SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[ X ] Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the quarterly period ended November 1, 1997 or
[ ] Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 for the transition period from ________ to _________
Commission File Number 1-7562
THE GAP, INC.
(Exact name of registrant as specified in its charter)
Delaware 94-1697231
(State of Incorporation) (I.R.S. Employer
Identification No.)
One Harrison
San Francisco, California 94105
(Address of principal executive offices)
Registrant's telephone number, including area code: (415)427-2000
_______________________
Securities registered pursuant to Section 12(b) of the Act:
Common Stock, $0.05 par value New York Stock Exchange, Inc.
(Title of class) Pacific Stock Exchange, Inc.
(Name of each exchange where registered)
Securities registered pursuant to Section 12(g) of the Act: None
_______________________
Indicate by check mark whether Registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that
the registrant was required to file such reports) and (2) has been subject
to such filing requirements for the past 90 days.
Yes X No
Indicate the number of shares outstanding of each of the issuer's classes of
Common Stock, as of the latest practicable date.
Common Stock, $0.05 par value, 263,791,121 shares as of December 8, 1997
<TABLE>
<CAPTION>
PART 1 THE GAP, INC. AND SUBSIDIARIES
ITEM 1 CONDENSED CONSOLIDATED BALANCE SHEETS
($000) November 1, February 1, November 2,
1997 1997 1996
(Unaudited) (See Note 1) (Unaudited)
ASSETS
<S> <C> <C> <C> <C>
Current Assets:
Cash and equivalents $ 627,760 $ 485,644 $ 477,272
Short-term investments - 135,632 109,340
Merchandise inventory 980,531 578,765 711,934
Prepaid expenses and other 154,670 129,214 140,033
Total Current Assets 1,762,961 1,329,255 1,438,579
Property and equipment, net 1,319,462 1,135,720 1,067,607
Long-term investments - 36,138 37,966
Lease rights and other assets 142,653 125,814 84,004
Total Assets $ 3,225,076 $ 2,626,927 $ 2,628,156
LIABILITIES AND STOCKHOLDERS' EQUITY
Current Liabilities:
Notes payable $ 115,245 $ 40,050 $ 86,333
Accounts payable 433,313 351,754 390,206
Accrued expenses 349,999 282,494 271,418
Income taxes payable 93,395 91,806 61,432
Deferred lease credits and other current liabilities 15,170 8,792 9,829
Total Current Liabilities 1,007,122 774,896 819,218
Long-term Liabilities:
Long-term debt 495,941 - -
Deferred lease credits and other liabilities 249,151 197,561 176,712
745,092 197,561 176,712
Stockholders' Equity:
Common stock $.05 par value:
Authorized 500,000,000 shares
Issued 318,761,298, 317,864,090
and 317,515,944 shares
Outstanding 263,441,719, 274,517,331
and 278,743,066 shares 15,938 15,895 15,877
Additional paid-in capital 495,063 442,049 420,271
Retained earnings 2,196,647 1,938,352 1,787,708
Foreign currency translation adjustments (7,790) (5,187) (3,036)
Restricted stock plan deferred compensation (43,908) (47,838) (42,132)
Treasury stock, at cost (1,183,088) (688,801) (546,462)
1,472,862 1,654,470 1,632,226
Total Liabilities and Stockholders' Equity $ 3,225,076 $ 2,626,927 $ 2,628,156
See accompanying notes to condensed consolidated financial statements.
</TABLE>
<TABLE>
<CAPTION>
THE GAP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF EARNINGS
Thirteen Weeks Ended Thirty-nine Weeks Ended
<S> <C> <C> <C> <C>
Unaudited November 1, November 2, November 1, November 2,
($000 except per share amounts) 1997 1996 1997 1996
Net sales $ 1,765,939 $ 1,382,996 $ 4,342,346 $ 3,616,485
Costs and expenses
Cost of goods sold and 1,044,673 837,775 2,716,885 2,257,254
occupancy expenses
Operating expenses 453,977 328,434 1,118,350 906,442
Net interest (income)/expense 4,052 (5,213) (2,145) (12,787)
Earnings before income taxes 263,237 222,000 509,256 465,576
Income taxes 98,714 87,690 190,971 183,903
Net earnings $ 164,523 $ 134,310 $ 318,285 $ 281,673
Weighted average number
of shares 266,784,436 281,746,335 269,982,251 285,302,456
Earnings per share $ 0.62 $ 0.48 $ 1.18 $ 0.99
Cash dividends per share $ 0.075 $ 0.075 $ 0.225 $ 0.225
See accompanying notes to condensed consolidated financial statements
</TABLE>
<TABLE>
<CAPTION>
THE GAP, INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited ($000) Thirty-nine Weeks Ended
November 1, 1997 November 2, 1996
<S> <C> <C>
Cash Flows from Operating Activities:
Net earnings $ 318,285 $ 281,673
Adjustments to reconcile net earnings to net cash
provided by operating activities:
Depreciation and amortization (a) 194,571 156,699
Tax benefit from exercise of stock options by
employees and from vesting of restricted stock 16,047 45,559
Change in operating assets and liabilities:
Merchandise inventory (401,827) (226,535)
Prepaid expenses and other (32,789) (13,274)
Accounts payable 81,647 124,472
Accrued expenses 67,138 76,493
Income taxes payable 1,598 (4,893)
Deferred lease credits and other
long-term liabilities 52,462 33,973
Net cash provided by operating activities 297,132 474,167
Cash Flows from Investing Activities:
Net maturity of short-term investments 174,709 4,181
Purchase of long-term investments (2,939) (31,611)
Purchases of property and equipment (352,745) (246,831)
Acquisition of lease rights and other assets (13,223) (9,880)
Net cash used for investing activities (194,198) (284,141)
Cash Flows from Financing Activities:
Net increase in notes payable 73,031 63,291
Issuance of long-term debt 495,890
Issuance of common stock 23,838 28,853
Purchase of treasury stock (494,287) (324,402)
Cash dividends paid (59,990) (63,312)
Net cash provided by/(used) for financing activities 38,482 (295,570)
Effect of exchange rate changes on cash 700 3,250
Net increase/(decrease) in cash and equivalents 142,116 (102,294)
Cash and equivalents at beginning of year 485,644 579,566
Cash and equivalents at end of quarter $ 627,760 $ 477,272
See accompanying notes to condensed consolidated financial statements.
(a) Includes amortization of restricted stock, discounted stock options,
and discount on long-term debt.
</TABLE>
THE GAP, INC. AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. BASIS OF PRESENTATION
The condensed consolidated balance sheets as of November 1, 1997 and
November 2, 1996, and the interim condensed consolidated statements of
earnings and the interim condensed consolidated statements of cash flows
for the thirteen and thirty-nine weeks ended November 1, 1997 and
November 2, 1996 have been prepared by the Company, without audit. In
the opinion of management, such statements include all adjustments (which
include only normal recurring adjustments) considered necessary to
present fairly the financial position, results of operations and cash
flows of the Company at November 1, 1997 and November 2, 1996, and for
all periods presented.
Certain information and footnote disclosures normally included in the
annual financial statements prepared in accordance with generally
accepted accounting principles have been omitted from these interim
financial statements. It is suggested that these condensed consolidated
financial statements be read in conjunction with the consolidated
financial statements and notes thereto included in the Company's annual
report on Form 10-K for the year ended February 1, 1997.
The results of operations for the thirty-nine weeks ended November 1,
1997 are not necessarily indicative of the operating results that may be
expected for the year ending January 31, 1998.
2. SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Year-to-date 1997 and 1996 gross interest payments were $4.6 million and
$4.0 million respectively; income tax payments were $174.2 million and
$142.7 million respectively.
3. DERIVATIVES
The Company enters into foreign exchange contracts to reduce exposure to
foreign currency exchange risk. These contracts are primarily designated
and effective as hedges of commitments to purchase merchandise. The
market value gains and losses on these contracts are deferred and
recognized as part of the underlying cost to purchase the merchandise.
At the end of the third quarter, the Company had various put option
contracts to repurchase up to 2,000,000 shares of Gap stock. The
contracts have exercise prices ranging from $38.74 to $52.03, with
expiration dates ranging from November 1997 through April 1998.
In the second quarter, the Company entered into interest rate swaps in
order to reduce interest rate risk on a substantial portion of its
issuance of its long-term debt. The swap agreements, which were issued
at an aggregate notional amount of $400 million, settled in the third
quarter at an interest rate of 6.7 percent. The Company is amortizing
net gains associated with these swaps of approximately $2.9 million over
the life of the debt securities.
4. RECLASSIFICATION OF INVESTMENTS
Prior to the second quarter, investments were classified as held to
maturity and were carried at amortized cost. During the second quarter
the Company sold short- and long-term debt securities prior to their
maturity. The Company used the proceeds for general corporate purposes.
Consequently, any investments held subsequent to the second quarter are
classified as available for sale and are reported at fair market value.
The gains and losses on investments are deferred and recorded in equity.
5. DEBT OBLIGATIONS
On September 17, 1997, the Company issued $500 million of 6.9 percent
unsecured notes, due September 15, 2007. Interest on the notes is
payable semi-annually. The balance of the debt obligations at November
1, 1997 is net of unamortized discount.
6. SUBSEQUENT EVENT
On November 24, 1997, the Company's Board of Directors authorized a
three-for-two split of its common stock effective December 22, 1997, in
the form of a stock dividend for stockholders of record at the close of
business on December 8, 1997.
7. NEW ACCOUNTING PRONOUNCEMENTS
In June 1997, the Financial Accounting Standards Board issued Statements
of Financial Accounting Standards (SFAS) No. 130, Reporting Comprehensive
Income, which requires that an enterprise report, by major components and
as a single total, the change in its net assets during the period from
non-owner sources; and SFAS No. 131, Disclosures About Segments of an
Enterprise and Related Information, which establishes annual and interim
reporting standards for an enterprise's operating segments and related
disclosures about its products, services, geographic areas and major
customers. Adoption of these standards will not impact the Company's
consolidated financial position, results of operations or cash flows, and
any effect will be limited to the form and content of its disclosures.
Both statements are effective for fiscal years beginning after December
15, 1997, with earlier application permitted.
Deloitte &
Touche LLP
50 Fremont Street Telephone:(415) 247-4000
San Francisco, California 94105-2230 Facsimile:(415) 247-4329
INDEPENDENT ACCOUNTANTS' REPORT
To the Board of Directors and Stockholders of
The Gap, Inc.:
We have reviewed the accompanying condensed consolidated balance sheets of
The Gap, Inc. and subsidiaries as of November 1, 1997 and November 2, 1996
and the related condensed consolidated statements of earnings for the
thirteen week and thirty-nine week periods ended and consolidated statements
of cash flows for the thirty-nine week periods ended November 1, 1997 and
November 2, 1996. These financial statements are the responsibility of the
Company's management.
We conducted our reviews in accordance with standards established by the
American Institute of Certified Public Accountants. A review of interim
financial information consists principally of applying analytical procedures
to financial data and of making inquiries of persons responsible for
financial and accounting matters. It is substantially less in scope than an
audit conducted in accordance with generally accepted auditing standards,
the objective of which is the expression of an opinion regarding the
financial statements taken as a whole. Accordingly, we do not express such
an opinion.
Based on our reviews, we are not aware of any material modifications that
should be made to such condensed consolidated financial statements for them
to be in conformity with generally accepted accounting principles.
We have previously audited, in accordance with generally accepted auditing
standards, the consolidated balance sheet of The Gap, Inc. and subsidiaries
as of February 1, 1997, and the related consolidated statements of earnings,
stockholders' equity and cash flows for the year then ended (not presented
herein); and in our report dated February 27, 1997, we expressed an
unqualified opinion on those consolidated financial statements. In our
opinion, the information set forth in the accompanying consolidated balance
sheet as of February 1, 1997 is fairly stated, in all material respects, in
relation to the consolidated balance sheet from which it was derived.
/s/ Deloitte & Touche LLP
December 4, 1997
THE GAP, INC. AND SUBSIDIARIES
MANAGEMENT'S DISCUSSION AND ANALYSIS OF
RESULTS OF OPERATIONS AND FINANCIAL CONDITION
The information below contains certain forward-looking statements which reflect
the Company's current view with respect to future events and financial
performance. Wherever used, the words "expect," "plan," "anticipate,"
"believe," and similar expressions identify forward-looking statements.
Any such forward-looking statements are subject to risks and uncertainties that
could cause the Company's actual results of operations to differ materially
from historical results or current expectations. Some of these risks include,
without limitation, ongoing competitive pressures in the apparel industry, a
continuation or exacerbation of the current over-capacity problem affecting the
industry, and/or changes in the level of consumer spending or preferences in
apparel, and other factors that may be described in the Company's filings with
the Securities and Exchange Commission. Future economic and industry trends
that could potentially impact revenues and profitability remain difficult to
predict.
The Company does not undertake to publicly update or revise its forward-looking
statements even if experience or future changes make it clear that any
projected results expressed or implied therein will not be realized.
RESULTS OF OPERATIONS
Net Sales
Thirteen Weeks Ended Thirty-nine Weeks Ended
November 1, November 2, November 1, November 2,
1997 1996 1997 1996
Net sales ($000) 1,765,939 1,382,996 4,342,346 3,616,485
Total net sales growth 28 20 20 26
Comparable store sales 9 1 4 6
growth percentage
Net sales per average 123 114 319 308
square foot ($)
Square footage of gross store 14,679 12,348
space at period end (000)
Fifty-two Fifty-three
weeks ended weeks ended
November 1, 1997 November 2, 1996
Number of:
New stores 281 220
Expanded stores 76 43
Closed stores 27 43
The increases in third quarter and year-to-date 1997 net sales over the same
periods last year were attributable to the increase in retail selling space,
both through the opening of new stores (net of stores closed) and the expansion
of existing stores. Growth in comparable store sales also contributed to the
increase.
Cost of Goods Sold and Occupancy Expenses
Cost of goods sold and occupancy expenses as a percentage of net sales
decreased to 59.2 percent for the third quarter of 1997 from 60.6 percent for
the same period in 1996. The 1.4 percentage point increase in gross margin net
of occupancy expenses was primarily attributable to a decrease in occupancy
expenses as a percentage of net sales. Merchandise margin for the quarter was
essentially flat compared to that for the same period last year. Decreases in
initial merchandise margins were offset by increases in the percentage of
merchandise sold at regular prices.
For the year-to-date period of 1997, cost of goods sold and occupancy expenses
as a percentage of net sales increased to 62.6 percent from 62.4 percent for
the same period in 1996. The .2 percentage point decrease in gross margin net
of occupancy expenses was attributable to a .9 percentage point decrease in
merchandise margins as a percentage of net sales offset by a .7 percentage
point decrease in occupancy expenses as a percentage of net sales.
For the year-to-date period, the decreases in merchandise margins as a
percentage of net sales resulted from decreases in both initial margins and
margins achieved on marked-down goods.
The Company reviews its inventory levels in order to identify slow-moving
merchandise and broken assortments (items no longer in stock in a sufficient
range of sizes) and uses markdowns to clear merchandise. Such markdowns may
have an adverse impact on earnings depending upon the extent of the markdowns
and amount of inventory affected.
For the third quarter and year-to-date period of 1997, occupancy expenses
decreased as a percentage of net sales when compared to the same periods last
year. The decrease in occupancy expenses as a percentage of net sales for both
periods was primarily attributable to leverage achieved through increases in
comparable store sales. The growth of the Old Navy division with lower
occupancy expenses when compared to other divisions also contributed to the
decrease.
Operating Expenses
Operating expenses as a percentage of net sales increased to 25.7 percent for
the third quarter of 1997 from 23.7 percent for the same period in 1996. The
2.0 percentage point increase was primarily attributable to a .8 percentage
point increase in advertising/marketing costs and a 1.0 percentage point
increase in the write-off of leasehold improvements and fixtures associated
with the remodeling, relocation and closing of certain stores planned for the
next fiscal year.
For the year-to-date period, operating expenses as a percentage of net sales
increased to 25.7 percent from 25.1 percent when compared to the same period in
1996. The .6 percentage point increase was attributable to a .7 percentage
point increase in advertising/marketing costs and a .5 percentage point
increase in the write-off of leasehold improvements and fixtures. These
expenses were partially offset by decreases in payroll expense as a percentage
of sales due to leverage from increased sales.
Net Interest Income/Expense
Net interest expense was approximately $4.1 million for the third quarter
compared to net interest income of $5.2 million for the same period in 1996.
For the year-to-date period, net interest income was $2.1 million compared to
$12.8 million for the same period in 1996. The change in 1997 from 1996 was
due to the issuance of long-term debt securities during the quarter, as well as
to a decrease in average net investments for the quarter and year-to-date
periods.
Income Taxes
The effective tax rate was 37.5 percent for year-to-date 1997 compared to 39.5
percent for the same period of 1996. The decrease in the effective tax rate
was a result of the impact from tax planning initiatives to support changing
business needs.
