Exhibit 4.2
The Gap, Inc.
$1,200,000,000/1/
5.75% Senior Convertible Notes due 2009
REGISTRATION AGREEMENT
New York, New York
March 5, 2002
Banc of America Securities LLC
X.X. Xxxxxx Securities Inc.
Xxxxxxx Xxxxx Xxxxxx Inc.
As Representatives of the Initial Purchasers Named in
Schedule I to the Purchase Agreement (as defined below)
c/o Xxxxxxx Xxxxx Xxxxxx Inc.
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Ladies and Gentlemen:
The Gap, Inc., a Delaware corporation (the "Company"), proposes to issue
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and sell (such issuance and sale, the "Initial Placement") to the several
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parties named in Schedule I to the Purchase Agreement (the "Initial Purchasers")
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for whom you (the "Representatives") are acting as representatives, upon the
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terms set forth in a purchase agreement, dated February 27, 2002 (the "Purchase
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Agreement"), $1,200,000,000 aggregate principal amount (plus an option to
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purchase up to an additional $180,000,000 aggregate principal amount) of its
5.75% Senior Convertible Notes due 2009 (the "Securities"). The Securities will
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be convertible into shares of Common Stock (as defined herein), at the
conversion price set forth in the Offering Memorandum (as defined herein), as
the same may be adjusted from time to time pursuant to the Indenture (as defined
herein). As an inducement to you to enter into the Purchase Agreement and in
satisfaction of a condition to your obligations thereunder, the Company agrees
with you, (i) for your benefit and (ii) for the benefit of the holders from time
to time of the Securities and the Common Stock issuable upon conversion of the
Securities, as follows:
1. Definitions. Capitalized terms used herein without definition
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shall have the respective meanings set forth in the Purchase Agreement. As used
in this Agreement, the following capitalized terms shall have the following
meanings:
"Act" means the Securities Act of 1933, as amended, and the rules and
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regulations of the SEC promulgated thereunder.
"Affiliate" of any specified person means any other person, directly or
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indirectly, controlling or controlled by or under direct or indirect common
control with such specified person. For the purposes of this definition,
"control" (including, with correlative meanings, the terms "controlling",
"controlled by" and "under common control with"), as used with respect to
______________________
/1/ Plus up to $180,000,000 additional principal amount of such notes subject to
an option.
any person, shall mean the possession, directly or indirectly, of the power to
direct or cause the direction of the management or policies of such person
whether through the ownership of voting securities or by agreement or otherwise.
"Broker-Dealer" means any broker or dealer registered as such under the
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Exchange Act.
"Business Day" has the meaning set forth in the Indenture.
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"Closing Date" means March 5, 2002.
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"Common Stock" means the common stock, par value $0.05 per share, of
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the Company, as it exists on the date of this Agreement and any other shares of
capital stock or other securities of the Company into which such Common Stock
may be reclassified or changed, together with any and all other securities which
may from time to time be issuable upon conversion of Securities.
"Damages Payment Date" means, with respect to the Securities or the
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Common Stock issuable upon conversion thereof, as applicable, each Interest
Payment Date; and in the event that any Security, or portion thereof, is called
for redemption or surrendered for purchase by the Company pursuant to a
Designated Event Offer (as defined in the Indenture) and not withdrawn, the
relevant redemption date or Designated Event Payment Date (as defined in the
Indenture), as the case may be, shall also be a Damages Payment Date with
respect to such Security, or portion thereof, unless the Indenture provides that
accrued and unpaid interest on the Security (or portion thereof) to be redeemed
or repurchased, as the case may be, is to be paid to the person who was the
Record Holder thereof on a record date prior to such redemption date or
Designated Event Payment Date, as the case may be, in which case the relevant
Damages Payment Date shall be the date on which interest is payable to such
Record Holder.
"Default Rate" means the rate of interest payable with respect to
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overdue amounts on the Securities pursuant to Section 4.01 of the Indenture.
"DTC" has the meaning set forth in the Indenture.
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"Exchange Act" means the Securities Exchange Act of 1934, as amended,
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and the rules and regulations of the SEC promulgated thereunder.
"Final Maturity Date" means March 15, 2009.
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"Holder" means a person who is a holder or beneficial owner (including
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the Initial Purchasers) of any Securities or shares of Common Stock issued upon
conversion of Securities; provided that, unless otherwise expressly stated
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herein, only registered holders of Securities or Common Stock issued on
conversion thereof shall be counted for purposes of calculating any proportion
of holders entitled to take any action or give notice pursuant to this
Agreement.
"Indenture" means the Indenture relating to the Securities, dated as of
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March 5, 2002, between the Company and The Bank of New York, as trustee, as the
same may be amended from time to time in accordance with the terms thereof.
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"Initial Placement" has the meaning set forth in the preamble hereto.
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"Initial Purchasers" has the meaning set forth in the preamble hereto.
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"Interest Payment Date" shall mean March 15 and September 15.
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"Liquidated Damages" has the meaning set forth in Section 2(e) hereof.
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"Losses" has the meaning set forth in Section 5(d) hereof.
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"Majority Holders" means the Holders of a majority of the then
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outstanding aggregate principal amount of Securities registered under a Shelf
Registration Statement; provided that Holders of Common Stock issued upon
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conversion of Securities shall be deemed to be Holders of the aggregate
principal amount of Securities from which such Common Stock was converted; and
provided, further, that Securities or Common Stock which have been sold or
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otherwise transferred pursuant to the Shelf Registration Statement shall not be
included in the calculation of Majority Holders.
"Majority Underwriting Holders" means, with respect to any Underwritten
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Offering, the Holders of a majority of the then outstanding aggregate principal
amount of Securities registered under any Shelf Registration Statement whose
Securities are or are to be included in such Underwritten Offering; provided
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that Holders of Common Stock issued upon conversion of Securities shall be
deemed to be Holders of the aggregate principal amount of Securities from which
such Common Stock was converted and provided, further, that Securities or Common
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Stock which have been sold or otherwise transferred pursuant to the Shelf
Registration Statement shall not be included in the calculation of Majority
Underwriting Holders.
"Managing Underwriters" means the Underwriter or Underwriters that
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shall administer an Underwritten Offering.
"NASD" has the meaning set forth in Section 3(i) hereof.
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"NASD Rules" means the rules and regulation promulgated by the NASD.
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"Notice and Questionnaire" means a Selling Securityholder Notice and
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Questionnaire substantially in the form of Exhibit A hereto.
"Notice Holder" shall mean on any date, any Holder of Transfer
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Restricted Securities that has delivered a completed and signed Notice and
Questionnaire to the Company on or prior to such date.
"Offering Memorandum" means the Final Memorandum as defined in the
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Purchase Agreement.
"Person" has the meaning set forth in the Indenture.
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"Prospectus" means the prospectus included in any Shelf Registration
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Statement (including, without limitation, a prospectus that discloses
information previously omitted from a
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prospectus filed as part of an effective registration statement in reliance upon
Rule 430A under the Act), as amended or supplemented by any prospectus
supplement, with respect to the terms of the offering of any portion of the
Securities or Common Stock issuable upon conversion thereof covered by such
Shelf Registration Statement, and all amendments and supplements to such
prospectus, including all documents incorporated or deemed to be incorporated by
reference in such prospectus.
"Purchase Agreement" has the meaning set forth in the preamble hereto.
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"Record Holder" means (i) with respect to any Damages Payment Date
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which occurs on an Interest Payment Date, each person who is registered on the
books of the registrar as the holder of Securities at the close of business on
the record date with respect to such Interest Payment Date and (ii) with respect
to any Damages Payment Date relating to the Common Stock issued upon conversion
thereof, each person who is a holder of record of such Common Stock fifteen days
prior to the Damages Payment Date.
"Registration Default" has the meaning set forth in Section 2(e)
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hereof.
"Representatives" has the meaning set forth in the preamble hereto.
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"Rule 144" means Rule 144 (or any successor provision) under the Act.
