Exhibit 4.B
________________________________________________________________________________
MENTOR GRAPHICS CORPORATION
As Issuer
And
WILMINGTON TRUST COMPANY
as Trustee
____________________________
INDENTURE
Dated as of
June 3, 2002
____________________________
6 7/8% Convertible Subordinated Notes Due 2007
________________________________________________________________________________
TABLE OF CONTENTS
_______________
Page
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ARTICLE 1
Definitions
Section 1.01. Definitions .................................................... 2
ARTICLE 2
Issue, Description, Execution, Registration and Exchange of Notes
Section 2.01. Designation Amount and Issue of Notes .......................... 9
Section 2.02. Form of Notes .................................................. 10
Section 2.03. Date and Denomination of Notes; Payments of Interest ........... 10
Section 2.04. Execution of Notes ............................................. 13
Section 2.05. Exchange and Registration of Transfer Notes; Restrictions on
Transfer; Depositary ........................................... 13
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes ..................... 20
Section 2.07. Temporary Notes ................................................ 21
Section 2.08. Cancellation of Notes Paid, Etc ................................ 22
Section 2.09. CUSIP Numbers .................................................. 22
ARTICLE 3
Redemption of Notes
Section 3.01. Optional Redemption by the Company ............................. 22
Section 3.02. Notice of Redemptions; Selection of Notes ...................... 23
Section 3.03. Payment of Notes Called for Redemption ......................... 25
Section 3.04. Conversion Arrangement on Call for Redemption .................. 25
Section 3.05. Redemption at Option of Holders upon a Change of Control ....... 26
ARTICLE 4
Subordination of Notes
Section 4.01. Agreement of Subordination ..................................... 28
Section 4.02. Payments to Noteholders ........................................ 29
Section 4.03. Subrogation of Notes ........................................... 32
Section 4.04. Authorization to Effect Subordination .......................... 33
Section 4.05. Notice to Trustee .............................................. 34
Section 4.06. Trustee's Relation to Senior Debt .............................. 34
Section 4.07. No Impairment of Subordination ................................. 35
Section 4.08. Certain Conversions Not Deemed Payment ......................... 35
Section 4.09. Article Applicable to Paying Agents ............................ 36
Section 4.10. Senior Debt Entitled to Rely ................................... 36
Section 4.11. Reliance on Judicial Order or Certificate of Liquidating Agent.. 36
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ARTICLE 5
Particular Covenants of the Company
Section 5.01. Payment of Principal, Premium and Interest ..................... 36
Section 5.02. Maintenance of Office or Agency ................................ 37
Section 5.03. Appointments to Fill Vacancies in Trustee's Office ............. 37
Section 5.04. Provisions As To Paying Agent .................................. 38
Section 5.05. Existence ...................................................... 39
Section 5.06. Maintenance of Properties ...................................... 39
Section 5.07. Payment of Taxes and Other Claims .............................. 39
Section 5.08. Rule 144A Information Requirement .............................. 40
Section 5.09. Stay, Extension and Usury Laws ................................. 40
Section 5.10. Compliance Certificate ......................................... 40
ARTICLE 6
Noteholders' List and Reports by the Company and the Trustee
Section 6.01. Noteholders' Lists ............................................. 41
Section 6.02. Preservation and Disclosure of Lists ........................... 41
Section 6.03. Reports by Trustee ............................................. 42
Section 6.04. Reports by Company ............................................. 42
ARTICLE 7
Remedies of the Trustee and Noteholders on an Event of Default
Section 7.01. Events of Default .............................................. 42
Section 7.02. Payments of Notes on Default; Suit Therefor .................... 45
Section 7.03. Application of Monies Collected by Trustee ..................... 46
Section 7.04. Proceedings by Noteholder ...................................... 47
Section 7.05. Proceedings by Trustee ......................................... 48
Section 7.06. Remedies Cumulative and Continuing ............................. 48
Section 7.07. Direction of Proceedings and Waiver of Defaults by Majority of
Noteholders .................................................... 49
Section 7.08. Notice of Defaults ............................................. 49
Section 7.09. Undertaking to Pay Costs ....................................... 50
ARTICLE 8
The Trustee
Section 8.01. Duties and Responsibilities of Trustee ......................... 50
Section 8.02. Reliance on Documents, Opinions, Etc ........................... 52
Section 8.03. No Responsibility for Recitals, Etc ............................ 52
Section 8.04. Trustee, Paying Agents, Conversion Agents or Registrar May Own
Notes .......................................................... 53
Section 8.05. Monies to Be Held in Trust ..................................... 53
Section 8.06. Compensation and Expenses of Trustee ........................... 53
Section 8.07. Officers' Certificate as Evidence .............................. 54
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Section 8.08. Conflicting Interests of Trustee ............................... 54
Section 8.09. Eligibility of Trustee ......................................... 54
Section 8.10. Resignation Or Removal Of Trustee .............................. 54
Section 8.11. Acceptance by Successor Trustee ................................ 56
Section 8.12. Succession by Merger, Etc ...................................... 56
Section 8.13. Preferential Collection of Claims .............................. 57
Section 8.14. Trustee's Application for Instructions from the Company ........ 57
ARTICLE 9
The Noteholders
Section 9.01. Action by Noteholders .......................................... 57
Section 9.02. Proof of Execution by Noteholders .............................. 58
Section 9.03. Who Are Deemed Absolute Owners ................................. 58
Section 9.04. Company-owned Notes Disregarded ................................ 58
Section 9.05. Revocation of Consents; Future Holders Bound ................... 59
ARTICLE 10
Meetings of Noteholders
Section 10.01. Purpose of Meetings ............................................ 59
Section 10.02. Call of Meetings by Trustee .................................... 60
Section 10.03. Call of Meetings by Company or Noteholders ..................... 60
Section 10.04. Qualifications for Voting ...................................... 60
Section 10.05. Regulations .................................................... 61
Section 10.06. Voting ......................................................... 61
Section 10.07. No Delay of Rights by Meeting .................................. 62
ARTICLE 11
Supplemental Indentures
Section 11.01. Supplemental Indentures Without Consent of Noteholders ......... 62
Section 11.02. Supplemental Indenture with Consent of Noteholders ............. 64
Section 11.03. Effect of Supplemental Indenture ............................... 65
Section 11.04. Notation on Notes .............................................. 65
Section 11.05. Evidence of Compliance of Supplemental Indenture to be
Furnished to Trustee .......................................... 66
ARTICLE 12
Consolidation, Merger, Sale, Conveyance and Lease
Section 12.01. Company May Consolidate, Etc, on Certain Terms ................. 66
Section 12.02. Successor Corporation to Be Substituted ........................ 66
Section 12.03. Opinion of Counsel to Be Given Trustee ......................... 67
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ARTICLE 13
Satisfaction and Discharge of Indenture
Section 13.01. Discharge of Indenture ........................................ 67
Section 13.02. Deposited Monies to Be Held in Trust by Trustee ............... 68
Section 13.03. Paying Agent to Repay Monies Held ............................. 68
Section 13.04. Return of Unclaimed Monies .................................... 68
Section 13.05. Reinstatement ................................................. 68
ARTICLE 14
Immunity of Incorporators, Stockholders, Officers and Directors
Section 14.01. Indenture and Notes Solely Corporate Obligations .............. 69
ARTICLE 15
Conversion of Notes
Section 15.01. Right to Convert .............................................. 69
Section 15.02. Exercise of Conversion Privilege; Issuance of Common Stock on
Conversion; No Adjustment for Interest or Dividends ........... 70
Section 15.03. Cash Payments in Lieu of Fractional Shares .................... 71
Section 15.04. Conversion Price .............................................. 72
Section 15.05. Adjustment of Conversion Price ................................ 72
Section 15.06. Effect of Reclassification, Consolidation, Merger or Sale ..... 82
Section 15.07. Taxes on Shares Issued ........................................ 83
Section 15.08. Reservation of Shares; Shares to Be Fully Paid; Compliance with
Governmental Requirements; Listing of Common Stock ............ 84
Section 15.09. Responsibility of Trustee ..................................... 84
Section 15.10. Notice To Holders Prior To Certain Actions .................... 85
ARTICLE 16
Miscellaneous Provisions
Section 16.01. Provisions Binding on Company's Successors .................... 86
Section 16.02. Official Acts by Successor Corporation ........................ 86
Section 16.03. Addresses for Notices, Etc .................................... 86
Section 16.04. Governing Law ................................................. 87
Section 16.05. Evidence of Compliance with Conditions Precedent; Certificates
to Trustee .................................................... 87
Section 16.06. Legal Holidays ................................................ 87
Section 16.07. Trust Indenture Act ........................................... 88
Section 16.08. No Security Interest Created .................................. 88
Section 16.09. Benefits of Indenture ......................................... 88
Section 16.10. Table of Contents, Headings, Etc .............................. 88
Section 16.11. Authenticating Agent .......................................... 88
Section 16.12. Execution in Counterparts ..................................... 89
Section 16.13. Severability .................................................. 89
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Reconciliation and Tie Between the Trust Indenture Act of 1939 and Indenture,
dated as of June 3, 2002, between Mentor Graphics Corporation and Wilmington
Trust Company, as Trustee.
TRUST INDENTURE ACT SECTION INDENTURE SECTION
Section 310 (a)(1) ...................................... 8.9
(a)(2) ...................................... 8.9
(a)(3) ...................................... N.A.
(a)(4) ...................................... N.A.
(a)(5) ...................................... 8.9
(b) ......................................... 8.8; 8.9; 8.10; 8.11
Section 311 (a) ......................................... 8.13
(b) ......................................... 8.13
(b)(2) ...................................... 8.13
Section 312 (a) ......................................... 6.1; 6.2(a)
(b) ......................................... 6.2(b)
(c) ......................................... 6.2(c)
Section 313 (a) ......................................... 6.3(a)
(b) ......................................... 6.3(a)
(c) ......................................... 6.3(a)
(d) ......................................... 6.3(b)
Section 314 (a) ......................................... 6.4
(b) ......................................... N.A.
(c)(1) ...................................... 16.5
(c)(2) ...................................... 16.5
(c)(3) ...................................... N.A.
(d) ......................................... N.A.
(e) ......................................... 16.5
Section 315 (a) ......................................... 8.1
(b) ......................................... 7.8
(c) ......................................... 8.1
(d) ......................................... 8.1
(d)(1) ...................................... 8.1(a)
(d)(2) ...................................... 8.1(b)
(d)(3) ...................................... 8.1(c)
(e) ......................................... 7.9
Section 316 (a) ......................................... 7.7
(a)(1)(A) ................................... 7.7
(a)(1)(B) ................................... 7.7
(a)(2) ...................................... N.A.
(b) ......................................... 7.4
Section 317 (a)(1) ...................................... 7.5
(a)(2) ...................................... 7.5
(b) ......................................... 5.4
Section 318 (a) ......................................... 16.7
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* Note: This reconciliation and tie shall not, for any purpose, be deemed to be
a part of the Indenture.
** Note: N.A. means Not Applicable.
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INDENTURE
This INDENTURE, dated as of June 3, 2002, is between Mentor Graphics
Corporation, an Oregon corporation (hereinafter called the "Company"), having
its principal office at ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇,
and Wilmington Trust Company, a Delaware banking corporation, as trustee
hereunder (hereinafter called the "Trustee"), having its principal corporate
office at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇
▇▇▇▇▇-▇▇▇▇.
W I T N E S S E T H:
WHEREAS, for its lawful corporate purposes, the Company has duly
authorized the issue of its 6 7/8% Convertible Subordinated Notes Due 2007
(hereinafter called the "Notes"), in an aggregate principal amount not to exceed
$150,000,000 (or $172,500,000 if the option set forth in Section 2 of the
Purchase Agreement dated as of May 29, 2002 (as amended from time to time by the
parties thereto) by and between the Company and the Initial Purchasers is
exercised in full) and, to provide the terms and conditions upon which the Notes
are to be authenticated, issued and delivered, the Company has duly authorized
the execution and delivery of this Indenture; and
WHEREAS, the Notes, the certificate of authentication to be borne by
the Notes, a form of assignment, a form of option to elect repayment upon a
Change of Control, and a form of conversion notice to be borne by the Notes are
to be substantially in the forms hereinafter provided for; and
WHEREAS, all acts and things necessary to make the Notes, when executed
by the Company and authenticated and delivered by the Trustee or a duly
authorized authenticating agent, as provided in this Indenture, the valid,
binding and legal obligations of the Company, and to constitute these presents a
valid agreement according to its terms, have been done and performed, and the
execution of this Indenture and the issue hereunder of the Notes have in all
respects been duly authorized.
NOW, THEREFORE, THIS INDENTURE WITNESSETH:
That in order to declare the terms and conditions upon which the Notes
are, and are to be, authenticated, issued and delivered, and in consideration of
the premises and of the purchase and acceptance of the Notes by the holders
thereof, the Company covenants and agrees with the Trustee for the equal and
proportionate benefit of the respective holders from time to time of the Notes
(except as otherwise provided below), as follows:
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ARTICLE 1
Definitions
Section 1.01 . Definitions. The terms defined in this Section 1.01
(except as herein otherwise expressly provided or unless the context otherwise
requires) for all purposes of this Indenture and of any indenture supplemental
hereto shall have the respective meanings specified in this Section 1.01. All
other terms used in this Indenture that are defined in the Trust Indenture Act
or which are by reference therein defined in the Securities Act (except as
herein otherwise expressly provided or unless the context otherwise requires)
shall have the meanings assigned to such terms in said Trust Indenture Act and
in said Securities Act as in force at the date of the execution of this
Indenture. The words "herein," "hereof," "hereunder", and words of similar
import refer to this Indenture as a whole and not to any particular Article,
Section or other Subdivision. The terms defined in this Article include the
plural as well as the singular.