LIQUIDITY AND CAPITAL RESOURCES
The following sets forth certain measures of the Company's liquidity:
Thirty-nine weeks ended
November 1, 1997 November 2, 1996
Cash provided by operating
activities ($000) $297,132 $474,167
Working capital ($000) $755,839 $619,361
Current ratio 1.75:1 1.76:1
For the thirty-nine weeks ended November 1, 1997, the decrease in cash flows
provided by operating activities was attributable to an increased investment in
inventory and the timing of certain payables, offset in part by an increase in
net earnings and depreciation.
The Company funds inventory expenditures during normal and peak periods through
a combination of cash flows provided by operations and normal trade credit
arrangements. The Company's business follows a seasonal pattern, peaking over
a total of about ten to twelve weeks during the late summer and holiday
periods.
The Company has committed credit facilities totaling $950 million, consisting
of an $800 million, 364-day revolving credit facility, and a $150 million, 5-
year revolving credit facility through June 30, 2002. These credit facilities
provide for the issuance of up to $450 million in letters of credit. The
Company has additional uncommitted credit facilities of $300 million for the
issuance of letters of credit. At November 1, 1997, the Company had
outstanding letters of credit of approximately $450 million.
To provide financial flexibility, management issued $500 million of 6.9
percent, 10-year debt securities in the third quarter. The proceeds from this
issuance are intended to be used for general corporate purposes, including
store expansion, brand investment, development of additional distribution
channels and repurchases of the Company's common stock pursuant to its ongoing
repurchase program.
For the thirty-nine weeks ended November 1, 1997, capital expenditures net of
construction allowances and dispositions, totaled approximately $344 million.
These expenditures included the addition of 237 new stores, the expansion of 67
stores and the remodeling of certain stores, resulting in a net increase in
store space of approximately 2.0 million square feet or 16 percent since
February 1, 1997.
For 1997, the Company expects capital expenditures to total at least $450
million, net of construction allowances, representing the addition of at least
275 new stores, the expansion of at least 75 stores, and the remodeling of
certain stores. Planned expenditures also include amounts for corporate
offices, distribution centers, and equipment. The Company expects to fund such
capital expenditures through a combination of cash flow from operations and
other sources of financing. Square footage growth is expected to be
approximately 20 percent before store closings. New stores are generally
expected to be leased.
During the quarter, the Company completed construction of a corporate office
facility in San Bruno, California. The estimated cost of completion is
included above in the capital expenditures expected for 1997. The Company
continues to explore alternatives for additional corporate office facilities in
San Francisco and San Bruno, California.
During the quarter, the Company commenced construction on a distribution center
in Fresno, California for an estimated cost at completion of $60 million. The
majority of the expenditures for this facility will be incurred in 1998. The
facility is expected to begin operations in early 1999.
In October 1996, the Board of Directors approved a program under which the
Company may repurchase up to 30 million shares of its outstanding common stock
in the open market over a three-year period. During the third quarter, the
Company acquired 4.8 million shares for approximately $243 million. To date
under this program, 16.8 million shares have been repurchased for approximately
$635 million.
During the year, the Company entered into various put option contracts, foreign
exchange contracts, and interest rate swaps to hedge against stock price
fluctuations, foreign currency exchange risk, and interest rate risk,
respectively. Additional information on these contracts and agreements is
presented in the Notes to Condensed Consolidated Financial Statements (Note 4).
PART II
OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
a) Exhibits
(4) Indenture, dated September 1, 1997, between the Registrant and Harris
Trust Company of California
(10.1) Amendment No. 5 to GapShare
(10.2) The Gap, Inc. Nonemployee Director Deferred Compensation Plan, filed
as exhibit 4.1 to Registrant's Registration Statement on Form S-8,
Commission File No. 333-36265
(10.3) Form of Discounted Stock Option Agreement under the Nonemployee
Director Deferred Compensation Plan, filed as exhibit 4.5 to
Registrant's Registration Statement on Form S-8, Commission
File No. 333-36265
(11) Computation of Earnings per Share
(15) Letter re: Unaudited Interim Financial Information
(27) Financial Data Schedule
b) The Company did not file any reports on Form 8-K during the three
months ended November 1, 1997.
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
THE GAP, INC.
Date: December 12, 1997 By /s/ Warren R. Hashagen
Warren R. Hashagen
Chief Financial Officer
(Principal financial officer of the registrant)
Date: December 12, 1997 By /s/ Millard S. Drexler
Millard S. Drexler
President and Chief
Executive Officer
EXHIBIT INDEX
(4) Indenture, dated September 1, 1997, between the Registrant and Harris
Trust Company of California
(10.1) Amendment No. 5 to GapShare
(10.2) The Gap, Inc. Nonemployee Director Deferred Compensation Plan, filed as
exhibit 4.1 to Registrant's Registration Statement on Form S-8,
Commission File No. 333-36265
(10.3) Form of Discounted Stock Option Agreement under the Nonemployee
Director Deferred Compensation Plan, filed as exhibit 4.5 to
Registrant's Registration Statement on Form S-8, Commission File
No. 333-36265
(11) Computation of Earnings per Share
(15) Letter re: Unaudited Interim Financial Information
(27) Financial Data Schedule
CONFORMED COPY
THE GAP, INC.
TO
HARRIS TRUST COMPANY OF CALIFORNIA
as Trustee
__________
INDENTURE
Dated as of September 1, 1997
Providing for Issuance of
Debt Securities in Series
THE GAP, INC.
Certain Sections of this Indenture relating to
Sections 310 through 318, inclusive, of the
Trust Indenture Act of 1939:
Trust Indenture
Act Section Indenture Section
310(a)(1) . . . . . . . . . . . . 609
(a)(2) . . . . . . . . . . . . 609
(a)(3) . . . . . . . . . . . . Not Applicable
(a)(4) . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . 608
610
311(a) . . . . . . . . . . . . 613
(b) . . . . . . . . . . . . 613
312(a) . . . . . . . . . . . . 701
702(a)
(b) . . . . . . . . . . . . 702(b)
(c) . . . . . . . . . . . . 702(c)
313(a) . . . . . . . . . . . . 703(a)
(b) . . . . . . . . . . . . 703(a)
(c) . . . . . . . . . . . . 703(a)
(d) . . . . . . . . . . . . 703(b)
314(a) . . . . . . . . . . . . 704
(a)(4) . . . . . . . . . . . . 101
1004
(b) . . . . . . . . . . . . Not Applicable
(c)(1) . . . . . . . . . . . . 102
(c)(2) . . . . . . . . . . . . 102
(c)(3) . . . . . . . . . . . . Not Applicable
(d) . . . . . . . . . . . . Not Applicable
(e) . . . . . . . . . . . . 102
315(a) . . . . . . . . . . . . 601
(b) . . . . . . . . . . . . 602
(c) . . . . . . . . . . . . 601
(d) . . . . . . . . . . . . 601
(e) . . . . . . . . . . . . 514
316(a) . . . . . . . . . . . . 101
(a)(1)(A). . . . . . . . . . . . 502
512
(a)(1)(B). . . . . . . . . . . . 513
(a)(2) . . . . . . . . . . . . Not Applicable
(b) . . . . . . . . . . . . 508
(c) . . . . . . . . . . . . 104(c)
317(a)(1) . . . . . . . . . . . . 503
(a)(2) . . . . . . . . . . . . 504
(b) . . . . . . . . . . . . 1003
318(a) . . . . . . . . . . . . 107
____________________
NOTE: This reconciliation and tie shall not, for any
purpose, be deemed to be a part of the Indenture.
TABLE OF CONTENTS
Page
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions.. 1
Section 102. Compliance Certificates and Opinions. . . . 9
Section 103. Form of Documents Delivered to Trustee. . . 9
Section 104. Acts of Holders; Record Dates . . . . . . .10
Section 105. Notices, Etc., to Trustee and Company . . .12
Section 106. Notice to Holders; Waiver . . . . . . . . .12
Section 107. Conflict with Trust Indenture Act . . . . .13
Section 108. Effect of Headings and Table of Contents. .13
Section 109. Successors and Assigns. . . . . . . . . . .13
Section 110. Separability Clause . . . . . . . . . . . .13
Section 111. Benefits of Indenture . . . . . . . . . . .13
Section 112. Governing Law . . . . . . . . . . . . . . .14
Section 113. Legal Holidays. . . . . . . . . . . . . . .14
ARTICLE TWO
Security Forms
Section 201. Forms Generally . . . . . . . . . . . . . .14
Section 202. Form of Face of Security. . . . . . . . . .15
Section 203. Form of Reverse of Security . . . . . . . .17
Section 204. Additional Provisions Required in
Book-Entry Security . . . . . . . . . . . .22
Section 205. Form of Trustee's Certificate of
Authentication. . . . . . . . . . . . . . .22
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series. . . .23
Section 302. Denominations . . . . . . . . . . . . . . .26
Section 303. Execution, Authentication, Delivery
and Dating. . . . . . . . . . . . . . . . .26
Section 304. Temporary Securities. . . . . . . . . . . .29
Section 305. Registration, Registration of Transfer
and Exchange. . . . . . . . . . . . . . . .29
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities. . . . . . . . . . . . . . . . .31
Section 307. Payment of Interest; Interest Rights
Preserved . . . . . . . . . . . . . . . . .32
Section 308. Persons Deemed Owners . . . . . . . . . . .34
Section 309. Cancellation. . . . . . . . . . . . . . . .34
Section 310. Computation of Interest . . . . . . . . . .35
Section 311. CUSIP Numbers.. . . . . . . . . . . . . . .35
ARTICLE FOUR
Satisfaction and Discharge
Section 401. Satisfaction and Discharge of Indenture . .35
Section 402. Application of Trust Money. . . . . . . . .37
ARTICLE FIVE
Remedies
Section 501. Events of Default . . . . . . . . . . . . .37
Section 502. Acceleration of Maturity; Rescission
and Annulment . . . . . . . . . . . . . . .39
Section 503. Collection of Indebtedness and Suits
for Enforcement by Trustee. . . . . . . . .41
Section 504. Trustee May File Proofs of Claim. . . . . .42
Section 505. Trustee May Enforce Claims Without
Possession of Securities . . . .. . . . . .42
Section 506. Application of Money Collected. . . . . . .43
Section 507. Limitation on Suits . . . . . . . . . . . .43
Section 508. Unconditional Right of Holders to Receive
Principal, Premium and Interest . . . . . .44
Section 509. Restoration of Rights and Remedies. . . . .44
Section 510. Rights and Remedies Cumulative. . . . . . .45
Section 511. Delay or Omission Not Waiver. . . . . . . .45
Section 512. Control by Holders. . . . . . . . . . . . .45
Section 513. Waiver of Past Defaults . . . . . . . . . .46
Section 514. Undertaking for Costs . . . . . . . . . . .46
Section 515. Waiver of Stay or Extension Laws. . . . . .46
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities47
Section 602. Notice of Defaults. . . . . . . . . . . . .47
Section 603. Certain Rights of Trustee . . . . . . . . .48
Section 604. Not Responsible for Recitals or Issuance
of Securities. . . . . . . . . . . . .49
Section 605. May Hold Securities . . . . . . . . . . . .49
Section 606. Money Held in Trust . . . . . . . . . . . .50
Section 607. Compensation and Reimbursement. . . . . . .50
Section 608. Disqualification; Conflicting Interests . .51
Section 609. Corporate Trustee Required; Eligibility . .51
Section 610. Resignation and Removal; Appointment
of Successor . . . . . . . . . . . . .52
Section 611. Acceptance of Appointment by Successor. . .54
Section 612. Merger, Conversion, Consolidation or
Succession to Business . . . . . . . .56
Section 613. Preferential Collection of Claims
Against Company. . . . . . . . . . . .56
Section 614. Appointment of Authenticating Agent . . . .56
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee Names and
Addresses of Holders. . . . . . . . . . . .58
Section 702. Preservation of Information;
Communications to Holders . . . . . . . . .59
Section 703. Reports by Trustee. . . . . . . . . . . . .59
Section 704. Reports by Company. . . . . . . . . . . . .60
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company May Consolidate, Etc., Only on
Certain Terms . . . . . . . . . . . . . . .60
Section 802. Successor Substituted . . . . . . . . . . .61
Section 803. Officers' Certificate and Opinion of
Counsel . . . . . . . . . . . . . . . . . .61
ARTICLE NINE
Supplemental Indentures
Section 901. Supplemental Indentures Without Consent
of Holders. . . . . . . . . . . . . . . . .62
Section 902. Supplemental Indentures with Consent of
Holders . . . . . . . . . . . . . . . . . .63
Section 903. Execution of Supplemental Indentures. . . .65
Section 904. Effect of Supplemental Indentures . . . . .65
Section 905. Conformity with Trust Indenture Act . . . .65
Section 906. Reference in Securities to Supplemental
Indentures. . . . . . . . . . . . . . . . .65
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and
Interest. . . . . . . . . . . . . . . . . .66
Section 1002. Maintenance of Office or Agency . . . . . .66
Section 1003. Money for Securities Payments to Be Held
in Trust. . . . . . . . . . . . . . . . . .66
Section 1004. Statement by Officers as to Default . . . .68
Section 1005. Existence . . . . . . . . . . . . . . . . .68
Section 1006. Maintenance of Properties . . . . . . . . .68
Section 1007. Payment of Taxes and Other Claims . . . . .69
Section 1008. Waiver of Certain Covenants . . . . . . . .69
Section 1009. Calculation of Original Issue Discount. . .70
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article. . . . . . . . . .70
Section 1102. Election to Redeem: Notice to Trustee . . .70
Section 1103. Selection by Trustee of Securities to
Be Redeemed . . . . . . . . . . . . . . . .70
Section 1104. Notice of Redemption. . . . . . . . . . . .71
Section 1105. Deposit of Redemption Price . . . . . . . .72
Section 1106. Securities Payable on Redemption Date . . .73
Section 1107. Securities Redeemed in Part . . . . . . . .73
ARTICLE TWELVE
Sinking Funds
Section 1201. Applicability of Article. . . . . . . . . .74
Section 1202. Satisfaction of Sinking Fund Payments
with Securities . . . . . . . . . . . . . .74
Section 1203. Redemption of Securities for Sinking
Fund. . . . . . . . . . . . . . . . . . . .74
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
Section 1301. Applicability of Article; Company's
Option to Effect Defeasance or Covenant
Defeasance. . . . . . . . . . . . . . . . .75
Section 1302. Defeasance and Discharge. . . . . . . . . .75
Section 1303. Covenant Defeasance . . . . . . . . . . . .76
Section 1304. Conditions to Defeasance or Covenant
Defeasance . . . . . . . . . . . . . .77
Section 1305. Deposited Money and U.S. Government
Obligations to be Held in Trust; Other
Miscellaneous Provisions . . . . . . .80
Section 1306. Reinstatement . . . . . . . . . . . . . . .80
INDENTURE, dated as of September 1, 1997, between
The Gap, Inc., a corporation duly organized and existing
under the laws of the State of Delaware (herein called the
"Company"), having its principal office at One Harrison, San
Francisco, California, and Harris Trust Company of
California, a state trust company duly organized and
existing under the laws of the State of California, as
Trustee (herein called the "Trustee").
RECITALS OF THE COMPANY
The Company has duly authorized the execution and
delivery of this Indenture to provide for the issuance from
time to time of its unsecured debentures, notes or other
evidences of indebtedness (herein called the "Securities"),
to be issued in one or more series as in this Indenture
provided.
All things necessary to make this Indenture a
valid agreement of the Company, in accordance with its
terms, have been done.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
For and in consideration of the premises and the
purchase of the Securities by the Holders thereof, it is
mutually agreed, for the equal and proportionate benefit of
all Holders of the Securities or of series thereof, as
follows:
ARTICLE ONE
Definitions and Other Provisions
of General Application
Section 101. Definitions.
For all purposes of this Indenture, except as
otherwise expressly provided or unless the context otherwise
requires:
(1) the terms defined in this Article have the
meanings assigned to them in this Article and include
the plural as well as the singular;
(2) all other terms used herein which are defined
in the Trust Indenture Act, either directly or by
reference therein, have the meanings assigned to them
therein;
(3) all accounting terms not otherwise defined
herein have the meanings assigned to them in accordance
with generally accepted accounting principles, and,
except as otherwise herein expressly provided, the term
"generally accepted accounting principles" with respect
to any computation required or permitted hereunder
shall mean such accounting principles as are generally
accepted at the date of such computation; and
(4) unless the context otherwise requires, any
reference to an "Article" or a "Section" refers to an
Article or a Section, as the case may be, of this
Indenture; and
(5) 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.
"Act", when used with respect to any Holder, has
the meaning specified in Section 104.
"Affiliate" of any specified Person means any
other Person directly or indirectly controlling or con-
trolled by or under direct or indirect common control with
such specified Person. For the purposes of this definition,
"control" when used with respect to any specified Person
means the power to direct the management and policies of
such Person, directly or indirectly, whether through the
ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings
correlative to the foregoing.
"Authenticating Agent" means any Person authorized
by the Trustee pursuant to Section 614 to act on behalf of
the Trustee to authenticate Securities of one or more
series.
"Board of Directors" means either the board of
directors of the Company or any duly authorized committee of
that board.
