Exhibit 4.2
================================================================================
THE GAP, INC.
as Issuer
---------
TO
THE BANK OF NEW YORK
as Trustee
----------
----------------------
Indenture
Dated as of November 21, 2001
----------------------
Up to $700,000,000
8.15% NOTES DUE DECEMBER 15, 2005
8.80% NOTES DUE DECEMBER 15, 2008
================================================================================
================================================================================
The Gap, Inc.
Certain Sections of this Indenture relating to
Sections 310 through 318 of the
Trust Indenture Act of 1939:
Trust Indenture Indenture
Act Section Section
----------- -------
Section 310(a)(1) ............................................ 6.09
(a)(2) ............................................ 6.09
(a)(3) ............................................ Not Applicable
(a)(4) ............................................ Not Applicable
(b) ............................................ 6.08
6.10
Section 311(a) ............................................ 6.13
(b) ............................................ 6.13
Section 312(a) ............................................ 7.01
(b) ............................................ 7.02
(c) ............................................ 7.02
Section 313(a) ............................................ 7.03
(b) ............................................ 7.03
(c) ............................................ 7.03
(d) ............................................ 7.03
Section 314(a) ............................................ 7.04
10.08
(b) ............................................ Not Applicable
(c)(1) ............................................ 1.02
(c)(2) ............................................ 1.02
(c)(3) ............................................ Not Applicable
(d) ............................................ Not Applicable
(e) ............................................ 1.02
Section 315(a) ............................................ 6.01
(b) ............................................ 6.02
(c) ............................................ 6.01
(d) ............................................ 6.01
(e) ............................................ 5.14
Section 316(a)(1)(A) ............................................ 5.02
5.12
(a)(1)(B) ............................................ 5.13
(a)(2) ............................................ Not Applicable
(b) ............................................ 5.08
(c) ............................................ 1.04
Section 317(a)(1) ............................................ 5.03
(a)(2) ............................................ 5.04
(b) ............................................ 10.03
Section 318(a) ............................................ 1.07
Note: This reconciliation and tie shall not, for any purpose, be deemed to be
part of this Indenture.
================================================================================
TABLE OF CONTENTS
Page
ARTICLE ONE
Definitions and Other Provisions of General Application
SECTION 1.01. Definitions...................................................................1
SECTION 1.02. Compliance Certificates and Opinions.........................................10
SECTION 1.03. Form of Documents Delivered to Trustee.......................................11
SECTION 1.04. Acts of Holders; Record Dates................................................11
SECTION 1.05. Notices, Etc., to Trustee and Company........................................14
SECTION 1.06. Notice to Holders; Waiver....................................................14
SECTION 1.07. Application of Trust Indenture Act...........................................15
SECTION 1.08. Effect of Headings and Table of Contents.....................................15
SECTION 1.09. Successors and Assigns.......................................................15
SECTION 1.10. Separability Clause..........................................................15
SECTION 1.11. Benefits of Indenture........................................................16
SECTION 1.12. No Personal Liability of Directors, Officers, Employees and Stockholders.....16
SECTION 1.13. Governing Law................................................................16
SECTION 1.14. Legal Holidays...............................................................16
ARTICLE TWO
Security Forms
SECTION 2.01. Forms Generally..............................................................17
SECTION 2.02. Form of Face of the Securities...............................................17
SECTION 2.03. Form of Reverse of the Securities............................................22
SECTION 2.04. Additional Provisions Required in Global Security............................27
SECTION 2.05. Form of Trustee's Certificate of Authentication..............................27
ARTICLE THREE
The Securities
SECTION 3.01. Title and Terms..............................................................28
SECTION 3.02. Denominations................................................................30
SECTION 3.03. Execution, Authentication, Delivery and Dating...............................30
SECTION 3.04. Temporary Securities.........................................................31
SECTION 3.05. Registration, Registration of Transfer and Exchange..........................31
Note : This table shall not, for any purpose, be deemed to be part of this
Indenture
-i-
================================================================================
Page
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities.............................36
SECTION 3.07. Payment of Interest; Interest Rights Preserved...............................37
SECTION 3.08. Persons Deemed Owners........................................................38
SECTION 3.09. Cancellation.................................................................38
SECTION 3.10. Computation of Interest......................................................39
SECTION 3.11. CUSIP Numbers................................................................39
ARTICLE FOUR
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture......................................39
SECTION 4.02. Application of Trust Money...................................................40
ARTICLE FIVE
Remedies
SECTION 5.01. Events of Default............................................................41
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment...........................42
SECTION 5.03. Collection of Indebtedness and Suits for Enforcement by Trustee..............44
SECTION 5.04. Trustee May File Proofs of Claim.............................................44
SECTION 5.05. Trustee May Enforce Claims Without Possession of Securities..................45
SECTION 5.06. Application of Money Collected...............................................45
SECTION 5.07. Limitation on Suits..........................................................46
SECTION 5.08. Unconditional Right of Holders to Receive Principal, Premium and Interest....46
SECTION 5.09. Restoration of Rights and Remedies...........................................47
SECTION 5.10. Rights and Remedies Cumulative...............................................47
SECTION 5.11. Delay or Omission Not Waiver.................................................47
SECTION 5.12. Control by Holders...........................................................47
SECTION 5.13. Waiver of Past Defaults......................................................47
SECTION 5.14. Undertaking for Costs........................................................48
SECTION 5.15. Waiver of Stay or Extension Laws.............................................49
ARTICLE SIX
The Trustee
SECTION 6.01. Certain Duties and Responsibilities..........................................49
SECTION 6.02. Notice of Defaults...........................................................49
Note : This table shall not, for any purpose, be deemed to be part of this
Indenture
-ii-
================================================================================
Page
SECTION 6.03. Certain Rights of Trustee....................................................50
SECTION 6.04. Not Responsible for Recitals or Issuance of Securities.......................51
SECTION 6.05. May Hold Securities..........................................................52
SECTION 6.06. Money Held in Trust..........................................................52
SECTION 6.07. Compensation and Reimbursement...............................................52
SECTION 6.08. Disqualification; Conflicting Interests......................................53
SECTION 6.09. Corporate Trustee Required; Eligibility......................................53
SECTION 6.10. Resignation and Removal; Appointment of Successor............................54
SECTION 6.11. Acceptance of Appointment by Successor.......................................55
SECTION 6.12. Merger, Conversion, Consolidation or Succession to Business..................55
SECTION 6.13. Preferential Collection of Claims Against the Company........................56
SECTION 6.14. Appointment of Authenticating Agent..........................................56
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and the Company
SECTION 7.01. Company to Furnish Trustee Names and Addresses of Holders....................58
SECTION 7.02. Preservation of Information; Communications to Holders.......................58
SECTION 7.03. Reports by Trustee...........................................................58
SECTION 7.04. Reports by Company...........................................................59
SECTION 7.05. Officers' Certificate with Respect to Change in Interest Rates...............59
ARTICLE EIGHT
Merger, Consolidation, Etc.
SECTION 8.01. Mergers, Consolidations and Certain Sales of Assets..........................60
SECTION 8.02. Successor Substituted........................................................60
SECTION 8.03. Officers' Certificate and Opinion of Counsel.................................61
ARTICLE NINE
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Holders...........................61
SECTION 9.02. Supplemental Indentures With Consent of Holders..............................62
SECTION 9.03. Execution of Supplemental Indentures.........................................63
SECTION 9.04. Effect of Supplemental Indentures............................................64
SECTION 9.05. Conformity with Trust Indenture Act..........................................64
SECTION 9.06. Reference in Securities to Supplemental Indentures...........................64
Note : This table shall not, for any purpose, be deemed to be part of this
Indenture
-iii-
================================================================================
ARTICLE TEN
Covenants
Page
SECTION 10.01. Payment of Principal, Premium and Interest...................................64
SECTION 10.02. Maintenance of Office or Agency..............................................65
SECTION 10.03. Money for Security Payments to be Held in Trust..............................65
SECTION 10.04. Existence....................................................................67
SECTION 10.05. Maintenance of Properties....................................................67
SECTION 10.06. Payment of Taxes and Other Claims............................................67
SECTION 10.07. Provision of Financial Information...........................................68
SECTION 10.08. Provision of Additional Information..........................................68
SECTION 10.09. Statement by Officers as to Compliance.......................................68
SECTION 10.10. Waiver of Certain Covenants..................................................69
SECTION 10.11. Statement by Officers as to Default..........................................69
ARTICLE Eleven
Defeasance and Covenant Defeasance
SECTION 11.01. Company's Option to Effect Defeasance or Covenant Defeasance.................69
SECTION 11.02. Defeasance and Discharge.....................................................70
SECTION 11.03. Covenant Defeasance..........................................................70
SECTION 11.04. Conditions to Defeasance or Covenant Defeasance..............................71
SECTION 11.05. Deposited Money and U.S. Government Obligations to Be Held in Trust; Other
Miscellaneous Provisions.....................................................72
SECTION 11.06. Reinstatement................................................................73
SECTION 11.07. Repayment to Company.........................................................73
ARTICLE Twelve
Redemption of Securities
SECTION 12.01. Right of Redemption..........................................................74
SECTION 12.02. Applicability of Article.....................................................74
SECTION 12.03. Election to Redeem; Notice to Trustee........................................74
SECTION 12.04. Selection by Trustee of Securities to Be Redeemed............................74
SECTION 12.05. Notice of Redemption.........................................................75
SECTION 12.06. Deposit of Redemption Price..................................................76
SECTION 12.07. Securities Payable on Redemption Date........................................76
Note : This table shall not, for any purpose, be deemed to be part of this
Indenture
-iv-
================================================================================
Page
ANNEX A - Form of Regulation S Certificate
ANNEX B - Form of Restricted Securities Certificate
ANNEX C - Form of Unrestricted Securities Certificate
Note : This table shall not, for any purpose, be deemed to be part of this
Indenture
-v-
================================================================================
INDENTURE, dated as of November 21, 2001, between The Gap, Inc., a
corporation organized under the laws of the State of Delaware (the "Company"),
having its principal office at One Harrison, San Francisco, California 94105,
and The Bank of New York, a New York banking corporation, as Trustee (herein
called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the creation of an issue of up to
$200,000,000 aggregate principal amount of its 8.15% Notes due December 15, 2005
(the "2005 Notes") and up to $500,000,000 aggregate principal amount of its
8.80% Notes due December 15, 2008 (the "2008 Notes" and, together with the 2005
Notes, and including the Exchange Securities, as hereinafter defined, the
"Securities") of substantially the tenor and amount hereinafter set forth, and
to provide therefor the Company has duly authorized the execution and delivery
of this Indenture. The Securities may consist of Original Securities and/or
Exchange Securities, each as defined herein. The Original Securities and the
Exchange Securities shall rank pari passu in right of payment with all existing
and future unsecured and unsubordinated obligations of the Company.
All things necessary to make the Securities, when executed by the
Company and authenticated and delivered hereunder and duly issued by the
Company, the valid obligations of the Company, and to make this Indenture a
valid agreement of the Company, in accordance with their and its terms, have
been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the purchase of the
Securities by the Holders thereof, it is mutually covenanted and agreed, for the
equal and proportionate benefit of all Holders of the Securities, as follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
SECTION 1.01 Definitions.
-----------
For all purposes of this Indenture, except as otherwise expressly
provided or unless the context otherwise requires:
(1) the terms defined in this Article have the meanings assigned to
them in this Article and include the plural as well as the singular;
================================================================================
(2) all other terms used herein which are defined 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 GAAP (whether or not such is
indicated herein); 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.
Certain terms, used principally in Article Six, are defined in that
Article.
"2005 Notes" has the meaning set forth in the recitals.
"2008 Notes" has the meaning set forth in the recitals.
"Act", when used with respect to any Holder, has the meaning specified
in Section 1.04.
"Additional Interest" has the meaning set forth in the form of the
Securities contained in Section 2.02. Unless the context otherwise requires,
references herein to "interest" on the Securities shall include Additional
Interest.
"Additional Interest Notice" has the meaning set forth in Section
3.01.
"Adjusted Treasury Rate" has the meaning set forth in Section 2.03.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agent Member" means any member of, or participant in, the Depositary.
"Applicable Procedures" means, with respect to any transfer or
transaction involving a Global Security or beneficial interest therein, the
rules and procedures of the Depositary for such Security, Euroclear and
Clearstream, in each case to the extent applicable to such transaction and as in
effect from time to time.
"Authenticating Agent" means any Person authorized by the Trustee
pursuant to Section 6.14 to act on behalf of the Trustee to authenticate
Securities.
-2-
================================================================================
"Board of Directors" means either the board of directors of the
Company or any duly authorized committee thereof.
"Board Resolution" means a copy of a resolution certified by the
Secretary or an Assistant Secretary of the Company to have been duly adopted by
the Board of Directors and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which banking institutions in The Borough of
Manhattan, The City of New York, New York are authorized or obligated by law or
executive order to close.
"Clearstream" means Clearstream Banking S.A. (or any successor
securities clearing agency).
"Commission" means the Securities and Exchange Commission, as from
time to time constituted, created under the Exchange Act, or, if at any time
after the execution of this instrument such Commission is not existing and
performing the duties now assigned to it under the Trust Indenture Act, then the
body performing such duties at such time.
"Company" means the Person named as the "Company" in the first
paragraph of this instrument until a successor Person shall have become such
pursuant to the applicable provisions of this Indenture and thereafter "Company"
shall mean such successor Person.
"Company Request" or "Company Order" means a written request or order
signed in the name of the Company by its Chairman of the Board, its Chief
Executive Officer, its President, its Chief Financial Officer or a Vice
President, and by its Treasurer, an Assistant Treasurer, its Controller, an
Assistant Controller, its Secretary or an Assistant Secretary, and delivered to
the Trustee.
"Corporate Trust Office" means the principal office of the Trustee in
the Borough of Manhattan, The City of New York, New York, at which at any
particular time its corporate trust business shall be administered, which at the
date hereof is located at 20 Broad Street, Lower Level, Attn: Corporate Trust
Reorg. Department, New York, New York 10005.
"Corporation" means a corporation, association, company, joint-stock
company or business trust.
"Default" means any event that is, or with the passage of time or the
giving of notice or both would be, an Event of Default.
"Default Amount" has the meaning specified in Section 5.02.
-3-
================================================================================
"Defaulted Interest" has the meaning specified in Section 3.07.
"Depositary" means, with respect to the Securities issuable or issued
in whole or in part in the form of one or more Global Securities, DTC, and with
respect to payments of the principal of, premium, if any, and interest on such
Global Securities, its nominee, for so long as it shall be a clearing agency
registered under the Exchange Act, or such successor (which shall be a clearing
agency registered under the Exchange Act) as the Company shall designate from
time to time in an Officers' Certificate delivered to the Trustee.
"DTC" means The Depository Trust Company.
"DWAC System" means DTC's Deposit/Withdrawal at Custodian system.
"Euroclear" means the Euroclear Clearance System (or any successor
securities clearing agency).
"Event of Default" has the meaning specified in Section 5.01.
"Exchange Act" means the Securities Exchange Act of 1934, as amended
(or any successor act) and the rules and regulations thereunder.
"Exchange and Registration Rights Agreement" means the Exchange and
Registration Rights Agreement among the Company and the Purchasers, dated
November 21, 2001, as the same may be amended, supplemented or otherwise
modified from time to time in accordance with its terms.
"Exchange Offer" has the meaning set forth in the form of the
Securities contained in Section 2.02.
"Exchange Registration Statement" has the meaning set forth in the
form of the Securities contained in Section 2.02.
"Exchange Security" means any Security issued in exchange for an
Original Security or Original Securities pursuant to the Exchange Offer or
otherwise registered under the Securities Act and any Security with respect to
which the next preceding Predecessor Security of such Security was an Exchange
Security.
"Expiration Date" has the meaning specified in Section 1.04.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as have been approved by a significant segment of the accounting
profession, which are in effect on the Issue Date.
-4-
================================================================================
"Global Security" means a Security in the form prescribed in Section
2.02 evidencing all or part of a series of Securities, issued to the Depositary
or its nominee, and registered in the name of such Depositary or its nominee.
"Holder" means a Person in whose name a Security is registered in the
Security Register.
"Indenture" means this instrument as originally executed or as it may
from time to time be supplemented or amended by one or more indentures
supplemental hereto entered into pursuant to the applicable provisions hereof,
including, for all purposes of this instrument, and any such supplemental
indenture, the provisions of the Trust Indenture Act that are deemed to be a
part of and govern this instrument and any such supplemental indenture,
respectively.
"Interest Payment Date", when used with respect to any Security, means
the Stated Maturity of an installment of interest on such Security.
"Issue Date" means the date on which the Securities are first
authenticated and delivered under this Indenture.
"Maturity", when used with respect to any Security, means the date on
which the principal of such Security becomes due and payable as therein or
herein provided, whether at the Stated Maturity, by declaration of acceleration,
call for redemption or otherwise.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Notice of Default" has the meaning specified in Section 5.01.
"Officers' Certificate" means a certificate signed by (i) the Chairman
of the Board, the Chief Executive Officer, the President, the Chief Financial
Officer or a Vice President, and (ii) the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Secretary or an Assistant Secretary, of
the Company, and delivered to the Trustee and containing the statements provided
for in Section 1.02. One of the officers signing an Officers' Certificate given
pursuant to Section 10.09 shall be the principal executive, financial or
accounting officer of the Company.
"Opinion of Counsel" means a written opinion of legal counsel, who may
be counsel for the Company, and who shall be acceptable to the Trustee, and
containing the statements provided for in Section 1.02.
"Original Securities" means all Securities other than Exchange
Securities.
"Outstanding", when used with respect to Securities, means, as of the
date of determination, all Securities authenticated and delivered under this
Indenture, except:
------
-5-
================================================================================
(i) Securities cancelled by the Trustee or delivered to the Trustee
for cancellation;
(ii) Securities for whose payment or redemption money in the necessary
amount has been deposited with the Trustee or any Paying Agent (other than
the Company) in trust or set aside and segregated in trust by the Company
(if the Company shall act as its own Paying Agent) for the Holders of such
Securities, provided that if such Securities are to be redeemed, notice of
such redemption has been duly given pursuant to this Indenture or provision
therefor satisfactory to the Trustee has been made; and
(iii) Securities, except to the extent provided in Sections 11.02 and
11.03, with respect to which the Company has effected defeasance or
covenant defeasance as provided in Article Eleven; and
(iv) Securities which have been paid pursuant to Section 3.06 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,
Securities owned by the Company or any other obligor upon the Securities or any
Affiliate of the Company or of such other obligor shall be disregarded and
deemed not to be Outstanding, except that, in determining whether the Trustee
shall be protected in relying upon any such request, demand, authorization,
direction, notice, consent or waiver, only Securities which a Responsible
Officer actually knows to be so owned shall be so disregarded. Securities so
owned which have been pledged in good faith may be regarded as Outstanding if
the pledgee establishes to the satisfaction of the Trustee the pledgee's right
so to act with respect to such Securities and that the pledgee is not the
Company or any other obligor upon the Securities or any Affiliate of the Company
or of 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. The Trustee is hereby authorized by the Company to act as a "Paying
Agent" for the purposes of this Indenture, until such time as the Company
notifies the Trustee in writing that such authorization is revoked.
"Person" means any individual, corporation, partnership, limited
liability company, joint venture, association, joint stock company, trust,
unincorporated organization, government or agency or political subdivision
thereof or any other entity.
-6-
================================================================================
"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 3.06 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.
"Purchase Agreement" means the Purchase Agreement, dated November 16,
2001, between the Company and the Purchasers, as such agreement may be amended
from time to time.
"Purchasers" means Goldman, Sachs & Co., J.P. Morgan Securities Inc.,
Salomon Smith Barney Inc., ABN AMRO Incorporated, Banc of America Securities
LLC, HSBC Securities (USA) Inc., Fleet Securities, Inc., Mizuho International
plc, Scotia Capital (USA) Inc. and US Bancorp Piper Jaffray Inc.
"Redemption Date", when used with respect to any Security to be
redeemed, means the date fixed for such redemption by or pursuant to this
Indenture.