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"SEC" means the Securities and Exchange Commission.
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"Securities" has the meaning set forth in the preamble hereto.
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"Shelf Registration" means a registration effected pursuant to Section
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2 hereof.
"Shelf Registration Period" has the meaning set forth in Section 2(c)
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hereof.
"Shelf Registration Statement" means a "shelf" registration statement
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of the Company filed pursuant to the provisions of Section 2 hereof which covers
some or all of the Securities and the Common Stock issuable upon conversion
thereof, as applicable, on Form S-3 or on another appropriate form for an
offering to be made on a delayed or continuous basis pursuant to Rule 415 under
the Act, or any similar rule that may be adopted by the SEC, and all amendments
and supplements to such registration statement, including post-effective
amendments, in each case including the Prospectus contained therein, all
exhibits thereto and all documents incorporated or deemed to be incorporated by
reference therein.
"Suspension Period" has the meaning set forth in Section 2(d) hereof.
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"Transfer Restricted Securities" means each Security and each share of
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Common Stock issuable or issued upon conversion thereof until the date on which
such Security or share of Common Stock, as the case may be, (i) has been
transferred pursuant to the Shelf Registration Statement or another registration
statement covering such Security or share of Common Stock which has been filed
with the SEC pursuant to the Act, in either case after such registration
statement has become effective and while such registration statement is
effective under the Act, (ii) has been transferred pursuant to Rule 144 under
the Act (or any similar provision then in
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force) or (iii) may be sold or transferred pursuant to Rule 144(k) under the Act
(or any successor provision then in force).
"Trustee" means the trustee with respect to the Securities under the
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Indenture.
"Underwriter" means any underwriter of the Securities or Common Stock
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issuable upon conversion thereof in connection with an offering thereof under a
Shelf Registration Statement.
"Underwritten Offering" means an offering in which the Securities or
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Common Stock issued upon conversion thereof are sold to an Underwriter or with
the assistance of an Underwriter for reoffering to the public.
All references in this Agreement to financial statements and schedules
and other information which is "contained", "included", or "stated" in the Shelf
Registration Statement, any preliminary Prospectus or Prospectus (and all other
references of like import) shall be deemed to mean and include all such
financial statements and schedules and other information which is incorporated
or deemed to be incorporated by reference in such Shelf Registration Statement,
preliminary Prospectus or Prospectus, as the case may be; and all references in
this Agreement to amendments or supplements to the Shelf Registration Statement,
any preliminary Prospectus or Prospectus shall be deemed to mean and include any
document filed with the SEC under the Exchange Act, after the date of such Shelf
Registration Statement, preliminary Prospectus or Prospectus, as the case may
be, which is incorporated or deemed to be incorporated by reference therein.
2. Shelf Registration Statement.
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(a) The Company shall prepare and file with the SEC within 90
days following the Closing Date a Shelf Registration Statement with respect to
resales of the Transfer Restricted Securities by the Holders from time to time
in accordance with the methods of distribution elected by such Holders and set
forth in such Shelf Registration Statement and thereafter shall use its
reasonable best efforts to cause such Shelf Registration Statement to be
declared effective under the Act within 180 days after the Closing Date;
provided that if any Securities are issued upon exercise of the option granted
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to the Initial Purchasers in the Purchase Agreement and the date on which such
Securities are issued occurs after the Closing Date, the Company will take such
steps, prior to the effective date of the Shelf Registration Statement, to
ensure that such Securities and Common Stock issuable upon conversion thereof
are included in the Shelf Registration Statement on the same terms as the
Securities issued on the Closing Date. The Company shall supplement or amend the
Shelf Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Company for the
Shelf Registration Statement, or by the Act, the Exchange Act or the SEC.
(b) Not less than 30 calendar days prior to the date on which
the Company intends in good faith to have the Shelf Registration Statement
declared effective, the Company shall mail the Notice and Questionnaire to the
Holders of Transfer Restricted Securities. The Company shall take action to name
each Holder that is a Notice Holder as of the date that is 20 calendar days
prior to the effectiveness of the Shelf Registration Statement so that such
Holder is named as a selling securityholder in the Shelf Registration Statement
at the time of its
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effectiveness and is permitted to deliver the Prospectus forming a part
thereof as of such time to purchasers of such Holder's Transfer Restricted
Securities in accordance with applicable law. The Company shall be under no
obligation to name any Holder that is not a Notice Holder as a selling security
holder in the Shelf Registration Statement.
(2) After the Shelf Registration Statement has become effective, the
Company shall, upon the request of any Holder of Transfer Restricted Securities,
promptly send a Notice and Questionnaire to such Holder. From and after the date
on which the Shelf Registration Statement has become effective, the Company
shall (i) as promptly as is practicable after the date a completed and signed
Notice and Questionnaire is delivered to the Company, and in any event within 10
Business Days after such date, prepare and file with the SEC (x) a supplement to
the Prospectus or, if required by applicable law, a post-effective amendment to
the Shelf Registration Statement and (y) any other document required by
applicable law, so that the Holder delivering such Notice and Questionnaire is
named as a selling securityholder in the Shelf Registration Statement and is
permitted to deliver the Prospectus to purchasers of such Holder's Transfer
Restricted Securities in accordance with applicable law, and (ii) if the Company
shall file a post-effective amendment to the Shelf Registration Statement, use
its reasonable best efforts to cause such post-effective amendment to become
effective under the Act as promptly as is practicable; provided, however, that
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if a Notice and Questionnaire is delivered to the Company during a Suspension
Period, the Company shall not be obligated to take the actions set forth in
clauses (i) and (ii) until the termination of such Suspension Period.
(c) The Company shall use its reasonable best efforts to keep the
Shelf Registration Statement continuously effective under the Act in order to
permit the Prospectus forming a part thereof to be usable, subject to Section
2(d), by all Notice Holders until the earliest of (i) the second anniversary of
the Closing Date or, if later, the second anniversary of the last date on which
any Securities are issued upon exercise of the Initial Purchasers' option, (ii)
the date on which all the Securities and Common Stock issued or issuable upon
conversion thereof may be sold by non-affiliates ("affiliates" for such purpose
having the meaning set forth in Rule 144) of the Company pursuant to paragraph
(k) of Rule 144 (or any successor provision) promulgated by the SEC under the
Act, (iii) the date as of which all the Securities and Common Stock issued or
issuable upon conversion thereof have been transferred pursuant to Rule 144
under the Securities Act (or any similar provision then in force) and (iv) such
date as of which all the Securities and the Common Stock issued or issuable upon
conversion thereof have been sold pursuant to the Shelf Registration Statement
(in any such case, such period being called the "Shelf Registration Period").
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The Company will, (x) subject to Section 2(d), prepare and file with the SEC
such amendments and post-effective amendments to the Shelf Registration
Statement as may be necessary to keep the Shelf Registration Statement
continuously effective for the Shelf Registration Period, (y) subject to Section
2(d), cause the related Prospectus to be supplemented by any required
supplement, and as so supplemented to be filed pursuant to Rule 424 (or any
similar provisions then in force) under the Act and (z) comply in all material
respects with the provisions of the Act with respect to the disposition of all
securities covered by the Shelf Registration Statement during the Shelf
Registration Period in accordance with the intended methods of disposition by
the sellers thereof set forth in such Shelf Registration Statement as so amended
or such Prospectus as so supplemented.
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(d) The Company may suspend the use of the Prospectus for a period not
to exceed either 30 days in any three-month period or two periods of 60 days in
the aggregate during any 12-month period (the "Suspension Period") for valid
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business reasons, to be determined by the Company in its sole reasonable
judgment (not including avoidance of the Company's obligations hereunder),
including, without limitation, the acquisition or divestiture of assets, public
filings with the SEC, pending corporate developments and similar events;
provided that the Company promptly thereafter complies with the requirements of
Section 3(j) hereof, if applicable; provided, further, that the existence of a
Suspension Period will not prevent the occurrence of a Registration Default or
otherwise limit the obligation of the Company to pay Liquidated Damages.