"Board Resolution" means a copy of a resolution
certified by the Secretary or an Assistant Secretary of the
Company to have been duly adopted by the Board of Directors
and to be in full force and effect on the date of such
certification, and delivered to the Trustee.
"Book-Entry Security" means a Security in the form
prescribed in Section 204 evidencing all or part of a series
of Securities, issued to the Depositary for such series or
its nominee, and registered in the name of such Depositary
or such nominee.
"Business Day", when used with respect to any
Place of Payment, means each Monday, Tuesday, Wednesday,
Thursday and Friday which is not a day on which banking
institutions in that Place of Payment are authorized or
obligated by law or executive order to close.
"Commission" means the Securities and Exchange
Commission, as from time to time constituted, created under
the Securities Exchange Act of 1934, or, if at any time
after the execution of this instrument such Commission is
not existing and performing the duties now assigned to it
under the Trust Indenture Act, then the body performing such
duties 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
corporate trust office of the Trustee in Los Angeles,
California, at which at any particular time its corporate
trust business shall be administered, which at the date
hereof is 601 South Figueroa Street, Ste 4900, Los Angeles,
CA 90017 Attn: Corporate Trust Department.
"Corporation" means a corporation, association,
company, joint-stock company or business trust.
"Defaulted Interest" has the meaning specified in
Section 307.
"Depositary" means, with respect to the Securities
of any series issuable or issued in whole or in part in the
form of one or more Book-Entry Securities, the Person
designated as Depositary for such series by the Company
pursuant to Section 301, which Person shall be a clearing
agency registered under the Securities Exchange Act of 1934;
and if at any time there is more than one such Person
'Depositary' as used with respect to the Securities of any
series shall mean the Depositary with respect to the
Securities of such series.
"Event of Default" has the meaning specified in
Section 501.
"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. The term "Indenture" shall also include the
forms and terms of particular series of Securities
established as contemplated by Section 301.
"Indexed Security" means any Security which
provides that the principal amount thereof payable at Stated
Maturity may be more or less than the principal face amount
thereof at original issuance.
"Interest", when used with respect to an Original
Issue Discount Security which by its terms bears interest
only after Maturity, means interest payable after Maturity.
"Interest Payment Date", when used with respect to
any Security, means the Stated Maturity of an installment of
interest on such Security.
"Maturity", when used with respect to any
Security, means the date on which the principal of such
Security or an installment of principal becomes due and
payable as therein or herein provided, whether at the Stated
Maturity or by declaration of acceleration, call for
redemption or otherwise.
"Officers' Certificate" means a certificate signed
by the Chairman of the Board, the Chief Executive Officer,
the President, the Chief Financial Officer or a Vice
President, and by the Treasurer, an Assistant Treasurer, the
Controller, an Assistant Controller, the Secretary or an
Assistant Secretary, of the Company, and delivered to the
Trustee. One of the officers signing an Officers'
Certificate given pursuant to Section 1004 shall be the
principal executive, financial or accounting officer of the
Company.
"Opinion of Counsel" means a written opinion of
counsel, who may be counsel for the Company, and who shall
be acceptable to the Trustee.
"Original Issue Discount Security" means any
Security which provides for an amount less than the
principal amount thereof to be due and payable upon a
declaration of acceleration of the Maturity thereof pursuant
to Section 502.
"Outstanding", when used with respect to
Securities, means, as of the date of determination, all
Securities theretofore authenticated and delivered under
this Indenture, except:
(i) Securities theretofore 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 theretofore
deposited with the Trustee or any Paying Agent (other
than the Company) in trust or set aside and segregated
in trust by the Company (if the Company shall act as
its own Paying Agent) for the Holders of such
Securities; provided that, if such Securities are to be
redeemed, notice of such redemption has been duly given
pursuant to this Indenture or provision therefor
satisfactory to the Trustee has been made;
(iii) Securities, except to the extent provided in
Sections 1302 and 1303, with respect to which the
Company has effected defeasance or covenant defeasance
as provided in Article Thirteen; and
(iv) Securities which have been paid pursuant to
Section 306 or in exchange for or in lieu of which
other Securities have been authenticated and delivered
pursuant to this Indenture, other than any such
Securities in respect of which there shall have been
presented to the Trustee proof satisfactory to it that
such Securities are held by a bona fide purchaser in
whose hands such Securities are valid obligations of
the Company;
provided, however, that in determining whether the Holders
of the requisite principal amount of the Outstanding
Securities have given any request, demand, authorization,
direction, notice, consent or waiver hereunder, or whether
sufficient funds are available for redemption or for any
other purpose, and for the purpose of making the calcula-
tions required by section 313 of the Trust Indenture Act,
(i) the principal amount of an Original Issue Discount
Security that shall be deemed to be Outstanding shall be the
amount of the principal thereof that would be due and
payable as of the date of such determination upon acceler-
ation of the Maturity thereof pursuant to Section 502,
(ii) the principal amount of a Security denominated in one
or more foreign currencies or currency units shall be the
U.S. dollar equivalent, determined in the manner provided as
contemplated by Section 301 on the date of original issuance
of such Security, of the principal amount (or, in the case
of an Original Issue Discount Security, the U.S. dollar
equivalent on the date of original issuance of such Security
of the amount determined as provided in (i) above) of such
Security, (iii) the principal amount of any Indexed Security
that may be counted in making such determination or
calculation and that shall be deemed to be Outstanding for
such purpose shall be equal to the principal face amount of
such Indexed Security at original issuance, unless otherwise
provided with respect to such Security pursuant to Section
301, and (iv) 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 of the Trustee
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 or any premium or interest
on any Securities on behalf of the Company.
"Person" means any individual, corporation,
partnership, joint venture, trust, unincorporated
organization or government or any agency or political
subdivision thereof.
"Place of Payment", when used with respect to the
Securities of any series, means the place or places where
the principal of and any premium and interest on the
Securities of that series are payable as specified as
contemplated by Sections 301 and 1002.
"Predecessor Security" of any particular Security
means every previous Security evidencing all or a portion of
the same debt as that evidenced by such particular Security;
and, for the purposes of this definition, any Security
authenticated and delivered under Section 306 in exchange
for or in lieu of a mutilated, destroyed, lost or stolen
Security shall be deemed to evidence the same debt as the
mutilated, destroyed, lost or stolen Security.
"Redemption Date", when used with respect to any
Security to be redeemed, means the date fixed for such
redemption by or pursuant to this Indenture.
"Redemption Price", when used with respect to any
Security to be redeemed, means the price at which it is to
be redeemed pursuant to this Indenture.
"Regular Record Date" for the interest payable on
any Interest Payment Date on the Securities of any series
means the date specified for that purpose as contemplated by
Section 301.
"Responsible Officer", when used with respect to
the Trustee, means any vice president, any assistant
secretary, any assistant treasurer, any trust officer or
assistant trust officer, or any other officer of the Trustee
customarily performing functions similar to those performed
by any of the above designated officers and also means, with
respect to a particular corporate trust matter, any other
officer to whom such matter is referred because of his
knowledge of and familiarity with the particular subject.
"Securities" has the meaning stated in the first
recital of this Indenture and more particularly means any
Securities authenticated and delivered under this Indenture.
"Security Register" and "Security Registrar" have
the respective meanings specified in Section 305.
"Special Record Date" for the payment of any
Defaulted Interest means a date fixed by the Trustee
pursuant to Section 307.
"Stated Maturity", when used with respect to any
Security or any installment of principal thereof or interest
thereon, means the date specified in such Security as the
fixed date on which the principal of such Security or such
installment of principal or interest is due and payable.
"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.
"Trustee" means the Person named as the "Trustee"
in the first paragraph of this instrument until a successor
Trustee shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Trustee" shall
mean or include each Person who is then a Trustee hereunder,
and if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any
series shall mean the Trustee with respect to Securities of
that series.
"Trust Indenture Act" means the Trust Indenture
Act of 1939 as in force at the date as of which this
instrument was executed; 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.
"U.S. Government Obligations" has the meaning
specified in Section 1304.
"Vice President", when used with respect to the
Company or the Trustee, means any vice president, whether or
not designated by a number or a word or words added before
or after the title "vice president".
Section 102. Compliance Certificates and Opinions.
Upon any application or request by the Company to
the Trustee to take any action under any provision of this
Indenture, the Company shall furnish to the Trustee such
certificates and opinions as may be required under the Trust
Indenture Act. 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
requirements 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
(1) a statement that each individual signing such
certificate or opinion has read such covenant or
condition and the definitions herein relating thereto;
(2) a brief statement as to the nature and scope
of the examination or investigation upon which the
statements or opinions contained in such certificate or
opinion are based;
(3) a statement that, in the opinion of each such
individual, he has made such examination or
investigation as is necessary to enable him to express
an informed opinion as to whether or not such covenant
or condition has been complied with; and
(4) a statement as to whether, in the opinion of
each such individual, such condition or covenant has
been complied with.
Section 103. Form of Documents Delivered to Trustee.
In any case where several matters are required to
be certified by, or covered by an opinion of, any specified
Person, it is not necessary that all such matters be cer-
tified by, or covered by the opinion of, only one such Per-
son, or that they be so certified or covered by only one
document, but one such Person may certify or give an opinion
with respect to some matters and one or more other such
Persons as to other matters, and any such Person may certify
or give an opinion as to such matters in one or several
documents.
Any certificate or opinion of an officer of the
Company may be based, insofar as it relates to legal
matters, upon a certificate or opinion of, or
representations by, counsel, unless such officer knows, or
in the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to
the matters upon which his certificate or opinion is based
are erroneous. Any such certificate or opinion of counsel
may be based, insofar as it relates to factual matters, upon
a certificate or opinion of, or representations by, an
officer or officers of the Company stating that the
information with respect to such factual matters is in the
possession of the Company, unless such counsel knows, or in
the exercise of reasonable care should know, that the
certificate or opinion or representations with respect to
such matters are erroneous.
Where any Person is required to make, give or
execute two or more applications, requests, consents,
certificates, statements, opinions or other instruments
under this Indenture, they may, but need not, be
consolidated and form one instrument.
Section 104. Acts of Holders; Record Dates.
(a) Any request, demand, authorization, direc-
tion, notice, consent, waiver or other action provided by
this Indenture to be given or taken by Holders may be embo-
died in and evidenced by one or more instruments of sub-
stantially similar tenor signed by such Holders in person or
by 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 601) conclusive in favor of the Trustee
and the Company, if made in the manner provided in this
Section.
(b) The fact and date of the execution by any
Person of any such instrument or writing may be proved by
the affidavit of a witness 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.
(c) The Company may, in the circumstances
permitted by the Trust Indenture Act, fix any day as the
record date for the purpose of determining the Holders of
Securities of any series entitled to give or take any
request, demand, authorization, direction, notice, consent,
waiver or other action, or to vote on any action, authorized
or permitted to be given or taken by Holders of Securities
of such series. If not set by the Company prior to the
first solicitation of a Holder of Securities of such series
made by any Person in respect of any such action, or, in the
case of any such vote, prior to such vote, the record date
for any such action or vote shall be the 30th day (or, if
later, the date of the most recent list of Holders required
to be provided pursuant to Section 701) prior to such first
solicitation or vote, as the case may be. With regard to
any record date for action to be taken by the Holders of one
or more series of Securities, only the Holders of Securities
of such series on such date (or their duly designated
proxies) shall be entitled to give or take, or vote on, the
relevant action.
(d) The ownership of Securities shall be proved
by the Security Register.
(e) Any request, demand, authorization, direc-
tion, 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.
Section 105. 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
made, given, furnished or filed in writing to or with
the Trustee at its Corporate Trust Office, Attention:
Corporate Trust Trustee Administration, or
(2) the Company by the Trustee or by any 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 it 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 106. Notice to Holders; Waiver.
Where this Indenture provides for notice to
Holders of any event, such notice shall be sufficiently
given (unless otherwise herein expressly provided) if in
writing and mailed, first-class postage prepaid, to each
Holder affected by such event, at his address as it appears
in the Security Register, not later than the latest date (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. Any notice mailed to
a Holder in the manner herein prescribed shall be
conclusively deemed to have been received by such Holder,
whether or not such Holder actually receives such notice.
Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to
receive such notice, either before or after the event, and
such waiver shall be the equivalent of such notice. Waivers
of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the
validity of any action taken in reliance upon such waiver.
In case by reason of the suspension of regular
mail service or by reason of any other cause it shall be
impracticable to give such notice by mail, then such
notification as shall be made with the approval of the
Trustee shall constitute a sufficient notification for every
purpose hereunder.
Section 107. Conflict with Trust Indenture Act.
If any provision hereof limits, qualifies or con-
flicts 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 provi-
sion 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 108. Effect of Headings and Table of Contents.
The Article and Section headings herein and the
Table of Contents are for convenience only and shall not
affect the construction hereof.
Section 109. Successors and Assigns.
All covenants and agreements in this Indenture by
the Company shall bind its successors and assigns, whether
so expressed or not.
Section 110. Separability Clause.
In case any provision in this Indenture or in the
Securities shall be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired
thereby.
Section 111. Benefits of Indenture.
Nothing in this Indenture or in the Securities,
express or implied, shall give to any Person, other than the
parties hereto and their successors hereunder and the Hold-
ers, any benefit or any legal or equitable right, remedy or
claim under this Indenture.
Section 112. Governing Law.
THIS INDENTURE AND THE SECURITIES SHALL BE GOV-
ERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF NEW YORK.
Section 113. Legal Holidays.
In any case where any Interest Payment Date,
Redemption Date, Stated Maturity or Maturity of any Security
shall not be a Business Day at any Place of Payment, then
(notwithstanding any other provision of this Indenture or of
the Securities (other than a provision of the Securities of
any series which specifically states that such provision
shall apply in lieu of this Section)) payment of interest or
principal (and premium, if any) need not be made at such
Place of Payment on such date, but may be made on the next
succeeding Business Day at such Place of Payment with the
same force and effect as if made on the Interest Payment
Date, the Redemption Date, or at the Stated Maturity or
Maturity.
ARTICLE TWO
Security Forms
Section 201. Forms Generally.
The Securities of each series shall be in sub-
stantially the form set forth in this Article, or in such
other form as shall be established by or pursuant to a Board
Resolution or in one or more indentures supplemental hereto,
in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or per-
mitted 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 Depositary
therefor or as may, consistently herewith, be determined by
the officers executing such Securities, as evidenced by
their execution of the Securities. If the form of
Securities of any series is established by, or by action
taken pursuant to, a Board Resolution, a copy of an
appropriate record of such action shall be certified by the
Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the
Company Order contemplated by Section 303 for the
authentication and delivery of such Securities.
The definitive Securities shall be printed,
lithographed or engraved on steel engraved borders 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.
Section 202. Form of Face of Security.
[insert any legend required by the InternalRevenue Code and the
regulations thereunder.]
THE GAP, INC.
............................................
No. . . . . . . $. . . . . . .
CUSIP No.______________
The Gap, Inc., a corporation duly organized and
existing under the laws 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 on
........................... [if the Security is to bear
interest prior to Maturity, insert --, and to pay interest
thereon from ........... or from the most recent Interest
Payment Date to which interest has been paid or duly
provided for, semi-annually on ............. and
............ in each year, commencing ........., at the rate
of .......... % per annum, until the principal hereof is
paid or made available for payment [if applicable, insert
and (to the extent that the payment of such interest shall
be legally enforceable) at the rate of .... % per annum on
any overdue principal and premium and on any overdue
installment of interest]. The interest so payable, and
punctually paid or duly provided for, on any Interest
Payment Date will, as provided in such Indenture, be paid to
the Person in whose name this Security (or one or more
Predecessor Securities) is registered at the close of
business on the Regular Record Date for such interest, which
shall be the .......... or ........ (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 of this
series 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 of this series may be
listed, and upon such notice as may be required by such
exchange, all as more fully provided in said Indenture].
[If the Security is not to bear interest prior toMaturity,
insert -- The principal of this Security shall not
bear interest except in the case of a default in payment of
principal upon acceleration, upon redemption or at Stated
Maturity and in such case the overdue principal of this
Security shall bear interest at the rate of ....% per annum
(to the extent that the payment of such interest shall be
legally enforceable), which shall accrue from the date of
such default in payment to the date payment of such princi-
pal has been made or duly provided for. Interest on any
overdue principal shall be payable on demand. Any such
interest on any overdue principal that is not so paid on
demand shall bear interest at the rate of ......% per annum
(to the extent that the payment of such interest shall be
legally enforceable), which shall accrue from the date of
such demand for payment to the date payment of such interest
has been made or duly provided for, and such interest shall
also be payable on demand.]
Payment of the principal of (and premium, if any)
and [if applicable, insert -- any such] interest on this
Security will be made at the office or agency of the Company
maintained for that purpose in ............., 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 [if applicable, insert -- ; provided, however, that at
the option of the Company payment of interest may be made by
check mailed to the address of the Person entitled thereto
as such address shall appear in the Security Register or by
wire transfer to an account maintained by the Person
entitled thereto as specified in the Security Register,
provided that such Person shall have given the Trustee
written wire instructions.]