"Redemption Price", when used with respect to any Security to be
redeemed, means the price at which it is to be redeemed pursuant to this
Indenture.
"Registered Securities" means the Exchange Securities and all other
Securities sold or otherwise disposed of pursuant to an effective registration
statement under the Securities Act, together with their respective Successor
Securities.
"Registration Default" has the meaning set forth in the form of
Security contained in Section 2.02.
"Regular Record Date" for the interest payable on any Interest Payment
Date means the June 1 or December 1 (whether or not a Business Day), as the case
may be, next preceding such Interest Payment Date.
"Regulation S" means Regulation S under the Securities Act (or any
successor provision), as it may be amended from time to time.
"Regulation S Certificate" means a certificate substantially in the
form set forth in Annex A.
"Regulation S Global Security" has the meaning specified in Section
2.01.
"Regulation S Legend" means a legend substantially in the form of the
legend required in the form of the Securities set forth in Section 2.02 to be
placed upon each Regulation S Security.
-7-
================================================================================
"Regulation S Securities" means the Securities purchased by the
Purchasers from the Company pursuant to the Purchase Agreement in reliance on
Regulation S under the Securities Act. Such term includes the Regulation S
Global Security.
"Resale Registration Statement" has the meaning set forth in the form
of the Securities contained in Section 2.02.
"Responsible Officer" shall mean any officer within the corporate
trust department of the Trustee, including any vice president, assistant vice
president, assistant secretary, assistant treasurer, trust officer or any other
officer of the Trustee who customarily performs functions similar to those
performed by the Persons who at the time shall be such officers, respectively,
or to whom any corporate trust matter is referred because of such person's
knowledge of and familiarity with the particular subject and who shall have
direct responsibility for the administration of this Indenture.
"Restricted Global Security" has the meaning specified in Section
2.01.
"Restricted Period" means the period of 41 consecutive days beginning
on and including the later of (i) the day on which Securities are first offered
to persons other than distributors (as defined in Regulation S) in reliance on
Regulation S and (ii) the original issuance date of the Securities.
"Restricted Securities" means all Securities required pursuant to
Section 3.05(c) to bear any Restricted Securities Legend. Such term includes the
Restricted Global Securities.
"Restricted Securities Certificate" means a certificate substantially
in the form set forth in Annex B.
"Restricted Securities Legend" means, collectively, the legends
substantially in the forms of the legends required in the form of the Securities
set forth in Section 2.02 to be placed upon each Restricted Security.
"Rule 144A" means Rule 144A under the Securities Act (or any successor
provision), as it may be amended from time to time.
"Rule 144A Securities" means the Securities purchased by the
Purchasers from the Company pursuant to the Purchase Agreement, other than the
Regulation S Securities.
"SEC Reports" has the meaning specified in Section 7.04.
"Securities" has the meaning specified in the recitals and such
reference includes the Exchange Securities and the Original Securities.
-8-
================================================================================
"Securities Act" means the Securities Act of 1933 and any statute
successor thereto, in each case as amended from time to time.
"Securities Act Legend" means a Restricted Securities Legend or a
Regulation S Legend.
"Security Register" and "Security Registrar" have the respective
meanings specified in Section 3.05.
"Special Record Date" for the payment of any Defaulted Interest means
a date fixed by the Trustee pursuant to Section 3.07.
"S&P" means Standard & Poor's Ratings Services, a division of
McGraw-Hill, Inc., and its successors.
"Stated Maturity", when used with respect to any Security or any
installment of interest thereon, means the date specified in such Security as
the fixed date on which the principal of such Security or such installment of
interest is due and payable, and shall not include any contingent obligations to
repay or redeem any such interest or principal prior to the date originally
scheduled for the payment thereof.
"Statistical Release" has the meaning set forth in Section 2.03.
"Step-Down Date" has the meaning set forth in the form of the
Securities contained in Section 2.02.
"Step-Up" has the meaning set forth in the form of the Securities
contained in Section 2.02.
"Subsidiary" means any corporation of which at least a majority of the
outstanding stock having by the terms thereof ordinary voting power for the
election 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) is at the time
directly or indirectly owned by the Company, or by one or more other
Subsidiaries, or by the Company and one or more other Subsidiaries.
"Successor Security" of any particular Security means every Security
issued after, and 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 3.06 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.
"Trustee" means the Person named as the "Trustee" in the first
paragraph of this instrument until a successor Trustee shall have become such
pursuant to the
-9-
================================================================================
applicable provisions of this Indenture, and thereafter "Trustee" shall mean
such successor Trustee.
"Trust Indenture Act" means the Trust Indenture Act of 1939 as in
force at the date as of which this instrument was executed; provided, however,
-------- -------
that in the event the Trust Indenture Act of 1939 is amended after such date,
"Trust Indenture Act" means, to the extent required by any such amendment, the
Trust Indenture Act of 1939 as so amended.
"Unrestricted Securities Certificate" means a certificate
substantially in the form set forth in Annex C.
"U.S. Government Obligations" means securities that are (x) direct
obligations of the United States of America for the payment of which its full
faith and credit is pledged or (y) obligations of a Person controlled or
supervised by and acting as an agency or instrumentality of the United States of
America the payment of which is unconditionally guaranteed as a full faith and
credit obligation by the United States of America, which, in either case, are
not callable or redeemable at the option of the issuer thereof, and shall also
include a depositary receipt issued by a bank (as defined in Section 3(a)(2) of
the Securities Act) as custodian with respect to any such U.S. Government
Obligation or a specific payment of principal of or interest on any such U.S.
Government Obligation held by such custodian for the account of the holder of
such depositary receipt, provided that (except as required by law) such
custodian is not authorized to make any deduction from the amount payable to the
holder of such depositary receipt from any amount received by the custodian in
respect of the U.S. Government Obligation or the specific payment of principal
of or interest on the U.S. Government Obligation evidenced by such depositary
receipt.
"Vice President", when used with respect to the Company or the
Trustee, means any vice president, whether or not designated by a number or a
word or words (including "Senior" and "Executive") added before or after the
title "vice president".
SECTION 1.02. Compliance Certificates and Opinions.
------------------------------------
Upon any application or request by the Company to the Trustee to take
any action under any provision of this Indenture, the Company shall furnish to
the Trustee such certificates and opinions as may be required under the Trust
Indenture Act and under this Indenture. Each such certificate or opinion shall
be given in the form of an Officers' Certificate, if to be given by an officer
of the Company, or an Opinion of Counsel, if to be given by counsel, and shall
comply with the requirements of the Trust Indenture Act and any other
requirement set forth in this Indenture.
Every certificate or opinion with respect to compliance with a
condition or covenant provided for in this Indenture shall include
-10-
================================================================================
(1) a statement that each individual signing such certificate or
opinion has read such covenant or condition and the definitions herein
relating thereto;
(2) a brief statement as to the nature and scope of the examination or
investigation upon which the statements or opinions contained in such
certificate or opinion are based;
(3) a statement that, in the opinion of each such individual, he has
made such examination or investigation as is necessary to enable him to
express an informed opinion as to whether or not such covenant or condition
has been complied with; and
(4) a statement as to whether, in the opinion of each such individual,
such condition or covenant has been complied with.
SECTION 1.03. 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 of an officer of the Company may be based, insofar as
it relates to legal matters, upon an opinion of counsel submitted therewith,
unless such officer knows, or in the exercise of reasonable care should know,
that the opinion with respect to the matters upon which his certificate is based
is erroneous. Any opinion of counsel may be based, insofar as it relates to
factual matters, upon a certificate of an officer or officers of the Company
submitted therewith stating the information on which counsel is relying, unless
such counsel knows, or in the exercise of reasonable care should know, that the
certificate with respect to such matters is 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 1.04. Acts of Holders; Record Dates.
-----------------------------
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
-11-
================================================================================
in and evidenced by one or more instruments of substantially similar tenor
signed by such Holders in person or by an agent duly appointed in writing; and,
except as herein otherwise expressly provided, such action shall become
effective when such instrument or instruments are delivered to the Trustee and,
where it is hereby expressly required, to the Company. Such instrument or
instruments (and the action embodied therein and evidenced thereby) are herein
sometimes referred to as the "Act" of the Holders signing such instrument or
instruments. Proof of execution of any such instrument or of a writing
appointing any such agent shall be sufficient for any purpose of this Indenture
and (subject to Section 6.01) conclusive in favor of the Trustee and the
Company, if made in the manner provided in this Section.
The fact and date of the execution by any Person of any such
instrument or writing pursuant to this Section 1.04 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 manner which the Trustee deems sufficient.
The ownership of Securities shall be proved by the Security Register.
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 in
reliance thereon, whether or not notation of such action is made upon such
Security.
The Company may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of either series entitled to
give, make or take any request, demand, authorization, direction, notice,
consent, waiver or other action provided or permitted by this Indenture to be
given, made or taken by Holders of Securities of such series, provided that the
--------
Company may not set a record date for, and the provisions of this paragraph
shall not apply with respect to, the giving or making of any notice,
declaration, request or direction referred to in the next paragraph. If not set
by the Company prior to the first solicitation of a Holder made by any Person in
respect of any such matter referred to in the foregoing sentence, the record
date for any such matter shall be the 30th day (or, if later, the date of the
most recent list of Holders required to be provided pursuant to Section 7.01)
prior to such first solicitation. If any record date is set pursuant to this
paragraph, the Holders of Outstanding Securities of such series on such record
date, and no other Holders, shall be entitled to take the relevant action,
whether or not such Holders remain Holders after such record date; provided that
--------
no such action shall be effective hereunder unless taken on or prior to the
-12-
================================================================================
applicable Expiration Date by Holders of the requisite principal amount of
Outstanding Securities of such series on such record date. Nothing in this
paragraph shall be construed to prevent the Company from setting a new record
date for any action for which a record date has previously been set pursuant to
this paragraph (whereupon the record date previously set shall automatically and
with no action by any Person be cancelled and of no effect), and nothing in this
paragraph shall be construed to render ineffective any action taken by Holders
of the requisite principal amount of Outstanding Securities of a series on the
date such action is taken. Promptly after any record date is set pursuant to
this paragraph, the Company, at its own expense, shall cause notice of such
record date, the proposed action by Holders and the applicable Expiration Date
to be given to the Trustee in writing and to each Holder of Securities in the
manner set forth in Section 1.06.
The Trustee may set any day as a record date for the purpose of
determining the Holders of Outstanding Securities of either series entitled to
join in the giving or making of (i) any Notice of Default, (ii) any declaration
of acceleration referred to in Section 5.02, (iii) any request to institute
proceedings referred to in Section 5.07(2) or (iv) any direction referred to in
Section 5.12. If any record date is set pursuant to this paragraph with respect
to one or more series of Securities, the Holders of Outstanding Securities of
such series on such record date, and no other Holders, shall be entitled to join
in such notice, declaration, request or direction, whether or not such Holders
remain Holders after such record date; provided that no such action shall be
--------
effective hereunder unless taken on or prior to the applicable Expiration Date
by Holders of the requisite principal amount of Outstanding Securities of such
series on such record date. Nothing in this paragraph shall be construed to
prevent the Trustee from setting a new record date for any action for which a
record date has previously been set pursuant to this paragraph (whereupon the
record date previously set shall automatically and with no action by any Person
be cancelled and of no effect), and nothing in this paragraph shall be construed
to render ineffective any action taken by Holders of the requisite principal
amount of Outstanding Securities of either series on the date such action is
taken. Promptly after any record date is set pursuant to this paragraph with
respect to either series of Securities, the Trustee, at the Company's expense,
shall cause notice of such record date, the proposed action by Holders and the
applicable Expiration Date to be given to the Company in writing and to each
Holder of Securities of such series in the manner set forth in Section 1.06.
With respect to any record date set with respect to either series of
Securities pursuant to this Section, the party hereto which sets such record
dates may designate any day as the "Expiration Date" and from time to time may
change the Expiration Date to any earlier or later day; provided that no such
--------
change shall be effective unless notice of the proposed new Expiration Date is
given to the other party hereto in writing, and to each Holder of Securities of
such series in the manner set forth in Section 1.06, on or prior to the existing
Expiration Date. If an Expiration Date is not designated with respect to any
record date set pursuant to this Section, the party hereto which set such record
date shall be deemed to have initially designated the 180th day
-13-
================================================================================
after such record date as the Expiration Date with respect thereto, subject to
its right to change the Expiration Date as provided in this paragraph.
Notwithstanding the foregoing, no Expiration Date shall be later than the 180th
day after the applicable record date.
Without limiting the foregoing, a Holder entitled hereunder to take
any action hereunder with regard to any particular Security may do so with
regard to all or any part of the principal amount of such Security or by one or
more duly appointed agents each of which may do so pursuant to such appointment
with regard to all or any part of such principal amount.
SECTION 1.05. Notices, Etc., to Trustee and Company.
-------------------------------------
Any request, demand, authorization, direction, notice, consent, waiver
or Act of Holders or other document provided or permitted by this Indenture to
be made upon, given or furnished to, or filed with,
(1) the Trustee by any Holder or by the Company shall be sufficient
for every purpose hereunder if delivered in writing to the Trustee at its
Corporate Trust Office; or
(2) the Company by the Trustee or by any Holder shall be sufficient
for every purpose hereunder (unless otherwise herein expressly provided) if
in writing and mailed, first-class postage prepaid, to the Company
addressed to the Company at the address of its principal office specified
in the first paragraph of this instrument or at any other address
previously furnished in writing to the Trustee by the Company.
SECTION 1.06. Notice to Holders; Waiver.
-------------------------
Where this Indenture provides for notice to Holders of any event, such
notice shall be sufficiently given (unless otherwise herein expressly provided)
if (i) in the case of a Global Security, in writing by facsimile and/or by
overnight mail to the Depositary, and (ii) in the case of securities other than
Global Securities, in writing and mailed, first-class postage prepaid, to each
Holder affected by such event, at his address as it appears in the Security
Register, not later than the latest date (if any), and not earlier than the
earliest date (if any), prescribed for the giving of such notice. In any case
where notice to Holders is given by mail, neither the failure to mail such
notice, nor any defect in any notice so mailed, to any particular Holder shall
affect the sufficiency of such notice with respect to other Holders. Where this
Indenture provides for notice in any manner, such notice may be waived in
writing by the Person entitled to receive such notice, either before or after
the event, and such waiver shall be the equivalent of such
-14-
================================================================================
notice. Waivers of notice by Holders shall be filed with the Trustee, but such
filing shall not be a condition precedent to the validity of any action taken in
reliance upon such waiver.
In case by reason of the suspension of regular mail service or by
reason of any other cause it shall be impracticable to give such notice by mail,
then such notification as shall be made with the approval of the Trustee shall
constitute a sufficient notification for every purpose hereunder.
SECTION 1.07. Application of Trust Indenture Act.
----------------------------------
The Trust Indenture Act shall apply as a matter of contract to this
Indenture for purposes of interpretation, construction and defining the rights
and obligations hereunder. If any provision hereof limits, qualifies or
conflicts with a provision of the Trust Indenture Act that is required under
such Act to be a part of and govern this Indenture, the latter provision shall
control. If any provision of this Indenture modifies or excludes any provision
of the Trust Indenture Act that may be so modified or excluded, the latter
provision shall be deemed to apply to this Indenture as so modified or to be
excluded, as the case may be.
SECTION 1.08. Effect of Headings and Table of Contents.
----------------------------------------
The Article and Section headings herein and the Table of Contents are
for convenience only and shall not affect the construction hereof.
SECTION 1.09. Successors and Assigns.
----------------------
All covenants and agreements in this Indenture by the Company shall
bind its successors and assigns, whether so expressed or not.
SECTION 1.10. Separability Clause.
-------------------
In case any provision in this Indenture or in the Securities shall be
invalid, illegal or unenforceable, the validity, legality and enforceability of
the remaining provisions shall not in any way be affected or impaired thereby.
-15-
================================================================================
SECTION 1.11. Benefits of Indenture.
---------------------
Nothing in this Indenture or in the Securities, express or implied,
shall give to any Person, other than the parties hereto and their successors
hereunder and the Holders of Securities, any benefit or any legal or equitable
right, remedy or claim under this Indenture.
SECTION 1.12. No Personal Liability of Directors, Officers, Employees and
-----------------------------------------------------------
Stockholders.
------------
No past, present or future director, officer, employee, incorporator
or stockholder of the Company, as such, shall have any liability for any
obligations of the Company under the Securities, this Indenture or for any claim
based on, in respect of, or by reason of, such obligations or their creation.
Each Holder shall be deemed to have waived and released each such past, present
and future director, officer, employee, incorporator and stockholder of the
Company of any such liability by accepting a Security as part of the
consideration for the issuance of the Securities.
SECTION 1.13. Governing Law.
-------------
This Indenture and the Securities shall be governed by and construed
in accordance with the laws of the State of New York without regard to
principles of conflicts of law thereof.
SECTION 1.14. Legal Holidays.
--------------
In any case where any Interest Payment Date, Redemption Date or Stated
Maturity of any Security shall not be a Business Day, then (notwithstanding any
other provision of this Indenture or of the Securities) payment of interest and
premium, if any need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the
Interest Payment Date, Redemption Date or at the Stated Maturity; provided that
--------
no interest shall accrue for the period from and after such Interest Payment
Date, Redemption Date or Stated Maturity, as the case may be.
-16-
================================================================================
ARTICLE TWO
Security Forms
SECTION 2.01. Forms Generally.
---------------
The Securities of each series and the Trustee's certificates of
authentication thereof shall be in substantially the forms set forth in this
Article, with such appropriate legends, insertions, omissions, substitutions and
other variations as are required or permitted by this Indenture, and may have
such letters, numbers or other marks of identification and such legends or
endorsements placed thereon as may be required to comply with the rules of any
securities exchange or as may, consistently herewith, be determined by the
officers executing such Securities, as evidenced by their execution of the
Securities.
Upon their original issuance, each series of the Rule 144A Securities
shall be issued in the form of one or more Global Securities registered in the
name of the Depositary or its nominee and deposited with the Trustee, as
custodian for the Depositary, for credit by the Depositary to the respective
accounts of beneficial owners of the Securities represented thereby (or such
other accounts as they may direct). Such Global Securities, together with their
Successor Securities which are Global Securities other than the Regulation S
Global Security, are collectively herein called the "Restricted Global
Security." Upon their original issuance, each series of the Regulation S
Securities shall be issued in the form of one or more Global Securities
registered in the name of the Depositary, or its nominee and deposited with the
Trustee, as custodian for the Depositary, for credit to the respective accounts
of the beneficial owners of the Securities represented thereby (or such other
accounts as they may direct); provided that upon such deposit all such
--------
Securities shall be credited to or through accounts maintained at the Depositary
by or on behalf of Euroclear or Clearstream. Such Global Securities, together
with their Successor Securities which are Global Securities other than the
Restricted Global Security, are collectively herein called the "Regulation S
Global Security."
The definitive Securities 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, as
evidenced by their execution of such Securities.
In certain cases described elsewhere herein, the legends set forth in
Section 2.02 may be omitted from Securities issued hereunder.
SECTION 2.02. Form of Face of the Securities.
------------------------------
[If the Security is a Global Security, insert the legends required by
Section 2.04 of the Indenture]
-17-
================================================================================
[If Restricted Securities, then insert - THIS NOTE HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE SOLD OR OTHERWISE TRANSFERRED IN THE
ABSENCE OF SUCH REGISTRATION OR AN APPLICABLE EXEMPTION THEREFROM.
EACH PURCHASER OF THIS NOTE IS HEREBY NOTIFIED THAT THE SELLER OF THIS
NOTE MAY BE RELYING ON THE EXEMPTION FROM THE PROVISIONS OF SECTION 5
OF THE SECURITIES ACT PROVIDED BY RULE 144A THEREUNDER.