"Affiliate" of any specified Person means any other Person directly or
indirectly controlling or controlled by or under direct or indirect common
control with such specified Person. For the purposes of this definition,
"control," when used with respect to any specified Person means the power to
direct or cause the direction of 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.
"Board of Directors" means the Board of Directors of the Company or a
committee of such Board duly authorized to act for it hereunder.
"Business Day" means each Monday, Tuesday, Wednesday, Thursday and
Friday which is not a day on which the banking institutions in The City of New
York or the city in which the Corporate Trust Office is located are authorized
or obligated by law or executive order to close or be closed.
"Change of Control" means the occurrence of any of the following after
the original issuance of the Notes: (a) the acquisition by any Person, of
beneficial ownership, directly or indirectly, through a purchase, merger or
other acquisition transaction or series of purchase, merger or other acquisition
transactions, of shares of the Company's capital stock entitling that Person to
exercise 50% or more of the total voting power of all shares of Company's
capital stock entitled to vote generally in elections of directors, other than
any acquisition by the Company, any of the Company's subsidiaries or any of the
Company's employee benefit plans, (b) the first day on which a majority of the
members of the Board of Directors of the Company are not Continuing Directors;
or (c) the Company's consolidation or merger with or into any other Person, any
merger of another Person into the Company, or any conveyance, transfer, sale,
lease or other disposition of all or substantially all of the Company's
properties and assets to another Person, other than (i) any transaction pursuant
to which holders of the
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Company's capital stock immediately prior to the transaction have the
entitlement to exercise, directly or indirectly, 50% or more of the total voting
power of all shares of capital stock entitled to vote generally in elections of
directors of the continuing or surviving Person immediately after giving effect
to such transaction; and (ii) any merger, share exchange, transfer of assets or
similar transaction solely for the purpose of changing the Company's
jurisdiction of incorporation and resulting in a reclassification, conversion or
exchange of outstanding shares of Common Stock, if at all, solely into shares of
common stock, ordinary shares or American Depositary Shares of the surviving
entity or a direct or indirect parent of the surviving corporation; provided
that a Change of Control shall not be deemed to have occurred if either (x) the
Closing Price of the Common Stock for any five (5) Trading Days during the ten
(10) Trading Days immediately preceding the Change of Control is at least equal
to 105% of the Conversion Price in effect on the date on which the Change of
Control occurs or (y) in the case of a merger or consolidation otherwise
constituting a Change of Control, all of the consideration (excluding cash
payments for fractional shares) in such merger or consolidation constituting the
Change of Control consists of common stock traded on a United States national
securities exchange or quoted on the Nasdaq National Market System (or which
will be so traded or quoted when issued or exchanged in connection with such
Change of Control) and as a result of such transaction or transactions the Notes
become convertible solely into such common stock. Beneficial ownership shall be
determined in accordance with Rule 13d-3 promulgated by the Commission under the
Exchange Act. The term "Person" as used in this definition includes any
syndicate or group that would be deemed to be a "person" under Section 13(d)(3)
of the Exchange Act.
"Closing Price" has the meaning specified in Section 15.05(h)(1).
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Exchange Act, or, if at any time after
the execution of this Indenture such Commission is not existing and performing
the duties now assigned to it under the Trust Indenture Act, then the body
performing such duties at such time.
"Common Stock" means any stock of any class of the Company which has no
preference in respect of dividends or of amounts payable in the event of any
voluntary or involuntary liquidation, dissolution or winding up of the Company
and which is not subject to redemption by the Company. Subject to the provisions
of Section 15.06, however, shares issuable on conversion of Notes shall include
only shares of the class designated as common stock of the Company at the date
of this Indenture (namely, the Common Stock, no par value) or shares of any
class or classes resulting from any reclassification or reclassifications
thereof and which have no preference in respect of dividends or of amounts
payable in the event of any voluntary or involuntary liquidation, dissolution or
winding up of the Company and which are not subject to redemption by the
Company; provided, however, that if at any time there shall be more than one
such resulting class, the shares of each such class then so issuable
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shall be substantially in the proportion which the total number of shares of
such class resulting from all such reclassifications bears to the total number
of shares of all such classes resulting from all such reclassifications.
"Company" means the corporation named as the "Company" in the first
paragraph of this Indenture, and, subject to the provisions of Article 12, shall
include its successors and assigns.
"Company Notice" has the meaning specified in Section 3.05(b).
"Continuing Director" means, at any date, a member of the Company's
Board of Directors (i) who was a member of such board on June 3, 2002 or (ii)
who was nominated or elected by at least a majority of the directors who were
Continuing Directors at the time of such nomination or election or whose
election to the Company's Board of Directors was recommended or endorsed by at
least a majority of the directors who were Continuing Directors at the time of
such nomination or election or such lesser number comprising a majority of a
nominating committee comprised of independent directors if authority for such
nominations or elections has been delegated to a nominating committee whose
authority and composition have been approved by at least a majority of the
directors who were Continuing Directors at the time such committee was formed.
(Under this definition, if the Board of Directors of the Company as of the date
of this Indenture were to approve a new director or directors and then resign,
no Change of Control would occur even though the current Board of Directors
would thereafter cease to be in office).
"Conversion Price" has the meaning specified in Section 15.04.
"Corporate Trust Office" or other similar term, means the designated
office of the Trustee at which at any particular time its corporate trust
business shall be administered, which office is, at the date as of which this
Indenture is dated, located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust Department (Mentor
Graphics Corporation, 6 7/8% Convertible Subordinated Notes Due 2007).
"Credit Agreement" means that certain Credit Agreement dated as of
January 10, 2001 among the Company, Bank of America, N.A., as Agent, The Bank of
Nova Scotia, as Documentation Agent, Fleet National Bank, N.A., as Syndication
Agent and the other financial institutions from time to time parties thereto
(including all deferrals, renewals, extensions or refundings of, or amendments,
modifications or supplements to, the foregoing).
"Custodian" means Wilmington Trust Company, as custodian with respect
to the Notes in global form, or any successor entity thereto.
"default" means any event that is, or after notice or passage of time,
or both, would be, an Event of Default.
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"Defaulted Interest" has the meaning specified in Section 2.03.
"Depositary" means, with respect to the Notes issuable or issued in
whole or in part in global form, the Person specified in Section 2.05(d) as the
Depositary with respect to such Notes, until a successor shall have been
appointed and become such pursuant to the applicable provisions of this
Indenture, and thereafter, "Depositary" shall mean or include such successor.
"Designated Senior Debt" means Senior Debt under the Credit Agreement
and the Company's obligations under any other particular Senior Debt in which
the instrument creating or evidencing the same or the assumption or guarantee
thereof (or related agreements or documents to which the Company is a party)
expressly provides that such Senior Debt shall be "Designated Senior Debt" or
that the Company designates in writing to the Trustee as "Designated Senior
Debt" for purposes of this Indenture (provided that such instrument, agreement
or other document may place limitations and conditions on the right of such
Senior Debt to exercise the rights of Designated Senior Debt). If any payment
made to any holder of any Designated Senior Debt or its Representative with
respect to such Designated Senior Debt is rescinded or must otherwise be
returned by such holder or Representative upon the insolvency, bankruptcy or
reorganization of the Company or otherwise, the reinstated Indebtedness of the
Company arising as a result of such rescission or return shall constitute
Designated Senior Debt effective as of the date of such rescission or return.
"Designated Subsidiary" means any existing or future, direct or
indirect Subsidiary of the Company whose assets constitute 15% or more of the
total assets of the Company on a consolidated basis.
"Event of Default" means any event specified in Section 7.01(a), (b),
(c), (d), (e) or (f).
"Exchange Act" means the Securities Exchange Act of 1934, as amended,
and the rules and regulations promulgated thereunder, as in effect from time to
time.
"Exchange Rate Contract" means, with respect to any Person, any
currency swap agreements, forward exchange rate agreements, foreign currency
futures or options, exchange rate collar agreements, exchange rate insurance and
other agreements or arrangements, or combination thereof, the principal purpose
of which is to provide protection against fluctuations in currency exchange
rates. An Exchange Rate Contract may also include an Interest Rate Agreement.
"GAAP" means generally accepted accounting principles set forth in the
opinions and pronouncements of the Accounting Principles Board of the American
Institute of Certified Public Accountants and statements and pronouncements of
the Financial Accounting Standards Board or in such other statements by such
other entity as approved by a significant segment of the accounting profession,
which are applied on a consistent basis.
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"Global Note" has the meaning set forth in Section 2.05(b).
"Guarantee" means a guarantee, other than by endorsement of negotiable
instruments for collection in the ordinary course of business, direct or
indirect, in any manner, including, without limitation, letters of credit and
reimbursement agreements in respect thereof, of all or any part of any
Indebtedness.
"Indebtedness" means, with respect to any Person, any indebtedness of
such Person, whether or not contingent, in respect of borrowed money or
evidenced by bonds, notes, Notes or similar instruments or letters of credit,
bank guarantees or bankers' acceptances, or reimbursement agreements in respect
thereof, or representing the balance deferred and unpaid of the purchase price
of any property, including pursuant to capital leases and sale-and-leaseback
transactions, or representing the Company's obligations and liabilities,
contingent or otherwise, in respect of leases required, in conformity with GAAP,
to be accounted for as capitalized lease obligations on the Company's balance
sheet, or under other leases for facilities, equipment or related assets,
whether or not capitalized, entered into or leased for financing purposes, or
representing any hedging obligations under an Exchange Rate Contract or an
Interest Rate Agreement, except any such balance that constitutes an accrued
expense or trade payable, if and to the extent any of the foregoing
indebtedness, other than obligations under an Exchange Rate Contract or an
Interest Rate Agreement, would appear as a liability upon a balance sheet of
such Person prepared in accordance with GAAP, and also includes, to the extent
not otherwise included, the Guarantee of items which would be included within
this definition. The amount of any Indebtedness outstanding as of any date shall
be the accreted value thereof, in the case of any Indebtedness issued with
original issue discount. Indebtedness shall not include liabilities for taxes of
any kind.
"Indenture" means this instrument as originally executed or, if amended
or supplemented as herein provided, as so amended or supplemented.
"Initial Purchasers" means Bank of American Securities LLC, Fleet
Securities, Inc., Scotia Capital (USA) Inc., ▇▇▇▇▇▇▇ & Company, Inc., ▇▇▇▇,
▇▇▇▇▇▇▇▇ & ▇▇▇▇, Inc., ▇▇▇▇▇ Fargo Securities, LLC and ▇.▇. ▇▇▇▇▇▇▇▇ & Co.
"Institutional Accredited Investor" means an institutional "accredited
investor" within the meaning of Rule 501(a)(1), (2), (3) or (7) under the
Securities Act.
"Interest Rate Agreement" means, with respect to any Person, any
interest rate swap agreement, interest rate cap agreement, interest rate collar
agreement or other similar agreement the principal purpose of which is to
protect the party indicated therein against fluctuations in interest rates.
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"Liquidated Damages" has the meaning specified in Section 3(a) of the
Registration Rights Agreement.
"Non-Payment Default" has the meaning specified in Section 4.02(ii).
"Note" or "Notes" means any Note or Notes, as the case may be,
authenticated and delivered under this Indenture, including the Global Note.
"Note register" has the meaning specified in Section 2.05(a).
"Note registrar" has the meaning specified in Section 2.05(a).
"Noteholder" or "holder" as applied to any Note, or other similar terms
(but excluding the term "beneficial holder"), means any Person in whose name at
the time a particular Note is registered on the Note registrar's books.
"Officers' Certificate," when used with respect to the Company, means a
certificate signed by both (a) the Chairman of the Board, the Chief Executive
Officer, the President or any Vice President (whether or not designated by a
number or numbers or word or words added before or after the title "Vice
President") and (b) the Treasurer or any Assistant Treasurer, the Controller or
any Assistant Controller, or the Secretary or any Assistant Secretary of the
Company.
"Opinion of Counsel" means an opinion in writing signed by legal
counsel, who may be an employee of or counsel to the Company, or other counsel
reasonably acceptable to the Trustee.
"outstanding," when used with reference to Notes and subject to the
provisions of Section 9.04, means, as of any particular time, all Notes
authenticated and delivered by the Trustee under this Indenture, except:
Notes theretofore canceled by the Trustee or delivered to the Trustee
for cancellation;
Notes, or portions thereof, (i) for the redemption of which monies in
the necessary amount shall have been deposited in trust with the Trustee or with
any paying agent (other than the Company) or (ii) which shall have been
otherwise defeased in accordance with Article 13;
Notes in lieu of which, or in substitution for which, other Notes shall
have been authenticated and delivered pursuant to the terms of Section 2.06; and
Notes converted into Common Stock pursuant to Article 15 and Notes
deemed not outstanding pursuant to Article 3.
"Payment Blockage Notice" has the meaning specified in Section
4.02(ii).
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"Payment Default" has the meaning specified in Section 4.02(i)
"Person" means a corporation, an association, a partnership, a limited
liability company, an individual, a joint venture, a joint stock company, a
trust, an unincorporated organization or a government or an agency or a
political subdivision thereof.
"Portal Market" means The Portal Market operated by the National
Association of Securities Dealers, Inc. or any successor thereto.
"Predecessor Note" of any particular Note means every previous Note
evidencing all or a portion of the same debt as that evidenced by such
particular Note, and, for the purposes of this definition, any Note
authenticated and delivered under Section 2.06 in lieu of a lost, destroyed or
stolen Note shall be deemed to evidence the same debt as the lost, destroyed or
stolen Note that it replaces.
"QIB" means a "qualified institutional buyer" as defined in Rule 144A.
"Registration Rights Agreement" means that certain Registration Rights
Agreement, dated as of June 3, 2002, among the Company and the Initial
Purchasers, as amended from time to time in accordance with its terms.
