusts.
"COUPON" means any interest coupon appertaining to a Bearer Security.
"DEFAULT" means any event which is, or after notice or passage of time, or
both, would be, an Event of Default.
"DEPOSITARY", when used with respect to the Securities of or within any
series issuable or issued in whole or in part in global form, means the Person
designated as Depositary by the Company pursuant to Section 3.1 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter shall mean or include each Person
which is then a Depositary hereunder, and if at any time there is more than one
such Person, shall be a collective reference to such Persons.
<PAGE>
4
"DOLLAR" means the coin or currency of the United States which at the time
of payment is legal tender for the payment of public and private debts.
"ECU" means the European Currency Unit as defined and revised from time to
time by the Council of the European Communities.
"EUROPEAN COMMUNITIES" means the European Economic Community, the European
Coal and Steel Community and the European Atomic Energy Community.
"EUROPEAN MONETARY SYSTEM" means the European Monetary System established
by the Resolution of December 5, 1978 of the Council of the European
Communities.
"EXCHANGE RATE AGENT", when used with respect to Securities of or within
any series, means, unless otherwise specified with respect to any Securities
pursuant to Section 3.1, a New York Clearing House bank designated pursuant to
Section 3.1 or Section 3.12.
"EXCHANGE RATE OFFICER'S CERTIFICATE" means a certificate setting forth (i)
the applicable Market Exchange Rate or the applicable bid quotation and (ii) the
Dollar or Foreign Currency amounts of principal (and premium, if any) and
interest, if any (on an aggregate basis and on the basis of a Security having
the lowest denomination principal amount in the relevant currency or currency
unit), payable with respect to a Security of any series on the basis of such
Market Exchange Rate or the applicable bid quotation, signed by the Treasurer,
any Vice President or any Assistant Treasurer of the Company.
"FLIGHT EQUIPMENT" means:
(a) aircraft of all types and classes used in transportation and
incidental services, together with all aircraft instruments, appurtenances,
parts and fixtures comprising such aircraft;
(b) aircraft engines of all types and classes used in transportation
and incidental services, together with all accessories, appurtenances,
parts and fixtures comprising such aircraft engines;
(c) aircraft communication equipment of all types and classes used in
transportation and incidental services, including radio, radar, radiophone
and other aircraft communication apparatus, together with all accessories,
appurtenances, parts and fixtures comprising such aircraft communication
equipment;
(d) miscellaneous flight equipment of all types and classes
(including miscellaneous crew flight equipment) used in transportation and
incidental services; and
(e) spare parts, accessories and assemblies held for use in or repair
of the items described in (a) through (d) above.
<PAGE>
5
"FOREIGN CURRENCY" means any currency issued by the government of one or
more countries other than the United States or by any recognized confederation
or association of such governments.
"GOVERNMENT OBLIGATIONS" means securities which are (i) direct obligations
of the United States or, if specified as contemplated by Section 3.1, the
government which issued the currency in which the Securities of a particular
series are payable, for the payment of which its full faith and credit is
pledged or (ii) obligations of a Person controlled or supervised by and acting
as an agency or instrumentality of the United States or, if specified as
contemplated by Section 3.1, such government which issued the foreign currency
in which the Securities of such series are payable, the payment of which is
unconditionally guaranteed as a full faith and credit obligation by the United
States or such other government, which, in either case, are not callable or
redeemable at the option of the issuer thereof, and shall also include a
depositary receipt issued by a bank or trust company as custodian with respect
to any such Government Obligation or a specific payment of interest on or
principal of any such Government Obligation held by such custodian for the
account of the holder of a depositary receipt, PROVIDED that (except as required
by law) such custodian is not authorized to make any deduction from the amount
payable to the holder of such depositary receipt from any amount received by the
custodian in respect of the Government Obligation evidenced by such depositary
receipt.
"GUARANTEE" means the Guarantor's unconditional guarantee of the payment of
Securities as more fully described in Article Twelve.
"GUARANTOR" means the Person named as the "Guarantor" in the first
paragraph of this instrument until one or more successor corporations shall have
become such pursuant to the applicable provisions of this Indenture, and
thereafter means such successors.
"GUARANTOR ORDER" and "GUARANTOR REQUEST" mean, respectively, a written
order or request signed in the name of the Guarantor by a Co-Chairman of the
Board, its President, any Executive Vice President or any Senior Vice President,
signing alone, or by any Vice President signing together with the Treasurer, any
Assistant Treasurer, the Secretary or any Assistant Secretary of the Guarantor,
or with respect to Sections 3.3, 3.4, 3.5 and 6.1, any other employee of the
Guarantor named in an Officers' Certificate delivered to the Trustee.
"HOLDER" means, with respect to a Bearer Security or coupon, a bearer
thereof and, with respect to a Registered Security, a person in whose name a
Security is registered on the Register.
"INDEBTEDNESS" of any Person means, without duplication, the principal of,
and premium, if any, and accrued and unpaid interest (including post-petition
interest, whether or not allowable as a claim in bankruptcy) on any obligation,
whether outstanding on the date hereof or thereafter created, incurred or
assumed, which is (i) indebtedness of such Person for money borrowed, (ii)
Guarantees by such Person of indebtedness for money borrowed by any other
Person, (iii) indebtedness evidenced by notes, debentures, bonds or other
instruments of indebtedness for payment of which such Person is responsible or
liable, (iv) obligations for
<PAGE>
6
the reimbursement of any obligor on any letter of credit, bankers' acceptance
or similar credit transactions, (v) obligations of such Person under Capital
Leases, (vi) commitment and other bank financing fees under contractual
obligations associated with bank debt, (vii) any indebtedness representing
the deferred and unpaid purchase price of any property or business, and
(viii) all deferrals, renewals, extensions and refundings of any such
indebtedness or obligations; PROVIDED, HOWEVER, that Indebtedness shall not
include amounts owed to trade creditors in the ordinary course of business or
nonrecourse indebtedness secured by real property.
"INDEBTEDNESS GUARANTEE" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Indebtedness
or other obligation of any other Person and, without limiting the generality of
the foregoing, any obligation, direct or indirect, contingent or otherwise, of
such Person (i) to purchase or pay (or advance or supply funds for the purchase
or payment of) such Indebtedness or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to take-or-pay, or to maintain financial
statement conditions or otherwise) or (ii) entered into for the purpose of
assuring in any other manner the obligee of such Indebtedness or other
obligation of the payment or performance thereof (or payment of damages in the
event of nonperformance) or to protect such obligee against loss in respect
thereof (in whole or in part); PROVIDED, HOWEVER, that the terms Indebtedness
Guarantee shall not include endorsements for collection or deposit in the
ordinary course of business. The term "Indebtedness Guarantee" used as a verb
has a corresponding meaning.
"INDENTURE" means this Indenture as originally executed or as amended or
supplemented from time to time and shall include the forms and terms (but not
defined terms established in an Officers' Certificate or a Board Resolution) of
particular series of Securities established as contemplated by Sections 2.1 and
3.1.
"INDEXED SECURITY" means a Security the terms of which provide that the
principal amount thereof payable at Stated Maturity may be more or less than the
principal face amount thereof at original issuance.
"INTEREST", when used with respect to an Original Issue Discount Security
which by its terms bears interest only after maturity, means interest payable
after maturity.
"INTEREST PAYMENT DATE", when used with respect to any Security, means the
Stated Maturity of an installment of interest on such Security.
"MARKET EXCHANGE RATE" means, unless otherwise specified with respect to
any Securities pursuant to Section 3.1, (i) for any conversion involving a
currency unit on the one hand and Dollars or any Foreign Currency on the other,
the exchange rate between the relevant currency unit and Dollars or such Foreign
Currency calculated by the method specified pursuant to Section 3.1 for the
Securities of the relevant series, (ii) for any conversion of Dollars into any
Foreign Currency, the noon buying rate for such Foreign Currency for cable
transfers quoted in New York City as certified for customs purposes by
<PAGE>
7
the Federal Reserve Bank of New York and (iii) for any conversion of one
Foreign Currency into Dollars or another Foreign Currency, the spot rate at
noon local time in the relevant market at which, in accordance with normal
banking procedures, the Dollars or Foreign Currency into which conversion is
being made could be purchased with the Foreign Currency from which conversion
is being made from major banks located in New York City, London or any other
principal market for Dollars or such purchased Foreign Currency, in each case
determined by the Exchange Rate Agent. Unless otherwise specified with
respect to any Securities pursuant to Section 3.1, in the event of the
unavailability of any of the exchange rates provided for in the foregoing
clauses (i), (ii) and (iii), the Exchange Rate Agent shall use, in its sole
discretion and without liability on its part, such quotation of the Federal
Reserve Bank of New York as of the most recent available date, or quotations
from one or more major banks in New York City, London or other principal
market for such currency or currency unit in question (which may include any
such bank acting as Trustee under this Indenture), or such other quotations
as the Exchange Rate Agent shall deem appropriate. Unless otherwise
specified by the Exchange Rate Agent, if there is more than one market for
dealing in any currency or currency unit by reason of foreign exchange
regulations or otherwise, the market to be used in respect of such currency
or currency unit shall be that upon which a nonresident issuer of securities
designated in such currency or currency unit would purchase such currency or
currency unit in order to make payments in respect of such securities.
"MATURITY", when used with respect to any Security, means the date on which
the principal of such Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated Maturity or by
declaration of acceleration, call for redemption or otherwise.
"OFFICER" means the Chairman or a Co-Chairman of the Board of Directors,
the President, any Executive Vice President, any Senior Vice President, any Vice
President or the Secretary of the Company or the Guarantor, as the case may be.
"OFFICERS' CERTIFICATE" means a certificate signed by the Chairman or a
Co-Chairman of the Board, the President, any Executive Vice President or any
Senior Vice President of the Company or the Guarantor, as the case may be,
signing alone, or by any Vice President signing together with the Secretary,
any Assistant Secretary, the Treasurer, or any Assistant Treasurer of the
Company or the Guarantor, as the case may be.
"OPINION OF COUNSEL" means a written opinion of legal counsel, who may be
(a) the senior attorney employed by the Company or the Guarantor, (b) Simpson
Thacher & Bartlett or (c) other counsel designated by the Company or the
Guarantor and who shall be acceptable to the Trustee.
"ORIGINAL ISSUE DISCOUNT SECURITY" means any Security which provides for an
amount less than the stated principal amount thereof to be due and payable upon
declaration of acceleration of the Maturity thereof pursuant to Section 5.2.
<PAGE>
8
"OUTSTANDING", when used with respect to Securities, means, as of the date
of determination, all Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(ii) Securities, or portions thereof, for whose payment or redemption
money in the necessary amount has been theretofore deposited with the
Trustee or any Paying Agent (other than the Company) in trust or set aside
and segregated in trust by the Company (if the Company shall act as its own
Paying Agent) for the Holders of such Securities and any coupons
appertaining thereto PROVIDED that, if such Securities are to be redeemed,
notice of such redemption has been duly given pursuant to this Indenture or
provisions therefor satisfactory to the Trustee have been made;
(iii) Securities, except to the extent provided in Sections 4.4 and
4.5, with respect to which the Company has effected defeasance and/or
covenant defeasance as provided in Article 4; and
(iv) Securities which have been paid pursuant to Section 3.6 or in
exchange for or in lieu of which other Securities have been authenticated
and delivered pursuant to this Indenture, other than any such Securities in
respect of which there shall have been presented to the Trustee proof
satisfactory to it that such Securities are held by a bona fide purchaser
in whose hands such Securities are valid obligations of the Company;
PROVIDED, HOWEVER, that in determining whether the Holders of the requisite
principal amount of the Outstanding Securities have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, or whether
sufficient funds are available for redemption or for any other purpose, and for
the purpose of making the calculations required by section 313 of the Trust
Indenture Act, (w) the principal amount of any Original Issue Discount
Securities that may be counted in making such determination or calculation and
that shall be deemed to be Outstanding for such purpose shall be equal to the
amount of principal thereof that would be (or shall have been declared to be)
due and payable, at the time of such determination, upon a declaration of
acceleration of the maturity thereof pursuant to Section 5.2, (x) the principal
amount of any Security denominated in a Foreign Currency that may be counted in
making such determination or calculation and that shall be deemed Outstanding
for such purpose shall be equal to the Dollar equivalent, determined as of the
date such Security is originally issued by the Company as set forth in an
Exchange Rate Officer's Certificate delivered to the Trustee, of the principal
amount (or, in the case of an Original Issue Discount Security, the Dollar
equivalent as of such date of original issuance of the amount determined as
provided in clause (w) above) of such Security, (y) the principal amount of any
Indexed Security that may be counted in making such determination or calculation
and that shall be deemed outstanding for such purpose shall be equal to the
principal face amount of such Indexed Security at original issuance, unless
otherwise provided with respect to such Security pursuant to Section 3.1, and
(z) Securities owned by the Company, the Guarantor or any other obligor upon the
Securities or any Affiliate of the Company or the Guarantor or of such other
<PAGE>
9
obligor shall be disregarded and deemed not to be outstanding, except that, in
determining whether the Trustee shall be protected in making such calculation or
in relying upon any such request, demand, authorization, direction, notice,
consent or waiver, only Securities which the Trustee knows to be so owned shall
be so disregarded. Securities so owned which have been pledged in good faith
may be regarded as outstanding if the pledgee establishes to the satisfaction of
the Trustee the pledgee's right so to act with respect to such Securities and
that the pledgee is not the Company, the Guarantor or any other obligor upon the
Securities or any Affiliate of the Company, the Guarantor or such other obligor.
"PAYING AGENT" means any Person authorized by the Company to pay the
principal of, premium, if any, or interest on any Securities on behalf of the
Company.
"PERIODIC OFFERING" means an offering of Securities of a series from time
to time the specific terms of which Securities, including, without limitation,
the rate or rates of interest or formula for determining the rate or rates of
interest thereon, if any, the Stated Maturity or Stated Maturities thereof, the
original issue date or dates thereof, the redemption provisions, if any, with
respect thereto, and any other terms specified as contemplated by Section 3.1
with respect thereto, are to be determined by the Company upon the issuance of
such Securities.
"PERSON" means any individual, corporation, partnership, joint venture,
association, joint-stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"PLACE OF PAYMENT", when used with respect to the Securities of or within
any series, means the place or places where, subject to the provisions of
Section 9.2, the principal of, premium, if any, and interest on such Securities
are payable as specified as contemplated by Section 3.1.
"PREDECESSOR SECURITY" of any particular Security means every previous
Security evidencing all or a portion of the same debt as that evidenced by such
particular Security; and, for the purposes of this definition, any Security
authenticated and delivered under Section 3.6 in exchange for or in lieu of a
mutilated, destroyed, lost or stolen Security shall be deemed to evidence the
same debt as the mutilated, destroyed, lost or stolen Security.
"REDEMPTION DATE", when used with respect to any Security to be redeemed,
means the date fixed for such redemption by or pursuant to this Indenture.
"REDEMPTION PRICE", when used with respect to any Security to be redeemed,
in whole or in part, means the price at which it is to be redeemed pursuant to
this Indenture.
"REGISTERED SECURITY" means any Security in the form (to the extent
applicable thereto) established pursuant to Section 2.1 which is registered as
to principal and interest in the Register.
<PAGE>
10
"REGULAR RECORD DATE" for the interest payable on any Interest Payment Date
on the Registered Securities of or within any series means the date specified
for that purpose as contemplated by Section 3.1.
"RESPONSIBLE OFFICER", when used with respect to the Trustee, shall mean
any assistant vice president, any senior trust officer, or any trust officer, in
the Corporate Trust Division of the Trustee, or any other officer of the Trustee
customarily performing functions similar to those performed by the persons who
at the time shall be such officers, respectively, and also means, with respect
to a particular corporate trust matter, any other officer to whom such corporate
trust matter is referred because of his knowledge of and familiarity with the
particular subject.
"SECURITY" or "SECURITIES" has the meaning stated in the first recital of
this Indenture and more particularly means any Security or Securities of the
Company issued, authenticated and delivered under this Indenture.
"SENIOR INDEBTEDNESS OF THE COMPANY" means all Indebtedness of the Company
(other than the Securities and Indebtedness owing to the Guarantor or any
Subsidiary), unless such Indebtedness, by its terms or the terms of the
instrument creating or evidencing it, is expressly stated to be subordinate in
right of payment to or PARI PASSU with the Securities; PROVIDED, HOWEVER, that
Senior Indebtedness of the Company shall not include any Indebtedness, Guarantee
or other obligation of the Company that is subordinate or junior in any respect
to any other Indebtedness of the Company.
"SENIOR INDEBTEDNESS OF THE GUARANTOR" means all Indebtedness of the
Guarantor (other than the Guarantee and Indebtedness owing to any Subsidiary of
the Guarantor), unless such Indebtedness, by its terms or the terms of the
instrument creating or evidencing it, is subordinate in right of payment to or
PARI PASSU with the Guarantee PROVIDED, HOWEVER, that Senior Indebtedness of the
Guarantor shall not include any Indebtedness, Guarantee or other obligation of
the Guarantor that is subordinate or junior in any respect to any other
Indebtedness of the Guarantor. All guarantees by the Guarantor of Senior
Indebtedness of the Company shall be deemed Senior Indebtedness of the
Guarantor.
"SERIES" or "SERIES" when used with respect to the Securities shall mean
all Securities bearing the same title established pursuant to Section 3.1.
"SPECIAL RECORD DATE" for the payment of any Defaulted Interest on the
Registered Securities of any issue means a date fixed by the Trustee pursuant to
Section 3.7.
"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 or in a coupon representing such installment of interest as the
fixed date on which the principal of such Security or such installment of
principal or interest is due and payable.
"SUBSIDIARY" means any corporation of which the Guarantor at the time owns
or controls, directly or indirectly, more than 50% of the shares of outstanding
stock having
<PAGE>
11
general voting power under ordinary circumstances to elect a majority of the
Board of Directors of such corporation (irrespective of whether or not at the
time stock of any other class or classes of such corporation shall have or
might have voting power by reason of the happening of any contingency).
"TRUST INDENTURE ACT" means the Trust Indenture Act of 1939, as amended, as
in effect on the date of this Indenture, except as provided in Section 8.3.
"TRUSTEE" means the party named as such in the first paragraph of this
Indenture until a successor Trustee replaces it pursuant to the applicable
provisions of this Indenture, and thereafter means such successor Trustee and
if, at any time, there is more than one Trustee, "Trustee" as used with respect
to the Securities of any series shall mean the Trustee with respect to the
Securities of that series.
"UNITED STATES" means, unless otherwise specified with respect to the
Securities of any series as contemplated by Section 3.1, the United States of
America (including the States and the District of Columbia), its territories,
its possessions and other areas subject to its jurisdiction.
"U.S. PERSON" means, unless otherwise specified with respect to the
Securities of any series as contemplated by Section 3.1, a citizen, national or
resident of the United States, a corporation, partnership or other entity
created or organized in or under the laws of the United States or any political
subdivision thereof, or an estate or trust the income of which is subject to
United States federal income taxation regardless of its source.
"YIELD TO MATURITY" means the yield to maturity, calculated by the Company
at the time of issuance of a series of Securities or, if applicable, at the most
recent determination of interest on such series, in accordance with accepted
financial practice.
(b) The following terms shall have the meanings specified in the Sections
referred to opposite such term below:
TERM SECTION
"Act" 1.4(a)
"Bankruptcy Law" 5.1
"Component Currency" 3.11(h)
"Conversion Date" 3.11(d)
"Custodian" 5.1
"Defaulted Interest" 3.7(b)
"Election Date" 3.11(h)
"Event of Default" 5.1
"Register" 3.5
"Registrar" 3.5
"Special Paying Agent" 3.1(b)
"Special Paying Agent Agreement" 6.2(j)
<PAGE>
12
"Specified Amount" 3.11(h)
"Valuation Date" 3.11(c)
Section 1.2. COMPLIANCE CERTIFICATES AND OPINIONS. Upon any application or
request by the Company or the Guarantor to the Trustee to take any action under
any provision of this Indenture, the Company or the Guarantor shall furnish to
the Trustee an Officers' Certificate stating that all conditions precedent, if
any, provided for in this Indenture relating to the proposed action have been
complied with and an Opinion of Counsel stating that in the opinion of such
counsel all such conditions precedent, if any, have been complied with, except
that in the case of any such application or request as to which the furnishing
of such documents is specifically required by any provision of this Indenture
relating to such particular application or request, no additional certificate or
opinion need be furnished.
Every certificate or opinion with respect to compliance with a condition or
covenant provided for in this Indenture (other than pursuant to Sections 2.3,
3.3 and 9.7) shall include:
(1) a statement that each individual signing such certificate or opinion
has read such condition or covenant and the definitions herein relating thereto;
(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
or caused to be made such examination or investigation as is necessary to enable
him to express an informed opinion as to whether or not such condition or
covenant has been complied with; and
(4) a statement as to whether, in the opinion of each such individual, such
condition or covenant has been complied with.
Section 1.3. FORM OF DOCUMENTS DELIVERED TO TRUSTEE. In any case where
several matters are required to be certified by, or covered by an opinion of,
any specified Person, it is not necessary that all such matters be certified by,
or covered by the opinion of, only one such Person, or that they be so certified
or covered by only one document, but one such Person may certify or give an
opinion with respect to some matters and one or more other such Persons as to
other matters, and any such Person may certify or give an opinion as to such
matters in one or several documents.
Any certificate or opinion of an officer of the Company or the Guarantor
may be based, insofar as it relates to legal matters, upon a certificate or
opinion of, or representations by, counsel, unless such officer knows, or in the
exercise of reasonable care should know, that the certificate or opinion or
representations with respect to the matters upon which his certificate or
opinion is based are erroneous. Any such certificate or Opinion of Counsel may
be based, insofar as it relates to factual matters, upon a certificate or
opinion of, or representations by, an officer or officers of the Company or the
Guarantor, as the case may be, stating that the information with respect to such
factual matters is in the possession of the
<PAGE>
13
Company or the Guarantor, as the case may be, unless such counsel knows, or
in the exercise of reasonable care should know, that the certificate or
opinion or representations as 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 1.4. ACTS OF HOLDERS. (a) Any request, demand, authorization,
direction, notice, consent, waiver or other action provided by this Indenture to
be given or taken by Holders may be embodied in and evidenced by one or more
instruments of substantially similar tenor signed by such Holders in person or
by agent duly appointed in writing. 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 and the Guarantor. Such instrument or instruments (and the action
embodied therein and evidenced thereby) are herein sometimes referred to as the
"Act" of the Holders signing such instrument or instruments. Whenever in this
Indenture it is provided that the Holders of a specified percentage in aggregate
principal amount of the Outstanding Securities of any series may take any Act,
the fact that the Holders of such specified percentage have joined therein may
be evidenced (i) by the instrument or instruments executed by Holders in person
or by agent or proxy appointed in writing, or (ii) by the record of Holders
voting in favor thereof at any meeting of such Holders duly called and held in
accordance with the provisions of Article 13, or (iii) by a combination of such
instrument or instruments and any such record of such a meeting of Holders.
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 conclusive in
favor of the Trustee and the Company and the Guarantor, if made in the manner
provided in clause (b) of this Section 1.4.
(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 of such execution or by a
certificate of a notary public or other officer authorized by law to take
acknowledgments of deeds, certifying that the individual signing such instrument
or writing acknowledged to him the execution thereof. Where such execution is
by a signer acting in a capacity other than his individual capacity, such
certificate or affidavit shall also constitute sufficient proof of his
authority. The fact and date of the execution of any such instrument or
writing, or the authority of the Person executing the same, may also be proved
in any other reasonable manner which the Trustee deems sufficient.
(c) The ownership of Bearer Securities may be proved by the production of
such Bearer Securities or by a certificate executed by any trust company, bank,
banker or other depositary, wherever situated, if such certificate shall be
deemed by the Trustee to be satisfactory, showing that at the date therein
mentioned such Person had on deposit with such depositary, or exhibited to it,
the Bearer Securities therein described; or such facts may be proved by the
certificate or affidavit of the Person holding such Bearer Securities, if such
certificate or affidavit is deemed by the Trustee to be satisfactory. The
Trustee, the Guarantor and the Company may assume that such ownership of any
Bearer Security continues until (i)
<PAGE>
14
another such certificate or affidavit bearing a later date issued in respect
of the same Bearer Security is produced, (ii) such Bearer Security is
produced to the Trustee by some other Person, (iii) such Bearer Security is
surrendered in exchange for a Registered Security or (iv) such Bearer
Security is no longer outstanding. The ownership of Bearer Securities may
also be proved in any other reasonable manner which the Trustee deems
sufficient.
(d) The ownership of Registered Securities shall be proved by the Register
or by a certificate of the Registrar.
(e) Any request, demand, authorization, direction, notice, consent, waiver
or other Act of the Holder of any Security shall bind every future Holder of the
same Security and the holder of every Security issued upon the registration of
transfer thereof or in exchange therefor or in lieu thereof in respect of
anything done, omitted or suffered to be done by the Trustee or the Company or
the Guarantor in reliance thereon, whether or not notation of such action is
made upon such Security.
(f) If the Company shall solicit from the Holders any request, demand,
authorization, direction, notice, consent, waiver or other Act, the Company may,
at its option, by or pursuant to an Officers' Certificate delivered to the
Trustee, fix in advance a record date for the determination of Holders entitled
to give such request, demand, authorization, direction, notice, consent, waiver
or other Act, but the Company shall have no obligation to do so. If such a
record date is fixed, such request, demand, authorization, direction, notice,
consent, waiver or other Act may be given before or after such record date, but
only the Holders of record at the close of business on such record date shall be
deemed to be Holders for the purposes of determining whether Holders of the
requisite proportion of Outstanding Securities have authorized or agreed or
consented to such request, demand, authorization, direction, notice, consent,
waiver or other Act, and for that purpose the Outstanding Securities shall be
computed as of such record date; PROVIDED that no such authorization, agreement
or consent by the Holders on such record date shall be deemed effective unless
it shall become effective pursuant to the provisions of clause (a) of this
Section 1.4 not later than six months after the record date.
(g) At any time prior to (but not after) the evidencing to the Trustee, as
provided in clause (a) of this Section 1.4, of the taking of any Act by the
Holders of the percentage in aggregate principal amount of the Outstanding
Securities specified in this Indenture in connection with such Act, any Holder
of a Security the number, letter or other distinguishing symbol of which is
shown by the evidence to be included in the Securities the Holders of which have
consented to such Act may, by filing written notice with the Trustee at the
Corporate Trust Office and upon proof of ownership as provided in this Section
1.4, revoke such Act so far as it concerns such Security.
(h) The Trustee may in any instance require further proof with respect to
any of the matters referred to in this Section 1.4 so long as its request is a
reasonable one.
<PAGE>
15
Section 1.5. NOTICES, ETC., TO TRUSTEE, COMPANY AND GUARANTOR. Any
request, demand, authorization, direction, notice, consent, waiver or Act of
Holders or other document provided or permitted by this Indenture to be made
upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company or the Guarantor 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 Division, or
(2) the Company or the Guarantor by the Trustee or by any Holder shall
be sufficient for every purpose hereunder (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid,
to the Company or the Guarantor addressed to it at 5101 Northwest Drive,
St. Paul, Minnesota 55111, Attention: Senior Vice President-Finance and
Treasurer or at any other address previously furnished in writing to the
Trustee by the Company or the Guarantor, respectively.
Section 1.6. NOTICE TO HOLDERS; WAIVER. Where this Indenture provides for
notice to Holders of any event, (i) if any of the Securities affected by such
event are Registered Securities, such notice to the Holders thereof shall be
sufficiently given (unless otherwise herein expressly provided or otherwise
agreed to by a Holder) if in writing and mailed, first-class postage prepaid, to
each such Holder affected by such event, at his address as it appears in the
Register, within the time prescribed for the giving of such notice and (ii) if
any of the Securities affected by such event are Bearer Securities, notice to
the Holders thereof shall be sufficiently given (unless otherwise herein or in
the terms of such Bearer Securities expressly provided) if published once in an
Authorized Newspaper in New York, New York, and in such other city or cities, if
any, as may be specified as contemplated by Section 3.1(5).
In any case where notice to Holders is given by mail, neither the failure
to mail such notice, nor any defect in any notice so mailed, to any particular
Holder shall affect the sufficiency of such notice with respect to other Holders
of Registered Securities or the sufficiency of any notice to Holders of Bearer
Securities given as provided herein. In any case where notice is given to
Holders by publication, neither the failure to publish such notice, nor any
defect in any notice so published, shall affect the sufficiency of such notice
with respect to other Holders of Bearer Securities or the sufficiency of any
notice to Holders of Registered Securities given as provided herein. Any notice
mailed to a Holder in the manner herein prescribed shall be conclusively deemed
to have been received by such Holder, whether or not such Holder actually
receives such notice.
If by reason of the suspension of regular mail service or by reason of any
other cause it shall be impracticable to give such notice as provided above,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder. If it is
impossible or, in the opinion of the Trustee, impracticable to give any notice
by publication in the manner herein required, then such publication in lieu
thereof as shall be made with the approval of the Trustee shall constitute a
sufficient publication of such notice.
<PAGE>
16
Any request, demand, authorization, direction, notice, consent or waiver
required or permitted under this Indenture shall be in the English language,
except that any published notice may be in an official language of the country
of publication.
Where this Indenture provides for notice in any manner, such notice may be
waived in writing by the Person entitled to receive such notice, either before
or after the event, and such waiver shall be equivalent of such notice. Waivers
of notice by Holders shall be filed with the Trustee, but such filing shall not
be a condition precedent to the validity of any action taken in reliance upon
such waiver.
Section 1.7. 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 1.8. SUCCESSORS AND ASSIGNS. All covenants and agreements in this
Indenture by the Company and the Guarantor shall bind their respective
successors and assigns, whether so expressed or not.
Section 1.9. SEPARABILITY. In case any provision of this Indenture or 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 1.10. BENEFITS OF INDENTURE. Nothing in this Indenture or in the
Securities, expressed or implied, shall give to any Person, other than the
parties hereto, any Registrar, any Paying Agent and their successors hereunder
and the Holders, any benefit or any legal or equitable right, remedy or claim
under this Indenture.
Section 1.11. GOVERNING LAW. THIS INDENTURE, THE SECURITIES AND ANY COUPONS
APPERTAINING THERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
LAWS OF THE STATE OF NEW YORK. This Indenture is subject to the Trust Indenture
Act and if any provision hereof limits, qualifies or conflicts with the duties
imposed on any person by the provisions of Sections 310 to 317, inclusive, of
the Trust Indenture Act, such imposed duties shall control.
Section 1.12. LEGAL HOLIDAYS. Unless otherwise specified pursuant to
Section 3.1 or in any Security, in any case where any Interest Payment Date,
Redemption Date, sinking fund payment date, Stated Maturity or Maturity of any
Security shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or any Security or coupon
other than a provision in the Securities of any series which specifically states
that such provision shall apply in lieu of this Section) payment of principal,
premium, if any, or interest need not be made at such Place of Payment on such
date, but may be made on the next succeeding Business Day at such Place of
Payment with the same force and effect as if made on such date; PROVIDED that no
interest shall accrue on the amount so payable for the period from and after
such Interest Payment Date, Redemption Date, sinking fund payment date, Stated
Maturity or Maturity, as the case may be, to such Business Day if such payment
is made or duly provided for on such Business Day.