THIS NOTE MAY NOT BE OFFERED, SOLD, PLEDGED OR OTHERWISE TRANSFERRED
EXCEPT (A)(1) TO A PERSON THAT THE TRANSFEROR REASONABLY BELIEVES IS A
QUALIFIED INSTITUTIONAL BUYER WITHIN THE MEANING OF RULE 144A UNDER
THE SECURITIES ACT ACQUIRING FOR ITS OWN ACCOUNT OR THE ACCOUNT OF A
QUALIFIED INSTITUTIONAL BUYER IN A TRANSACTION MEETING THE
REQUIREMENTS OF RULE 144A, (2) PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT PROVIDED BY RULE 144 THEREUNDER
(IF AVAILABLE), (3) TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED
INVESTOR WITHIN THE MEANING OF RULE 501(A)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN EXEMPTION FROM
REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE), (4) IN AN
OFFSHORE TRANSACTION COMPLYING WITH RULE 903 OR RULE 904 OF REGULATION
S UNDER THE SECURITIES ACT, OR (5) PURSUANT TO AN EFFECTIVE
REGISTRATION STATEMENT UNDER THE SECURITIES ACT, AND (B) IN ACCORDANCE
WITH ALL APPLICABLE SECURITIES LAWS OF THE STATES OF THE UNITED STATES
AND OTHER JURISDICTIONS.
THIS NOTE, AND ANY RELATED DOCUMENTATION MAY BE AMENDED OR
SUPPLEMENTED FROM TIME TO TIME TO MODIFY THE RESTRICTIONS ON RESALES
AND OTHER TRANSFERS OF THIS NOTE TO REFLECT ANY CHANGE IN APPLICABLE
LAW OR REGULATION (OR THE INTERPRETATION THEREOF) OR IN PRACTICES
RELATING TO THE RESALE OR TRANSFER OF RESTRICTED SECURITIES GENERALLY.
THE HOLDER OF THIS NOTE SHALL BE DEEMED BY THE ACCEPTANCE OF THIS NOTE
TO HAVE AGREED TO ANY SUCH AMENDMENT OR SUPPLEMENT.]
[If a Regulation S Security, then insert -- THIS NOTE HAS NOT BEEN
REGISTERED UNDER THE U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT") AND MAY NOT BE OFFERED, SOLD OR DELIVERED IN THE
UNITED STATES TO, OR FOR THE ACCOUNT OR BENEFIT OF, ANY U.S. PERSON,
UNLESS THIS NOTE IS REGISTERED UNDER THE SECURITIES ACT OR AN
EXEMPTION FROM THE REGISTRATION REQUIREMENTS OF THE SECURITIES ACT IS
AVAILABLE.]
THE GAP, INC.
[Insert for 2005 Notes -- 8.15%] [Insert for 2008 Notes -- 8.80%] NOTES DUE
DECEMBER 15, [Insert for 2005 Notes -- 2005] [Insert for 2008 Notes --
2008]
[IF RESTRICTED GLOBAL SECURITY - CUSIP NO. ]
[IF ANY REGULATION S SECURITY - CUSIP NO. ]
[IF REGULATION S GLOBAL SECURITY - ISIN NO. ]
-18-
================================================================================
No. $
------ ------------
The Gap, Inc., a corporation organized under the laws of the State of
Delaware (herein called the "Company", which term includes any successor Person
under the Indenture hereinafter referred to), for value received, hereby
promises to pay to , or registered assigns, the principal sum of
-------------
Dollars [if this Security is a Global Security, then insert:
- -------------
(which principal amount may from time to time be increased or decreased to such
other principal amounts (which, taken together with the principal amounts of all
other Outstanding Securities, shall not exceed [Insert for 2005 Notes --
$200,000,000] [Insert for 2008 Notes -- $500,000,000] in the aggregate at any
time) by adjustments made on the records of the Trustee hereinafter referred to
in accordance with the Indenture)] on December 15, [Insert for 2005 Notes
- --2005] [Insert for 2008 Notes -- 2008], and to pay interest thereon from
November 21, 2001 or from the most recent Interest Payment Date to which
interest has been paid or duly provided for, semi-annually on June 15 and
December 15 in each year, commencing June 15, 2002 at the rate of [Insert for
2005 Notes -- 8.15%] [Insert for 2008 Notes -- 8.80%] per annum, which rate
shall be subject to adjustment from time to time as set forth on the reverse of
this Security, until the principal hereof is paid or made available for payment.
[If Original Securities, then insert: provided, however, that if (i) the Company
-------- -------
has not filed a registration statement (the "Exchange Registration Statement")
under the Securities Act, registering a security substantially identical to this
Security (except that such Security will not contain terms with respect to the
Additional Interest payments described below or transfer restrictions) pursuant
to an exchange offer (the "Exchange Offer") (or, in lieu thereof, a registration
statement registering this Security for resale (a "Resale Registration
Statement")) by February 19, 2002, (ii) the Exchange Registration Statement
relating to the Exchange Offer has not become or been declared effective by May
20, 2002 or, if applicable, the Resale Registration Statement, has not become or
been declared effective within 120 days of the date of the filing of such
registration statement, (iii) the Exchange Offer has not been completed within
45 days after the date on which the Exchange Registration Statement has become
or been declared effective (if the Exchange Offer is then required to be made
pursuant to the Exchange and Registration Rights Agreement), (iv) either the
Exchange Registration Statement or, if applicable, the Resale Registration
Statement is filed and declared effective (except as specifically permitted
therein) but shall thereafter cease to be effective without being succeeded
immediately by an additional registration statement filed and declared effective
or (v) the Holders of this series of Securities are prevented or restricted by
the Company from affecting sales pursuant to any Resale Registration Statement
except as expressly permitted under the Exchange and Registration Rights
Agreement, in each case (i) through (v) upon the terms and conditions set forth
in the Exchange and Registration Rights Agreement (each such event referred to
in clauses (i) through (iv), a "Registration Default"), then interest will
accrue (in addition to any stated interest on the Securities) (the "Step-Up") at
a rate of 0.25% per annum, determined daily, on the principal amount of the
Securities, for the 90-day period immediately following the occurrence of the
Registration Default, which rate shall be increased by 0.25% per annum at the
beginning of each subsequent 90-day period (provided that the rate at which such
--------
additional interest
-19-
================================================================================
accrues shall not exceed 1.00% per annum in the aggregate) and interest shall be
payable at such increased rate until such time (the "Step-Down Date") as no
Registration Default is in effect (after which such interest rate will be
restored to its initial rate). Interest accruing as a result of the Step-Up
(which shall be computed on the basis of a 365 or 366-day year, as the case may
be) is referred to herein as "Additional Interest." Additional Interest on such
Securities shall cease to accrue (A) in the case of clause (i) above, upon the
filing of the Exchange Registration Statement or Resale Registration Statement,
(B) in the case of clause (ii) above, upon the effectiveness of the Exchange
Registration Statement or Resale Registration Statement, (C) in the case of
clause (iii) above, upon the completion of the Exchange Offer, (D) in the case
of clause (iv) above, upon the effectiveness of a new Exchange Registration
Statement or Resale Registration Statement succeeding a withdrawn Exchange
Registration Statement or Resale Registration Statement or upon the cessation of
the stop order suspending the effectiveness of such Exchange Registration
Statement or Resale Registration Statement, as applicable, (E) in the case of
clause (v) above, when the holders of such Securities are no longer prevented or
restricted by the Company from effecting sales pursuant to any Resale
Registration Statement and (F) other than with respect to a Holder that is an
affiliate of the Company or a Holder that is not otherwise eligible to utilize
the provisions of Rule 144(k) under the Securities Act, upon the expiration of
two years (or such shorter period as may be prescribed by paragraph (k) of Rule
144) commencing on the Issue Date, in each case (A)-(E), subject to the new
accrual of Additional Interest upon the occurrence of a new Registration
Default. Accrued Additional Interest, if any, shall be paid semi-annually on
June 15 and December 15 in each year; and the amount of accrued Additional
Interest shall be determined on the basis of the number of days actually
elapsed. Any accrued and unpaid interest (including Additional Interest) on this
Security upon the issuance of an Exchange Security (as defined in the Indenture)
in exchange for this Security shall cease to be payable to the Holder hereof but
such accrued and unpaid interest (including Additional Interest) shall be
payable on the next Interest Payment Date for such Exchange Security to the
Holder thereof on the related Regular Record Date. 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 Regular Record Date for such interest, which shall be June 1 or December
1 (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 Regular 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 not less than 10
days prior to such Special Record 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 may be listed, and upon such notice as may be required
by such exchange, all as more fully provided in said Indenture.
-20-
================================================================================
In the case of a default in payment of principal and premium, if any,
or upon acceleration or redemption, interest shall be payable pursuant to the
preceding paragraph on such overdue principal and premium, if any, such interest
shall be payable on demand and, if not so paid on demand, such interest shall
itself bear interest at the same rate of interest that is payable pursuant to
the preceding paragraph on the overdue principal (to the extent that the payment
of such interest shall be legally enforceable), and 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 on unpaid interest shall also be payable on
demand.
If this Security is issued in the form of a Global Security, payments
of the principal of and premium, if any, and interest on this Security shall be
made in immediately available funds to the Depositary. If this Security is
issued in certificated form, payment of the principal of and premium, if any,
and interest on this Security will be made at the corporate trust office of the
Trustee and at the office or agency of the Company maintained for that purpose
in the Borough of Manhattan, The City of New York, New York, and at any other
office or agency maintained by the Company for such purpose, in such coin or
currency of the United States of America as at the time of payment is legal
tender for payment of public and private debts; provided, however, that at the
-------- -------
option of the Company payment of interest may be made by check mailed to the
address of the Person entitled thereto as such address shall appear in the
Security Register.
Reference is hereby made to the further provisions of this Security
set forth on the reverse hereof, which further provisions shall for all purposes
have the same effect as if set forth at this place.
Unless the certificate of authentication hereon has been executed by
the Trustee referred to on the reverse hereof by manual signature, this Security
shall not be entitled to any benefit under the Indenture or be valid or
obligatory for any purpose.
IN WITNESS WHEREOF, the Company has caused this instrument to be duly
executed.
Dated:
The Gap, Inc.
By
---------------------------------
Name:
Title:
Attest:
-21-
================================================================================
- ------------------------------
Name:
Title:
SECTION 2.03. Form of Reverse of the Securities.
---------------------------------
This Security is one of a duly authorized issue of a series of
Securities of the Company designated as its [Insert for 2005 Notes -- 8.15%]
[Insert for 2008 Notes -- 8.80%] Notes due December 15, [Insert for 2005 Notes
- -- 2005] [Insert for 2008 Notes -- 2008] issued under an Indenture, dated as of
November 21, 2001 (herein called the "Indenture"), between the Company and The
Bank of New York, as trustee (herein called the "Trustee", which term includes
any successor trustee under the Indenture). The Securities of this series are
limited in aggregate principal amount to [Insert for 2005 Notes -- $200,000,000]
[Insert for 2008 Notes -- $500,000,000]. Reference is hereby made to the
Indenture and all indentures supplemental thereto for a statement of the
respective rights, limitations of rights, duties and immunities thereunder of
the Company, the Trustee and the Holders of this series of Securities and of the
terms upon which this series of Securities are, and are to be, authenticated and
delivered.
The Securities of this series do not have the benefit of any sinking
fund obligations.
At any time on or after the Issue Date, the interest rate payable on
this Security shall be subject to adjustment from time to time as set forth
below if Moody's downgrades the rating ascribed to the Securities to Baa3 or
below or S&P downgrades the rating ascribed to this series of Securities to BBB
or below.
(a) If the rating ascribed to the Securities of this series by Moody's
is changed to a rating set forth below, the interest rate applicable to this
series of Securities shall increase from the rate set forth on the face of this
Security (as it may be increased as provided herein in the event of a
Registration Default) by the percentage per annum set opposite such rating:
Rating Percentage
- ------ ----------
Baa2 or above 0%
Baa3 .25%
Ba1 .50%
Ba2 .75%
Ba3 1.00%
B1 1.25%
B2 1.50%
B3 1.75%
-22-
================================================================================
Rating Percentage
- ------ ----------
Caa1 2.00%
Caa2 2.25%
Caa3 2.50%
Ca 2.75%
C 3.00%
(b) If the rating ascribed to the Securities of this series by S&P is
changed to a rating set forth below, the interest rate applicable to this series
of Securities shall increase from the rate set forth on the face of this
Security (as it may be increased as provided herein in the event of a
Registration Default) by the percentage per annum set opposite such rating:
Rating Percentage
- ------ ----------
BBB+ or above 0%
BBB .25%
BBB- .50%
BB+ .75%
BB 1.00%
BB- 1.25%
B+ 1.50%
B 1.75%
B- 2.00%
CCC+ 2.25%
CCC 2.50%
CCC- 2.75%
CC 3.00%
C 3.25%
D 3.50%
Each adjustment required by any change in rating as provided herein, whether
occasioned by the action of Moody's or S&P, shall be made independent of, and
shall be in addition to, any and all other adjustments, including (i) in the
case of an adjustment occasioned by the action of Moody's, any adjustment
occasioned by the action of S&P, (ii) in the case of an adjustment occasioned by
the action of S&P, any adjustment occasioned by the action of Moody's and (iii)
in the case of an adjustment occasioned by the action of Moody's and/or S&P, any
adjustment resulting from a Registration Default as provided herein. If,
subsequent to an adjustment in the interest rate on this Security as a result of
a change in the ratings ascribed to this series of Securities by Moody's or S&P,
either Moody's or S&P subsequently changes its ratings ascribed to this series
of Securities to any of the thresholds set forth above, the interest rate on
this Security shall be readjusted in accordance with the tables set forth above.
In no event shall the interest rate payable
-23-
================================================================================
with respect to this Security be reduced to below [Insert for 2005 Notes --
8.15%] [Insert for 2008 Notes -- 8.80%] [if Original Securities, then insert:
plus any increase in the interest rate applicable as a consequence of a
Registration Default, as provided herein].
Any interest rate increase or decrease on this Security as a
consequence of a change in the ratings ascribed to this series of Securities by
Moody's and/or S&P as described herein, shall take effect from the Interest
Payment Date following such ratings change.
The Securities of this series are subject to redemption upon not less
than 30 nor more than 60 days' notice by mail, at any time, as a whole or in
part, at the election of the Company, at a redemption price equal to the greater
of (i) 100% of the principal amount of the Securities of this series to be
redeemed or (ii) the sum of the present values of the remaining scheduled
payments of principal and interest thereon (not including the portion of any
such payments of interest accrued as of the Redemption Date) discounted to the
Redemption Date on a semiannual basis (assuming a 360-day year consisting of
twelve 30-day months) at the Adjusted Treasury Rate (determined on the third
Business Day preceding such Redemption Date), together in the case of any such
redemption with accrued and unpaid interest (except if the Redemption Date is an
Interest Payment Date) and Additional Interest, if any, to the Redemption Date,
but interest installments that are due on or prior to such Redemption Date shall
be payable to the holders of such Securities of record at the close of business
on the relevant Regular Record Dates. "Adjusted Treasury Rate" means (i) the
arithmetic mean of the yields under the heading "Week Ending" published in the
Statistical Release most recently published prior to the date of determination
under the caption "Treasury Constant Maturities" for the maturity (rounded to
the nearest month) corresponding to the remaining life to maturity, as of the
Redemption Date, of the principal being redeemed plus (ii) 0.45%. If no maturity
set forth under such heading exactly corresponds to the maturity of such
principal, yields for the two published maturities most closely corresponding to
the maturity of such principal shall be calculated pursuant to the immediately
preceding sentence, and the Adjusted Treasury Rate shall be interpolated or
extrapolated from such yields on a straight-line basis, rounding in each of the
relevant periods to the nearest month. "Statistical Release" means the
statistical release designated "H.15 (519)" or any successor publication which
is published weekly by the Federal Reserve System and which establishes yields
on actively-traded United States government securities adjusted to constant
maturities, or, if such statistical release is not published at the time of any
determination under the terms hereof, then such other reasonably comparable
index which shall be designated by the Company. In the event of redemption of
this Security in part only, a new Security or Securities for the unredeemed
portion hereof shall be issued in the name of the Holder hereof upon the
cancellation hereof.
[If a Global Security insert -- In the event of a deposit or
withdrawal of an interest in this Security (including upon an exchange or
transfer of this Security in part only) effected in accordance with the
Applicable Procedures, the Security Registrar, upon
-24-
================================================================================
receipt of notice of such event from the Depositary's custodian for this
Security, shall make an adjustment on its records to reflect an increase or
decrease of the Outstanding principal amount of this Security resulting from
such deposit or withdrawal, as the case may be.]
If an Event of Default with respect to the Securities of this series
shall occur and be continuing, the entire principal of the Securities of this
series may be declared due and payable in the manner and with the effect
provided in the Indenture.
The Indenture contains provisions for defeasance at any time of (i)
the entire indebtedness of this Security, or (ii) certain restrictive covenants
with respect to this Security, in each case upon compliance with certain
conditions set forth therein.
Unless the context otherwise requires, the Original Securities of this
series of Securities (as defined in the Indenture) and the Exchange Securities
of this series of Securities (as defined in the Indenture) shall constitute one
class for all purposes under the Indenture, including without limitation,
amendments and waivers.
The Indenture permits, with certain exceptions as therein provided,
the amendment thereof and the modification of the rights and obligations of the
Company and the rights of the Holders of the Securities of this series under the
Indenture at any time by the Company and the Trustee with the consent of the
Holders of a majority in aggregate principal amount of the Securities of this
series at the time Outstanding. The Indenture also contains provisions
permitting the Holders of specified percentages in aggregate principal amount of
the Securities of this series at the time Outstanding, on behalf of the Holders
of all the Securities of this 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.
As provided in and subject to the provisions of the Indenture, the
Holder of this Security shall not have the right to institute any proceeding
with respect to the Indenture or for the appointment of a receiver or trustee or
for any other remedy thereunder, unless such Holder shall have previously given
the Trustee written notice of a continuing Event of Default with respect to the
Securities of this series, the Holders of at least 25% in aggregate principal
amount of the Securities of this series at the time Outstanding shall have made
written request to the Trustee to institute proceedings in respect of such Event
of Default as Trustee and offered the Trustee indemnity reasonably satisfactory
to the Trustee, and the Trustee shall not have received from the Holders of a
majority in aggregate principal amount of Securities of this series at the time
Outstanding a direction inconsistent with such request, and shall have failed to
institute any such proceeding, for 60 days after receipt of such notice, request
and offer of indemnity. The
-25-
================================================================================
foregoing shall not apply to any suit instituted by the Holder of this Security
for the enforcement of any payment of principal hereof and premium, if any, or
interest hereon on or after the respective due dates expressed herein.
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, premium, if any, and
interest 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 this Security is registrable in the Security
Register, upon surrender of this Security for registration of transfer at the
office or agency of the Company in the Borough of Manhattan, The City of New
York, New York, duly endorsed by, or accompanied by a written instrument of
transfer in form satisfactory to the Company and the Security 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 like tenor and for the same aggregate principal amount, will be issued to
the designated transferee or transferees.
The Securities of this series are issuable only in registered form
without coupons in denominations of $1,000 and any integral multiple thereof. As
provided in the Indenture and subject to certain limitations therein set forth,
Securities of this series are exchangeable for a like tenor and aggregate
principal amount of Securities of this series 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 none of
the Company, the Trustee or any such agent shall be affected by notice to the
contrary.
Interest [If an Original Security, then insert: (other than Additional
Interest)] on this Security shall be computed on the basis of a 360-day year of
twelve 30-day months.
All terms used in this Security which are defined in the Indenture
shall have the meanings assigned to them in the Indenture.
-26-
================================================================================
SECTION 2.04. Additional Provisions Required in Global Security.
-------------------------------------------------
Any Global Security issued hereunder shall, in addition to the
provisions contained in Sections 2.02 and 2.03, bear a legend in substantially
the following form:
[If a Global Security, insert -- THIS SECURITY IS A GLOBAL SECURITY
WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN
THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF. THIS SECURITY MAY NOT BE
EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS
SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER
THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES
DESCRIBED IN THE INDENTURE.]
[If a Global Security to be held by DTC, insert -- UNLESS THIS
SECURITY IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST
COMPANY, A NEW YORK CORPORATION ("DTC"), TO ISSUER 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 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 A PERSON IS WRONGFUL
INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.]