(e) If (i) the Shelf Registration Statement is not filed with the SEC
on or prior to 90 days after the Closing Date, (ii) the Shelf Registration
Statement has not been declared effective by the SEC within 180 days after the
Closing Date, or (iii) the Shelf Registration Statement is filed and declared
effective but shall thereafter cease to be effective (without being succeeded
immediately by a replacement shelf registration statement filed and declared
effective) or usable (including as a result of a Suspension Period) for the
offer and sale of Transfer Restricted Securities for a period of time (including
any Suspension Period) which shall exceed 90 days in the aggregate in any
12-month period during the period beginning on the Closing Date and ending on
the second anniversary of the Closing Date or, if later, the second anniversary
of the last date on which any Securities are issued upon exercise of the Initial
Purchasers' option (each such event referred to in clauses (i) through (iii), a
"Registration Default"), the Company will pay liquidated damages ("Liquidated
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Damages") to each Holder of Transfer Restricted Securities who has complied with
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such Holder's obligations under this Agreement. The amount of Liquidated Damages
payable during any period in which a Registration Default has occurred and is
continuing is the amount which is equal to one-quarter of one percent (25 basis
points) per annum per $1,000 principal amount of Securities and $2.50 per annum
per 62.035 shares of Common Stock (subject to adjustment in the event of a stock
split, stock recombination, stock dividend and the like) constituting Transfer
Restricted Securities for the first 90 days during which a Registration Default
has occurred and is continuing and one-half of one percent (50 basis points) per
annum per $1,000 principal amount of Securities and $5.00 per annum per 62.035
shares of Common Stock (subject to adjustment as set forth above) constituting
Transfer Restricted Securities for any additional days during which a
Registration Default has occurred and is continuing (in each case subject to
further adjustment from time to time in the event of a stock split, stock
recombination, stock dividend and the like), it being understood that all
calculations pursuant to this and the preceding sentence shall be carried out to
five decimals. Following the cure of all Registration Defaults, Liquidated
Damages will cease to accrue with respect to such Registration Default. All
accrued Liquidated Damages shall be paid by the Company on each Damages Payment
Date and Liquidated Damages will be calculated on the basis of a 360-day year
consisting of twelve 30-day months. The parties hereto agree that the Liquidated
Damages provided for in this Section 2(e) constitute a reasonable estimate of
the damages that may be incurred by Holders by reason of a Registration Default.
(f) All of the Company's obligations (including, without limitation,
the obligation to pay Liquidated Damages) set forth in the preceding paragraph
which are outstanding or exist with respect to any Transfer Restricted Security
at the time such security
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ceases to be a Transfer Restricted Security shall survive until such time as all
such obligations with respect to such security shall have been satisfied in
full.
(g) Immediately upon the occurrence or the termination of a
Registration Default, the Company shall give the transfer and paying agent for
the Common Stock, in the case of notice with respect to Common Stock issued or
issuable upon conversion thereof, notice of such commencement or termination, of
the obligation to pay Liquidated Damages with regard to the Common Stock and the
amount thereof and of the event giving rise to such commencement or termination
(such notice to be contained in an Officers' Certificate (as such term is
defined in the Indenture)), and prior to receipt of such Officers' Certificate
the transfer and paying agent shall be entitled to assume that no such
commencement or termination has occurred, as the case may be.
3. Registration Procedures. In connection with any Shelf Registration
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Statement, the following provisions shall apply:
(a) The Company shall (i) furnish to the Representatives, prior to the
filing thereof with the SEC, a copy of any Shelf Registration Statement, and
each amendment thereof, and a copy of any Prospectus, and each amendment or
supplement thereto (excluding amendments caused by the filing of a report under
the Exchange Act), and shall reflect in each such document, when so filed with
the SEC, such comments as the Representatives may promptly propose, except to
the extent the Company reasonably determines it to be inadvisable or
inappropriate to reflect such comments therein, and (ii) include information
regarding the Notice Holders and the methods of distribution they have elected
for their Transfer Restricted Securities provided to the Company in Notice and
Questionnaires as necessary to permit such distribution by the methods specified
therein.
(b) Subject to Section 2(d), the Company shall ensure that (i) any
Shelf Registration Statement and any amendment thereto and any Prospectus
forming a part thereof and any amendment or supplement thereto comply in all
material respects with the Act and the rules and regulations thereunder, (ii)
any Shelf Registration Statement and any amendment thereto does not, when it
becomes effective, contain an untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements therein not misleading and (iii) any Prospectus forming a part of any
Shelf Registration Statement, and any amendment or supplement to such
Prospectus, does not include an untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements therein, in
light of the circumstances under which they were made, not misleading; provided
that the Company makes no representation with respect to information with
respect to any Underwriter or any Holder required to be included in any Shelf
Registration Statement or Prospectus pursuant to the Act or the rules and
regulations thereunder and which information is included therein in reliance
upon and in conformity with information furnished to the Company in writing by
such Underwriter or Holder.
(c) The Company, as promptly as reasonably practicable, shall advise
the Representatives and each Notice Holder and, if requested by you or any such
Holder, confirm such advice in writing:
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(i) when a Shelf Registration Statement and any amendment
thereto has been filed with the SEC and when the Shelf Registration
Statement or any post-effective amendment thereto has become effective;
(ii) of any request by the SEC following effectiveness of the
Shelf Registration Statement for amendments or supplements to the Shelf
Registration Statement or the Prospectus or for additional information
(other than any such request relating to a review of the Company's Exchange
Act filings);
(iii) of the determination by the Company that a post-effective
amendment to the Shelf Registration Statement would be appropriate;
(iv) of the commencement or termination of (but not the nature
of or details concerning) any Suspension Period;
(v) of the issuance by the SEC of any stop order suspending the
effectiveness of the Shelf Registration Statement or the initiation or
threat of any proceedings for that purpose;
(vi) of the receipt by the Company of any notification with
respect to the suspension of the qualification of the Transfer Restricted
Securities included in any Shelf Registration Statement for sale in any
jurisdiction or the initiation or threat of any proceeding for such
purpose;
(vii) of the happening of (but not the nature of or details
concerning) any event that requires the making of any changes in the Shelf
Registration Statement or the Prospectus so that, as of such date, the
statements therein are not misleading and the Shelf Registration Statement
or the Prospectus, as the case may be, does not include an untrue statement
of a material fact or omit to state a material fact required to be stated
therein or necessary to make the statements therein (in the case of the
Prospectus, in light of the circumstances under which they were made) not
misleading; and
(viii) of the Company's suspension of the use of the Prospectus as
a result of any of the events or circumstances described in paragraphs (ii)
through (vii) above, and of the termination of any such suspension.
(d) The Company shall use its reasonable best efforts to obtain the
withdrawal of any order suspending the effectiveness of any Shelf Registration
Statement or the lifting of any suspension of the qualification (or exemption
from qualification) of any of the Transfer Restricted Securities for offer or
sale in any jurisdiction at the earliest possible time.
(e) The Company shall promptly furnish to each Notice Holder, without
charge, at least one copy of any Shelf Registration Statement and any
post-effective amendment thereto, including all exhibits (including those
incorporated by reference), financial statements and schedules.
(f) The Company shall, during the Shelf Registration Period, promptly
deliver to each Initial Purchaser, each Notice Holder and any sales or placement
agent or underwriters
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acting on their behalf, without charge, as many copies of the Prospectus
(including each preliminary Prospectus) included in any Shelf Registration
Statement (excluding documents incorporated by reference), and any amendment or
supplement thereto, as such person may reasonably request; and, except as
provided in Sections 2(d) and 3(s) hereof, the Company consents to the use of
the Prospectus or any amendment or supplement thereto by each of the selling
Holders in connection with the offering and sale of the Transfer Restricted
Securities covered by the Prospectus or any amendment or supplement thereto.