<PAGE>
17
Section 1.13. COMPANY TO ESTABLISH RECORD DATES. Except as otherwise
provided in this Indenture the Company may set a record date in the
circumstances permitted by the Trust Indenture Act for the purpose of
determining the holders of Securities of any series entitled to take any action
(including the making of any demand or request, the giving of any notice,
consent or waiver or the taking of any other action), or to vote on any action
authorized or permitted to be given or taken by holders of Securities of such
series; PROVIDED, that if a record date is not set by the Company prior to the
first solicitation of a holder of Securities of such series in respect of any
such action, or, in the case of any such vote, prior to such vote, the record
date for any such action or vote shall be the 30th day prior to such first
solicitation or vote, as the case may be. With regard to any record date for
action to be taken by the holders of one or more series of Securities, only the
holders of Securities of such series on such date (or their duly designated
proxies) shall be entitled to take, or vote on, the relevant action.
Section 1.14. NO SECURITY INTEREST CREATED. Nothing in this Indenture or
in the Securities or coupons, if any, express or implied, shall be construed to
constitute a security interest under the Uniform Commercial Code or similar
legislation, as now or hereafter enacted and in effect in any jurisdiction where
property of the Guarantor or its Subsidiaries is or may be located.
Section 1.15. LIABILITY SOLELY CORPORATE. No recourse shall be had for
the payment of the principal of (or premium, if any) or the interest on any
Securities or coupons, if any, or any part thereof, or of the indebtedness
represented thereby, or upon any obligation, covenant or agreement of this
Indenture, against any incorporator, or against any stockholder, officer or
director, as such, past, present or future, of the Company or the Guarantor (or
any incorporator, stockholder, officer or director of any predecessor or
successor corporation), either directly or through the Company or the Guarantor
(or any such predecessor or successor corporation), whether by virtue of any
constitution, statute or rule of law, or by the enforcement of any assessment or
penalty or otherwise; it being expressly agreed and understood that this
Indenture and all the Securities and coupons, if any, are solely corporate
obligations, and that no personal liability whatsoever shall attach to, or be
incurred by, any such incorporator, stockholder, officer or director, past,
present or future, of the Company or the Guarantor (or any incorporator,
stockholder, officer or director of any such predecessor or successor
corporation), either directly or indirectly through the Company or the Guarantor
or any such predecessor or successor corporation, because of the indebtedness
hereby authorized or under or by reason of any of the obligations, covenants,
promises or agreements contained in this Indenture or in any of the Securities
or coupons, if any, or to be implied herefrom or therefrom; and that any such
personal liability is hereby expressly waived and released as a condition of,
and as part of the consideration for, the execution of this Indenture and the
issue of Securities; PROVIDED, HOWEVER, that nothing herein or in the Securities
or coupons, if any, contained shall be taken to prevent recourse to and the
enforcement of the liability, if any, of any stockholder or subscriber to
capital stock upon or in respect of the shares of capital stock not fully paid.
<PAGE>
18
ARTICLE 2
SECURITY FORMS
Section 2.1. FORMS GENERALLY. The Securities of each series and the
coupons, if any, to be attached thereto shall be in substantially such form
(including global form) as shall be established by delivery to the Trustee of an
Officers' Certificate or in one or more indentures supplemental hereto, in each
case with such appropriate insertions, omissions, substitutions and other
variations as are required or permitted by this Indenture, and may have such
letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities and coupons, if any, as evidenced by their
execution of the Securities and coupons, if any. If temporary Securities of any
series are issued as permitted by Section 3.4, the form thereof also shall be
established as provided in the preceding sentence. If the forms of Securities
and coupons, if any, of any series are established by an Officers' Certificate,
such Officers' Certificate shall be delivered to the Trustee at or prior to the
delivery of the Company Order contemplated by Section 3.3 for the authentication
and delivery of such Securities.
Unless otherwise specified as contemplated by Section 3.1, Bearer
Securities shall have interest coupons attached.
The permanent Securities and coupons, if any, shall be printed,
lithographed or engraved or produced by any combination of these methods or may
be produced in any other manner, all as determined by the officers executing
such Securities and coupons, if any, as evidenced by their execution of such
Securities and coupons, if any.
Section 2.2. FORM OF TRUSTEE'S CERTIFICATE OF AUTHENTICATION. The Trustee's
certificate of authentication shall be in substantially the following form:
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of a series issued under the within-mentioned
Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
Dated: By:_________________________________
Authorized Signatory
Section 2.3. SECURITIES IN GLOBAL FORM. If Securities of or within a series
are issuable in whole or in part in temporary or permanent global form, as
specified as contemplated by Section 3.1, then, notwithstanding clause (8) of
Section 3.1(b) and the provisions of Section 3.2, any such Security shall
represent such of the outstanding securities of such series as shall
<PAGE>
19
be specified therein and may provide that it shall represent the aggregate
amount of Outstanding Securities from time to time endorsed thereon and that
the aggregate amount of Outstanding Securities represented thereby may from
time to time be reduced to reflect exchanges. Any endorsement of a Security
in global form to reflect the amount, or any increase or decrease in the
amount, or changes in the rights of Holders, of Outstanding Securities
represented thereby, shall be made by the Trustee in such manner and upon
instructions given by such Person or Persons as shall be specified therein or
in the Company Order to be delivered to the Trustee pursuant to Section 3.3
or 3.4. Subject to the provisions of Section 3.3 and, if applicable, Section
3.4, the Trustee shall deliver and redeliver any Security in global form in
the manner and upon instructions given by the Person or Persons specified
therein or in the applicable Company Order. Any instructions by the Company
with respect to endorsement or delivery or redelivery of a Security in global
form shall be in writing but need not comply with Section 1.2 hereof and need
not be accompanied by an Opinion of Counsel.
The provisions of the last paragraph of Section 3.3 shall apply to any
Security in global form if such Security was never issued and sold by the
Company and the Company delivers to the Trustee the Security in global form
together with written instructions (which need not comply with Section 1.2 and
need not be accompanied by an Opinion of Counsel) with regard to the reduction
in the principal amount of Securities represented thereby, together with the
written statement contemplated by the last paragraph of Section 3.3.
Notwithstanding the provisions of Sections 2.1 and 3.7, unless otherwise
specified as contemplated by Section 3.1, payment of principal of, premium, if
any, and interest on any Security in permanent global form shall be made to the
Person or Persons specified therein.
ARTICLE 3
THE SECURITIES
Section 3.1. AMOUNT UNLIMITED; ISSUABLE IN SERIES. (a) The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited. The Securities may be issued from time to time in
one or more series.
(b) The Securities may be issued in one or more series, each of which shall
be issued by or pursuant to a Board Resolution of the Company and the Guarantor
or one or more supplemental indentures thereto. With respect to any particular
series of Securities, there shall be established by or pursuant to a Board
Resolution of the Company and the Guarantor and set forth (or the manner of
determination set forth) in an Officers' Certificate of the Company and the
Guarantor:
(1) the title of the Securities of the series (which title shall
distinguish the Securities of the series from all other series of
Securities);
<PAGE>
20
(2) any limit upon the aggregate principal amount of the Securities of
the series which may be authenticated and delivered under this Indenture
(which limit shall not pertain to (i) Securities authenticated and
delivered upon registration of transfer of, or in exchange for, or in lieu
of, other Securities of the series pursuant to Section 3.4, 3.5, 3.6, 8.6,
or 10.7 and (ii) any Securities which, pursuant to the last paragraph of
Section 3.3, are deemed never to have been authenticated and delivered
hereunder);
(3) the date or dates on which or periods during which the Securities
of the series may be issued, and the date or dates (or the method of
determination thereof) on which the principal of (and premium, if any, on)
the Securities of such series are or may be payable (which, if so provided
in such Board Resolution or supplemental indenture, may be determined by
the Company from time to time and set forth in the Securities of the series
issued from time to time);
(4) the rate or rates at which the Securities of the series shall bear
interest, if any, or the method of calculating such rate or rates of
interest, the date or dates from which such interest shall accrue or the
method by which such date or dates shall be determined, the Interest
Payment Dates on which any such interest shall be payable (or the method of
determination thereof) and, with respect to Registered Securities, the
Regular Record Date, if any, for the interest payable on any Registered
Security on any Interest Payment Date;
(5) the place or places where, subject to the provisions of Section
9.2, the principal of, premium, if any, and interest, if any, on Securities
of the series shall be payable; the extent to which, or the manner in
which, any interest payable on any Security in global form on an Interest
Payment Date will be paid, if other than in the manner provided in Section
3.7; and the manner in which any principal of, or premium, if any, on, any
Security in global form will be paid, if other than as set forth elsewhere
herein;
(6) the period or periods within which, or the date or dates on which,
the price or prices at which, the currency or currencies (including
currency units) in which, and the other terms and conditions upon which,
Securities of the series may be redeemed, in whole or in part, at the
option of the Company and, if other than as provided in Section 10.3, the
manner in which the particular Securities of such series (if less than all
Securities of such series are to be redeemed) are to be selected for
redemption;
(7) the obligation, if any, of the Company to redeem or purchase
Securities of the series pursuant to any sinking fund or analogous
provisions or upon the happening of a specified event or at the option of a
Holder thereof and the period or periods within which, the price or prices
at which, and the other terms and conditions upon which, Securities of the
series shall be redeemed or purchased, in whole or in part, pursuant to
such obligation;
<PAGE>
21
(8) if other than denominations of $1,000 and any integral multiple
thereof, if Registered Securities, and if other than denominations of
$5,000, if Bearer Securities, the denominations in which Securities of the
series shall be issuable;
(9) if other than Dollars, the currency or currencies (including
currency units) in which the principal of, premium, if any, and interest,
if any, on the Securities of the series shall be payable, or in which the
Securities of the series shall be denominated, the particular provisions
applicable thereto in accordance with, in addition to, or in lieu of the
provisions of Section 3.11, and whether the Securities of the series may be
satisfied and discharged other than as provided in Article 4;
(10) if the payments of principal of, premium, if any, or interest, if
any, on the Securities of the series are to be made, at the election of the
Company, the Guarantor or a Holder, in a currency or currencies (including
currency units) other than that in which such Securities are denominated or
designated to be payable, the currency or currencies (including currency
units) in which such payments are to be made, the terms and conditions of
such payments and the manner in which the exchange rate with respect to
such payments shall be determined, the particular provisions applicable
thereto in accordance with, in addition to, or in lieu of the provisions of
Section 3.11, and whether the Securities of the series may be satisfied and
discharged other than as provided in Article 4;
(11) if the amount of payments of principal of, premium, if any, and
interest, if any, on the Securities of the series shall be determined with
reference to an index, formula or other method (which index, formula or
method may be based, without limitation, on a currency or currencies
(including currency units) other than that in which the Securities of the
series are denominated or designated to be payable), the index, formula or
other method by which such amounts shall be determined;
(12) if other than the principal amount thereof, the portion of the
principal amount of such Securities of the series which shall be payable
upon declaration of acceleration thereof pursuant to Section 5.2 or the
method by which such portion shall be determined;
(13) if other than as provided in Section 3.7, the Person to whom any
interest on any Registered Security of the series shall be payable, the
manner in which, or the Person to whom, any interest on any Bearer
Securities of the series shall be payable, and the extent to which, or the
manner in which (including any certification requirement and other terms
and conditions under which), any interest payable on a temporary or
permanent global Security on an Interest Payment Date will be paid if other
than in the manner provided in Section 2.3 and Section 3.4, as applicable;
(14) provisions, if any, granting special rights to the Holders of
Securities of the series upon the occurrence of such events as may be
specified;
<PAGE>
22
(15) any deletions from, modifications of or additions to the Events
of Default set forth in Section 5.1 or covenants of the Company and/or the
Guarantor set forth in Article 9 pertaining to the Securities of the
series;
(16) under what circumstances, if any, the Company or the Guarantor
will pay additional amounts on the Securities of that series held by a
Person who is not a U.S. Person in respect of taxes or similar charges
withheld or deducted and, if so, whether the Company will have the option
to redeem such Securities rather than pay such additional amounts (and the
terms of any such option);
(17) whether Securities of the series shall be issuable as Registered
Securities or Bearer Securities (with or without interest coupons), or
both, and any restrictions applicable to the offering, sale or delivery of
Bearer Securities and, if other than as provided in Section 3.5, the terms
upon which Bearer Securities of a series may be exchanged for Registered
Securities of the same series and vice versa;
(18) the date as of which any Bearer Securities of the series and any
temporary global Security representing outstanding Securities of the series
shall be dated if other than the date of original issuance of the first
Security of the series to be issued;
(19) the applicability, if any, to the Securities of or within the
series of Sections 4.4 and 4.5, or such other means of defeasance or
covenant defeasance as may be specified for the Securities and coupons, if
any, of such series, and whether, for the purpose of such defeasance or
covenant defeasance, the term "Government Obligations" shall include
obligations referred to in the definition of such term which are not
obligations of the United States or an agency or instrumentality of the
United States;
(20) if other than the Trustee, the identity of the Registrar and any
Paying Agent including any offshore Paying Agent (a "Special Paying Agent")
required to act as paying agent and/or exchange agent for a series of
Securities outside of the United States;
(21) any terms which may be related to warrants issued by the Company
in connection with, or for the purchase of, Securities of such series,
including whether and under what circumstances the Securities of any series
may be used toward the exercise price of any such warrants;
(22) the designation of the initial Exchange Rate Agent, if any;
(23) whether Securities of the series shall be issued in whole or in
part in temporary or permanent global form and, if so, (i) the initial
Depositary for such global Securities and (ii) if other than as provided in
Section 3.4 or 3.5, as applicable, whether and the circumstances under
which beneficial owners of interests in any Securities of the series in
temporary or permanent global form may exchange such
<PAGE>
23
interests for Securities of such series and of like tenor of any authorized
form and denomination;
(24) if Bearer Securities of the series are to be issued, (x) whether
interest in respect of any portion of a temporary Security in global form
(representing all of the Outstanding Bearer Securities of the series)
payable in respect of any Interest Payment Date prior to the exchange of
such temporary Security for definitive Securities of the series shall be
paid to any clearing organization with respect to the portion of such
temporary Security held for its account and, in such event, the terms and
conditions (including any certification requirements) upon which any such
interest payment received by a clearing organization will be credited to
the Persons entitled to interest payable on such Interest Payment Date, and
(y) the terms upon which interests in such temporary Security in global
form may be exchanged for interests in a permanent Security in global form
or for definitive Securities of the series and the terms upon which
interests in a permanent Security in global form, if any, may be exchanged
for definitive Securities of the series;
(25) if other than as provided in Article 13, the terms and conditions
under which the Securities and the Guarantee will be subordinated to the
Senior Indebtedness of the Company and the Senior Indebtedness of the
Guarantor, respectively, and deletions from, modifications of or additions
to the definition of Senior Indebtedness; and
(26) any other terms of the series (which terms shall not be
inconsistent with the provisions of this Indenture), including any terms
which may be required by or advisable under United States laws or
regulations or advisable in connection with the marketing of Securities of
the series.
(c) All Securities of any one series and coupons, if any, appertaining to
any Bearer Securities of such series shall be substantially identical except as
to denomination and the rate or rates of interest, if any, and Stated Maturity,
the date from which interest, if any, shall accrue and except as may otherwise
be provided in or pursuant to an Officers' Certificate pursuant to this Section
3.1 or in an indenture supplemental hereto. All Securities of any one series
need not be issued at the same time and, unless otherwise provided, a series may
be reopened, without the consent of the Holders, for issuances of additional
Securities of such series or for the establishment of additional terms with
respect to the Securities of such series.
(d) If any of the terms of the Securities of any series are established by
action taken pursuant to a Board Resolution, a copy of such Board Resolution
shall be certified by the Secretary or an Assistant Secretary of the Company or
the Guarantor, as the case may be, and delivered to the Trustee at or prior to
the delivery of the Officers' Certificate of the Company or the Guarantor,
setting forth, or providing the manner for determining, the terms of the
Securities of such series, and an appropriate record of any action taken
pursuant thereto in connection with the issuance of any Securities of such
series shall be delivered to the Trustee prior to the authentication and
delivery thereof. With respect to Securities of a series subject
<PAGE>
24
to a Periodic Offering, such Board Resolutions or Officers' Certificates may
provide general terms for Securities of such series and provide either that
the specific terms of particular Securities of such series shall be specified
in a Company Order and a Guarantor Order, or that such terms shall be
determined by the Company and the Guarantor, or one or more of their
respective agents designated in their respective Officers' Certificates, in
accordance with the Company Order and the Guarantor Order, as contemplated by
the first proviso of the third paragraph of Section 3.3.
Section 3.2. DENOMINATIONS. Unless otherwise provided as contemplated by
Section 3.1, any Registered Securities of a series shall be issuable in
denominations of $1,000 and any integral multiple thereof and any Bearer
Securities of a series shall be issuable in denominations of $5,000.
Section 3.3. EXECUTION, AUTHENTICATION, DELIVERY AND DATING. Securities
shall be executed on behalf of the Company by the Chairman or one of its
Co-Chairmen or its President and Chief Executive Officer (or any other
officer certified by any of the foregoing officers in an Officer's
Certificate to be an executive officer of the Company) and attested to by its
Secretary or an Assistant Secretary. The Company's seal shall be affixed to
the Securities, or a facsimile of such seal shall be engraved, printed, or
otherwise reproduced on the Securities. The signatures of such officers on
the Securities may be manual or facsimile. The coupons, if any, of Bearer
Securities shall bear the facsimile signature of the Chairman or one of the
Co-Chairmen or President and Chief Executive Officer (or any other officer
certified by any of the foregoing officers in an Officer's Certificate to be
an executive officer of the Company) and shall be attested by the Secretary
or an Assistant Secretary of the Company.
Securities and coupons 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, the Company may deliver Securities,
together with any coupons appertaining thereto, of any series executed by the
Company to the Trustee for authentication, together with a Company Order for the
authentication and make available for delivery such Securities, and the Trustee
in accordance with the Company Order shall authenticate and deliver such
Securities; PROVIDED, HOWEVER, that in the case of Securities offered in a
Periodic Offering, the Trustee shall authenticate and deliver such Securities
from time to time in accordance with such other procedures (including, without
limitation, the receipt by the Trustee of oral or electronic instructions from
the Company or its duly authorized agents, promptly confirmed in writing)
acceptable to the Trustee as may be specified by or pursuant to a Company Order
delivered to the Trustee prior to the time of the first authentication of
Securities of such series; PROVIDED, FURTHER, that, in connection with its sale
during the "restricted period" (as defined in Section 1.163-5(c)(2)(i)(D)(7) of
the United States Treasury Regulations), no Bearer Security shall be mailed or
otherwise delivered to any location in the United States. If any Security shall
be represented by a permanent Security in
<PAGE>
25
global form, then, for purposes of this Section and Section 3.4, the notation
of a beneficial owner's interest therein upon original issuance of such
Security or upon exchange of a portion of a temporary Security in global form
shall be deemed to be delivery in connection with the original issuance of
such beneficial owner's interest in such permanent Security in global form.
Except as permitted by Section 3.6 or 3.7, the Trustee shall not authenticate
and deliver any Bearer Security unless all coupons for interest then matured
have been detached and cancelled.
If the form or terms of the Securities of a series have been established by
or pursuant to one or more Officers' Certificates as permitted by Sections 2.1
and 3.1, in authenticating such Securities and accepting the additional
responsibilities under this Indenture in relation to such Securities, the
Trustee shall be entitled to receive, and (subject to section 315(a) through (d)
of the Trust Indenture Act) shall be fully protected in relying upon, an Opinion
of Counsel stating,
(1) all instruments furnished by the Company or the Guarantor to the
Trustee in connection with the authentication and delivery of such
Securities and coupons conform to the requirements of this Indenture and
constitute sufficient authority hereunder for the Trustee to authenticate
and deliver such Securities and coupons;
(2) that the forms and terms of such Securities and any coupons have
been established in conformity with the provisions of this Indenture;
(3) the execution and delivery of such Securities and coupons have
been duly authorized by all necessary corporate action of the Company and
such Securities and coupons have been duly executed by the Company, and
that such Securities together with any coupons appertaining thereto, when
authenticated and delivered by the Trustee and issued by the Company in the
manner and subject to any conditions specified in such Opinion of Counsel,
will constitute valid and legally binding obligations of the Company,
enforceable in accordance with their terms, subject to customary
exceptions;
(4) in the event that the forms or terms of such Securities and
coupons have been established in a supplemental indenture, the execution
and delivery of such supplemental indenture has been duly authorized by all
necessary corporate action of the Company, such supplemental indenture has
been duly executed and delivered by the Company and, assuming due
authorization, execution and delivery by the Trustee, is a valid and
binding obligation enforceable against the Company in accordance with its
terms, subject to applicable bankruptcy, insolvency and similar laws
affecting creditors' rights generally and subject, as to enforceability, to
general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law); and
(5) the amount of Securities Outstanding of such series, together with
the amount of such Securities, does not exceed any limit established under
the terms of
<PAGE>
26
this Indenture on the amount of Securities of such series that may be
authenticated and delivered;
PROVIDED, HOWEVER, that, with respect to Securities of a series subject to a
Periodic Offering, the Trustee shall be entitled to receive such Opinion of
Counsel only once at or prior to the time of the first authentication of
Securities of such series and that the Opinion of Counsel above may state:
(x) that the forms of such Securities have been, and the terms of such
Securities (when established in accordance with such procedures as may be
specified from time to time in a Company Order, all as contemplated by and
in accordance with a Board Resolution or an Officers' Certificate pursuant
to Section 3.1, as the case may be) will have been, established in
conformity with the provisions of this Indenture; and
(y) that such Securities, together with the coupons, if any,
appertaining thereto, when (1) executed by the Company, (2) completed,
authenticated and delivered by the Trustee in accordance with this
Indenture, and (3) issued by the Company in the manner and subject to any
conditions specified in such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company, enforceable in accordance with
their terms, subject to customary exceptions.
With respect to Securities of a series subject to a Periodic Offering,
the Trustee may conclusively rely, as to the authorization by the Company of any
of such Securities, the form and terms thereof and the legality, validity,
binding effect and enforceability thereof, upon the Opinion of Counsel and other
documents delivered pursuant to Sections 2.1 and 3.1 and this Section, as
applicable, at or prior to the time of the first authentication of Securities of
such series unless and until it has received written notification that such
opinion or other documents have been superseded or revoked. In connection with
the authentication and delivery of Securities of a series subject to a Periodic
Offering, the Trustee shall be entitled to assume that the Company's
instructions to authenticate and deliver such Securities do not violate any
rules, regulations or orders of any governmental agency or commission having
jurisdiction over the Company or the Guarantor.
If the form or terms of the Securities of a series have been established by
or pursuant to one or more Officers' Certificates as permitted by Sections 2.1
and 3.1, the Trustee shall have the right to decline to authenticate such
Securities if the issue of such Securities pursuant to this Indenture will
adversely affect the Trustee's own rights, duties or immunities under this
Indenture or otherwise in a manner which is not reasonably acceptable to the
Trustee. Notwithstanding the generality of the foregoing, the Trustee will not
be required to authenticate Securities denominated in a Foreign Currency if the
Trustee reasonably believes that it would be unable to perform its duties with
respect to such Securities.
Notwithstanding the provisions of Section 3.1 and of the two preceding
paragraphs, if all of the Securities of any series are not to be issued at one
time, it shall not be necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 3.1 at or prior to the
<PAGE>
27
time of the authentication of each Security of such series if such Officers'
Certificate is delivered at or prior to the authentication upon original
issuance of the first Security of such series to be issued.
If the Company shall establish pursuant to Section 3.1 that the Securities
of a series are to be issued in whole or in part in global form, then the
Company shall execute and the Trustee shall, in accordance with this Section and
the Company Order with respect to such series, authenticate and deliver one or
more Securities in global form that (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 Security or Securities in
global form, (ii) shall be registered, if a Registered Security, in the name of
the Depositary for such Security or Securities in global form or the nominee of
such Depositary and (iii) shall be delivered by the Trustee to such Depositary
or pursuant to such Depositary's instruction.
Each Depositary designated pursuant to Section 3.1 for a Registered
Security in global form must, at the time of its designation and at all times
while it serves as Depositary, be a clearing agency registered under the
Securities Exchange Act of 1934 and any other applicable statute or regulation.
The Trustee shall have no responsibility to determine if the Depositary is so
registered. Each Depositary shall enter into an agreement with the Trustee
governing the respective duties and rights of such Depositary and the Trustee
with regard to Securities issued in global form.
Each Registered Security shall be dated the date of its authentication and
each Bearer Security (including a Bearer Security represented by a temporary
global Security) shall be dated as of the date specified as contemplated by
Section 3.1.
No Security or coupon appertaining thereto shall be entitled to any
benefits under this Indenture or be valid or obligatory for any purpose until
such Security is authenticated by the manual signature of one of the authorized
signatories of the Trustee or an Authenticating Agent. Such signature upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered under this Indenture and is entitled
to the benefits of this Indenture. Except as permitted by Section 3.6 or 3.7,
the Trustee shall not authenticate and deliver any Bearer Security unless all
appurtenant coupons for interest then matured have been detached and cancelled.
Notwithstanding the foregoing, if any Security shall have been
authenticated and delivered hereunder but never issued and sold by the Company,
and the Company shall deliver such Security to the Trustee for cancellation as
provided in Section 3.9 together with a written statement (which need not comply
with Section 1.2 and need not be accompanied by an Opinion of Counsel) stating
that such Security has never been issued and sold by the Company, for all
purposes of this Indenture such Security shall be deemed never to have been
authenticated and delivered hereunder and shall not be entitled to the benefits
of this Indenture.
<PAGE>
28
Section 3.4. TEMPORARY SECURITIES. Pending the preparation of definitive
Securities of any series, the Company may execute and, upon Company Order, the
Trustee shall authenticate and deliver temporary Securities of such series which
are printed, lithographed, typewritten, mimeographed or otherwise produced, in
any authorized denomination, substantially of the tenor and form, with or
without coupons, 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
conclusively evidenced by their execution of such Securities and coupons, if
any. In the case of Securities of any series, such temporary Securities may be
in global form.
Except in the case of temporary Securities in global form, each of which
shall be exchanged in accordance with the provisions thereof, if temporary
Securities of any series are issued, the Company will cause permanent Securities
of such series to be prepared without unreasonable delay. After preparation of
such permanent Securities, the temporary Securities shall be exchangeable for
such permanent Securities of like tenor upon surrender of the temporary
Securities of such series at the office or agency of the Company pursuant to
Section 9.2 in a Place of Payment for such series, without charge to the Holder.
Upon surrender for cancellation of any one or more temporary Securities of any
series (accompanied by any unmatured coupons appertaining thereto), the Company
shall execute and the Trustee shall authenticate and deliver in exchange
therefor a like principal amount of permanent Securities of the same series of
authorized denominations and of like tenor; PROVIDED, HOWEVER, that no permanent
Bearer Security shall be delivered in exchange for a temporary Registered
Security; and PROVIDED FURTHER that no permanent Bearer Security shall be
delivered in exchange for a temporary Bearer Security unless the Trustee shall
have received from the person entitled to receive the definitive Bearer Security
a certificate substantially in the form approved in the Officers' Certificate
relating thereto and such delivery shall occur only outside the United States.
Until so exchanged, the temporary Securities of any series thereon shall in all
respects be entitled to the same benefits under this Indenture as permanent
Securities of such series except as otherwise specified as contemplated by
Section 3.1.
Section 3.5. REGISTRATION, REGISTRATION OF TRANSFER AND EXCHANGE. (a) The
Company shall cause to be kept at the Corporate Trust Office of the Trustee or
in any office or agency to be maintained by the Company in accordance with
Section 9.2 in a Place of Payment a register (the "Register") in which, subject
to such reasonable regulations as it may prescribe, the Company shall provide
for the registration of Registered Securities and the registration of transfers
of Registered Securities. The Register shall be in written form or any other
form capable of being converted into written form within a reasonable time. The
Trustee is hereby appointed "Registrar" for the purpose of registering
Registered Securities and transfers of Registered Securities as herein provided.
Upon surrender for registration of transfer of any Registered Security of
any series at the office or agency maintained pursuant to Section 9.2 in a Place
of Payment for that series, the Company shall execute, and the Trustee shall
authenticate and deliver, in the name of the designated transferee or
transferees, one or more new Registered Securities of the same series,
<PAGE>
29
of any authorized denominations, of a like aggregate principal amount and
tenor and with like terms and conditions.
Bearer Securities or any coupons appertaining thereto shall be transferable
by delivery.
At the option of the Holder, Registered Securities of any series (except a
Registered Security in global form) may be exchanged for other Registered
Securities of the same series, of any authorized denominations and of a like
aggregate principal amount containing identical terms and provisions, upon
surrender of the Registered Securities to be exchanged at such office or agency.
Whenever any Registered Securities are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Registered
Securities which the Holder making the exchange is entitled to receive. Unless
otherwise specified as contemplated by Section 3.1, Bearer Securities may not be
issued in exchange for Registered Securities.
(b) Unless otherwise specified as contemplated by Section 3.1, to the
extent permitted by law, at the option of the Holder, Bearer Securities of such
series may be exchanged for Registered Securities (if the Securities of such
series are issuable in registered form) or Bearer Securities (if Bearer
Securities of such series are issuable in more than one denomination and such
exchanges are permitted by such series) of the same series, of any authorized
denominations and of like tenor and aggregate principal amount, upon surrender
of the Bearer Securities to be exchanged at any such office or agency, with all
unmatured coupons and all matured coupons in default thereto appertaining. If
the Holder of a Bearer Security is unable to produce any such unmatured coupon
or coupons or matured coupon or coupons in default, such exchange may be
effected if the Bearer Securities are accompanied by payment in funds acceptable
to the Company and the Trustee in an amount equal to the face amount of such
missing coupon or coupons, or the surrender of such missing coupon or coupons
may be waived by the Company and the Trustee if there be furnished to them such
security or indemnity as they may require to save each of them and any Paying
Agent harmless. If thereafter the Holder of such Security shall surrender to
any Paying Agent any such missing coupon in respect of which such a payment
shall have been made, such Holder shall be entitled to receive the amount of
such payment; PROVIDED, HOWEVER, that, except as otherwise provided in Section
9.2, interest represented by coupons shall be payable only upon presentation and
surrender of those coupons at an office or agency located outside the United
States. Notwithstanding the foregoing, in case any Bearer Security of any series
is surrendered at any such office or agency in exchange for a Registered
Security of the same series after the close of business at such office or agency
on (i) any Regular Record Date and before the opening of business at such office
or agency on the relevant Interest Payment Date, or (ii) any Special Record Date
and before the opening of business at such office or agency on the related date
for payment of Defaulted Interest, such Bearer Security shall be surrendered
without the coupon relating to such Interest Payment Date or proposed date of
payment, as the case may be (or, if such coupon is so surrendered with such
Bearer Security, such coupon shall be returned to the person so surrendering the
Bearer Security), and interest or Defaulted Interest, as the case may be, will
not be payable on such Interest Payment Date or proposed date for payment, as
the case may be, in respect of the Registered Security issued in exchange
<PAGE>
30
for such Bearer Security, but will be payable only to the Holder of such
coupon, when due in accordance with the provisions of this Indenture. The
Company shall execute, and the Trustee shall authenticate and deliver, the
Registered Security or Securities which the Holder making the exchange is
entitled to receive.
Notwithstanding the foregoing, the exchange of Bearer Securities for
Registered Securities will be subject to the provisions of United States income
tax laws and regulations applicable to Securities in effect at the time of such
exchange.