[If the Security is payable in a foreign currency,
insert -- the appropriate provision.]
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 under its corporate seal.
The Gap, Inc.
By.......................
Attest:
...........................
Section 203. Form of Reverse of Security.
This Security is one of a duly authorized issue of
securities of the Company (herein called the "Securities"),
issued and to be issued in one or more series under an
Indenture, dated as of [__________], 1997 (herein called the
"Indenture"), between the Company and Harris Trust Company
of California, as Trustee (herein called the "Trustee",
which term includes any successor trustee under the
Indenture), to which Indenture and all indentures
supplemental thereto reference is hereby made for a
statement of the respective rights, limitations of rights,
duties and immunities thereunder of the Company, the Trustee
and the Holders of the Securities and of the terms upon
which the Securities are, and are to be, authenticated and
delivered. This Security is one of the series designated on
the face hereof[, limited in aggregate principal amount to
$..........].
[If applicable, insert -- The Securities of this
series are subject to redemption upon not less than 30 nor
more than 60 days' notice by mail, [if applicable, insert --
(1) on ........... in any year commencing with the
year...... and ending with the year .......... through
operation of the sinking fund for this series at a
Redemption Price equal to 100% of the principal amount, and
(2)] at any time [on or after .......... 19..], as a whole
or in part, at the election of the Company, [at Redemption
Prices determined as follows:] [at the following Redemption
Prices (expressed as percentages of the principal amount):
If redeemed [on or before ................, _%, and if
redeemed] during the 12-month period beginning ........ of
the years indicated,
Redemption Redemption
Year Price Year Price
and thereafter at a Redemption Price equal to ..........% of
the principal amount,] together in the case of any such
redemption [if applicable, insert -- (whether through
operation of the sinking fund or otherwise)] with accrued
interest to the Redemption Date, but interest installments
whose Stated Maturity is on or prior to such Redemption Date
will be payable to the Holders of such Securities, or one or
more Predecessor Securities, of record at the close of
business on the relevant Regular Record Dates or Special
Record Dates referred to on the face hereof, all as provided
in the Indenture.]
[If applicable insert -- The Securities of this
series are subject to redemption upon not less than 30 nor
more than 60 days' notice by mail, (1) on .......... in any
year commencing with the year .... and ending with the year
.... through operation of the sinking fund for this series
at the Redemption Prices for redemption through operation of
the sinking fund (expressed as percentages of the principal
amount) set forth in the table below, and (2) at any time
[on or after ........], as a whole or in part, at the
election of the Company, at the Redemption Prices for
redemption otherwise than through operation of the sinking
fund (expressed as percentages of the principal amount) set
forth in the table below: If redeemed during the 12-month
period beginning .......... of the years indicated,
Redemption Price Redemption Price for
For Redemption Redemption Otherwise
Through Operation Than Through Operation
Year of the Sinking Fund of the Sinking Fund
and thereafter at a Redemption Price equal to ........% of
the principal amount, together in the case of any such
redemption (whether through operation of the sinking fund or
otherwise) with accrued interest to the Redemption Date, but
interest installments whose Stated Maturity is on or prior
to such Redemption Date will be payable to the Holders of
such Securities, or one or more Predecessor Securities, of
record at the close of business on the relevant Regular
Record Dates or Special Record Dates referred to on the face
hereof, all as provided in the Indenture.]
Notwithstanding the foregoing, the Company may
not, prior to .........., redeem any Securities of this
series as contemplated by [Clause (2) of] the preceding
paragraph as a part of, or in anticipation of, any refunding
operation by the application, directly or indirectly, of
moneys borrowed having an interest cost to the Company
(calculated in accordance with generally accepted financial
practice) of less than .......% per annum.]
[The sinking fund for this series provides for the
redemption on ........ in each year beginning with the year
......... and ending with the year of .......... [not less
than $............ ("mandatory sinking fund") and not more
than] $......... aggregate principal amount of Securities of
this series. Securities of this series acquired or redeemed
by the Company otherwise than through [mandatory] sinking
fund payments may be credited against subsequent [mandatory]
sinking fund payments otherwise required to be made [in the
inverse order in which they become due].]
[If the Security is subject to redemption, insert-- In
the event of redemption of this Security in part only,
a new Security or Securities of this series and of like
tenor for the unredeemed portion hereof will be issued in
the name of the Holder hereof upon the cancellation hereof.]
[If applicable, insert -- The Indenture contains
provisions for defeasance at any time of [the entire
indebtedness of this Security] [or] [certain restrictive
covenants and Events of Default with respect to this
Security] [, in each case] upon compliance with certain
conditions set forth in this Indenture.]
[If the Security is not an Original Issue Discount Security,
insert -- If an Event of Default with respect to
Securities of this series shall occur and be continuing, the
principal of the Securities of this series may be declared
due and payable in the manner and with the effect provided
in the Indenture.]
[If the Security is an Original Issue DiscountSecurity,
insert -- If an Event of Default with respect to
Securities of this series shall occur and be continuing, an
amount of principal of the Securities of this series may be
declared due and payable in the manner and with the effect
provided in the Indenture. Such amount shall be equal to --
insert formula for determining the amount. Upon payment
(i) of the amount of principal so declared due and payable
and (ii) of interest on any overdue principal and overdue
interest (in each case to the extent that the payment of
such interest shall be legally enforceable), all of the
Company's obligations in respect of the payment of the
principal of and interest, if any, on the Securities of this
series shall terminate.]
[If the Security is an Indexed Security, insert --
the appropriate provision.]
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 each series to be
affected under the Indenture at any time by the Company and
the Trustee with the consent of the Holders of a majority in
principal amount of the Securities at the time Outstanding
of each series to be affected. The Indenture also contains
provisions permitting the Holders of specified percentages
in principal amount of the Securities of each series at the
time Outstanding, on behalf of the Holders of all Securities
of such series, to waive compliance by the Company with cer-
tain provisions of the Indenture and certain past defaults
under the Indenture and their consequences. Any such
consent or waiver by the Holder of this Security shall be
conclusive and binding upon such Holder and upon all future
Holders of this Security and of any Security issued upon the
registration of transfer hereof or in exchange herefor or in
lieu hereof, whether or not notation of such consent or
waiver is made upon this Security.
No reference herein to the Indenture and no provi-
sion of this Security or of the Indenture shall alter or
impair the obligation of the Company, which is absolute and
unconditional, to pay the principal of and any premium 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 any place where the
principal of and any premium and interest on this Security
are payable, 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 and of
like tenor, of authorized denominations 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 $.......
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
aggregate principal amount of Securities of this series and
of like tenor of a different authorized denomination, as
requested by the Holder surrendering the same.
No service charge shall be made for any such
registration of transfer or exchange, but the Company may
require payment of a sum sufficient to cover any tax or
other governmental charge payable in connection therewith.
Prior to due presentment of this Security for
registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the Person in
whose name this Security is registered as the owner hereof
for all purposes, whether or not this Security be overdue,
and neither the Company, the Trustee nor any such agent
shall be affected by notice to the contrary.
All terms used in this Security which are defined
in the Indenture shall have the meanings assigned to them in
the Indenture.
Section 204. Additional Provisions Required in
Book-Entry Security.
Any Book-Entry Security issued hereunder shall, in
addition to the provisions contained in Sections 202 and
203, bear a legend in substantially the following form:
"This Security is a Book-Entry Security within the
meaning of the Indenture hereinafter referred to and is
registered in the name of a Depositary or a nominee of a
Depositary. This Security is exchangeable for Securities
registered in the name of a person other than the Depositary
or its nominee only in the limited circumstances described
in the Indenture and may not be transferred except as a
whole by the Depositary to a nominee of the Depositary or by
a nominee of the Depositary to the Depositary or another
nominee of the Depositary."
Section 205. Form of Trustee's Certificate of
Authentication.
The Trustee's certificate of authentication shall
be in substantially the following form:
Dated: ______________
This is one of the Securities of the series
designated therein referred to in the within-mentioned
Indenture.
[__________________]
As Trustee
By...........................
Authorized Signatory
ARTICLE THREE
The Securities
Section 301. Amount Unlimited; Issuable in Series.
The aggregate principal amount of Securities which
may be authenticated and delivered under this Indenture is
unlimited.
The Securities may be issued from time to time in
one or more series. There shall be established in or
pursuant to a Board Resolution and, subject to Section 303,
set forth, or determined in the manner provided, in an
Officers' Certificate, or established in one or more
indentures supplemental hereto, prior to the issuance of
Securities of any series,
(1) the title of the Securities of the series
(which shall distinguish the Securities of the series
from Securities of any other series);
(2) any limit upon the aggregate principal amount
of the Securities of the series which may be
authenticated and delivered under this Indenture
(except for Securities authenticated and delivered upon
registration of transfer of, or in exchange for, or in
lieu of, other Securities of the series pursuant to
Section 304, 305, 306, 906 or 1107 and except for any
Securities which, pursuant to Section 303, are deemed
never to have been authenticated and delivered
hereunder);
(3) the Person to whom any interest on a Security
of the series shall be payable, if other than 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;
(4) the date or dates on which the principal of
and premium, if any, on the Securities of the series is
payable or the method of determination thereof;
(5) the rate or rates at which the Securities of
the series shall bear interest, if any, or the method
of calculating such rate or rates of interest, the date
or dates from which such interest shall accrue or the
method by which such date or dates shall be determined,
the Interest Payment Dates on which any such interest
shall be payable and the Regular Record Date for any
interest payable on any Interest Payment Date;
(6) the place or places where the principal of
and any premium and interest on Securities of the
series shall be payable;
(7) the period or periods within which, the price
or prices at which, the currency or currencies
(including currency units) in which and the other terms
and conditions upon which Securities of the series may
be redeemed, in whole or in part, at the option of the
Company;
(8) the obligation, if any, of the Company to
redeem or purchase Securities of the series pursuant to
any sinking fund or analogous provisions or at the
option of a Holder thereof and the period or periods
within which, the price or prices at which and the
other terms and conditions upon which Securities of the
series shall be redeemed or purchased, in whole or in
part, pursuant to such obligation;
(9) if other than denominations of $1,000 and any
integral multiple thereof, the denominations in which
Securities of the series shall be issuable;
(10) the currency, currencies or currency units in
which payment of the principal of and any premium and
interest on any Securities of the series shall be
payable if other than the currency of the United States
of America and the manner of determining the equivalent
thereof in the currency of the United States of America
for purposes of the definition of "Outstanding" in
Section 101;
(11) if the amount of payments of principal of or
any premium or interest on any Securities of the series
may be determined with reference to an index, formula
or other method, the index, formula or other method by
which such amounts shall be determined;
(12) if the principal of or any premium or
interest on any Securities of the series is to be
payable, at the election of the Company or a Holder
thereof, in one or more currencies or currency units
other than that or those in which the Securities are
stated to be payable, the currency, currencies or
currency units in which payment of the principal of and
any premium and interest on Securities of such series
as to which such election is made shall be payable, and
the periods within which and the other terms and
conditions upon which such election is to be made;
(13) if other than the principal amount thereof,
the portion of the principal amount of Securities of
the series which shall be payable upon declaration of
acceleration of the Maturity thereof pursuant to
Section 502 or the method by which such portion shall
be determined;
(14) the application, if any, of Section 1302 or
1303 to the Securities of any series;
(15) whether the Securities of the series shall be
issued in whole or in part in the form of one or more
Book-Entry Securities and, in such case, the Depositary
with respect to such Book-Entry Security or Securities
and the circumstances under which any Book-Entry
Security may be registered for transfer or exchange, or
authenticated and delivered, in the name of a Person
other than such Depositary or its nominee, if other
than as set forth in Section 305; and
(16) any other terms of the series (which terms
shall not be inconsistent with the provisions of this
Indenture, except as permitted by Section 901(5)).
All Securities of any one series shall be substan-
tially identical except as to denomination and except as may
otherwise be provided in or pursuant to the Board Resolution
referred to above and (subject to Section 303) set forth, or
determined in the manner provided, in the Officers'
Certificate referred to above or in any such indenture
supplemental hereto. All Securities of any one series need
not be issued at the same time and, unless otherwise
provided, a series may be reopened, without the consent of
the Holders, for issuances of additional Securities of such
series.
If any of the terms of the series are established
by action taken pursuant to a Board Resolution, a copy of an
appropriate record of such action shall be certified by the
Secretary or an Assistant Secretary of the Company and
delivered to the Trustee at or prior to the delivery of the
Officers' Certificate setting forth, or providing the manner
for determining, the terms of the series.
Section 302. Denominations.
The Securities of each series shall be issuable in
registered form without coupons in such denominations as
shall be specified as contemplated by Section 301. In the
absence of any such provisions with respect to the Securi-
ties of any series, the Securities of such series shall be
issuable in denominations of $1,000 and any integral mul-
tiple thereof.
Section 303. 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,
under its corporate seal reproduced thereon attested by its
Secretary or one of its Assistant Secretaries. The
signature of any of these officers on the Securities may be
manual or facsimile.
Securities bearing the manual or facsimile
signatures of individuals who were at any time the proper
officers of the Company shall bind the Company,
notwithstanding that such individuals or any of them have
ceased to hold such offices prior to the authentication and
delivery of such Securities or did not hold such offices at
the date of such Securities.
At any time and from time to time after the
execution and delivery of this Indenture, the Company may
deliver Securities of any 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 the Company
Order shall authenticate and deliver or make available for
delivery such Securities; provided, however, that, in the
case of Securities of a series that are not to be originally
issued at one time, the Trustee shall authenticate and
deliver or make available for delivery such Securities from
time to time in accordance with such other procedures
(including, without limitation, the receipt by the Trustee
of oral or electronic instructions from the Company or its
duly authorized agents, promptly confirmed in writing)
acceptable to the Trustee as may be specified by or pursuant
to a Company Order delivered to the Trustee prior to the
time of the first authentication of Securities of such
series. If the form or terms of the Securities of the
series have been established in or pursuant to one or more
Board Resolutions as permitted by Sections 201 and 301, in
authenticating such Securities, and accepting the additional
responsibilities under this Indenture in relation to such
Securities, the Trustee shall be entitled to receive, and
(subject to Section 601) shall be fully protected in relying
upon, an Opinion of Counsel stating,
(a) if the form of such Securities has been
established by or pursuant to Board Resolution as
permitted by Section 201, that such form has been
established in conformity with the provisions of this
Indenture;
(b) if the terms of such Securities have been
established by or pursuant to Board Resolution as
permitted by Section 301, that such terms have been
established in conformity with the provisions of this
Indenture; and
(c) that such Securities, when authenticated and
delivered by the Trustee and issued by the Company in
the manner and subject to any conditions specified in
such Opinion of Counsel, will constitute valid and
legally binding obligations of the Company enforceable
in accordance with their terms, subject to bankruptcy,
insolvency, fraudulent transfer, reorganization,
moratorium and similar laws of general applicability
relating to or affecting creditors' rights and to
general equity principles.
If such form or terms have been so established, the Trustee
shall not be required to authenticate such Securities if the
issue of such Securities pursuant to this Indenture will
affect the Trustee's own rights, duties or immunities under
the Securities and this Indenture or otherwise in a manner
which is not reasonably acceptable to the Trustee.
Notwithstanding the provisions of Section 301 and
of the preceding paragraph, if all Securities of a series
are not to be originally issued at one time, it shall not be
necessary to deliver the Officers' Certificate otherwise
required pursuant to Section 301 or the Company Order and
Opinion of Counsel otherwise required pursuant to such
preceding paragraph at or prior to the time of authentica-
tion of each Security of such series if such documents, with
appropriate modifications to cover such future issuances,
are delivered at or prior to the authentication upon
original issuance of the first Security of such series to be
issued.
If the Company shall establish pursuant to Section
301 that the Securities of a series are to be issued in
whole or in part in the form of one or more Book-Entry
Securities, then the Company shall execute and the Trustee
shall, in accordance with this Section and the Company Order
with respect to such series, authenticate and deliver or
make available for delivery one or more Securities in such
form that (i) shall represent and shall be denominated in an
amount equal to the aggregate principal amount of the
Outstanding Securities of such series to be represented by
such Book-Entry Security or Securities, (ii) shall be
registered in the name of the Depositary for such Book-Entry
Security or Securities or the nominee of such Depositary,
(iii) shall be delivered by the Trustee to such Depositary
or pursuant to such Depositary's instruction and (iv) shall
bear the legend set forth in Section 204.
Unless otherwise established pursuant to Section
301, each Depositary designated pursuant to Section 301 for
a Book-Entry Security must, at the time of its designation
and at all times while it serves as Depositary, be a
clearing agency registered under the Securities Exchange Act
of 1934 and any other applicable statute or regulation. The
Trustee shall have no responsibility to determine if the
Depositary is so registered. Each Depositary shall enter
into an agreement with the Trustee governing the respective
duties and rights of such Depositary and the Trustee with
regard to Book-Entry Securities.