(g) Prior to any offering of Transfer Restricted Securities pursuant
to any Shelf Registration Statement, the Company shall register or qualify or
cooperate with the Notice Holders and their respective counsel in connection
with the registration or qualification (or exemption from such registration or
qualification) of such Transfer Restricted Securities for offer and sale, under
the securities or blue sky laws of such jurisdictions within the United States
as any such Notice Holders reasonably request and shall maintain such
qualification in effect so long as required and do any and all other acts or
things necessary or advisable to enable the offer and sale in such jurisdictions
of the Transfer Restricted Securities covered by such Shelf Registration
Statement; provided, however, that the Company will not be required to (A)
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qualify generally to do business as a foreign corporation or as a dealer in
securities in any jurisdiction where it is not then so qualified or to (B) take
any action which would subject it to service of process or taxation in any such
jurisdiction where it is not then so subject.
(h) The Company shall cooperate with the Holders to facilitate the
timely preparation and delivery of certificates representing Transfer Restricted
Securities sold pursuant to any Shelf Registration Statement free of any
restrictive legends and in such denominations permitted by the Indenture and
registered in such names as Holders may request at least two Business Days prior
to settlement of sales of Transfer Restricted Securities pursuant to such Shelf
Registration Statement.
(i) Subject to the exceptions contained in (A) and (B) of Section 3(g)
hereof, the Company shall use its reasonable best efforts to cause the Transfer
Restricted Securities covered by the applicable Shelf Registration Statement to
be registered with or approved by such other federal, state and local
governmental agencies or authorities, and self-regulatory organizations in the
United States as may be necessary to enable the Holders to consummate the
disposition of such Transfer Restricted Securities as contemplated by the Shelf
Registration Statement; without limitation to the foregoing, the Company shall
provide all such information as may be required by the National Association of
Securities Dealers, Inc. (the "NASD") in connection with the offering under the
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Shelf Registration Statement of the Transfer Restricted Securities (including,
without limitation, such as may be required by NASD Rule 2710 or 2720), and
shall cooperate with each Holder in connection with any filings required to be
made with the NASD by such Holder in that regard.
(j) Upon the occurrence of any event described in Section 3(c)(vii)
hereof, the Company shall promptly prepare and file with the SEC a
post-effective amendment to any Shelf Registration Statement or an amendment or
supplement to the related Prospectus or any document incorporated therein by
reference or file a document which is incorporated or deemed to be incorporated
by reference in such Shelf Registration Statement or Prospectus, as the case may
be, so that, as thereafter delivered to purchasers of the Transfer Restricted
Securities
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included therein, the Shelf Registration Statement and the Prospectus, in each
case as then amended or supplemented, will not include an untrue statement of a
material fact or omit to state any material fact required to be stated therein
or necessary in order to make the statements therein (in the case of the
Prospectus in light of the circumstances under which they were made) not
misleading and, in the case of a post-effective amendment, use its reasonable
best efforts to cause it to become effective as promptly as practicable;
provided that the Company's obligations under this paragraph (j) shall be
suspended if the Company has suspended the use of the Prospectus in accordance
with Section 2(d) hereof and given notice of such suspension to Notice Holders,
it being understood that the Company's obligations under this Section 3(j) shall
be automatically reinstated at the end of such Suspension Period.
(k) The Company shall use its reasonable best efforts to provide, on
or prior to the first Business Day following the effective date of any Shelf
Registration Statement hereunder (i) a CUSIP number for the Transfer Restricted
Securities registered under such Shelf Registration Statement and (ii) global
certificates for such Transfer Restricted Securities to the Trustee, in a form
eligible for deposit with DTC.
(l) The Company shall use its best efforts to comply with all
applicable rules and regulations of the SEC and shall make generally available
to its security holders as soon as practicable but in any event not later than
50 days after the end of a 12-month period (or 105 days, if such period is a
fiscal year) after (i) the effective date of the applicable Shelf Registration
Statement, (ii) the effective date of each post-effective amendment to any Shelf
Registration Statement, and (iii) the date of each filing by the Company with
the SEC of an Annual Report on Form 10-K that is incorporated by reference or
deemed to be incorporated by reference in the Shelf Registration Statement, an
earnings statement satisfying the provisions of Section 11(a) of the Act and
Rule 158 promulgated by the SEC thereunder.
(m) The Company shall use its reasonable best efforts to cause the
Indenture to be qualified under the TIA (as defined in the Indenture) in a
timely manner.
(n) The Company shall cause all Common Stock issued or issuable upon
conversion of the Securities to be listed on each securities exchange or
quotation system on which the Common Stock is then listed no later than the date
the applicable Shelf Registration Statement is declared effective and, in
connection therewith, to make such filings as may be required under the Exchange
Act and to have such filings declared effective as and when required thereunder.
(o) The Company may require each Holder of Transfer Restricted
Securities to be sold pursuant to any Shelf Registration Statement to furnish to
the Company such information regarding the Holder and the distribution of such
Transfer Restricted Securities sought by the Notice and Questionnaire and such
additional information as may, from time to time, be required by the Act and the
rules and regulations promulgated thereunder, and the obligations of the Company
to any Holder hereunder shall be expressly conditioned on the compliance of such
Holder with such request.
(p) The Company shall, if reasonably requested, use its reasonable
best efforts to promptly incorporate in a Prospectus supplement or
post-effective amendment to a Shelf
11
Registration Statement (i) such information as the Majority Holders provide or,
if Transfer Restricted Securities are being sold in an Underwritten Offering, as
the Managing Underwriters or the Majority Underwriting Holders reasonably agree
should be included therein and provide to the Company in writing for inclusion
in the Shelf Registration Statement or Prospectus, and (ii) such information as
a Holder may provide from time to time to the Company in writing for inclusion
in a Prospectus or any Shelf Registration Statement concerning such Holder and
the distribution of such Holder's Transfer Restricted Securities and, in either
case, shall make all required filings of such Prospectus supplement or
post-effective amendment promptly after being notified in writing of the matters
to be incorporated in such Prospectus supplement or post-effective amendment,
provided that the Company shall not be required to take any action under this
Section 3(p) that is not, in the reasonable opinion of counsel for the Company,
in compliance with applicable law.
(q) The Company shall enter into such customary agreements (including
underwriting agreements) and take all other appropriate actions as may be
requested in order to expedite or facilitate the registration or the disposition
of the Transfer Restricted Securities, and in connection therewith, if an
underwriting agreement is entered into, cause the same to contain
indemnification and contribution provisions and procedures no less favorable
than those set forth in Section 5 (except that the Company's indemnification and
contribution obligations in any such underwriting agreement shall in addition to
the Prospectus also apply to any preliminary Prospectus authorized by the
Company to be used in connection with resale of Securities or Common Stock
issued or issuable upon the conversion thereof). The plan of distribution in the
Shelf Registration Statement and the Prospectus included therein shall permit
resales of Transfer Restricted Securities to be made by selling securityholder
through underwriters, brokers and dealers, and shall also include such other
information as the Representatives may reasonably request.