(c) Except as otherwise specified pursuant to Section 3.1, in no event may
Registered Securities, including Registered Securities received in exchange for
Bearer Securities, be exchanged for Bearer Securities.
(d) If the Company shall establish pursuant to Section 3.1 that the
Registered Securities of a series are to be issued in whole or in part in the
form of one or more Securities in global form, then the Company shall execute
and the Trustee shall, in accordance with Section 3.3 and the Company Order with
respect to such series, authenticate and deliver one or more Securities in
global form in temporary or permanent form that (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 one or more
Securities in global form, (ii) shall be registered in the name of the
Depositary for such Security or Securities in global form or the nominee of such
depositary, and (iii) shall bear a legend substantially to the following effect:
"This Security may not be transferred except as a whole by the Depositary to a
nominee of the Depositary or by a nominee of the Depositary to the Depositary or
another nominee of the Depositary or by the Depositary or any such nominee to a
successor Depositary or a nominee of such successor Depositary, unless and until
this Security is exchanged in whole or in part for Securities in definitive
form."
Notwithstanding any other provision (other than the provisions set forth in
the seventh and eighth paragraphs of this Section) of this Section, unless and
until it is exchanged in whole or in part for Securities in certificated form, a
Security in global form representing all or a portion of the Securities of a
series may not be transferred except as a whole by the Depositary for such
series to a nominee of such Depositary or by a nominee of such Depositary to
such Depositary or another nominee of such Depositary or by such Depositary or
any such nominee to a successor Depositary for such series or a nominee of such
successor Depositary.
If at any time the Depositary for the Securities of a series notifies the
Company that it is unwilling or unable to continue as Depositary for the
Securities of such series or if at any time the Depositary for the Securities of
such series shall no longer be eligible under Section 3.3, the Company shall
appoint a successor Depositary with respect to the Securities of such series. If
a successor Depositary for the Securities of such series is not appointed by the
Company within 90 days after the issuer receives such notice or becomes aware of
such ineligibility, the Company's election pursuant to Section 3.1 shall no
longer be effective with respect to the Securities of such series and the
Company shall execute, and the Trustee, upon receipt of a Company Order for the
authentication and delivery of certificated Securities of
<PAGE>
31
such series of like tenor, shall authenticate and deliver Securities of such
series of like tenor in certificated form, in authorized denominations and in
an aggregate principal amount equal to the principal amount of the Security
or Securities of such series of like tenor in global form in exchange for
such Security or Securities in global form.
The Company may at any time in its sole discretion determine that
Securities of a series issued in global form shall no longer be represented by
such a Security or Securities in global form. In such event the Company shall
execute, and the Trustee, upon receipt of a Company Order for the authentication
and delivery of certificated Securities of such series of like tenor, shall
authenticate and deliver, Securities of such series of like tenor in
certificated form, in authorized denominations and in an aggregate principal
amount equal to the principal amount of the Security or Securities of such
series of like tenor in global form in exchange for such Security or Securities
in global form.
If specified by the Company pursuant to Section 3.1 with respect to a
series of Securities, the Depositary for such series may surrender a Security in
global form of such series in exchange in whole or in part for Securities of
such series in certificated form on such terms as are acceptable to the Company
and such Depositary. Thereupon, the Company shall execute, and the Trustee shall
authenticate and deliver, without service charge,
(i) to each Person specified by such Depositary a new certificated
Security or Securities of the same series of like tenor, of any authorized
denomination as requested by such Person in aggregate principal amount
equal to and in exchange for such Person's beneficial interest in the
Security in global form; and
(ii) to such Depositary a new Security in global form of like tenor in
a denomination equal to the difference, if any, between the principal
amount of the surrendered Security in global form and the aggregate
principal amount of certificated Securities delivered to Holders thereof.
Upon the exchange of a Security in global form for Securities in
certificated form, such Security in global form shall be cancelled by the
Trustee. Unless expressly provided with respect to the Securities of any series
that such Security may be exchanged for Bearer Securities, Securities in
certificated form issued in exchange for a Security in global form pursuant to
this Section shall be registered in such names and in such authorized
denominations as the Depositary for such Security in global form, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. The Trustee shall deliver such Securities to the Persons
in whose names such Securities are so registered.
Whenever any Securities are surrendered for exchange, the Company shall
execute, and the Trustee shall authenticate and deliver, the Securities which
the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or upon any
exchange of Securities shall be the valid obligations of the Company, evidencing
the same debt, and
<PAGE>
32
entitled to the same benefits under this Indenture, as the Securities
surrendered upon such registration of transfer or exchange.
Every Registered Security presented or surrendered for registration of
transfer or for exchange shall (if so required by the Company, the Registrar or
the Trustee) be duly endorsed, or be accompanied by a written instrument of
transfer in form satisfactory to those of the Company, the Registrar and the
Trustee requiring such written instrument of transfer duly executed by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registration of transfer or for any
exchange of Securities, but the Company may require payment of a sum sufficient
to cover any tax or other governmental charge that may be imposed in connection
with any registration or transfer or exchange of Securities, other than
exchanges pursuant to Section 3.4 or 10.7 not involving any transfer.
In the event of any redemption in part, the Company shall not be required
(i) to issue, register the transfer of, or exchange any Securities of any series
for a period beginning at the opening of business 15 days before any selection
for redemption of Securities of like tenor and of the series of which such
Security is a part and ending at the close of business on the earliest date on
which the relevant notice of redemption is deemed to have been given to all
Holders of Securities of like tenor and of such series to be redeemed; (ii) to
register the transfer of or exchange any Registered Security so selected for
redemption, in whole or in part, called for redemption or otherwise surrendered
for repayment, except the unredeemed or unrepaid portion of any Security being
redeemed in part; or (iii) to exchange any Bearer Security so selected for
redemption, except that such a Bearer Security may be exchanged for a Registered
Security of that series and like tenor; PROVIDED that such Registered Security
shall be simultaneously surrendered for redemption.
Section 3.6. REPLACEMENT SECURITIES. If a mutilated Security or a Security
with a mutilated coupon appertaining to it is surrendered to the Trustee,
together with, in proper cases, such security or indemnity as may be required by
the Company or the Trustee to save each of them harmless, the Company shall
execute and the Trustee shall authenticate and deliver a replacement Registered
Security, if such surrendered Security was a Registered Security, or a
replacement Bearer Security with coupons corresponding to the coupons
appertaining to the surrendered Security, if such surrendered Security was a
Bearer Security, of the same series and date of maturity, if the Trustee's
requirements are met.
If there shall be delivered to the Company, the Guarantor and the Trustee
(i) evidence to their satisfaction of the destruction, loss or theft of any
Security or Security with a destroyed, lost or stolen coupon and (ii) such
security or indemnity as may be required by them to save each of them and any
agent of either of them harmless, then, in the absence of notice to the Company,
the Guarantor or the Trustee that such Security or coupon has been acquired by a
bona fide purchaser, the Company shall execute and the Trustee shall
authenticate and deliver in lieu of any such destroyed, lost or stolen Security
or in exchange for the Security to which a destroyed, lost or stolen coupon
appertains (with all appurtenant coupons not destroyed, lost or stolen), a
replacement Registered Security if such Holder's
<PAGE>
33
claim appertains to a Registered Security, or a replacement Bearer Security
with coupons corresponding to the coupons appertaining to the destroyed, lost
or stolen Bearer Security or the Bearer Security to which such lost,
destroyed or stolen coupon appertains, if such Holder's claim appertains to a
Bearer Security, of the same series and principal amount, containing
identical terms and provisions and bearing a number not contemporaneously
outstanding with coupons corresponding to the coupons, if any, appertaining
to the destroyed, lost or stolen Security.
In case any such mutilated, destroyed, lost or stolen Security or coupon
has become or is about to become due and payable, the Company in its discretion
may, instead of issuing a new Security or coupon, pay such Security or coupon;
PROVIDED, HOWEVER, that payment of principal of and any premium or interest on
Bearer Securities shall, except as otherwise provided in Section 9.2, be payable
only at an office or agency located outside the United States and, unless
otherwise specified as contemplated by Section 3.1, any interest on Bearer
Securities shall be payable only upon presentation and surrender of the coupons
appertaining thereto.
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 counsel of the Company and of the Trustee) connected
therewith.
Every new Security of any series with its coupons, if any, issued pursuant
to this Section in lieu of any destroyed, lost or stolen Security, or in
exchange for a Security to which a destroyed, lost or stolen coupon appertains,
shall constitute an original additional contractual obligation of the Company
guaranteed by the Guarantor, whether or not the destroyed, lost or stolen
Security and its coupon, if any, or the destroyed, lost or stolen coupon, shall
be at any time enforceable by anyone, and shall be entitled to all the benefits
of this Indenture equally and proportionately with any and all other Securities
of that series and their coupons, if any, 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 or coupons.
Section 3.7. PAYMENT OF INTEREST; INTEREST RIGHTS PRESERVED. (a) Unless
otherwise provided as contemplated by Section 3.1, interest, if any, on any
Registered 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 at the office or agency
maintained for such purpose pursuant to Section 9.2; PROVIDED, HOWEVER, that, at
the option of the Company or the Guarantor, as the case may be, interest on any
series of Registered Securities that bear interest may be paid (i) by check
mailed to the address of the Person entitled thereto as it shall appear on the
Register of Holders of Securities of such series or (ii) to the extent specified
as contemplated by Section 3.1, by wire transfer to an
<PAGE>
34
account maintained by the Person entitled thereto as specified in the
Register of Holders of Securities of such series.
Unless otherwise provided as contemplated by Section 3.1, (i) interest, if
any, on Bearer Securities shall be paid only against presentation and surrender
of the coupons for such interest installments as are evidenced thereby as they
mature and (ii) original issue discount, if any, on Bearer Securities shall be
paid only against presentation and surrender of such Securities; in either case
at the office of a Paying Agent located outside the United States, unless the
Company or the Guarantor, as the case may be, shall have otherwise instructed
the Trustee in writing provided that any such instruction for payment in the
United States does not cause any Bearer Security to be treated as a
"registration-required obligation" under the United States law and regulations.
The interest, if any, on any temporary Bearer Security shall be paid, as to any
installment of interest evidenced by a coupon attached thereto, only upon
presentation and surrender of such coupon and, as to other installments of
interest, only upon presentation of such Security for notation thereon of the
payment of such interest. If at the time a payment of principal of or interest,
if any, on a Bearer Security or coupon shall become due, the payment of the full
amount so payable at the office or offices of all the Paying Agents outside the
United States is illegal or effectively precluded because of the imposition of
exchange controls or other similar restrictions on the payment of such amount in
Dollars, then the Company or the Guarantor, as the case may be, may instruct the
Trustee to make such payments at a Paying Agent located in the United States,
provided that provision for such payment in the United States would not cause
such Bearer Security to be treated as a "registration-required obligation" under
the United States law and regulations.
(b) Unless otherwise provided as contemplated by Section 3.1, any interest
on any Registered Security of any series which is payable, but is not punctually
paid or duly provided for, on any interest payment date (herein called
"Defaulted Interest") shall forthwith cease to be payable to the Holder on the
relevant Regular Record Date by virtue of having been such Holder, and such
Defaulted Interest may be paid by the Company or the Guarantor, at its election
in each case, as provided in clause (1) or (2) below:
(1) The Company or the Guarantor may elect to make payment of any
Defaulted Interest to the Persons in whose names the Registered Securities
of such series (or their respective Predecessor Securities) are registered
at the close of business on a Special Record Date for the payment of such
Defaulted Interest, which shall be fixed in the following manner. The
Company or the Guarantor 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 (1) provided. Thereupon the
Trustee shall fix a Special Record Date for the payment of such Defaulted
Interest which shall be not more than 15 days and not less than 10 days
prior to the date of the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the proposed payment. The
Trustee shall promptly notify the Company or the Guarantor of such Special
Record Date and, in the name and at the expense of the Company or the
<PAGE>
35
Guarantor, as the case may be, shall cause notice of the proposed payment
of such Defaulted Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of Registered
Securities of such series at his address as it appears in the Register, not
less than 10 days prior to such Special Record Date. Notice of the
proposed payment of such Defaulted Interest and the Special Record Date
therefor having been so mailed, such Defaulted Interest shall be paid to
the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on such Special Record Date and shall no longer be payable pursuant to the
following clause (2).
(2) The Company or the Guarantor may make payment of any Defaulted
Interest to the Persons in whose names the Registered Securities of such
series (or their respective Predecessor Securities) are registered at the
close of business on a specified date 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 or the Guarantor to the
Trustee of the proposed payment pursuant to this clause (2), such manner of
payment shall be deemed practicable by the Trustee.
(c) Subject to the foregoing provisions of this Section and Section 3.5,
each Security delivered under this Indenture upon registration of transfer of or
in exchange for or in lieu of any other Security shall carry the rights to
interest accrued and unpaid, and to accrue, which were carried by such other
Security.
(d) Any Defaulted Interest payable in respect of Bearer Securities of any
series shall be payable pursuant to such procedures as may be satisfactory to
the Trustee in such manner that there is no discrimination between the Holders
of Registered Securities (if any) and Bearer Securities of such series, and
notice of the payment date therefor shall be given by the Trustee, in the name
and at the expense of the Company, in the manner provided in Section 1.6 not
more than 25 days and not less than 20 days prior to the date of the proposed
payment.
Section 3.8. PERSONS DEEMED OWNERS. Prior to due presentment of any
Registered Security for registration of transfer, the Company, the Guarantor,
the Trustee and any agent of the Company, the Guarantor or the Trustee may treat
the Person in whose name such Registered Security is registered as the owner of
such Registered Security for the purpose of receiving payment of principal of,
premium, if any, and (subject to Section 3.7) interest on such Registered
Security and for all other purposes whatsoever, whether or not such Registered
Security be overdue, and neither the Company, the Guarantor, the Trustee nor any
agent of the Company, the Guarantor or the Trustee shall be affected by notice
to the contrary.
The Company, the Guarantor, the Trustee and any agent of the Company, the
Guarantor or the Trustee may treat the bearer of any Bearer Security and the
bearer of any coupon as the absolute owner of such Bearer Security or coupon for
the purpose of receiving payment thereof or on account thereof and for all other
purposes whatsoever, whether or not
<PAGE>
36
such Bearer Security or coupon be overdue, and neither the Company, the
Guarantor, the Trustee nor any agent of the Company, the Guarantor or the
Trustee shall be affected by notice to the contrary. All payments made to
any Holder, or upon his order, shall be valid, and, to the extent of the sum
or sums paid, effectual to satisfy and discharge the liability for moneys
payable upon such Security or coupon.
None of the Company, the Guarantor, the Trustee or any agent of the
Company, the Guarantor or the Trustee shall have any responsibility or liability
for any aspect of the records relating to or payments made on account of
beneficial ownership interests of a Security in global form, or for maintaining,
supervising or reviewing any records relating to such beneficial ownership
interests. Notwithstanding the foregoing, with respect to any Security in
global form, nothing herein shall prevent the Company, the Guarantor or the
Trustee, or any agent of the Company, the Guarantor or the Trustee, from giving
effect to any written certification, proxy or other authorization furnished by
any Depositary (or its nominee), as a Holder, with respect to such Security in
global form or impair, as between such Depositary and owners of beneficial
interests in such Security in global form, the operation of customary practices
governing the exercise of the rights of such Depositary (or its nominee) as
Holder of such Security in global form.
The Company or the Guarantor, as the case may be, shall have the right to
require a Holder, in connection with the payment of the principal of, premium,
if any, and interest, if any, on any Security, to certify information to the
Company or the Guarantor, as the case may be, or, in the absence of such
certification, the Company or the Guarantor, as the case may be, shall be
entitled to rely on any legal presumption to enable the Company or the
Guarantor, as the case may be, to determine its duties and liabilities, if any,
to deduct or withhold taxes, assessments or governmental charges for such
payment.
Section 3.9. CANCELLATION. The Company at any time may deliver to the
Trustee for cancellation any Securities or coupons previously authenticated and
delivered hereunder which the Company may have acquired in any manner
whatsoever, and may deliver to the Trustee (or to any other Person for delivery
to the Trustee) for cancellation any Securities previously authenticated
hereunder which the Company has not issued, and all Securities or coupons so
delivered shall be promptly cancelled by the Trustee. The Registrar and any
Paying Agent shall forward to the Trustee any Securities and coupons surrendered
to them for replacement, for registration of transfer, or for exchange or
payment. The Trustee shall cancel all Registered Securities and matured coupons
surrendered for replacement, for registration of transfer, or for exchange,
payment, redemption or cancellation and may dispose of cancelled Securities and
coupons and issue a certificate of destruction to the Company. All Bearer
Securities and unmatured coupons so delivered shall be held by the Trustee and,
upon instruction by the Company Order, shall be cancelled or held for
reissuance. Bearer Securities and unmatured coupons held for reissuance may be
reissued only in exchange for Bearer Securities of the same series and of like
Stated Maturity and with like terms and conditions pursuant to Section 3.5 or in
replacement of mutilated, lost, stolen or destroyed Bearer Securities of the
same series and of like Stated Maturity and with like terms and conditions or
the related coupons pursuant to Section 3.6. All Bearer Securities and
unmatured coupons held by the Trustee pending such cancellation or reissuance
shall be
<PAGE>
37
deemed to be delivered for cancellation for all purposes of this Indenture
and the Securities. The Company may not issue new Securities to replace
Securities that it has paid or delivered to the Trustee for cancellation,
except as expressly permitted in the terms of Securities for any particular
series or as permitted pursuant to the terms of this Indenture. All
cancelled Securities and coupons held by the Trustee shall be delivered to
the Company upon Company Request. The acquisition of any Securities or
coupons by the Company shall not operate as a redemption or satisfaction of
the indebtedness represented thereby unless and until such Securities or
coupons are surrendered to the Trustee for cancellation. Permanent
Securities in global form shall not be destroyed until exchanged in full for
definitive Securities or until payment thereon is made in full.
Section 3.10. COMPUTATION OF INTEREST. Except as otherwise specified as
contemplated by Section 3.1, (i) interest on any Securities that bear interest
at a fixed rate shall be computed on the basis of a 360-day year of twelve
30-day months and (ii) interest on any Securities that bear interest at a
variable rate shall be computed on the basis of the actual number of days in an
interest period divided by 360.
Section 3.11. CURRENCY AND MANNER OF PAYMENT IN RESPECT OF SECURITIES.
(a) Unless otherwise specified with respect to any Securities pursuant to
Section 3.1, with respect to Registered Securities of any series not permitting
the election provided for in paragraph (b) below or the Holders of which have
not made the election provided for in paragraph (b) below, and with respect to
Bearer Securities of any series, except as provided in paragraph (d) below,
payment of the principal of, premium, if any, and interest, if any, on any
Registered or Bearer Security of such series will be made in the currency or
currencies or currency unit or units in which such Registered Security or Bearer
Security, as the case may be, is payable. The provisions of this Section 3.11
may be modified or superseded pursuant to Section 3.1 with respect to any
Securities. For all purposes of this Indenture, currency units shall include
any composite currency.
(b) It may be provided pursuant to Section 3.1, with respect to Registered
Securities of any series, that Holders shall have the option, subject to
paragraphs (d) and (e) below, to receive payments of principal of, premium, if
any, or interest, if any, on such Registered Securities in any of the currencies
or currency units which may be designated for such election by delivering to the
Trustee (or the applicable Paying Agent) a written election with signature
guarantees and in the applicable form established pursuant to Section 3.1, not
later than the close of business on the Election Date immediately preceding the
applicable payment date. If a Holder so elects to receive such payments in any
such currency or currency unit, such election will remain in effect for such
Holder or any transferee of such Holder until changed by such Holder or such
transferee by written notice to the Trustee (or any applicable Paying Agent) for
such series of Registered Securities (but any such change must be made not later
than the close of business on the Election Date immediately preceding the next
payment date to be effective for the payment to be made on such payment date,
and no such change of election may be made with respect to payments to be made
on any Registered Security of such series with respect to which an Event of
Default has occurred or with respect to which the Company has deposited funds
pursuant to Article 4 or with respect to which a
<PAGE>
38
notice of redemption has been given by the Company). Any Holder of any such
Registered Security who shall not have delivered any such election to the
Trustee (or any applicable Paying Agent) not later than the close of business
on the applicable Election Date will be paid the amount due on the applicable
payment date in the relevant currency or currency unit as provided in Section
3.11(a). The Trustee (or the applicable Paying Agent) shall notify the
Exchange Rate Agent as soon as practicable after the Election Date of the
aggregate principal amount of Registered Securities for which Holders have
made such written election.
(c) If the election referred to in paragraph (b) above has been provided
for with respect to any Registered Securities of a series pursuant to Section
3.1, then, unless otherwise specified pursuant to Section 3.1 with respect to
any such Registered Securities, not later than the fourth Business Day after the
Election Date for each payment date for such Registered Securities, the Exchange
Rate Agent will deliver to the Company a written notice specifying, in the
currency or currencies or currency unit or units in which Registered Securities
of such series are payable, the respective aggregate amounts of principal of,
premium, if any, and interest, if any, on such Registered Securities to be paid
on such payment date, and specifying the amounts in such currency or currencies
or currency unit or units so payable in respect of such Registered Securities as
to which the Holders of Registered Securities denominated in any currency or
currencies or currency unit or units shall have elected to be paid in another
currency or currency unit as provided in paragraph (b) above. If the election
referred to in paragraph (b) above has been provided for with respect to any
Registered Securities of a series pursuant to Section 3.1, and if at least one
Holder has made such election, then, unless otherwise specified pursuant to
Section 3.1, on the second Business Day preceding such payment date the Company
will deliver to the Trustee (or the applicable Paying Agent) an Exchange Rate
Officer's Certificate in respect of the Dollar, Foreign Currency or Currencies,
ECU or other currency unit payments to be made on such payment date. Unless
otherwise specified pursuant to Section 3.1, the Dollar, Foreign Currency or
Currencies, ECU or other currency unit amount receivable by Holders of
Registered Securities who have elected payment in a currency or currency unit as
provided in paragraph (b) above shall be determined by the Company or the
Guarantor, as the case may be, on the basis of the applicable Market Exchange
Rate in effect on the second Business Day (the "Valuation Date") immediately
preceding each payment date, and such determination shall be conclusive and
binding for all purposes, absent manifest error.
(d) If a Conversion Event occurs with respect to a Foreign Currency, ECU or
any other currency unit in which any of the Securities are denominated or
payable otherwise than pursuant to an election provided for pursuant to
paragraph (b) above, then, with respect to each date for the payment of
principal of, premium, if any, and interest, if any, on the applicable
Securities denominated or payable in such Foreign Currency, ECU or such other
currency unit occurring after the last date on which such Foreign Currency, ECU
or such other currency unit was used (the "Conversion Date"), the Dollar shall
be the currency of payment for use on each such payment date (but such Foreign
Currency, ECU or such other currency unit that was previously the currency of
payment shall, at the Company's election, resume being the currency of payment
on the first such payment date preceded by 15 Business Days during which the
circumstances which gave rise to the Dollar becoming such currency no longer
prevail). Unless otherwise specified pursuant to Section 3.1, the Dollar
<PAGE>
39
amount to be paid by the Company to the Trustee or any applicable Paying
Agent and by the Trustee or any applicable Paying Agent to the Holders of
such Securities with respect to such payment date shall be, in the case of a
Foreign Currency other than a currency unit, the Dollar Equivalent of the
Foreign Currency or, in the case of a Foreign Currency that is a currency
unit, the Dollar Equivalent of the Currency Unit, in each case as determined
by the Exchange Rate Agent in the manner provided in paragraph (f) or (g)
below.
(e) Unless otherwise specified pursuant to Section 3.1, if the Holder of a
Registered Security denominated in any currency or currency unit shall have
elected to be paid in another currency or currency unit or in other currencies
as provided in paragraph (b) above, and (i) a Conversion Event occurs with
respect to any such elected currency or currency unit, such Holder shall receive
payment in the currency or currency unit in which payment would have been made
in the absence of such election and (ii) if a Conversion Event occurs with
respect to the currency or currency unit in which payment would have been made
in the absence of such election, such Holder shall receive payment in Dollars as
provided in paragraph (d) of this Section 3.11 (but, subject to any contravening
valid election pursuant to paragraph (b) above, the elected payment currency or
currency unit, in the case of the circumstances described in clause (i) above,
or the payment currency or currency unit in the absence of such election, in the
case of the circumstances described in clause (ii) above, shall, at the
Company's or the Guarantor's election, as the case may be, resume being the
currency or currency unit of payment with respect to Holders who have so
elected, but only with respect to payments on payment dates preceded by 15
Business Days during which the circumstances which gave rise to such currency or
currency unit, in the case of the circumstances described in clause (i) above,
or the Dollar, in the case of the circumstances described in clause (ii) above,
becoming the currency or currency unit, as applicable, of payment, no longer
prevail).
(f) The "Dollar Equivalent of the Foreign Currency" shall be determined by
the Exchange Rate Agent and shall be obtained for each subsequent payment date
by the Exchange Rate Agent by converting the specified Foreign Currency into
Dollars at the Market Exchange Rate on the Conversion Date.
(g) The "Dollar Equivalent of the Currency Unit" shall be determined by the
Exchange Rate Agent and, subject to the provisions of paragraph (h) below, shall
be the sum of each amount obtained by converting the Specified Amount of each
Component Currency (as each such term is defined in paragraph (h) below) into
Dollars at the Market Exchange Rate for such Component Currency on the Valuation
Date with respect to each payment.
(h) For purposes of this Section 3.11 the following terms shall have the
following meanings:
A "Component Currency" shall mean any currency which, on the Conversion
Date, was a component currency of the relevant currency unit, including, but not
limited to, ECU.
<PAGE>
40
"Election Date" shall mean the Regular Record Date for the applicable
series of Registered Securities as specified pursuant to Section 3.1 by which
the written election referred to in Section 3.11(b) may be made.
A "Specified Amount" of a Component Currency shall mean the number of units
of such Component Currency or fractions thereof which such Component Currency
represented in the relevant currency unit, including, but not limited to, ECU,
on the Conversion Date. If after the Conversion Date the official unit of any
Component Currency is altered by way of combination or subdivision, the
Specified Amount of such Component Currency shall be divided or multiplied in
the same proportion. If after the Conversion Date two or more Component
Currencies are consolidated into a single currency, the respective Specified
Amounts of such Component Currencies shall be replaced by an amount in such
single currency equal to the sum of the respective Specified Amounts of such
consolidated Component Currencies expressed in such single currency, and such
amount shall thereafter be a Specified Amount and such single currency shall
thereafter be a Component Currency. If after the Conversion Date any Component
Currency shall be divided into two or more currencies, the Specified Amount of
such Component Currency shall be replaced by specified amounts of such two or
more currencies, the sum of which, at the Market Exchange Rate of such two or
more currencies on the date of such replacement, shall be equal to the Specified
Amount of such former Component Currency and such amounts shall thereafter be
Specified Amounts and such currencies shall thereafter be Component Currencies.
If, after the Conversion Date of the relevant currency unit, including, but not
limited to, ECU, a Conversion Event (other than any event referred to above in
this definition of "Specified Amount") occurs with respect to any Component
Currency of such currency unit and is continuing on the applicable Valuation
Date, the Specified Amount of such Component Currency shall, for purposes of
calculating the Dollar Equivalent of the Currency Unit, be converted into
Dollars at the Market Exchange Rate in effect on the Conversion Date of such
Component Currency.
All decisions and determinations of the Exchange Rate Agent regarding the
Dollar Equivalent of the Foreign Currency, the Dollar Equivalent of the Currency
Unit, the Market Exchange Rate and changes in the Specified Amounts as specified
above shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive for all purposes and irrevocably binding upon the Company,
the Guarantor, the Trustee (and any applicable Paying Agent) and all Holders of
Securities denominated or payable in the relevant currency, currencies or
currency units. The Exchange Rate Agent shall promptly give written notice to
the Company, the Guarantor and the Trustee of any such decision or
determination.
In the event that the Company or the Guarantor, as the case may be,
determines in good faith that a Conversion Event has occurred with respect to a
Foreign Currency, the Company or the Guarantor, as the case may be, will
promptly give written notice thereof to the Trustee (or any applicable Paying
Agent) and to the Exchange Rate Agent (and the Trustee (or such Paying Agent)
will promptly thereafter give notice in the manner provided in Section 1.6 to
the affected Holders) specifying the Conversion Date. In the event the Company
or the Guarantor, as the case may be, so determines that a Conversion Event has
occurred with respect to ECU or any other currency unit in which Securities are
denominated
<PAGE>
41
or payable, the Company or the Guarantor, as the case may be, will promptly
give written notice thereof to the Trustee (or any applicable Paying Agent)
and to the Exchange Rate Agent (and the Trustee (or such Paying Agent) will
promptly thereafter give notice in the manner provided in Section 1.6 to the
affected Holders) specifying the Conversion Date and the Specified Amount of
each Component Currency on the Conversion Date. In the event the Company or
the Guarantor, as the case may be, determines in good faith that any
subsequent change in any Component Currency as set forth in the definition of
Specified Amount above has occurred, the Company or the Guarantor, as the
case may be, will similarly give written notice to the Trustee (or any
applicable Paying Agent) and to the Exchange Rate Agent.
The Trustee of the appropriate series of Securities shall be fully
justified and protected in relying and acting upon information received by it
from the Company, the Guarantor and the Exchange Rate Agent and shall not
otherwise have any duty or obligation to determine the accuracy or validity of
such information independent of the Company, the Guarantor or the Exchange Rate
Agent.
Section 3.12. APPOINTMENT AND RESIGNATION OF EXCHANGE RATE AGENT.
(a) Unless otherwise specified pursuant to Section 3.1, if and so long as
the Securities of any series (i) are denominated in a currency other than
Dollars or (ii) may be payable in a currency other than Dollars, or so long as
it is required under any other provision of this Indenture, then the Company and
the Guarantor will maintain with respect to each such series of Securities, or
as so required, at least one Exchange Rate Agent. The Company and the Guarantor
will cause the Exchange Rate Agent to make the necessary foreign exchange
determinations at the time and in the manner specified pursuant to Section 3.11
for the purpose of determining the applicable rate of exchange and, if
applicable, for the purpose of converting the issued currency or currencies or
currency unit or units into the applicable payment currency or currency unit for
the payment of principal, premium, if any, and interest, if any, pursuant to
Section 3.11.
(b) No resignation of the Exchange Rate Agent and no appointment of a
successor Exchange Rate Agent pursuant to this Section shall become effective
until the acceptance of appointment by the successor Exchange Rate Agent as
evidenced by a written instrument delivered to the Company, the Guarantor and
the Trustee of the appropriate series of Securities accepting such appointment
executed by the successor Exchange Rate Agent.
(c) If the Exchange Rate Agent shall resign, be removed or become incapable
of acting, or if a vacancy shall occur in the office of the Exchange Rate Agency
for any cause, with respect to the Securities of one or more series, the Company
and the Guarantor shall promptly appoint a successor Exchange Rate Agent or
Exchange Rate Agents with respect to the Securities of that or those series (it
being understood that any such successor Exchange Rate Agent may be appointed
with respect to the Securities of one or more or all of such series and that,
unless otherwise specified pursuant to Section 3.1, at any time there shall only
be one Exchange Rate Agent with respect to the Securities of any particular
series that are originally issued by the Company on the same date and that are
initially denominated and/or payable in the same currency or currencies or
currency unit or units).
<PAGE>
42
Section 3.13. 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 addition to the other identification numbers printed on the
Securities) 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 any defect in or omission of such numbers.