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. Notwithstanding the
foregoing, if any Security shall have been authenticated and
delivered hereunder but never issued and sold by the
Company, and the Company shall deliver such Security to the
Trustee for cancellation as provided in Section 309, for all
purposes of this Indenture such Security shall be deemed
never to have been authenticated and delivered hereunder and
shall never be entitled to the benefits of this Indenture.
Section 304. Temporary Securities.
Pending the preparation of definitive Securities
of any series, the Company may execute, and upon Company
Order the Trustee shall authenticate and deliver or make
available for delivery, temporary Securities which are
printed, lithographed, typewritten, mimeographed or
otherwise produced, in any authorized denomination,
substantially of the tenor of the definitive Securities in
lieu of which they are issued and with such appropriate
insertions, omissions, substitutions and other variations as
the officers executing such Securities may determine, as
evidenced by their execution of such Securities.
If temporary Securities of any series are issued,
the Company will cause definitive Securities of that series
to be prepared without unreasonable delay. After the prep-
aration 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 the office or
agency of the Company in a Place of Payment for that series,
without charge to the Holder. Upon surrender for
cancellation of any one or more temporary Securities of any
series the Company shall execute and the Trustee shall
authenticate and deliver or make available for delivery in
exchange therefor one or more definitive Securities of the
same series, of any authorized denominations and of a like
aggregate principal amount and tenor. Until so exchanged
the temporary Securities of any series shall in all respects
be entitled to the same benefits under this Indenture as
definitive Securities of such series and tenor.
Section 305. Registration, Registration of
Transfer and Exchange.
The Company shall cause to be kept at the
Corporate Trust Office of the Trustee a register (the
register maintained in such office and in any other office
or agency of the Company in a Place of Payment being herein
sometimes collectively referred to as the "Security
Register") in which, subject to such reasonable regulations
as it may prescribe, the Company shall provide for the
registration of Securities and of transfers of Securities.
The Trustee is hereby appointed "Security Registrar" for the
purpose of registering Securities and transfers of
Securities as herein provided.
Upon surrender for registration of transfer of any
Security of any series at the office or agency in a Place of
Payment for that series, the Company shall execute, and the
Trustee shall authenticate and deliver or make available for
delivery, 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 aggregate
principal amount and tenor.
At the option of the Holder, Securities of any
series may be exchanged for other Securities of the same
series, of any authorized denominations and of a like
aggregate principal amount and tenor, 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 or make available for delivery, the Securities
which the Holder making the exchange is entitled to receive.
All Securities issued upon any registration of
transfer or exchange of Securities shall be the valid
obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the
Securities surrendered upon such registration of transfer or
exchange.
Every Security presented or surrendered for
registration of transfer or for exchange shall (if so
required by the Company, the Security Registrar or the
Trustee) be duly endorsed, or be accompanied by a written
instrument of transfer in form satisfactory to the Company,
the Security Registrar and the Trustee duly executed, by the
Holder thereof or his attorney duly authorized in writing.
No service charge shall be made for any registra-
tion 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 304, 906 or 1107
not involving any transfer.
The Company shall not be required (i) to issue,
register the transfer of or exchange Securities of any
series during a period beginning at the opening of business
15 days before the day of the mailing of a notice of redemp-
tion of Securities of that series selected for redemption
under Section 1103 and ending at the close of business on
the day of such mailing, or (ii) to register the transfer of
or exchange any Security so selected for redemption in whole
or in part, except the unredeemed portion of any Security
being redeemed in part.
Notwithstanding the foregoing, any Book-Entry
Security shall be exchangeable pursuant to this Section 305
for Securities registered in the names of Persons other than
the Depositary for such Security or its nominee only if (i)
such Depositary notifies the Company that it is unwilling or
unable to continue as Depositary for such Book-Entry
Security or if at any time such Depositary ceases to be a
clearing agency registered under the Securities Exchange Act
of 1934, as amended, (ii) the Company executes and delivers
to the Trustee a Company Order that such Book-Entry Security
shall be so exchangeable or (iii) there shall have occurred
and be continuing an Event of Default with respect to the
Securities. Any Book-Entry Security that is exchangeable
pursuant to the preceding sentence shall be exchangeable for
Securities registered in such names as such Depositary shall
direct.
Notwithstanding any other provision in this
Indenture, unless and until it is exchanged in whole or in
part for Securities that are not in the form of a Book-Entry
Security, a Book-Entry Security may not be transferred or
exchanged except as a whole by the Depositary with respect
to such Book-Entry Security to a nominee of such Depositary
or by a nominee of such Depositary to such Depositary or
another nominee of such Depositary.
Section 306. Mutilated, Destroyed, Lost and Stolen
Securities.
If any mutilated Security is surrendered to the
Trustee, the Company shall execute and the Trustee shall
authenticate and deliver or make available for delivery in
exchange therefor a new Security of the same series and 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 destruc-
tion, loss or theft of any Security and (ii) such security
or indemnity as may be required by them to save each of them
and any agent of either of them harmless, then, in the
absence of notice to the Company or the Trustee that such
Security has been acquired by a bona fide purchaser, the
Company shall execute and the Trustee shall authenticate and
deliver, in lieu of any such destroyed, lost or stolen
Security, a new Security of the same series and of like
tenor and principal amount and bearing a number not
contemporaneously outstanding.
In case any such mutilated, destroyed, lost or
stolen Security has become or is about to become due and
payable, the Company in its discretion may, instead of
issuing a new Security, pay such Security.
Upon the issuance of any new Security under this
Section, the Company may require the payment of a sum
sufficient to cover any tax or other governmental charge that
may be imposed in relation thereto and any other expenses
(including the fees and expenses of the Trustee) connected
therewith.
Every new Security of any series issued pursuant
to this Section in lieu of any destroyed, lost or stolen
Security shall constitute an original additional contractual
obligation of the Company, whether or not the destroyed,
lost or stolen Security shall be at any time enforceable by
anyone, and shall be entitled to all the benefits of this
Indenture equally and proportionately with any and all other
Securities of that series duly issued hereunder.
The provisions of this Section are exclusive and
shall preclude (to the extent lawful) all other rights and
remedies with respect to the replacement or payment of
mutilated, destroyed, lost or stolen Securities.
Section 307. Payment of Interest; Interest Rights
Preserved.
Except as otherwise provided as contemplated by
Section 301 with respect to any series of Securities,
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 at the office or agency maintained for such purpose
pursuant to Section 1002; provided, however, that at the
option of the Company, interest on Securities of any series
that bear interest may be paid (i) by check mailed to the
address of the Person entitled thereto as it shall appear on
the Security Register or (ii) by wire transfer to an account
maintained by the Person entitled thereto as specified in
the Security Register.
Any interest on any Security of any series which
is payable, but is not punctually paid or duly provided for,
on any Interest Payment Date (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Holder
on the relevant Regular Record Date by virtue of having been
such Holder, and such Defaulted Interest may be paid by the
Company, at its election in each case, as provided in Clause
(1) or (2) below:
(1) The Company may elect to make payment of any
Defaulted Interest to the Persons in whose names the
Securities of such series (or their respective
Predecessor Securities) are registered at the close of
business on a Special Record Date for the payment of
such Defaulted Interest, which shall be fixed in the
following manner. The Company shall notify the Trustee
in writing of the amount of Defaulted Interest proposed
to be paid on each Security of such series and the date
of the proposed payment, and at the same time the
Company shall deposit with the Trustee an amount of
money equal to the aggregate amount proposed to be paid
in respect of such Defaulted Interest or shall make
arrangements satisfactory to the Trustee for such
deposit prior to the date of the proposed payment, such
money when deposited to be held in trust for the
benefit of the Persons entitled to such Defaulted
Interest as in this Clause provided. Thereupon the
Trustee shall fix a Special Record Date for the payment
of such Defaulted Interest which shall be not more than
15 days and not less than 10 days prior to the date of
the proposed payment and not less than 10 days after
the receipt by the Trustee of the notice of the
proposed payment. The Trustee shall promptly notify
the Company of such Special Record Date and, in the
name and at the expense of the Company, shall cause
notice of the proposed payment of such Defaulted
Interest and the Special Record Date therefor to be
mailed, first-class postage prepaid, to each Holder of
Securities of such series at his address as it appears
in the Security Register, not less than 10 days prior
to such Special Record Date. Notice of the proposed
payment of such Defaulted Interest and the Special
Record Date therefor having been so mailed, such
Defaulted Interest shall be paid to the Persons in
whose names the Securities of such series (or their
respective Predecessor Securities) are registered at
the close of business on such Special Record Date and
shall no longer be payable pursuant to the following
Clause (2).
(2) The Company may make payment of any Defaulted
Interest on the Securities of any series in any other
lawful manner not inconsistent with the requirements of
any securities exchange on which such Securities may be
listed, and upon such notice as may be required by such
exchange, if, after notice given by the Company to the
Trustee of the proposed payment pursuant to this
Clause, such manner of payment shall be deemed prac-
ticable by the Trustee.
Subject to the foregoing provisions of this Sec-
tion, each Security delivered under this Indenture upon
registration of transfer of or in exchange for or in lieu of
any other Security shall carry the rights to interest
accrued and unpaid, and to accrue, which were carried by
such other Security.
Section 308. Persons Deemed Owners.
Prior to due presentment of a Security for
registration of transfer, the Company, the Trustee 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 and any premium and (subject to Section 307) any interest
on such Security and for all other purposes whatsoever,
whether or not such Security be overdue, and neither the
Company, the Trustee nor any agent of the Company or the
Trustee shall be affected by notice to the contrary.
Section 309. Cancellation.
All Securities surrendered for payment,
redemption, registration of transfer or exchange or for
credit against any sinking fund payment shall, if
surrendered to any Person other than the Trustee, be
delivered to the Trustee. All Securities so delivered and
any Securities surrendered directly to the Trustee for any
such purpose shall be promptly cancelled by the Trustee and
such cancellation shall be noted conspicuously on each such
Security. 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 may deliver to
the Trustee (or to any other Person for delivery to the
Trustee) for cancellation any Securities previously
authenticated hereunder which the Company has not issued and
sold, and all Securities so delivered shall be promptly
cancelled by the Trustee. No Securities shall be authen-
ticated in lieu of or in exchange for any Securities
cancelled as provided in this Section, except as expressly
permitted by this Indenture. Unless the Company directs
otherwise by a Company Order, all cancelled Securities held
by the Trustee may be destroyed, but the Trustee shall not
be obligated to so destroy such Securities, and, if any such
cancelled Security is destroyed, the Trustee shall furnish
to the Company a certificate with respect to such
destruction.
Section 310. Computation of Interest.
Except as otherwise specified as contemplated by
Section 301 for Securities of any series, interest on the
Securities of each series shall be computed on the basis of
a 360-day year of twelve 30-day months.
Section 311. CUSIP Numbers.
The Company in issuing the Securities may use
"CUSIP" numbers (if then generally in use), and, if so, the
Trustee shall use "CUSIP" numbers in notices of redemption
as a convenience to Holders; provided that any such notice
may state that no representation is made as to the
correctness of such numbers either as printed on the
Securities or as contained in any notice of a redemption and
that reliance may be placed only on the other identification
numbers printed on the Securities, and any such redemption
shall not be affected by 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 401. Satisfaction and Discharge of
Indenture.
This Indenture shall upon Company Request cease to
be of further effect with respect to Securities of any
series (except as to any surviving rights of registration of
transfer, exchange or replacement of such Securities herein
expressly provided for), and the Trustee, at the expense of
the Company, shall execute proper instruments acknowledging
satisfaction and discharge of this Indenture with respect to
such Securities, when
(1) either
(A) all such Securities theretofore authenticated
and delivered (other than (i) such Securities which
have been destroyed, lost or stolen and which have been
replaced or paid as provided in Section 306 and (ii)
such Securities for whose payment money has theretofore
been deposited in trust or segregated and held in trust
by the Company and thereafter repaid to the Company or
discharged from such trust, as provided in Section
1003) have been delivered to the Trustee for
cancellation; or
(B) all such Securities not theretofore delivered
to the Trustee for cancellation
(i) have become due and payable, or
(ii) will become due and payable at their
Stated Maturity within one year, or
(iii) are to be called for redemption within
one year under arrangements satisfactory to the
Trustee for the giving of notice of redemption by
the Trustee in the name, and at the expense, of
the Company
and the Company, in the case of (B)(i), (ii) or (iii) above,
has deposited or caused to be deposited with the Trustee as
trust funds in trust for the purpose an amount in the
currency or currencies or currency unit or units in which
such Securities are payable sufficient to pay and discharge
the entire indebtedness on such Securities not theretofore
delivered to the Trustee for cancellation, for principal and
any premium and interest to the date of such deposit (in the
case of Securities which have become due and payable) or to
the Stated Maturity or Redemption Date, as the case may be;
(2) the Company has paid or caused to be paid all
other sums payable hereunder by the Company; and
(3) the Company has delivered to the Trustee an
Officers' Certificate and an Opinion of Counsel, each
stating that all conditions precedent herein provided
for relating to the satisfaction and discharge of this
Indenture with respect to such Securities have been
complied with.
Notwithstanding the satisfaction and discharge of
this Indenture, the obligations of the Company to the
Trustee under Section 607, the obligations of the Company to
any Authenticating Agent under Section 614 and, if money
shall have been deposited with the Trustee pursuant to
subclause (B) of Clause (1) of this Section, the obligations
of the Trustee under Section 402 and the last paragraph of
Section 1003 shall survive.
Section 402. Application of Trust Money.
Subject to provisions of the last paragraph of
Section 1003, all money deposited with the Trustee pursuant
to Section 401 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 and any premium and interest for
whose payment such money has been deposited with the
Trustee.
ARTICLE FIVE
Remedies
Section 501. Events of Default.
"Event of Default", wherever used herein with
respect to Securities of any series, means any one of the
following events (whatever the reason for such Event of
Default and whether it shall be voluntary or involuntary or
be effected by operation of law or pursuant to any judgment,
decree or order of any court or any order, rule or
regulation of any administrative or governmental body):
(1) default in the payment of any interest upon
any Security of that series when it becomes due and
payable, and continuance of such default for a period
of 30 days; or
(2) default in the payment of the principal of
(or premium, if any, on) any Security of that series at
its Maturity; or
(3) default in the deposit of any sinking fund
payment, when and as due by the terms of a Security of
that series; or
(4) default in the performance, or breach, of any
covenant or warranty of the Company in this Indenture
with respect to 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 principal amount of the
Outstanding Securities of that series a written notice
specifying such default or breach and requiring it to
be remedied and stating that such notice is a "Notice
of Default" hereunder; or
(5) 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 Trustee or to the Company and the
Trustee by the Holders of at least 25% in principal
amount of Outstanding Securities 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
(6) 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
(7) 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 pos-
session 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; or
(8) any other Event of Default provided with
respect to Securities of that series.
Section 502. Acceleration of Maturity; Rescission
and Annulment.
If an Event of Default (other than an Event of
Default described in clause 6 or 7 of Section 501) with
respect to Securities of any series at the time Outstanding
occurs and is continuing, then in every such case the
Trustee or the Holders of not less than 25% in principal
amount of the Outstanding Securities of that series may
declare the principal amount (or, if any of the Securities
of that series are Original Issue Discount Securities or
Indexed Securities, such portion of the principal amount of
such Securities as may be specified in the terms thereof) of
all of the Securities of that series to be due and payable
immediately, by a notice in writing to the Company (and to
the Trustee if given by Holders), and upon any such
declaration such principal amount (or, in the case of
Original Issue Discount Securities or Indexed Securities,
such specified amount) shall become immediately due and
payable.
At any time after such a declaration of
acceleration with respect to Securities of any series has
been made and before a judgment or decree for payment of the
money due has been obtained by the Trustee as hereinafter in
this Article provided, the Holders of a majority in
principal amount of the Outstanding Securities of that
series, by written notice to the Company and the Trustee,
may rescind and annul such declaration and its consequences
if
(1) the Company has paid or deposited with the
Trustee a sum sufficient to pay
(A) all overdue interest 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 any interest thereon at the rate
or rates prescribed therefor in such Securities,
(C) to the extent that payment of such
interest is lawful, interest upon overdue interest
at the rate or rates prescribed therefor in such
Securities, and
(D) all sums paid or advanced by the Trustee
hereunder and the reasonable compensation,
expenses, disbursements and advances of the
Trustee, its agents and counsel;
and
(2) all Events of Default with respect to
Securities of that series, other than the non-payment
of the principal of Securities of that series which
have become due solely by such declaration of
acceleration, have been cured or waived as provided in
Section 513.
No such rescission shall affect any subsequent default or
impair any right consequent thereon.
If an Event of Default described in clause 6 or 7
of Section 501 occurs, the Outstanding Securities shall ipso
facto become immediately due and payable without need of any
declaration or other act on the part of the Trustee or any
Holder.
Section 503. 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 any premium and interest and, to the extent that payment
of such interest shall be legally enforceable, interest on
any overdue principal and premium and on any overdue
interest, at the rate or rates prescribed therefor in such
Securities, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of col-
lection, including the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel.