SECTION 2.05. Form of Trustee's Certificate of Authentication.
-----------------------------------------------
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
Dated:
The Bank of New York,
as Trustee
By
-------------------------------
Authorized Signatory
-27-
================================================================================
ARTICLE THREE
The Securities
SECTION 3.01. Title and Terms.
---------------
The Securities shall be issued in two series, namely 8.15% Notes due
December 15, 2005 and 8.80% Notes due December 15, 2008.
The aggregate principal amount of Securities which may be
authenticated by the Trustee and delivered under this Indenture is limited to
$700,000,000 (comprised of up to $200,000,000 in aggregate principal amount of
2005 Notes and up to $500,000,000 aggregate principal of 2008 Notes), except for
Securities authenticated and delivered upon registration of transfer of, or in
exchange for, or in lieu of, other Securities pursuant to Section 3.04, 3.05,
3.06 or 9.06. The Trustee shall authenticate Original Securities on the Issue
Date in an aggregate principal amount not to exceed $200,000,000 in the case of
the 2005 Notes and $500,000,000 in the case of the 2008 Notes.
The Company may issue Exchange Securities of a series from time to
time pursuant to an Exchange Offer or otherwise, in each case pursuant to a
Board Resolution, subject to Section 3.03, included in an Officers' Certificate
delivered to the Trustee, in authorized denominations in exchange for a like
principal amount of Original Securities of such series. Upon any such exchange
the Original Securities of such series shall be canceled in accordance with
Section 3.09 and shall no longer be deemed Outstanding for any purpose. In no
event shall the aggregate principal amount of Original Securities and Exchange
Securities Outstanding exceed $200,000,000 in the case of the 2005 Notes and
$500,000,000 in the case of the 2008 Notes.
The Securities shall be known and designated as the "8.15%
Notes due December 15, 2005," in the case of the 2005 Notes, and the "8.80%
Notes due December 15, 2008," in the case of the 2008 Notes, of the Company. The
Stated Maturity of the 2005 Notes shall be December 15, 2005 and the Stated
Maturity of the 2008 Notes shall be December 15, 2008. The 2005 Notes shall
initially bear interest at the rate of 8.15% per annum and the 2008 Notes shall
initially bear interest at the rate of 8.80% per annum, which rate of interest,
in each case, may be adjusted from time to time as provided in Section 2.03,
from November 21, 2001 or from the most recent Interest Payment Date thereafter
to which interest has been paid or duly provided for, as the case may be,
payable semi-annually on June 15 and December 15, commencing June 15, 2002,
until the principal thereof is paid or made available for payment; provided,
--------
however, with respect to Original Securities of either series of Securities, if
- -------
there has been a Registration Default with respect to such series of Securities,
a Step-Up will occur and such Original Securities will from then bear Additional
Interest until the Step-Down Date. Accrued Additional Interest, if any, shall be
paid in cash in arrears semi-annually on June 15 and December 15 in each year,
and the amount of accrued Additional Interest
-28-
================================================================================
shall be determined on the basis of the number of days actually elapsed. In
connection with the cash payment of any Additional Interest, the Company shall
notify the Trustee (the "Additional Interest Notice") on or before the later to
occur of (i) the Regular Record Date preceding such payment of any Additional
Interest, and (ii) the date on which any such Additional Interest begins to
accrue, of the amount of Additional Interest to be paid by the Company on the
next Interest Payment Date. In the event of the occurrence of a Step-Down Date
during the period between the date on which the Additional Interest Notice is
given and the next Interest Payment Date, the Company shall so notify the
Trustee and shall provide the Trustee with the revised amount of Additional
Interest to be paid by the Company on such Interest Payment Date.
In the case of a default in payment of principal or upon acceleration,
interest shall be payable pursuant to the preceding paragraph on such overdue
principal, such interest shall be payable on demand and, if not so paid on
demand, such interest shall itself bear interest at the same rate of interest
that is payable pursuant to the preceding paragraph on the overdue principal (to
the extent that the payment of such interest shall be legally enforceable), and
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 on unpaid
interest shall also be payable on demand.
If the Securities of a series are issued in the form of one or more
Global Securities, payments of the principal of, premium, if any, and interest
on the Securities of such series shall be made in immediately available funds to
the Depositary. If the Securities of a series are issued in certificated form,
the principal of and premium, if any, and interest on the Securities of such
series shall be payable at the corporate trust office of the Trustee in the
Borough of Manhattan, The City of New York, New York, maintained for such
purpose and at any other office or agency maintained by the Company for such
purpose; provided, however, that at the option of the Company payment of
-------- -------
interest may be made by check mailed to the address of the Person entitled
thereto as such address shall appear in the Security Register.
The Securities shall not have the benefit of any sinking fund
obligations.
The Securities of each series shall be subject to defeasance and
covenant defeasance at the option of the Company as provided in Article Eleven.
The Securities of each series shall also be subject to redemption at the option
of the Company as provided in Article Twelve.
Unless the context otherwise requires, the Original Securities and the
Exchange Securities of each series of Securities shall constitute one class for
all purposes under this Indenture, including without limitation, amendments,
waivers and redemptions.
-29-
================================================================================
SECTION 3.02. Denominations.
-------------
The Securities shall be issuable only in registered form without
coupons and only in denominations of $1,000 and any integral multiple thereof.
SECTION 3.03. Execution, Authentication, Delivery and Dating.
----------------------------------------------
The Securities shall be executed on behalf of the Company by its
Chairman of the Board, its Chief Executive Officer, its President, its Chief
Administrative Officer, its Chief Financial Officer or one of its Vice
Presidents, and attested by its Secretary or one of its Assistant Secretaries.
The signature of any of these officers on the Securities may be manual or
facsimile.
Securities bearing the manual or facsimile signatures of individuals
who were at any time the proper officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have ceased to hold such
offices prior to the authentication and delivery of such Securities or did not
hold such offices at the date of such Securities.
At any time and from time to time after the execution and delivery of
this Indenture, the Company may deliver Securities of either series executed by
the Company to the Trustee for authentication, together with a Company Order for
the authentication and delivery of such Securities; and the Trustee, in
accordance with such Company Order, shall authenticate and deliver such
Securities as provided by this Indenture.
At any time and from time to time after the execution and delivery of
this Indenture and after the effectiveness of a registration statement under the
Securities Act with respect thereto, the Company may deliver Exchange Securities
of a series of Securities executed by the Company to the Trustee for
authentication, together with a Company Order for the authentication and
delivery of such Exchange Securities and a like principal amount of Original
Securities of such series of Securities for cancellation in accordance with
Section 3.09 of this Indenture, and the Trustee in accordance with the Company
Order shall authenticate and deliver such Securities. In authenticating any such
Exchange 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 6.01) shall be fully protected in relying upon,
an Opinion of Counsel stating,
(a) that such Exchange Securities have been duly and validly issued in
accordance with the terms of this Indenture, and are entitled to all the
rights and benefits set forth herein; and
(b) that the issuance of the Exchange Securities in exchange for the
Original Securities has been effected in compliance with the Securities
Act.
-30-
================================================================================
Each Security shall be dated the date of its authentication.
No Security shall be entitled to any benefit under this Indenture or
be valid or obligatory for any purpose unless there appears on such Security a
certificate of authentication substantially in the form provided for herein
executed by the Trustee by manual signature, and such certificate upon any
Security shall be conclusive evidence, and the only evidence, that such Security
has been duly authenticated and delivered hereunder.
SECTION 3.04. Temporary Securities.
--------------------
Pending the preparation of definitive Securities of either series, the
Company may execute, and upon a Company Order the Trustee shall authenticate and
deliver, temporary Securities which are printed, lithographed, typewritten,
mimeographed or otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in lieu of which they
are issued and with such appropriate insertions, omissions, substitutions and
other variations as the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities of either series are issued, the Company will
cause definitive Securities of such series to be prepared without unreasonable
delay. After the preparation of definitive Securities of such series, the
temporary Securities of such series shall be exchangeable for definitive
Securities of such series upon surrender of the temporary Securities of such
series at any office or agency of the Company designated pursuant to Section
10.02, without charge to the Holder. Upon surrender for cancellation of any one
or more temporary Securities of either series, the Company shall execute and the
Trustee shall authenticate and deliver in exchange therefor a like tenor and
principal amount of definitive Securities of the same series of authorized
denominations. Until so exchanged, the temporary Securities of either series
shall in all respects be entitled to the same benefits under this Indenture as
definitive Securities of such series.
SECTION 3.05. Registration, Registration of Transfer and Exchange.
---------------------------------------------------
(a) The Company shall cause to be kept at the Corporate Trust Office
of the Trustee a register (the register maintained in such office and in any
other office or agency designated pursuant to Section 10.02 being herein
sometimes collectively referred to as the "Security Register") in which, subject
to such reasonable regulations as they may prescribe, the Company shall provide
for the registration of Securities and of transfers and exchanges of Securities.
The Trustee is hereby appointed "Security Registrar" for the purpose of
registering Securities and transfers and exchanges of Securities as herein
provided.
-31-
================================================================================
Such Security Register shall distinguish between 2005 Notes and 2008
Notes, and between Original Securities and Exchange Securities.
Subject to the other provisions of this Indenture regarding
restrictions on transfer, upon surrender for registration of transfer of any
Security of either series at an office or agency of the Company designated
pursuant to Section 10.02 for such purpose in accordance with the terms hereof,
the Company shall execute, and the Trustee shall authenticate and deliver, in
the name of the designated transferee or transferees, one or more new Securities
of the same series of any authorized denominations and of a like tenor and
aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture.
At the option of the Holder and subject to the other provisions of
this Section 3.05, Securities of either series may be exchanged for other
Securities of the same series of any authorized denominations and of a like
tenor and aggregate principal amount and bearing the applicable legends set
forth in Section 2.02, upon surrender of the Securities to be exchanged at such
office or agency. Whenever any Securities are so surrendered for exchange, the
Company shall execute, and the Trustee shall authenticate and deliver, the
Securities which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of transfer or exchange of
Securities shall be the legal, valid and binding obligations of the Company,
evidencing the same debt, and (subject to the provisions in the Original
Securities regarding the payment of Additional Interest) entitled to the same
benefits under this Indenture, as the Securities surrendered upon such
registration of transfer or exchange.
Every Security presented or surrendered for registration of transfer
or for exchange shall (if so required by the Company or the Trustee) be duly
endorsed, or be accompanied by a written instrument of transfer in form
satisfactory to the Company and the Security Registrar duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made to the Holder for any registration of
transfer or exchange of Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Securities, other
than exchanges pursuant to Section 3.04, 3.05 or 9.06.
In the event of a redemption, in whole or in part, of the Securities
of either series, neither the Company nor the Security Registrar will be
required (a) to register the transfer of or exchange Securities of such series
for a period of 15 days immediately preceding the date notice is given
identifying the serial numbers of the Securities called for such redemption
under Section 12.04 or (b) to register the transfer of or exchange any Security
of such series, or portion thereof, called for redemption.
-32-
================================================================================
(b) Certain Transfers and Exchanges. Notwithstanding any other
-------------------------------
provision of this Indenture or the Securities, transfers and exchanges of
Securities and beneficial interests in a Global Security of the kinds specified
in this Section 3.05(b) shall be made only in accordance with this Section
3.05(b).
(i) Restricted Global Security to Regulation S Global Security. If the
----------------------------------------------------------
owner of a beneficial interest in the Restricted Global Security of either
series wishes at any time to transfer such interest to a Person who wishes
to acquire the same in the form of a beneficial interest in the Regulation
S Global Security of such series, such transfer may be effected only in
accordance with the provisions of this clause (b)(i) and clause (b)(iv)
below and subject to the Applicable Procedures. Upon receipt by the
Trustee, as Security Registrar, of (A) an order given by the Depositary or
its authorized representative directing that a beneficial interest in such
Restricted Global Security in a specified principal amount be debited from
a specified Agent Member's account and that a beneficial interest in the
corresponding Regulation S Global Security in an equal principal amount be
credited to another specified Agent Member's account and (B) a Regulation S
Certificate, satisfactory to the Trustee and duly executed by the owner of
such beneficial interest in the Restricted Global Security or his attorney
duly authorized in writing, then the Trustee, as Security Registrar shall
reduce the principal amount of such Restricted Global Security and increase
the principal amount of the corresponding Regulation S Global Security by
such specified principal amount.
(ii) Regulation S Global Security to Restricted Global Security. If
----------------------------------------------------------
the owner of a beneficial interest in the Regulation S Global Security of
either series wishes at any time to transfer such interest to a Person who
wishes to acquire the same in the form of a beneficial interest in the
corresponding Restricted Global Security, such transfer may be effected
only in accordance with this clause (b)(ii) and subject to the Applicable
Procedures. Upon receipt by the Trustee, as Security Registrar, of (A) an
order given by the Depositary or its authorized representative directing
that a beneficial interest in such Regulation S Global Security in a
specified principal amount be debited from a specified Agent Member's
account and that a beneficial interest in the corresponding Restricted
Global Security in an equal principal amount be credited to another
specified Agent Member's account and (B) if such transfer is to occur
during the Restricted Period, a Restricted Securities Certificate,
satisfactory to the Trustee and duly executed by the owner of such
beneficial interest in such Regulation S Global Security or his attorney
duly authorized in writing, then the Trustee, as Security Registrar, shall
reduce the principal amount of such Regulation S Global Security and
increase the principal amount of the corresponding Restricted Global
Security by such specified principal amount.
(iii) Non-Global Security to Non-Global Security. A Security of either
------------------------------------------
series that is not a Global Security may be transferred, in whole or in
part,
-33-
================================================================================
to a Person who takes delivery in the form of another Security of such
series that is not a Global Security as provided in Section 3.05(a);
provided that, if the Security to be transferred in whole or in part is a
--------
Restricted Security, or is a Regulation S Security and the transfer is to
occur during the Restricted Period, then the Trustee shall have received
(A) a Restricted Securities Certificate, satisfactory to the Trustee and
duly executed by the transferor Holder or his attorney duly authorized in
writing, in which case the transferee Holder shall take delivery in the
form of a Restricted Security, or (B) a Regulation S Certificate,
satisfactory to the Trustee and duly executed by the transferor Holder or
his attorney duly authorized in writing, in which case the transferee
Holder shall take delivery in the form of a Regulation S Security (subject
in every case to Section 3.05(c)), respectively.
(iv) Regulation S Global Security to be Held Through Euroclear or
------------------------------------------------------------
Clearstream during Restricted Period. The Company shall use its best
------------------------------------
efforts to cause the Depositary to ensure that, until the expiration of the
Restricted Period, beneficial interests in any Regulation S Global Security
may be held only in or through accounts maintained at the Depositary by
Euroclear or Clearstream (or by Agent Members acting for the account
thereof), and no person shall be entitled to effect any transfer or
exchange that would result in any such interest being held otherwise than
in or through such an account; provided that this clause (b)(iv) shall not
--------
prohibit any transfer or exchange of such an interest in accordance with
clause (b)(ii) above.
(v) Exchanges of Book-Entry Securities for Certificated Securities. A
--------------------------------------------------------------
beneficial interest in a Global Security of either series may not be
exchanged for a Security of such series in certificated form unless (i) DTC
(x) notifies the Company that it is unwilling or unable to continue as
Depositary for such Global Security or (y) has ceased to be a clearing
agency registered under the Exchange Act and in either case the Company
thereupon fails to appoint a successor Depositary, (ii) the Company, at its
option, notifies the Trustee in writing that it elects to cause the
issuance of the Securities of such series in certificated form or (iii)
there shall have occurred and be continuing an Event of Default or any
event which after notice or lapse of time or both would be an Event of
Default with respect to the Securities of such series. In all cases,
certificated Securities delivered in exchange for any Global Security or
beneficial interests therein will be registered in the names, and issued in
any approved denominations, requested by or on behalf of the Depositary (in
accordance with its customary procedures). Any certificated Security issued
in exchange for an interest in a Global Security will bear the legend
restricting transfers that is borne by such Global Security. Any such
exchange will be effected through the DWAC System and an appropriate
adjustment will be made in the records of the Security Registrar to reflect
a decrease in the principal amount of the relevant Global Security.
-34-
================================================================================
(c) Securities Act Legends. Rule 144A Securities and their Successor
----------------------
Securities shall bear a Restricted Securities Legend, and the Regulation S
Securities and their Successor Securities shall bear a Regulation S Legend,
subject to the following:
(i) subject to the following clauses of this Section 3.05(c), a
Security or any portion thereof which is exchanged, upon transfer or
otherwise, for a Global Security or any portion thereof shall bear the
Securities Act Legend borne by such Global Security while represented
thereby;
(ii) subject to the following clauses of this Section 3.05(c), a new
Security which is not a Global Security and is issued in exchange for
another Security (including a Global Security) or any portion thereof, upon
transfer or otherwise, shall bear the Securities Act Legend borne by such
other Security; provided that, if such new Security is required pursuant to
--------
Section 3.05(b) to be issued in the form of a Restricted Security, it shall
bear a Restricted Securities Legend and, if such new Security is so
required to be issued in the form of a Regulation S Security, it shall bear
a Regulation S Legend;
(iii) Registered Securities shall not bear a Securities Act Legend;
(iv) at any time after the Securities of either series may be freely
transferred without registration under the Securities Act or without being
subject to transfer restrictions pursuant to the Securities Act, a new
Security which does not bear a Securities Act Legend may be issued in
exchange for or in lieu of a Security of such series (other than a Global
Security) or any portion thereof which bears such a legend if the Trustee
has received an Unrestricted Securities Certificate, satisfactory to the
Trustee and duly executed by the Holder of such legended Security or his
attorney duly authorized in writing, and after such date and receipt of
such certificate, the Trustee shall authenticate and deliver such a new
Security of such series in exchange for or in lieu of such other Security
as provided in this Article Three;
(v) a new Security of a series which does not bear a Securities Act
Legend may be issued in exchange for or in lieu of a Security of such
series (other than a Global Security) or any portion thereof which bears
such a legend if, in the Company's judgment, placing such a legend upon
such new Security is not necessary to ensure compliance with the
registration requirements of the Securities Act, and the Trustee, at the
written direction of the Company, shall authenticate and deliver such new
Security as provided in this Article Three; and
(vi) notwithstanding the foregoing provisions of this Section 3.05(c),
a Successor Security of a Security that does not bear a particular form of
Securities Act Legend shall not bear such form of legend unless the Company
has reasonable cause to believe that such Successor Security is a
"restricted security" within the meaning of Rule 144, in which case the
Trustee, at the direction of the Company, shall authenticate and deliver a
new Security bearing a Restricted
-35-
================================================================================
Securities Legend in exchange for such Successor Security as provided in
this Article Three.
(d) The Trustee shall have no obligation or duty to monitor, determine
or inquire as to compliance with any restrictions on transfer imposed under this
Indenture or under applicable law with respect to any transfer of any interest
in any Security (including any transfers between or among Agent Members or
beneficial owners of interests in any Global Security) other than to require
delivery of such certificates and other documentation or evidence as are
expressly required by, and to do so if and when expressly required by the terms
of, this Indenture, and to examine the same to determine substantial compliance
as to form with the express requirements hereof.
SECTION 3.06. Mutilated, Destroyed, Lost and Stolen Securities.
------------------------------------------------
If any mutilated Security of either series is surrendered to the
Trustee, the Company shall execute and the Trustee shall authenticate and
deliver in exchange therefor a new Security of the same series of like tenor and
principal amount and bearing a number not contemporaneously outstanding.
If there shall be delivered to the Company and the Trustee (i)
evidence to their satisfaction of the destruction, loss or theft of any Security
of either series and (ii) such security or indemnity as may be required by them
to save each of them and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such Security has been
acquired by a bona fide purchaser, the Company shall execute and the Trustee
shall authenticate and deliver, in exchange for or in lieu of any such
destroyed, lost or stolen Security, a new Security of the same series of like
tenor, form, terms and principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or stolen Security of
either series has become or is about to become due and payable, the Company in
the discretion of the Company may, instead of issuing a new Security of the same
series, pay such Security.