"Representative" means (a) the indenture trustee or other trustee,
agent or representative for holders of Senior Debt or (b) with respect to any
Senior Debt that does not have any such trustee, agent or other representative,
(i) in the case of such Senior Debt issued pursuant to an agreement providing
for voting arrangements as among the holders or owners of such Senior Debt, any
holder or owner of such Senior Debt acting with the consent of the required
persons necessary to bind such holders or owners of such Senior Debt and (ii) in
the case of all other such Senior Debt, the holder or owner of such Senior Debt.
"Responsible Officer", when used with respect to the Trustee, means an
officer of the Trustee in the Corporate Trust Office assigned and duly
authorized by the Trustee to administer this Indenture.
"Restricted Securities" has the meaning specified in Section 2.05(d).
"Rule 144A" means Rule 144A as promulgated under the Securities Act.
"Securities Act" means the Securities Act of 1933, as amended, and the
rules and regulations promulgated thereunder, as in effect from time to time.
"Senior Debt" means Indebtedness (including any monetary obligation in
respect of the Credit Agreement, and interest, whether or not allowable,
accruing on Indebtedness incurred pursuant to the Credit Agreement after the
filing of a petition initiating any proceeding under any bankruptcy, insolvency
or similar law) of the Company arising under the Credit Agreement or any other
8
Indebtedness of the Company, whether outstanding on the date of this Indenture
or thereafter created, incurred, assumed or guaranteed by the Company.
Notwithstanding anything to the contrary in the foregoing, Senior Debt shall not
include: (a) Indebtedness of or amounts owed by the Company for compensation to
employees, or for goods or materials purchased or for services obtained in the
ordinary course of business; (b) Indebtedness of the Company to any subsidiary
of the Company; or (c) Indebtedness of the Company that expressly provides that
it shall not be senior in right of payment to the Notes or expressly provides
that it is pari passu or junior to the Notes.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or managing general partner of which is such Person or a
subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more subsidiaries of such Person (or any combination
thereof).
"Trading Day" has the meaning specified in Section 15.05(h)(5).
"Trigger Event" has the meaning specified in Section 15.05(d).
"Trust Indenture Act" means the Trust Indenture Act of 1939, as
amended.
"Trustee" means Wilmington Trust Company and its successors and any
corporation resulting from or surviving any consolidation or merger to which it
or its successors may be a party and any successor trustee at the time serving
as successor trustee hereunder.
The definitions of certain other terms are as specified in Sections
2.05 and 3.05 and Article 15.
ARTICLE 2
Issue, Description, Execution, Registration and Exchange of Notes
Section 2.01 . Designation Amount and Issue of Notes. The Notes shall
be designated as "6 7/8% Convertible Subordinated Notes Due 2007". Notes not to
exceed the aggregate principal amount of $150,000,000 (or $172,500,000 if the
option set forth in Section 2 of the Purchase Agreement dated as of May 29, 2002
by and between the Company and the Initial Purchasers is exercised in full)
(except pursuant to Sections 2.05, 2.06, 3.03, 3.05 and 15.02 hereof or as
otherwise expressly permitted herein) upon the execution of this Indenture, or
9
from time to time thereafter, may be executed by the Company and delivered to
the Trustee for authentication, and the Trustee shall thereupon authenticate and
deliver said Notes to or upon the written order of the Company, signed by (a)
its Chairman of the Board, Chief Executive Officer, President or any Vice
President (whether or not designated by a number or numbers or word or words
added before or after the title "Vice President") and (b) its Treasurer or any
Assistant Treasurer, its Controller or any Assistant Controller or its Secretary
or any Assistant Secretary, without any further action by the Company hereunder.
Section 2.02. Form of Notes. The Notes and the Trustee's certificate
of authentication to be borne by such Notes shall be substantially in the form
set forth in Exhibit A, which is incorporated in and made a part of this
Indenture.
Any of the Notes may have such letters, numbers or other marks of
identification and such notations, legends and endorsements as the officers
executing the same may approve (execution thereof to be conclusive evidence of
such approval) and as are not inconsistent with the provisions of this
Indenture, or as may be required to comply with any law or with any rule or
regulation made pursuant thereto or with any rule or regulation of any
securities exchange or automated quotation system on which the Notes may be
listed, or to conform to usage.
Any Note in global form shall represent such of the outstanding Notes
as shall be specified therein and shall provide that it shall represent the
aggregate amount of outstanding Notes from time to time endorsed thereon and
that the aggregate amount of outstanding Notes represented thereby may from time
to time be increased or reduced to reflect transfers or exchanges permitted
hereby. Any endorsement of a Note in global form to reflect the amount of any
increase or decrease in the amount of outstanding Notes represented thereby
shall be made by the Trustee or the Custodian, at the direction of the Trustee,
in such manner and upon instructions given by the holder of such Notes in
accordance with this Indenture. Payment of principal of and interest and
premium, if any, on any Note in global form shall be made to the holder of such
Note.
The terms and provisions contained in the form of Note attached as
Exhibit A hereto shall constitute, and are hereby expressly made, a part of this
Indenture and, to the extent applicable, the Company and the Trustee, by their
execution and delivery of this Indenture, expressly agree to such terms and
provisions and to be bound thereby.
Section 2.03. Date and Denomination of Notes; Payments of Interest.
The Notes shall be issuable in registered form without coupons in denominations
of $1,000 principal amount and integral multiples thereof. Every Note shall be
dated the date of its authentication and shall bear interest from the applicable
date in each case as specified on the face of the form of Note attached as
Exhibit A hereto. Interest on the Notes shall be computed on the basis of a
360-day year comprised of twelve (12) 30-day months.
10
The Person in whose name any Note (or its Predecessor Note) is
registered on the Note register at the close of business on any record date with
respect to any interest payment date shall be entitled to receive the interest
payable on such interest payment date, except (i) that the interest payable upon
redemption (unless the date of redemption is an interest payment date) will be
payable to the Person to whom principal is payable and (ii) as set forth in the
next succeeding sentence. In the case of any Note (or portion thereof) that is
converted into Common Stock during the period from (but excluding) a record date
to (but excluding) the next succeeding interest payment date, either (x) if such
Note (or portion thereof) has been called for redemption on a redemption date
which occurs during such period, or is to be redeemed in connection with a
Change of Control on a Repurchase Date (as defined in Section 3.05) that occurs
during such period, the Company shall not be required to pay interest on such
interest payment date in respect of any such Note (or portion thereof) except to
the extent required to be paid upon redemption of such Note or portion thereof
pursuant to Section 3.03 or 3.05 hereof or (y) if such Note (or portion thereof)
has not been called for redemption on a redemption date that occurs during such
period and is not to be redeemed in connection with a Change of Control on a
Repurchase Date that occurs during such period, such Note (or portion thereof)
that is submitted for conversion during such period shall be accompanied by
funds equal to the interest payable on such succeeding interest payment date on
the principal amount so converted, as provided in the penultimate paragraph of
Section 15.02 hereof. Interest shall be payable at the office of the Company
maintained by the Company for such purposes in the Borough of Manhattan, City of
New York, which shall initially be an office or agency of the Trustee and may,
as the Company shall specify to the paying agent in writing by each record date,
be paid either by check mailed to the address of the Person entitled thereto as
it appears in the Note register (provided that the holder of Notes with an
aggregate principal amount in excess of $5,000,000 shall, at the written
election of such holder, be paid by wire transfer in immediately available
funds); provided, however, that payments to the Depositary will be made by wire
transfer of immediately available funds to the account of the Depositary or its
nominee. The term "record date" with respect to any interest payment date shall
mean the June 1 or December 1 preceding the relevant June 15 or December 15,
respectively.
Any interest on any Note which is payable, but is not punctually paid
or duly provided for, on any June 15 or December 15 (herein called "Defaulted
Interest") shall forthwith cease to be payable to the Noteholder on the relevant
record date by virtue of his having been such Noteholder, and such Defaulted
Interest shall 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 Notes (or
their respective Predecessor Notes) are registered at the close
of business on a special record date for the payment of such
Defaulted Interest, which
11
shall be fixed in the following manner. The Company
shall notify the Trustee in writing of the amount
of Defaulted Interest to be paid on each Note and
the date of the payment (which shall be not less
than twenty-five (25) days after the receipt by the
Trustee of such notice, unless the Trustee shall
consent to an earlier date), and at the same time
the Company shall deposit with the Trustee an
amount of money equal to the aggregate amount 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 Person 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 fifteen (15) days and
not less than ten (10) days prior to the date of
the proposed payment, and not less than ten (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 Noteholder at his address as it appears in
the Note register, not less than ten (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 Notes (or their
respective Predecessor Notes) were registered at
the close of business on such special record date
and shall no longer be payable pursuant to the
following clause (2) of this Section 2.03.
(2) The Company may make payment of any
Defaulted Interest in any other lawful manner not
inconsistent with the requirements of any
securities exchange or automated quotation system
on which the Notes may be listed or designated for
issuance, and upon such notice as may be required
by such exchange or automated quotation system, if,
after notice given by the Company to the Trustee of
the proposed payment pursuant to this clause, such
manner of payment shall be deemed practicable by
the Trustee.
12
Section 2.04. Execution of Notes. The Notes shall be signed in the
name and on behalf of the Company by the manual or facsimile signature of its
Chairman of the Board, Chief Executive Officer, President or any Vice President
(whether or not designated by a number or numbers or word or words added before
or after the title "Vice President") and attested by the manual or facsimile
signature of its Secretary or any of its Assistant Secretaries or its Treasurer
or any of its Assistant Treasurers (which may be printed, engraved or otherwise
reproduced thereon, by facsimile or otherwise). Only such Notes as shall bear
thereon a certificate of authentication substantially in the form set forth on
the form of Note attached as Exhibit A hereto, manually executed by the Trustee
(or an authenticating agent appointed by the Trustee as provided by Section
16.11), shall be entitled to the benefits of this Indenture or be valid or
obligatory for any purpose. Such certificate by the Trustee (or such an
authenticating agent) upon any Note executed by the Company shall be conclusive
evidence that the Note so authenticated has been duly authenticated and
delivered hereunder and that the holder is entitled to the benefits of this
Indenture.
In case any officer of the Company who shall have signed any of the
Notes shall cease to be such officer before the Notes so signed shall have been
authenticated and delivered by the Trustee, or disposed of by the Company, such
Notes nevertheless may be authenticated and delivered or disposed of as though
the person who signed such Notes had not ceased to be such officer of the
Company, and any Note may be signed on behalf of the Company by such persons as,
at the actual date of the execution of such Note, shall be the proper officers
of the Company, although at the date of the execution of this Indenture any such
person was not such an officer.
Section 2.05. Exchange and Registration of Transfer Notes;
Restrictions on Transfer; Depositary.
(a) The Company shall cause to be kept at the Corporate Trust Office a
register (the register maintained in such office and in any other office or
agency of the Company designated pursuant to Section 5.02 being herein sometimes
collectively referred to as the "Note register") in which, subject to such
reasonable regulations as it may prescribe, the Company shall provide for the
registration of Notes and transfers of Notes. The Note register shall be in
written form or in any form capable of being converted into written form within
a reasonably prompt period of time. The Trustee is hereby appointed "Note
registrar" for the purpose of registering Notes and transfers of Notes as herein
provided. The Company may appoint one or more co-registrars in accordance with
Section 5.02.
Upon surrender for registration of transfer of any Note to the Note
registrar or any co-registrar, and satisfaction of the requirements for such
transfer set forth in this Section 2.05, the Company shall execute, and the
Trustee shall authenticate and deliver, in the name of the designated transferee
or transferees, one or more new Notes of any authorized denominations and of a
like aggregate principal amount and bearing such restrictive legends as may be
required by this Indenture.
13
Notes may be exchanged for other Notes of any authorized denominations
and of a like aggregate principal amount, upon surrender of the Notes to be
exchanged at any such office or agency maintained by the Company pursuant to
Section 5.02. Whenever any Notes are so surrendered for exchange, the Company
shall execute, and the Trustee shall authenticate and deliver, the Notes which
the Noteholder making the exchange is entitled to receive bearing registration
numbers not contemporaneously outstanding.
All Notes issued upon any registration of transfer or exchange of Notes
shall be the valid obligations of the Company, evidencing the same debt, and
entitled to the same benefits under this Indenture, as the Notes surrendered
upon such registration of transfer or exchange.
All Notes presented or surrendered for registration of transfer or for
exchange, redemption or conversion shall (if so required by the Company or the
Note registrar) be duly endorsed, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Company, and the Notes shall
be duly executed by the Noteholder thereof or the Noteholder's attorney duly
authorized in writing.
No service charge shall be made for any registration of transfer or
exchange of Notes, but the Company may require payment of a sum sufficient to
cover any tax, assessment or other governmental charge that may be imposed in
connection with any registration of transfer or exchange of Notes.
Neither the Company nor the Trustee nor any Note registrar shall be
required to exchange or register a transfer of (a) any Notes for a period of
fifteen (15) days next preceding any selection of Notes to be redeemed, (b) any
Notes or portions thereof called for redemption pursuant to Section 3.02, (c)
any Notes or portions thereof surrendered for conversion pursuant to Article 15
or (d) any Notes or portions thereof tendered for redemption (and not withdrawn)
pursuant to Section 3.05.
(b) So long as the Notes are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, all Notes that, upon
initial issuance are beneficially owned by QIBs or as a result of a sale or
transfer after initial issuance are beneficially owned by QIBs, will be
represented by one or more Notes in global form registered in the name of the
Depositary or the nominee of the Depositary (the "Global Note"), except as
otherwise specified below. The transfer and exchange of beneficial interests in
any such Global Note shall be effected through the Depositary in accordance with
this Indenture and the procedures of the Depositary therefor. The Trustee shall
make appropriate endorsements to reflect increases or decreases in the principal
amounts of any such Global Note as set forth on the face of the Note ("Principal
Amount") to
14
reflect any such transfers. Except as provided below, beneficial owners of a
Global Note shall not be entitled to have certificates registered in their
names, will not receive or be entitled to receive physical delivery of
certificates in definitive form and will not be considered holders of such
Global Note.