If an Event of Default with respect to Securities
of any series occurs and is continuing, the Trustee may in
its discretion proceed to protect and enforce its rights and
the rights of the Holders of Securities of such series by
such appropriate judicial proceedings as the Trustee shall
deem most effectual to protect and enforce any such rights,
whether for the specific enforcement of any covenant or
agreement in this Indenture or in aid of the exercise of any
power granted herein, or to enforce any other proper remedy.
Section 504. Trustee May File Proofs of Claim.
In case of 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 or other property payable or deliverable on any such
claims and to distribute the same; and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is
hereby authorized by each Holder to make such payments to
the Trustee and, in the event that the Trustee shall consent
to the making of such payments directly to the Holders, to
pay to the Trustee any amount due it for the reasonable
compensation, expenses, disbursements and advances of the
Trustee, its agents and counsel, and any other amounts due
the Trustee under Section 607.
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 Securi-
ties 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 may be a member of a
creditors' or other similar committee.
Section 505. Trustee May Enforce Claims Without
Possession of Securities.
All rights of action and claims under this Inden-
ture or the Securities may be prosecuted and enforced by the
Trustee without the possession of any of the Securities or
the production thereof in any proceeding relating thereto,
and any such proceeding instituted by the Trustee shall be
brought in its own name as trustee of an express trust, and
any recovery of judgment shall, after provision for the
payment of the reasonable compensation, expenses,
disbursements and advances of the Trustee, its agents and
counsel, be for the ratable benefit of the Holders of the
Securities in respect of which such judgment has been
recovered.
Section 506. Application of Money Collected.
Any money collected by the Trustee pursuant to
this Article shall be applied in the following order, at the
date or dates fixed by the Trustee and, in case of the
distribution of such money on account of principal or any
premium or interest, upon presentation of the Securities and
the notation thereon of the payment if only partially paid
and upon surrender thereof if fully paid:
FIRST: To the payment of all amounts due the
Trustee under Section 607;
SECOND: To the payment of the amounts then due
and unpaid for principal of and any premium 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 and any premium and interest,
respectively; and
THIRD: The balance, if any, to the Person or
Persons entitled thereto.
Section 507. Limitation on Suits.
No Holder of any Security of any series shall have
any right to institute any proceeding, judicial or
otherwise, with respect to this Indenture, or for the
appointment of a receiver or trustee, or for any other
remedy hereunder, unless
(1) such Holder has previously given written
notice to the Trustee of a continuing Event of Default
with respect to the Securities of that series;
(2) the Holders of not less than 25% in principal
amount of the Outstanding Securities of that series
shall have made written request to the Trustee to
institute proceedings in respect of such Event of
Default in its own name as Trustee hereunder;
(3) such Holder or Holders have offered to the
Trustee reasonable indemnity against the costs,
expenses and liabilities to be incurred in compliance
with such request;
(4) the Trustee for 60 days after its receipt of
such notice, request and offer of indemnity has failed
to institute any such proceeding; and
(5) no direction inconsistent with such written
request has been given to the Trustee before or during
such 60-day period by the Holders of a majority in
principal amount of the Outstanding Securities of that
series;
it being understood and intended that no one or more of such
Holders shall have any right in any manner whatever by vir-
tue 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 Holders.
Section 508. Unconditional Right of Holders to
Receive Principal, Premium and Interest.
Notwithstanding any other provision in this
Indenture, the Holder of any Security shall have the right,
which is absolute and unconditional, to receive payment of
the principal of and any premium and (subject to Section
307) any interest on such Security on the Stated Maturity or
Maturities expressed in such Security (or, in the case of
redemption, on the Redemption Date) and to institute suit
for the enforcement of any such payment, and such rights
shall not be impaired without the consent of such Holder.
Section 509. Restoration of Rights and Remedies.
If the Trustee or any Holder has instituted any
proceeding to enforce any right or remedy under this
Indenture and such proceeding has been discontinued or
abandoned for any reason, or has been determined adversely
to the Trustee or to such Holder, then and in every such
case, subject to any determination in such proceeding, the
Company, the Trustee and the Holders shall be restored
severally and respectively to their former positions
hereunder and thereafter all rights and remedies of the
Trustee and the Holders shall continue as though no such
proceeding had been instituted.
Section 510. Rights and Remedies Cumulative.
Except as otherwise provided with respect to the
replacement or payment of mutilated, destroyed, lost or
stolen Securities in the last paragraph of Section 306, no
right or remedy herein conferred upon or reserved to the
Trustee or to the Holders is intended to be exclusive of any
other right or remedy, and every right and remedy shall, to
the extent permitted by law, be cumulative and in addition
to every other right and remedy given hereunder or now or
hereafter existing at law or in equity or otherwise. The
assertion or employment of any right or remedy hereunder, or
otherwise, shall not prevent the concurrent assertion or
employment of any other appropriate right or remedy.
Section 511. Delay or Omission Not Waiver.
No delay or omission of the Trustee or of any
Holder of any Securities to exercise any right or remedy
accruing upon any Event of Default shall impair any such
right or remedy or constitute a waiver of any such Event of
Default or an acquiescence therein. Every right and remedy
given by this Article or by law to the Trustee or to the
Holders may be exercised from time to time, and as often as
may be deemed expedient, by the Trustee or by the Holders,
as the case may be.
Section 512. Control by Holders.
The Holders of a majority in principal amount of
the Outstanding Securities of any series shall have the
right to direct the time, method and place of conducting any
proceeding for any remedy available to the Trustee, or
exercising any trust or power conferred on the Trustee, with
respect to the Securities of such series, provided that
(1) such direction shall not be in conflict with
any rule of law or with this Indenture, and
(2) the Trustee may take any other action deemed
proper by the Trustee which is not inconsistent with
such direction.
(3) subject to the provisions of Section 601, 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 513. Waiver of Past Defaults.
The Holders of not less than a majority in
principal amount of the Outstanding Securities of any series
may on behalf of the Holders of all the Securities of such
series waive any past default hereunder with respect to such
series and its consequences, except a default
(1) in the payment of the principal of or any
premium 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 Inden-
ture; but no such waiver shall extend to any subsequent or
other default or impair any right consequent thereon.
Section 514. Undertaking for Costs.
In any suit for the enforcement of any right or
remedy under this Indenture, or in any suit against the
Trustee for any action taken, suffered or omitted by it as
Trustee, a court may require any party litigant in such suit
to file an undertaking to pay the costs of such suit, and
may assess costs, including counsel 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
Company, the Trustee or the Holders of more than 10% of the
aggregate principal amount of the Outstanding Securities of
any series.
Section 515. Waiver of Stay or Extension Laws.
The Company covenants (to the extent that it may
lawfully do so) that it will not at any time insist upon, or
plead, or in any manner whatsoever claim or take the benefit
or advantage of, any stay or extension law wherever enacted,
now or at any time hereafter in force, which may affect the
covenants or the performance of this Indenture; and the
Company (to the extent that it may lawfully do so) hereby
expressly waives all benefit or advantage of any such law
and covenants that it will not hinder, delay or impede the
execution of any power herein granted to the Trustee, but
will suffer and permit the execution of every such power as
though no such law had been enacted.
ARTICLE SIX
The Trustee
Section 601. Certain Duties and Responsibilities.
The duties and responsibilities of the Trustee
shall be as provided by the Trust Indenture Act. Except
during the continuance of an Event of Default, the Trustee
undertakes to perform such duties and only such duties as
are specifically set forth in this Indenture, and no implied
covenants or obligations shall be read into this Indenture
against the Trustee. In case an Event of Default has
occurred and is continuing, the Trustee shall exercise its
rights and powers and use the same degree of care as a
prudent man would exercise or use under the circumstances in
the conduct of his 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 602. Notice of Defaults.
If a default occurs hereunder with respect to
Securities of any series, the Trustee shall give the Holders
of Securities of such series notice of such default as and
to the extent provided by the Trust Indenture Act; provided,
however, that in the case of any default of the character
specified in Section 501(4) with respect to Securities of
such series, no such notice to Holders shall be given until
at least 30 days after the occurrence thereof. For the
purpose of this Section, the term "default" means any event
which is, or after notice or lapse of time or both would
become, an Event of Default with respect to Securities of
such series.
Section 603. Certain Rights of Trustee.
Subject to the provisions of Section 601:
(a) the Trustee may conclusively rely and shall
be protected in acting or refraining from acting upon
any resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness or other paper or document believed by it
to be genuine and to have been signed or presented by
the proper party or parties;
(b) any request or direction of the Company
mentioned herein shall be sufficiently evidenced by a
Company Request or Company Order and any resolution of
the Board of Directors may be sufficiently evidenced by
a Board Resolution;
(c) whenever in the administration of this
Indenture the Trustee shall deem it desirable that a
matter be proved or established prior to taking,
suffering or omitting any action hereunder, the Trustee
(unless other evidence be herein specifically
prescribed) may, in the absence of bad faith on its
part, rely upon an Officers' Certificate;
(d) the Trustee may consult with counsel of its
selection and the advice of such counsel or any Opinion
of Counsel shall be full and complete authorization and
protection in respect of any action taken, suffered or
omitted by it hereunder in good faith and in reliance
thereon;
(e) the Trustee shall be under no obligation to
exercise any of the rights or powers vested in it by
this Indenture at the request or direction of any of
the Holders pursuant to this Indenture, unless such
Holders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and
liabilities which might be incurred by it in compliance
with such request or direction;
(f) the Trustee shall not be bound to make any
investigation into the facts or matters stated in any
resolution, certificate, statement, instrument,
opinion, report, notice, request, direction, consent,
order, bond, debenture, note, other evidence of
indebtedness or other paper or document, but the
Trustee, in its discretion, may make such further
inquiry or investigation into such facts or matters as
it may see fit, and, if the Trustee shall determine to
make such further inquiry or investigation, it shall be
entitled to examine the books, records and premises of
the Company, personally or by agent or attorney;
(g) the Trustee may execute any of the trusts or
powers hereunder or perform any duties hereunder either
directly or by or through agents or attorneys and the
Trustee shall not be responsible for any misconduct or
negligence on the part of any agent or attorney
appointed with due care by it hereunder;
(h) the Trustee shall not be liable for any
action taken, suffered, or omitted to be taken by it in
good faith and reasonably believed by it to be
authorized or within the discretion or rights or powers
conferred upon it by this Indenture; and
(i) The Trustee shall not be deemed to have
notice of any Default or Event of Default unless a
Responsible Officer of the Trustee has actual knowledge
thereof or unless written notice of any event which is
in fact such a default is received by the Trustee at
the Corporate Trust Office of the Trustee, and such
notice references the Securities and this Indenture.
Section 604. Not Responsible for Recitals or
Issuance of Securities.
The recitals contained herein and in the Securi-
ties, except the Trustee's certificates of authentication,
shall be taken as the statements of the Company, and neither
the Trustee nor any Authenticating Agent assumes any
responsibility for their correctness. The Trustee makes no
representations as to the validity or sufficiency of this
Indenture or of the Securities. Neither the Trustee nor any
Authenticating Agent shall be accountable for the use or
application by the Company of Securities or the proceeds
thereof.
Section 605. May Hold Securities.
The Trustee, any Authenticating Agent, any Paying
Agent, any Security Registrar or any other agent of the
Company, in its individual or any other capacity, may become
the owner or pledgee of Securities and, subject to Sections
608 and 613, may otherwise deal with the Company with the
same rights it would have if it were not Trustee,
Authenticating Agent, Paying Agent, Security Registrar or
such other agent.
Subject to the provisions of Section 608, 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 606. 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 607. 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 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 607, 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 501(6) or Section 501(7), the expenses (including
the reasonable charges and expenses of its counsel) and the
compensation for the services are intended to constitute
expenses of administration under any applicable Federal or
state bankruptcy, insolvency or other similar law.
The provisions of this Section shall survive the
termination of this Indenture and the resignation or removal
of the Trustee.
Section 608. 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 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 609. 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 (or with respect to Harris Trust Company
of California, but not any successor Trustee, the parent
holding company of which has a combined capital and surplus)
of at least $50,000,000 and an office (or with respect to
Harris Trust Company of California, but not any successor
Trustee, an affiliate with an office) in the Borough of
Manhattan, The City of New York at which at any particular
time the Trustee's corporate trust business may be
administered. If such Person (or parent holding company
thereof) publishes reports of condition at least annually,
pursuant to law or to the requirements of any Federal or
state 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.
Section 610. Resignation and Removal;
Appointment of Successor.
(a) No resignation or removal of the Trustee and
appointment of a successor Trustee pursuant to this Article
shall become effective until the acceptance of appointment
by the successor Trustee in accordance with the applicable
requirements of Section 611.
(b) The Trustee may resign at any time with
respect to the Securities of one or more series by giving
written notice thereof to the Company. If the instrument of
acceptance by a successor Trustee required by Section 611
shall not have been delivered to the Trustee within 30 days
after the giving of such notice of resignation, the
resigning Trustee may petition, at the expense of the
Company, any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the
Securities of such series.
(c) The Trustee may be removed at any time with
respect to the Securities of any series by Act of the
Holders of a majority in principal amount of the Outstanding
Securities of such series, delivered to the Trustee and to
the Company. If the instrument of acceptance by a successor
Trustee required by Section 611 shall not have been
delivered to the Trustee within 30 days after the giving of
such notice of 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 of such series.
(d) If at any time:
(1) the Trustee shall fail to comply with
Section 608 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 609 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 a bankrupt or
insolvent or a receiver of the Trustee or of its
property shall be appointed or any public officer
shall take charge or control of the Trustee or of
its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
then, in any such case, (i) the Company by or pursuant to a
Board Resolution may remove the Trustee and appoint a
successor Trustee with respect to all Securities, or (ii)
subject to Section 514, any Holder who has been a bona fide
Holder of a Security for at least six months may, on behalf
of himself and all others similarly situated, petition any
court of competent jurisdiction for the removal of the
Trustee with respect to all Securities and the appointment
of a successor Trustee or Trustees.
(e) If the Trustee shall resign, be removed or
become incapable of acting, or if a vacancy shall occur in
the office of Trustee for any cause, with respect to the
Securities of one or more series, the Company, by or
pursuant to a Board Resolution, shall promptly appoint a
successor Trustee or Trustees with respect to the Securities
of that or those series (it being understood that any such
successor Trustee may be appointed with respect to the
Securities of one or more or all of such series and that at
any time there shall be only one Trustee with respect to the
Securities of any particular series) and shall comply with
the applicable requirements of Section 611. If, within one
year after such resignation, removal or incapability, or the
occurrence of such vacancy, a successor Trustee with respect
to the Securities of any series shall be appointed by Act of
the Holders of a majority in principal amount of the
Outstanding Securities of such series delivered to the
Company and the retiring Trustee, the successor Trustee so
appointed shall, forthwith upon its acceptance of such
appointment in accordance with the applicable requirements
of Section 611, become the successor Trustee with respect to
the Securities of such series and to that extent supersede
the successor Trustee appointed by the Company. If no
successor Trustee with respect to the Securities of any
series shall have been so appointed by the Company or the
Holders and accepted appointment in the manner required by
Section 611, any Holder who has been a bona fide Holder of a
Security of such series for at least six months may, on
behalf of himself and all others similarly situated,
petition any court of competent jurisdiction for the
appointment of a successor Trustee with respect to the
Securities of such series.
(f) The Company shall give notice of each resig-
nation and each removal of the Trustee with respect to the
Securities of any series and each appointment of a successor
Trustee with respect to the Securities of any series to all
Holders of Securities of such series in the manner provided
in Section 106. Each notice shall include the name of the
successor Trustee with respect to the Securities of such
series and the address of its Corporate Trust Office.
Section 611. Acceptance of Appointment by
Successor.
(a) In case of the appointment hereunder of a
successor Trustee with respect to all Securities, every such
successor Trustee so appointed shall execute, acknowledge
and deliver to the Company and to the retiring Trustee an
instrument accepting such appointment, and thereupon the
resignation or removal of the retiring Trustee shall become
effective and such successor Trustee, without any further
act, deed or conveyance, shall become vested with all the
rights, powers, trusts and duties of the retiring Trustee;
but, on the request of the Company or the successor Trustee,
such retiring Trustee shall, upon payment of its charges,
execute and deliver an instrument transferring to such
successor Trustee all the rights, powers and trusts of the
retiring Trustee and shall duly assign, transfer and deliver
to such successor Trustee all property and money held by
such retiring Trustee hereunder.