Upon the issuance of any new Security under this Section, the Company
may require the payment of a sum sufficient to cover any tax or other
governmental charge that may be imposed in relation thereto and any other
expenses (including the fees and expenses of the Trustee) connected therewith.
Every new Security of either series issued pursuant to this Section in
lieu of any destroyed, lost or stolen Security shall constitute an original
additional contractual obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by anyone, and shall be
entitled to all the benefits of this
-36-
================================================================================
Indenture equally and proportionately with any and all other Securities of the
same series duly issued hereunder.
The provisions of this Section are exclusive and shall preclude (to
the extent lawful) all other rights and remedies with respect to the replacement
or payment of mutilated, destroyed, lost or stolen Securities.
SECTION 3.07. Payment of Interest; Interest Rights Preserved.
----------------------------------------------
Interest on any Security which is payable, and is punctually paid or
duly provided for, on any Interest Payment Date shall be paid to the Person in
whose name that Security (or one or more Predecessor Securities) is registered
at the close of business on the Regular Record Date for such interest.
Any interest (including Additional Interest) on any Security of either
series which is payable, but is not punctually paid or duly provided for, on any
Interest Payment Date (herein called "Defaulted Interest") shall (a) bear
interest at the rate per annum determined pursuant to the form of Security for
such series included herein (to the extent that the payment of such interest
shall be legally enforceable), and (b) 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, at its election in each
case, as provided in clause (1) or (2) below:
(1) The Company may elect to make payment of any Defaulted Interest to
the Persons in whose names the Securities of such series (or their
respective Predecessor Securities) are registered at the close of business
on a "Special Record Date" for the payment of such Defaulted Interest,
which shall be fixed in the following manner. The Company shall notify the
Trustee in writing of the amount of Defaulted Interest proposed to be paid
on each Security of such series and the date of the proposed payment, and
at the same time the Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid in respect of such
Defaulted Interest or shall make arrangements satisfactory to the Trustee
for such deposit prior to the date of the proposed payment, such money when
deposited to be held in trust for the benefit of the Persons entitled to
such Defaulted Interest as provided in this clause. Thereupon the Trustee
shall fix a Special Record Date for the payment of such Defaulted Interest
which shall be not more than 15 days and not less than 10 days prior to the
date of the proposed payment and not less than 10 days after the receipt by
the Trustee of the notice of the proposed payment. The Trustee shall
promptly notify the Company of such Special Record Date and, in the name
and at the expense of the Company, shall cause notice of the proposed
payment of such Defaulted Interest and the Special Record Date therefor to
be mailed, first-class postage prepaid, to each Holder of Securities of
such series at his address as it appears in the Security Register, not less
than 10 days prior to such Special
-37-
================================================================================
Record Date. Notice of the proposed payment of such Defaulted Interest and
the Special Record Date therefor having been so mailed, such Defaulted
Interest shall be paid to the Persons in whose names the Securities of such
series (or their respective Predecessor Securities) are registered at the
close of business on such Special Record Date and shall no longer be
payable pursuant to the following clause (2).
(2) The Company may make payment of any Defaulted Interest on the
Securities of either series in any other lawful manner not inconsistent
with the requirements of any securities exchange on which the Securities of
such series may be listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the Trustee of the
proposed payment pursuant to this clause, such manner of payment shall be
deemed practicable by the Trustee.
Subject to the foregoing provisions of this Section, each Security
delivered under this Indenture upon registration of transfer of or in exchange
for or in lieu of any other Security shall carry the rights to interest accrued
and unpaid, and to accrue, which were carried by such other Security.
SECTION 3.08. Persons Deemed Owners.
---------------------
Prior to due presentment of a 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 such Security is registered as the owner of such
Security for the purpose of receiving payment of principal of, premium, if any,
and (subject to Section 3.07) interest on such Security and for all other
purposes whatsoever, whether or not such Security be overdue, and none of the
Company, the Trustee or any agent of the Company or the Trustee shall be
affected by notice to the contrary.
SECTION 3.09. Cancellation.
------------
All Securities surrendered for payment, redemption, registration of
transfer or exchange shall, if surrendered to any Person other than the Trustee,
be delivered to the Trustee and shall be promptly cancelled by it. The Company
may at any time deliver to the Trustee for cancellation any Securities
previously authenticated and delivered hereunder which the Company may have
acquired in any manner whatsoever, and all Securities so delivered shall be
promptly cancelled by the Trustee. No Securities shall be authenticated in lieu
of or in exchange for any Securities cancelled as provided in this Section,
except as expressly permitted by this Indenture. All cancelled Securities held
by the Trustee shall be disposed of in accordance with its standard procedures
or as directed by a Company Order; provided, however, that the Trustee shall not
-------- -------
be required to destroy such Securities.
-38-
================================================================================
SECTION 3.10. Computation of Interest.
-----------------------
Interest on the Securities shall be computed on the basis of a 360-day
year of twelve 30-day months, except that Additional Interest shall be computed
on the basis of a 365 or 366-day year, as the case may be.
SECTION 3.11. CUSIP Numbers.
-------------
The Company in issuing the Securities may use "CUSIP" and "ISIN"
numbers (if then generally in use), and, if so, the Trustee shall use "CUSIP"
numbers in notices of redemption as a convenience to Holders; provided that any
--------
such notice may state that no representation is made as to the correctness of
such numbers either as printed on the Securities or as contained in any notice
of a redemption and that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption shall not be affected
by any defect in or omission of such CUSIP numbers. The Company will promptly
notify the Trustee of any change in the CUSIP numbers.
ARTICLE FOUR
Satisfaction and Discharge
SECTION 4.01. Satisfaction and Discharge of Indenture.
---------------------------------------
This Indenture shall cease to be of further effect as to all
outstanding Securities of either series and the Trustee, on demand of and at the
expense of the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to such series, when
(1) either
(A) the Company shall have paid or caused to be paid the
principal of and premium, if any, and interest on the Securities of
such series as and when the same will have become due and payable; or
(B) all outstanding Securities of such series (except lost,
stolen or destroyed Securities which have been replaced or paid) have
been delivered to the Trustee for cancellation;
and the Company, in the case of (A) above, has deposited or caused to
be deposited with the Trustee as trust funds in trust for the purpose
an amount sufficient to pay and discharge the entire indebtedness on
the Securities of such series not theretofore delivered to the Trustee
for cancellation, for principal, premium, if any, and interest to the
date of such deposit (in the
-39-
================================================================================
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 has paid or caused to be paid all other sums payable
hereunder with respect to such series by the Company;
(3) the Company has delivered to the Trustee an Officers' Certificate
and an Opinion of Counsel, each stating that all conditions precedent
herein provided for relating to the satisfaction and discharge of this
Indenture with respect to such series have been complied with; and
(4) the Trustee shall have received such other documents and
assurances as the Trustee shall have reasonably requested.
Notwithstanding the satisfaction and discharge of this Indenture, the following
shall survive: (i) the obligations of the Company to the Trustee under Section
6.07, (ii) the substitution of apparently mutilated, defaced, destroyed, lost or
stolen Securities, (iii) rights of Holders of Securities to receive payment of
principal of and premium, if any, and interest on the Securities, (iv) rights,
obligations and immunities of the Trustee under this Indenture (including, 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 4.02
and the last paragraph of Section 10.03), and (v) rights of holders of the
Securities as beneficiaries of this Indenture with respect to any property
deposited with the Trustee payable to all or any of them.
SECTION 4.02. Application of Trust Money.
--------------------------
Subject to the provisions of the last paragraph of Section 10.03, all
money deposited with the Trustee pursuant to Section 4.01 shall be held in trust
and applied by it, in accordance with the provisions of the Securities 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 interest for whose payment such money has been deposited with the Trustee.
-40-
================================================================================
ARTICLE FIVE
Remedies
SECTION 5.01. Events of Default.
-----------------
"Event of Default", wherever used herein with respect to Securities of
either series, means any one of the following events with respect to such series
of Securities (whatever the reason for such Event of Default and whether it
shall be voluntary or involuntary or be effected by operation of law or pursuant
to any judgment, decree or order of any court or any order, rule or regulation
of any administrative or governmental body):
(1) default in the payment of any interest upon any Security of that
series when it becomes due and payable, and continuance of such default for
a period of 30 days; or
(2) default in the payment of the principal of or premium, if any, on
any Security of that series when due; or
(3) default in the performance, or breach, of any covenant or warranty
of the Company in this Indenture or in the Securities of that series (other
than a covenant or warranty a default in whose performance or whose breach
is elsewhere in this Section specifically dealt with), and continuance of
such default or breach for a period of 60 days after there has been given,
by registered or certified mail, to the Company by the Trustee or to the
Company and the Trustee by the Holders of at least 25% in aggregate
principal amount of the Outstanding Securities of that series a written
notice specifying such default or breach and requiring it to be remedied
and stating that such notice is a "Notice of Default" hereunder; or
(4) if an event of default as defined in any mortgage, indenture or
instrument under which there may be issued, or by which there may be
secured or evidenced, any indebtedness for money borrowed of the Company or
any Subsidiary, whether such indebtedness now exists or shall hereafter be
created, if (A) such default either (1) results from the failure to pay the
principal of any such indebtedness at its stated maturity or (2) relates to
an obligation other than the obligation to pay the principal of such
indebtedness at its stated maturity and results in such indebtedness
becoming or being declared due and payable prior to the date on which it
would otherwise become due and payable, (B) the principal amount of such
indebtedness, together with the principal amount of any other such
indebtedness in default for failure to pay principal at stated maturity or
the maturity of which has been so accelerated, aggregates $25,000,000 or
more at any one time outstanding and (C) such indebtedness is not
discharged, or such acceleration is not rescinded or annulled within a
period of 10 Business Days after there has been given, by registered or
certified mail, to the Company by the
-41-
================================================================================
Trustee or to the Company and the Trustee by the Holders of at least 25% in
principal amount of Outstanding Securities of that series a written notice
specifying such event of default and requiring the Company to cause such
acceleration to be rescinded or annulled or to cause such indebtedness to
be discharged and stating that such notice is a "Notice of Default"
hereunder; or
(5) the entry by a court having jurisdiction in the premises of (A) a
decree or order for relief in respect of the Company in an involuntary case
or proceeding under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or (B) a decree or order adjudging the
Company a bankrupt or insolvent, or approving as properly filed a petition
seeking reorganization, arrangement, adjustment or composition of or in
respect of the Company under any applicable Federal or State law, or
appointing a custodian, receiver, liquidator, assignee, trustee,
sequestrator or other similar official of the Company or of any substantial
part of its property, or ordering the winding up or liquidation of its
affairs, and the continuance of any such decree or order for relief or any
such other decree or order unstayed and in effect for a period of 60
consecutive days; or
(6) the commencement by the Company of a voluntary case or proceeding
under any applicable Federal or State bankruptcy, insolvency,
reorganization or other similar law or of any other case or proceeding to
be adjudicated a bankrupt or insolvent, or the consent by it to the entry
of a decree or order for relief in respect of the Company in an involuntary
case or proceeding under any applicable Federal or State bankruptcy,
insolvency, reorganization or other similar law or to the commencement of
any bankruptcy or insolvency case or proceeding against it, or the filing
by it of a petition or answer or consent seeking reorganization or relief
under any applicable Federal or State law, or the consent by it to the
filing of such petition or to the appointment of or taking possession by a
custodian, receiver, liquidator, assignee, trustee, sequestrator or other
similar official of the Company or of any substantial part of its property,
or the making by it of an assignment for the benefit of creditors, or the
admission by it in writing of its inability to pay its debts generally as
they become due, or the taking of corporate action by the Company in
furtherance of any such action.
SECTION 5.02. Acceleration of Maturity; Rescission and Annulment.
--------------------------------------------------
If an Event of Default with respect to the Securities of either series
(other than an Event of Default specified in Section 5.01(5) or (6)) with
respect to the Company occurs and is continuing, then and in every such case the
Trustee or the Holders of not less than 25% in aggregate principal amount of the
Outstanding Securities of that series may declare the Default Amount of all the
Securities of that series to be due and payable immediately, by a notice in
writing to the Company (and to the Trustee if given by Holders), and upon any
such declaration such Default Amount and any accrued interest,
-42-
================================================================================
together with all other amounts due with respect to that series under this
Indenture, shall become immediately due and payable. If an Event of Default
specified in Section 5.01(5) or (6) with respect to the Company occurs, the
Default Amount of and any accrued interest on the Securities then Outstanding,
together with all other amounts due under this Indenture, shall ipso facto
become immediately due and payable without any declaration or other Act on the
part of the Trustee or any Holder.
The "Default Amount" in respect of any particular Security as of any
particular date of acceleration shall equal the principal amount and premium, if
any, of the Security plus accrued and unpaid interest to such date.
At any time after such a declaration of acceleration has been made
with respect to the Securities of either series and before a judgment or decree
for payment of the money due based on such acceleration 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 Company and the Trustee, may rescind and annul such
declaration and its consequences if:
(1) the Company has paid or deposited with the Trustee a sum
sufficient to pay
(A) all overdue interest on all Securities of that series,
(B) the principal of and premium, if any, on any Securities of
that series which have become due otherwise than by such declaration
of acceleration and interest thereon at the rate prescribed by the
Securities of that series,
(C) to the extent that payment of such interest is lawful,
interest upon overdue interest at the applicable rate prescribed by
the Securities of that series, and
(D) all sums paid or advanced by the Trustee hereunder and the
reasonable compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default with respect to the Securities of that
series, other than the non-payment of the principal of and any premium and
interest on such Securities which have become due solely by such
declaration of acceleration, have been cured or waived as provided in
Section 5.13.
No such rescission shall affect any subsequent default or impair any right
consequent thereon.
-43-
================================================================================
SECTION 5.03. 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
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,
the Company will, upon demand of the Trustee, pay to it, for the
benefit of the Holders of such Securities, the whole amount then due and payable
on such Securities for principal and premium, if any, and interest, and, to the
extent that payment of such interest shall be legally enforceable, interest on
any overdue principal and premium, if any, and on any overdue interest, at the
rate provided by such Securities, and, in addition thereto, such further amount
as shall be sufficient to cover the costs and expenses incurred by the Trustee
under this Indenture, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel.
If an Event of Default with respect to the Securities of either 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
effective 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 5.04. Trustee May File Proofs of Claim.
--------------------------------
In case of any judicial proceeding relative to the Company (or any
other obligor upon the Securities), its property or its creditors, the Trustee
shall be entitled and empowered, by intervention in such proceeding or
otherwise, to take any and all actions authorized under the Trust Indenture Act
in order to have claims of the Holders and the Trustee allowed in any such
proceeding. In particular, the Trustee shall be authorized to collect and
receive any moneys, securities or other property payable or deliverable upon the
exchange of the Securities or upon any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Holder to make such payments to the Trustee and, in the event that the
Trustee shall consent to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, and any other
amounts due the Trustee under Section 6.07.
-44-
================================================================================
No provision of this Indenture shall be deemed to authorize the
Trustee to authorize or consent to or accept or adopt on behalf of any Holder
any plan of reorganization, arrangement, adjustment or composition affecting the
Securities or the rights of any Holder thereof or to authorize the Trustee to
vote in respect of the claim of any Holder in any such proceeding; provided,
--------
however, that the Trustee may, on behalf of the Holders, vote for the election
- -------
of a trustee in bankruptcy or similar official and be a member of a creditors
committee or other similar committee.
SECTION 5.05. Trustee May Enforce Claims Without Possession of Securities.
-----------------------------------------------------------
All rights of action and claims under this Indenture or the Securities
may be prosecuted and enforced by the Trustee without the possession of any of
the Securities or the production thereof in any proceeding relating thereto, and
any such proceeding instituted by the Trustee shall be brought in its own name
as trustee of an express trust, and any recovery of judgment shall, after
provision for the payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and counsel, be for the
ratable benefit of the Holders of the Securities in respect of which such
judgment has been recovered.
SECTION 5.06. Application of Money Collected.
------------------------------
Any money collected by the Trustee pursuant to this Article shall be
applied in the following order, at the date or dates fixed by the Trustee and,
in case of the distribution of such money on account of principal, premium, if
any, or interest, upon presentation of the Securities and the notation thereon
of the payment if only partially paid and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the Trustee under Section
6.07; and
SECOND: To the payment of the amounts then due and unpaid for
principal of, premium, if any, and interest on the Securities in respect of
which or for the benefit of which such money has been collected, ratably,
without preference or priority of any kind, according to the amounts due
and payable on such Securities for principal, premium, if any, and
interest, respectively.
The Trustee, upon prior written notice to the Company, may fix a record date and
payment date for any payment to the Holders pursuant to this Section 5.06.
-45-
================================================================================
SECTION 5.07. Limitation on Suits.
-------------------
No Holder of any Security of either series shall have any right to
institute any proceeding, judicial or otherwise, with respect to this Indenture,
or for the appointment of a receiver or trustee, or for any other remedy
hereunder, unless
(1) such Holder has previously given written notice to the Trustee of
a continuing Event of Default with respect to the Securities of that
series;
(2) the Holders of at least 25% in aggregate principal amount of the
Outstanding Securities of that series shall have made written request to
the Trustee to institute proceedings in respect of such Event of Default in
its own name as Trustee hereunder;
(3) such Holder or Holders have offered and provided to the Trustee
indemnity reasonably satisfactory to the Trustee against the costs,
expenses and liabilities to be incurred in compliance with such request;
(4) the Trustee for 60 days after its receipt of such notice, request,
offer and provision of indemnity has failed to institute any such
proceeding; and
(5) no direction inconsistent with such written request has been given
to the Trustee during such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that series;
it being understood and intended that no one or more 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 Holders,
or to obtain or to seek to obtain priority or preference over any other Holders
or to enforce any right under this Indenture, except in the manner herein
provided and for the equal and ratable benefit of all the Holders.
SECTION 5.08. Unconditional Right of Holders to Receive Principal, Premium and
----------------------------------------------------------------
Interest.
--------
Notwithstanding any other provision in this Indenture, the Holder of
any Security shall have the right, which is absolute and unconditional, to
receive payment of the principal of, premium, if any, and (subject to Section
3.07) interest on such Security on the Stated Maturity expressed in such
Security (or, in the case of redemption, on the Redemption Date), and to
institute suit for the enforcement of any such payment, and such rights shall
not be impaired without the consent of such Holder.
-46-
================================================================================
SECTION 5.09. Restoration of Rights and Remedies.
----------------------------------
If the Trustee or any Holder has instituted any proceeding to enforce
any right or remedy under this Indenture and such proceeding has been
discontinued or abandoned for any reason, or has been determined adversely to
the Trustee or to such Holder, then and in every such case, subject to any
determination in such proceeding, the Company, the Trustee and the Holders shall
be restored severally and respectively to their former positions hereunder and
thereafter all rights and remedies of the Trustee and the Holders shall continue
as though no such proceeding had been instituted.
SECTION 5.10. 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 3.06, no right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any other right or
remedy, and every right and remedy shall, to the extent permitted by law, be
cumulative and in addition to every other right and remedy given hereunder or
now or hereafter existing at law or in equity or otherwise. The assertion or
employment of any right or remedy hereunder, or otherwise, shall not prevent the
concurrent assertion or employment of any other appropriate right or remedy.
SECTION 5.11. Delay or Omission Not Waiver.
----------------------------
No delay or omission of the Trustee or of any Holder of any Security
to exercise any right or remedy accruing upon any Event of Default shall impair
any such right or remedy or constitute a waiver of any such Event of Default or
an acquiescence therein. Every right and remedy given by this Article or by law
to the Trustee or to the Holders may be exercised from time to time, and as
often as may be deemed expedient, by the Trustee or by the Holders, as the case
may be.
SECTION 5.12. Control by Holders.
------------------
The Holders of a majority in aggregate principal amount of the
Outstanding Securities of either series shall have the right to direct the time,
method and place of conducting any proceeding for any remedy available to the
Trustee or exercising any trust or power conferred on the Trustee with respect
to the Securities of such series; provided that
--------
(1) such direction shall not be in conflict with any rule of law or
with this Indenture,
-47-
================================================================================
(2) the Trustee may take any other action deemed proper by the Trustee
which is not inconsistent with such direction, and
(3) subject to the provisions of Section 6.01, the Trustee shall have
the right to decline to follow any such direction if the Trustee in good
faith shall, by a Responsible Officer or Officers of the Trustee, determine
that the proceeding so directed would involve the Trustee in personal
liability.