Section 3.14. JUDGMENTS. If for the purpose of obtaining a judgment in
any court with respect to any obligation of the Company or the Guarantor, as the
case may be, hereunder or under any Security, it shall become necessary to
convert into any other currency any amount in the currency due hereunder or
under such Security, then such conversion shall be made at the Market Exchange
Rate as in effect on the date the Company or the Guarantor as the case may be,
shall make payment to any Person in satisfaction of such judgment. If pursuant
to any such judgment, conversion shall be made on a date other than the date
payment is made and there shall occur a change between such Market Exchange Rate
and the Market Exchange Rate as in effect on the date of payment, the Company or
the Guarantor, as the case may be, agrees to pay such additional amounts (if
any) as may be necessary to ensure that the amount paid is equal to the amount
in such other currency which, when converted at the Market Exchange Rate as in
effect on the date of payment or distribution, is the amount then due hereunder
or under such Security. Any amount due from the Company or the Guarantor, as
the case may be, under this Section 3.14 shall be due as a separate debt and is
not to be affected by or merged into any judgment being obtained for any other
sums due hereunder or in respect of any Security. In no event, however, shall
the Company or the Guarantor, as the case may be, be required to pay more in the
currency or currency unit due hereunder or under such Security at the Market
Exchange Rate as in effect when payment is made than the amount of currency
stated to be due hereunder or under such Security so that in any event the
Company's or the Guarantor's, as the case may be, obligations hereunder or under
such Security will be effectively maintained as obligations in such currency,
and the Company or the Guarantor, as the case may be, shall be entitled to
withhold (or be reimbursed for, as the case may be) any excess of the amount
actually realized upon any such conversion over the amount due and payable on
the date of payment or distribution.
ARTICLE 4
SATISFACTION, DISCHARGE AND DEFEASANCE
Section 4.1. TERMINATION OF COMPANY'S OBLIGATIONS UNDER THE INDENTURE.
Except as otherwise provided as contemplated by Section 3.1, this Indenture
shall upon Company Request or Guarantor Request, as the case may be, cease to be
of further effect with respect to Securities of or within any series and any
coupons appertaining thereto (except as to any surviving rights of registration
of transfer or exchange of such Securities and replacement of such Securities
which may have been lost, stolen or mutilated as herein expressly provided for)
and the Trustee, at the expense of the Company or the Guarantor, as the case may
be,
<PAGE>
43
shall execute proper instruments acknowledging satisfaction and discharge of
this Indenture with respect to such Securities and any coupons appertaining
thereto when
(1) either
(A) all such Securities previously authenticated and delivered and
all coupons appertaining thereto (other than (i) such coupons appertaining
to Bearer Securities surrendered in exchange for Registered Securities and
maturing after such exchange, surrender of which is not required or has
been waived as provided in Section 3.5, (ii) such Securities and coupons
which have been destroyed, lost or stolen and which have been replaced or
paid as provided in Section 3.6, (iii) such coupons appertaining to Bearer
Securities called for redemption and maturing after the relevant Redemption
Date, surrender of which has been waived as provided in Section 10.6 and
(iv) such Securities and coupons 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 9.3) have been delivered to the Trustee for cancellation; or
(B) all Securities of such series and, in the case of (i) or (ii)
below, any coupons appertaining thereto not theretofore 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) if redeemable at the option of the Company, are to be
called for redemption within one year under arrangements satisfactory
to the Trustee for the giving of notice of redemption by the Trustee
in the name, and at the expense, of, the Company or the Guarantor, as
the case may be,
and the Company or the Guarantor, in the case of (i), (ii) or (iii) above,
has irrevocably deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose an amount in the currency or
currencies or currency unit or units in which the Securities of such series
are payable, sufficient to pay and discharge the entire indebtedness on
such Securities and such coupons not theretofore delivered to the Trustee
for cancellation, for principal, premium, if any, and interest, with
respect thereto, 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;
(2) the Company or the Guarantor has paid or caused to be paid all
other sums payable hereunder by the Company and the Guarantor; and
(3) the Company and the Guarantor have delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each stating that all
conditions
<PAGE>
44
precedent herein provided for relating to the satisfaction and discharge
of this Indenture as to such series have been complied with.
Notwithstanding the satisfaction and discharge of this Indenture, the obligation
of the Company to the Trustee and any predecessor Trustee under Section 6.9, the
obligations of the Company to any Authenticating Agent under Section 6.14 and,
if money shall have been deposited with the Trustee pursuant to subclause (B) of
clause (1) of this Section, the obligations of the Trustee under Section 4.2 and
the last paragraph of Section 9.3 shall survive. If, after the deposit referred
to in Section 4.1 has been made, (x) the Holder of a Security is entitled to,
and does, elect pursuant to Section 3.11(b), to receive payment in a currency
other than that in which the deposit pursuant to Section 4.1 was made, or (y) if
a Conversion Event occurs with respect to the currency in which the deposit was
made or elected to be received by the Holder pursuant to Section 3.11(b), then
the indebtedness represented by such Security shall be fully discharged to the
extent that the deposit made with respect to such Security shall be converted
into the currency in which such payment is made.
Section 4.2. APPLICATION OF TRUST FUNDS. Subject to the provisions of the
last paragraph of Section 9.3, all money deposited with the Trustee pursuant to
Section 4.1 shall be held in trust and applied by it, in accordance with the
provisions of the Securities, the coupons 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, premium, if any, and any interest for whose payment such money
has been deposited with or received by the Trustee, but such money need not be
segregated from other funds except to the extent required by law.
Section 4.3. APPLICABILITY OF DEFEASANCE PROVISIONS; COMPANY'S OPTION TO
EFFECT DEFEASANCE OR COVENANT DEFEASANCE. If pursuant to Section 3.1 provision
is made for either or both of (i) defeasance of the Securities of or within a
series under Section 4.4 or (ii) covenant defeasance of the Securities of or
within a series under Section 4.5, then the provisions of such Section or
Sections, as the case may be, together with the provisions of Sections 4.6
through 4.9 inclusive, with such modifications thereto as may be specified
pursuant to Section 3.1 with respect to any Securities, shall be applicable to
such Securities and any coupons appertaining thereto, and the Company may at its
option, at any time, with respect to such Securities and any coupons
appertaining thereto, elect to have Section 4.4 (if applicable) or Section 4.5
(if applicable) be applied to such Outstanding Securities and any coupons
appertaining thereto upon compliance with the conditions set forth below in this
Article.
Section 4.4. DEFEASANCE AND DISCHARGE. Upon the Company's exercise of the
option specified in Section 4.3 applicable to this Section with respect to the
Securities of or within a series, the Company and the Guarantor shall be deemed
to have been discharged from their obligations with respect to such Securities
and any coupons appertaining thereto on the date the conditions set forth in
Section 4.6 are satisfied (hereinafter "defeasance"). For this purpose, such
defeasance means that the Company shall be deemed to have paid and discharged
the entire indebtedness represented by such Securities and any coupons
appertaining thereto which shall thereafter be deemed to be "Outstanding" only
for the purposes of Section 4.7 and the other Sections of this Indenture
referred to in clause (ii) of
<PAGE>
45
this Section, and to have satisfied all its other obligations under such
Securities and any coupons appertaining thereto and this Indenture insofar as
such Securities and any coupons appertaining thereto are concerned (and the
Trustee, at the expense of the Company, shall on Company Order execute proper
instruments acknowledging the same), except the following which shall survive
until otherwise terminated or discharged hereunder: (i) the rights of Holders
of such Securities and any coupons appertaining thereto to receive, solely
from the trust funds described in Section 4.6(a) and as more fully set forth
in such Section, payments in respect of the principal of, premium, if any,
and interest, if any, on such Securities or any coupons appertaining thereto
when such payments are due; (ii) the Company's and the Guarantor's
obligations with respect to such Securities under Sections 3.5, 3.6, 9.2 and
9.3 and with respect to the payment of additional amounts, if any, payable
with respect to such Securities as specified pursuant to Section 3.1(b)(16);
(iii) the rights, powers, trusts, duties and immunities of the Trustee
hereunder; and (iv) this Article 4. Subject to compliance with this Article
4, the Company may exercise its option under this Section notwithstanding the
prior exercise of its option under Section 4.5 with respect to such
Securities and any coupons appertaining thereto. Following a defeasance,
payment of such Securities may not be accelerated because of a Default or an
Event of Default.
Section 4.5. COVENANT DEFEASANCE. Upon the Company's exercise of the option
specified in Section 4.3 applicable to this Section with respect to any
Securities of or within a series, the Company and the Guarantor shall be
released from their obligations under Sections 7.1, 7.2, 9.4 and 9.5, and, if
specified pursuant to Section 3.1, its obligations under any other covenant,
with respect to such Securities and any coupons appertaining thereto on and
after the date the conditions set forth in Section 4.6 are satisfied
(hereinafter, "covenant defeasance"), and such Securities and any coupons
appertaining thereto shall thereafter be deemed to be not "Outstanding" for the
purposes of any direction, waiver, consent or declaration or Act of Holders (and
the consequences of any thereof) in connection with Sections 7.1, 7.2, 9.4 and
9.5, or such other covenant, but shall continue to be deemed "Outstanding" for
all other purposes hereunder. For this purpose, such covenant defeasance means
that, with respect to such Securities and any coupons appertaining thereto, the
Company and the Guarantor may omit to comply with and shall have no liability in
respect of any term, condition or limitation set forth in any such Section or
such other covenant, whether directly or indirectly, by reason of any reference
elsewhere herein to any such Section or such other covenant or by reason of
reference in any such Section or such other covenant to any other provision
herein or in any other document and such omission to comply shall not constitute
a Default or an Event of Default under Section 5.1(3) or 5.1(6) or otherwise, as
the case may be, but, except as specified above, the remainder of this Indenture
and such Securities and any coupons appertaining thereto shall be unaffected
thereby.
Section 4.6. CONDITIONS TO DEFEASANCE OR COVENANT DEFEASANCE. The following
shall be the conditions to application of Section 4.4 or Section 4.5 to any
Securities of or within a series and any coupons appertaining thereto:
(a) The Company or the Guarantor shall have deposited or caused to be
deposited irrevocably with the Trustee (or another trustee satisfying the
requirements of Section 6.12 who shall agree to comply with, and shall be
entitled to the benefits of, the provisions of
<PAGE>
46
Sections 4.3 through 4.9 inclusive and the last paragraph of Section 9.3
applicable to the Trustee, for purposes of such Sections also a "Trustee") as
trust funds in trust for the purpose of making the payments referred to in
clauses (x) and (y) of this Section 4.6(a), specifically pledged as security
for, and dedicated solely to, the benefit of the Holders of such Securities
and any coupons appertaining thereto, with instructions to the Trustee as to
the application thereof, (A) money in an amount (in such currency, currencies
or currency unit in which such Securities and any coupons appertaining
thereto are then specified as payable at Maturity), or (B) if Securities of
such series are not subject to repayment at the option of Holders, 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 referred to in clause (x) or (y) of this
Section 4.6(a), money in an amount or (C) a combination thereof in an amount,
sufficient, in the opinion of a nationally recognized firm of independent
certified public accountants expressed in a written certification thereof
delivered to the Trustee, to pay and discharge, and which shall be applied by
the Trustee to pay and discharge, (x) the principal of, premium, if any, and
interest, if any, on such Securities and any coupons appertaining thereto on
the Maturity of such principal or installment of principal or interest and
(y) any mandatory sinking fund payments applicable to such Securities on the
day on which such payments are due and payable in accordance with the terms
of this Indenture and such Securities and any coupons appertaining thereto.
Before such a deposit the Company may make arrangements satisfactory to the
Trustee for the redemption of Securities at a future date or dates in
accordance with Article 10 which shall be given effect in applying the
foregoing.
(b) Such defeasance or covenant defeasance shall not result in a breach or
violation of, or constitute a Default or Event of Default under, this Indenture
or result in a breach or violation of, or constitute a default under, any other
material agreement or instrument to which the Company or the Guarantor is a
party or by which it is bound.
(c) No Default or Event of Default under Section 5.1(4) or 5.1(5) with
respect to such Securities and any coupons appertaining thereto shall have
occurred and be continuing during the period commencing on the date of such
deposit and ending on the 91st day after such date (it being understood that
this condition shall not be deemed satisfied until the expiration of such
period).
(d) In the case of an election under Section 4.4, the Company shall have
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel to
the effect that (i) the Company has received from, or there has been published
by, the Internal Revenue Service a ruling, or (ii) since the date of execution
of this Indenture, there has been a change in the applicable Federal income tax
law, in either case to the effect that, and based thereon such opinion shall
confirm that, the Holders of such Securities and any coupons appertaining
thereto will not recognize income, gain or loss for Federal income tax purposes
as a result of such defeasance 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 deposit, defeasance and discharge had not occurred.
<PAGE>
47
(e) In the case of an election under Section 4.5, the Company shall have
delivered to the Trustee an Opinion of Counsel to the effect that the Holders of
such Securities and any coupons appertaining thereto will not recognize income,
gain or loss for Federal income tax purposes as a result of such covenant
defeasance and will be subject to Federal income tax on the same amounts, in the
same manner and at the same times as would have been the case if such covenant
defeasance had not occurred.
(f) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent to the defeasance under Section 4.4 or the covenant defeasance under
Section 4.5 (as the case may be) have been complied with and an Opinion of
Counsel to the effect that either (i) as a result of a deposit pursuant to
subsection (a) above and the related exercise of the Company's option under
Section 4.4 or Section 4.5 (as the case may be), registration is not required
under the Investment Company Act of 1940, as amended, by the Company, with
respect to the trust funds representing such deposit or by the trustee for such
trust funds or (ii) all necessary registrations under said act have been
effected.
(g) Such defeasance or covenant defeasance shall be effected in compliance
with any additional or substitute terms, conditions or limitations which may be
imposed on the Company or the Guarantor in connection therewith as contemplated
by Section 3.1.
Section 4.7. DEPOSITED MONEY AND GOVERNMENT OBLIGATIONS TO BE HELD IN
TRUST. Subject to the provisions of the last paragraph of Section 9.3, all money
and Government Obligations (or other property as may be provided pursuant to
Section 3.1, including the proceeds thereof) deposited with the Trustee pursuant
to Section 4.6 in respect of any Securities of any series and any coupons
appertaining thereto shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and any coupons appertaining
thereto 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 Holders of such Securities and any coupons
appertaining thereto of all sums due and to become due thereon in respect of
principal, premium, if any, and interest, if any, but such money need not be
segregated from other funds except to the extent required by law.
Unless otherwise specified with respect to any Security pursuant to Section
3.1, if, after a deposit referred to in Section 4.6(a) has been made, (i) the
Holder of a Security in respect of which such deposit was made is entitled to,
and does, elect pursuant to Section 3.11(b) or the terms of such Security to
receive payment in a currency or currency unit other than that in which the
deposit pursuant to Section 4.6(a) has been made in respect of such Security, or
(ii) a Conversion Event occurs as contemplated in Section 3.11(d) or 3.11(e) or
by the terms of any Security in respect of which the deposit pursuant to Section
4.6(a) has been made, the indebtedness represented by such Security and any
coupons appertaining thereto shall be deemed to have been, and will be, fully
discharged and satisfied through the payment of the principal of, premium, if
any, and interest, if any, on such Security as the same becomes due out of the
proceeds yielded by converting (from time to time as specified below in the case
of any such election) the amount or other property deposited in respect of such
Security into the currency or currency unit in which such Security becomes
payable as a
<PAGE>
48
result of such election or Conversion Event based on the applicable Market
Exchange Rate for such currency or currency unit in effect on the second
Business Day prior to each payment date, except in the case of a Conversion
Event with respect to such currency or currency unit which is in effect (as
nearly as feasible) at the time of the Conversion Event.
Section 4.8. TRANSFERS AND DISTRIBUTION AT COMPANY REQUEST. To the extent
permitted by the Financial Accounting Standards Board Statement of Financial
Accounting Standards No. 76, as amended or interpreted by the Financial
Accounting Standards Board from time to time, or any successor thereto
("Standard No. 76"), or to the extent permitted by the Commission, the Trustee
shall, from time to time, take one or more of the following actions as specified
in a Company Request:
(a) Retransfer, reassign and deliver to the Company or the Guarantor any
securities deposited with the Trustee pursuant to Section 4.6(a), provided that
the Company or the Guarantor, as the case may be, shall in substitution
therefor, simultaneously transfer, assign and deliver to the Trustee other
Government Obligations appropriate to satisfy the Company's or the Guarantor's
obligations, as the case may be, in respect of the relevant Securities; and
(b) The Trustee (and any Paying Agent) shall promptly pay to the Company or
the Guarantor, as the case may be, upon Company Request or Guarantor Request, as
applicable, any excess money or securities held by them at any time, including,
without limitation, any assets deposited with the Trustee pursuant to Section
4.6(a) exceeding those necessary for the purposes of Section 4.6(a).
The Trustee shall not take the actions described in subsections (a) and (b) of
this Section 4.8 unless it shall have first received a written report of Ernst &
Young, or another nationally recognized independent public accounting firm (i)
expressing their opinion that the contemplated action is permitted by Standard
No. 76 or the Commission, for transactions accounted for as extinguishment of
debt under the circumstances described in paragraph 3.c of Standard No. 76 or
any successor provision and (ii) verifying the accuracy, after giving effect to
such action or actions, of the computations which demonstrate that the amounts
remaining to be earned on the Government Obligations deposited with the Trustee
pursuant to Section 4.6(a) will be sufficient for purposes of Section 4.6(a).
Section 4.9. REINSTATEMENT. If the Trustee or the Paying Agent is unable
to apply any money in accordance with Section 4.7 by reason of any order or
judgment of any court or governmental authority enjoining, restraining or
otherwise prohibiting such application, then the Company's or the Guarantor's,
as the case may be, obligations under this Indenture and the Securities of the
series with respect to which such money was deposited shall be revived and
reinstated as though no deposit had occurred pursuant to this Article 4 until
such time as the Trustee or Paying Agent is permitted to apply all such money in
accordance with Section 4.7; PROVIDED, however, that if the Company or the
Guarantor, as the case may be, makes any payment of principal of (or premium, if
any, on) or interest on any Securities of any series following the reinstatement
of the Company's or the Guarantor's, as the case may be, obligations, the
Company or the Guarantor, as the case may be, shall be subrogated to the
<PAGE>
49
rights of the Holders of such Securities to receive such payment from the
money held by the Trustee or the Paying Agent with respect to the Securities
of such series.
ARTICLE 5
DEFAULTS AND REMEDIES
Section 5.1. EVENTS OF DEFAULT. An "Event of Default" occurs with respect
to the Securities of any series if (regardless of the reason for such Event of
Default and whether it shall be occasioned by the provisions of Article 13 or 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):
(1) the Company defaults in the payment of interest on any Security of
that series or any coupon appertaining thereto or any additional amount
payable with respect to any Security of that series as specified pursuant
to Section 3.1(b)(16) when the same becomes due and payable and such
default continues for a period of 30 days;
(2) the Company defaults in the payment of the principal of or any
premium on any Security of that series when the same becomes due and
payable at its Maturity or on redemption or otherwise, or in the payment of
a mandatory sinking fund payment when and as due by the terms of the
Securities of that series;
(3) the Company or the Guarantor defaults in the performance of, or
breaches, any covenant or agreement of the Company or the Guarantor
contained in this Indenture, any supplement indenture, and any board
resolution referred to therein under which the Securities of any series may
have issued (other than a covenant or warranty a default in whose
performance or whose breach is elsewhere in this Section specifically dealt
with), and such default or breach continues for a period of 60 days after
there has been given, by registered or certified mail, to the Company and
the Guarantor by the Trustee or to the Company, the Guarantor and the
Trustee by the Holders of at least 25% in principal amount of the
Outstanding Securities of that series, a written notice specifying such
default or breach and requiring it to be remedied and stating that such
notice is a "Notice of Default" hereunder;
(4) the Company or the Guarantor pursuant to or within the meaning of
any Bankruptcy Law (A) commences a voluntary case, (B) consents to the
entry of an order for relief against it in an involuntary case, (C)
consents to the appointment of a Custodian of it or for all or
substantially all of its property, or (D) makes a general assignment for
the benefit of its creditors;
(5) a court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that (A) is for relief against the Company or the
Guarantor in an involuntary case, (B) appoints a Custodian of the Company
or the Guarantor or for all
<PAGE>
50
or substantially all of its property, or (C) orders the liquidation of
the Company or the Guarantor; and the order or decree remains unstayed
and in effect for 90 days; or
(6) any other Event of Default provided as contemplated by Section 3.1
with respect to Securities of that series.
The term "Bankruptcy Law" means Title 11, U.S. Code, or any similar federal
or state law for the relief of debtors. The term "Custodian" means any
receiver, trustee, assignee, liquidator or similar official under any Bankruptcy
Law.
Section 5.2. ACCELERATION; RESCISSION AND ANNULMENT. If an Event of Default
with respect to the Securities of any series at the time Outstanding occurs and
is continuing, the Trustee or the Holders of at least 25% in aggregate principal
amount of all of the outstanding Securities of that series, by written notice to
the Company and the Guarantor (and, if given by the Holders, to the Trustee),
may declare the principal (or, if the Securities of that series are Original
Issue Discount Securities or Indexed Securities, such portion of the principal
amount as may be specified in the terms of that series) of all the Securities of
that series to be due and payable and upon any such declaration such principal
(or, in the case of Original Issue Discount Securities or Indexed Securities,
such specified amount) shall be immediately due and payable.
At any time after such a declaration of acceleration with respect to
Securities of any series has been made and before a judgment or decree for
payment of the money due has been obtained by the Trustee as hereinafter in this
Article provided, the Holders of a majority in aggregate principal amount of the
outstanding Securities of that series, by written notice to the Trustee, may
rescind and annul such declaration and its consequences if all existing Defaults
and Events of Default with respect to Securities of that series, other than the
non-payment of the principal of Securities of that series which have become due
solely by such declaration of acceleration, have been cured or waived as
provided in Section 5.7. No such rescission shall affect any subsequent default
or impair any right consequent thereon.
Section 5.3. COLLECTION OF INDEBTEDNESS AND SUITS FOR ENFORCEMENT BY
TRUSTEE. The Company covenants that if
(1) default is made in the payment of any interest on any Security or
coupon, if any, when such interest becomes due and payable and such default
continues for a period of 30 days, or
(2) default is made in the payment of the principal of (or premium, if
any, on) any Security at the Maturity thereof and such default continues
for a period of 10 days, or
(3) default is made in the making or satisfaction of any sinking fund
payment or analogous obligation when the same becomes due pursuant to the
terms of the Securities of any series,
<PAGE>
51
the Company will, upon demand of the Trustee, pay to it, for the benefit of the
Holders of such Securities or coupons, if any, the whole amount then due and
payable on such Securities for principal, premium, if any, and interest and, to
the extent that payment of such interest shall be legally enforceable, interest
on any overdue principal, premium, if any, and on any overdue interest, at the
rate or rates prescribed therefor in such Securities or coupons, if any, and, in
addition thereto, such further amount as shall be sufficient to cover the costs
and expenses of collection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If the Company fails to pay such amount 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 such Securities and coupons, if
any, and collect the moneys adjudged or decreed to be payable in the manner
provided by law out of the property of the Company or any other obligor upon
such Securities and coupons, if any, wherever situated.
If an Event of Default with respect to Securities of any series occurs and
is continuing, the Trustee may in its discretion proceed to protect and enforce
its rights and the rights of the Holders of Securities of such series by such
appropriate judicial proceedings as the Trustee shall deem most effectual to
protect and enforce any such rights, whether for the specific enforcement of any
covenant or agreement in this Indenture or in aid of the exercise of any power
granted herein, or to enforce any other proper remedy.
Section 5.4. TRUSTEE MAY FILE PROOFS OF CLAIM. In case of the pendency of
any receivership, insolvency, liquidation, bankruptcy, reorganization,
arrangement, adjustment, composition or other judicial proceedings, or any
voluntary or involuntary case under the Federal bankruptcy laws, as now or
hereafter constituted, relative to the Company, the Guarantor or any other
obligor upon the Securities and coupons, if any, of a particular series or the
property of the Company, the Guarantor or of such other obligor, the Trustee
(irrespective of whether the principal of such Securities shall then be due and
payable as therein expressed or by declaration of acceleration or otherwise and
irrespective of whether the Trustee shall have made any demand on the Company
for the payment of overdue principal or interest) shall be entitled and
empowered, by intervention in such proceeding or otherwise,
(i) to file and prove a claim for the whole amount of principal (or,
if the Securities of such series are Original Issue Discount Securities,
such portion of the principal amount as may be due and payable with respect
to such series pursuant to a declaration in accordance with Section 5.2)
(and premium, if any) and interest owing and unpaid in respect of the
Securities and any coupons of such series and to file such other papers or
documents as may be necessary or advisable in order to have the claims of
the Trustee (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel) and of
the Holders of such Securities and any coupons allowed in such judicial
proceeding, and
<PAGE>
52
(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, custodian, liquidator, sequestrator (or
other similar official) in any such proceeding is hereby authorized by each such
Holder to make such payments to the Trustee, and in the event that the Trustee
shall consent to the making of such payments directly to such Holders, to pay to
the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.9.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or accept or adopt on behalf of any Holder any plan of
reorganization, arrangement, adjustment or composition affecting the Securities
and any coupons of such series or the rights of any Holder thereof, or to
authorize the Trustee to vote in respect of the claim of any Holder in any such
proceeding.
Section 5.5. TRUSTEE MAY ENFORCE CLAIMS WITHOUT POSSESSION OF SECURITIES.
All rights of action and claims under this Indenture or the Securities may be
prosecuted and enforced by the Trustee without the possession of any of the
Securities or the production thereof in any proceeding relating thereto, and any
such proceeding instituted by the Trustee shall be brought in its own name, as
trustee of an express trust, and any recovery of judgment shall, after provision
for the payment of the reasonable compensation, expenses, disbursements and
advances of the Trustee, its agents and counsel, be for the ratable benefit of
the Holders of the Securities or any coupons in respect of which such judgment
has been recovered.
Section 5.6. DELAY OR OMISSION NOT WAIVER. No delay or omission by the
Trustee or any Holder of any Securities to exercise any right or remedy accruing
upon an Event of Default shall impair any such right or remedy or constitute a
waiver of or acquiescence in any such Event of Default. Every right and remedy
given by this Indenture or by law to the Trustee or to the Holders may be
exercised from time to time, and as often as may be deemed expedient, by the
Trustee or by the Holders, as the case may be.
Section 5.7. WAIVER OF PAST DEFAULTS. The Holders of not less than a
majority in aggregate principal amount of Outstanding Securities of any series
by notice to the Trustee may waive on behalf of the Holders of all Securities of
such series a past Default or Event of Default with respect to that series and
its consequences and may rescind and annul a declaration of acceleration with
respect to that series except (i) a Default or Event of Default in the payment
of the principal of, premium, if any, or interest on any Security of such series
or any coupon appertaining thereto or (ii) in respect of a covenant or provision
hereof which pursuant to Section 8.2 cannot be amended or modified without the
consent of the Holder of each outstanding Security of such series adversely
affected. 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.
<PAGE>
53
Section 5.8. CONTROL BY MAJORITY. The Holders of not less than a majority
in aggregate principal amount of the Outstanding Securities of each series
affected (with each such series voting as a class) 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 it with
respect to Securities of that series; PROVIDED, HOWEVER, that (i) the Trustee
may refuse to follow any direction that conflicts with law or this Indenture,
(ii) subject to Section 6.1, the Trustee may refuse to follow any direction that
is unduly prejudicial to the rights of the Holders of Securities of such series
not consenting, or that would in the good faith judgment of the Trustee have a
substantial likelihood of involving the Trustee in personal liability and (iii)
the Trustee may take any other action deemed proper by the Trustee which is not
inconsistent with such direction.
Section 5.9. LIMITATION ON SUITS BY HOLDERS. No Holder of any Security of
any series or any related coupons 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) the Holder has previously given written notice to the Trustee of a
continuing Event of Default with respect to the Securities of that series;
(2) the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series have made a 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 indemnity
satisfactory to the Trustee against any loss, liability or expense to be,
or which may be, incurred by the Trustee in pursuing the remedy;
(4) the Trustee for 60 days after its receipt of such notice, request
and the offer of indemnity has failed to institute any such proceedings;
and
(5) during such 60-day period, the Holders of a majority in aggregate
principal amount of the Outstanding Securities of that series have not
given to the Trustee a direction inconsistent with such written request.
No one or more Holders shall have any right in any manner whatever by
virtue of, or by availing of, any provision of this Indenture to affect, disturb
or prejudice the rights of any other of such Holders, or to obtain or to seek to
obtain priority or preference over any other of such Holders or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal and ratable benefit of all of such Holders. For the protection and
enforcement of the provisions of this Section 5.9, each and every Holder of
Securities or any coupons of any series and the Trustee for such series shall be
entitled to such relief as can be given at law or in equity.
<PAGE>
54
Section 5.10. RIGHTS OF HOLDERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, but subject to Section 9.2, the right of any
Holder of a Security or coupon to receive payment of principal of, premium, if
any, and, subject to Sections 3.5 and 3.7, interest on the Security, on or after
the respective due dates expressed in the Security (or, in case of redemption,
on the redemption dates) and the right of any Holder of a coupon to receive
payment of interest due as provided in such coupon, or, subject to Section 5.9,
to bring suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
Section 5.11. APPLICATION OF MONEY COLLECTED. Subject to Article 13, if
the Trustee collects any money pursuant to this Article, it shall pay out the
money 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, premium, if any,
or interest, upon presentation of the Securities and the notation thereon of the
payment if only partially paid and upon surrender thereof if fully paid:
FIRST: to the Trustee for amounts due under Section 6.9;
SECOND: to Holders of Securities and coupons in respect of which or
for the benefit of which such money has been collected for amounts due and
unpaid on such Securities for principal of, premium, if any, and interest,
ratably, without preference or priority of any kind, according to the
amounts due and payable on such Securities for principal, premium, if any,
and interest, respectively; and
THIRD: to the Person or Persons entitled thereto.
Section 5.12. RESTORATION OF RIGHTS AND REMEDIES. If the Trustee or any
Holder has instituted any proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or abandoned for any reason,
or has been determined adversely to the Trustee or to such Holder, then and in
every such case, subject to any determination in such proceeding, the Company,
the Guarantor, the Trustee and the Holders shall be restored severally and
respectively to their former positions hereunder and thereafter all rights and
remedies of the Trustee and the Holders shall continue as though no such
proceeding had been instituted.
Section 5.13. RIGHTS AND REMEDIES CUMULATIVE. Except as otherwise provided
with respect to the replacement or payment of mutilated, destroyed, lost or
stolen Securities in the last paragraph of Section 3.6, no right or remedy
herein conferred upon or reserved to the Trustee or the Holders is intended to
be exclusive of any other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition to every other right
and remedy given hereunder or now or hereafter existing at law or in equity or
otherwise. The assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or employment of any other
appropriate right or remedy.
Section 5.14. UNDERTAKING FOR COSTS. In any suit for the enforcement of
any right or remedy under this Indenture, or in any suit against the Trustee for
any action taken, suffered
<PAGE>
55
or omitted by it as Trustee, a court may require any party litigant in such
suit to file an undertaking to pay the costs of such suit, and may assess
costs against any such party litigant, in the manner and to the extent
provided in the Trust Indenture Act; PROVIDED that neither this Section nor
the Trust Indenture Act shall be deemed to authorize any court to require
such an undertaking or to make such an assessment in any suit instituted by
the Company or the Guarantor.