(b) In case of the appointment hereunder of a
successor Trustee with respect to the Securities of one or
more (but not all) series, the Company, the retiring Trustee
and each successor Trustee with respect to the Securities of
one or more series shall execute and deliver an indenture
supplemental hereto wherein each successor Trustee shall
accept such appointment and which (1) shall contain such
provisions as shall be necessary or desirable to transfer
and confirm to, and to vest in, each successor Trustee all
the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those
series to which the appointment of such successor Trustee
relates, (2) if the retiring Trustee is not retiring with
respect to all Securities, shall contain such provisions as
shall be deemed necessary or desirable to confirm that all
the rights, powers, trusts and duties of the retiring
Trustee with respect to the Securities of that or those
series as to which the retiring Trustee is not retiring
shall continue to be vested in the retiring Trustee, and
(3) shall add to or change any of the provisions of this
Indenture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such
supplemental indenture shall constitute such Trustees
co-trustees of the same trust and that each such Trustee
shall be trustee of a trust or trusts hereunder separate and
apart from any trust or trusts hereunder administered by any
other such Trustee; and upon the execution and delivery of
such supplemental indenture the resignation or removal of
the retiring Trustee shall become effective to the extent
provided therein and each such successor Trustee, without
any further act, deed or conveyance, shall become vested
with all the rights, powers, trusts and duties of the
retiring Trustee with respect to the Securities of that or
those series to which the appointment of such successor
Trustee relates; but, on request of the Company or any
successor Trustee, such retiring Trustee shall duly assign,
transfer and deliver to such successor Trustee all property
and money held by such retiring Trustee hereunder with
respect to the Securities of that or those series to which
the appointment of such successor Trustee relates; provided,
however, that to the extent that such property and money is
not held by the Trustee in trust for the benefit of the
Holders of particular Securities, such retiring Trustee
shall transfer and deliver to such successor Trustee such
property and money upon payment of its charges hereunder.
(c) Upon request of any such successor Trustee,
the Company shall execute any and all instruments for more
fully and certainly vesting in and confirming to such suc-
cessor Trustee all such rights, powers and trusts referred
to in paragraph (a) and (b) of this Section, as the case may
be.
(d) No successor Trustee shall accept its
appointment unless at the time of such acceptance such
successor Trustee shall be qualified and eligible under this
Article.
Section 612. Merger, Conversion, Consolidation
or Succession to Business.
Any corporation into which the Trustee may be
merged or converted or with which it may be consolidated, or
any corporation resulting from any merger, conversion or
consolidation to which the Trustee shall be a party, or any
corporation succeeding to all or substantially all the
corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided such
corporation shall be otherwise qualified and eligible under
this Article, without the execution or filing of any paper
or any further act on the part of any of the parties hereto.
In case any Securities shall have been authenticated, but
not delivered, by the Trustee then in office, any successor
by merger, conversion or consolidation to such
authenticating Trustee may adopt such authentication and
deliver the Securities so authenticated with the same effect
as if such successor Trustee had itself authenticated such
Securities.
Section 613. Preferential Collection of Claims Against
Company.
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 614. Appointment of Authenticating Agent.
The Trustee may appoint an Authenticating Agent or
Agents with respect to one or more series of Securities
which shall be authorized to act on behalf of the Trustee to
authenticate Securities of such series issued upon original
issue and upon exchange, registration of transfer or partial
redemption thereof or pursuant to Section 306, and Securi-
ties 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 authen-
tication 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 (or with respect to Harris Trust Company of
California or any of its affiliates only, the parent holding
company of which has 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 (or parent holding company)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 consoli-
dated, or any corporation resulting from any merger, conver-
sion or consolidation to which such Authenticating Agent
shall be a party, 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 mail written notice of such appoint-
ment by first-class mail, postage prepaid, to all Holders of
Securities of the series with respect to which such
Authenticating Agent will serve, as their names and
addresses appear in the Security Register. Any successor
Authenticating Agent upon acceptance of its appointment
hereunder shall become vested with all the rights, powers
and duties of its predecessor hereunder, with like effect as
if originally named as an Authenticating Agent. No
successor Authenticating Agent shall be appointed unless
eligible under the provisions of this section.
The Company agrees to pay to each Authenticating
Agent from time to time reasonable compensation for its
services under this Section.
If an appointment with respect to one or more
series is made pursuant to this Section, the Securities of
such series may have endorsed thereon, in addition to or in
lieu of the Trustee's certificate of authentication, an
alternative certificate of authentication in the following
form:
Dated: _______________
This is one of the Securities of the series
designated therein referred to in the within-mentioned
Indenture.
[__________________],
As Trustee
By........................
As Authenticating Agent
By........................
Authorized Officer
ARTICLE SEVEN
Holders' Lists and Reports by Trustee and Company
Section 701. Company to Furnish Trustee
Names and Addresses of Holders.
The Company will furnish or cause to be furnished
to the Trustee
(a) semi-annually, not later than January 15 and
July 15 in each year, a list, in such form as the
Trustee may reasonably require, of the names and
addresses of the Holders as of the preceding January 1
or July 1, as the case may be, 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 in 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 702. Preservation of Information;
Communications to Holders.
(a) The Trustee shall preserve, in as current a
form as is reasonably practicable, the names and addresses
of Holders contained in the most recent list furnished to
the Trustee as provided in Section 701 and the names and
addresses of Holders received by the Trustee in its capacity
as Security Registrar. The Trustee may destroy any list
furnished to it as provided in Section 701 upon receipt of a
new list so furnished.
(b) The rights of the Holders to communicate with
other Holders with respect to their rights under this
Indenture or under the Securities, and the corresponding
rights and privileges 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 neither the Company nor the Trustee nor any agent of
either of then 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 703. 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 there-
to. If required by Section 313(a) of the Trust Indenture
Act, the Trustee shall, within sixty days after each May 1
following the date of the first issuance deliver to Holders
a brief report, dated as of such May 1, 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 any Securities are
listed, with the Commission and with the Company. The
Company promptly will notify the Trustee when any Securities
are listed on any stock exchange.
Section 704. 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;
provided that any such information, documents or reports
required to be filed with the Commission pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934 shall be
filed with the Trustee within 15 days after the same is so
required to be filed with the Commission.
Delivery of such reports, information and
documents to the Trustee is for informational purposes only
and the Trustee's receipt of such shall not constitute
constructive notice of any information contained therein or
determinable from information contained therein, including
the Company's compliance with any of its covenants hereunder
(as to which the Trustee is entitled to rely exclusively on
Officers' Certificates).
ARTICLE EIGHT
Consolidation, Merger, Conveyance, Transfer or Lease
Section 801. Company May Consolidate, Etc., Only
on Certain Terms.
The Company shall not consolidate with or merge
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 sup-
plemental hereto, executed and delivered to the
Trustee, in form satisfactory to the Trustee, the due
and punctual payment of the principal of and any
premium and interest on all the Securities and the
performance or observance of every covenant of this
Indenture on the part of the Company to be performed or
observed;
(2) immediately after giving effect to such
transaction, 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 802. 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 801, 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.
Section 803. Officers' Certificate and
Opinion of Counsel.
The Trustee, subject to the provisions of Sections
601 and 603, 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 901. 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 all or any series of
Securities (and if such covenants are to be for the
benefit of less than all series of Securities, stating
that such covenants are expressly being included solely
for the benefit of such series) or to surrender any
right or power herein conferred upon the Company; or
(3) to add any additional Events of Default with
respect to all or any series of Securities; or
(4) to add to or change any of the provisions of
this Indenture to such extent as shall be necessary to
permit or facilitate the issuance of Securities in
bearer form, registrable or not registrable as to
principal, and with or without interest coupons, or to
permit or facilitate the issuance of Securities in
uncertificated form or in the form of Book-Entry
Securities; or
(5) to add to, change or eliminate any of the
provisions of this Indenture in respect of one or more
series of Securities, provided that any such addition,
change or elimination (i) shall neither (A) apply to
any Security of any series 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 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 Securities
of any series as permitted by Sections 201 and 301; or
(8) to evidence and provide for the acceptance of
appointment hereunder by a successor Trustee with
respect to the Securities of one or more series and to
add to or change any of the provisions of this Inden-
ture as shall be necessary to provide for or facilitate
the administration of the trusts hereunder by more than
one Trustee, pursuant to the requirements of Section
611(b); or
(9) 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, if any, on
securities in bearer form or coupons, if any; 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 any series in any material respect.
Section 902. Supplemental Indentures with Consent
of Holders.
With the consent of the Holders of not less than a
majority in principal amount of the Outstanding Securities
of 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 or of modifying in any
manner the rights of the Holders of Securities of such
series under this Indenture; provided, however, that no such
supplemental indenture shall, without the consent of the
Holder of each Outstanding Security affected thereby,
(1) change the Stated Maturity of the principal
of, or any installment of principal of or interest on,
any Security, or reduce the principal amount thereof or
the rate of interest thereon or any premium payable
upon the redemption thereof, or reduce the amount of
the principal of an Original Issue Discount Security
that would be due and payable upon a declaration of
acceleration of the Maturity thereof pursuant to
Section 502, or change any Place of Payment where, or
the coin or currency in which, any Security or any
premium or interest thereon is payable, or impair the
right to institute suit for the enforcement of any such
payment on or after the Stated Maturity thereof (or, in
the case of redemption, on or after the Redemption
Date), or
(2) reduce the percentage in principal amount of
the Outstanding Securities of any series, the consent
of whose Holders is required for any such supplemental
indenture, or the consent of whose Holders is required
for any waiver (of compliance with certain provisions
of this Indenture or certain defaults hereunder and
their consequences) provided for in this Indenture, or
(3) modify any of the provisions of this Section,
Section 513 or Section 1008, except to increase any
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 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 1008,
or the deletion of this proviso, in accordance with the
requirements of Sections 611(b) and 901(8).
A supplemental indenture which changes or eliminates any
covenant or other provision of this Indenture which has
expressly been included solely for the benefit of one or
more particular series of Securities, or which modifies the
rights of the Holders of Securities of such series with
respect to such covenant or other provision, shall be deemed
not to affect the rights under this Indenture of the Holders
of Securities of any other series.
It shall not be necessary for any Act of Holders
under this Section to approve the particular form of any
proposed supplemental indenture, but it shall be sufficient
if such Act shall approve the substance thereof.
Section 903. Execution of Supplemental Indentures.
In executing, or accepting the additional trusts
created by, any supplemental indenture permitted by this
Article or the modifications thereby of the trusts created
by this Indenture, the Trustee shall be entitled to receive,
and (subject to Section 601) shall be fully protected in
relying upon, an Opinion of Counsel stating that the execu-
tion of such supplemental indenture is authorized or permit-
ted by this Indenture. The Trustee may, but shall not be
obligated to, enter into any such supplemental indenture
which affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise.
Section 904. Effect of Supplemental Indentures.
Upon the execution of any supplemental indenture
under this Article, this Indenture shall be modified in
accordance therewith and such supplemental indenture shall
form a part of this Indenture for all purposes; and every
Holder of Securities theretofore or thereafter authenticated
and delivered hereunder shall be bound thereby.
Section 905. Conformity with Trust Indenture Act.
Every supplemental indenture executed pursuant to
this Article shall conform to the requirements of the Trust
Indenture Act.
Section 906. Reference in Securities to
Supplemental Indentures.
Securities of any series authenticated and
delivered after the execution of any supplemental indenture
pursuant to this Article may, and shall if required by the
Trustee, bear a notation in form approved by the Trustee as
to any matter provided for in such supplemental indenture.
If the Company shall so determine, new Securities of any
series so modified as to conform, in the opinion of the
Trustee and the Company, to any such supplemental indenture
may be prepared and executed by the Company and authen-
ticated and delivered by the Trustee in exchange for
Outstanding Securities of such series.
ARTICLE TEN
Covenants
Section 1001. Payment of Principal, Premium and Interest.
The Company covenants and agrees for the benefit
of each series of Securities that it will duly and punc-
tually pay the principal of and any premium and interest on
the Securities of that series in accordance with the terms
of such Securities and this Indenture.
Section 1002. Maintenance of Office or Agency.
The Company will maintain in each Place of Payment
for any series of Securities an office or agency where Secu-
rities of that series may be presented or surrendered for
payment, where Securities of that series may be surrendered
for registration of transfer or exchange and where notices
and demands to or upon the Company in respect of the Securi-
ties of that 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 main-
tain 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 where the Securities
of one or more series may be presented or surrendered for
any or all such purposes and may from time to time rescind
such designations; provided, however, that no such designa-
tion or rescission shall in any manner relieve the Company
of its obligation to maintain an office or agency in each
Place of Payment for Securities of any series for such pur-
poses. 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 1003. Money for Securities Payments to
Be Held in Trust.
If the Company shall at any time act as its own
Paying Agent with respect to any series of Securities, it
will, on or before each due date of the principal of or any
premium 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 and
any premium and interest so becoming due until such sums
shall be paid to such Persons or otherwise disposed of as
herein provided and will promptly notify the Trustee of its
action or failure so to act.
Whenever the Company shall have one or more Paying
Agents for any series of Securities, it will, prior to each
due date of the principal of or any premium or interest on
any Securities of that series, deposit with a Paying Agent a
sum sufficient to pay such amount, such sum to be held as
provided by the Trust Indenture Act, and (unless such Paying
Agent is the Trustee) the Company will promptly notify the
Trustee of its action or failure so to act.
The Company will cause each Paying Agent for any
series of Securities other than the Trustee to execute and
deliver to the Trustee an instrument in which such Paying
Agent shall agree with the Trustee, subject to the provi-
sions of this Section, that such Paying Agent will (i) com-
ply with the provisions of the Trust Indenture Act
applicable to it as a Paying Agent and (ii) during the
continuance of any default by the Company (or any other
obligor upon the Securities of that series) in the making of
any payment in respect of the Securities of that series, and
upon the written request of the Trustee, forthwith pay to
the Trustee all sums held in trust by such Paying Agent for
payment in respect of the Securities of that series.
The Company may at any time, for the purpose of
obtaining the satisfaction and discharge of this Indenture
or for any other purpose, pay, or by Company Order direct
any Paying Agent to pay, to the Trustee all sums held in
trust by the Company or such Paying Agent, such sums to be
held by the Trustee upon the same trusts as those upon which
such sums were held by the Company or such Paying Agent;
and, upon such payment by any Paying Agent to the Trustee,
such Paying Agent shall be released from all further
liability with respect to such money.
Any money deposited with the Trustee or any Paying
Agent, or then held by the Company, in trust for the payment
of the principal of or any premium or interest on any
Security of any series and remaining unclaimed for two years
after such principal, premium or interest has become due and
payable shall be paid to the Company on Company Request, or
(if then held by the Company) shall be discharged from such
trust; and the Holder of such Security shall thereafter, as
an unsecured general creditor, look only to the Company for
payment thereof, and all liability of the Trustee or such
Paying Agent with respect to such trust money, and all
liability of the Company as trustee thereof, shall thereupon
cease; provided, however, that the Trustee or such Paying
Agent, before being required to make any such repayment, may
at the expense of the Company cause to be published once, in
a newspaper published in the English language, customarily
published on each Business Day and of general circulation in
The City of 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 1004. Statement by Officers as to Default.
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 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 1005. 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 1006. 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 1007. 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.
Section 1008. Waiver of Certain Covenants.
The Company may omit in any particular instance to
comply with any term, provision or condition set forth in
Sections 1005 to 1007, inclusive, with respect to the
Securities of any series if before or after the time for
such compliance the Holders of at least a majority in
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 term, provision or condition, but no such waiver
shall extend to or affect such term, provision 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
term, provision or condition shall remain in full force and
effect.
Section 1009. Calculation of Original Issue Discount.
If the Trustee is requested or required to send
Form 1099 (or any successor form) to Holders of Original
Issue Discount Securities, the Company shall file with the
Trustee promptly at the end of each calendar year (i) a
written notice specifying the amount of original issue
discount (including daily rates and accrual periods) accrued
on Outstanding Securities as of the end of such year and
(ii) such other specific information relating to such
original issue discount as may then be relevant under the
Internal Revenue Code of 1986, as amended from time to time.
ARTICLE ELEVEN
Redemption of Securities
Section 1101. Applicability of Article.
Securities of any series which are redeemable in
whole or in part before their Stated Maturity shall be
redeemable in accordance with their terms and (except as
otherwise specified as contemplated by Section 301 for
Securities of any series) in accordance with this Article.
Section 1102. Election to Redeem: Notice to Trustee.
The election of the Company to redeem any Securi-
ties shall be evidenced by or pursuant to a Board
Resolution. In case of any redemption at the election of
the Company of the Securities of any series, the Company
shall, at least 60 days prior to the Redemption Date fixed
by the Company (unless a shorter notice shall be
satisfactory to the Trustee), notify the Trustee of such
Redemption Date, of the principal amount of Securities of
such series to be redeemed and, if applicable, of the tenor
of the Securities to be redeemed. In the case of any
redemption of Securities prior to the expiration of any
restriction on such redemption provided in the terms of such
Securities or elsewhere in this Indenture, the Company shall
furnish the Trustee with an Officers' Certificate evidencing
compliance with such restriction.
Section 1103. Selection by Trustee of Securities
to Be Redeemed.
If less than all the Securities of any series are
to be redeemed (unless all of the Securities of such series
and of a specified tenor are to be redeemed), the particular
Securities to be redeemed shall be selected not more than 60
days prior to the Redemption Date by the Trustee, from the
Outstanding Securities of such series not previously called
for redemption, by such method as the Trustee shall deem
fair and appropriate and which may provide for the selection
for redemption a portion of the principal amount of any
Security of such series, provided that the unredeemed
portion of the principal amount of any Security shall be in
an authorized denomination (which shall not be less than the
minimum authorized denomination) for such Security. If less
than all of the Securities of such series and of a specified
tenor are to be redeemed, the particular Securities to be
redeemed shall be selected not more than 60 days prior to
the Redemption Date by the Trustee, from the Outstanding
Securities of such series and specified tenor not previously
called for redemption in accordance with the preceding
sentence.