SECTION 5.13. Waiver of Past Defaults.
-----------------------
The Holders of not less than a majority in aggregate principal amount
of the Outstanding Securities of either series may on behalf of the Holders of
all the Securities of such series by written notice to the Trustee waive any
past default hereunder with respect to such series and its consequences, except
a default
(1) in the payment of the principal of, premium, if any, or interest
on any Security of such series, or
(2) in respect of a covenant or provision hereof which under Article
Nine cannot be modified or amended without the consent of the Holder of
each Outstanding Security of such series affected.
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 5.14. 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 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, including
reasonable attorney's fees and expenses, 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 Trustee or any Holder, or group of Holders, holding in
the aggregate more than 10% in principal amount of the Outstanding Securities of
either series or in any suit instituted by any Holder for the enforcement of
principal of, premium, if any, or interest on any Security on or after the
applicable Stated Maturity of such Security (or, in the case of redemption, on
or after the Redemption Date).
-48-
================================================================================
SECTION 5.15. Waiver of Stay or Extension Laws.
--------------------------------
The Company covenants (to the extent that it may lawfully do so) that
it will not at any time insist upon, or plead, or in any manner whatsoever claim
or take the benefit or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the covenants or the
performance of this Indenture; and the Company (to the extent that it may
lawfully do so) hereby expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the execution of any
power herein granted to the Trustee, but will suffer and permit the execution of
every such power as though no such law had been enacted.
ARTICLE SIX
The Trustee
SECTION 6.01. Certain Duties and Responsibilities.
-----------------------------------
The duties and responsibilities of the Trustee shall be as provided by
the Trust Indenture Act. If an Event of Default shall have occurred and be
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 its exercise
as a prudent person would exercise or use under the circumstances in the conduct
of such person's own affairs. 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 6.02. Notice of Defaults.
------------------
If a default occurs hereunder with respect to Securities of either
series, the Trustee shall give the Holders of Securities of such series notice
of such Default hereunder as and to the extent provided by the Trust Indenture
Act, unless such Default has been cured or waived; provided, however, that in
-------- -------
the case of any Default of the character specified in Section 5.01(3) with
respect to Securities of such series, no such notice to Holders shall be given
until at least 30 days after the occurrence thereof and provided, further, that
-------- -------
the Trustee may withhold from such Holders notice of any continuing Default
(other than a Default of the character specified in Sections 5.01(1) and
-49-
================================================================================
5.01(2)), if the Trustee shall determine that withholding such notice is in the
interests of such Holders.
SECTION 6.03. Certain Rights of Trustee.
-------------------------
Subject to the provisions of Section 6.01:
(a) the Trustee may conclusively rely and shall be fully protected in
acting or refraining from acting upon any resolution, certificate,
statement, instrument, opinion, report, notice, request, direction,
consent, order, bond, debenture, note, other evidence of indebtedness or
other paper or document whether in its original form or facsimile form
believed by it to be genuine and to have been signed or presented by the
proper party or parties;
(b) any request or direction of the Company mentioned herein shall be
sufficiently evidenced by a Company Request or a Company Order and any
resolution of the Board of Directors may be sufficiently evidenced by a
Board Resolution;
(c) whenever in the administration of this Indenture the Trustee shall
deem it desirable that a matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee (unless other
evidence be herein specifically prescribed) may, in the absence of bad
faith on its part, rely upon an Officers' Certificate or an Opinion of
Counsel;
(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 security or indemnity reasonably satisfactory
to the Trustee against the costs, expenses and liabilities which might be
incurred by it in compliance with such request or direction reasonably
satisfactory to the Trustee;
(f) prior to the occurrence of an Event of Default and after all such
Events of Default shall have been cured, the Trustee shall not be bound to
make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request,
direction, consent, order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the Trustee, in its
discretion, may make such further inquiry or investigation into such facts
or matters as it may see fit, and, if the Trustee shall determine to
-50-
================================================================================
make such further inquiry or investigation, it shall be entitled to examine
the books, records and premises of the Company, personally or by agent or
attorney at the sole cost of the Company and shall incur no liability or
additional liability of any kind by reason of such inquiry or
investigation;
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys and the Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney appointed with due care by
it hereunder;
(h) the Trustee shall not be liable for any action taken, suffered or
omitted by it in good faith which the Trustee reasonably believed to have
been authorized or within its rights or powers;
(i) except as otherwise required pursuant to the Trust Indenture Act,
the Trustee shall not be deemed to have notice of any Default or Event of
Default unless a Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of any such Default or Event of Default,
as the case may be, is received by the Trustee at the Corporate Trust
Office of the Trustee, and that such notice references the Securities and
this Indenture; and
(j) the rights, privileges, protections, immunities and benefits given
to the Trustee, including, without limitation, its right to be indemnified,
are extended to, and shall be enforceable by, the Trustee in each of its
capacities hereunder, and to each agent, custodian and other Person
employed to act hereunder.
(k) the Trustee may request that the Company deliver an Officers'
Certificate setting forth the names of individuals and/or titles of
officers authorized at such time to take specified actions pursuant to this
Indenture, which Officers' Certificate may be signed by any person
authorized to sign an Officers' Certificate, including any person specified
as so authorized in any certificate previously delivered and not
superseded.
SECTION 6.04. Not Responsible for Recitals or Issuance of Securities.
------------------------------------------------------
The recitals contained herein and in the Securities, except the
Trustee's certificates of authentication, shall be taken as the statements of
the Company, and the Trustee assumes no responsibility for their correctness.
The Trustee makes no representations as to the validity or sufficiency of this
Indenture or the Securities. The Trustee shall not be accountable for the use or
application by the Company of Securities or the proceeds thereof.
-51-
================================================================================
SECTION 6.05. May Hold Securities.
-------------------
The Trustee, any Paying Agent, any Security Registrar (if other than
the Trustee) or any other agent of the Company, in its individual or any other
capacity, may become the owner or pledgee of Securities and, subject to Sections
6.08 and 6.13, may otherwise deal with the Company with the same rights it would
have if it were not Trustee, Paying Agent, Security Registrar or such other
agent.
Subject to the provisions of Section 6.08, the Trustee may become and
act as trustee under other indentures under which other securities, or
certificates of interest or participation in other securities, of the Company
are outstanding in the same manner as if it were not Trustee.
SECTION 6.06. Money Held in Trust.
-------------------
Money held by the Trustee in trust hereunder need not be segregated
from other funds except to the extent required by law. The Trustee shall be
under no liability for interest on any money received by it hereunder except as
otherwise agreed in writing with the Company.
SECTION 6.07. Compensation and Reimbursement.
------------------------------
The Company agrees
(1) to pay to the Trustee from time to time such compensation as shall
be agreed in writing between the Company and the Trustee for all services
rendered by it hereunder (which compensation shall not be limited by any
provision of law in regard to the compensation of a trustee of an express
trust);
(2) except as otherwise expressly provided herein, to reimburse the
Trustee upon its request for all reasonable expenses, disbursements and
advances incurred or made by the Trustee in accordance with any provision
of this Indenture (including the reasonable compensation and the expenses
and disbursements of its agents and counsel), except any such expense,
disbursement or advance as may be attributable to its negligence or bad
faith; and
(3) to indemnify each of the Trustee, or any predecessor Trustee, for,
and to hold it harmless against, any and all loss, liability, damage, claim
or expense incurred without negligence or willful misconduct on its part,
arising out of or in connection with the acceptance or administration of
the trust or trusts
-52-
================================================================================
hereunder, including the costs and expenses of defending itself against any
claim or liability in connection with the exercise or performance of any of
its powers or duties hereunder and the costs and expenses of enforcing this
right of indemnification.
The Trustee shall have a lien prior to the Securities as to all
property and funds held by it hereunder for any amount owing it or any
predecessor Trustee pursuant to this Section 6.07, except with respect to funds
held in trust for the benefit of the Holders of particular Securities.
When the Trustee incurs expenses or renders services in connection
with an Event of Default specified in Section 5.01, the expenses (including the
reasonable charges and expenses of its counsel) and the compensation for the
services are intended to constitute expenses of administration under any
applicable Federal or State bankruptcy, insolvency or other similar law.
The provisions of this Section shall survive the termination of this
Indenture and the resignation or removal of the Trustee.
SECTION 6.08. Disqualification; Conflicting Interests.
---------------------------------------
If the Trustee has or shall acquire a conflicting interest within the
meaning of the Trust Indenture Act, the Trustee shall either eliminate such
interest within 90 days after ascertaining that it has such conflicting interest
or resign, to the extent and in the manner provided by, and subject to the
provisions of, the Trust Indenture Act and this Indenture.
SECTION 6.09. Corporate Trustee Required; Eligibility.
---------------------------------------
There shall at all times be a Trustee hereunder which shall be a
Person that is eligible pursuant to the Trust Indenture Act to act as such and
has a combined capital and surplus of at least $50,000,000 and its Corporate
Trust Office in the Borough of Manhattan, The City of New York, New York. If
such Person publishes reports of condition at least annually, pursuant to law or
to the requirements of a 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 Person 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.
-53-
================================================================================
SECTION 6.10. Resignation and Removal; Appointment of Successor.
-------------------------------------------------
(a) No resignation or removal of the Trustee and no appointment of a
successor Trustee pursuant to this Article shall become effective until the
acceptance of appointment by the successor Trustee under Section 6.11, at which
time the retiring Trustee shall be fully discharged from its obligations
hereunder.
(b) The Trustee may resign at any time by giving written notice
thereof to the Company. If an instrument of acceptance by a successor Trustee
shall not have been delivered to the Trustee within 30 days after the giving of
such notice of resignation, the resigning Trustee may petition any court of
competent jurisdiction for the appointment of a successor Trustee.
(c) The Trustee may be removed at any time by Act of the Holders of a
majority in principal amount of the Outstanding Securities, delivered to the
Trustee and to the Company.
(d) If an instrument of acceptance by a successor Trustee shall not
have been delivered to the Trustee within 30 days after the giving of such
notice of removal, the Trustee being removed may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
Trustee with respect to the Securities.
(e) If at any time:
(1) the Trustee shall fail to comply with Section 6.08 after written
request therefor by the Company or by any Holder who has been a bona fide
Holder of a Security for at least six months, or
(2) the Trustee shall cease to be eligible under Section 6.09 and
shall fail to resign after written request therefor by the Company or by
any such Holder, or
(3) the Trustee shall become incapable of acting or shall be adjudged
bankrupt or insolvent or a receiver of the Trustee or of its property shall
be appointed or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of rehabilitation,
conservation or liquidation,
then, in any such case, (i) the Company by or pursuant to a Board Resolution may
remove the Trustee and appoint a successor Trustee with respect to the
Securities, or (ii) subject to Section 5.14, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor Trustee.
(f) If the Trustee shall resign, be removed or become incapable of
acting, or if a vacancy shall occur in the office of Trustee for any cause, the
Company, by
-54-
================================================================================
Board Resolution, shall promptly appoint a successor Trustee. If, within one
year after such resignation, removal or incapability, or the occurrence of such
vacancy, a successor Trustee shall be appointed by Act of the Holders of a
majority in principal amount of the Outstanding Securities delivered to the
Company and the retiring Trustee, the successor Trustee so appointed shall,
forthwith upon its acceptance of such appointment, become the successor Trustee
and supersede the successor Trustee appointed by the Company. If no successor
Trustee shall have been so appointed by the Company or the Holders and accepted
appointment in the manner hereinafter provided, any Holder who has been a bona
fide Holder of a Security 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.
(g) The Company shall give notice of each resignation and each removal
of the Trustee and each appointment of a successor Trustee to all Holders in the
manner provided in Section 1.06. Each notice shall include the name of the
successor Trustee and the address of its Corporate Trust Office.
SECTION 6.11. Acceptance of Appointment by Successor.
--------------------------------------
Every successor Trustee appointed hereunder shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an instrument accepting
such appointment, and thereupon the resignation or removal of the retiring
Trustee shall become effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the rights, powers, trusts
and duties of the retiring Trustee; but, on request of the Company or the
successor Trustee under Section 6.07, 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. Upon
request of any such successor Trustee, the Company shall execute any and all
instruments for more fully and certainly vesting in and confirming to such
successor Trustee all such rights, powers and trusts.
No successor Trustee shall accept its appointment unless at the time
of such acceptance such successor Trustee shall be qualified and eligible under
this Article.
SECTION 6.12. 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 that
--------
such corporation shall be otherwise
-55-
================================================================================
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 6.13. Preferential Collection of Claims Against the Company.
-----------------------------------------------------
If and when the Trustee shall be or become a creditor of the Company
(or any other obligor upon the Securities), the Trustee shall be subject to the
provisions of the Trust Indenture Act regarding the collection of claims against
the Company (or any such other obligor).
SECTION 6.14. Appointment of Authenticating Agent.
-----------------------------------
The Trustee may appoint an Authenticating Agent or Agents with respect
to the Securities which shall be authorized to act on behalf of the Trustee to
authenticate Securities issued upon original issue and upon exchange,
registration of transfer or partial redemption thereof or pursuant to Section
3.06, and Securities so authenticated shall be entitled to the benefits of this
Indenture and shall be valid and obligatory for all purposes as if authenticated
by the Trustee hereunder. Wherever reference is made in this Indenture to the
authentication and delivery of Securities by the Trustee or the Trustee's
certificate of authentication, such reference shall be deemed to include
authentication and delivery on behalf of the Trustee by an Authenticating Agent
and a certificate of authentication executed on behalf of the Trustee by an
Authenticating Agent. Each Authenticating Agent shall be acceptable to the
Company and shall at all times be a corporation organized and doing business
under the laws of the United States of America, any State thereof or the
District of Columbia, authorized under such laws to act as Authenticating Agent,
having a combined capital and surplus of not less than $50,000,000 and subject
to supervision or examination by Federal or State authority. If such
Authenticating Agent publishes reports of condition at least annually, pursuant
to law or to the requirements of said supervising or examining authority, then
for the purposes of this Section, the combined capital and surplus of such
Authenticating Agent shall be deemed to be its combined capital and surplus as
set forth in its most recent report of condition so published. If at any time an
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, such Authenticating Agent shall resign immediately
in the manner and with the effect specified in this Section.
Any corporation into which an Authenticating Agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which such Authenticating Agent
shall be a party,
-56-
================================================================================
or any corporation succeeding to all or substantially all the corporate agency
or corporate trust business of an Authenticating Agent, shall continue to be an
Authenticating Agent, provided such corporation shall be otherwise eligible
under this Section, without the execution or filing of any paper or any further
act on the part of the Trustee or the Authenticating Agent.
An Authenticating Agent may resign at any time by giving written
notice thereof to the Trustee and to the Company. The Trustee may at any time
terminate the agency of an Authenticating Agent by giving written notice thereof
to such Authenticating Agent and to the Company. Upon receiving such a notice of
resignation or upon such a termination, or in case at any time such
Authenticating Agent shall cease to be eligible in accordance with the
provisions of this Section, the Trustee may appoint a successor Authenticating
Agent which shall be acceptable to the Company and shall give notice of such
appointment in the manner provided in Section 1.06 to all Holders of Securities.
Any successor Authenticating Agent upon acceptance of its appointment hereunder
shall become vested with all the rights, powers and duties of its predecessor
hereunder, with like effect as if originally named as an Authenticating Agent.
No successor Authenticating Agent shall be appointed unless eligible under the
provisions of this Section.
The Company agrees to pay to each Authenticating Agent from time to
time reasonable compensation for its services under this Section.
If an appointment is made pursuant to this Section, the Securities of
either series may have endorsed thereon, in lieu of the Trustee's certificate of
authentication, an alternative certificate of authentication in the following
form:
This is one of the Securities of the series designated therein
referred to in the within-mentioned Indenture.
The Bank of New York,
As Trustee
By
--------------------------------------
As Authenticating Agent
By
--------------------------------------
Authorized Signatory
-57-
================================================================================
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and the Company
SECTION 7.01. Company to Furnish Trustee Names and Addresses of Holders.
---------------------------------------------------------
The Company will furnish or cause to be furnished to the Trustee
(a) semi-annually, not more than 15 days after each Regular Record
Date, a list, in such form as the Trustee may reasonably require, of the
names and addresses of the Holders as of such Regular Record Date, and
(b) at such other times as the Trustee may request in writing, within
30 days after the receipt by the Company of any such request, a list of
similar form and content as of a date not more than 15 days prior to the
time such list is furnished;
excluding from any such list names and addresses received by the Trustee in its
- ---------
capacity as Security Registrar.
SECTION 7.02. Preservation of Information; Communications to Holders.
------------------------------------------------------
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, the names and addresses of Holders contained in the most recent
list furnished to the Trustee as provided in Section 7.01 and the names and
addresses of Holders received by the Trustee in its capacity as Security
Registrar. The Trustee may destroy any list furnished to it as provided in
Section 7.01 upon receipt of a new list so furnished.
(b) The rights of Holders to communicate with other Holders with
respect to their rights under this Indenture or under the Securities, and the
corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Holder of Securities, by receiving and holding the same,
agrees with the Company and the Trustee that none of the Company, the Trustee or
any agent of any of them shall be held accountable by reason of any disclosure
of information as to names and addresses of Holders made pursuant to the Trust
Indenture Act.
SECTION 7.03. Reports by Trustee.
------------------
(a) The Trustee shall transmit to Holders such reports concerning the
Trustee and its actions under this Indenture as may be required pursuant to the
Trust Indenture Act at the times and in the manner provided pursuant thereto. If
required by
-58-
================================================================================
Section 313 (a) of the Trust Indenture Act, the Trustee shall, within sixty days
after each May 15 following the date of this Indenture deliver to Holders a
brief report, dated as of such May 15, which complies with the provisions of
such Section 313(a).
(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 either
series of Securities are listed, with the Commission and with the Company. The
Company shall promptly notify the Trustee of the listing of either series of
Securities on any stock exchange and of any delisting thereof.
SECTION 7.04. Reports by Company.
------------------
The Company shall file with the Trustee and the Commission, and
transmit to Holders, such information, documents and other reports, and such
summaries thereof, as may be required pursuant to the Trust Indenture Act at the
times and in the manner provided pursuant to such Act and in the manner set
forth in Section 10.07; provided that any such information, documents or reports
--------
required to be filed with the Commission pursuant to Section 13 or 15(d) of the
Exchange Act ( "SEC Reports") shall be filed with the Trustee within 15 days
after the same is so required to be filed with the Commission. In the event the
Company shall cease to be required to file SEC Reports pursuant to the Exchange
Act, the Company will nonetheless continue to file such reports with the
Commission (unless the Commission will not accept such a filing) and the Trustee
and to furnish copies of such SEC Reports to the Holders of Securities at the
time the Company is required to file such reports with the Trustee and will make
such information available to investors who request it in writing.
Delivery of such reports, information and documents to the Trustee
shall be for informational purposes only and the Trustee's receipt of such
reports, information and documents shall not constitute constructive notice of
any information contained therein or determinable from information contained
therein, including the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on Officers'
Certificates).
SECTION 7.05. Officers' Certificate with Respect to Change in Interest Rates.
--------------------------------------------------------------
Within seven Business Days after any Step-Up or Step-Down Date, or
after any adjustment of the interest rate payable as a result of a ratings
change by Moody's or S&P as provided in Section 2.03, with respect to Securities
of either series, the Company shall deliver an Officers' Certificate to the
Trustee stating the new interest rate with respect to the Securities of such
series and the date on which it became effective.
-59-
================================================================================
ARTICLE EIGHT
Merger, Consolidation, Etc.
SECTION 8.01. Mergers, Consolidations and Certain Sales of Assets.