(c) So long as the Notes are eligible for book-entry settlement with
the Depositary, or unless otherwise required by law, upon any transfer of a
definitive Note to a QIB in accordance with Rule 144A, and upon receipt of the
definitive Note or Notes being so transferred, together with a certification,
substantially in the form on the reverse of the Note, from the transferor that
the transfer is being made in compliance with Rule 144A (or other evidence
satisfactory to the Trustee), the Trustee shall make an endorsement on the
Global Note to reflect an increase in the aggregate Principal Amount of the
Notes represented by such Global Note, and the Trustee shall cancel such
definitive Note or Notes in accordance with the standing instructions and
procedures of the Depositary, the aggregate Principal Amount of the Notes
represented by such Global Note to be increased accordingly; provided, however,
that no definitive Note, or portion thereof, in respect of which the Company or
an Affiliate of the Company held any beneficial interest shall be included in
such Global Note until such definitive Note is freely tradable in accordance
with Rule 144(k) under the Securities Act, provided further that the Trustee
shall issue Notes in definitive form upon any transfer of a beneficial interest
in the Global Note to the Company or any Affiliate of the Company.
Upon any sale or transfer of a Note to an Institutional Accredited
Investor (other than pursuant to a registration statement that has been declared
effective under the Securities Act), such Institutional Accredited Investor
shall, prior to such sale or transfer, furnish to the Company and/or the Trustee
a signed letter containing representations and agreements relating to
restrictions on transfer substantially in the form set forth in Exhibit B to
this Indenture. Upon any transfer of a beneficial interest in the Global Note to
an Institutional Accredited Investor, the Trustee shall make an endorsement on
the Global Note to reflect a decrease in the aggregate Principal Amount of the
Notes represented by such Global Note, and the Company shall execute a
definitive Note or Notes in exchange therefore, and the Trustee, upon receipt of
such definitive Note or Notes and the written order of the Company, shall
authenticate and deliver such definitive Note or Notes.
Any Note in global form may be endorsed with or have incorporated in
the text thereof such legends or recitals or changes not inconsistent with the
provisions of this Indenture as may be required by the Custodian, the Depositary
or by the National Association of Securities Dealers, Inc. in order for the
Notes to be tradeable on The Portal Market or as may be required for the Notes
to be tradeable on any other market developed for trading of securities pursuant
to Rule 144A or required to comply with any applicable law or any regulation
thereunder or with the rules and regulations of any securities exchange or
automated quotation system upon which the Notes may be listed or traded or to
conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular Notes are subject.
15
(d) Every Note that bears or is required under this Section 2.05(d) to
bear the legend set forth in this Section 2.05(d) (together with any Common
Stock issued upon conversion of the Notes and required to bear the legend set
forth in Section 2.05(e), collectively, the "Restricted Securities") shall be
subject to the restrictions on transfer set forth in this Section 2.05(d)
(including those set forth in the legend set forth below) unless such
restrictions on transfer shall be waived by written consent of the Company, and
the holder of each such Restricted Security, by such Noteholder's acceptance
thereof, agrees to be bound by all such restrictions on transfer. As used in
Sections 2.05(d) and 2.05(e), the term "transfer" encompasses any sale, pledge,
loan, transfer or other disposition whatsoever of any Restricted Security.
Until the expiration of the holding period applicable to sales thereof
under Rule 144(k) under the Securities Act (or any successor provision), any
certificate evidencing such Note (and all securities issued in exchange therefor
or substitution thereof, other than Common Stock, if any, issued upon conversion
thereof, which shall bear the legend set forth in Section 2.05(e), if
applicable) shall bear a legend in substantially the following form, unless such
Note has been sold pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer), or unless otherwise agreed by the Company in writing,
with written notice thereof to the Trustee:
THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT OF 1933"), OR ANY STATE SECURITIES LAWS, AND
MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER:
REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS
DEFINED IN RULE 144A UNDER THE SECURITIES ACT OF 1933;
AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL
ISSUANCE OF THIS SECURITY RESELL OR OTHERWISE TRANSFER THE
SECURITY EVIDENCED HEREBY OR THE COMMON STOCK ISSUABLE UPON
CONVERSION OF SUCH SECURITY EXCEPT (A) TO THE COMPANY OR ANY
SUBSIDIARY THEREOF, (B) TO A QUALIFIED INSTITUTIONAL BUYER IN
16
COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT OF 1933,
(C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY
RULE 144 UNDER THE SECURITIES ACT OF 1933 (IF AVAILABLE), (D)
TO AN INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR
WITHIN THE MEANING OF RULE 501(a)(1), (2), (3) OR (7) OF
REGULATION D UNDER THE SECURITIES ACT PURSUANT TO AN EXEMPTION
FROM REGISTRATION UNDER THE SECURITIES ACT (IF AVAILABLE), OR
(E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS BEEN
DECLARED EFFECTIVE UNDER THE SECURITIES ACT OF 1933 AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER; AND
AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE
SECURITY EVIDENCED HEREBY IS TRANSFERRED (OTHER THAN A
TRANSFER PURSUANT TO CLAUSE 2(C) OR 2(E) ABOVE) A NOTICE
SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
Any Note (or security issued in exchange or substitution therefor) as
to which such restrictions on transfer shall have expired in accordance with
their terms or as to conditions for removal of the foregoing legend set forth
therein have been satisfied may, upon surrender of such Note for exchange to the
Note registrar in accordance with the provisions of this Section 2.05, be
exchanged for a new Note or Notes, of like tenor and aggregate principal amount,
which shall not bear the restrictive legend required by this Section 2.05(d).
Notwithstanding any other provisions of this Indenture (other than the
provisions set forth in the second paragraph of Section 2.05(c) and in this
Section 2.05(d)), a Note in global form may not be transferred as a whole or in
part except by the Depositary to a nominee of the Depositary or by a nominee of
the Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary.
The Depositary shall be a clearing agency registered under the Exchange
Act. The Company initially appoints The Depository Trust Company to act as
Depositary with respect to the Notes in global form. Initially, the Global Note
shall be issued to the Depositary, registered in the name of Cede & Co., as the
nominee of the Depositary, and deposited with the Custodian for Cede & Co.
17
If at any time the Depositary for a Note in global form notifies the
Company that it is unwilling or unable to continue as Depositary for such Note,
the Company may appoint a successor Depositary with respect to such Note. If a
successor Depositary is not appointed by the Company within ninety (90) days
after the Company receives such notice, the Company will execute, and the
Trustee, upon receipt of an Officers' Certificate for the authentication and
delivery of Notes, will authenticate and deliver, Notes in certificated form, in
aggregate principal amount equal to the principal amount of such Note in global
form, in exchange for such Note in global form.
If a Note in certificated form is issued in exchange for any portion of
a Note in global form after the close of business at the office or agency where
such exchange occurs on any record date and before the opening of business at
such office or agency on the next succeeding interest payment date, interest
will not be payable on such interest payment date in respect of such
certificated Note, but will be payable on such interest payment date, subject to
the provisions of Section 2.03, only to the Person to whom interest in respect
of such portion of such Note in global form is payable in accordance with the
provisions of this Indenture.
Notes in certificated form issued in exchange for all or a part of a
Note in global form pursuant to this Section 2.05 shall be registered in such
names and in such authorized denominations as the Depositary, pursuant to
instructions from its direct or indirect participants or otherwise, shall
instruct the Trustee. Upon execution and authentication, the Trustee shall
deliver such Notes in certificated form to the Persons in whose names such Notes
in certificated form are so registered.
At such time as all interests in a Note in global form have been
redeemed, converted, canceled, exchanged for Notes in certificated form, or
transferred to a transferee who receives Notes in certificated form thereof,
such Note in global form shall, upon receipt thereof, be canceled by the Trustee
in accordance with standing procedures and instructions existing between the
Depositary and the Custodian. At any time prior to such cancellation, if any
interest in a Note in global form is exchanged for Notes in certificated form,
redeemed, converted, repurchased or canceled, or transferred to a transferee who
receives Notes in certificated form therefor or any Note in certificated form is
exchanged or transferred for part of a Note in global form, the principal amount
of such Note in global form shall, in accordance with the standing procedures
and instructions existing between the Depositary and the Custodian, be
appropriately reduced or increased, as the case may be, and an endorsement shall
be made on such Note in global form, by the Trustee or the Custodian, at the
direction of the Trustee, to reflect such reduction or increase.
(e) Until the expiration of the holding period applicable to sales thereof under
Rule 144(k) under the Securities Act (or any successor provision), any stock
certificate representing Common Stock issued upon conversion of any Note
18
shall bear a legend in substantially the following form, unless such Common
Stock has been sold pursuant to a registration statement that has been declared
effective under the Securities Act (and which continues to be effective at the
time of such transfer) or such Common Stock has been issued upon conversion of
Notes that have been transferred pursuant to a registration statement that has
been declared effective under the Securities Act, or unless otherwise agreed by
the Company in writing with written notice thereof to the transfer agent:
THE COMMON STOCK EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN
REGISTERED UNDER THE SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT OF 1933"), OR ANY STATE SECURITIES LAWS, AND
MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER AGREES
THAT UNTIL THE EXPIRATION OF THE HOLDING PERIOD APPLICABLE TO
SALES OF THE COMMON STOCK EVIDENCED HEREBY UNDER RULE 144(K)
UNDER THE SECURITIES ACT (OR ANY SUCCESSOR PROVISION) IT WILL
NOT RESELL OR OTHERWISE TRANSFER THE COMMON STOCK EVIDENCED
HEREBY EXCEPT (A) TO THE COMPANY OR ANY SUBSIDIARY THEREOF,
(B) TO A QUALIFIED INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE
144A UNDER THE SECURITIES ACT OF 1933, (C) PURSUANT TO THE
EXEMPTION FROM REGISTRATION PROVIDED BY RULE 144 UNDER THE
SECURITIES ACT OF 1933 (IF AVAILABLE), (D) TO AN INSTITUTIONAL
INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING OF
RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE
SECURITIES ACT PURSUANT TO AN EXEMPTION FROM REGISTRATION
UNDER THE SECURITIES ACT (IF AVAILABLE), OR (E) PURSUANT TO A
REGISTRATION STATEMENT WHICH HAS BEEN DECLARED EFFECTIVE UNDER
THE SECURITIES ACT OF 1933 AND WHICH CONTINUES TO BE EFFECTIVE
AT THE TIME OF SUCH TRANSFER; AND AGREES THAT IT WILL DELIVER
TO EACH PERSON TO WHOM THE SECURITY EVIDENCED HEREBY IS
TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE (C) OR
(E) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS
LEGEND.
19
Any such Common Stock as to which such restrictions on transfer shall
have expired in accordance with their terms or as to which the conditions for
removal of the foregoing legend set forth therein have been satisfied may, upon
surrender of the certificates representing such shares of Common Stock for
exchange in accordance with the procedures of the transfer agent for the Common
Stock, be exchanged for a new certificate or certificates for a like number of
shares of Common Stock, which shall not bear the restrictive legend required by
this Section 2.05(e).
(f) Any Note or Common Stock issued upon the conversion or exchange of
a Note that, prior to the expiration of the holding period applicable to sales
thereof under Rule 144(k) under the Securities Act (or any successor provision),
is purchased or owned by the Company or any Affiliate thereof may not be resold
by the Company or such Affiliate unless registered under the Securities Act or
resold pursuant to an exemption from the registration requirements of the
Securities Act in a transaction which results in such Notes or Common Stock, as
the case may be, no longer being "restricted securities" (as defined under Rule
144).
Section 2.06. Mutilated, Destroyed, Lost or Stolen Notes. In case any
Note shall become mutilated or be destroyed, lost or stolen, the Company in its
discretion may execute, and upon its written request the Trustee or an
authenticating agent appointed by the Trustee shall authenticate and make
available for delivery, a new Note, bearing a number not contemporaneously
outstanding, in exchange and substitution for the mutilated Note, or in lieu of
and in substitution for the Note so destroyed, lost or stolen. In every case the
applicant for a substituted Note shall furnish to the Company, to the Trustee
and, if applicable, to such authenticating agent such security or indemnity as
may be required by them to save each of them harmless for any loss, liability,
cost or expense caused by or connected with such substitution, and, in every
case of destruction, loss or theft, the applicant shall also furnish to the
Company, to the Trustee and, if applicable, to such authenticating agent
evidence to their satisfaction of the destruction, loss or theft of such Note
and of the ownership thereof.
Following receipt by the Trustee or such authenticating agent, as the
case may be, of satisfactory security or indemnity and evidence, as described in
the preceding paragraph, the Trustee or such authenticating agent may
authenticate any such substituted Note and make available for delivery such
Note. Upon the issuance of any substituted Note, the Company may require the
payment of a sum sufficient to cover any tax, assessment or other governmental
charge that may be imposed in relation thereto and any other expenses connected
therewith. In case any Note which has matured or is about to mature or has been
called for redemption or has been tendered for redemption (and not withdrawn) or
is to be converted into Common Stock shall become mutilated or be destroyed,
lost or stolen, the Company may, instead of issuing a substitute Note, pay or
authorize the payment of or convert or authorize the conversion of the same
(without
20
surrender thereof except in the case of a mutilated Note), as the case may be,
if the applicant for such payment or conversion shall furnish to the Company, to
the Trustee and, if applicable, to such authenticating agent such security or
indemnity as may be required by them to save each of them harmless for any loss,
liability, cost or expense caused by or connected with such substitution, and,
in every case of destruction, loss or theft, the applicant shall also furnish to
the Company, the Trustee and, if applicable, any paying agent or conversion
agent evidence to their satisfaction of the destruction, loss or theft of such
Note and of the ownership thereof.