(r) The Company shall if reasonably requested in writing by the
Majority Holders, the Majority Underwriting Holders or the Managing
Underwriter(s):
(i) make reasonably available for inspection during normal
business hours by any Underwriter participating in any disposition pursuant
to such Shelf Registration Statement, and any attorney, accountant or other
agent retained by any such Underwriter, all relevant financial and other
records, pertinent corporate documents and properties of the Company and
its subsidiaries as is customary for due diligence examinations in
connection with public offerings;
(ii) cause the Company's officers, directors, employees,
accountants and auditors to supply all relevant information reasonably
requested by any such Underwriter, attorney, accountant or agent in
connection with any such Shelf Registration Statement as is customary for
similar due diligence examinations; provided, however, that any information
-------- -------
that is designated in writing by the Company, in good faith, as
confidential at the time of delivery of such information shall be kept
confidential by the Holders or any such Underwriter, attorney, accountant
or agent, unless disclosure thereof is made in connection with a court,
administrative or regulatory proceeding or required by law, or such
information has become available to the public generally through the
Company or through a third party without an accompanying obligation of
confidentiality;
12
(iii) deliver a letter, addressed to the selling Holders and the
Underwriters, if any, in which the Company shall make such representations
and warranties in form, substance and scope as are customarily made by
issuers to Underwriters;
(iv) obtain opinions of counsel to the Company and updates
thereof (which counsel and opinions, in form, scope and substance, shall be
reasonably satisfactory to the Majority Holders or, in the case of an
Underwritten Offering, the Majority Underwriting Holders and the Managing
Underwriters, if any) addressed to each selling Holder and the
Underwriters, if any, covering such matters as are customarily covered in
opinions requested in public offerings;
(v) obtain "cold comfort" letters and updates thereof from the
current and former independent certified public accountants of the Company
(and, if necessary, any other independent certified public accountants of
any subsidiary of the Company or of any business acquired by the Company
for which financial statements and financial data are, or are required to
be, included in the Shelf Registration Statement), addressed to each
selling Holder (provided such Holder furnishes the accountants, prior to
the date such "cold comfort" letter is required to be delivered, with such
representations as the accountants customarily require in similar
situations) and the Underwriters, if any, in customary form and covering
matters of the type customarily covered in "cold comfort" letters in
connection with primary underwritten offerings; and
(vi) deliver such documents and certificates as may be reasonably
requested by the Majority Holders or, in the case of an Underwritten
Offering, the Majority Underwriting Holders, and the Managing Underwriters,
if any, including those to evidence compliance with Section 3(j) and with
any customary conditions contained in the underwriting agreement or other
agreement entered into by the Company.
The foregoing actions set forth in clauses (iii), (iv), (v) and (vi) of
this Section 3(r) shall be performed at (A) the effectiveness of such Shelf
Registration Statement and each post-effective amendment thereto and (B) each
closing under any underwriting or similar agreement as and to the extent
required thereunder.
(s) Each Notice Holder agrees that, upon receipt of notice of the
happening of an event described in Sections 3(c)(ii) through and including
3(c)(vii), each Holder shall forthwith discontinue (and shall cause its agents
and representatives to discontinue) disposition of Transfer Restricted
Securities and will not resume disposition of Transfer Restricted Securities
until such Holder has received copies of an amended or supplemented Prospectus
contemplated by Section 3(j) hereof, or until such Holder is advised in writing
by the Company that the use of the Prospectus may be resumed or that the
relevant Suspension Period has been terminated, as the case may be, provided
that, the foregoing shall not prevent the sale, transfer or other disposition of
Transfer Restricted Securities by a Notice Holder in a transaction which is
exempt from, or not subject to, the registration requirements of the Act, so
long as such Notice Holder does not and is not required to deliver the
applicable Prospectus or Shelf Registration Statement in connection with such
sale, transfer or other disposition, as the case may be; and provided,
13
further, that the provisions of this Section 3(s) shall not prevent the
occurrence of a Registration Default or otherwise limit the obligation of the
Company to pay Liquidated Damages.
(t) The Company shall in connection with an Underwritten Offering use
its reasonable best efforts (i) if the Securities have been rated prior to the
initial sale of such Securities, to confirm that such ratings will apply to the
Securities covered by the Shelf Registration Statement; or (ii) if the
Securities were not previously rated, to cause the Securities covered by the
Shelf Registration Statement to be rated with at least one nationally recognized
statistical rating agency, if so requested by the Majority Holders or by any
Managing Underwriters.
(u) In the event that any Broker-Dealer shall underwrite any
Securities or participate as a member of an underwriting syndicate or selling
group or "assist in the distribution" (within the meaning of the NASD Rules)
thereof, whether as a Holder of such Transfer Restricted Securities or as an
underwriter, a placement or sales agent or a broker or dealer in respect
thereof, or otherwise, the Company shall assist such Broker-Dealer in complying
with the NASD Rules, including, without limitation, by:
(i) if the NASD Rules shall so require, engaging a "qualified
independent underwriter" (as defined in the NASD Rules) to participate in
the preparation of the Shelf Registration Statement, to exercise usual
standards of due diligence with respect thereto and, if any portion of the
offering contemplated by the Shelf Registration Statement is an
Underwritten Offering or is made through a placement or sales agent, to
recommend the price of such Transfer Restricted Securities;
(ii) indemnifying any such qualified independent underwriter to
the extent of the indemnification of Underwriters provided in Section 5
hereof; and
(iii) providing such information to such Broker-Dealer as may be
required in order for such Broker-Dealer to comply with the requirements of
the NASD Rules.
(iv) Anything herein to the contrary notwithstanding, the Company
will not be required to pay the costs and expenses of, or to participate in
the marketing or "road show" presentations of, more than one Underwritten
Offering initiated at the request of the Holders of Securities or shares of
Common Stock issued or issuable upon conversion thereof, or to effect more
than one Underwritten Offering at the request of such Holders. For purposes
of this Agreement, the "Minimum Amount" means 50% of the aggregate
--------------
principal amount of Securities originally issued under the Indenture;
provided that, for purposes of computing the Minimum Amount, Holders of
Common Stock issued upon conversion of Securities shall be deemed to be
holders of the aggregate principal amount of Securities which were
converted into those shares of Common Stock. Only Holders of Securities or
shares of Common Stock issued or issuable upon conversion thereof which are
Transfer Restricted Securities shall be entitled to include such Securities
or shares of Common Stock in an Underwritten Offering and only Transfer
Restricted Securities shall be included in the computation of the Minimum
Amount. The Underwritten Offering initiated by Holders as aforesaid shall
include both
14
Securities and Common Stock if so requested by the Holders. Upon receipt by
the Company, from Holders of at least the Minimum Amount of Securities
and/or Common Stock issued or issuable upon conversion thereof, of a
request for an Underwritten Offering, the Company will, within 10 days
thereafter, mail notice to all Holders of Securities and shares of Common
Stock issued upon conversion thereof stating that: (i) the Company has
received a request from the Holders of the requisite amount of Securities
and/or Common Stock issued or issuable on conversion thereof to effect an
Underwritten Offering on behalf of such Holders; (ii) under the terms of
this Agreement, all Holders of Securities and shares of Common Stock issued
or issuable upon conversion thereof which are Transfer Restricted
Securities may include their Securities and shares of Common Stock in such
Underwritten Offering, subject to the terms and conditions set forth in
this Agreement and subject to the right of the Managing Underwriters to
reduce, in light of market conditions and other similar factors, the
aggregate principal amount of Securities and number of shares of Common
Stock included in such Underwritten Offering; (iii) all Holders electing to
include Securities or shares of Common Stock in such Underwritten Offering
must notify the Company in writing of such election (the "Election"), and
--------
setting forth an address and facsimile number to which such written
elections may be sent and the deadline (which shall be 12:00 midnight on
the 10th calendar day after such notice is mailed to Holders or, if not a
Business Day, the next succeeding Business Day (the "Deadline")) by which
--------
such elections must be received by the Company; and (iv) setting forth such
other instructions as shall be necessary to enable Holders to include their
Securities and shares of Common Stock in such Underwritten Offering. No
Holder shall be entitled to participate in an Underwritten Offering unless
such Holder notifies the Company of such Election by the Deadline.