Section 5.15. WAIVER OF STAY OR EXTENSION LAWS. Each of the Company and
the Guarantor covenants (to the extent that it may lawfully do so) that it will
not at any time insist upon, or plead, or in any manner whatsoever claim or take
the benefit or advantage of, any stay or extension law wherever enacted, now or
at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and each of the Company and the Guarantor (to the
extent that it may lawfully do so) hereby expressly waives all benefit or
advantage of any such law, and covenants that it will not hinder, delay or
impede the execution of any power herein granted to the Trustee, but will suffer
and permit the execution of every such power as though no such law had been
enacted.
ARTICLE 6
THE TRUSTEE
Section 6.1. CERTAIN DUTIES AND RESPONSIBILITIES. The duties and
responsibilities of the Trustee shall be as provided by the Trust Indenture Act.
Notwithstanding the foregoing, 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. 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 6.2. RIGHTS OF TRUSTEE. Subject to the provisions of the Trust
Indenture Act:
(a) The Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, certificate, statement, instrument, opinion,
report, notice, request, direction, consent, order, bond, debenture, note 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 or the Guarantor mentioned
herein shall be sufficiently evidenced by a Company Request or Company Order or
a Guarantor Request or Guarantor Order, as the case may be (other than delivery
of any Security, together with any coupons appertaining thereto, to the Trustee
for authentication and delivery pursuant to Section 3.3, which shall be
sufficiently evidenced as provided therein), and any resolution of the Board of
Directors may be sufficiently evidenced by a Board Resolution.
<PAGE>
56
(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 Holders pursuant to this Indenture, unless such Holders shall have offered
to the Trustee reasonable security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance with such request or
direction.
(f) The Trustee shall not be bound to make any investigation into the facts
or matters stated in any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent, order, bond, debenture,
note 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 and the Guarantor, personally or by agent or attorney.
(g) The Trustee may act through agents or attorneys and shall not be
responsible for the misconduct or negligence of any agent or attorney appointed
with due care.
(h) The Trustee shall not be liable for any action it takes or omits to
take in good faith which it believes to be authorized or within its rights or
powers.
(i) Except during the continuance of an Event of Default, the Trustee
undertakes and shall be responsible to perform only such duties as are
specifically set forth in this Indenture and no implied covenants or obligations
shall be read into this Indenture or be enforceable against Trustee. The
Trustee shall be liable only for its negligence, willful misconduct or bad
faith. In case an Event of Default has occurred and is continuing, the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his or her own
affairs.
(j) In the event the Company shall appoint a Special Paying Agent in
connection with a series of Securities, the Company and the Trustee shall enter
into a special paying agent agreement (a "Special Paying Agent Agreement") with
such person on terms as may be mutually agreed by the Company, the Trustee and
such Special Paying Agent. Notwithstanding any other provision contained
herein, such Special Paying Agent so appointed shall be a third party
beneficiary of this Agreement, and all of the benefits and protections of the
Trustee provided for herein (including, but not limited to all of the
<PAGE>
57
provisions for the benefit of the trustee contained in this Article 6) shall
also apply to the Special Paying Agent, in addition to, and not as a
substitute for, such other benefits and protections as may be provided for in
the related Special Paying Agent Agreement.
Section 6.3. TRUSTEE MAY HOLD SECURITIES. The Trustee, any Paying Agent,
any Registrar or any other agent of the Company or the Guarantor, in its
individual or any other capacity, may become the owner or pledgee of Securities
and coupons and, subject to Sections 310(b) and 311 of the Trust Indenture Act,
may otherwise deal with the Company, an Affiliate or Subsidiary and the
Guarantor with the same rights it would have if it were not Trustee, Paying
Agent, Registrar or such other agent.
Section 6.4. MONEY HELD IN TRUST. Money held by the Trustee or any Paying
Agent in trust hereunder need not be segregated from other funds except to the
extent required by law. Neither the Trustee nor any Paying Agent shall be under
any liability for interest on any money received by it hereunder except as
otherwise set forth in this Indenture or as otherwise agreed with the Company or
the Guarantor.
Section 6.5. TRUSTEE'S DISCLAIMER. The recitals contained herein and in the
Securities, except the Trustee's certificate of authentication, shall be taken
as the statements of the Company and the Guarantor, and the Trustee assumes no
responsibility for their correctness. The Trustee makes no representation as to
the validity or adequacy of this Indenture, the Securities or any coupon. The
Trustee shall not be accountable for the Company's use of the proceeds from the
Securities or for monies paid over to the Company or the Guarantor pursuant to
the Indenture.
Section 6.6. NOTICE OF DEFAULTS. (a) If a Default occurs and is
continuing with respect to the Securities of any series and if it is known to
the Trustee, the Trustee shall, within 90 days after it occurs, transmit, in the
manner and to the extent provided in Section 313(c) of the Trust Indenture Act,
notice of all uncured Defaults known to it; PROVIDED, HOWEVER, that, in the case
of a Default in payment on the Securities of any series, the Trustee may
withhold the notice if and so long as the board of directors, the executive
committee or a committee of its Responsible Officers in good faith determines
that withholding such notice is in the interests of Holders of Securities of
that series; PROVIDED FURTHER that, in the case of any default or breach of the
character specified in Section 5.1(3) with respect to the Securities and coupons
of such series, no such notice to Holders shall be given until at least 60 days
after the occurrence thereof.
(b) The Trustee shall not be charged with knowledge of any Default or
Event of Default under this Indenture (except default in the payment of moneys
to the Trustee that the Company is required to pay or cause to be paid to the
Trustee on or before a specified date), unless either (i) an officer of the
Trustee assigned to its corporate trust department shall have actual knowledge
of such Default or Event of Default or (ii) written notice of such Default or
Event of Default shall have been given to the Trustee in the manner contemplated
by Section 1.5.
<PAGE>
58
Section 6.7. REPORTS BY TRUSTEE TO HOLDERS. (a) Within 60 days after each
May 15 of each year commencing with the first May 15 after the first issuance of
Securities pursuant to this Indenture, the Trustee shall transmit by mail to all
Holders of Securities as provided in Section 313(c) of the Trust Indenture Act a
brief report dated as of such May 15 if required by Section 313(a) of the Trust
Indenture Act. The Trustee also shall comply with Section 313(b) and (d) of the
Trust Indenture Act and shall transmit to Holders, in the manner and to the
extent provided in said Section 313(c) of the Trust Indenture Act, such other
reports, if any, as may be required pursuant to the Trust Indenture Act.
(b) A copy of each such report shall, at the time of such transmission to
Holders, be filed by the Trustee with each stock exchange upon which any
Securities are listed, with the Commission and with the Company. The Company
will notify the Trustee when any Securities are listed on any stock exchange.
Section 6.8. SECURITYHOLDER LISTS. The Trustee shall preserve in as current
a form as is reasonably practicable the most recent list available to it of the
names and addresses of Holders of Securities of each series. If the Trustee is
not the Registrar, the Company shall furnish to the Trustee semiannually on or
before the last day of June and December in each year, and at such other times
as the Trustee may request in writing, a list, in such form and as of such date
as the Trustee may reasonably require, containing all the information in the
possession of the Registrar, the Company or any of its Paying Agents other than
the Trustee as to the names and addresses of Holders of Securities of each such
series. If there are Bearer Securities of any series outstanding, even if the
Trustee is the Registrar, the Company shall furnish to the Trustee such a list
containing such information with respect to Holders of such Bearer Securities
only.
Section 6.9. COMPENSATION AND INDEMNITY.
(a) The Company shall pay to the Trustee from time to time such
compensation as shall be agreed between the Company and the Trustee for all
services rendered by it hereunder. The Trustee's compensation shall not be
limited by any law on compensation of a trustee of an express trust. The
Company shall reimburse the Trustee upon request for all reasonable
out-of-pocket expenses incurred by it in connection with the performance of its
duties under this Indenture, except any such expense as may be attributable to
its negligence or bad faith. Such expenses shall include the reasonable
compensation and expenses of the Trustee's agents and counsel.
(b) The Company shall indemnify the Trustee for, and hold it harmless
against, any loss, liability or expense incurred by it without negligence or bad
faith on its part arising out of or in connection with its acceptance or
administration of the trust or trusts hereunder. The Trustee shall notify the
Company promptly of any claim for which it may seek indemnity. The Company
shall defend the claim and the Trustee shall cooperate in the defense. The
Trustee may have separate counsel and the Company shall pay the reasonable fees
and expenses of such counsel. The Company need not pay for any settlement made
without its consent.
<PAGE>
59
(c) The Company need not reimburse any expense or indemnify against any
loss or liability incurred by the Trustee through the Trustee's own negligence
or bad faith.
(d) To secure the payment obligations of the Company pursuant to this
Section, the Trustee shall have a lien prior to the Securities of any series on
all money or property held or collected by the Trustee, except that held in
trust to pay principal, premium, if any, and interest on particular Securities.
(e) When the Trustee incurs expenses or renders services in connection with
an Event of Default specified in Section 5.1(4) or Section 5.1(5), 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.
(f) The provisions of this Section shall survive the termination of this
Indenture.
Section 6.10. REPLACEMENT OF TRUSTEE.
(a) The resignation or removal of the Trustee and the appointment of a
successor Trustee shall become effective only upon the successor Trustee's
acceptance of appointment as provided in Section 6.11.
(b) The Trustee may resign at any time with respect to the Securities of
any series by giving written notice thereof to the Company and the Guarantor.
If the instrument of acceptance by a successor Trustee required by Section 6.11
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee with respect
to the Securities of such series.
(c) The Holders of a majority in aggregate principal amount of the
Outstanding Securities of any series may remove the Trustee with respect to that
series by so notifying the Trustee and the Company and the Guarantor and may
appoint a successor Trustee for such series with the Company's and the
Guarantor's consent.
(d) If at any time:
(1) the Trustee fails to comply with Section 310(b) of the Trust
Indenture Act after written request therefor by the Company or the
Guarantor or by any Holder who has been a bona fide Holder of a Security
for at least six months, or
(2) the Trustee shall cease to be eligible under Section 310(a) of the
Trust Indenture Act and shall fail to resign after written request therefor
by the Company, the Guarantor or by any Holder of a Security who has been a
bona fide Holder of a Security for at least six months; or
<PAGE>
60
(3) the Trustee becomes incapable of acting, is adjudged a bankrupt or
an insolvent or a receiver or public officer takes charge of the Trustee or
its property or affairs for the purpose of rehabilitation, conservation or
liquidation, then, in any such case, (i) the Company or the Guarantor may
remove the Trustee with respect to all Securities, or (ii) subject to
Section 315(e) of the Trust Indenture Act, any Holder who has been a bona
fide Holder of a Security for at least six months may, on behalf of himself
and all other similarly situated, petition any court of competent
jurisdiction for the removal of the Trustee with respect to all Securities
and the appointment of a successor Trustee or Trustees.
(e) If the Trustee resigns or is removed or if a vacancy exists in the
office of Trustee for any reason, with respect to Securities of one or more
series, the Company or the Guarantor shall promptly appoint a successor Trustee
with respect to the Securities of that or those series (it being understood that
any such successor Trustee may be appointed with respect to the Securities of
one or more or all of such series and that at any time there shall be only one
Trustee with respect to the Securities of any particular series) and shall
comply with the applicable requirements of Section 6.11. If, within one year
after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee with respect to the Securities of any series shall
be appointed by Act of the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the Company and the retiring
Trustee, the successor Trustee so appointed shall, forthwith upon its acceptance
of such appointment in accordance with the applicable requirements of Section
6.11, become the successor Trustee with respect to the Securities of such series
and to that extent supersede the successor Trustee appointed by the Company or
the Guarantor. If no successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the Guarantor or the
Holders and accepted appointment in the manner required by Section 6.11, the
resigning or retiring Trustee, or any Holder who has been a bona fide Holder of
a Security of such series for at least six months may, on behalf of himself and
all others similarly situated, petition any court of competent jurisdiction for
the appointment of a successor Trustee with respect to the Securities of such
series.
Section 6.11. ACCEPTANCE OF APPOINTMENT BY SUCCESSOR.
(a) In case of the appointment hereunder of a successor Trustee with
respect to all Securities, every such successor Trustee shall execute,
acknowledge and deliver to the Company, the Guarantor and to the retiring
Trustee an instrument accepting such appointment. Thereupon, the resignation or
removal of the retiring Trustee shall become effective, and the successor
Trustee, without further act, deed or conveyance, shall become vested with all
the rights, powers and duties of the retiring Trustee; but, on the request of
the Company, the Guarantor or the successor Trustee, such retiring Trustee
shall, upon payment of its charges, execute and deliver an instrument
transferring to such successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver to such successor
Trustee all property and money held by such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a successor Trustee with
respect to the Securities of one or more (but not all) series, the Company, the
Guarantor, the retiring
<PAGE>
61
Trustee and such successor Trustee shall execute and deliver an indenture
supplemental hereto wherein such successor Trustee shall accept such
appointment and which (i) shall contain such provisions as shall be necessary
or desirable to transfer and confirm to, and to vest in, such successor
Trustee all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates, (ii) if the retiring Trustee
is not retiring with respect to all Securities, shall contain such provisions
as shall be deemed necessary or desirable to confirm that all the rights,
powers, trusts and duties of the retiring Trustee with respect to the
Securities of that or those series as to which the retiring Trustee is not
retiring shall continue to be vested in the retiring Trustee, and (iii) shall
add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one Trustee, it being understood that nothing herein
or in such supplemental indenture shall constitute such Trustees co-trustees
of the same trust and that each such Trustee shall be trustee of a trust or
trusts hereunder separate and apart from any trust or trusts hereunder
administered by any other such Trustee and upon the execution and delivery of
such supplemental indenture the resignation or removal of the retiring
Trustee shall become effective to the extent provided therein and each such
successor Trustee, without any further act, deed or conveyance, shall become
vested with all the rights, powers, trusts and duties of the retiring Trustee
with respect to the Securities of that or those series to which the
appointment of such successor Trustee relates; but, on request of the
Company, the Guarantor or any successor Trustee, such retiring Trustee shall
duly assign, transfer and deliver to such successor Trustee all property and
money held by such retiring Trustee hereunder with respect to the Securities
of that or those series to which the appointment of such successor Trustee
relates.
(c) Upon request of any such successor Trustee, the Company and the
Guarantor shall execute any and all instruments for more fully and certainly
vesting in and confirming to such successor Trustee all such rights, powers and
trusts referred to in paragraph (a) or (b) of this Section, as the case may be.
(d) No successor Trustee shall accept its appointment unless at the time of
such acceptance such successor Trustee shall be qualified and eligible under the
Trust Indenture Act.
(e) The Company shall give notice of each resignation and each removal of
the Trustee with respect to the Securities of any series and each appointment of
a successor Trustee with respect to the Securities of any series in the manner
provided for notices to the Holders of Securities in Section 1.6. Each notice
shall include the name of the successor Trustee with respect to the securities
of such series and the address of its Corporate Trust office.
Section 6.12. ELIGIBILITY; DISQUALIFICATION. There shall at all times be a
Trustee hereunder which shall be eligible to act as Trustee under Section
310(a)(1) of the Trust Indenture Act and shall have a combined capital and
surplus of at least $75,000,000 (or having a combined capital and surplus in
excess of $5,000,000 and the obligations of which, whether now in existence or
hereafter incurred, are fully and unconditionally guaranteed by a
<PAGE>
62
corporation organized and doing business under the laws of the United States,
any State or Territory thereof or of the District of Columbia and having a
combined capital and surplus of at least $75,000,000). If such corporation
publishes reports of condition at least annually, pursuant to law or the
requirements of Federal, State, Territorial or District of Columbia
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. If at any time the Trustee shall cease to be
eligible in accordance with the provisions of this Section, it shall resign
immediately in the manner and with the effect hereinafter specified in this
Article. If the Trustee has or shall acquire any conflicting interest within
the meaning of the Trust Indenture Act, the Trustee shall comply with the
relevant provisions thereof.
Section 6.13. MERGER, CONVERSION, CONSOLIDATION OR SUCCESSION TO BUSINESS.
Any corporation into which the Trustee may be merged or converted or with which
it may be consolidated, or any corporation resulting from any merger, conversion
or consolidation to which the Trustee shall be a party, or any corporation
succeeding to all or substantially all the corporate trust business of the
Trustee, shall be the successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under this Article,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto. In case any Securities shall have been authenticated,
but not delivered, by the Trustee then in office, any successor by merger,
conversion or consolidation to such authenticating Trustee may adopt such
authentication and deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such Securities.
Section 6.14. APPOINTMENT OF AUTHENTICATING AGENT. The Trustee may appoint
an Authenticating Agent or Agents with respect to one or more series of
Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon original issue, exchange,
registration of transfer or partial redemption thereof, and Securities so
authenticated shall be entitled to the benefits of this Indenture and shall be
valid and obligatory for all purposes as if authenticated by the Trustee
hereunder. Any such appointment shall be evidenced by an instrument in writing
signed by a Responsible Officer of the Trustee, a copy of which instrument shall
be promptly furnished to the Company and the Guarantor. 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 the Guarantor and, except as may otherwise be
provided pursuant to Section 3.1, shall at all times be a bank or trust company
or corporation organized and doing business and in good standing under the laws
of the United States of America or of any State or the District of Columbia,
authorized under such laws to act as Authenticating Agent, having a combined
capital and surplus of not less that $1,500,000 and subject to supervision or
examination by Federal or State authorities. If such Authenticating Agent
publishes reports of condition at least annually, pursuant to law or the
requirements of the aforesaid 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
<PAGE>
63
most recent report of condition so published. In case 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 further act
on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent for any series of Securities may at any time resign
by giving written notice of resignation to the Trustee for such series and to
the Company and the Guarantor. The Trustee for any series of Securities may at
any time terminate the agency of an Authenticating Agent by giving written
notice of termination to such Authenticating Agent and to the Company and the
Guarantor. 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 for such
series may appoint a successor Authenticating Agent which shall be acceptable to
the Company and shall give notice of such appointment to all Holders of
Securities of the series with respect to which such Authenticating Agent will
serve in the manner set forth in Section 1.6. Any successor Authenticating
Agent upon acceptance of its appointment hereunder shall become vested with all
the rights, powers and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent herein. 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 including reimbursement of its reasonable expenses 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 or in lieu of the Trustee's certificate of authentication, an
alternate certificate of authentication substantially in the following form:
<PAGE>
64
This is one of the Securities of a series issued under the within-mentioned
Indenture.
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By:_____________________________________
[Authenticating Agent's Name],
as Authenticating Agent
Dated:
By:_____________________________________
Authorized Signatory
Sections 6.2, 6.3, 6.5 and 6.9 shall be applicable to any Authenticating Agent.
Section 6.15. TRUSTEE'S APPLICATION FOR INSTRUCTIONS FROM THE COMPANY. Any
application by the Trustee for written instructions from the Company or the
Guarantor may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
fifteen Business Days after the date any officer of the Company or the
Guarantor, as the case may be, actually receives such application, unless any
such officer shall have consented in writing to any earlier date) unless prior
to taking any such action (or the effective date in the case of an omission),
the Trustee shall have received written instructions in response to such
application specifying the action to be taken or omitted.
Section 6.16. PREFERENTIAL COLLECTION OF CLAIMS AGAINST COMPANY OR
GUARANTOR. If and when the Trustee shall be or become a creditor of the Company
or the Guarantor (or any other obligor upon the Securities or the coupons, if
any), the Trustee shall be subject to the provisions of the Trust Indenture Act
regarding the collection of claims against the Company or the Guarantor (or any
such other obligor).
ARTICLE 7
CONSOLIDATION, MERGER OR SALE BY
THE COMPANY AND THE GUARANTOR
Section 7.1. CONSOLIDATION, MERGER OR SALE OF ASSETS BY THE COMPANY
PERMITTED. The Company may merge or consolidate with or into any other
corporation or sell, convey,
<PAGE>
65
transfer, lease or otherwise dispose of all or substantially all of its
assets to any Person, if (i)(A) in the case of a merger or consolidation, the
Company is the surviving corporation or (B) in the case of a merger or
consolidation where the Company is not the surviving corporation and in the
case of any such sale, conveyance or other disposition, the resulting,
successor or acquiring Person is a corporation organized and existing under
the laws of the United States or a State thereof or the District of Columbia
and such corporation expressly assumes by supplemental indenture all the
obligations of the Company under the Securities and any coupons appertaining
thereto the obligations of the Company and under this Indenture, (ii)
immediately thereafter, giving effect to such merger or consolidation, or
such sale, conveyance, transfer, lease or other disposition (including,
without limitation, any Indebtedness directly or indirectly incurred or
anticipated to be incurred in connection with or in respect of such
transactions), no Default or Event of Default shall have occurred and be
continuing, (iii) the Company has delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel each stating that such merger or
consolidation, or such sale, conveyance, transfer, lease or other
disposition, complies with this Article and that all conditions precedent
herein provided for relating to such transaction have been complied with and
(iv) the Guarantor has (A) delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that the obligations of the Guarantor
under this Indenture remain in full force and effect or (B) in the case of
consolidation or a merger by the Company with, or conveyance, transfer or
lease of the Company's properties and assets substantially as an entirety to
the Guarantor, stating that the Guarantor has directly assumed as obligor the
obligations of the Company under this Indenture. In the event of the
assumption by a successor corporation of the obligations of the Company as
provided in clause (i)(B) of the immediately preceding sentence, such
successor corporation shall succeed to and be substituted for the Company
hereunder and under the Securities and any coupons appertaining thereto and
all such obligations of the Company shall terminate.
Section 7.2. CONSOLIDATION, MERGER OR SALE OF ASSETS BY THE GUARANTOR
PERMITTED. The Guarantor may merge or consolidate with or into any other
corporation or sell, convey, transfer, lease or otherwise dispose of all or
substantially all of its assets to any Person, if (i)(A) in the case of a merger
or consolidation, the Guarantor is the surviving corporation or (B) in the case
of merger or consolidation where the Guarantor is not the surviving corporation
and in the case of any such sale, conveyance or other disposition, the
resulting, successor or acquiring Person is a corporation organized and existing
under the laws of the United States or a State thereof or the District of
Columbia and such corporation expressly assumes by supplemental indenture all
the obligations of the Guarantor under this Indenture, (ii) immediately
thereafter, giving effect to such merger or consolidation, or such sale,
conveyance, transfer, lease or other disposition (including without limitation,
any Indebtedness directly or indirectly incurred or anticipated to be incurred
in connection with or in respect of such transaction), no Default or Event of
Default shall have occurred and be continuing and (iii) the Guarantor has
delivered to the Trustee an Officers' Certificate and an Opinion of Counsel each
stating that such merger or consolidation, or such sale, conveyance, transfer,
lease or other disposition, complies with this Article and that all conditions
precedent herein provided for relating to such transaction have been complied
with. In the event of the assumption by a successor corporation of the
obligations of the Guarantor as provided in clause (i)(B) of the immediately
preceding sentence, such successor corporation shall succeed
<PAGE>
66
to and be substituted for the Guarantor hereunder and all such obligations of
the Guarantor shall terminate.
ARTICLE 8
SUPPLEMENTAL INDENTURES
Section 8.1. SUPPLEMENTAL INDENTURES WITHOUT CONSENT OF HOLDERS. Without
the consent of any Holders, the Company and the Guarantor, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into indentures supplemental hereto, in form reasonably satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another corporation to the Company
or the Guarantor and the assumption by any such successor of the covenants
of the Company or the Guarantor herein and in the Securities or the
Guarantees; or
(2) to add to the covenants of the Company or the Guarantor for the
benefit of the Holders of all or any series of Securities (and if such
covenants are to be for the benefit of less than all series of Securities,
stating that such covenants are expressly being included solely for the
benefit of such series) or to surrender any right or power herein conferred
upon the Company or the Guarantor and to make the occurrence, or the
occurrence and continuance, of a default in any of such additional
covenants, restrictions or conditions a Default or an Event of Default
permitting the enforcement of all or any of the several remedies provided
in this Indenture as herein set forth; PROVIDED, HOWEVER, that in respect
of any such additional covenant, restriction or condition such supplemental
indenture may provide for a particular period of grace after default (which
period may be shorter or longer than that allowed in the case of other
defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default; or
(3) to add any additional Events of Default with respect to all or any
series of Securities; or
(4) to add to or change any of the provisions of this Indenture to
such extent as shall be necessary to facilitate the issuance of Bearer
Securities (including, without limitation, to provide that Bearer
Securities may be registrable as to principal only) or to facilitate the
issuance of Securities in global form, PROVIDED that any such action shall
not adversely affect the interests of the Holders of Securities of any
series or any related coupons in any material respect; or
(5) to add to, change or eliminate any of the provisions of this
Indenture, PROVIDED that any such addition, change or elimination shall
become effective only when there is no Security Outstanding of any series
created prior to the execution of such supplemental indenture which is
entitled to the benefit of such provision and as to which such supplemental
indenture would apply; or
<PAGE>
67
(6) to secure the Securities; or
(7) to add to the conditions, limitations and restrictions on the
authorized amount, terms or purposes of issue, authentication and delivery
of Securities, as herein set forth, other conditions, limitations and
restrictions thereafter to be observed; or
(8) to establish the form or terms of Securities of any series as
permitted by Sections 2.1 and 3.1; or
(9) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities of one or
more series and to add to or change any of the provisions of this Indenture
as shall be necessary to provide for or facilitate the administration of
the trusts hereunder by more than one Trustee, pursuant to the requirements
of Section 6.10; or
(10) if allowed without penalty under applicable laws and regulations,
to permit payment in the United States (including any of the states and the
District of Columbia), its territories, its possessions and other areas
subject to its jurisdiction of principal, premium, if any, or interest, if
any, on Bearer Securities or coupons, if any; or
(11) to correct or supplement any provision herein which may be
inconsistent with any other provision herein or to make any other
provisions with respect to matters or questions arising under this
Indenture, provided such action shall not adversely affect the interests of
the Holders of Securities of any series in any material respect, or to cure
any ambiguity or correct any mistake; or
(12) to cure any ambiguity or to correct or supplement any provision
contained herein which may be defective or inconsistent with any other
provision contained herein or in any supplemental indenture, or to make any
other provision in regard to matters or questions arising under this
Indenture which the Board of Directors of the Company may deem necessary or
desirable and which shall not adversely affect the interests of the holders
of the Securities in any material respect; or
(13) to supplement any of the provisions of this Indenture to such
extent as shall be necessary to permit or facilitate the defeasance and
discharge of any series of Securities pursuant to Article 4, PROVIDED that
any such action shall not adversely affect the interests of the Holders of
Securities of such series or any other series of Securities or any related
coupons in any material respect.
Section 8.2. SUPPLEMENTAL INDENTURES WITH CONSENT OF HOLDERS. With the
written consent of the Holders of not less than a majority of the aggregate
principal amount of the Outstanding Securities of each series adversely affected
by such supplemental indenture, the Company, the Guarantor and the Trustee may
enter into an indenture or indentures supplemental hereto to add any provisions
to or to change or eliminate any provisions of this Indenture or of any other
indenture supplemental hereto or to modify the rights of the Holders
<PAGE>
68
of Securities of each such series; PROVIDED, HOWEVER, that without the
consent of the Holder of each Outstanding Security affected thereby, an
amendment under this Section may not:
(1) change the Stated Maturity of the principal of, or any installment
of principal of or interest on, any Security, or reduce the principal
amount thereof or the rate of interest thereon or any premium payable upon
the redemption thereof, or reduce the amount of the principal of an
Original Issue Discount Security that would be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant to Section
5.2, or change the coin or currency in which any Securities or any premium
or the interest thereon is payable, or impair the right to institute suit
for the enforcement of any such payment on or after the Stated Maturity
thereof (or, in the case of redemption, on or after the Redemption Date);
(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;
(3) change any obligation of the Company to maintain an office or
agency in the places and for the purposes specified in Section 9.2;
(4) make any change in Section 5.7 or this Section 8.2 except to
increase any percentage or to provide that certain other provisions of this
Indenture cannot be modified or waived with the consent of the Holders of
each Outstanding Security affected thereby; or
(5) modify the obligations of the Guarantor to make payment under the
Guarantee contained in Article XII of this Indenture.
For the purposes of this Section 8.2, if the Securities of any series are
issuable upon the exercise of warrants, any holder of an unexercised and
unexpired warrant with respect to such series shall not be deemed to be a Holder
of Outstanding Securities of such series in the amount issuable upon the
exercise of such warrants.
A supplemental indenture that 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 that 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 is not necessary under this Section 8.2 for the Holders to consent to
the particular form of any proposed supplemental indenture, but it is sufficient
if they consent to the substance thereof.
<PAGE>
69
Section 8.3. COMPLIANCE WITH TRUST INDENTURE ACT. Every supplemental
indenture executed pursuant to this Article shall comply with the requirements
of the Trust Indenture Act as then in effect.
Section 8.4. EXECUTION OF SUPPLEMENTAL INDENTURES. In executing, or
accepting the additional trusts created by, any supplemental indenture permitted
by this Article or the modification thereby of the trusts created by this
Indenture, the Trustee shall be entitled to receive, and 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 8.5. 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 and of any coupon appertaining
thereto shall be bound thereby.
Section 8.6. REFERENCE IN SECURITIES TO SUPPLEMENTAL INDENTURES.
Securities, including any coupons, of any series authenticated and delivered
after the execution of any supplemental indenture pursuant to this Article may,
and shall if required by the Trustee, bear a notation in form approved by the
Trustee as to any matter provided for in such supplemental indenture. If the
Company shall so determine, new Securities including any coupons of any series
so modified as to conform, in the opinion of the Trustee and the Company, 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 including any coupons of such series.
Section 8.7. NOTICE OF SUPPLEMENTAL INDENTURE. Promptly after the
execution by the Company, the Guarantor and the appropriate Trustee of any
supplemental indenture pursuant to Section 8.2, the Company shall transmit, in
the manner and to the extent provided in Section 1.6, to all Holders of any
series of the Securities affected thereby, a notice setting forth in general
terms the substance of such supplemental indenture.
ARTICLE 9
COVENANTS
Section 9.1. PAYMENT OF PRINCIPAL, PREMIUM, IF ANY, AND INTEREST. The
Company covenants and agrees for the benefit of the Holders of each series of
Securities that it will duly and punctually pay the principal of, premium, if
any, and interest on the Securities of that series in accordance with the terms
of the Securities of such series, any coupons appertaining thereto and this
Indenture. An installment of principal or interest shall be considered paid on
the date it is due if the Trustee or Paying Agent holds on that date money
designated for and sufficient to pay the installment. Unless otherwise
specified as
<PAGE>
70
contemplated by Section 3.1 with respect to any series of Securities or
except as otherwise provided in Section 3.7, any interest due on Bearer
Securities on or before Maturity shall be payable only upon presentation and
surrender of the several coupons for such interest installments as are
evidenced thereby as they severally mature. If so provided in the terms of
any series of Securities established as provided in Section 3.1, the
interest, if any, due in respect of any temporary Security in global form or
permanent Security in global form, together with any additional amounts
payable in respect thereof, as provided in the terms and conditions of such
Security, shall be payable only upon presentation of such Security to the
Trustee for notation thereon of the payment of such interest.