Every substitute Note issued pursuant to the provisions of this Section
2.06 by virtue of the fact that any Note is destroyed, lost or stolen shall
constitute an additional contractual obligation of the Company, whether or not
the destroyed, lost or stolen Note shall be found at any time, and shall be
entitled to all the benefits of (but shall be subject to all the limitations set
forth in) this Indenture equally and proportionately with any and all other
Notes duly issued hereunder. To the extent permitted by law, all Notes shall be
held and owned upon the express condition that the foregoing provisions are
exclusive with respect to the replacement or payment or conversion of mutilated,
destroyed, lost or stolen Notes and shall preclude any and all other rights or
remedies notwithstanding any law or statute existing or hereafter enacted to the
contrary with respect to the replacement or payment or conversion of negotiable
instruments or other securities without their surrender.
Section 2.07. Temporary Notes. Pending the preparation of Notes in
certificated form, the Company may execute and the Trustee or an authenticating
agent appointed by the Trustee shall, upon the written request of the Company,
authenticate and deliver temporary Notes (printed or lithographed). Temporary
Notes shall be issuable in any authorized denomination, and substantially in the
form of the Notes in certificated form, but with such omissions, insertions and
variations as may be appropriate for temporary Notes, all as may be determined
by the Company. Every such temporary Note shall be executed by the Company and
authenticated by the Trustee or such authenticating agent upon the same
conditions and in substantially the same manner, and with the same effect, as
the Notes in certificated form. Without unreasonable delay the Company will
execute and deliver to the Trustee or such authenticating agent Notes in
certificated form (other than in the case of Notes in global form) and thereupon
any or all temporary Notes (other than any such Note in global form) may be
surrendered in exchange therefor, at each office or agency maintained by the
Company pursuant to Section 5.02 and the Trustee or such authenticating agent
shall authenticate and make available for delivery in exchange for such
temporary Notes an equal aggregate principal amount of Notes in certificated
form. Such exchange shall be made by the Company at its own expense and without
any charge therefor. Until so exchanged, the temporary Notes shall in all
respects be entitled to the same benefits and subject to the same limitations
under this Indenture as Notes in certificated form authenticated and delivered
hereunder.
21
Section 2.08. Cancellation of Notes Paid, Etc. All Notes surrendered for
the purpose of payment, redemption, conversion, exchange or registration of
transfer shall, if surrendered to the Company or any paying agent or any Note
registrar or any conversion agent, be surrendered to the Trustee and promptly
canceled by it, or, if surrendered to the Trustee, shall be promptly canceled by
it, and no Notes shall be issued in lieu thereof except as expressly permitted
by any of the provisions of this Indenture. The Trustee shall dispose of such
canceled Notes in accordance with its customary procedures. If the Company shall
acquire any of the Notes, such acquisition shall not operate as a redemption or
satisfaction of the indebtedness represented by such Notes unless and until the
same are delivered to the Trustee for cancellation.
Section 2.09. CUSIP Numbers. The Company in issuing the Notes 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 Noteholders;
provided, however, that any such notice may state that no representation is made
as to the correctness of such numbers either as printed on the Notes or as
contained in any notice of a redemption and that reliance may be placed only on
the other identification numbers printed on the Notes, and any such redemption
shall not be affected by any defect in or omission of such numbers. The Company
will promptly notify the Trustee of any change in the "CUSIP" numbers.
ARTICLE 3
Redemption of Notes
Section 3.01. Optional Redemption by the Company. (a) Except as otherwise
provided in Section 3.05, the Notes may not be redeemed by the Company, in whole
or in part, at any time prior to June 20, 2005.
(a) At any time on or after June 20, 2005, and prior to maturity, the
Notes may be redeemed at the option of the Company, in whole or in part, upon
notice as set forth in Section 3.02, at the following redemption prices
(expressed as percentages of the principal amount) together with accrued and
unpaid interest, if any (including Liquidated Damages, if any) to, but
excluding, the date fixed for redemption:
Period Redemption Price
Beginning on June 20, 2005 and ending on June 14, 2006 102.750%
Beginning on June 15, 2006 and ending on June 14, 2007 101.375%
22
and 100% on June 15, 2007; provided, however, that if the date fixed for
redemption is on a June 15 or December 15, then the interest payable on such
date shall be paid to the holder of record on the preceding June 1 or December
1, respectively.
Section 3.02. Notice of Redemptions; Selection of Notes. In case the
Company shall desire to exercise the right to redeem all or, as the case may be,
any part of the Notes pursuant to Section 3.01, it shall fix a date for
redemption and it or, at its written request received by the Trustee not fewer
than thirty (30) days prior (or such shorter period of time as may be acceptable
to the Trustee) to the date fixed for redemption, the Trustee in the name of and
at the expense of the Company, shall mail or cause to be mailed a notice of such
redemption not fewer than twenty (20) nor more than sixty (60) days prior to the
date fixed for redemption to the holders of Notes so to be redeemed as a whole
or in part at their last addresses as the same appear on the Note register;
provided, however, that if the Company shall give such notice, it shall also
give written notice, and written notice of the Notes to be redeemed, to the
Trustee. Such mailing shall be by first class mail. The notice if mailed in the
manner herein provided shall be conclusively presumed to have been duly given,
whether or not the holder receives such notice. In any case, failure to give
such notice by mail or any defect in the notice to the holder of any Note
designated for redemption as a whole or in part shall not affect the validity of
the proceedings for the redemption of any other Note. Concurrently with the
mailing of any such notice of redemption, the Company shall issue a press
release announcing such redemption, the form and content of which press release
shall be determined by the Company in its sole discretion. The failure to issue
any such press release or any defect therein shall not affect the validity of
the redemption notice or any of the proceedings for the redemption of any Note
called for redemption.
Each such notice of redemption shall specify the aggregate principal
amount of Notes to be redeemed, the CUSIP number or numbers of the Notes being
redeemed, the date fixed for redemption (which shall be a Business Day), the
redemption price at which Notes are to be redeemed, the place or places of
payment, that payment will be made upon presentation and surrender of such
Notes, that interest accrued to the date fixed for redemption will be paid as
specified in said notice, and that on and after said date interest thereon or on
the portion thereof to be redeemed will cease to accrue. Such notice shall also
state the current Conversion Price and the date on which the right to convert
such Notes or portions thereof into Common Stock will expire. If fewer than all
the Notes are to be redeemed, the notice of redemption shall identify the Notes
to be redeemed (including CUSIP numbers, if any). In case any Note is to be
redeemed in part only, the notice of redemption shall state the portion of the
principal amount thereof to be redeemed and shall state that, on and after the
date fixed for redemption, upon surrender of such Note, a new Note or Notes in
principal amount equal to the unredeemed portion thereof will be issued.
23
On or prior to the redemption date specified in the notice of
redemption given as provided in this Section 3.02, the Company will deposit with
the Trustee or with one or more paying agents (or, if the Company is acting as
its own paying agent, set aside, segregate and hold in trust as provided in
Section 5.04(b)) an amount of money in immediately available funds sufficient to
redeem on the redemption date all the Notes (or portions thereof) so called for
redemption (other than those theretofore surrendered for conversion into Common
Stock) at the appropriate redemption price, together with accrued interest to,
but excluding, the date fixed for redemption; provided, however, that if such
payment is made on the redemption date it must be received by the Trustee or
paying agent, as the case may be, by 10:00 a.m. New York City time on such date.
The Company shall be entitled to retain any interest, yield or gain on amounts
deposited with the Trustee or any paying agent pursuant to this Section 3.02 in
excess of amounts required hereunder to pay the redemption price together with
accrued interest to, but excluding, the date fixed for redemption. If any Note
called for redemption is converted pursuant hereto prior to such redemption, any
money deposited with the Trustee or any paying agent or so segregated and held
in trust for the redemption of such Note shall be paid to the Company upon its
written request, or, if then held by the Company, shall be discharged from such
trust. Whenever any Notes are to be redeemed, the Company will give the Trustee
written notice in the form of an Officers' Certificate not fewer than thirty
(30) days (or such shorter period of time as may be acceptable to the Trustee)
prior to the redemption date as to the aggregate principal amount of Notes to be
redeemed.
If less than all of the outstanding Notes are to be redeemed, the
Trustee shall select the Notes or portions thereof of the Global Note or the
Notes in certificated form to be redeemed (in principal amounts of $1,000 or
integral multiples thereof) by lot, on a pro rata basis or by another method the
Trustee deems fair and appropriate. If any Note selected for partial redemption
is submitted for conversion in part after such selection, the portion of such
Note submitted for conversion shall be deemed (so far as may be) to be the
portion to be selected for redemption. The Notes (or portions thereof) so
selected shall be deemed duly selected for redemption for all purposes hereof,
notwithstanding that any such Note is submitted for conversion in part before
the mailing of the notice of redemption.
Upon any redemption of less than all of the outstanding Notes, the
Company and the Trustee may (but need not), solely for purposes of determining
the pro rata allocation among such Notes as are unconverted and outstanding at
the time of redemption, treat as outstanding any Notes surrendered for
conversion during the period of fifteen (15) days next preceding the mailing of
a notice of redemption and may (but need not) treat as outstanding any Note
authenticated and delivered during such period in exchange for the unconverted
portion of any Note converted in part during such period.
24
Section 3.03. Payment of Notes Called for Redemption. If notice of
redemption has been given as above provided, the Notes or portion of Notes with
respect to which such notice has been given shall, unless converted into Common
Stock pursuant to the terms hereof, become due and payable on the date fixed for
redemption and at the place or places stated in such notice at the applicable
redemption price, together with interest accrued to (but excluding) the date
fixed for redemption, and on and after said date (unless the Company shall
default in the payment of such Notes at the redemption price, together with
interest accrued to said date) interest on the Notes or portion of Notes so
called for redemption shall cease to accrue and, after the close of business on
the Business Day next preceding the date fixed for redemption, such Notes shall
cease to be convertible into Common Stock and, except as provided in Sections
8.05 and 13.04, to be entitled to any benefit or security under this Indenture,
and the holders thereof shall have no right in respect of such Notes except the
right to receive the redemption price thereof and unpaid interest to (but
excluding) the date fixed for redemption. On presentation and surrender of such
Notes at a place of payment in said notice specified, the said Notes or the
specified portions thereof shall be paid and redeemed by the Company at the
applicable redemption price, together with interest accrued thereon to (but
excluding) the date fixed for redemption; provided, however, that if the
applicable redemption date is an interest payment date, the semi-annual payment
of interest becoming due on such date shall be payable to the holders of such
Notes registered as such on the relevant record date instead of the holders
surrendering such Notes for redemption on such date.
Upon presentation of any Note redeemed in part only, the Company shall
execute and the Trustee shall authenticate and make available for delivery to
the holder thereof, at the expense of the Company, a new Note or Notes, of
authorized denominations, in principal amount equal to the unredeemed portion of
the Notes so presented.
Notwithstanding the foregoing, the Trustee shall not redeem any Notes or
mail any notice of redemption during the continuance of a default in payment of
interest or premium, if any, on the Notes. If any Note called for redemption
shall not be so paid upon surrender thereof for redemption, the principal and
premium, if any, shall, until paid or duly provided for, bear interest from the
date fixed for redemption at the rate borne by the Note and such Note shall
remain convertible into Common Stock until the principal and premium, if any,
and interest shall have been paid or duly provided for.
Section 3.04. Conversion Arrangement on Call for Redemption. In
connection with any redemption of Notes, the Company may arrange for the
purchase and conversion of any Notes by an agreement with one or more investment
bankers or other purchasers to purchase such Notes by paying to the Trustee in
trust for the Noteholders, on or before the date fixed for redemption, an amount
not less than the applicable redemption price, together with interest accrued to
(but excluding) the date fixed for redemption, of such Notes. Notwithstanding
anything to the contrary contained in this Article 3, the obligation of the
Company to pay the redemption price of such Notes, together with interest
accrued to (but excluding) the date fixed for redemption, shall be
25
deemed to be satisfied and discharged to the extent such amount is so paid by
such purchasers. If such an agreement is entered into, a copy of which will be
filed with the Trustee prior to the date fixed for redemption, any Notes not
duly surrendered for conversion by the holders thereof may, at the option of the
Company, be deemed, to the fullest extent permitted by law, acquired by such
purchasers from such holders and (notwithstanding anything to the contrary
contained in Article 15) surrendered by such purchasers for conversion, all as
of immediately prior to the close of business on the date fixed for redemption
(and the right to convert any such Notes shall be extended through such time),
subject to payment of the above amount as aforesaid. At the direction of the
Company, the Trustee shall hold and dispose of any such amount paid to it in the
same manner as it would monies deposited with it by the Company for the
redemption of Notes. Without the Trustee's prior written consent, no arrangement
between the Company and such purchasers for the purchase and conversion of any
Notes shall increase or otherwise affect any of the powers, duties,
responsibilities or obligations of the Trustee as set forth in this Indenture.
Section 3.05. Redemption at Option of Holders upon a Change of Control.
(a) If there shall occur a Change of Control at any time prior to
maturity of the Notes, then each Noteholder shall have the right, at such
holder's option, to require the Company to repurchase all of such holder's
Notes, or any portion thereof that is an integral multiple of $1,000 principal
amount, on the date set by the Company for such repurchase (the "Repurchase
Date") that is no earlier than twenty-five (25) days and no later than
thirty-five (35) days after the date of the Company Notice (as defined in
Section 3.05(b) below) of such Change of Control at a repurchase price equal to
100% of the principal amount thereof, together with accrued and unpaid interest
(including Liquidated Damages, if any) to (but excluding) the Repurchase Date;
provided, however, that, if such Repurchase Date is a June 15 or December 15,
then the interest payable on such date shall be paid to the holders of record of
the Notes on the next preceding June 1 or December 1, respectively.
Upon presentation of any Note repurchased in part only, the Company shall
execute and, upon the Company's written direction to the Trustee, the Trustee
shall authenticate and deliver to the holder thereof, at the expense of the
Company, a new Note or Notes, of authorized denominations, in principal amount
equal to the unrepurchased portion of the Notes so presented.