Notwithstanding anything to the contrary contained herein, if the Managing
Underwriters for an Underwritten Offering to be effected pursuant to this
Section 3(u)(iv) advise the Holders of the Securities and shares of the
Common Stock to be included in such Underwritten Offering that, because of
aggregate principal amount of Securities and/or number of shares of Common
Stock that such Holders have requested be included in the Underwritten
Offering, the success of the offering would likely be materially adversely
affected by the inclusion of all of the Securities and shares of Common
Stock requested to be included, then the principal amount of Securities and
the number of shares of Common Stock to be offered for the accounts of
Holders shall be reduced pro rata, according to the aggregate principal
amount of Securities and number of shares of Common Stock, respectively,
requested for inclusion by each such Holder, to the extent necessary to
reduce the size of the offering to the size recommended by the Managing
Underwriter. Notwithstanding anything to the contrary contained herein,
neither the Company nor any Person, other than a Holder of Securities or
shares of Common Stock issued or issuable upon conversion thereof and only
with respect to its Transfer Restricted Securities, shall be entitled to
include any securities in the Underwritten Offering.
4. Registration Expenses. The Company shall bear all expenses
---------------------
incurred in connection with the performance of its obligations under Sections 2
and 3 hereof and shall reimburse the Holders for the reasonable fees and
disbursements of one firm or counsel designated by the Majority Holders to act
as counsel for the Holders in connection therewith. Notwithstanding the
provisions of this Section 4, each Holder shall bear the expense of any broker's
commission, agency fee, Underwriter's discount or commission, or fees and
15
disbursements of any counsel retained by such Xxxxxx in addition to the counsel
designated by the Majority Holders.
5. Indemnification and Contribution.
--------------------------------
(a) The Company agrees to indemnify and hold harmless each Holder of
Transfer Restricted Securities covered by any Shelf Registration Statement
(including each of the Initial Purchasers), the directors, officers, employees
and agents of each such Holder and each person who controls any such Holder
within the meaning of either the Act or the Exchange Act against any and all
losses, claims, damages or liabilities, joint or several, to which they or any
of them may become subject under the Act, the Exchange Act or other Federal or
state law or regulation, at common law or otherwise, insofar as such losses,
claims, damages or liabilities (or actions in respect thereof) arise out of or
are based upon any untrue statement or alleged untrue statement of a material
fact contained in the Shelf Registration Statement as originally filed or in any
amendment thereof, or in any Prospectus, or in any amendment thereof or
supplement thereto, or arise out of or are based upon the omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in the light of the circumstances under
which they were made, not misleading, and agrees to reimburse each such
indemnified party, as incurred, for any legal or other expenses reasonably
incurred by any of them in connection with investigating or defending any such
loss, claim, damage, liability or action; provided, however, that the Company
-------- -------
will not be liable in any such case to the extent that any such loss, claim,
damage or liability arises out of or is based upon (A) any such untrue statement
or alleged untrue statement or omission or alleged omission made therein in
reliance upon and in conformity with written information furnished to the
Company by or on behalf of any such Holder or any Initial Purchaser specifically
for inclusion therein, (B) use of a Shelf Registration Statement or the related
Prospectus during a period when use of such Prospectus has been suspended
pursuant to Section 2(d) or Section 3(s) hereof; provided, further, in each
-------- -------
case, that Holders received prior notice of such suspension, or (C) if the
Holder fails to deliver a Prospectus, as then amended or supplemented, provided
that the Company shall have delivered to such Holder such Prospectus, as then
amended or supplemented. This indemnity agreement will be in addition to any
liability which the Company may otherwise have.
(b) Each Holder of Transfer Restricted Securities covered by a Shelf
Registration Statement (including the Initial Purchasers) severally and not
jointly agrees to indemnify and hold harmless (i) the Company, (ii) each of its
directors, (iii) each of its officers and (iv) each person who controls the
Company within the meaning of either the Act or the Exchange Act to the same
extent as the foregoing indemnity from the Company to each such Holder, but only
with reference to written information relating to such Holder furnished to the
Company by or on behalf of such Holder specifically for inclusion in the
documents referred to in the foregoing indemnity. This indemnity agreement shall
be in addition to any liability which any such Holder may otherwise have.
(c) Promptly after receipt by an indemnified party under this Section
5 of notice of the commencement of any action, such indemnified party will, if a
claim in respect thereof is to be made against the indemnifying party under this
Section 5, notify the indemnifying party in writing of the commencement thereof;
but the failure so to notify the indemnifying party will not relieve it from
liability under paragraph (a) or (b) above unless and
16
to the extent it did not otherwise learn of such action and such failure results
in the forfeiture by the indemnifying party of substantial rights and defenses.
The indemnifying party shall be entitled to appoint counsel of the indemnifying
party's choice at the indemnifying party's expense to represent the indemnified
party in any action for which indemnification is sought (in which case the
indemnifying party shall not thereafter be responsible for the fees and expenses
of any separate counsel retained by the indemnified party or parties except as
set forth below); provided, however, that such counsel shall be reasonably
-------- -------
satisfactory to the indemnified party. Notwithstanding the indemnifying party's
election to appoint counsel to represent the indemnified party in an action, the
indemnified party shall have the right to employ separate counsel (including
local counsel), and the indemnifying party shall bear the reasonable fees, costs
and expenses of such separate counsel if (i) the use of counsel chosen by the
indemnifying party to represent the indemnified party would present such counsel
with a conflict of interest; (ii) the actual or potential defendants in, or
targets of, any such action include both the indemnified party and the
indemnifying party and the indemnified party shall have reasonably concluded
that there may be legal defenses available to it and/or other indemnified
parties which are different from or additional to those available to the
indemnifying party and that representation of the indemnified party by counsel
chosen by the indemnifying party would be inappropriate due to actual or
potential differing interests among the parties represented by such counsel;
(iii) the indemnifying party shall not have employed counsel satisfactory to the
indemnified party to represent the indemnified party within a reasonable time
after notice of the institution of such action; or (iv) the indemnifying party
shall authorize the indemnified party to employ separate counsel at the expense
of the indemnifying party. Neither an indemnifying party nor an indemnified
party will, without the prior written consent of the other parties, settle or
compromise or consent to the entry of any judgment with respect to any pending
or threatened claim, action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder (whether or not such
other parties are actual or potential parties to such claim or action) unless
such settlement, compromise or consent includes an unconditional release of such
other parties from all liability arising out of such claim, action, suit or
proceeding. An indemnifying party shall not be liable for any losses, claims,
damages or liabilities by reason of any settlement of any action or proceeding
effected without such indemnifying party's prior written consent, which consent
will not be unreasonably withheld.
(d) In the event that the indemnity provided in paragraph (a) or (b)
of this Section 5 is unavailable to or insufficient to hold harmless an
indemnified party for any reason, then each applicable indemnifying party shall
have an obligation to contribute to the aggregate losses, claims, damages and
liabilities (including legal or other expenses reasonably incurred in connection
with investigating or defending same) (collectively "Losses"), as incurred, to
------
which such indemnified party may be subject in such proportion as is appropriate
to reflect the relative benefits received by such indemnifying party, on the one
hand, and such indemnified party, on the other hand, from the Initial Placement
and any sales of Transfer Restricted Securities under the Shelf Registration
Statement; provided, however, that in no case shall the Initial Purchasers be
responsible, in the aggregate, for any amount in excess of the purchase discount
or commission applicable to the Securities, as set forth in the Purchase
Agreement. If the allocation provided by the immediately preceding sentence is
unavailable for any reason, the indemnifying party and the indemnified party
shall contribute in such proportion as is appropriate to reflect not only such
relative benefits but also the relative fault of such indemnifying party, on the
one hand, and such indemnified party, on the other hand, in connection with the
statements or omissions
17
which resulted in such Losses as well as any other relevant equitable
considerations. Benefits received by the Company shall be deemed to be equal to
the total net proceeds from the Initial Placement (before deducting expenses).