The Company shall have the right to require a Holder, in connection with
the payment of the principal of (and premium, if any) or interest, if any, on a
Security, to present at the office or agency of the Company at which such
payment is made a certificate concerning the nationality or residence of the
Holder (such as Internal Revenue Service Forms 1001, 4224, W-8d, W-9, any
successor forms or any other substantially similar documents), to enable the
Company to determine its duties and liabilities with respect to any taxes,
assessments or governmental charges which it may be required to deduct or
withhold therefrom under any present or future law of the United States of
America or of any State, County, Municipality or taxing authority therein, and
the Company shall be entitled to determine its duties and liabilities with
respect to such deduction or withholding on the basis of information contained
in such certificate or, if no such certificate shall be so presented, on the
basis of any presumption created by any such law, and shall be entitled to act
in accordance with such determination.
Section 9.2. MAINTENANCE OF OFFICE OR AGENCY. If Securities of a series are
issued as Registered Securities, the Company or the Guarantor will maintain in
each Place of Payment for any series of Securities an office or agency where
Securities of that series may be presented or surrendered for payment, where
Securities of that series may be surrendered for registration of transfer or
exchange and where notices and demands to or upon the Company or the Guarantor
in respect of the Securities of that series and this Indenture may be served.
If Securities of a series are issuable as Bearer Securities, the Company or the
Guarantor will maintain, (i) subject to any laws or regulations applicable
thereto, an office or agency in a Place of Payment for that series which is
located outside the United States, where Securities of that series and related
coupons may be presented and surrendered for payment; PROVIDED, HOWEVER, that if
the Securities of that series are listed on The International Stock Exchange of
the United Kingdom and the Republic of Ireland Limited, the Luxembourg Stock
Exchange or any other stock exchange located outside the United States and such
stock exchange shall so require, the Company or the Guarantor will maintain a
Paying Agent for the Securities of that series in London, Luxembourg or any
other required city located outside the United States, as the case may be, so
long as the Securities of that series are listed on such exchange, and (ii)
subject to any laws or regulations applicable thereto, in a Place of Payment for
that series located outside the United States, where Securities of that series
may be surrendered for exchange and where notices and demands to or upon the
Company in respect of the Securities of that series and this Indenture may be
served. The Company or the Guarantor will give prompt written notice to the
Trustee of the location, and any change in the location, of any such office or
agency. If at any time the Company or the Guarantor shall fail to maintain any
<PAGE>
71
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company and the
Guarantor hereby appoint the Trustee as its agent to receive all such
presentations, surrenders, notices and demands.
Unless otherwise specified as contemplated by Section 3.1, no payment of
principal, premium or interest on Bearer Securities shall be made at any office
or agency of the Company in the United States, by check mailed to any address in
the United States, by transfer to an account located in the United States or
upon presentation or surrender in the United States of a Bearer Security or
coupon for payment, even if the payment would be credited to an account located
outside the United States; provided, however, that, if the Securities of a
series are denominated and payable in Dollars, payment of principal of and any
premium or interest on any such Bearer Security shall be made at the office of
the Company's or the Guarantor's Paying Agent in the Borough of Manhattan, The
City of New York, if (but only if) payment in Dollars of the full amount of such
principal, premium or interest, as the case may be, at all offices or agencies
outside the United States maintained for the purpose by the Company or the
Guarantor in accordance with this Indenture is illegal or effectively precluded
by exchange controls or other similar restrictions.
The Company or the Guarantor may also from time to time designate one or
more other offices or agencies where the Securities (including any coupons, if
any) of one or more series may be presented or surrendered for any or all such
purposes and may from time to time rescind such designations; PROVIDED, HOWEVER,
that no such designation or rescission shall in any manner relieve the Company
or the Guarantor of their obligation to maintain an office or agency in each
Place of Payment for Securities (including any coupons, if any) of any series
for such purposes. The Company or the Guarantor will give prompt written notice
to the Trustee of any such designation or rescission and of any change in the
location of any such other office or agency.
Unless otherwise specified as contemplated by Section 3.1, the Trustee
shall initially serve as Paying Agent.
Section 9.3. MONEY FOR SECURITIES TO BE HELD IN TRUST; UNCLAIMED MONEY. If
the Company or the Guarantor shall at any time act as its own Paying Agent with
respect to any series of Securities, it will, on or before each due date of the
principal of, premium, if any, or interest on any of the Securities of that
series, segregate and hold in trust for the benefit of the Persons entitled
thereto a sum sufficient to pay the principal, 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 in writing of its
action or failure so to act.
The Company or the Guarantor will cause each Paying Agent for any series of
Securities other than the Trustee 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:
<PAGE>
72
(1) hold all sums held by it for the payment of the principal of,
premium, if any, or interest on Securities of that series in trust for the
benefit of the Persons entitled thereto until such sums shall be paid to
such Persons or otherwise disposed of as herein provided;
(2) give the Trustee notice of any default by the Company or the
Guarantor (or any other obligor upon the Securities of that series) in the
making of any payment of principal, premium, if any, or interest on the
Securities; 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 or the Guarantor may at any time, for the purpose of obtaining
the satisfaction and discharge of this Indenture or for any other purpose, pay,
or by Company Order or by Guarantor Order, as the case may be, direct any Paying
Agent to pay, to the Trustee all sums held in trust by the Company or the
Guarantor or such Paying Agent, such sums to be held by the Trustee upon the
same trusts as those upon which such sums were held by the Company or the
Guarantor 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 or the Guarantor, in trust for the payment of any principal,
premium, if any, or interest on any Security of any series and remaining
unclaimed for two years after such principal, premium, if any, or interest has
become due and payable shall be paid to the Company on Company Request (or, if
deposited by the Guarantor, paid to the Guarantor on Guarantor Request), or (if
then held by the Company or the Guarantor) shall be discharged from such trust;
and the Holder of such Security and coupon, if any, shall thereafter, as an
unsecured general creditor, look only to the Company or the Guarantor 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 or the Guarantor
as trustee thereof, shall thereupon cease; PROVIDED, HOWEVER, that the Trustee
or such Paying Agent, before being required to make any such repayment, may at
the expense of the Company or the Guarantor, as the case may be, cause to be
published once, in a newspaper published in the English language, customarily
published on each Business Day and of general circulation in The City of New
York, or cause to be mailed to such Holder, notice that such money remains
unclaimed and that, after a date specified therein, which shall not be less than
30 days from the date of such publication, any unclaimed balance of such money
then remaining will be repaid to the Company or the Guarantor, as the case may
be.
Section 9.4. CORPORATE EXISTENCE. Subject to Article 7, each of the Company
and the Guarantor will at all times do or cause to be done all things necessary
to preserve and keep in full force and effect its corporate existence and its
rights and franchises; PROVIDED that nothing in this Section 9.4 shall prevent
the abandonment or termination of any right or franchise of the Company or the
Guarantor, if, in the opinion of the Company or the Guarantor, as the
<PAGE>
73
case may be, such abandonment or termination is in the best interests of the
Company or the Guarantor, as the case may be, and does not materially
adversely affect the ability of the Company or the Guarantor, as the case may
be, to operate its business or to fulfill its obligations hereunder.
Section 9.5. INSURANCE. Each of the Company and the Guarantor covenants and
agrees that it will maintain, and cause each of its Subsidiaries to maintain,
insurance with responsible and reputable insurance companies or associations or
through a program of self-insurance in such amounts and covering such risks as
are consistent with sound business practice for corporations engaged in the same
or a similar business similarly situated.
Section 9.6. REPORTS BY THE GUARANTOR. The Guarantor covenants:
(a) to file with the Trustee, within 30 days after the Guarantor 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 it may be required to file with the Commission
pursuant to section 13 or section 15(d) of the Securities Exchange Act of 1934,
as amended; or, if it is not required to file information, documents or reports
pursuant to either of such sections, then to 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, as amended, in respect of a security listed and
registered on a national securities exchange as may be prescribed from time to
time in such rules and regulations;
(b) to file with the Trustee and the Commission, in accordance with the
rules and regulations prescribed from time to time by the Commission, such
additional information, documents and reports with respect to compliance by it
with the conditions and covenants provided for in this Indenture, as may be
required from time to time by such rules and regulations; and
(c) to transmit to all Holders of Securities, within 30 days after the
filing thereof with the Trustee, in the manner and to the extent provided in
Section 313(c) of the Trust Indenture Act, such summaries of any information,
documents and reports required to be filed by it pursuant to subsections (a) and
(b) of this Section 9.6, as may be required by rules and regulations prescribed
from time to time by the Commission.
Section 9.7. ANNUAL REVIEW CERTIFICATE; NOTICE OF DEFAULT.
(a) The Company covenants and agrees to deliver to the Trustee, within 120
days after the end of each fiscal year of the Company, a brief certificate from
the principal executive officer, principal financial officer, or principal
accounting officer as to his or her knowledge of the Company's compliance with
all conditions and covenants under this Indenture. For purposes of this Section
9.7, such compliance shall be determined without regard to any period of grace
or requirement of notice provided under this Indenture. The Company shall
<PAGE>
74
file with the Trustee written notice of occurrence of any Event of Default
within thirty Business Days of its becoming aware of any such Event of
Default.
(b) The Guarantor covenants and agrees to deliver to the Trustee, within
120 days after the end of each fiscal year of the Guarantor, a brief certificate
from the principal executive officer, principal financial officer, or principal
accounting officer as to his or her knowledge of the Company's compliance with
all conditions and covenants under this Indenture. For purposes of this Section
9.7, such compliance shall be determined without regard to any period of grace
or requirement of notice provided under this Indenture. The Guarantor shall file
with the Trustee written notice of occurrence of any Event of Default within 30
Business Days of its becoming aware of any such Event of Default.
ARTICLE 10
REDEMPTION
Section 10.1. APPLICABILITY OF ARTICLE. Securities (including coupons, if
any) of any series which are redeemable whether by operation of a sinking fund
or otherwise before their Stated Maturity shall be redeemable in accordance with
their terms and (except as otherwise specified as contemplated by Section 3.1
for Securities of any series) in accordance with this Article; PROVIDED,
HOWEVER, that if any provision of any such form of Security shall conflict with
any provision of this Article, the provision of such form of Security shall
govern. Except as otherwise set forth in the form of Security for such series,
each Security shall be subject to partial redemption only in the amount of
$1,000 or integral multiples of $1,000.
Section 10.2. ELECTION TO REDEEM; NOTICE TO TRUSTEE. The election of the
Company to redeem any Securities, including coupons, if any, shall be evidenced
by or pursuant to a Board Resolution or an Officers' Certificate. In the case
of any redemption at the election of the Company of less than all the Securities
or coupons, if any, of any series, 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, of the
principal amount of Securities of such series to be redeemed and, if applicable,
of the tenor of the Securities to be redeemed. In the case of any redemption of
Securities (i) prior to the expiration of any restriction on such redemption
provided in the terms of such Securities 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 10.3. SELECTION OF SECURITIES TO BE REDEEMED. Unless otherwise
specified as contemplated by Section 3.1, if less than all the Securities
(including coupons, if any) of a series with the same original issue date,
interest rate and Stated Maturity are to be redeemed, the Trustee, not more than
45 days prior to the redemption date, shall select the Securities of the series
to be redeemed in such manner as the Trustee shall deem fair and appropriate.
The Trustee shall make the selection from Securities of the series that are
Outstanding and that have not previously been called for redemption and may
provide for the selection for
<PAGE>
75
redemption of portions (equal to the minimum authorized denomination for
Securities, including coupons, if any, of that series or any integral
multiple thereof) of the principal amount of Securities, including coupons,
if any, of such series of a denomination larger than the minimum authorized
denomination for Securities of that series. The Trustee shall promptly
notify the Company in writing of the Securities selected by the Trustee for
redemption and, in the case of any Securities selected for partial
redemption, the principal amount thereof to be redeemed.
For purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities (including coupons, if any)
shall relate, in the case of any Securities (including coupons, if any) redeemed
or to be redeemed only in part, to the portion of the principal amount of such
Securities (including coupons, if any) which has been or is to be redeemed.
Section 10.4. NOTICE OF REDEMPTION. Unless otherwise specified as
contemplated by Section 3.1, notice of redemption shall be given in the manner
provided in Section 1.6 not less than 30 days nor more than 60 days prior to the
Redemption Date to the Holders of the Securities to be redeemed.
All notices of redemption shall state:
(1) the Redemption Date;
(2) the Redemption Price;
(3) if fewer than all the Outstanding Securities of a series are to be
redeemed, the identification (and, in the case of partial redemption, the
principal amounts) of the particular Security or Securities to be redeemed;
(4) in case any Security is to be redeemed in part only, the notice
which relates to such Security shall state that on and after the Redemption
Date, upon surrender of such Security, the holder will receive, without a
charge, a new Security or Securities of authorized denominations for the
principal amount thereof remaining unredeemed;
(5) the Place or Places of Payment where such Securities, together in
the case of Bearer Securities with all coupons appertaining thereto, if
any, maturing after the Redemption Date, are to be surrendered for payment
for the Redemption Price;
(6) that Securities of the series called for redemption and all
unmatured coupons, if any, appertaining thereto must be surrendered to the
Paying Agent to collect the redemption price;
(7) that, on the Redemption Date, the Redemption Price and any accrued
interest will become due and payable upon each such Security, or the
portion thereof, to be redeemed and, if applicable, that interest thereon
will cease to accrue on and after said date;
<PAGE>
76
(8) that the redemption is for a sinking fund, if such is the case;
(9) that, unless otherwise specified in such notice, Bearer Securities
of any series, if any, surrendered for redemption must be accompanied by
all coupons maturing subsequent to the Redemption Date or the amount of any
such missing coupon or coupons will be deducted from the Redemption Price,
unless security or indemnity satisfactory to the Company, the Trustee and
any Paying Agent is furnished; and
(10) CUSIP number (if any).
Notice of redemption of Securities to be redeemed 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 10.5. DEPOSIT OF REDEMPTION PRICE. On or prior to 12:00 noon 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 9.3) an amount of
money in the currency or currencies (including currency units or composite
currencies) in which the Securities of such series are payable (except as
otherwise specified pursuant to Section 3.1 for the Securities of such series)
sufficient to pay on the Redemption Date the Redemption Price of, and (unless
the Redemption Date shall be an Interest Payment Date) interest accrued to the
Redemption Date on, all Securities or portions thereof which are to be redeemed
on that date.
Unless any Security by its terms prohibits any sinking fund payment
obligation from being satisfied by delivering and crediting Securities
(including Securities redeemed otherwise than through a sinking fund), the
Company may deliver such Securities to the Trustee for crediting against such
payment obligation in accordance with the terms of such Securities and this
Indenture.
Section 10.6. 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 and the
Guarantor shall default in the payment of the Redemption Price together with
interest accrued to the Redemption Date and accrued interest) such Securities
shall cease to bear interest and the coupons for any such interest
appertaining to any Bearer Security so to be redeemed, except to the extent
provided below, shall be void. Except as provided in the next succeeding
paragraph, upon surrender of any such Security, including coupons, if any,
for redemption in accordance with said notice, such Security shall be paid by
the Company at the Redemption Price, together with accrued interest to the
Redemption Date; PROVIDED, HOWEVER, that installments of interest on Bearer
Securities whose Stated Maturity is prior to the Redemption Date shall be
payable only at an office or agency located outside the United States and its
possessions (except as otherwise provided in Section 9.2) and, unless
otherwise specified as contemplated by Section 3.1, only upon presentation
and surrender of coupons for such interest; and PROVIDED FURTHER that, unless
otherwise specified as contemplated by Section 3.1, installments of interest
on Registered Securities
<PAGE>
77
whose Stated Maturity is prior to the Redemption Date shall be payable to the
Holders of such Securities, or one or more Predecessor Securities, registered
as such at the close of business on the relevant Record Dates according to
their terms and the provisions of Section 3.7.
If any Bearer Security surrendered for redemption shall not be accompanied
by all appurtenant coupons maturing after the Redemption Date, such Bearer
Security may be paid after deducting from the Redemption Price an amount equal
to the face amount of all such missing coupons, or the surrender of such missing
coupon or coupons may be waived by the Company and the Trustee if there be
furnished to them such security or indemnity as they may require to save each of
them and any Paying Agent harmless. If thereafter the Holder of such Bearer
Security shall surrender to the Trustee or any Paying Agent any such missing
coupon in respect of which a deduction shall have been made from the Redemption
Price, such Holder shall be entitled to receive the amount so deducted;
PROVIDED, HOWEVER, that interest represented by coupons shall be payable only at
an office or agency located outside of the United States (except as otherwise
provided pursuant to Section 9.2) and, unless otherwise specified as
contemplated by Section 3.1, only upon presentation and surrender of those
coupons.
If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal (and premium, if any) shall, until paid,
bear interest from the Redemption Date at the rate prescribed therefor in the
Security.
Section 10.7. SECURITIES REDEEMED IN PART. Upon surrender of a Security
that is redeemed in part at any Place of Payment therefor (with, if the Company
or the Trustee so required, 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), the Company
shall execute and the Trustee shall authenticate and deliver to the Holder of
that Security, without service charge, a new Security or Securities of the same
series with the same form and the same Maturity in any authorized denomination
equal in aggregate principal amount to the unredeemed portion of the principal
of the Security surrendered.
ARTICLE 11
SINKING FUNDS
Section 11.1. APPLICABILITY OF ARTICLE. The provisions of this Article
shall be applicable to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 3.1 for
Securities of such series.
The minimum amount of any sinking fund payment provided for by the terms of
Securities of any series is herein referred to as a "mandatory sinking fund
payment," and any payment in excess of such minimum amount provided for by the
terms of Securities of any series is herein referred to as an "optional sinking
fund payment." If provided for by the
<PAGE>
78
terms of Securities of any series, the cash amount of any sinking fund
payment may be subject to reduction as provided in Section 11.2. Each
sinking fund payment shall be applied to the redemption of Securities of any
series as provided for by the terms of Securities of such series.
Section 11.2. SATISFACTION OF SINKING FUND PAYMENTS WITH SECURITIES. The
Company or the Guarantor (i) may deliver Outstanding Securities of a series
(other than any previously called for redemption) together, in the case of
Bearer Securities of such series, with all unmatured coupons appertaining
thereto and (ii) may apply as a credit Securities of a series which have been
redeemed either at the election of the Company pursuant to the terms of such
Securities or through the application of permitted optional sinking fund
payments pursuant to the terms of such Securities, in each case in satisfaction
of all or any part of any sinking fund payment with respect to the Securities of
such series required to be made pursuant to the terms of such Securities as
provided for by the terms of such series; PROVIDED that such Securities have not
been previously so credited. Such Securities shall be received and credited for
such purpose by the Trustee at the Redemption Price specified in such Securities
for redemption through operation of the sinking fund and the amount of such
sinking fund payment shall be reduced accordingly.
Section 11.3. REDEMPTION OF SECURITIES FOR SINKING FUND. Not less than 60
days prior to each sinking fund payment date for any series of Securities
(unless a shorter period shall be satisfactory to the Trustee), the Company will
deliver to the Trustee an Officers' Certificate specifying the amount of the
next ensuing sinking fund payment for that series pursuant to the terms of that
series, the portion thereof, if any, which is to be satisfied by payment of cash
and the portion thereof, if any, which is to be satisfied by delivering and
crediting Securities of that series pursuant to Section 11.2 and will also
deliver to the Trustee any Securities to be so delivered. Not less than 30 days
before each such sinking fund payment date, the Trustee shall select the
Securities to be redeemed upon such sinking fund payment date in the manner
specified in Section 10.3 and cause notice of the redemption thereof to be given
in the name of and at the expense of the Company in the manner provided in
Section 10.4. Such notice having been duly given, the redemption of such
Securities shall be made upon the terms and in the manner stated in Sections
10.6 and 10.7.
ARTICLE 12
GUARANTEE OF SECURITIES
Section 12.1. UNCONDITIONAL GUARANTEE. The Guarantor hereby unconditionally
guarantees to each Holder of a Security of any series authenticated and
delivered by the Trustee or Authenticating Agent, the due and punctual payment
of the principal of and premium, if any, and interest on, and any Redemption
Price with respect to, such Security, when and as the same shall become due and
payable, whether at maturity, by acceleration or redemption or otherwise, in
accordance with the terms of such Security and of this Indenture. In case of
the failure of the Company punctually to pay any such principal, premium or
interest payment or Redemption Price, the Guarantor hereby agrees to cause any
such
<PAGE>
79
payment to be made punctually when and as the same shall become due and
payable, whether at maturity, upon acceleration or redemption or otherwise,
and as if such payment were made by the Company.
The Guarantor hereby agrees that its obligations hereunder shall be as
principal and not merely as surety, and shall be absolute and unconditional,
irrespective of, and shall be unaffected by, any invalidity, irregularity or
failure to enforce the provisions of any such Security or this Indenture, or any
waiver, modification, consent or indulgence granted to the Company with respect
thereto (unless the same shall also be provided the Guarantor), by the Holder of
such Security or the Trustee, the recovery of any judgment against the Company
or any action to enforce the same, or any other circumstances which may
otherwise constitute a legal or equitable discharge of a surety or guarantor.
The Guarantor hereby waives diligence, presentment, demand of payment, filing of
claims with a court in the event of merger, insolvency or bankruptcy of the
Company, any right to require a proceeding first against the Company, protest or
notice with respect to any such Security or the indebtedness evidenced thereby
and all demands whatsoever, and covenants that this Guarantee will not be
discharged except by payment in full of the principal, premium, if any, and
interest on, and any Redemption Price in respect of, the Securities and the
complete performance of all other obligations contained in the Securities.
The Guarantee is, to the extent and in the manner set forth in Article 13
(which reference shall include deletions from, additions to or modifications of
Article 13 and related definitions pursuant to applicable provisions in any
Supplemental Indenture, Board Resolution or Officers' Certificate pursuant to
Section 3.1 establishing the terms of a series of Securities), subordinated and
subject in right of payment to the prior payment in full of the principal of and
premium, if any, and interest on all Senior Indebtedness of the Guarantor, and
this Guarantee is made subject to such provisions of this Indenture.
The Guarantor hereby irrevocably agrees that any claim or other rights that
it may now or hereafter acquire against the Company that arise from the
existence, payment, performance or enforcement of the Company's obligations
under the Securities or this Indenture, including, without limitation, any right
of subrogation, reimbursement, exoneration, contribution, indemnification, any
right to participate in any claim or remedy of the Holder of any Securities
against the Company, whether or not such claim, remedy or right arises in
equity, or under contract, statute or common law, including, without limitation,
the right to take or receive from the Company, directly or indirectly, in cash
or other property or by setoff or in any other manner, payment or security on
account of such claim or other rights, shall be subordinated and postponed in
right of payment to the prior payment and performance in full of all of the
Company's obligations under the Securities or this Indenture. If any amount
shall be paid to the Guarantor in violation of the preceding sentence and the
obligations of the Company guaranteed by the Guarantor pursuant hereto shall not
have been paid in full, such amount shall be deemed to have been paid to the
Guarantor for the benefit of, and held in trust for the benefit of, the Holders
of Securities entitled to the benefit of this Guarantee, and shall forthwith be
paid to the Trustee. The Guarantor acknowledges that it will receive direct and
indirect benefits from the issuance of the Securities and that the agreement set
forth in this paragraph is knowingly made in contemplation of such benefits.
<PAGE>
80
ARTICLE 13
SUBORDINATION OF SECURITIES AND GUARANTEE
Unless otherwise set forth in the Supplemental Indenture, Board Resolution
or Officers' Certificate pursuant to Section 3.1 establishing the terms of a
series of Securities, such series of Securities shall be subject to the
following provisions:
Section 13.1. SECURITIES AND GUARANTEE SUBORDINATED TO SENIOR INDEBTEDNESS.
(a) The Company agrees, and each Holder of the Securities by acceptance
thereof likewise agrees, that the payment of the principal of, premium, if any,
and interest on the Securities is subordinated, to the extent and in the manner
provided in this Article 13, to the prior payment in full of all Senior
Indebtedness of the Company.
(b) The Guarantor agrees, and each Holder of the Securities by acceptance
thereof likewise agrees, that the payment by the Guarantor of all amounts under
the Guarantee is subordinated, to the extent and in the manner provided in this
Article 13, to the prior payment in full of all Senior Indebtedness of the
Guarantor.
(c) All provisions of this Article 13 shall be subject to Section 13.14.
Section 13.2. COMPANY AND GUARANTOR NOT TO MAKE PAYMENTS WITH RESPECT TO
SECURITIES AND GUARANTEE IN CERTAIN CIRCUMSTANCES.
(a) Upon the maturity of any Senior Indebtedness of the Company or Senior
Indebtedness of the Guarantor, as the case may be, by lapse of time,
acceleration or otherwise, all obligations with respect thereto shall first be
paid in full, or such payment duly provided for in cash or in a manner
satisfactory to the holders of such Senior Indebtedness, before any payment is
made on account of the principal of, premium, if any, or interest on the
Securities or to redeem, retire, purchase, deposit moneys for the defeasance of
or acquire any of the Securities or on account of the Guarantee, as the case may
be.
(b) Upon the happening of (i) any default in payment of any Senior
Indebtedness of the Company or Senior Indebtedness of the Guarantor, as the case
may be, when due (following the expiration of any applicable grace period) or
(ii) any other default on Senior Indebtedness of the Company or Senior
Indebtedness of the Guarantor, as the case may be, and the maturity of such
Senior Indebtedness is accelerated in accordance with its terms, then, unless
(w) such default relates to Senior Indebtedness of the Company or Senior
Indebtedness of the Guarantor, as the case may be, in an aggregate amount equal
to or less than $20 million, (x) such default shall have been cured or waived or
shall have ceased to exist, (y) any such acceleration has been rescinded, or (z)
such Senior Indebtedness has been paid in full, no direct or indirect payment in
cash, property or securities, by set-off or otherwise (except payment of the
Securities from funds previously deposited in accordance with Section 4.1 at any
time such deposit was not prohibited by this Indenture), shall be made or agreed
to
<PAGE>
81
be made by the Company on account of the principal of or premium, if any, or
interest on the Securities, or in respect of any redemption, retirement,
purchase, deposit of moneys for the defeasance or other acquisition of any of
the Securities in the case of such a default in Senior Indebtedness of the
Company or by the Guarantor on account of the Guarantee in the case of such a
default in Senior Indebtedness of the Guarantor and neither the Company in
the case of such a default in Senior Indebtedness of the Company nor the
Guarantor in the case of such a default in Senior Indebtedness of the
Guarantor shall deposit money for any such payment or distribution with the
Trustee or any Paying Agent nor shall the Company or the Guarantor (if the
Company or the Guarantor is acting as its own Paying Agent) segregate and
hold in trust money for any such payment or distribution.
(c) In the event that, notwithstanding the provisions of Section 13.2(a) or
13.2(b), the Trustee or the Holder of any Security shall have received any
payment on account of the principal of or premium, if any, or interest on the
Securities or on account of the Guarantee in contravention of Section 13.2(a) or
13.2(b) or after the happening of a default in payment of any Senior
Indebtedness of the Company or Senior Indebtedness of the Guarantor, as the case
may be, or any acceleration of the maturity of any Senior Indebtedness of the
Company or Senior Indebtedness of the Guarantor, as the case may be, then, in
either such case, except in the case of any such default which shall have been
cured or waived or shall have ceased to exist, such payment (subject to the
provisions of Sections 13.6 and 13.7) shall be held for the benefit of, and
shall be paid over and delivered to, the holders of such Senior Indebtedness of
the Company or Senior Indebtedness of the Guarantor, as the case may be (PRO
RATA as to each of such holders on the basis of the respective amounts of Senior
Indebtedness of the Company or Senior Indebtedness of the Guarantor, as the case
may be, held by them), or their representative or the trustee under the
indenture or other agreement (if any) pursuant to which Senior Indebtedness of
the Company or Senior Indebtedness of the Guarantor, as the case may be, may
have been issued, as their respective interests may appear, for application to
the payment of all Senior Indebtedness of the Company or Senior Indebtedness of
the Guarantor, as the case may be, remaining unpaid to the extent necessary to
pay all Senior Indebtedness of the Company or Senior Indebtedness of the
Guarantor, as the case may be, in full in accordance with its terms, after
giving effect to any concurrent payment or distribution to or for the holders of
Senior Indebtedness of the Company or Senior Indebtedness of the Guarantor, as
the case may be.
(d) Subject to the introductory paragraph of this Article 13, nothing in
this Article 13 shall prevent or delay the Trustee or the holders of the
Securities from taking any action in connection with the acceleration of the
maturity of the Securities pursuant to Section 5.2 upon the occurrence of an
Event of Default.
Section 13.3. SECURITIES AND GUARANTEE SUBORDINATED TO PRIOR PAYMENT OF
ALL SENIOR INDEBTEDNESS ON DISSOLUTION, LIQUIDATION OR REORGANIZATION OF THE
COMPANY OR THE GUARANTOR. Upon the distribution of assets of the Company or the
Guarantor in any dissolution, winding up, liquidation (total or partial) or
similar proceeding relating to the Company or the Guarantor (whether in
bankruptcy, insolvency or receivership proceedings or upon an assignment for the
benefit of creditors or otherwise):
<PAGE>
82
(1) the holders of all Senior Indebtedness of the Company or Senior
Indebtedness of the Guarantor, as the case may be, shall first be entitled to
receive payment in full of all Senior Indebtedness (or to have such payment duly
provided for in a manner satisfactory to them) in cash or in a manner
satisfactory to the holders of Senior Indebtedness of the Company or Senior
Indebtedness of the Guarantor, as the case may be, before the Holders of the
Securities, in the case of Senior Indebtedness of the Company, or the Guarantee,
in the case of Senior Indebtedness of the Guarantor, are entitled to receive any
payment on account of the principal of, premium, if any, or interest on the
Securities or Guarantee, as the case may be;
(2) any payment or distribution of assets of the Company or the Guarantor
of any kind or character, whether in cash, property or securities (other than
securities of the Company or the Guarantor as reorganized or readjusted or
securities of the Company or the Guarantor or any other company, trust or
corporation provided for by a plan of reorganization or readjustment, the
payment of which is junior or otherwise subordinate, at least to the extent
provided in this Article 13 with respect to the Securities or the Guarantee, as
the case may be, to the payment of all Senior Indebtedness of the Company or
Senior Indebtedness of the Guarantor, as the case may be, at the time
outstanding and to the payment of all securities issued in exchange therefor to
the holders of the Senior Indebtedness of the Company or Senior Indebtedness of
the Guarantor, as the case may be, at the time outstanding), to which the
Holders of the Securities or the Guarantee, as the case may be, or the Trustee
on behalf of the Holders of the Securities would be entitled except for the
provisions of this Article 13, shall be paid by the liquidating trustee or agent
or other person making such payment or distribution directly to the holders of
the Senior Indebtedness of the Company or Senior Indebtedness of the Guarantor,
as the case may be, or their representatives or to the trustee under any
indenture under which such Senior Indebtedness may have been issued (PRO RATA as
to each such holder, representative or trustee on the basis of respective
amounts of unpaid Senior Indebtedness held or represented by each), to the
extent necessary to make payment in full of all Senior Indebtedness of the
Company or Senior Indebtedness of the Guarantor, as the case may be, remaining
unpaid, after giving effect to any concurrent payment or distribution or
provision therefor to the holders of such Senior Indebtedness; and
(3) in the event that notwithstanding the foregoing provisions of this
Section 13.3, any payment or distribution of assets of the Company or the
Guarantor of any kind or character, whether in cash, property or securities
(other than securities of the Company or the Guarantor as reorganized or
readjusted or securities of the Company or the Guarantor or any other company,
trust or corporation provided for by a plan of reorganization or readjustment,
the payment of which is junior or otherwise subordinate, at least to the extent
provided in this Article 13 with respect to the Securities or the Guarantee, to
the payment of all Senior Indebtedness of the Company or Senior Indebtedness of
the Guarantor, as the case may be, at the time outstanding and to the payment of
all securities issued in exchange therefor to the holders of the Senior
Indebtedness of the Company or Senior Indebtedness of the Guarantor, as the case
may be, at the time outstanding), shall be received by the Trustee or the
Holders of the Securities or the Guarantee, as the case may be, on account of
principal of, premium, if any, or interest on the Securities or on account of
the Guarantee before all Senior Indebtedness of the Company or Senior
Indebtedness of the Guarantor, as the case may be, is
<PAGE>
83
paid in full in cash or in a manner satisfactory to the holders of such
Senior Indebtedness in accordance with its terms, or effective provision made
for its payment, such payment or distribution (subject to the provisions of
Sections 13.6 and 13.7) shall be received and held for the benefit of and
paid over to the holders of the Senior Indebtedness of the Company or Senior
Indebtedness of the Guarantor, as the case may be, remaining unpaid or
unprovided for or their representative, or to the trustee under any indenture
under which such Senior Indebtedness of the Company or Senior Indebtedness of
the Guarantor, as the case may be, may have been issued (PRO RATA as provided
in paragraph (2) above), for application to the payment of such Senior
Indebtedness of the Company or Senior Indebtedness of the Guarantor, as the
case may be, to the extent necessary to pay all such Senior Indebtedness of
the Company or Senior Indebtedness of the Guarantor, as the case may be, in
full in cash or in a manner satisfactory to the holders of Senior
Indebtedness of the Company or Senior Indebtedness of the Guarantor, as the
case may be, in accordance with its terms, after giving effect to any
concurrent payment or distribution or provision therefor to the holders of
such Senior Indebtedness of the Company or Senior Indebtedness of the
Guarantor, as the case may be.