---------------------------------------------------
The Company shall not consolidate with or merge with or into any other
Person or convey, transfer or lease its properties and assets substantially as
an entirety to any Person, unless:
(1) either the Company shall be the continuing corporation, or the
successor Person or purchaser shall be a corporation, partnership or trust
organized and validly existing under the laws of the United States of
America, any State thereof or the District of Columbia and shall expressly
assume, by an indenture supplemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due and punctual payment
of the principal of, premium, if any, and interest on all the Securities,
the performance or observance of every covenant of this Indenture on the
part of the Company to be performed or observed and all of the Company's
obligations under the Exchange and Registration Rights Agreement;
(2) immediately after giving effect to such transaction, no Event of
Default, and no event which, after notice or lapse of time or both, would
become an Event of Default, shall have occurred and be continuing; and
(3) if a supplemental indenture is to be executed in connection with
such consolidation, merger, transfer or lease, the Company shall have
delivered to the Trustee (A) an Officers' Certificate and (B) an Opinion of
Counsel attesting to compliance with these provisions.
SECTION 8.02. Successor Substituted.
---------------------
Upon any consolidation of the Company with, or merger of the Company
with or into, any other Person or any conveyance, transfer or lease of the
properties and assets of the Company substantially as an entirety in accordance
with Section 8.01, the successor Person formed by such consolidation or into
which the Company is merged or to which such conveyance, transfer or lease is
made shall succeed to, and be substituted for, and may exercise every right and
power of, the Company under this Indenture with the same effect as if such
successor Person had been named as the Company herein, and thereafter, except in
the case of a lease, the predecessor Person shall be relieved of all obligations
and covenants under this Indenture and the Securities.
-60-
================================================================================
SECTION 8.03. Officers' Certificate and Opinion of Counsel.
--------------------------------------------
The Trustee, subject to the provisions of Sections 6.01 and 6.03,
shall receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, conveyance, transfer or lease, and
any such assumption, complies with the provisions of this Article before the
Trustee shall execute any supplemental indenture required pursuant to this
Article.
ARTICLE NINE
Supplemental Indentures
SECTION 9.01. Supplemental Indentures Without Consent of Holders.
--------------------------------------------------
Without the consent of any Holders, the Company, when authorized by a
Board Resolution, and the Trustee, at any time and from time to time, may enter
into one or more indentures supplemental hereto, in form satisfactory to the
Trustee, for any of the following purposes:
(1) to evidence the succession of another Person to the Company and
the assumption by any such successor of the covenants of the Company herein
and in the Securities; or
(2) to add to the covenants of the Company for the benefit of the
Holders of the Securities of either series (and if such covenants are to be
for the benefit of only one series, stating that such covenants are
expressly being included solely for the benefit of such series) or to
surrender any right or power herein conferred upon the Company; or
(3) to add any additional Events of Default with respect to both or
either 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 permit or facilitate the issuance of
Securities in uncertificated form in addition to or in place of
certificated Securities; or
(5) to add to, change or eliminate any of the provisions of this
Indenture in respect of one or both series of Securities, provided that any
such addition, change or elimination (i) shall neither (A) apply to any
Security created prior to the execution of such supplemental indenture and
entitled to the benefit of such provision nor (B) modify the rights of the
Holder of any such Security with
-61-
================================================================================
respect to such provision or (ii) shall become effective only when there is
no such Security Outstanding; or
(6) to secure the Securities; or
(7) to establish the form or terms of the Securities of either series
as permitted by Sections 2.01 and 3.01; or
(8) to evidence and provide for the acceptance of appointment
hereunder by a successor Trustee with respect to the Securities; or
(9) if allowed, without penalty under applicable laws and regulations,
to permit payment in the United States (including any of the States thereof
and the District of Columbia), its territories, its possessions and other
areas subject to its jurisdiction of principal, premium, if any, or
interest on securities in bearer form; or
(10) to cure any ambiguity, to correct or supplement any provision
herein which is mistaken or 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 that such action pursuant to this
clause (10), other than with respect to a mistaken provision, shall not
adversely affect the interests of the Holders of Securities of either
series in any material respect; or
(11) to modify, eliminate or add to the provisions of this Indenture
to such extent as shall be necessary to comply with any requirement of the
Commission in order to effect qualification of this Indenture under the
Trust Indenture Act in connection with the issuance of Exchange Securities
or thereafter to maintain the qualification of this Indenture under the
Trust Indenture Act.
SECTION 9.02. Supplemental Indentures With Consent of Holders.
-----------------------------------------------
With the consent of the Holders of not less than a majority in
principal amount of the Outstanding Securities of each series adversely affected
by such supplemental indenture, by Act of said Holders delivered to the Company
and the Trustee, the Company, when authorized by a Board Resolution, and the
Trustee may enter into an indenture or indentures supplemental hereto for the
purpose of adding any provisions to or changing in any manner or eliminating any
of the provisions of this Indenture with respect to such series of Securities or
of modifying in any manner the rights of the Holders of such series of
Securities under this Indenture; provided, however, that no such supplemental
indenture shall, without the consent of the Holder of each Outstanding Security
of such series affected thereby,
-62-
================================================================================
(1) change the Stated Maturity of the principal of or interest on, any
Security of that series, or reduce the principal amount thereof or the
premium, if any, or the rate of interest thereon or modify the provisions
with respect to the adjustment of the interest rate payable on the
Securities of that series in a manner adverse to Holders of such series, or
change the place of payment where, or the coin or currency in which,
payment of the principal of, premium, if any, or interest on any Security
of that series is payable, or impair the right to institute suit for the
enforcement of any payment in respect of any Security of that series on or
after the Stated Maturity thereof (or, in the case of redemption, on or
after the Redemption Date), or
(2) reduce the amount payable upon a redemption of any Securities of
such series or modify the Company's right to redeem the Securities of that
series in a manner adverse to such Holders, or
(3) reduce the percentage in principal amount of the Outstanding
Securities of that series, the consent of whose Holders is required for any
such supplemental indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions of this Indenture or
certain defaults hereunder and their consequences) provided for in this
Indenture, or
(4) modify any of the provisions of this Section, Section 5.13,
Section 10.08 or Section 10.10, except to increase any percentage set forth
in such Sections or to provide that certain other provisions of this
Indenture cannot be modified or waived without the consent of the Holder of
each Outstanding Security of such series affected thereby; provided,
however, that this clause shall not be deemed to require the consent of any
Holder with respect to changes in the references to "the Trustee" and
concomitant changes in this Section and Section 10.10, or the deletion of
this proviso, in accordance with the requirements of Section 9.01(8).
It shall not be necessary for any Act of Holders under this Section to
approve the particular form of any proposed supplemental indenture, but it shall
be sufficient if such Act shall approve the substance thereof.
SECTION 9.03. Execution of Supplemental Indentures.
------------------------------------
In executing, or accepting the additional trusts created by, any
supplemental indenture permitted by this Article or the modifications thereby of
the trusts created by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 6.01) 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
-63-
================================================================================
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
SECTION 9.04. Effect of Supplemental Indentures.
---------------------------------
Upon the execution of any supplemental indenture under this Article,
this Indenture shall be modified in accordance therewith, and such supplemental
indenture shall form a part of this Indenture for all purposes; and every Holder
of Securities theretofore or thereafter authenticated and delivered hereunder
shall be bound thereby.
SECTION 9.05. Conformity with Trust Indenture Act.
-----------------------------------
Every supplemental indenture executed pursuant to this Article shall
conform to the requirements of the Trust Indenture Act.
SECTION 9.06. Reference in Securities to Supplemental Indentures.
--------------------------------------------------
Securities of either series authenticated and delivered after the
execution of any supplemental indenture pursuant to this Article may, and shall
if required by the Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture. If the Company shall
so determine, new Securities of either 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 of such series.
ARTICLE TEN
Covenants
SECTION 10.01. Payment of Principal, Premium and Interest.
------------------------------------------
The Company will duly and punctually pay the principal of and premium,
if any, and interest on each series of Securities in accordance with the terms
of such series of Securities and this Indenture.
-64-
================================================================================
SECTION 10.02. Maintenance of Office or Agency.
-------------------------------
The Company will maintain in the Borough of Manhattan, The City of New
York, New York, an office or agency where Securities of either series may be
presented or surrendered for payment or redemption, where Securities of either
series may be surrendered for registration of transfer or exchange and where
notices and demands to or upon the Company in respect of the Securities of
either series and this Indenture may be served. The Company will give prompt
written notice to the Trustee of the location, and any change in the location,
of such office or agency. If at any time the Company shall fail to maintain any
such required office or agency or shall fail to furnish the Trustee with the
address thereof, such presentations, surrenders, notices and demands may be made
or served at the Corporate Trust Office of the Trustee, and the Company hereby
appoints the Trustee as its agent to receive all such presentations, surrenders,
notices and demands.
The Company may also from time to time designate one or more other
offices or agencies (in or outside the Borough of Manhattan, The City of New
York, New York) where the Securities may be presented or surrendered for any or
all such purposes and may from time to time rescind such designations; provided,
--------
however, that no such designation or rescission shall in any manner relieve the
- -------
Company of its obligation to maintain an office or agency in the Borough of
Manhattan, The City of New York, New York for such purposes. The Company will
give prompt written notice to the Trustee of any such designation or rescission
and of any change in the location of any such other office or agency.
SECTION 10.03. Money for Security Payments to be Held in Trust.
-----------------------------------------------
If the Company shall at any time act as its own Paying Agent with
respect to either 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. As provided in Section 5.04, upon any bankruptcy or
reorganization proceeding relative to the Company, the Trustee shall serve as
the Paying Agent for the Securities.
Whenever the Company shall have one or more Paying Agents for either
series of Securities, it will, prior to each due date of the principal of,
premium, if any, or interest on any Securities of that series, deposit with a
Paying Agent a sum sufficient to pay the principal, premium, if any, or interest
so becoming due, such sum to be held in trust for the benefit of the Persons
entitled to such principal, premium, if any, or interest, and (unless such
Paying Agent is the Trustee) the Company will promptly notify the Trustee in
writing of its action or failure so to act. As provided in Section 5.04, upon
any
-65-
================================================================================
bankruptcy or reorganization proceeding relative to the Company the Trustee
shall serve as the Paying Agent for the Securities.
The Company will cause each Paying Agent for either 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 any
other obligor upon the Securities of that series) in the making of any
payment of principal, premium, if any, or interest;
(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; and
(4) acknowledge, accept and agree to comply in all respects with the
provisions of this Indenture relating to the duties, rights and obligations
of such Paying Agent.
The Company may at any time, for the purpose of obtaining the
satisfaction and discharge of this Indenture with respect to either series of
Securities or for any other purpose, pay, or by Company Order direct any Paying
Agent to pay, to the Trustee all sums held in trust by the Company or such
Paying Agent, such sums to be held by the Trustee upon the same trusts as those
upon which such sums were held by the Company or such Paying Agent; and, upon
such payment by any Paying Agent to the Trustee, such Paying Agent shall be
released from all further liability with respect to such money.
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Security 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 the Company Request, or (if then held by the Company) shall be
discharged from such trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for payment thereof, and
all liability of the Trustee or such Paying Agent with respect to such trust
money, and all liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying Agent, before being
-------- -------
required to make any such repayment, shall, at the expense of the Company, cause
to be published once, in a newspaper published in the English language,
customarily published on each Business Day and of general circulation in the
Borough of
-66-
================================================================================
Manhattan, The City of New York, New York, 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.
SECTION 10.04. Existence.
---------
Subject to Article Eight, the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its corporate
existence.
SECTION 10.05. Maintenance of Properties.
-------------------------
The Company will cause all material properties used or useful in the
conduct of its business or the business of any Subsidiary to be maintained and
kept in good condition, repair and working order and supplied with all necessary
equipment and will cause to be made all necessary repairs renewals,
replacements, betterments and improvements thereof, all as in the judgment of
the Company may be necessary or appropriate in connection with its business;
provided, however, that nothing in this Section shall prevent the Company from
- -------- -------
discontinuing the operation or maintenance of, or selling, abandoning or
otherwise disposing of, any of such properties if such discontinuance or
disposal is, in the judgment of the Company, desirable in the conduct of its
business or the business of any Subsidiary and not disadvantageous in any
material respect to the Holders.
SECTION 10.06. Payment of Taxes and Other Claims.
---------------------------------
The Company will pay or discharge or cause to be paid or discharged,
before the same shall become delinquent, (1) all material taxes, assessments and
governmental charges levied or imposed upon the Company or any Subsidiary or
upon the income, profits or property of the Company or any Subsidiary, and (2)
all lawful claims for labor, materials and supplies which, if unpaid, might by
law become a lien upon the property of the Company or any Subsidiary; provided,
--------
however, that the Company shall not be required to pay or discharge or cause to
- -------
be paid or discharged (i) any such tax, assessment, charge or claim whose
amount, applicability or validity is being contested in good faith by
appropriate proceedings or (ii) any such tax, assessment, charge or claim which
the failure to pay or discharge, individually or in the aggregate with all such
other failures, would not have a material adverse effect on the Company and its
Subsidiaries taken as a whole.
-67-
================================================================================
SECTION 10.07. Provision of Financial Information.
----------------------------------
The Company agrees to furnish the Trustee and file with the
Commission, in each case within the time periods specified in the Commission's
rules and regulations:
(i) all quarterly and annual financial information that would be
required to be included in filings with the Commission on Forms 10-Q and
10-K, including a "Management's Discussion and Analysis of Financial
Condition and Results of Operations" that describes the financial condition
and results of operations of the Company and its consolidated Subsidiaries
(showing in reasonable detail, either on the face of the financial
statements or in the footnotes thereto and in "Management's Discussion of
Analysis of Financial Condition and Results of Operations," the financial
condition and results of operations of the Company and its Subsidiaries)
and, with respect to the annual information only, a report thereon by the
Company's certified independent accountants; and
(ii) all current reports that would be required to be filed with the
Commission on Form 8-K.
In the event the Company shall cease to be required to file SEC
Reports pursuant to the Exchange Act, the Company shall nevertheless continue to
file such reports with the Commission (unless the Commission will not accept
such a filing) and the Trustee for so long as any Securities are outstanding.
The Company will furnish copies of the SEC Reports to the Holders of Securities
who request it in writing.
SECTION 10.08. Provision of Additional Information.
-----------------------------------
For so long as any Securities of either series are outstanding and are
"restricted securities" within the meaning of Rule 144(a)(3) under the
Securities Act or, if earlier, until two years after the Issue Date, at any time
when the Company is not subject to Section 13 or 15(d) of the Exchange Act, for
the benefit of holders from time to time of Securities of such series, to
furnish at its expense, upon request, to holders of Securities such series and
prospective purchasers of such securities, information satisfying the
requirements of subsection (d)(4)(i) of Rule 144A under the Securities Act.
SECTION 10.09. Statement by Officers as to Compliance.
--------------------------------------
The Company will deliver to the Trustee, within 120 days after the end
of each fiscal year of the Company ending after the date hereof, an Officers'
Certificate, one of the signers of which shall be the principal executive
officer, principal financial officer or principal accounting officer of the
Company, stating whether or not to the best knowledge of the signers thereof the
Company is in default in the performance and
-68-
================================================================================
observance of any of the terms, provisions and conditions of this Indenture
(without regard to any period of grace or requirement of notice provided
hereunder) and, if the Company shall be in default, specifying all such defaults
and the nature and status thereof of which they may have knowledge.
SECTION 10.10. Waiver of Certain Covenants.
---------------------------
The Company may omit in any particular instance to comply with any
covenant or condition set forth in Sections 10.03 to 10.07, inclusive, with
respect to the Securities of either series if before or after the time for such
compliance the Holders of at least a majority in aggregate principal amount of
the Outstanding Securities of such series shall, by Act of such Holders, either
waive such compliance in such instance or generally waive compliance with such
covenant or condition, but no such waiver shall extend to or affect such
covenant or condition except to the extent so expressly waived, and, until such
waiver shall become effective, the obligations of the Company and the duties of
the Trustee in respect of any such covenant or condition shall remain in full
force and effect.
SECTION 10.11. Statement by Officers as to Default.
-----------------------------------
The Company shall deliver to the Trustee, as soon as possible and in
any event within five days after the Company becomes aware of the occurrence of
any Event of Default or an event which, with notice or the lapse of time or
both, would constitute an Event of Default, an Officers' Certificate setting
forth the details of such Event of Default or default and the action which the
Company proposes to take with respect thereto.
ARTICLE ELEVEN
Defeasance and Covenant Defeasance
SECTION 11.01. Company's Option to Effect Defeasance or Covenant Defeasance.
------------------------------------------------------------
The Company may, at its option by Board Resolution at any time
(subject to 5 Business Day's prior written notification to the Trustee or such
lesser period as may be acceptable to the Trustee), elect to have either Section
11.02 or Section 11.03 applied to the Outstanding Securities of either series
upon compliance with the conditions set forth below in this Article Eleven.
-69-
================================================================================
SECTION 11.02. Defeasance and Discharge.
------------------------
Upon the Company's exercise of its option provided in Section 11.01 to
have this Section applied to either series of Securities, the Company shall be
deemed to have been discharged from its obligations with respect to the
Outstanding Securities of that series on and after the date the conditions
precedent set forth below 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 the Outstanding Securities of
that series which shall thereafter be deemed to be "Outstanding" only for the
purposes of the Sections of this Indenture referred to in clauses (1) and (2) of
this Section, and to have satisfied all its other obligations under the
Securities of that series and this Indenture insofar as the Securities of that
series is concerned (and the Trustee, at the expense of the Company, shall
execute proper instruments acknowledging the same), except for the following
which shall survive until otherwise terminated or discharged hereunder:
(1) the rights of Holders of Outstanding Securities of that series to
receive, solely from the trust fund described in Section 11.04 as more
fully set forth in such Section, payments of the principal of and premium,
if any, and interest on such Securities when such payments are due;
(2) the Company's obligations with respect to the Securities of that
series under Sections 3.05, 3.06, 10.02 and 10.03 and such obligations as
shall be ancillary thereto;
(3) the rights, powers, trusts, duties, immunities and other
provisions in respect of the Trustee hereunder; and
(4) this Article Eleven.
Subject to compliance with this Article Eleven, the Company may
exercise its option under this Section 11.02 notwithstanding the prior exercise
of its option under Section 11.03 with respect to the Securities. Following a
defeasance with respect to the Securities of either series, payment of the
Securities of that series may not be accelerated because of an Event of Default
with respect to such series.
SECTION 11.03. Covenant Defeasance.
-------------------
Upon the Company's exercise of its option with respect to either
series of Securities provided in Section 11.01 applicable to this Section, the
Company shall be released from its obligations under Section 8.01 and any Event
of Default applicable to the Securities of such series shall not be deemed to be
an Event of Default with respect to the Outstanding Securities of such series on
and after the date the conditions set forth below are satisfied (hereinafter,
"covenant defeasance"), and the Securities of such series
-70-
================================================================================
shall thereafter be deemed not to be "Outstanding" for the purposes of any
direction, waiver, consent or declaration or Act of Holders (and the
consequences of any thereof) in connection with Section 8.01, but shall continue
to be deemed "Outstanding" for all other purposes hereunder. For this purpose,
such covenant defeasance means that, with respect to the Outstanding Securities
of that series, the Company 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 any
reference in any such Section or such other covenant to any other provision
herein or in any other document, but the remainder of this Indenture and the
Securities of such series shall be unaffected thereby.
SECTION 11.04. Conditions to Defeasance or Covenant Defeasance.