Benefits received by the Initial Purchasers shall be deemed to be equal to the
total purchase discounts and commissions received in connection with the Initial
Placement, and benefits received by any other Holders shall be deemed to be
equal to the value of receiving Transfer Restricted Securities registered under
the Act. Benefits received by any Underwriter shall be deemed to be equal to the
total underwriting discounts and commissions, as set forth on the cover page of
the Prospectus forming a part of the Shelf Registration Statement which resulted
in such Losses. Relative fault shall be determined by reference to whether any
untrue statement or omission or alleged untrue statement or omission relates to
information provided by the indemnifying party, on the one hand, or by the
indemnified party, on the other hand, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such untrue statement or omission. The parties agree that it would not be just
and equitable if contribution were determined by pro rata allocation or any
other method of allocation which does not take account of the equitable
considerations referred to above. Notwithstanding the provisions of this Section
5(d), no person guilty of fraudulent misrepresentation (within the meaning of
Section 11(f) of the Act) shall be entitled to contribution from any person who
was not guilty of such fraudulent misrepresentation. For purposes of this
Section 5, each person who controls a Holder within the meaning of either the
Act or the Exchange Act and each director, officer, employee and agent of such
Holder shall have the same rights to contribution as such Holder, and each
person who controls the Company within the meaning of either the Act or the
Exchange Act, each officer of the Company who signed the Shelf Registration
Statement and each director of the Company shall have the same rights to
contribution as the Company, and each person who controls an Underwriter within
the meaning of either the Act or the Exchange Act and each officer and director
of each Underwriter shall have the same rights to contribution as such
Underwriter, subject in each case to the applicable terms and conditions of this
paragraph (d).
(e) The provisions of this Section 5 will remain in full force and
effect, regardless of any investigation made by or on behalf of any Holder, any
Underwriter or the Company or any of the officers, directors or controlling
persons referred to in Section 5 hereof, and will survive the sale by a Holder
of Transfer Restricted Securities covered by a Shelf Registration Statement.
6. Miscellaneous.
-------------
(a) No Inconsistent Agreements. The Company has not, as of the date
--------------------------
hereof, entered into nor shall it, on or after the date hereof, enter into, any
agreement with respect to its securities that is inconsistent with the rights
granted to the Holders herein or otherwise conflicts with the provisions hereof.
(b) Amendments and Waivers. The provisions of this Agreement,
----------------------
including the provisions of this sentence, may not be amended, qualified,
modified or supplemented, and waivers or consents to departures from the
provisions hereof may not be given, unless the Company has obtained the written
consent of the Majority Holders; provided that with respect to any matter that
--------
directly or indirectly affects the rights of the Initial Purchasers hereunder,
the Company shall obtain the written consent of each of the Initial Purchasers
against which such
18
amendment, qualification, supplement, waiver or consent is to be effective.
Notwithstanding the foregoing (except the foregoing proviso), a waiver or
consent to departure from the provisions hereof with respect to a matter that
relates exclusively to the rights of Holders whose Transfer Restricted
Securities are being sold pursuant to a Shelf Registration Statement and that
does not directly or indirectly affect the rights of other Holders may be given
by the Majority Holders, determined on the basis of the Transfer Restricted
Securities being sold rather than registered under such Shelf Registration
Statement.
(c) Notices. All notices and other communications provided for or
-------
permitted hereunder shall be made in writing by hand-delivery, first-class mail,
telecopier, or air courier guaranteeing overnight delivery:
(1) if to the Representatives, initially at its address set forth in
the Purchase Agreement;
(2) if to any other Holder, at the most current address of such Holder
maintained by the Registrar under the Indenture or the registrar of the Common
Stock (provided that while the Securities or the Common Stock are in book-entry
form, notice to the Trustee shall serve as notice to the Holders), or, in the
case of the Notice Holder, the address set forth in its Notice and
Questionnaire; and
(3) if to the Company, initially at its address set forth in the
Purchase Agreement.
All such notices and communications shall be deemed to have been duly given
when received, if delivered by hand or air courier, and when sent, if sent by
first-class mail or telecopier.
The Initial Purchasers or the Company by notice to the other may designate
additional or different addresses for subsequent notices or communications.
(d) Successors and Assigns. This Agreement shall inure to the benefit
----------------------
of and be binding upon the successors and assigns of each of the parties,
including, without the need for an express assignment or any consent by the
Company thereto, subsequent Holders. The Company hereby agrees to extend the
benefits of this Agreement to any Holder and Underwriter and any such Holder and
Underwriter may specifically enforce the provisions of this Agreement as if an
original party hereto. In the event that any other person shall succeed to the
Company under the Indenture, then such successor shall enter into an agreement,
in form and substance reasonably satisfactory to the Representatives, whereby
such successor shall assume all of the Company's obligations under this
Agreement.
(e) Counterparts. This Agreement may be executed in any number of
------------
counterparts and by the parties hereto in separate counterparts, each of which
when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement.
(f) Headings. The headings in this Agreement are for convenience of
--------
reference only and shall not limit or otherwise affect the meaning hereof.
19
(g) GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED
-------------
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO AGREEMENTS
MADE AND TO BE PERFORMED IN SAID STATE.
(h) Severability. In the event that any one of more of the provisions
------------
contained herein, or the application thereof in any circumstances, is held
invalid, illegal or unenforceable in any respect for any reason, the validity,
legality and enforceability of any such provision in every other respect and of
the remaining provisions hereof shall not be in any way impaired or affected
thereby, it being intended that all of the rights and privileges of the parties
shall be enforceable to the fullest extent permitted by law.
(i) Securities Held by the Company, etc. Whenever the consent or
-----------------------------------
approval of Holders of a specified percentage of principal amount of Securities
or the Common Stock issuable upon conversion thereof is required hereunder,
Securities or the Common Stock issued upon conversion thereof held by the
Company or its Affiliates (other than subsequent Holders of Securities or the
Common Stock issued upon conversion thereof if such subsequent Holders are
deemed to be Affiliates solely by reason of their holdings of such Securities)
shall not be counted in determining whether such consent or approval was given
by the Holders of such required percentage.
(j) Termination. This Agreement and the obligations of the parties
-----------
hereunder shall terminate upon the end of the Shelf Registration Period, except
for any liabilities or obligations under Section 2(e), 4 or 5 to the extent
arising prior to the end of the Shelf Registration Period.
20
Please confirm that the foregoing correctly sets forth the agreement
between the Company and you.
Very truly yours,
THE GAP, INC.
By /s/ Xxxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxxx Xxxxxxx
Title: Vice President and Treasurer
The foregoing Agreement is hereby confirmed
and accepted as of the date first above written.
BANC OF AMERICA SECURITIES LLC
X.X. XXXXXX SECURITIES INC.
XXXXXXX XXXXX XXXXXX INC.
By: XXXXXXX XXXXX XXXXXX INC.
By /s/ X. X. Xxxxx
------------------------------------
Name: X. X. Xxxxx
Title: M.D.
For itself and the other Initial Purchasers named
in Schedule I to the Purchase Agreement.
21
EXHIBIT A
Form of Selling Securityholder Notice and Questionnaire
The undersigned beneficial holder (the "Selling Securityholder") of
5.75% Senior Convertible Notes due 2009 (the "Notes") of The Gap, Inc. (the
"Company") or shares of Company common stock issuable upon conversion of the
Notes (together with the Notes, the "Transfer Restricted Securities") of the
Company understands that the Company has filed or intends to file with the
Securities and Exchange Commission (the "Commission") a registration statement
on Form S-3 (the "Shelf Registration Statement") for the registration and resale
under Rule 415 of the Securities Act of 1933, as amended (the "Securities Act"),
of the Transfer Restricted Securities in accordance with the terms of the
Registration Agreement (the "Registration Agreement") dated as of March 5, 2002,
between the Company and the Initial Purchasers named therein. The Registration
Agreement is available from the Company upon request at the address set forth
below. All capitalized terms not otherwise defined herein shall have the meaning
ascribed thereto in the Registration Agreement.
In order to sell or otherwise dispose of any Transfer Restricted
Securities pursuant to the Shelf Registration Statement, a beneficial owner of
Transfer Restricted Securities generally will be required to be named as a
selling securityholder in the related prospectus, deliver a prospectus to
purchasers of Transfer Restricted Securities and be bound by those provisions of
the Registration Agreement applicable to such beneficial owner (including
certain indemnification provisions as described below). Beneficial owners are
encouraged to complete and deliver this Notice and Questionnaire prior to the
effectiveness of the Shelf Registration Statement so that such beneficial owners
may be named as selling securityholders in the related prospectus at the time of
effectiveness.