The Company or the Guarantor shall give prompt written notice to the
Trustee of any dissolution, winding up, liquidation or reorganization of the
Company or the Guarantor, as the case may be, or any assignment for the benefit
of the Company's or the Guarantor's creditors, as the case may be, tending
toward the liquidation of the business and assets of the Company or the
Guarantor, as the case may be.
Section 13.4. HOLDERS TO BE SUBROGATED TO RIGHTS OF HOLDERS OF SENIOR
INDEBTEDNESS. Upon the payment in full of all Senior Indebtedness of the Company
or Senior Indebtedness of the Guarantor, as the case may be, in cash or in a
manner satisfactory to the holders of such Senior Indebtedness, the Holders of
the Securities or the Guarantee, as the case may be, shall be subrogated equally
and ratably to the rights of the holders of Senior Indebtedness of the Company
or Senior Indebtedness of the Guarantor, as the case may be, to receive payments
or distributions of assets of the Company or the Guarantor, as the case may be,
applicable to the Senior Indebtedness of the Company or Senior Indebtedness of
the Guarantor, as the case may be, until all amounts owing on the Securities or
the Guarantee, as the case may be, shall be paid in full, and for the purpose of
such subrogation no payments or distributions to the holders of Senior
Indebtedness of the Company or Senior Indebtedness of the Guarantor, as the case
may be, by or on behalf of the Company or the Guarantor, as the case may be, or
by or on behalf of Holders of the Securities or the Guarantee by virtue of this
Article 13 which otherwise would have been made to the Holders of the Securities
or the Guarantee shall, as between the Company, the Guarantor and the Holders of
the Securities or the Guarantee, be deemed to be payment by the Company or the
Guarantor, as the case may be, to or on account of Senior Indebtedness of the
Company or Senior Indebtedness of the Guarantor, as the case may be, it being
understood that the provisions of this Article 13 are intended solely for the
purpose of defining the relative rights of the Holders of the Securities or the
Guarantee, on the one hand, and the holders of Senior Indebtedness of the
Company or Senior Indebtedness of the Guarantor, as the case may be, on the
other hand.
<PAGE>
84
Section 13.5. OBLIGATION OF THE COMPANY AND GUARANTOR UNCONDITIONAL.
Nothing contained in this Article 13 or elsewhere in this Indenture or in any
Security or the Guarantee is intended to or shall impair, as between the Company
or the Guarantor, as the case may be, and the Holders of the Securities and the
Guarantee, the obligations of the Company and the Guarantor, which are absolute
and unconditional, to pay to the Holders of the Securities and the Guarantee the
principal of (premium, if any) and interest on the Securities as and when the
same shall become due and payable in accordance with their terms, or is intended
to or shall affect the relative rights of the Holders of the Securities and the
Guarantee and creditors of the Company or the Guarantor other than the holders
of Senior Indebtedness of the Company or Senior Indebtedness of the Guarantor,
as the case may be, nor, except as expressly provided in this Article 13 (and
subject to the introductory paragraph of this Article 13), shall anything herein
or in the Securities prevent the Trustee or the Holder of any Security or
Guarantee from exercising all remedies otherwise permitted by applicable law
upon default under this Indenture, subject to the rights, if any, under this
Article 13 of the holders of Senior Indebtedness of the Company and Senior
Indebtedness of the Guarantor, in respect of cash, property or securities of the
Company or the Guarantor received upon the exercise of any such remedy. Upon
any distribution of assets of the Company or the Guarantor referred to in this
Article 13, the Trustee, subject to the provisions of Section 6.1, and the
Holders of the Securities and the Guarantee shall be entitled to rely upon any
order or decree by any court of competent jurisdiction in which such
dissolution, winding up, liquidation or reorganization proceedings are pending,
or a certificate of the liquidating trustee or agent or other person making any
distribution to the Trustee or the Holders of the Securities or the Guarantee,
for the purpose of ascertaining the persons entitled to participate in such
distribution, the holders of Senior Indebtedness of the Company and Senior
Indebtedness of the Guarantor and other indebtedness of the Company and the
Guarantor, the amount thereof or payable thereon, the amount or amounts paid or
distributed thereon and all other facts pertinent thereto or to this Article 13.
Nothing contained in this Article 13 or elsewhere in this Indenture or in
any Security or the Guarantee is intended to or shall affect the obligations of
the Company and the Guarantor to make, or prevent the Company or the Guarantor
from making, at any time except during the pendency of any dissolution, winding
up, liquidation (total or partial) or similar proceeding, and except during the
continuance of any event specified in Section 13.2 (not cured or waived),
payments at any time of the principal of (or premium, if any) or interest on the
Securities or the Guarantee.
Section 13.6. KNOWLEDGE OF TRUSTEE. Notwithstanding any provision of this
Indenture, the Trustee shall not at any time be charged with knowledge of the
existence of any facts which would prohibit the making of any payment of moneys
to or by the Trustee until a Responsible Officer of the Trustee on behalf of the
Trustee shall have received at the Corporate Trust Office of the Trustee written
notice thereof from the Company, the Guarantor, any Holder, or the holder or
representative of any class of Senior Indebtedness of the Company or Senior
Indebtedness of the Guarantor identifying the specific sections of this
Indenture involved and describing in detail the facts that would obligate the
Trustee to withhold payments to Holders of Securities, and prior to such time,
the Trustee, subject to the provisions of Section 6.1, shall be entitled in all
respects conclusively to assume that no such
<PAGE>
85
facts exist. The Trustee shall be entitled to rely on the delivery to it of a
written notice by an individual representing himself to be a holder of Senior
Indebtedness of the Company or Senior Indebtedness of the Guarantor (or a
trustee on behalf of such holder) to establish that such notice has been
given by a holder of any such Senior Indebtedness or a trustee on behalf of
any such holder.
In the event that the Trustee determines in good faith that further
evidence is required with respect to the right of any person as a holder of
Senior Indebtedness of the Company or Senior Indebtedness of the Guarantor to
participate in any payment or distribution pursuant to this Article, the Trustee
may request such person to furnish evidence to the reasonable satisfaction of
the Trustee as to the amount of Senior Indebtedness of the Company or Senior
Indebtedness of the Guarantor held by such person, the extent to which such
person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such person under this Article, and if such
evidence is not furnished, the Trustee may defer any payment to such person
pending judicial determination as to the right of such person to receive such
payment.
Section 13.7. APPLICATION BY TRUSTEE OF MONEYS DEPOSITED WITH IT. If prior
to the date on which by the terms of this Indenture any moneys deposited with
the Trustee or any Paying Agent (other than the Company, the Guarantor or a
Subsidiary) may become payable for any purpose (including, without limitation,
the payment of the principal of, premium, if any, or interest on any Security or
an account of the Guarantee) the Trustee shall not have received with respect to
such moneys the notice provided for in Section 13.6, then the Trustee shall have
full power and authority to receive such moneys and to apply the same to the
purpose for which they were received and shall not be affected by any notice to
the contrary which may be received by it on or after such date. This Section
13.7 shall be construed solely for the benefit of the Trustee and Paying Agent
and shall not otherwise affect the rights of holders of such Senior
Indebtedness.
Section 13.8. SUBORDINATION RIGHTS NOT IMPAIRED BY ACTS OR OMISSIONS OF
COMPANY, GUARANTOR OR HOLDERS OF SENIOR INDEBTEDNESS. No right of any present or
future holders of any Senior Indebtedness of the Company or Senior Indebtedness
of the Guarantor to enforce subordination as provided herein shall at any time
in any way be prejudiced or impaired by any act or failure to act on the part of
the Company or the Guarantor or by any act or failure to act by any such holder,
or by any noncompliance by the Company or the Guarantor with the terms of this
Indenture, regardless of any knowledge thereof which any such holder may have or
be otherwise charged with.
Section 13.9. HOLDERS AUTHORIZE TRUSTEE TO EFFECTUATE SUBORDINATION OF
SECURITIES AND GUARANTEE. Each Holder of the Securities by his acceptance
thereof authorizes and expressly directs the Trustee on his behalf to take such
action as may be necessary or appropriate in the discretion of the Trustee to
effectuate the subordination provided in this Article 13 and appoints the
Trustee his attorney in-fact for such purpose, including, without limitation, in
the event of any dissolution, winding up, liquidation or reorganization of the
Company or the Guarantor (whether in bankruptcy, insolvency or receivership
proceedings or upon an assignment for the benefit of creditors or otherwise)
tending towards liquidation of the
<PAGE>
86
business and assets of the Company or the Guarantor, the timely filing of a
claim for the unpaid balance of its or his Securities in the form required in
said proceedings. If the Trustee does not file a proper claim or proof of
debt in the form required in such proceedings before the expiration of the
time to file such claim or claims, then the holders of Senior Indebtedness of
the Company or Senior Indebtedness of the Guarantor, as the case may be, are
hereby authorized to have the right to file and are hereby authorized to file
an appropriate claim for and on behalf of the Holders of said Securities or
the Guarantee, as the case may be.
Section 13.10. RIGHT OF TRUSTEE TO HOLD SENIOR INDEBTEDNESS. The Trustee
shall be entitled to all of the rights set forth in this Article 13 in respect
of any Senior Indebtedness of the Company or Senior Indebtedness of the
Guarantor, as the case may be, at any time held by it to the same extent as any
other holder of such Senior Indebtedness of the Company or Senior Indebtedness
of the Guarantor, as the case may be, and nothing in this Indenture shall be
construed to deprive the Trustee of any of its rights as such holder. With
respect to the holders of Senior Indebtedness of the Company or Senior
Indebtedness of the Guarantor, as the case may be, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 13, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness of the Company or
Senior Indebtedness of the Guarantor, as the case may be, shall be read into
this Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Indebtedness of the Company or Senior
Indebtedness of the Guarantor, as the case may be, and the Trustee shall not be
liable to any holder of Senior Indebtedness of the Company or Senior
Indebtedness of the Guarantor, as the case may be, if it shall mistakenly pay
over or deliver to Holders of Securities or the Guarantee, the Company, the
Guarantor or any other Person monies or assets to which any holder of such
Senior Indebtedness shall be entitled by virtue of this Article 13 or otherwise.
Section 13.11. ARTICLE 13 NOT TO PREVENT EVENTS OF DEFAULT. The failure to
make a payment on account of principal or interest by reason of any provision in
this Article 13 shall not be construed as preventing the occurrence of an Event
of Default under Section 5.1.
Section 13.12. PAYING AGENTS OTHER THAN THE TRUSTEE. In case at any time
any Paying Agent (including, without limitation, the Company, the Guarantor or
any Subsidiary) other than the Trustee shall have been appointed by the Company
or the Guarantor and be then acting hereunder, the term "Trustee" as used in
this Article 13 shall in such case (unless the context shall otherwise require)
be construed as extending to and including such Paying Agent (except the
Company, the Guarantor and their subsidiaries in the case of Sections 13.6 and
13.7) within its meaning as fully for all intents and purposes as if such Paying
Agent were named in this Article 13 in addition to or in place of the Trustee.
Section 13.13. TRUSTEE'S COMPENSATION NOT PREJUDICED. Nothing in this
Article 13 shall apply to amounts due to the Trustee pursuant to Section 6.9.
Section 13.14. TRUST MONEYS NOT SUBORDINATED. Notwithstanding anything
contained herein to the contrary, payments from money held in trust under
Article 4 by the Trustee for the payment of principal of, premium, if any, and
interest on the Securities shall not be
<PAGE>
87
subordinated to the prior payment of any Senior Indebtedness of the Company
or Senior Indebtedness of the Guarantor or subject to the restrictions set
forth in this Article 13 and none of the Holders shall be obligated to pay
over any such amount to the Company or the Guarantor or any holder of Senior
Indebtedness of the Company or Senior Indebtedness of the Guarantor or any
other creditor of the Company or the Guarantor.
_____________________________________________
<PAGE>
88
This Indenture may be executed in any number of counterparts, each of which
shall be an original, but such counterparts shall together constitute but one
instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of the day and year first above written.
NORTHWEST AIRLINES, INC., as Issuer
By Joseph E. Francht, Jr.
----------------------
Name: Joesph E. Francht, Jr.
Title: Senior Vice President
Finance and Treasurer
Attest:
/s/ Michael L. Miller
- ---------------------
Name: Michael L. Miller
Title: Assistant Secretary
NORTHWEST AIRLINES
CORPORATION, as Guarantor
By /s/ Joseph E. Francht, Jr.
--------------------------
Name: Joseph E. Francht, Jr.
Title: Senior Vice President
Finance and Treasurer
Attest:
/s/ Michael L. Miller
- ---------------------
Name: Michael L. Miller
Title: Assistant Secretary
STATE STREET BANK AND TRUST
COMPANY, as Trustee
By /s/ Donald E. Smith
------------------
Name: Donald E. Smith
Title: Vice President
Attest:
/s/Paul D. Allen
- ----------------
Name: Paul D. Allen
Title: Vice President
<PAGE>
[IF THIS IS A GLOBAL SECURITY, INSERT - UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A
NEW YORK CORPORATION ("DTC"), TO NORTHWEST AIRLINES, INC. OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY
AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE &
CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE
OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY
OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE &
CO., HAS AN INTEREST HEREIN.]
[IF THIS IS A GLOBAL SECURITY, INSERT - TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, BY DTC TO A
NOMINEE OF DTC OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE THEREOF OR BY
DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR SUCH SUCCESSOR'S NOMINEE,
UNLESS AND UNTIL THIS SECURITY IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES
IN DEFINITIVE FORM AND TRANSFERS IN PART OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE.]
[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT - FOR
PURPOSES OF PROPOSED REGULATIONS UNDER SECTIONS 1271 THROUGH 1275 OF THE UNITED
STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE ISSUE DATE OF THIS
SECURITY IS ________; THIS SECURITY HAS BEEN ISSUED WITH $________ OF ORIGINAL
ISSUE DISCOUNT PER $1,000 PRINCIPAL AMOUNT; THE AMOUNT OF THE ORIGINAL ISSUE
DISCOUNT ALLOCABLE TO THE PERIOD FROM THE ISSUED DATE TO _____________ IS
$________; AND THE YIELD TO MATURITY IS ___________%. [If the Security has a
short first period, insert - THE METHOD USED TO DETERMINE THE YIELD TO MATURITY
WAS THE [EXACT] [APPROXIMATE] METHOD.]]
Registered Principal Amount:
No. CUSIP No.:
NORTHWEST AIRLINES, INC.
[Insert Designation of Senior Debt Series]
GUARANTEED AS TO PAYMENT OF PRINCIPAL,
PREMIUM, IF ANY, AND INTEREST BY
NORTHWEST AIRLINES CORPORATION
NORTHWEST AIRLINES, INC., a corporation duly organized and existing
under the laws of the State of Minnesota (herein called the "Company", which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received,
<PAGE>
hereby promises to pay to __________, or registered assigns, the principal sum
of _______________________________ ($___________) on [IF THE SECURITY IS TO
BEAR INTEREST PRIOR TO MATURITY, INSERT -, and to pay interest thereon]
[[INSERT AS APPLICABLE - annually OR semi-annually OR quarterly] on [INSERT
APPROPRIATE INTEREST PAYMENT DATES] (each an "Interest Payment Date") in each
year, commencing [INSERT - at the rate of _______% per annum - OR, IF
APPLICABLE, INSERT THE METHOD FOR DETERMINING THE ADJUSTABLE, FLOATING OR OTHER
FORM OF VARIABLE INTEREST RATE BORNE BY THE SECURITIES] until the principal
hereof is paid or made available for payment [IF APPLICABLE, INSERT - , and
(to the extent that the payment of such interest shall be legally enforceable)
at the rate of _____% per annum on any overdue principal and premium, if any,
and on any overdue installment of interest]. The interest so payable, and
punctually paid or duly provided for, on any Interest Payment Date will, as
provided in such Indenture, be paid to the Person in whose name this Security
(or one or more predecessor Securities) is registered at the close of business
on the Record Date for such interest, which shall be the [INSERT APPLICABLE
DATES] (whether or not a Business Day), as the case may be, next preceding such
Interest Payment Date. Any such interest not so punctually paid or duly
provided for will forthwith cease to be payable to the Holder on such Record
Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture.
[IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT -
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at
maturity and in such case the overdue principal of this Security shall bear
interest at the rate of _____% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
default in payment to the date payment of such principal has been made or duly
provided for. Interest on any overdue principal shall be payable on demand.
Any such interest on any overdue principal that is not so paid on demand shall
bear interest at the rate of _% per annum (to the extent that the payment of
such interest shall be legally enforceable), which shall accrue from the date of
such demand for payment to the date payment of such interest has been made or
duly provided for, and such interest shall also be payable on demand.]
Payment of the principal of (and premium, if any) and [IF APPLICABLE,
INSERT - ANY SUCH] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan,
The City of New York [INSERT - and ADDITIONAL PLACES OF PAYMENT], [INSERT - THE
CURRENCY OR CURRENCIES OF PAYMENT] [IF THIS SECURITY IS NOT A GLOBAL SECURITY,
INSERT -; PROVIDED, HOWEVER, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Register or by wire transfer to an
account located in the United States designated by the Holder]. [If this
Security is a Global Security, insert applicable form of payment].
<PAGE>
[IF THE SECURITY IS AN EXTENDIBLE SECURITY, OR IF THE SECURITY IS
REPAYABLE AT THE OPTION OF THE HOLDER, INSERT - The Securities of this series
are subject to repayment on [INSERT PROVISIONS WITH RESPECT TO REPAYMENT DATE OR
DATES] at the option of the holders thereof exercisable on or before the
__________, but not prior to the ________ preceding such _________ at a
repayment price equal to the principal amount thereof to be repaid, together
with interest payable thereon to the repayment date, as described on the reverse
side hereof.]
As provided in the Indenture (as defined below) and subject to certain
limitations set forth therein, the obligation of the Company to pay principal
of, and interest on, this Security is unconditionally guaranteed on an unsecured
basis pursuant to the Guarantee (the "Guarantee") of Northwest Airlines
Corporation (the "Guarantor"). The Indenture provides that the Guarantor shall
be released from the Guarantee and that the holder hereof shall have no further
claim against the Guarantor upon compliance with certain conditions.
This Security is one of a duly authorized series of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an indenture, dated as of March 1, 1997 (herein called the
"Indenture"), between the Company, Northwest Airlines Corporation and State
Street Bank and Trust Company, as Trustee (herein called the "Trustee", which
term includes any successor trustee under the Indenture), to which Indenture and
all indentures supplemental thereto reference is hereby made for a statement of
the respective rights, limitations of rights, duties and immunities thereunder
of the Company, the Guarantor, the Trustee and the Holders of the Securities and
of the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face hereof [IF
APPLICABLE, INSERT - limited (except as provided in the Indenture) in aggregate
principal amount to ____________]. The separate series of Securities may be
issued in various aggregate principal amounts, may mature at different times,
may bear interest, if any, at different rates, may be subject to different
redemption provisions (if any), may be subject to different sinking funds (if
any), may be subject to different covenants and Events of Default (as defined in
the Indenture) and may otherwise vary as in the Indenture provided. The
Indenture further provides that the Securities of a single series may be issued
at various times, with different maturity dates and may bear interest at
different rates.
[IF APPLICABLE, INSERT - The Securities of this series are subject to
redemption upon not less than 30 nor more than 60 days' notice by mail, [[IF
APPLICABLE, INSERT - (1) on __________ in any year commencing with the year
__________ and ending with the year ____________ through operation of the
sinking fund for this series (as more fully described in the next succeeding
paragraph) at [INSERT EITHER - a redemption price equal to 100% of the principal
amount of the Securities to be redeemed [if applicable, insert - plus a
Make-Whole Premium, if any,] OR the redemption prices for redemption through
operation of the sinking fund (expressed as percentages of the principal amount)
set forth in the table below,], and (2)]] at any time as a whole or in part,
[[IF APPLICABLE, INSERT - on or after ________,]] at the election of the
Company, at the [[INSERT EITHER - following redemption prices OR redemption
prices for redemption otherwise than through operation of the sinking fund]]
(expressed as percentages of the principal amount): if redeemed [[IF APPLICABLE,
INSERT - on or before
<PAGE>
____________, _______%, and if redeemed]] during the 12-month period beginning
____________ of the years indicated,
Redemption Price [[IF APPLICABLE,
For Redemption INSERT -
[[IF APPLICABLE, Redemption Price
INSERT - Through For Redemption
Operation Otherwise Than
of the Year Through Operation
Sinking Fund]] of the
SINKING FUND]]
and thereafter at a redemption price equal to ___% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the date fixed for
redemption, but interest installments becoming due on or prior to such
redemption date will be payable to the holders of such Securities of record at
the close of business on the relevant Record Dates referred to on the face
hereof, all as provided in the Indenture.]
[IF SECURITY IS SUBJECT TO MAKE-WHOLE PREMIUM, INSERT - The amount of
the Make-Whole Premium with respect to any Security (or portion thereof) to be
redeemed will be equal to the excess, if any, of:
[Describe Make-Whole Premium Calculation]
The present values of interest and principal payments referred to [in
clause ___] above will be determined in accordance with generally accepted
principles of financial analysis. Such present values will be calculated by
discounting the amount of each payment of interest or principal from the date
that each such payment would have been payable, but for the redemption, to the
Redemption Date at a discount rate equal to the Treasury Yield (as defined
below) plus ____ basis points.
The Make-Whole Premium will be calculated by an independent investment
banking institution of national standing appointed by the Company; provided that
if the Company fails to make such appointment at least __ Business Days prior to
the Redemption Date, or if the institution so appointed is unwilling or unable
to make such calculation, such calculation will be made by ______________ or, if
such firm is unwilling or unable to make such calculation, by an independent
investment banking institution of national standing appointed by the Trustee (in
any such case, an "INDEPENDENT INVESTMENT BANKER").
For purposes of determining the Make-Whole Premium, "TREASURY YIELD"
means a rate of interest per annum equal to the weekly average yield to maturity
of United States Treasury Notes that have a constant maturity that corresponds
to the remaining term to maturity of the Securities, calculated to the nearest
1/12th of a year (the "REMAINING TERM").
<PAGE>
The Treasury Yield will be determined as of the third Business Day
immediately preceding the applicable Redemption Date.
The weekly average yields of United States Treasury Notes will be
determined by reference to the most recent statistical release published by the
Federal Reserve Bank of New York and designated "H.15(519) Selected Interest
Rates Release" or any successor release (the "H.15 STATISTICAL RELEASE"). If
the H.15 Statistical Release sets forth a weekly average yield for United States
Treasury Notes having a constant maturity that is the same as the Remaining
Term, then the Treasury Yield will be equal to such weekly average yield. In
all other cases, the Treasury Yield will be calculated by interpolation, on a
straight-line basis, between the weekly average yields on the United States
Treasury Notes that have a constant maturity closest to and greater than the
Remaining Term and the United States Treasury Notes that have a constant
maturity closest to and less than the Remaining Term (in each case as set forth
in the H.15 Statistical Release). Any weekly average yields so calculated by
interpolation will be rounded to the nearest 1/100th of 1%, with any figure of
1/200% or above being rounded upward. If weekly average yields for United
States Treasury Notes are not available in the H.15 Statistical Release or
otherwise, then the Treasury Yield will be calculated by interpolation of
comparable rates selected by the Independent Investment Banker.]
[IF APPLICABLE, INSERT - The sinking fund for this series provides for
the redemption on ______________ in each year beginning with the year ________
and ending with the year _________ of [[not less than]] $_______ [[("mandatory
sinking fund payments") and not more than $_________]] aggregate principal
amount of Securities of this series.] [IF APPLICABLE, INSERT - Securities of
this series acquired or redeemed by the Company otherwise than through
[[mandatory]] sinking fund payments may, to the extent and upon the terms
provided in the Indenture, be credited against subsequent [[mandatory]] sinking
fund payments otherwise required to be made.]
[IF APPLICABLE, INSERT - Notwithstanding the foregoing, the Company
may not, prior to ____________, redeem any Securities of this series as
contemplated by [[Clause (2) of]] the [next] [second] preceding paragraph as a
part of, or in anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an interest cost to the
Company (calculated in accordance with generally accepted financial practice) of
less than _____% per annum.]
[IF APPLICABLE, INSERT - Partial redemptions must be in an amount not
less than $_________ principal amount of Securities.]
IF APPLICABLE, INSERT - In the event of redemption of this Security in
part only, a new Security or Securities of this series for the unredeemed
portion hereof having the same interest rate and maturity as this Security will
be issued in the name of
the holder hereof upon the cancellation hereof.]
[IF THE SECURITY IS AN EXTENDIBLE SECURITY OR IF THE SECURITY IS
REMOVABLE AT THE OPTION OF THE HOLDER, INSERT - The Securities of this series
are subject to repayment in whole,
<PAGE>
or in part, on ________ [[INSERT MONTH, DAY AND YEARS]], in increments of
__________ or multiples in excess of _________, provided that the portion
of the principal amount of any Security of this series not being repaid
shall be at least ___________, at the option of the holder thereof at a
repayment price equal to the principal amount thereof to be repaid, together
with interest payable thereon to the repayment date. For this Security to be
repaid at the option of the holder, the Company must receive at its office
or agency in the Borough of Manhattan, The City of New York maintained for such
purpose, on or before the [INSERT MONTH AND DAY], or, if such [INSERT MONTH AND
DAY] is not a Business Day, the next succeeding Business Day, but no earlier
than the [INSERT MONTH AND DAY] prior to the [INSERT MONTH AND DAY] on which the
repayment price will be paid (i) this Security, with the form entitled "Option
to Elect Repayment" below duly completed, or (ii) a telegram, telex, facsimile
transmission or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company in the United States of America setting forth the name of the holder of
the Security, the principal amount of the Security, the amount of such Security
to be repaid, a statement that the option to elect repayment is being made
thereby and a guarantee that the Security to be repaid with the form entitled
"Option to Elect Repayment" on the reverse thereof duly completed will be
received by the Company at such office or agency no later than five Business
Days after the date of such telegram, telex, facsimile transmission or letter,
and such Security and form duly completed are received by the Company by such
fifth Business Day. Either form of notice duly received on or before the
[INSERT MONTH AND DAY] preceding any such [INSERT MONTH AND DAY] shall be
irrevocable. All questions as to the validity, eligibility (including time of
receipt) and acceptance of any Securities of this series for repayment will be
determined by the Company, whose determination shall be final and binding.]
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Upon (i) payment of the amount of principal so declared due and
payable, (ii) payment of interest on any overdue principal and overdue interest
(in each case to the extent that the payment of such interest shall be legally
enforceable) and (iii) the occurrence of certain other events as set forth in
the Indenture, all of the Company's and the Guarantor's obligations in respect
of the payment of the principal of and interest, if any, on the Securities of
this series shall terminate.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company, the Guarantor and the rights of the Holders of the Securities of each
series to be affected under the Indenture at any time by the Company, the
Guarantor and the Trustee with the consent of the Holders of a majority in
principal amount of the Securities at the time Outstanding of each series to be
affected. The Indenture also contains provisions permitting the Holders of
specified percentages in principal amount of the Securities of each series at
the time Outstanding, on behalf of the Holders of all Securities of such series,
to waive compliance by the Company with certain provisions of the Indenture and
certain past defaults under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be conclusive and binding
upon such Holder and upon all future Holders of this Security
<PAGE>
and of any Security issued upon the registration of transfer hereof or in
exchange herefor or in lieu hereof, whether or not notation of such consent
or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest (if any) on this Security at the times, place and rate, and in the coin
or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of [IF THIS SECURITY IS A GLOBAL SECURITY,
INSERT -, a Security of the series of which this Security is a part] [IF THIS
SECURITY IS NOT A GLOBAL SECURITY, INSERT - this Security] is registrable in the
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any) and interest (if any) on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Securities of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of [IF THIS SECURITY IS A GLOBAL SECURITY, INSERT - the
series of which this Security is a part] [IF THIS SECURITY IS NOT A GLOBAL
SECURITY, INSERT - this series] are issuable only in registered form without
coupons in denominations of [$1,000] and any integral multiple [in excess
thereof]. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
No recourse shall be had for the payment of the principal of, or
premium, if any, or interest on, this Security, or for any claim based hereon or
otherwise in respect hereof, or based on or in respect of the Indenture, any
indenture supplemental thereto or the Guarantee, against any incorporator,
stockholder, officer or director, as such, past, present or future, of the
Company, the Guarantor or of any successor corporation of either, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise, all such liability being, by the acceptance
hereof and as part of the consideration for the issue hereof, expressly waived
and released.
<PAGE>
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee or an Authenticating Agent, by manual signature, this Security shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.
[If the Security is an extendible security or if the Security is
repayable at the option of the holder, insert form of option to elect
repayment.]
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed and its corporate seal to be hereunto affixed and attested.
NORTHWEST AIRLINES, INC.
Dated:_________________________ By: _______________________________
Name:
Title:
Attest: ________________________
Name:
Title:
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of a series issued under the within-mentioned
Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By: _____________________________________
Name:
Title:
Dated: _______________________
<PAGE>
************************
TRANSFER NOTICE
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto ________________________________________________________
(Please insert Social Security, Taxpayer Identification No. or other identifying
number of Assignee)
(Please print or typewrite name and address including postal zip code of
Assignee)
the within Security of NORTHWEST AIRLINES, INC. (the "COMPANY") and does hereby
irrevocably constitute and appoint _______________________ attorney to transfer
the said Security on the books of the Company, with full power of substitution
in the premises.
Dated: ________________ ____________________________________
(The signature must be guaranteed by an
eligible institution member of the
medallion signature guarantee program.)