(b) On or before the 30th day after the occurrence of a Change of
Control, the Company or at its written request (which must be received by the
Trustee at least five (5) Business Days prior to the date the Trustee is
requested to give notice as described below, unless the Trustee shall agree in
writing to a shorter period), the Trustee in the name of and at the expense of
the Company, shall mail or cause to be mailed to all holders of record on the
date of the Change of Control a notice (the "Company Notice") of the occurrence
of such Change of
26
Control and of the redemption right at the option of the holders arising as a
result thereof. Such notice shall be mailed in the manner and with the effect
set forth in the first paragraph of Section 3.02 (without regard for the time
limits set forth therein). If the Company shall give such notice, the Company
shall also deliver a copy of the Company Notice to the Trustee at such time as
it is mailed to Noteholders. Concurrently with or prior to the mailing of any
Company Notice, the Company shall issue a press release announcing such Change
of Control referred to in the Company Notice, the form and content of which
press release shall be determined by the Company in its sole discretion. The
failure to issue any such press release or any defect therein shall not affect
the validity of the Company Notice or any proceedings for the repurchase of any
Note which any Noteholder may elect to have the Company repurchase as provided
in this Section 3.05.
Each Company Notice shall specify the circumstances constituting the
Change of Control, the Repurchase Date, the price at which the Company shall be
obligated to repurchase Notes, that the holder must exercise the repurchase
right by giving written notice to the Trustee together with the Notes with
respect to which the repurchase right is being exercised on or prior to the
close of business on the Business Day that is five (5) Business Days prior to
the Repurchase Date, that the holder shall have the right to withdraw any Notes
surrendered prior to the close of business on the Business Day immediately
preceding the Repurchase Date, a description of the procedure which a Noteholder
must follow to exercise such repurchase right and to withdraw any surrendered
Notes, the place or places where the holder is to surrender such holder's Notes,
and the amount of interest accrued on each Note to the Repurchase Date.
No failure of the Company to give the foregoing notices and no defect
therein shall limit the Noteholders' redemption rights or affect the validity of
the proceedings for the repurchase of the Notes pursuant to this Section 3.05.
(c) For a Note to be so repurchased at the option of the holder, the
Company must receive at the office or agency of the Company maintained for that
purpose or, at the option of such holder, the Corporate Trust Office, such Note
with the form entitled "Option to Elect Repayment Upon A Change of Control" on
the reverse thereof duly completed, together with such Notes duly endorsed for
transfer, on or before the Change of Control Expiration Time. All questions as
to the validity, eligibility (including time of receipt) and acceptance of any
Note for repayment shall be determined by the Company, whose determination shall
be final and binding absent manifest error.
(d) On or prior to the Repurchase Date, the Company will deposit with the
Trustee or with one or more paying agents (or, if the Company is acting as its
own paying agent, set aside, segregate and hold in trust as provided in Section
5.04(b)) an amount of money sufficient to repay on the Repurchase Date all the
Notes to be repurchased on such date at the appropriate repurchase price,
together with accrued interest to (but excluding) the Repurchase Date; provided,
27
however, that if such payment is made on the Repurchase Date it must be received
by the Trustee or paying agent, as the case may be, by 10:00 a.m. New York City
time, on such date. Payment for Notes surrendered for repurchase (and not
withdrawn) prior to the Change of Control Expiration Time will be made promptly
(but in no event more than five (5) Business Days) following the Repurchase Date
by mailing checks for the amount payable to the holders of such Notes entitled
thereto as they shall appear on the registry books of the Company.
(e) In the case of a reclassification, change, consolidation, merger,
combination, sale or conveyance to which Section 15.06 applies, in which the
Common Stock of the Company is changed or exchanged as a result into the right
to receive stock, securities or other property or assets (including cash), which
includes shares of Common Stock of the Company or shares of common stock of
another Person that are, or upon issuance will be, traded on a United States
national securities exchange or approved for trading on an established automated
over-the-counter trading market in the United States and such shares constitute
at the time such change or exchange becomes effective in excess of 50% of the
aggregate fair market value of such stock, securities or other property or
assets (including cash) (as determined by the Company, which determination shall
be conclusive and binding), then the Person formed by such consolidation or
resulting from such merger or which acquires such assets, as the case may be,
shall execute and deliver to the Trustee a supplemental indenture (accompanied,
upon Trustee's request, by an Opinion of Counsel that such supplemental
indenture complies with the Trust Indenture Act as in force at the date of
execution of such supplemental indenture) modifying the provisions of this
Indenture relating to the right of holders of the Notes to cause the Company to
repurchase the Notes following a Change of Control, including without limitation
the applicable provisions of this Section 3.05 and the definitions of Common
Stock and Change of Control, as appropriate, as determined in good faith by the
Company (which determination shall be conclusive and binding), to make such
provisions apply to such other Person if different from the Company and the
common stock issued by such Person (in lieu of the Company and the Common Stock
of the Company).
(f) The Company will comply with the provisions of Rule 13e-4 and any
other tender offer rules under the Exchange Act to the extent then applicable in
connection with the repurchase rights of the holders of Notes in the event of a
Change of Control.
ARTICLE 4
Subordination of Notes
Section 4.01. Agreement of Subordination. The Company covenants and
agrees, and each holder of Notes issued hereunder by its acceptance thereof
likewise covenants and agrees, that all Notes shall be issued subject to the
provisions of this Article 4, and each Person holding any Note, whether upon
original issue or upon registration of transfer, assignment or exchange thereof,
accepts and agrees to be bound by such provisions.
28
The payment of the principal of, premium, if any, and interest (including
Liquidated Damages, if any) on all Notes (including, but not limited to, the
redemption price with respect to the Notes called for redemption in accordance
with Section 3.02 or submitted for redemption in accordance with Section 3.05,
as the case may be, as provided in this Indenture) issued hereunder shall, to
the extent and in the manner hereinafter set forth, be subordinated and subject
in right of payment to the prior payment in full of all Senior Debt, whether
outstanding at the date of this Indenture or thereafter incurred.
No provision of this Article 4 shall prevent the occurrence of any
default or Event of Default hereunder.
Section 4.02. Payments to Noteholders. No payment shall be made with
respect to the principal of, premium, if any, or interest (including Liquidated
Damages, if any) on the Notes (including, but not limited to, the redemption
price with respect to the Notes to be called for redemption in accordance with
Section 3.02 or submitted for redemption in accordance with Section 3.05, as the
case may be, as provided in this Indenture), except payments and distributions
made by the Trustee as permitted by the first or second paragraph of Section
4.05, if:
(i) a default in the payment of principal, premium, if any,
interest, rent or other obligations in respect of Designated Senior Debt
occurs and is continuing (or, in the case of Designated Senior Debt for
which there is a period of grace, in the event of such a default that
continues beyond the period of grace, if any, specified in the instrument
or lease evidencing such Designated Senior Debt) (a "Payment Default"),
unless and until such Payment Default shall have been cured or waived or
shall have ceased to exist; or
(ii) a default, other than a Payment Default, on any Designated
Senior Debt occurs and is continuing that then permits holders of such
Designated Senior Debt or a Representative thereof to accelerate its
maturity (or in the case of any lease, a default occurs and is continuing
that permits the lessor to either terminate the lease or require the
Company to make an irrevocable offer to terminate the lease following an
event of default thereunder) and the Trustee receives a notice of the
default (a "Payment Blockage Notice") from a holder of Designated Senior
Debt, a Representative of Designated Senior Debt or the Company (a
"Non-Payment Default").
If the Trustee receives any Payment Blockage Notice pursuant to clause
(ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section 4.02 unless and until at least 360 days shall have
elapsed
29
since the initial effectiveness of the immediately prior Payment Blockage Notice
unless the Non-Payment Default which was the basis of the Payment Blockage
Notice and all other events of default existing or continuing (whether such
events of default are known or unknown to the Person giving the Payment Blockage
Notice) at the time of the Payment Blockage Notice have been cured or waived for
a period of not less than 90 consecutive days. No Non-Payment Default that
existed or was continuing on the date of delivery of any Payment Blockage Notice
to the Trustee shall be, or be made, the basis for a subsequent Payment Blockage
Notice.
The Company may and shall resume payments on and distributions in respect
of the Notes upon the earlier of:
(1) the date upon which any such Payment
Default is cured or waived or ceases to exist, or
(2) in the case of a Non-Payment Default,
the earlier of (a) the date upon which such default
is cured or waived or ceases to exist or (b) 180 days
after the applicable Payment Blockage Notice is
received by the Trustee if the maturity of such
Designated Senior Debt has not been accelerated (or
in the case of any lease, 180 days after notice is
received if the Company has not received notice that
the lessor under such lease has exercised its right
to terminate the lease or require the Company to make
an irrevocable offer to terminate the lease following
an event of default thereunder),
unless this Article 4 otherwise prohibits the payment or distribution at the
time of such payment or distribution.
Upon any payment by the Company, or distribution of assets of the Company
of any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding up or liquidation or reorganization of the
Company, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Debt shall first be paid in full in cash or other payment satisfactory to
the holders of such Senior Debt (and satisfactory to the holders of Designated
Senior Debt in the case such Senior Debt includes Designated Senior Debt), or
payment thereof in accordance with its terms provided for in cash or other
payment satisfactory to the holders of such Senior Debt (and satisfactory to the
holders of Designated Senior Debt in the case such Senior Debt includes
Designated Senior Debt) before any payment is made on account of the principal
of, premium, if any, or interest (including Liquidated Damages, if any) on the
Notes (except payments made pursuant to Article 13 from monies deposited with
the Trustee pursuant thereto prior to commencement of proceedings for such
dissolution, winding up, liquidation or reorganization), and upon any such
dissolution or
30
winding up or liquidation or reorganization of the Company or bankruptcy,
insolvency, receivership or other similar proceeding, any payment by the
Company, or distribution of assets of the Company of any kind or character,
whether in cash, property or securities, to which the holders of the Notes or
the Trustee would be entitled, except for the provisions of this Article 4,
shall (except as aforesaid) be paid by the Company or by any receiver, trustee
in bankruptcy, liquidating trustee, agent or other Person making such payment or
distribution, or by the holders of the Notes or by the Trustee under this
Indenture if received by them or it, directly to the holders of Senior Debt (pro
rata to such holders on the basis of the respective amounts of Senior Debt held
by such holders, or as otherwise required by law or a court order) or their
Representative or Representatives, as their respective interests may appear, to
the extent necessary to pay all Senior Debt in full, in cash or other payment
satisfactory to the holders of such Senior Debt (and satisfactory to the holders
of Designated Senior Debt in the case such Senior Debt includes Designated
Senior Debt), after giving effect to any concurrent payment or distribution to
or for the holders of Senior Debt, before any payment or distribution is made to
the holders of the Notes or to the Trustee.
For purposes of this Article 4, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Company as
reorganized or readjusted, or securities of the Company or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at least to the extent provided in this Article 4 with respect
to the Notes to the payment of all Senior Debt which may at the time be
outstanding provided that (i) the Senior Debt is assumed by the new corporation,
if any, resulting from any reorganization or readjustment, and (ii) the rights
of the holders of Senior Debt (other than leases which are not assumed by the
Company or the new corporation, as the case may be) are not, without the consent
of such holders, altered by such reorganization as the case may be) are not,
without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Company with, or the merger of the
Company into, another corporation or the liquidation or dissolution of the
Company following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another Person upon the terms and conditions
provided for in Article 12 shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 4.02 if such
other Person shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article 12.
In the event of the acceleration of the Notes because of an Event of
Default, no payment or distribution shall be made to the Trustee or any holder
of Notes in respect of the principal of, premium, if any, or interest (including
Liquidated Damages, if any) on the Notes (including, but not limited to, the
redemption price with respect to the Notes called for redemption in accordance
with Section 3.02 or submitted for redemption in accordance with Section 3.05,
as the case may be, as provided in this Indenture), except payments and
distributions made by the Trustee as permitted by the first or second paragraph
of Section 4.05, until all Senior Debt has been paid in full in cash or other
payment satisfactory to
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the holders of Senior Debt (and satisfactory to the holders of Designated Senior
Debt in the case such Senior Debt includes Designated Senior Debt) or such
acceleration is rescinded in accordance with the terms of this Indenture. If
payment of the Notes is accelerated because of an Event of Default, the Company
or the Trustee shall promptly notify holders of Senior Debt of the acceleration.
In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Company of any kind or character,
whether in cash, property or securities (including, without limitation, by way
of setoff or otherwise), prohibited by the foregoing provisions in this Section
4.02, shall be received by the Trustee or the holders of the Notes before all
Senior Debt is paid in full in cash or other payment satisfactory to the holders
of such Senior Debt (and satisfactory to the holders of Designated Senior Debt
in the case such Senior Debt includes Designated Senior Debt), or provision is
made for such payment thereof in accordance with its terms in cash or other
payment satisfactory to the holders of such Senior Debt (and satisfactory to the
holders of Designated Senior Debt in the case such Senior Debt includes
Designated Senior Debt), such payment or distribution shall be held in trust for
the benefit of and shall be paid over or delivered to the holders of Senior Debt
or their Representative or Representatives, as their respective interests may
appear, as calculated by the Company, for application to the payment of any
Senior Debt remaining unpaid to the extent necessary to pay all Senior Debt in
full in cash or other payment satisfactory to the holders of such Senior Debt
(and satisfactory to the holders of Designated Senior Debt in the case such
Senior Debt includes Designated Senior Debt), after giving effect to any
concurrent payment or distribution to or for the holders of such Senior Debt.
Nothing in this Section 4.02 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 8.06. This Section 4.02 shall be
subject to the further provisions of Section 4.05.