The Trustee shall promptly notify the Company in
writing of the Securities selected for redemption and, in
the case of any Securities selected for partial redemption,
the principal amount thereof to be redeemed.
The provisions of the two preceding paragraphs
shall not apply with respect to any redemption affecting
only a single Security, whether such Security is to be
redeemed in whole or in part. In the case of any such
redemption in part, the unredeemed portion of the principal
amount of the Security shall be in an authorized
denomination (which shall not be less than the minimum
authorized denomination) for such Security.
For all purposes of this Indenture, unless the
context otherwise requires, all provisions relating to the
redemption of Securities shall relate, in the case of any
Securities redeemed or to be redeemed only in part, to the
portion of the principal amount of such Securities which has
been or is to be redeemed.
Section 1104. Notice of Redemption.
Notice of redemption shall be given by first-class
mail, postage prepaid, mailed not less than 30 nor more than
60 days prior to the Redemption Date, to each Holder of
Securities to be redeemed, at his address appearing in the
Security Register.
All notices of redemption shall identify the
Securities to be redeemed (including CUSIP numbers) and
shall state:
(1) the Redemption Date,
(2) the Redemption Price,
(3) if less than all the Outstanding Securities
of any series are to be redeemed, the identification
(and, in the case of partial redemption of any
Securities, the principal amounts) of the particular
Securities to be redeemed,
(4) that on the Redemption Date the Redemption
Price will become due and payable upon each such
Security, or portion thereof, to be redeemed and, if
applicable, that interest thereon will cease to accrue
on and after said date,
(5) the place or places where such Securities are
to be surrendered for payment of the Redemption Price,
and
(6) that the redemption is for a sinking fund, if
such is the case.
Notice of redemption of Securities to be redeemed
at the election of the Company shall be given by the Company
or, at the Company's request, by the Trustee in the name and
at the expense of the Company and shall be irrevocable.
Section 1105. Deposit of Redemption Price.
Prior to 12:00 noon New York City time on any
Redemption Date, the Company shall deposit with the Trustee
or with a Paying Agent (or, if the Company is acting as its
own Paying Agent, segregate and hold in trust as provided in
Section 1003) an amount of money in the currency or
currencies in which the Securities of such series are
payable (except as otherwise specified pursuant to Section
301 for the Securities of such series) sufficient to pay the
Redemption Price of, and (except if the Redemption Date
shall be an Interest Payment Date) accrued interest on, all
the Securities or portions thereof which are to be redeemed
on that date.
Section 1106. Securities Payable on Redemption Date.
Notice of redemption having been given as afore-
said, the Securities so to be redeemed shall, on the Redemp-
tion Date, become due and payable at the Redemption Price
therein specified, and from and after such date (unless the
Company shall default in the payment of the Redemption Price
and accrued interest) such Securities shall cease to bear
interest. Upon surrender of any such Security for
redemption in accordance with said notice, such Security
shall be paid by the Company at the Redemption Price,
together with accrued interest to the Redemption Date;
provided, however, that, unless otherwise specified as
contemplated by Section 301, installments of interest whose
Stated Maturity is on or prior to the Redemption Date shall
be payable to the Holders of such Securities, or one or more
Predecessor Securities, registered as such at the close of
business on the relevant Record Dates according to their
terms and the provisions of Section 307.
If any Security called for redemption shall not be
so paid upon surrender thereof for redemption, the principal
and any premium shall, until paid, bear interest from the
Redemption Date at the rate prescribed therefor in the
Security.
Section 1107. Securities Redeemed in Part.
Any Security which is to be redeemed only in part
shall be surrendered at a Place of Payment therefor (with,
if the Company or the Trustee so requires, due endorsement
by, or a written instrument of transfer in form satisfactory
to the Company and the Trustee duly executed by, the Holder
thereof or his attorney duly authorized in writing), and the
Company shall execute, and the Trustee shall authenticate
and deliver or make available for delivery to the Holder of
such Security without service charge, a new Security or
Securities of the same series and of like tenor, 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.
ARTICLE TWELVE
Sinking Funds
Section 1201. Applicability of Article.
The provisions of this Article shall be applicable
to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by
Section 301 for Securities of such series.
The minimum amount of any sinking fund payment
provided for by the terms of Securities of any series is
herein referred to as a "mandatory sinking fund payment",
and any payment in excess of such minimum amount provided
for by the terms of Securities of any series is herein
referred to as an "optional sinking fund payment". If
provided for by the terms of Securities of any series, the
cash amount of any sinking fund payment may be subject to
reduction as provided in Section 1202. Each sinking fund
payment shall be applied to the redemption of Securities of
any series as provided for by the terms of Securities of
such series.
Section 1202. Satisfaction of Sinking Fund Payments
with Securities.
The Company (1) may deliver Outstanding Securities
of a series (other than any previously called for redemp-
tion) and (2) may apply as a credit Securities of a series
which have been redeemed either at the election of the
Company pursuant to the terms of such Securities or through
the application of permitted optional sinking fund payments
pursuant to the terms of such Securities, in each case in
satisfaction of all or any part of any sinking fund payment
with respect to the Securities of such series required to be
made pursuant to the terms of such Securities as provided
for by the terms of such series; provided that such
Securities have not been previously so credited. Such
Securities shall be received and credited for such purpose
by the Trustee at the Redemption Price specified in such
Securities for redemption through operation of the sinking
fund and the amount of such sinking fund payment shall be
reduced accordingly.
Section 1203. Redemption of Securities for Sinking Fund.
Not less than 45 days prior to each sinking fund
payment date for any series of Securities, the Company will
deliver to the Trustee an Officers' Certificate specifying
the amount of the next ensuing sinking fund payment for that
series pursuant to the terms of that series, the portion
thereof, if any, which is to be satisfied by payment of cash
and the portion thereof, if any, which is to be satisfied by
delivering and crediting Securities of that series pursuant
to Section 1202 and will also deliver to the Trustee any
Securities to be so delivered. Not less than 30 days before
each such sinking fund payment date the Trustee shall select
the Securities to be redeemed upon such sinking fund payment
date in the manner specified in Section 1103 and cause
notice of the redemption thereof to be given in the name of
and at the expense of the Company in the manner provided in
Section 1104. Such notice having been duly given, the
redemption of such Securities shall be made upon the terms
and in the manner stated in Sections 1106 and 1107.
ARTICLE THIRTEEN
Defeasance and Covenant Defeasance
Section 1301. Applicability of Article; Company's Option to
Effect Defeasance or Covenant Defeasance.
If pursuant to Section 301 provision is made for
either or both of (a) defeasance of the Securities of a
series under Section 1302 or (b) covenant defeasance of the
Securities of a series under Section 1303, then the
provisions of such Section or Sections, as the case may be,
together with the other provisions of this Article Thirteen,
with such modifications thereto as may be specified pursuant
to Section 301 with respect to any Securities, shall be
applicable to the Securities of such series, and the Company
may at its option by Board Resolution, at any time, with
respect to the Securities of such series, elect to have
either Section 1302 (if applicable) or Section 1303 (if
applicable) applied to the Outstanding Securities of such
series upon compliance with the conditions set forth below
in this Article Thirteen.
Section 1302. Defeasance and Discharge.
Upon the Company's exercise of its option to have
this Section applied to any series of Securities the Company
shall be deemed to have been discharged from its obligations
with respect to the Outstanding Securities of such 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 such series
which shall thereafter be deemed to be "Outstanding" only
for the purposes of the Sections of this Indenture referred
to in clauses (A) and (B) of this Section, and to have
satisfied all its other obligations under such Securities
and this Indenture insofar as such Securities are 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: (A) the rights of
Holders of Outstanding Securities of such series to receive,
solely from the trust fund described in Section 1304 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, (B) the Company's obligations
with respect to such Securities under Sections 305, 306,
1002 and 1003 and such obligations as shall be ancillary
thereto, (C) the rights, powers, trusts, duties, immunities
and other provisions in respect of the Trustee hereunder and
(D) this Article Thirteen. Subject to compliance with this
Article Thirteen, the Company may exercise its option under
this Section 1302 notwithstanding the prior exercise of its
option under Section 1303 with respect to the Securities of
such series. Following a defeasance, payment of such
Securities may not be accelerated because of an Event of
Default.
Section 1303. Covenant Defeasance.
Upon the Company's exercise of its option (if any)
to have this Section applied to any series of Securities,
the Company shall be released from its obligations under
Section 801 (and any covenant made applicable to such
Securities pursuant to Section 301) and the occurrence of an
event specified in Section 501(4) (with respect to Section
801) (and any other Event of Default applicable to such
Securities that are determined pursuant to Section 301 to be
subject to this provision) 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 such Securities 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 801
(and any other covenant made applicable to such Security
pursuant to Section 301), 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 such 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 such Securities shall be
unaffected thereby.
Section 1304. Conditions to Defeasance or CovenantDefeasance.
The following shall be the conditions precedent to
application of either Section 1302 or Section 1303 to the
Outstanding Securities of or within such series:
(1) The Company shall irrevocably have deposited
or caused to be deposited with the Trustee (or another
trustee satisfying the requirements of Section 609 who
shall agree to comply with the provisions of this
Article Thirteen 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 such
Securities, (A) money in an amount (in such currency,
currencies or currency units in which such Securities
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 such series on the Maturity
of such principal, premium, if any, or interest and
(ii) any mandatory sinking fund payments applicable to
such Securities on the day on which such payments are
due and payable in accordance with the terms of this
Indenture and such Securities. Before such a deposit
the Company may make arrangements satisfactory to the
Trustee for the redemption of Securities at a future
date or dates in accordance with Article Eleven, which
shall be given effect in applying the foregoing. For
this purpose, "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 of 1933, as amended) 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.
(2) No Event of Default or event which with
notice or lapse of time or both would become an Event
of Default with respect to the Securities of such
series shall have occurred and be continuing (A) on the
date of such deposit or (B) insofar as subsections
501(6) and (7) 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).
(3) Such defeasance or covenant defeasance shall
not (A) cause the Trustee for the Securities of such
series to have a conflicting interest as defined in
Section 608 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
1302, 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 such 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
1303, the Company shall have delivered to the Trustee
an Opinion of Counsel to the effect that the Holders of
the Outstanding Securities of such series will not
recognize income, gain or loss for Federal income tax
purposes as a result of such covenant defeasance and
will be subject to Federal income tax on the same
amounts, in the same manner and at the same times as
would have been the case if such covenant defeasance
had not occurred.
(7) Such defeasance or covenant defeasance shall
be effected in compliance with any additional terms,
conditions or limitations which may be imposed on the
Company in connection therewith pursuant to Section
301.
(8) 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 1302 or the covenant defeasance under Section
1303 (as the case may be) have been complied with.
Section 1305. 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 1003, 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 1305, the "Trustee") pursuant to Section 1304
in respect of the Outstanding Securities of such series
shall be held in trust and applied by the Trustee, in
accordance with the provisions of such Securities and this
Indenture, to the payment, either directly or through any
Paying Agent (but not including the Company acting as its
own Paying Agent) as the Trustee may determine, to the
Holders of such Securities, 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 1304 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 1304 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 1306. Reinstatement.
If the Trustee or the Paying Agent is unable to
apply any money in accordance with Section 1305 by reason of
any order or judgment or any court or governmental authority
enjoining, restraining or otherwise prohibiting such
application, then the Company's obligations under the
Securities of such series shall be revived and reinstated as
though no deposit had occurred pursuant to this Article
Thirteen until such time as the Trustee or Paying Agent is
permitted to apply all such money in accordance with Section
1305; provided, however, that if the Company makes any
payment of principal of (and premium, if any) or interest on
any such Security 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.
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.
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/ Warren R. Hashagen, Jr.
Name: Warren R. Hashagen, Jr.
Title: Senior Vice President and
Chief Financial Officer
HARRIS TRUST COMPANY OF CALIFORNIA
By: /s/ Esther Cervantes
Name: Esther Cervantes
Title: Assistant Vice President
STATE OF CALIFORNIA )
) ss.:
COUNTY OF SAN FRANCISCO )
On September 15, 1997, before me, K.O. Baldree,
Notary Public, personally appeared Warren R. Hashagen, Jr.,
personally known to me to be the person whose name is
subscribed to the within instrument and acknowledged to me
that he executed the same in his authorized capacity and
that by his signature on the instrument the person, or the
entity upon behalf of which the person acted, executed the
instrument.
WITNESS my hand and official seal.
/s/ K.O. Baldree
Notary Public
STATE OF CALIFORNIA )
) ss.:
COUNTY OF SAN FRANCISCO )
On the 16th day of September, 1997, before me
personally came Esther Cervantes, to me known, who, being by
me duly sworn, did depose and say that she is Assistant Vice
President of Harris Trust Company of California, one of the
[companies] described in and which executed the foregoing
instrument; that it was so affixed by authority of the Board
of Directors of said corporation, and that she signed her
name thereto by like authority of the Board of Directors of
said corporation.
/s/ Ingrid Rucker-Biervliet
Notary Public
Amendment No. 5 to GapShare
Section 3.1 is amended to read as follows:
"Eligible Employee" means any Employee of an Employer, except (i) any
Employee who is a nonresident alien and who receives no earned income
(within the meaning of section 911(d)(2) of the Code) from an Employer
constituting income from sources within the United States (within the
meaning of section 861(a)(3) of the Code); (ii) any Employee who is
employed in a foreign country; provided that this exclusion shall not
apply to an Employee who is temporarily transferred to employment with
an Employer in a foreign country and who is a citizen or resident alien
of the United States at the time of such transfer; (iii) any Employee
whose compensation and conditions of employment are established by the
terms of a collective bargaining agreement to which the Employer is a
party and which does not specifically provide for coverage of such
Employee under the Plan; (iv) any individual who is paid through the
accounts payable system for services rendered, rather than an Employer's
regular payroll system; (v) any individual who has a written agreement
with an Employer that he or she will not be covered by the Employer's
benefit plans."
<TABLE>
THE GAP, INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
Thirteen Weeks Ended Thirty-Nine Weeks Ended
November 1, 1997 November 2, 1996 November 1, 1997 November 2, 1996
<S> <C> <C> <C> <C>
Net earnings ($000) $ 164,523 $134,310 $ 318,285 $281,673
Weighted average shares of
common stock outstanding
during the period 266,784,436 281,746,335 269,982,251 285,302,456
Add incremental shares
from assumed exercise of stock
options (primary) 7,258,911 3,791,197 5,636,174 3,729,777
274,043,347 285,537,532 275,618,425 289,032,233
Primary earnings per share $ 0.60 $ 0.47 $ 1.15 $ 0.97
Weighted average shares of
common stock outstanding
during the period 266,784,436 281,746,335 269,982,251 285,302,456
Add incremental shares from
assumed exercise of stock
options (fully-diluted) 7,890,377 3,790,834 7,740,007 3,732,400
274,674,813 285,537,169 277,722,258 289,034,856
Fully-diluted earnings
per share $ 0.60 $ 0.47 $ 1.15 $ 0.97
NOTE:
(1) The information provided above is presented in accordance with Regulation
S-K, Item 601(b)(11), while net earnings per share on the Consolidated
Statements of Earnings is presented in accordance with APB Opinion 15.
The information in this exhibit is not required under APB Opinion 15,
as the difference between primary and fully-diluted earnings per share
and earnings per share calculated on a weighted average share bases is
less than 3%.
</TABLE>
Deloitte &
Touche LLP
50 Fremont Street Telephone:(415) 247-4000
San Francisco, California 94105-2230 Facsimile:(415) 247-4329
To the Board of Directors and Stockholders of
The Gap, Inc.:
We have made reviews, in accordance with standards established by the
American Institute of Certified Public Accountants, of the unaudited interim
condensed consolidated financial statements of The Gap, Inc. and
subsidiaries for the thirteen and thirty-nine week periods ended November 1,
1997 and November 2, 1996, as indicated in our report dated December 4,
1997; because we did not perform an audit, we expressed no opinion on that
information.
We are aware that our report referred to above, which is included in your
Quarterly Report on Form 10-Q for the quarter ended November 1, 1997, is
incorporated by reference in Post Effective Amendment No. 1 to Registration
Statement No. 2-72586, Registration Statement No. 2-60029, Registration
Statement No. 33-39089, Registration Statement No. 33-40505, Registration
Statement No. 33-54686, Registration Statement No. 33-54688, Registration
Statement No. 33-54690, Registration Statement No. 33-56021, Registration
Statement No. 333-00417, Registration Statement No. 333-12337, and
Registration Statement No. 333-36265.
We also are aware that the aforementioned report, pursuant to Rule 436(c)
under the Securities Act of 1933, is not considered a part of the
Registration Statement prepared or certified by an accountant or a report
prepared or certified by an accountant within the meaning of Sections 7 and
11 of that Act.
/s/ Deloitte & Touche LLP
December 10, 1997