[NOTICE: The signature of this assignment must correspond with the name as
written upon the face of the within investment in every particular, without
alteration or enlargement or any change whatever.]
<PAGE>
[IF THIS IS A GLOBAL SECURITY, INSERT - UNLESS THIS CERTIFICATE IS
PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW
YORK CORPORATION ("DTC"), TO NORTHWEST AIRLINES, INC. OR ITS AGENT FOR
REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY SECURITY ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT HEREON IS MADE TO CEDE & CO.
OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC),
ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY
PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN
INTEREST HEREIN.]
[IF THIS IS A GLOBAL SECURITY, INSERT - TRANSFERS OF THIS GLOBAL
SECURITY SHALL BE LIMITED TO TRANSFERS IN WHOLE, BUT NOT IN PART, BY DTC TO A
NOMINEE OF DTC OR BY A NOMINEE THEREOF TO DTC OR ANOTHER NOMINEE THEREOF OR BY
DTC OR ANY SUCH NOMINEE TO A SUCCESSOR OF DTC OR SUCH SUCCESSOR'S NOMINEE,
UNLESS AND UNTIL THIS SECURITY IS EXCHANGED IN WHOLE OR IN PART FOR SECURITIES
IN DEFINITIVE FORM AND TRANSFERS IN PART OF THIS GLOBAL SECURITY SHALL BE
LIMITED TO TRANSFERS MADE IN ACCORDANCE WITH THE RESTRICTIONS SET FORTH IN THE
INDENTURE.]
[IF THE SECURITY IS AN ORIGINAL ISSUE DISCOUNT SECURITY, INSERT - FOR
PURPOSES OF PROPOSED REGULATIONS UNDER SECTIONS 1271 THROUGH 1275 OF THE UNITED
STATES INTERNAL REVENUE CODE OF 1986, AS AMENDED, THE ISSUE DATE OF THIS
SECURITY IS ________; THIS SECURITY HAS BEEN ISSUED WITH $________ OF ORIGINAL
ISSUE DISCOUNT PER $1,000 PRINCIPAL AMOUNT; THE AMOUNT OF THE ORIGINAL ISSUE
DISCOUNT ALLOCABLE TO THE PERIOD FROM THE ISSUED DATE TO _____________ IS
$________; AND THE YIELD TO MATURITY IS ___________%. [If the Security has a
short first period, insert - THE METHOD USED TO DETERMINE THE YIELD TO MATURITY
WAS THE [EXACT] [APPROXIMATE] METHOD.]]
Registered Principal Amount:
No. CUSIP No.:
NORTHWEST AIRLINES, INC.
[Insert Designation of Senior Subordinated Debt Series]
GUARANTEED AS TO PAYMENT OF PRINCIPAL,
PREMIUM, IF ANY, AND INTEREST BY
NORTHWEST AIRLINES CORPORATION
NORTHWEST AIRLINES, INC., a corporation duly organized and existing
under the laws of the State of Minnesota (herein called the "Company", which
term includes any successor corporation under the Indenture hereinafter referred
to), for value received,
<PAGE>
hereby promises to pay to __________, or registered assigns, the principal sum
of _______________________________ ($___________) on [IF THE SECURITY IS TO
BEAR INTEREST PRIOR TO MATURITY, INSERT -, and to pay interest thereon]
[[INSERT AS APPLICABLE - annually OR semi-annually OR quarterly] on
[INSERT APPROPRIATE INTEREST PAYMENT DATES] (each an "Interest Payment Date")
in each year, commencing [INSERT - at the rate of _______% per annum - OR, IF
APPLICABLE, INSERT THE METHOD FOR DETERMINING THE ADJUSTABLE, FLOATING OR
OTHER FORM OF VARIABLE INTEREST RATE BORNE BY THE SECURITIES] until the
principal hereof is paid or made available for payment [IF APPLICABLE,
INSERT - , and (to the extent that the payment of such interest shall be legally
enforceable) at the rate of _____% per annum on any overdue principal and
premium, if any, and on any overdue installment of interest]. The interest so
payable, and punctually paid or duly provided for, on any Interest Payment Date
will, as provided in such Indenture, be paid to the Person in whose name this
Security (or one or more predecessor Securities) is registered at the close of
business on the Record Date for such interest, which shall be the [INSERT
APPLICABLE DATES] (whether or not a Business Day), as the case may be, next
preceding such Interest Payment Date. Any such interest not so punctually paid
or duly provided for will forthwith cease to be payable to the Holder on such
Record Date and may either be paid to the Person in whose name this Security (or
one or more Predecessor Securities) is registered at the close of business on a
Special Record Date for the payment of such Defaulted Interest to be fixed by
the Trustee, notice whereof shall be given to Holders of Securities of this
series not less than 10 days prior to such Special Date, or be paid at any time
in any other lawful manner not inconsistent with the requirements of any
securities exchange on which the Securities of this series may be listed, and
upon such notice as may be required by such exchange, all as more fully provided
in said Indenture.
[IF THE SECURITY IS NOT TO BEAR INTEREST PRIOR TO MATURITY, INSERT -
The principal of this Security shall not bear interest except in the case of a
default in payment of principal upon acceleration, upon redemption or at
maturity and in such case the overdue principal of this Security shall bear
interest at the rate of _____% per annum (to the extent that the payment of such
interest shall be legally enforceable), which shall accrue from the date of such
default in payment to the date payment of such principal has been made or duly
provided for. Interest on any overdue principal shall be payable on demand.
Any such interest on any overdue principal that is not so paid on demand shall
bear interest at the rate of _% per annum (to the extent that the payment of
such interest shall be legally enforceable), which shall accrue from the date of
such demand for payment to the date payment of such interest has been made or
duly provided for, and such interest shall also be payable on demand.]
Payment of the principal of (and premium, if any) and [IF APPLICABLE,
INSERT - ANY SUCH] interest on this Security will be made at the office or
agency of the Company maintained for that purpose in the Borough of Manhattan,
The City of New York [INSERT - and ADDITIONAL PLACES OF PAYMENT], [INSERT - THE
CURRENCY OR CURRENCIES OF PAYMENT] [IF THIS SECURITY IS NOT A GLOBAL SECURITY,
INSERT -; PROVIDED, HOWEVER, that at the option of the Company payment of
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Register or by wire transfer to an
account located in the United States designated by the Holder]. [If this
Security is a Global Security, insert applicable form of payment].
<PAGE>
[IF THE SECURITY IS AN EXTENDIBLE SECURITY, OR IF THE SECURITY IS
REPAYABLE AT THE OPTION OF THE HOLDER, INSERT - The Securities of this series
are subject to repayment on [INSERT PROVISIONS WITH RESPECT TO REPAYMENT DATE OR
DATES] at the option of the holders thereof exercisable on or before the
__________, but not prior to the ________ preceding such _________ at a
repayment price equal to the principal amount thereof to be repaid, together
with interest payable thereon to the repayment date, as described on the reverse
side hereof.]
As provided in the Indenture (as defined below) and subject to certain
limitations set forth therein, the obligation of the Company to pay principal
of, and interest on, this Security is unconditionally guaranteed on an unsecured
basis pursuant to the Guarantee (the "Guarantee") of Northwest Airlines
Corporation (the "Guarantor"). The Indenture provides that the Guarantor shall
be released from the Guarantee and that the holder hereof shall have no further
claim against the Guarantor upon compliance with certain conditions.
This Security is one of a duly authorized series of securities of the
Company (herein called the "Securities"), issued and to be issued in one or more
series under an indenture, dated as of June 27, 1997 (herein called the
"Indenture"), between the Company, Northwest Airlines Company and State Street
Bank and Trust Company, as Trustee (herein called the "Trustee", which term
includes any successor trustee under the Indenture), to which Indenture and all
indentures supplemental thereto reference is hereby made for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Guarantor, the Trustee and the Holders of the Securities and of
the terms upon which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on the face hereof [IF
APPLICABLE, INSERT - limited (except as provided in the Indenture) in aggregate
principal amount to ____________]. The separate series of Securities may be
issued in various aggregate principal amounts, may mature at different times,
may bear interest, if any, at different rates, may be subject to different
redemption provisions (if any), may be subject to different sinking funds (if
any), may be subject to different covenants and Events of Default (as defined in
the Indenture) and may otherwise vary as in the Indenture provided. The
Indenture further provides that the Securities of a single series may be issued
at various times, with different maturity dates and may bear interest at
different rates.
This Security is subordinated to the Senior Indebtedness of the
Company, as defined in the Indenture. To the extent provided in the Indenture,
Senior Indebtedness must be paid before the Securities may be paid. The Company
agrees, and each Securityholder by accepting a Security agrees, to the
subordination provisions contained in the Indenture and authorizes the Trustee
to give them effect and appoints the Trustee as attorney-in-fact for such
purpose.
[IF APPLICABLE, INSERT - The Securities of this series are subject to
redemption upon not less than 30 nor more than 60 days' notice by mail, [[IF
APPLICABLE, INSERT - (1) on __________ in any year commencing with the year
__________ and ending with the year ____________ through operation of the
sinking fund for this series (as more fully described in the next succeeding
paragraph) at [INSERT EITHER - a redemption price equal to 100% of the
<PAGE>
principal amount of the Securities to be redeemed [if applicable, insert -
plus a Make-Whole Premium, if any,] OR the redemption prices for redemption
through operation of the sinking fund (expressed as percentages of the
principal amount) set forth in the table below,], and (2)]] at any time as a
whole or in part, [[IF APPLICABLE, INSERT - on or after ________,]] at the
election of the Company, at the [[INSERT EITHER - following redemption
prices OR redemption prices for redemption otherwise than through operation
of the sinking fund]](expressed as percentages of the principal amount): if
redeemed [[IF APPLICABLE, INSERT - on or before ____________, _______%, and if
redeemed]] during the 12-month period beginning ____________ of the years
indicated,
Redemption Price [[IF APPLICABLE,
For Redemption INSERT -
[[IF APPLICABLE, Redemption Price
INSERT - Through For Redemption
Operation Otherwise Than
of the YEAR Through Operation
SINKING FUND]] of the
SINKING FUND]]
and thereafter at a redemption price equal to ___% of the principal amount,
together in the case of any such redemption (whether through operation of the
sinking fund or otherwise) with accrued interest to the date fixed for
redemption, but interest installments becoming due on or prior to such
redemption date will be payable to the holders of such Securities of record at
the close of business on the relevant Record Dates referred to on the face
hereof, all as provided in the Indenture.]
[IF SECURITY IS SUBJECT TO MAKE-WHOLE PREMIUM, INSERT - The amount of
the Make-Whole Premium with respect to any Security (or portion thereof) to be
redeemed will be equal to the excess, if any, of:
[Describe Make-Whole Premium Calculation]
The present values of interest and principal payments referred to [in
clause ___] above will be determined in accordance with generally accepted
principles of financial analysis. Such present values will be calculated by
discounting the amount of each payment of interest or principal from the date
that each such payment would have been payable, but for the redemption, to the
Redemption Date at a discount rate equal to the Treasury Yield (as defined
below) plus ____ basis points.
The Make-Whole Premium will be calculated by an independent investment
banking institution of national standing appointed by the Company; provided that
if the Company fails to make such appointment at least __ Business Days prior to
the Redemption Date, or if the institution so appointed is unwilling or unable
to make such calculation, such calculation will be made by ______________ or, if
such firm is unwilling or unable to make
<PAGE>
such calculation, by an independent investment banking institution of
national standing appointed by the Trustee (in any such case, an "INDEPENDENT
INVESTMENT BANKER").
For purposes of determining the Make-Whole Premium, "TREASURY YIELD"
means a rate of interest per annum equal to the weekly average yield to
maturity of United States Treasury Notes that have a constant maturity that
corresponds to the remaining term to maturity of the Securities, calculated
to the nearest 1/12th of a year (the "REMAINING TERM"). The Treasury Yield
will be determined as of the third Business Day immediately preceding the
applicable Redemption Date.
The weekly average yields of United States Treasury Notes will be
determined by reference to the most recent statistical release published by the
Federal Reserve Bank of New York and designated "H.15(519) Selected Interest
Rates Release" or any successor release (the "H.15 STATISTICAL RELEASE"). If
the H.15 Statistical Release sets forth a weekly average yield for United States
Treasury Notes having a constant maturity that is the same as the Remaining
Term, then the Treasury Yield will be equal to such weekly average yield. In
all other cases, the Treasury Yield will be calculated by interpolation, on a
straight-line basis, between the weekly average yields on the United States
Treasury Notes that have a constant maturity closest to and greater than the
Remaining Term and the United States Treasury Notes that have a constant
maturity closest to and less than the Remaining Term (in each case as set forth
in the H.15 Statistical Release). Any weekly average yields so calculated by
interpolation will be rounded to the nearest 1/100th of 1%, with any figure of
1/200% or above being rounded upward. If weekly average yields for United
States Treasury Notes are not available in the H.15 Statistical Release or
otherwise, then the Treasury Yield will be calculated by interpolation of
comparable rates selected by the Independent Investment Banker.]
[IF APPLICABLE, INSERT - The sinking fund for this series provides for
the redemption on ____________ in each year beginning with the year ________
and ending with the year _________ of [[not less than]] $_________ [[("mandatory
sinking fund payments") and not more than $_________]] aggregate principal
amount of Securities of this series.] [IF APPLICABLE, INSERT - Securities of
this series acquired or redeemed by the Company otherwise than through
[[mandatory]] sinking fund payments may, to the extent and upon the terms
provided in the Indenture, be credited against subsequent [[mandatory]] sinking
fund payments otherwise required to be made.]
[IF APPLICABLE, INSERT - Notwithstanding the foregoing, the Company
may not, prior to ____________, redeem any Securities of this series as
contemplated by [[Clause (2) of]] the [next] [second] preceding paragraph as a
part of, or in anticipation of, any refunding operation by the application,
directly or indirectly, of moneys borrowed having an interest cost to the
Company (calculated in accordance with generally accepted financial practice) of
less than _____% per annum.]
[IF APPLICABLE, INSERT - Partial redemptions must be in an amount not
less than $_________ principal amount of Securities.]
<PAGE>
IF APPLICABLE, INSERT - In the event of redemption of this Security in
part only, a new Security or Securities of this series for the unredeemed
portion hereof having the same interest rate and maturity as this Security will
be issued in the name of the holder hereof upon the cancellation hereof.]
[IF THE SECURITY IS AN EXTENDIBLE SECURITY OR IF THE SECURITY IS
REMOVABLE AT THE OPTION OF THE HOLDER, INSERT - The Securities of this series
are subject to repayment in whole, or in part, on ________ [[INSERT MONTH, DAY
AND YEARS]], in increments of __________ or multiples in excess of _________,
provided that the portion of the principal amount of any Security of this series
not being repaid shall be at least ___________, at the option of the holder
thereof at a repayment price equal to the principal amount thereof to be repaid,
together with interest payable thereon to the repayment date. For this Security
to be repaid at the option of the holder, the Company must receive at its office
or agency in the Borough of Manhattan, The City of New York maintained for such
purpose, on or before the [INSERT MONTH AND DAY], or, if such [INSERT MONTH AND
DAY] is not a Business Day, the next succeeding Business Day, but no earlier
than the [INSERT MONTH AND DAY] prior to the [INSERT MONTH AND DAY] on which the
repayment price will be paid (i) this Security, with the form entitled "Option
to Elect Repayment" below duly completed, or (ii) a telegram, telex, facsimile
transmission or letter from a member of a national securities exchange or the
National Association of Securities Dealers, Inc. or a commercial bank or trust
company in the United States of America setting forth the name of the holder of
the Security, the principal amount of the Security, the amount of such Security
to be repaid, a statement that the option to elect repayment is being made
thereby and a guarantee that the Security to be repaid with the form entitled
"Option to Elect Repayment" on the reverse thereof duly completed will be
received by the Company at such office or agency no later than five Business
Days after the date of such telegram, telex, facsimile transmission or letter,
and such Security and form duly completed are received by the Company by such
fifth Business Day. Either form of notice duly received on or before the
[INSERT MONTH AND DAY] preceding any such [INSERT MONTH AND DAY] shall be
irrevocable. All questions as to the validity, eligibility (including time of
receipt) and acceptance of any Securities of this series for repayment will be
determined by the Company, whose determination shall be final and binding.]
If an Event of Default with respect to Securities of this series shall
occur and be continuing, the principal of the Securities of this series may be
declared due and payable in the manner and with the effect provided in the
Indenture. Upon (i) payment of the amount of principal so declared due and
payable, (ii) payment of interest on any overdue principal and overdue interest
(in each case to the extent that the payment of such interest shall be legally
enforceable) and (iii) the occurrence of certain other events as set forth in
the Indenture, all of the Company's and the Guarantor's obligations in respect
of the payment of the principal of and interest, if any, on the Securities of
this series shall terminate.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company, the Guarantor and the rights of the Holders of the Securities of each
series to be affected under the Indenture at any time by the Company, the
Guarantor and the Trustee with the consent of the Holders of a majority in
principal amount of the Securities at the time Outstanding of
<PAGE>
each series to be affected. The Indenture also contains provisions
permitting the Holders of specified percentages in principal amount of the
Securities of each series at the time Outstanding, on behalf of the Holders
of all Securities of such series, to waive compliance by the Company with
certain provisions of the Indenture and certain past defaults under the
Indenture and their consequences. Any such consent or waiver by the Holder
of this Security shall be conclusive and binding upon such Holder and upon
all future Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in lieu hereof,
whether or not notation of such consent or waiver is made upon this Security.
No reference herein to the Indenture and no provision of this Security
or of the Indenture shall alter or impair the obligation of the Company, which
is absolute and unconditional, to pay the principal of (and premium, if any) and
interest (if any) on this Security at the times, place and rate, and in the coin
or currency, herein prescribed.
As provided in the Indenture and subject to certain limitations
therein set forth, the transfer of [IF THIS SECURITY IS A GLOBAL SECURITY,
INSERT -, a Security of the series of which this Security is a part] [IF THIS
SECURITY IS NOT A GLOBAL SECURITY, INSERT - this Security] is registrable in the
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in any place where the principal of (and
premium, if any) and interest (if any) on this Security are payable, duly
endorsed by, or accompanied by a written instrument of transfer in form
satisfactory to the Company and the Registrar duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more new
Securities of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.
The Securities of [IF THIS SECURITY IS A GLOBAL SECURITY, INSERT - the
series of which this Security is a part] [IF THIS SECURITY IS NOT A GLOBAL
SECURITY, INSERT - this series] are issuable only in registered form without
coupons in denominations of [$1,000] and any integral multiple [in excess
thereof]. As provided in the Indenture and subject to certain limitations
therein set forth, Securities of this series are exchangeable for a like
aggregate principal amount of Securities of this series of like tenor of a
different authorized denomination, as requested by the Holder surrendering the
same.
No service charge shall be made for any such registration of transfer
or exchange, but the Company may require payment of a sum sufficient to cover
any tax or other governmental charge payable in connection therewith.
Prior to due presentment of this Security for registration of
transfer, the Company, the Trustee and any agent of the Company or the Trustee
may treat the Person in whose name this Security is registered as the owner
hereof for all purposes, whether or not this Security be overdue, and neither
the Company, the Trustee nor any such agent shall be affected by notice to the
contrary.
No recourse shall be had for the payment of the principal of, or
premium, if any, or interest on, this Security, or for any claim based hereon or
otherwise in respect hereof, or based on or in respect of the Indenture, any
indenture supplemental thereto or the
<PAGE>
Guarantee, against any incorporator, stockholder, officer or director, as
such, past, present or future, of the Company, the Guarantor or of any
successor corporation of either, whether by virtue of any constitution,
statute or rule of law, or by the enforcement of any assessment or penalty or
otherwise, all such liability being, by the acceptance hereof and as part of
the consideration for the issue hereof, expressly waived and released.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
Unless the certificate of authentication hereon has been executed by
the Trustee or an Authenticating Agent, by manual signature, this Security shall
not be entitled to any benefit under the Indenture or be valid or obligatory for
any purpose.
[If the Security is an extendible security or if the Security is
repayable at the option of the holder, insert form of option to elect
repayment.]
<PAGE>
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed and its corporate seal to be hereunto affixed and attested.
NORTHWEST AIRLINES, INC.
Dated:______________________ By:__________________________________
Name:
Title:
Attest:______________________
Name:
Title:
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Securities of a series issued under the within-mentioned
Indenture.
STATE STREET BANK AND TRUST COMPANY,
as Trustee
By:______________________________________
Name:
Title:
Dated:_______________________
<PAGE>
************************
TRANSFER NOTICE
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto _______________________________________________________
(Please insert Social Security, Taxpayer Identification No. or other identifying
number of Assignee)
(Please print or typewrite name and address including postal zip code of
Assignee)
the within Security of NORTHWEST AIRLINES, INC. (the "COMPANY") and does hereby
irrevocably constitute and appoint ____________________ attorney to transfer
the said Security on the books of the Company, with full power of substitution
in the premises.
Dated: _____________________ _________________________________
(The signature must be guaranteed by
an eligible institution member of the
medallion signature guarantee program.)
[NOTICE: The signature of this assignment must correspond with the name as
written upon the face of the within investment in every particular, without
alteration or enlargement or any change whatever.]
<PAGE>
SIMPSON THACHER & BARTLETT
(a partnership which includes professional corporations)
425 Lexington Avenue
New York, New York 10017
June 27, 1997
Northwest Airlines Corporation
Northwest Airlines, Inc.
5101 Northwest Drive
St. Paul, MN 55111-3034
Ladies and Gentlemen:
We have acted as counsel to Northwest Airlines Corporation, a Delaware
corporation ("NWA Corp."), and Northwest Airlines, Inc., a Minnesota
corporation ("Northwest" and, together with NWA Corp., the "Registrants"), in
connection with the registration statements on Form S-3 filed by the
Registrants on June 6, 1997 (File No. 333-28649) under the Securities Act of
1933, as amended (the "Act") (such registration statement, as amended, the
"Registration Statement"), relating to (i) debt securities of Northwest,
which may be either senior (the "Northwest Senior Securities") or
subordinated (the "Northwest Senior Subordinated Securities") (collectively,
the "Northwest Debt Securities"), including debt securities issuable upon
exercise of the Debt Warrants referred to below, (ii) guarantees of NWA Corp.
to be issued in connection with the Northwest Debt Securities and Pass
Through Certificates (as defined below) (the "Guarantees"), (iii) warrants to
purchase Northwest Debt Securities (the "Debt Warrants") and (iv) pass
through certificates (the "Pass Through Certificates") to be issued by one or
more trusts formed by Northwest relating to certain equipment notes either
issued by Northwest or relating to leases with Northwest, all of which are to
be issued and sold by the Registrants from time to time pursuant to Rule 415
under the Act for an aggregate initial offering price (together with the
aggregate initial offering price of securities previously registered under
the Registrant's registration statement on Form S-3 (File No. 333-13307)
which have not yet been sold and which, pursuant to Rule 429 under the Act,
are covered by the Prospectuses (as defined below) included in the
Registration Statement) not to exceed $500,000,000 or the equivalent thereof
in one or more foreign currencies or composite currencies. The Registration
Statement consists of two separate prospectuses, covering the following
securities: (i) Northwest Debt Securities and Debt Warrants to purchase
Northwest Debt Securities and Guarantees of such Northwest Debt
<PAGE>
Northwest Airlines Corporation
Northwest Airlines, Inc. -2- June 27, 1997
Securities by NWA Corp. (the "Debt Prospectus") and (ii) Northwest Pass
Through Certificates and Guarantees of such Pass Through Certificates by NWA
Corp. (the "Pass Through Prospectus" and, together with the Debt Prospectus,
the "Prospectuses"). The Northwest Debt Securities, Debt Warrants,
Guarantees and Pass Through Certificates are hereinafter referred to
collectively as the "Offered Securities."
The Offered Securities will be sold or delivered from time to time as
set forth in the Registration Statement, any amendment thereto, the two
separate Prospectuses or any supplements thereto ("Prospectus Supplements").
The Northwest Senior Securities will be issued under an Indenture dated as of
March 1, 1997 among Northwest, NWA Corp. and State Street Bank and Trust
Company, as trustee thereunder (the "Northwest Senior Indenture"), the
Northwest Senior Subordinated Securities will be issued under an Indenture
dated as of June 28, 1997 among Northwest, NWA Corp. and State Street Bank
and Trust Company, as trustee thereunder (the "Northwest Senior Subordinated
Indenture" and, together with the Northwest Senior Indenture, the "Northwest
Indentures"). The Northwest Indentures are included as exhibits to the
Registration Statement. The Pass Through Certificates will be issued under a
Pass Through Trust Agreement dated as of June 3, 1996 among Northwest, NWA
Corp. and the trustee thereunder (the "Pass Through Trust Agreement"), which
has been filed as an exhibit to the Registration Statement, and a Supplement
thereto relating to such series (a "Trust Supplement").
We have examined the Restated Certificate of Incorporation, as amended
in the case of NWA Corp., and Bylaws, as amended and restated in the case of
NWA Corp., of each of the Registrants and the Northwest Indentures and the
Pass Through Trust Agreement. In addition, we have examined, and have relied
as to matters of fact upon, originals or copies, certified or otherwise
identified to our satisfaction, of such corporate records, agreements,
documents and other instruments and such certificates or comparable documents
of public officials and of officers and representatives of the Registrants,
and have made such other and further investigations, as we have deemed
relevant and necessary as a basis for the opinions hereinafter set forth.
In such examination, we have assumed the genuineness of all signatures,
the legal capacity of natural persons, the authenticity of all documents
submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified or photostatic copies, and the
authenticity of the originals of such latter documents. In addition, we have
assumed that (i) a Prospectus Supplement will have been prepared and filed
with the Securities and Exchange Commission describing the Offered
Securities; (ii) all Offered Securities issued will be issued and sold in
compliance with applicable federal and state securities laws and solely in
the manner stated in the Registration Statement and the appropriate
Prospectus Supplement; (iii) a definitive
<PAGE>
Northwest Airlines Corporation
Northwest Airlines, Inc. -3- June 27, 1997
purchase, underwriting or similar agreement with respect to any Offered
Securities will have been duly authorized and validly executed and delivered
by one or both of NWA Corp. or Northwest and the other parties thereto; and
(iv) any Northwest Debt Securities issuable upon exercise of any Debt Warrant
will be duly authorized, created and, if appropriate, reserved for issuance
upon such exercise.
Based upon the foregoing, and subject to the qualifications and
limitations stated herein, we are of the opinion that:
1. With respect to Northwest Debt Securities to be issued under the
Northwest Indentures, when (i) the Board of Directors of Northwest and
NWA Corp. have taken all necessary corporate action to approve the terms
of the offering of such Northwest Debt Securities and related matters,
and (ii) such Northwest Debt Securities have been duly executed,
authenticated, issued and delivered in accordance with the provisions of
the applicable Northwest Indenture and the applicable definitive
purchase, underwriting or similar agreement approved by the Board of
Directors of Northwest and NWA Corp., and upon payment of the
consideration therefor provided for therein, or upon exercise of related
Debt Warrants in accordance with their terms, as the case may be, such
Northwest Debt Securities will be valid and legally binding obligations
of Northwest.
2. With respect to the Debt Warrants, when (i) the Board of
Directors of Northwest has taken all necessary corporate action to
approve the terms of the offering of such Debt Warrants and related
matters, (ii) a debt warrant agreement relating to such Debt Warrants in
the form filed as an exhibit to the Registration Statement has been duly
authorized and validly executed and delivered by Northwest and a warrant
agent appointed by Northwest and (iii) the Debt Warrants or certificates
representing the Debt Warrants have been duly executed, countersigned,
registered and delivered in accordance with the appropriate warrant
agreement or agreements and the applicable definitive purchase,
underwriting or similar agreement approved by the Board of Directors of
Northwest and NWA Corp., and upon payment of the consideration therefor
provided for therein, the Debt Warrants will be valid and legally
binding obligations of Northwest.
3. With respect to the Guarantees, when (i) the Board of Directors
of NWA Corp. has taken all necessary corporate action to approve the
terms of such Guarantees, and related matters, (ii) such Guarantees have
been duly executed, issued and delivered in accordance with the
provisions of the applicable Northwest Indenture or Pass Through
Agreement and related Trust Supplement and the applicable definitive
purchase, underwriting or similar agreement approved by the Board of
Directors of NWA Corp., and (iii) the events described in clauses (i) and
<PAGE>
Northwest Airlines Corporation
Northwest Airlines, Inc. -4- June 27, 1997
(ii) of paragraph 1 or the events described in clauses (i) through (iv)
of paragraph 4 have occurred in respect of the respective series of Debt
Securities or Pass Through Certificates to which such Guarantees relate,
as the case may be, the Guarantees will be valid and legally binding
obligations of NWA Corp.
4. With respect to each series of Pass Through Certificates, when
(i) the Trust Supplement relating to such series has been duly
authorized and validly executed and delivered by NWA Corp. and Northwest
to such trustee, (ii) the Board of Directors of Northwest has taken all
necessary corporate action to approve the terms of the offering of such
Pass Through Certificates and related matters and (iii) the Pass Through
Certificates of such series have been duly executed, authenticated,
issued and delivered in accordance with the provisions of the Pass
Through Trust Agreement, the related Trust Supplement and the applicable
definitive purchase, underwriting or similar agreement approved by the
Board of Directors of Northwest and NWA Corp., and upon payment of the
consideration therefor provided for therein, such Pass Through
Certificates will be valid and legally binding obligations of Northwest.
Our opinions set forth above are subject to the effects of bankruptcy,
insolvency, fraudulent conveyance, reorganization, moratorium and other
similar laws relating to or affecting creditors' rights generally, general
equitable principles (whether considered in a proceeding in equity or at law)
and an implied covenant of good faith and fair dealing.
Insofar as the opinions expressed herein relate to or are dependent upon
matters governed by the law of the State of Minnesota, we will rely on an
opinion from the Office of the General Counsel of Northwest.
We are members of the Bar of the State of New York, and we do not
express any opinion herein concerning any law other than the law of the State
of New York, the federal law of the United States and the Delaware General
Corporation Law and, to the extent set forth herein, the laws of the State of
Minnesota.
<PAGE>
Northwest Airlines Corporation
Northwest Airlines, Inc. -5- June 27, 1997
This opinion letter is rendered to you in connection with the
above-described transactions. The opinion letter may not be relied upon by
you for any other purpose, or relied upon, or furnished to, any other person,
firm or corporation without our prior written consent; provided, however,
that we hereby consent to the filing of this opinion as Exhibit 5 to the
Registration Statement and to the use of our name under the captions "Legal
Opinions" in the Prospectuses forming a part of the Registration Statement.
Very truly yours,
/s/ Simpson Thacher & Bartlett
SIMPSON THACHER & BARTLETT
<PAGE>
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the reference to our firm under the caption "Experts" in this
Registration Statement Amendment No. 1 to Form S-3 (No. 333-28649) which
Registration Statement also constitutes Post-Effective Amendment No. 2 to the
Registration Statement (Form S-3 No. 333-13307), and related Prospectus of
Northwest Airlines Corporation and Northwest Airlines, Inc. and to the
incorporation by reference therein of our reports dated January 21, 1997,
with respect to the consolidated financial statements of Northwest Airlines
Corporation incorporated by reference in its Annual Report (Form 10-K) for
the year ended December 31, 1996 and the related financial statement schedule
included therein, filed with the Securities and Exchange Commission.
/s/ Ernst & Young LLP
Minneapolis, Minnesota
June 23, 1997