Certain legal consequences arise from being named as selling
securityholders in the Shelf Registration Statement and the related prospectus.
Accordingly, holders and beneficial owners of Transfer Restricted Securities are
advised to consult their own securities law counsel regarding the consequences
of being named or not being named as a selling securityholder in the Shelf
Registration Statement and the related prospectus.
Notice
The undersigned beneficial owner (the "Selling Securityholder") of
Transfer Restricted Securities hereby gives notice to the Company of its
intention to sell or otherwise dispose of Transfer Restricted Securities
beneficially owned by it and listed below in Item 3 (unless otherwise specified
under Item 3) pursuant to the Shelf Registration Statement. The undersigned, by
signing and returning this Notice and Questionnaire, understands that it will be
bound by the terms and conditions of this Notice and Questionnaire and the
Registration Agreement.
A-1
The undersigned hereby provides the following information to the
Company and represents and warrants that such information is accurate and
complete:
Questionnaire
1. (a) Full legal name of Selling Securityholder:
____________________________________________________________
(b) Full legal name of registered holder (if not the same as (a) above)
through which Transfer Restricted Securities listed in (3) below
are held (if the Transfer Restricted Securities are held through a
broker-dealer or other third party and, as a result, you do not
know the legal name of the registered holder, please complete item
(l)(c) below):
____________________________________________________________
(c) Full legal name of broker-dealer or other third party through which
Transfer Restricted Securities listed in Item (3) below are held:
____________________________________________________________
(d) Full Legal Name of DTC Participant (if applicable and if not the
same as (b) or (c) above) through which Transfer Restricted
Securities listed in (3) below are held:
____________________________________________________________
2. Address for Notices to Selling Securityholder:
___________________________________________________________________
___________________________________________________________________
Telephone: ________________________________________________________
Fax: ______________________________________________________________
Contact Person: ___________________________________________________
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3. Beneficial Ownership of Transfer Restricted Securities:
(a) Type and principal amount (or number of shares) of Transfer
Restricted Securities beneficially owned:
____________________________________________________________
____________________________________________________________
(b) CUSIP No(s). of such Transfer Restricted Securities beneficially
owned:
____________________________________________________________
____________________________________________________________
Unless otherwise indicated in the space provided below, all Notes
and all shares of common stock listed in response to Item (3)(a)
above, and all shares of common stock issuable upon conversion of
the Notes listed in response to Item (3)(a) above, will be included
in the Shelf Registration Statement. If the undersigned does not
wish all such Notes or shares of common stock to be so included,
please indicate below the principal amount or the number of shares
to be included:
____________________________________________________________
____________________________________________________________
4. Beneficial ownership of other securities of the Company owned by the
Selling Securityholder:
Except as set forth below in this Item (4), the undersigned is not the
beneficial or registered owner of any securities of the Company other than
the Transfer Restricted Securities listed above in Item (3).
(a) Type and Amount of other securities of the Company beneficially
owned by the Selling Securityholder:
____________________________________________________________
____________________________________________________________
(b) CUSIP No(s). of such other securities of the company beneficially
owned:
____________________________________________________________
____________________________________________________________
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5. Relationship with the Company:
Except as set forth below, neither the undersigned nor any of its
affiliates, directors or principal equity holders (5% or more) has held
any position or office or has had any other material relationship with
the Company (or its predecessors or affiliates) during the past three
years.
State any exceptions here:
_______________________________________________________________________
_______________________________________________________________________
6. Plan of Distribution:
Except as set forth below, the undersigned (including donees or
pledgees) intends to distribute the Transfer Restricted Securities
listed above in Item (3) pursuant to the Shelf Registration Statement
only as follows (if at all): Such Transfer Restricted Securities may be
sold from time to time directly by the undersigned or alternatively
through underwriters or broker-dealers or agents. If the Transfer
Restricted Securities are sold through underwriters or broker-dealers,
the Selling Securityholder will be responsible for underwriting
discounts or commissions or agent's commissions. Such Transfer
Restricted Securities may be sold in one or more transactions at fixed
prices, at prevailing market prices at the time of sale, at varying
prices determined at the time of sale, or at negotiated prices. Such
sales may be effected in transactions (which may involve block
transactions) (i) on any national securities exchange or quotation
service on which the Transfer Restricted Securities may be listed or
quoted at the time of sale, (ii) in the over-the-counter market, (iii)
in transactions otherwise than on such exchanges or services or in the
over-the-counter market, or (iv) through the writing of options. In
connection with sales of the Transfer Restricted Securities or
otherwise, the undersigned may enter into hedging transactions with
broker-dealers, which may in turn engage in short sales of the Transfer
Restricted Securities, short and deliver Transfer Restricted Securities
to close out such short positions, or loan or pledge Transfer
Restricted Securities to broker-dealers that in turn may sell such
securities. The Selling Securityholder may pledge or grant a security
interest in some or all of the Transfer Restricted Securities owned by
it and, if it defaults in the performance of its secured obligations,
the pledgees or secured parties may offer and sell the Transfer
Restricted Securities from time to time pursuant to the Prospectus. The
Selling Securityholder also may transfer and donate shares in other
circumstances in which case the transferees, donees, pledgees or other
successors in interest will be the selling securityholder for purposes
of the Prospectus.
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State any exceptions here:
__________________________________________________________________
__________________________________________________________________
__________________________________________________________________
Note: The Company's obligation to cooperate in an underwritten
offering of the Transfer Restricted Securities is limited
under Section 3(u)(iv) of the Registration Agreement.
The undersigned acknowledges that it understands its obligation to
comply with the provisions of the Securities Exchange Act of 1934, as amended,
and the rules thereunder relating to stock manipulation, particularly Regulation
M thereunder (or any successor rules or regulations) and the provisions of the
Securities Act relating to prospectus delivery, in connection with any offering
of Transfer Restricted Securities pursuant to the Shelf Registration Statement.
The undersigned agrees that neither it nor any person acting on its behalf will
engage in any transaction in violation of such provisions.
The Selling Securityholder hereby acknowledges its obligations under
the Registration Agreement to indemnify and hold harmless certain persons set
forth therein.
Pursuant to the Registration Agreement, the Company has agreed under
certain circumstances indemnify the Selling Securityholders against certain
liabilities.
In accordance with the undersigned's obligation under the Registration
Agreement to provide such information as may be required by law for inclusion in
the Shelf Registration Statement, the undersigned agrees to promptly notify the
Company of any inaccuracies or changes in the information provided herein that
may occur subsequent to the date hereof at any time while the Shelf Registration
Statement remains effective. All notices hereunder and pursuant to the
Registration Agreement shall be made in writing at the address set forth below.
By signing below, the undersigned consents to the disclosure of the
information contained herein in its answers to items (1) through (6) above and
the inclusion of such information in the Shelf Registration Statement and the
related prospectus. The undersigned understands that such information will be
relied upon by the Company in connection with the preparation or amendment of
the Shelf Registration Statement and the related prospectus.
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IN WITNESS WHEREOF, the undersigned, by authority duly given, has
caused this Notice and Questionnaire to be executed and delivered either in
person or by its duly authorized agent.
Beneficial Owner
By:_____________________________________
Name:
Title:
Dated:
PLEASE RETURN THE COMPLETED AND EXECUTED NOTICE AND
QUESTIONNAIRE
TO THE COMPANY:
The Gap, Inc.
Xxx Xxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxxx X. Xxxx
with a copy to:
Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx LLP
Old Federal Reserve Bank Building
000 Xxxxxxx Xxxxxx
Xxx Xxxxxxxxx, XX 00000
Facsimile: (000) 000-0000
Attention: Xxxxx Xxxxxxxxx
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