Section 4.03. Subrogation of Notes. Subject to the payment in full of
all Senior Debt, the rights of the holders of the Notes shall be subrogated to
the extent of the payments or distributions made to the holders of such Senior
Debt pursuant to the provisions of this Article 4 (equally and ratably with the
holders of all indebtedness of the Company which by its express terms is
subordinated to other indebtedness of the Company to substantially the same
extent as the Notes are subordinated and is entitled to like rights of
subrogation) to the rights of the holders of Senior Debt to receive payments or
distributions of cash, property or securities of the Company applicable to the
Senior Debt until the principal, premium, if any, and interest (including
Liquidated Damages, if any) on the Notes shall be paid in full, and, for the
purposes of such subrogation, no payments or distributions to the holders of the
Senior Debt of any cash, property or securities to which the holders of the
Notes or the Trustee would be entitled except for the provisions of this Article
4, and no payment over pursuant to the provisions of this Article 4, to or for
the benefit of the holders of Senior Debt by holders of the Notes or the
Trustee, shall, as among the Company, its creditors other than
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holders of Senior Debt, and the holders of the Notes, be deemed to be a payment
by the Company to or on account of the Senior Debt, and no payments or
distributions of cash, property or securities to or for the benefit of the
holders of the Notes pursuant to the subrogation provisions of this Article 4,
which would otherwise have been paid to the holders of Senior Debt, shall be
deemed to be a payment by the Company to or for the account of the Notes. It is
understood that the provisions of this Article 4 are and are intended solely for
the purposes of defining the relative rights of the holders of the Notes, on the
one hand, and the holders of the Senior Debt, on the other hand.
Nothing contained in this Article 4 or elsewhere in this Indenture or
in the Notes is intended to or shall impair, as among the Company, its creditors
other than the holders of Senior Debt, and the holders of the Notes, the
obligation of the Company, which is absolute and unconditional, to pay to the
holders of the Notes the principal of, premium, if any, and interest (including
Liquidated Damages, if any) on the Notes as and when the same shall become due
and payable in accordance with their terms, or is intended to or shall affect
the relative rights of the holders of the Notes and creditors of the Company
other than the holders of the Senior Debt, nor shall anything herein or therein
prevent the Trustee or the holder of any Note from exercising all remedies
otherwise permitted by applicable law upon default under this Indenture, subject
to the rights, if any, under this Article 4 of the holders of Senior Debt in
respect of cash, property or securities of the Company received upon the
exercise of any such remedy.
Upon any payment or distribution of assets of the Company referred to
in this Article 4, the Trustee, subject to the provisions of Section 8.01, and
the holders of the Notes shall be entitled to rely upon any order or decree made
by any court of competent jurisdiction in which such bankruptcy, dissolution,
winding up, liquidation or reorganization proceedings are pending, or a
certificate of the receiver, trustee in bankruptcy, liquidating trustee, agent
or other Person making such payment or distribution, delivered to the Trustee or
to the holders of the Notes, for the purpose of ascertaining the Persons
entitled to participate in such distribution, the holders of the Senior Debt and
other indebtedness of the Company, the amount thereof or payable thereon and all
other facts pertinent thereto or to this Article 4.
Section 4.04. Authorization to Effect Subordination. Each holder of a
Note by the holder's acceptance thereof authorizes and directs the Trustee on
the holder's behalf to take such action as may be necessary or appropriate to
effectuate the subordination as provided in this Article 4 and appoints the
Trustee to act as the holder's attorney-in-fact for any and all such purposes.
If the Trustee does not file a proper proof of claim or proof of debt in the
form required in any proceeding referred to in the third paragraph of Section
7.02 hereof at least thirty (30) days before the expiration of the time to file
such claim, the holders of any Senior Debt or their Representatives are hereby
authorized to file an appropriate claim for and on behalf of the holders of the
Notes.
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Section 4.05. Notice to Trustee. The Company shall give prompt written
notice in the form of an Officers' Certificate to a Responsible Officer of the
Trustee and to any paying agent of any fact known to the Company that would
prohibit the making of any payment of monies to or by the Trustee or any paying
agent in respect of the Notes pursuant to the provisions of this Article 4.
Notwithstanding the provisions of this Article 4 or any other provision of this
Indenture, the Trustee shall not be charged with knowledge of the existence of
any facts that would prohibit the making of any payment of monies to or by the
Trustee in respect of the Notes pursuant to the provisions of this Article 4,
unless and until a Responsible Officer of the Trustee shall have received
written notice thereof at the Corporate Trust Office from the Company (in the
form of an Officers' Certificate) or a Representative or a holder or holders of
Senior Debt, and before the receipt of any such written notice, the Trustee,
subject to the provisions of Section 8.01, shall be entitled in all respects to
assume that no such facts exist; provided, however, that if on a date not less
than one Business Day prior to the date upon which by the terms hereof any such
monies may become payable for any purpose (including, without limitation, the
payment of the principal of, or premium, if any, or interest (including
Liquidated Damages, if any) on any Note) the Trustee shall not have received,
with respect to such monies, the notice provided for in this Section 4.05, then,
anything herein contained to the contrary notwithstanding, the Trustee shall
have full power and authority to apply monies received to the purpose for which
they were received, and shall not be affected by any notice to the contrary that
may be received by it on or after such prior date.
Notwithstanding anything in this Article 4 to the contrary, nothing
shall prevent any payment by the Trustee to the Noteholders of monies deposited
with it pursuant to Section 13.01, if a Responsible Officer of the Trustee shall
not have received written notice at the Corporate Trust Office on or before one
Business Day prior to the date such payment is due that such payment is not
permitted under Section 4.01 or 4.02.
The Trustee, subject to the provisions of Section 8.01, shall be
entitled to rely on the delivery to it of a written notice by a Representative
or a person representing himself to be a holder of Senior Debt (or a trustee on
behalf of such holder) to establish that such notice has been given by a
Representative or a holder of Senior Debt or a trustee on behalf of any such
holder or holders. The Trustee shall not be required to make any payment or
distribution to or on behalf of a holder of Senior Debt pursuant to this Article
4 unless it has received satisfactory evidence as to the amount of Senior Debt
held by such Person, the extent to which such Person is entitled to participate
in such payment or distribution and any other facts pertinent to the rights of
such Person under this Article 4.
Section 4.06. Trustee's Relation to Senior Debt. The Trustee, in its
individual capacity, shall be entitled to all the rights set forth in this
Article 4 in respect of any Senior Debt at any time held by it, to the same
extent as any other holder of Senior Debt, and nothing in Section 8.13 or
elsewhere in this Indenture shall deprive the Trustee of any of its rights as
such holder.
34
With respect to the holders of Senior Debt, the Trustee undertakes to
perform or to observe only such of its covenants and obligations as are
specifically set forth in this Article 4, and no implied covenants or
obligations with respect to the holders of Senior Debt shall be read into this
Indenture against the Trustee. The Trustee shall not be deemed to owe any
fiduciary duty to the holders of Senior Debt and, subject to the provisions of
Section 8.01, the Trustee shall not be liable to any holder of Senior Debt (i)
for any failure to make any payments or distributions to such holder or (ii) if
it shall pay over or deliver to holders of Notes, the Company or any other
Person money in compliance with this Article 4.
Section 4.07. No Impairment of Subordination. No right of any present
or future holder of any Senior Debt to enforce subordination as herein provided
shall at any time in any way be prejudiced or impaired by any act or failure to
act on the part of the Company or by any act or failure to act, in good faith,
by any such holder, or by any noncompliance by the Company with the terms,
provisions and covenants of this Indenture, regardless of any knowledge thereof
which any such holder may have or otherwise be charged with. Senior Debt may be
created, renewed or extended and holders of Senior Debt may exercise any rights
under any instrument creating or evidencing such Senior Debt, including, without
limitation, any waiver of default thereunder, without any notice to or consent
from the holders of the Notes or the Trustee. No compromise, alteration,
amendment, modification, extension, renewal or other change of, or waiver,
consent or other action in respect of, any liability or obligation under or in
respect of the Senior Debt or any terms or conditions of any instrument creating
or evidencing such Senior Debt shall in any way alter or affect any of the
provisions of this Article 4 or the subordination of the Notes provided thereby.
Section 4.08. Certain Conversions Not Deemed Payment. For the purposes
of this Article 4 only, (1) the issuance and delivery of junior securities upon
conversion of Notes in accordance with Article 15 shall not be deemed to
constitute a payment or distribution on account of the principal of, premium, if
any, or interest (including Liquidated Damages, if any) on Notes or on account
of the purchase or other acquisition of Notes, and (2) the payment, issuance or
delivery of cash (except in satisfaction of fractional shares pursuant to
Section 15.03), property or securities (other than junior securities) upon
conversion of a Note shall be deemed to constitute payment on account of the
principal of, premium, if any, or interest (including Liquidated Damages, if
any) on such Note. For the purposes of this Section 4.08, the term "junior
securities" means (a) shares of any stock of any class of the Company or (b)
securities of the Company that are subordinated in right of payment to all
Senior Debt that may be outstanding at the time of issuance or delivery of such
securities to substantially the same extent as, or to a greater extent than, the
Notes are so subordinated as provided in this Article 4. Nothing contained in
this Article 4 or elsewhere in this
35
Indenture or in the Notes is intended to or shall impair, as among the Company,
its creditors (other than holders of Senior Debt) and the Noteholders, the
right, which is absolute and unconditional, of the Holder of any Note to convert
such Note in accordance with Article 15.
Section 4.09. Article Applicable to Paying Agents. If at any time any
paying agent other than the Trustee shall have been appointed by the Company and
be then acting hereunder, the term "Trustee" as used in this Article 4 shall
(unless the context otherwise requires) be construed as extending to and
including such paying agent within its meaning as fully for all intents and
purposes as if such paying agent were named in this Article 4 in addition to or
in place of the Trustee; provided, however, that the first paragraph of Section
4.05 shall not apply to the Company or any Affiliate of the Company if it or
such Affiliate acts as paying agent.
The Trustee shall not be responsible for the actions or inactions of
any other paying agents (including the Company if acting as its own paying
agent) and shall have no control of any funds held by such other paying agents.
Section 4.10. Senior Debt Entitled to Rely. The holders of Senior Debt
(including, without limitation, Designated Senior Debt) shall have the right to
rely upon this Article 4, and no amendment or modification of the provisions
contained herein shall diminish the rights of such holders unless such holders
shall have agreed in writing thereto.
Section 4.11. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Company referred to in
this Article 4, the Trustee and the Noteholders shall be entitled to rely upon
any order or decree entered by any court of competent jurisdiction in which such
insolvency, bankruptcy, receivership, liquidation, reorganization, dissolution,
winding up or similar case or proceeding is pending, or a certificate of the
trustee in bankruptcy, liquidating trustee, custodian, receiver, assignee for
the benefit of creditors, agent or other Person making such payment or
distribution, delivered to the Trustee or to the Noteholders, for the purpose of
ascertaining the Persons entitled to participate in such payment or
distribution, the holders of Senior Debt and other indebtedness of the Company,
the amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or to this Article 4.
ARTICLE 5
Particular Covenants of the Company
Section 5.01. Payment of Principal, Premium and Interest. The Company
covenants and agrees that it will duly and punctually pay or cause to be paid
the principal of and premium, if any (including the redemption price upon
redemption pursuant to Article 3), and interest (including Liquidated Damages,
if any), on each of the Notes at the places, at the respective times and in the
manner provided herein and in the Notes.
36
Section 5.02. Maintenance of Office or Agency. The Company will
maintain an office or agency in the Borough of Manhattan, the City of New York,
where the Notes may be surrendered for registration of transfer or exchange or
for presentation for payment or for conversion or redemption and where notices
and demands to or upon the Company in respect of the Notes 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 not
designated or appointed by the Trustee. If at any time the Company shall fail to
maintain any such required office or agency or shall fail to furnish the Trustee
with the address thereof, such presentations, surrenders, notices and demands
may be made or served at the Corporate Trust Office or the office of agency of
the Trustee in The Borough of Manhattan, The City of New York (which shall
initially be located at c/o Computershare Trust Company of New York, Wall Street
Plaza, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇ Attn: Wilmington Trust
(Mentor Graphics Corporation, 67/8% Convertible Subordinated Notes Due 2007).
The Company may also from time to time designate co-registrars and one
or more offices or agencies where the Notes may be presented or surrendered for
any or all such purposes and may from time to time rescind such designations.
The Company will give prompt written notice of any such designation or
rescission and of any change in the location of any such other office or agency.
The Company hereby initially designates the Trustee as paying agent,
Note registrar, Custodian and conversion agent and each of the Corporate Trust
Office and the office of agency of the Trustee in The Borough of Manhattan, The
City of New York (which shall initially be located at c/o Computershare Trust
Company of New York, Wall Street Plaza, ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇
▇▇▇▇▇ Attn: Wilmington Trust (Mentor Graphics Corporation, 67/8% Convertible
Subordinated Notes Due 2007)), shall be considered as one such office or agency
of the Company for each of the aforesaid purposes.
So long as the Trustee is the Note registrar, the Trustee agrees to
mail, or cause to be mailed, the notices set forth in Section 8.10(a) and the
third paragraph of Section 8.11. If co-registrars have been appointed in
accordance with this Section, the Trustee shall mail such notices only to the
Company and the Noteholders it can identify from its records.
Section 5.03. Appointments to Fill Vacancies in Trustee's Office. The
Company, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 8.10, a Trustee, so that there
shall at all times be a Trustee hereunder.
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Section 5.04. Provisions As To Paying Agent.
(a) If the Company shall appoint a paying agent other than the Trustee,
or if the Trustee shall appoint such a paying agent, the Company will cause such
paying agent to execute and deliver to the Trustee an instrument in which such
agent shall agree with the Trustee, subject to the provisions of this Section
5.04:
(1) that it will hold all sums held by it as
such agent for the payment of the principal of and
premium, if any, or interest on the Notes (whether
such sums have been paid to it by the Company or by
any other obligor on the Notes) in trust for the
benefit of the holders of the Notes;
(2) that it will give the Trustee notice of
any failure by the Company (or by any other obligor
on the Notes) to make any payment of the principal of
and premium, if any, or interest on the Notes when
the same shall be due and payable; and
(3) that at any time during the continuance of
an Event of Default, upon request of the Trustee, it
will forthwith pay to the Trustee all sums so held in
trust.