-----------------------------------------------
The following shall be the conditions precedent to application of
either Section 11.02 or Section 11.03 to the Outstanding Securities of either
series:
(1) The Company shall irrevocably have deposited or caused to be
deposited with the Trustee (or another trustee satisfying the requirements
of Section 6.09 who shall agree to comply with the provisions of this
Article Eleven applicable to it) as trust funds in trust for the purpose of
making the following payments, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of the Securities of such
series, (A) money in an amount (in such currency, currencies or currency
units in which the Securities of such series are then specified as payable
at Maturity), or (B) U.S. Government Obligations which through the
scheduled payment of principal and interest in respect thereof in
accordance with their terms will provide, not later than one day before the
due date of any payment, money in an amount, or (C) a combination thereof
in an amount, sufficient, without reinvestment, in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay and
discharge, and which shall be applied by the Trustee (or other qualifying
trustee) to pay and discharge, (i) the principal of and premium, if any,
and interest on the Outstanding Securities of that series on the Maturity
of such principal, premium, if any, or interest;
(2) No Event of Default with respect to the Securities of that series
or event which with notice or lapse of time or both would become an Event
of Default with respect to the Securities of that series shall have
occurred and be continuing (A) on the date of such deposit or (B) insofar
as subsections 5.01(5) and (6) are concerned, at any time during the period
ending on the 91st day after the date of such deposit or, if longer, ending
on the day following the expiration of the longest preference period
applicable to the Company in respect of such deposit (it being understood
that this condition shall not be deemed satisfied until the expiration of
such period);
-71-
================================================================================
(3) Such defeasance or covenant defeasance shall not (A) cause the
Trustee for the Securities of that series to have a conflicting interest as
defined in Section 6.08 or for purposes of the Trust Indenture Act with
respect to any securities of the Company or (B) result in the trust arising
from such deposit to constitute, unless it is qualified as, a regulated
investment company under the Investment Company Act of 1940, as amended;
(4) Such defeasance or covenant defeasance shall not result in a
breach or violation of, or constitute a default under, this Indenture or
any other material agreement or instrument to which the Company is a party
or by which it is bound;
(5) In the case of an election under Section 11.02, the Company shall
have delivered to the Trustee an Opinion of Counsel stating that (x) the
Company has received from, or there has been published by, the Internal
Revenue Service a ruling, or (y) since the date 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 the Outstanding Securities of that series 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 amounts,
in the same manner and at the same times as would have been the case if
such defeasance had not occurred;
(6) In the case of an election under Section 11.03, the Company shall
have delivered to the Trustee an Opinion of Counsel to the effect that the
Holders of the Outstanding Securities of that series will not recognize
income, gain or loss for Federal income tax purposes as a result of such
covenant defeasance and will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as would have been the
case if such covenant defeasance had not occurred; and
(7) The Company shall have delivered to the Trustee an Officers'
Certificate and an Opinion of Counsel, each stating that all conditions
precedent provided for relating to either the defeasance under Section
11.02 or the covenant defeasance under Section 11.03 (as the case may be)
have been complied with.
SECTION 11.05. Deposited Money and U.S. Government Obligations to Be Held in
-------------------------------------------------------------
Trust; Other Miscellaneous Provisions.
-------------------------------------
Subject to the provisions of the last paragraph of Section 10.03, all
money and U.S. Government Obligations (including the proceeds thereof) deposited
with the Trustee or other qualifying trustee (collectively, for purposes of this
Section 11.05, the "Trustee") pursuant to Section 11.04 in respect of the
Outstanding Securities of either series shall be held in trust and applied by
the Trustee, in accordance with the provisions of the Securities of such series
and this Indenture, to the payment, either directly or
-72-
================================================================================
through any Paying Agent (but not including the Company acting as its own Paying
Agent) as the Trustee may determine, to the Holders of the Securities of such
series, of all sums due and to become due thereon in respect of principal and
premium, if any, and interest, but such money need not be segregated from other
funds except to the extent required by law.
The Company shall pay and indemnify the Trustee against any tax, fee
or other charge imposed on or assessed against the money or U.S. Government
Obligations deposited pursuant to Section 11.04 or the principal and interest
received in respect thereof.
Anything herein to the contrary notwithstanding, the Trustee shall
deliver or pay to the Company from time to time upon Company Request any money
or U.S. Government Obligations held by it as provided in Section 11.04 which in
the opinion of a nationally recognized firm of independent public accountants
expressed in a written certification thereof delivered to the Trustee, are in
excess of the amount thereof which would then be required to be deposited to
effect an equivalent defeasance or covenant defeasance.
SECTION 1.01. Reinstatement.
-------------
If the Trustee or the Paying Agent is unable to apply any money in
accordance with Section 11.02 or 11.03 by reason of any order or judgment of any
court or governmental authority enjoining, restraining or otherwise prohibiting
such application, then the Company's obligations under this Indenture and the
Securities of such series shall be revived and reinstated as though no deposit
had occurred pursuant to this Article Eleven until such time as the Trustee or
Paying Agent is permitted to apply all such money in accordance with Section
11.02 and 11.03; provided, however, that if the Company makes any payment of
-------- -------
principal of and premium, if any, or interest on any Security of such series
following the reinstatement of its obligations, the Company shall be subrogated
to the rights of the Holders of such Securities to receive such payment from the
money held by the Trustee or the Paying Agent.
SECTION 1.02. Repayment to Company.
--------------------
Any money deposited with the Trustee or any Paying Agent, or then held
by the Company, in trust for the payment of the principal of, premium, if any,
or interest on any Security 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 a Company Request for such payment, or (if then held by the
Company) shall be discharged from such trust; and the Holder of such Security
shall thereafter, as an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or
-73-
================================================================================
such Paying Agent with respect to such trust money, and all liability of the
Company as trustee thereof, shall thereupon cease; provided, however, that the
-------- -------
Trustee or such Paying Agent, before being required to make any such repayment,
shall, at the expense of the Company, cause to be published once, in a newspaper
published in the English language, customarily published on each Business Day
and of general circulation in the Borough of Manhattan, The City of New York,
New York, 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.
ARTICLE TWELVE
Redemption of Securities
SECTION 12.01. Right of Redemption.
-------------------
The Securities may be redeemed in accordance with the provisions of
the form of the Securities set forth in Sections 2.02 and 2.03.
SECTION 12.02. Applicability of Article.
------------------------
Redemption of Securities of either series at the election of the
Company pursuant to any provision of the Securities of such series or this
Indenture, shall be made in accordance with such provision and this Article
Twelve.
SECTION 12.03. Election to Redeem; Notice to Trustee.
-------------------------------------
The election of the Company to redeem any Securities pursuant to
Section 12.01 shall be evidenced by a Board Resolution. In case of any
redemption at the election of the Company of any of the Securities of either
series, the Company shall, at least 45 days prior to the Redemption Date fixed
by the Company (unless a shorter notice shall be satisfactory to the Trustee),
notify the Trustee in writing of such Redemption Date.
SECTION 12.04. Selection by Trustee of Securities to Be Redeemed.
-------------------------------------------------
If less than all the Securities of either series are to be redeemed,
the particular Securities of such series to be redeemed shall be selected by the
Trustee within five Business Days after it receives the notice described in
Section 12.03, from the
-74-
================================================================================
Outstanding Securities of such series not previously called for redemption, by
lot or by such other method as the Trustee may deem fair and appropriate. The
Trustee shall promptly notify the Company and the Security Registrar in writing
of the Securities of either series selected for redemption and, in the case of
any Securities selected for partial redemption, the principal amount thereof to
be redeemed. For all purposes of this Indenture, unless the context otherwise
requires, all provisions relating to the redemption of Securities shall relate,
in the case of any Securities of either series redeemed or to be redeemed only
in part, to the portion of the principal amount of such Securities which has
been or is to be redeemed.
SECTION 12.05. Notice of Redemption.
--------------------
Notice of redemption shall be given in the manner provided in Section
1.06 to the Holders of Securities to be redeemed not less than 30 nor more than
60 days prior to the Redemption Date, and such notice shall be irrevocable.
All notices of redemption shall state:
(a) the Redemption Date,
(b) the Redemption Price, and accrued interest (including Additional
Interest, if any), if any, to the Redemption Date,
(c) if less than all Outstanding Securities of either series are to be
redeemed, the aggregate principal amount of Securities of such series to be
redeemed and the aggregate principal amount of Securities of such series which
will be outstanding after such partial redemption,
(d) that on the Redemption Date the Redemption Price, and accrued
interest (including Additional Interest, if any), if any, to the Redemption
Date, will become due and payable upon each such Security to be redeemed, and
that interest thereon shall cease to accrue on and after said date, and
(e) the place or places where such Securities are to be surrendered
for payment of the Redemption Price and accrued interest (including Additional
Interest, if any), if any, to the Redemption Date.
In case of a partial redemption, the notice shall specify the serial and CUSIP
numbers (if any) and the portions thereof called for redemption and that
transfers and exchanges may occur on or prior to the Redemption Date.
Notice of redemption of Securities to be redeemed at the election of the Company
shall be given by the Company or, at the Company's written request, by the
Trustee in the name of and at the expense of the Company. Notice of redemption
of Securities to be
-75-
================================================================================
redeemed at the election of the Company received by the Trustee shall be given
by the Trustee to each Paying Agent in the name of and at the expense of the
Company.
SECTION 12.06. Deposit of Redemption Price.
---------------------------
On or prior to the Redemption Date, the Company shall deposit with the
Trustee (or, if the Company is acting as its own Paying Agent, segregate and
hold in trust as provided in Section 10.03) an amount of money (which shall be
in immediately available funds on such Redemption Date) sufficient to pay the
Redemption Price of, and (except if the Redemption Date shall be an Interest
Payment Date) accrued interest (including Additional Interest, if any) to the
Redemption Date on all the Securities which are to be redeemed on that date.
SECTION 12.07. Securities Payable on Redemption Date.
-------------------------------------
Notice of redemption having been given as aforesaid, the Securities so
to be redeemed shall, on the Redemption Date, become due and payable at the
Redemption Price therein specified and from and after such date (unless the
Company shall default in the payment of the Redemption Price, including accrued
interest) such Securities shall cease to bear interest. Upon surrender of any
Security for redemption in accordance with said notice such Security shall be
paid by the Company at the Redemption Price together with accrued and unpaid
interest (including Additional Interest, if any) to the Redemption Date;
provided, however, that installments of interest on Securities whose Stated
Maturity is on or prior to the Redemption Date shall be payable to the Holders
of such Securities, or one or more Predecessor Securities, registered as such on
the relevant Record Date according to their terms and the provisions of Section
3.07. If any Security called for redemption shall not be so paid upon surrender
thereof for redemption, the principal amount of, premium, if any, and, to the
extent permitted by applicable law, accrued interest on such Security shall,
until paid, bear interest from the Redemption Date at the rate of interest then
accruing on the principal of such Security. Any Security that is to be redeemed
only in part shall be surrendered at the Corporate Trust Office or an office or
agency of the Company designated for that purpose pursuant to Section 10.02
(with, if the Company or the Trustee so requires, due endorsement by, or a
written instrument of transfer in form satisfactory to the Company and the
Trustee duly executed by, the Holder thereof or his attorney duly authorized in
writing), and the Company shall execute, and the Trustee shall authenticate and
make available for delivery to the Holder of such Security without service
charge, a new Security or Securities, of any authorized denomination as
requested by such Holder, in aggregate principal amount equal to and in exchange
for the unredeemed portion of the principal of the Security so surrendered.
----------
-76-
================================================================================
This instrument may be executed in any number of counterparts, each of
which so executed shall be deemed to be an original, but all such counterparts
shall together constitute but one and the same instrument.
-77-
================================================================================
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to
be duly executed as of the day and year first above written.
THE GAP, INC.
By /s/ SABRINA SIMMONS
-------------------
Name: Sabrina Simmons
Title: Vice President and Treasurer
THE BANK OF NEW YORK, not in its individual
capacity but solely as Trustee
By /s/ MICHAEL PITFICK
-------------------
Name: Michael Pitfick
Title: Assistant Treasurer
-78-
================================================================================
ANNEX A- Form of
Regulation S Certificate
REGULATION S CERTIFICATE
(For transfers pursuant to Section .3.05(b)(i), (iii) and (v) of the Indenture)
The Bank of New York,
as Trustee
20 Broad Street, Lower Level
Attention: Corporate Trust Reorg. Department
New York, New York 10005
Re: [8.15% Notes due December 15, 2005] [8.80% Notes due December 15,
-----------------------------------------------------------------
2008] of The Gap, Inc. (the "Securities")
-----------------------------------------
Reference is made to the Indenture, dated as of November 21, 2001 (the
"Indenture"), between The Gap, Inc. (the "Company") and The Bank of New York, as
Trustee. Terms used herein and defined in the Indenture or in Regulation S or
Rule 144 under the U.S. Securities Act of 1933, as amended (the "Securities
Act") are used herein as so defined.
This certificate relates to U.S. $ principal amount of
------------
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s).
---------------------------
CERTIFICATE No(s).
---------------------
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner."
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be transferred
to a person (the "Transferee") who will take delivery in the form of a
Regulation S Security. In connection with such transfer, the Owner hereby
certifies that, unless such transfer is
A-1
================================================================================
being effected pursuant to an effective registration statement under the
Securities Act, it is being effected in accordance with Rule 904 or Rule 144
under the Securities Act and with all applicable securities laws of the states
of the United States and other jurisdictions. Accordingly, the Owner hereby
further certifies as follows:
(1) Rule 904 Transfers. If the transfer is being effected in
accordance with Rule 904:
(A) the Owner is not a distributor of the Securities, an
affiliate of the Company or any such distributor or a person acting on
behalf of any of the foregoing;
(B) the offer of the Specified Securities was not made to a
person in the United States;
(C) either:
(i) at the time the buy order was originated, the Transferee
was outside the United States or the Owner and any person acting
on its behalf reasonably believed that the Transferee was outside
the United States, or
(ii) the transaction is being executed in, on or through the
facilities of the Eurobond market, as regulated by the
Association of International Bond Dealers, or another designated
offshore securities market and neither the Owner nor any person
acting on its behalf knows that the transaction has been
prearranged with a buyer in the United States;
(D) no directed selling efforts have been made in the United
States by or on behalf of the Owner or any affiliate thereof;
(E) if the Owner is a dealer in securities or has received a
selling concession, fee or other remuneration in respect of the
Specified Securities, and the transfer is to occur during the
Restricted Period, then the requirements of Rule 904(c)(1) have been
satisfied; and
(F) the transaction is not part of a plan or scheme to evade the
registration requirements of the Securities Act.
(2) Rule 144 Transfers. If the transfer is being effected pursuant to
------------------
Rule 144:
(A) the transfer is occurring after a holding period of at least
one year (computed in accordance with paragraph (d) of Rule 144) has
elapsed since the Specified Securities were last acquired from the
A-2
================================================================================
Company or from an affiliate of the Company, whichever is later, and
is being effected in accordance with the applicable amount, manner of
sale and notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period of at least
two years has elapsed since the Specified Securities were last
acquired from the Company or from an affiliate of the Company,
whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Purchasers.
Dated:
(Print the name of the Undersigned, as such term is
defined in the second paragraph of this certificate.)
By:
--------------------------------------------------
Name:
Title:
(If the Undersigned is a corporation, partnership or
fiduciary, the title of the person signing on behalf
of the Undersigned must be stated.)
A-3
================================================================================
ANNEX B - Form of Restricted
Securities Certificate
RESTRICTED SECURITIES CERTIFICATE
(For transfers pursuant to Section .3.05(b)(ii), (iii), (iv) and (v) of the
Indenture)
The Bank of New York,
as Trustee
20 Broad Street, Lower Level
Attention: Corporate Trust Reorg. Department
New York, New York 10005
Re: [8.15% Notes due December 15, 2005] [8.80% Notes due December 15,
-----------------------------------------------------------------
2008] of The Gap, Inc. (the "Securities")
-----------------------------------------
Reference is made to the Indenture, dated as of November 21, 2001 (the
"Indenture"), between The Gap, Inc. (the "Company") and The Bank of New York, as
Trustee. Terms used herein and defined in the Indenture or in Regulation S or
Rule 144 under the U.S. Securities Act of 1933, as amended (the "Securities
Act") are used herein as so defined.
This certificate relates to U.S. $ principal amount of
-------------
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s).
---------------------------
CERTIFICATE No(s).
---------------------
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner."
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be transferred
to a person (the "Transferee") who will take delivery in the form of a
Restricted Security. In connection with such transfer, the Owner hereby
certifies that, unless such transfer is being effected pursuant to an effective
registration statement under the Securities Act, it is being effected in
accordance with Rule 144A or Rule 144 under the Securities Act and
B-1
================================================================================
all applicable securities laws of the states of the United States and other
jurisdictions. Accordingly, the Owner hereby further certifies as follows:
(1) Rule 144A Transfers. If the transfer is being effected in
accordance with Rule 144A:
(A) the Specified Securities are being transferred to a person
that the Owner and any person acting on its behalf reasonably believe
is a "qualified institutional buyer" within the meaning of Rule 144A,
acquiring for its own account or for the account of a qualified
institutional buyer; and
(B) the Owner and any person acting on its behalf have taken
reasonable steps to ensure that the Transferee is aware that the Owner
may be relying on Rule 144A in connection with the transfer.
(2) Rule 144 Transfers. If the transfer is being effected pursuant to
Rule 144:
(A) the transfer is occurring after a holding period of at least
one year (computed in accordance with paragraph (d) of Rule 144) has
elapsed since the Specified Securities were last acquired from the
Company or from an affiliate of the Company, whichever is later, and
is being effected in accordance with the applicable amount, manner of
sale and notice requirements of Rule 144; or
(B) the transfer is occurring after a holding period of at least
two years has elapsed since the Specified Securities were last
acquired from the Company or from an affiliate of the Company,
whichever is later, and the Owner is not, and during the preceding
three months has not been, an affiliate of the Company.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Purchasers.
Dated:
(Print the name of the Undersigned, as such
term is defined in the second paragraph of
this certificate.)
By:
-----------------------------------------
Name:
Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title of the
person signing on behalf of the Undersigned
must be stated.)
B-2
================================================================================
ANNEX C - Form of Unrestricted
Securities Certificate
UNRESTRICTED SECURITIES CERTIFICATE
(For removal of Securities Act Legends pursuant to Section .3.05(c))
The Bank of New York,
as Trustee
20 Broad Street, Lower Level
Attention: Corporate Trust Reorg. Department
New York, New York 10005
Re: [8.15% Notes due December 15, 2005] [8.80% Notes due December 15,
-----------------------------------------------------------------
2008] of The Gap, Inc. (the "Securities")
-----------------------------------------
Reference is made to the Indenture, dated as of November 21, 2001 (the
"Indenture"), between The Gap, Inc. (the "Company") and The Bank of New York, as
Trustee. Terms used herein and defined in the Indenture or in Regulation S or
Rule 144 under the U.S. Securities Act of 1933, as amended (the "Securities
Act") are used herein as so defined.
This certificate relates to U.S. $ principal amount of
-------------
Securities, which are evidenced by the following certificate(s) (the "Specified
Securities"):
CUSIP No(s).
---------------------------
CERTIFICATE No(s).
---------------------
The person in whose name this certificate is executed below (the "Undersigned")
hereby certifies that either (i) it is the sole beneficial owner of the
Specified Securities or (ii) it is acting on behalf of all the beneficial owners
of the Specified Securities and is duly authorized by them to do so. Such
beneficial owner or owners are referred to herein collectively as the "Owner."
If the Specified Securities are represented by a Global Security, they are held
through the Depositary or an Agent Member in the name of the Undersigned, as or
on behalf of the Owner. If the Specified Securities are not represented by a
Global Security, they are registered in the name of the Undersigned, as or on
behalf of the Owner.
The Owner has requested that the Specified Securities be exchanged for
Securities bearing no Securities Act Legend pursuant to Section 3.05(c) of the
Indenture. In connection with such exchange, the Owner hereby certifies that the
exchange is occurring after a holding period of at least two years (computed in
accordance with
C-1
================================================================================
paragraph (d) of Rule 144) has elapsed since the Specified Securities were last
acquired from the Company or from an affiliate of the Company, whichever is
later, and the Owner is not, and during the preceding three months has not been,
an affiliate of the Company. The Owner also acknowledges that any future
transfers of the Specified Securities must comply with all applicable securities
laws of the states of the United States and other jurisdictions.
This certificate and the statements contained herein are made for your
benefit and the benefit of the Company and the Purchasers.
Dated:
(Print the name of the Undersigned, as such
term is defined in the second paragraph of
this certificate.)
By:
-----------------------------------------
Name:
Title:
(If the Undersigned is a corporation,
partnership or fiduciary, the title of the
person signing on behalf of the Undersigned
must be stated.)
C-2
================================================================================