The Company shall, on or before each due date of the principal of,
premium, if any, or interest on the Notes, deposit with the paying agent a sum
(in funds which are immediately available on the due date for such payment)
sufficient to pay such principal, premium, if any, or interest, and (unless such
paying agent is the Trustee) the Company will promptly notify the Trustee of any
failure to take such action; provided, however, that if such deposit is made on
the due date, such deposit shall be received by the paying agent by 10:00 a.m.
New York City time, on such date.
(b) If the Company shall act as its own paying agent, it will, on or
before each due date of the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on the Notes, set aside, segregate and
hold in trust for the benefit of the holders of the Notes a sum sufficient to
pay such principal, premium, if any, or interest (including Liquidated Damages,
if any) so becoming due and will promptly notify the Trustee of any failure to
take such action and of any failure by the Company (or any other obligor under
the Notes) to make any payment of the principal of, premium, if any, or interest
(including Liquidated Damages, if any) on the Notes when the same shall become
due and payable.
(c) Anything in this Section 5.04 to the contrary notwithstanding, the
Company may, at any time, for the purpose of obtaining a satisfaction and
discharge of this Indenture, or for any other reason, pay or cause to be paid to
the Trustee all sums held in trust by the Company or any paying agent hereunder
as required by this Section 5.04, such sums to be held by the Trustee upon the
trusts herein contained and upon such payment by the Company or any paying agent
to the Trustee, the Company or such paying agent shall be released from all
further liability with respect to such sums.
38
(d) Anything in this Section 5.04 to the contrary notwithstanding, the
agreement to hold sums in trust as provided in this Section 5.04 is subject to
Sections 13.03 and 13.04.
The Trustee shall not be responsible for the actions of any other paying
agents (including the Company if acting as its own paying agent) and shall have
no control of any funds held by such other paying agents.
Section 5.05. Existence. Subject to Article 12, the Company will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided, however, that
the Company shall not be required to preserve any such right if the Company
shall determine that the preservation thereof is no longer desirable in the
conduct of the business of the Company and that the loss thereof is not
disadvantageous in any material respect to the Noteholders.
Section 5.06. Maintenance of Properties. The Company will cause all
properties used or useful in the conduct of its business or the business of any
Designated 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 so that the
business carried on in connection therewith may be properly and advantageously
conducted at all times; provided, however, that nothing in this Section shall
prevent the Company from discontinuing the operation or maintenance of any of
such properties if such discontinuance 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 Noteholders.
Section 5.07. Payment of Taxes and Other Claims. The Company will pay or
discharge, or cause to be paid or discharged, before the same may become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Company or any Designated Subsidiary or upon the income,
profits or property of the Company or any Designated Subsidiary, (ii) all claims
for labor, materials and supplies which, if unpaid, might by law become a lien
or charge upon the property of the Company or any Designated Subsidiary and
(iii) all stamps and other duties, if any, which may be imposed by the United
States or any political subdivision thereof or therein in connection with the
issuance, transfer, exchange or conversion of any Notes or with respect to this
Indenture; provided, however, that, in the case of clauses (i) and (ii), the
Company shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim (A) if the failure to do so
will not, in the aggregate, have a material adverse impact on the Company, or
(B) if the amount, applicability or validity is being contested in good faith by
appropriate proceedings.
39
Section 5.08. Rule 144A Information Requirement. Within the period prior
to the expiration of the holding period applicable to sales thereof under Rule
144(k) under the Securities Act (or any successor provision), the Company
covenants and agrees that it shall, during any period in which it is not subject
to Section 13 or 15(d) under the Exchange Act, make available to any holder or
beneficial holder of Notes or any Common Stock issued upon conversion thereof
which continue to be Restricted Securities in connection with any sale thereof
and any prospective purchaser of Notes or such Common Stock designated by such
holder or beneficial holder, the information required pursuant to Rule
144A(d)(4) under the Securities Act upon the request of any holder or beneficial
holder of the Notes or such Common Stock, and it will take such further action
as any holder or beneficial holder of such Notes or such Common Stock may
reasonably request, all to the extent required from time to time to enable such
holder or beneficial holder to sell its Notes or Common Stock without
registration under the Securities Act within the limitation of the exemption
provided by Rule 144A, as such Rule may be amended from time to time. Upon the
request of any holder or any beneficial holder of the Notes or such Common
Stock, the Company will deliver to such holder a written statement as to whether
it has complied with such requirements.
Section 5.09. Stay, Extension and Usury Laws. The Company covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Company from paying all or any portion of the principal of, premium,
if any, or interest (including Liquidated Damages, if any) on the Notes as
contemplated herein, wherever enacted, now or at any time hereafter in force, or
which may affect the covenants or the performance of this Indenture and the
Company (to the extent it may lawfully do so) hereby expressly waives all
benefit or advantage of any such law, and covenants that it will not, by resort
to any such law, 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.
Section 5.10. Compliance Certificate. The Company shall deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year
of the Company (which is the end of the calendar year), a certificate signed by
either the principal executive officer, principal financial officer or principal
accounting officer of the Company, stating whether or not to the best knowledge
of the signer 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 the status thereof of which the signer may have knowledge.
40
The Company will deliver to the Trustee, forthwith upon becoming aware
of (i) any default in the performance or observance of any covenant, agreement
or condition contained in this Indenture, or (ii) any Event of Default, an
Officers' Certificate specifying with particularity such default or Event of
Default and further stating what action the Company has taken, is taking or
proposes to take with respect thereto.
Any notice required to be given under this Section 5.10 or Section 4.05
shall be delivered to a Responsible Officer of the Trustee at its Corporate
Trust Office.
ARTICLE 6
Noteholders' List and Reports by the Company and the Trustee
Section 6.01. Noteholders' Lists. The Company covenants and agrees that
it will furnish or cause to be furnished to the Trustee, semiannually, not more
than fifteen (15) days after each June 1 and December 1 in each year beginning
with June 1, 2003, and at such other times as the Trustee may request in
writing, within thirty (30) days after receipt by the Company of any such
request (or such lesser time as the Trustee may reasonably request in order to
enable it to timely provide any notice to be provided by it hereunder), a list
in such form as the Trustee may reasonably require of the names and addresses of
the holders of Notes as of a date not more than fifteen (15) days (or such other
date as the Trustee may reasonably request in order to so provide any such
notices) prior to the time such information is furnished, except that no such
list need be furnished by the Company to the Trustee so long as the Trustee is
acting as the sole Note registrar.
Section 6.02. Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Notes contained in the most recent list furnished to it as provided in Section
6.01 or maintained by the Trustee in its capacity as Note registrar or
co-registrar in respect of the Notes, if so acting. The Trustee may destroy any
list furnished to it as provided in Section 6.01 upon receipt of a new list so
furnished.
(b) The rights of Noteholders to communicate with other holders of
Notes with respect to their rights under this Indenture or under the Notes, and
the corresponding rights and duties of the Trustee, shall be as provided by the
Trust Indenture Act.
(c) Every Noteholder, 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 them shall be held accountable by reason of any disclosure of
information as to names and addresses of holders of Notes made pursuant to the
Trust Indenture Act.
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Section 6.03. Reports by Trustee.
(a) Within sixty (60) days after June 15 of each year commencing with
the year 2003, the Trustee shall transmit to holders of Notes such reports dated
as of June 15 of the year in which such reports are made concerning the Trustee
and its actions under this Indenture as may be required pursuant to the Trust
Indenture Act at the times and in the manner provided pursuant thereto.
(b) A copy of such report shall, at the time of such transmission to
holders of Notes, be filed by the Trustee with each stock exchange and automated
quotation system upon which the Notes are listed and with the Company. The
Company will promptly notify the Trustee in writing when the Notes are listed on
any stock exchange or automated quotation system or delisted therefrom.
Section 6.04 . Reports by Company. The Company shall file with the
Trustee (and the Commission if at any time after the Indenture becomes qualified
under the Trust Indenture Act), and transmit to holders of Notes, 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, whether or not the Notes are governed by such
Act; provided, however, that any such information, documents or reports required
to be filed with the Commission pursuant to Section 13 or 15(d) of the Exchange
Act shall be filed with the Trustee within fifteen (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 7
Remedies of the Trustee and Noteholders On an Event of
Default
Section 7.01 . Events of Default. In case one or more of the following
Events of Default (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) shall have occurred and be
continuing:
(a) default in the payment of any installment of interest (including
Liquidated Damages, if any) upon any of the Notes as and when the same shall
become due and payable, and continuance of such default for a period of thirty
(30) days, whether or not such payment is permitted under Article 4 hereof; or
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(b) default in the payment of the principal of or premium, if any, on
any of the Notes as and when the same shall become due and payable either at
maturity or in connection with any redemption or repurchase pursuant to Article
3, by acceleration or otherwise, whether or not such payment is permitted under
Article 4 hereof; or
(c) failure on the part of the Company duly to observe or perform any
other of the covenants or agreements on the part of the Company in the Notes or
in this Indenture (other than a covenant or agreement a default in whose
performance or whose breach is elsewhere in this Section 7.01 specifically dealt
with) continued for a period of sixty (60) days after the date on which written
notice of such failure, requiring the Company to remedy the same, shall have
been given to the Company by the Trustee, or the Company and a Responsible
Officer of the Trustee by the holders of at least twenty-five percent (25%) in
aggregate principal amount of the Notes at the time outstanding determined in
accordance with Section 9.04; or
(d) a failure to pay when due at maturity or a default that results in
the acceleration of maturity of any Indebtedness of the Company and/or of
Designated Subsidiaries in an aggregate amount of $20 million or more, unless
the acceleration is rescinded, stayed or annulled within thirty (30) days after
written notice of default is given to the Company by the Trustee or to the
Company and the Trustee by the holders of at lease twenty five percent (25%) in
aggregate principal amount of the Notes at the time outstanding determined in
accordance with Section 9.04; or
(e) the commencement of a voluntary case or other proceeding seeking
liquidation, reorganization or other relief with respect to the Company or a
Designated Subsidiary or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a trustee,
receiver, liquidator, custodian or other similar official of the Company or of a
Designated Subsidiary or any substantial part of the property of the Company or
a Designated Subsidiary, or shall consent to any such relief or to the
appointment of or taking possession by any such official in an involuntary case
or other proceeding commenced against the Company or a Designated Subsidiary, or
shall make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due; or
(f) an involuntary case or other proceeding shall be commenced against
the Company or a Designated Subsidiary seeking liquidation, reorganization or
other relief with respect to the Company or a Designated Subsidiary or its debts
under any bankruptcy, insolvency or other similar law now or hereafter in effect
or seeking the appointment of a trustee, receiver, liquidator, custodian or
other similar official of the Company or a Designated Subsidiary or any
substantial part of the property of the Company or a Designated Subsidiary, and
such involuntary case or other proceeding shall remain undismissed and unstayed
for a period of ninety (90) consecutive days;
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then, and in each and every such case (other than an Event of Default specified
in Section 7.01(e) or (f)), unless the principal of all of the Notes shall have
already become due and payable, either the Trustee or the holders of not less
than twenty-five percent (25%) in aggregate principal amount of the Notes then
outstanding hereunder determined in accordance with Section 9.04, by notice in
writing to the Company (and to the Trustee if given by Noteholders), may declare
the principal of and premium, if any, on all the Notes and the interest accrued
thereon (including Liquidated Damages, if any) to be due and payable
immediately, and upon any such declaration the same shall become and shall be
immediately due and payable, anything in this Indenture or in the Notes
contained to the contrary notwithstanding. If an Event of Default specified in
Section 7.01(e) or (f) occurs, the principal of all the Notes and the interest
accrued thereon shall (including Liquidated Damages, if any) be immediately and
automatically due and payable without necessity of further action. This
provision, however, is subject to the conditions that if, at any time after the
principal of the Notes shall have been so declared due and payable, and before
any judgment or decree for the payment of the monies due shall have been
obtained or entered as hereinafter provided, the Company shall pay or shall
deposit with the Trustee a sum sufficient to pay all matured installments of
interest upon (including Liquidated Damages, if any) all Notes and the principal
of and premium, if any, on any and all Notes which shall have become due
otherwise than by acceleration (with interest on overdue installments of
interest (including Liquidated Damages, if any) (to the extent that payment of
such interest is enforceable under applicable law) and on such principal and
premium, if any, at the rate borne by the Notes, to the date of such payment or
deposit) and amounts due to the Trustee pursuant to Section 8.06, and if any and
all defaults under this Indenture, other than the nonpayment of principal of and
premium, if any, and accrued interest on (including Liquidated Damages, if any)
Notes which shall have become due by acceleration, shall have been cured or
waived pursuant to Section 7.07, then and in every such case the holders of a
majority in aggregate principal amount of the Notes then outstanding, by written
notice to the Company and to the Trustee, may waive all defaults or Events of
Default and rescind and annul such declaration and its consequences; but no such
waiver or rescission and annulment shall extend to or shall affect any
subsequent default or Event of Default, or shall impair any right consequent
thereon. The Company shall notify a Responsible Officer of the Trustee, promptly
upon becoming aware thereof, of any Event of Default.
In case the Trustee shall have proceeded to enforce any right under
this Indenture and such proceedings shall have been discontinued or abandoned
because of such waiver or rescission and annulment or for any other reason or
shall have been determined adversely to the Trustee, then and in every such case
the Company, the holders of Notes, and the Trustee shall be restored
respectively to their several positions and rights hereunder, and all rights,
remedies and powers of the Company, the holders of Notes, and the Trustee shall
continue as though no such proceeding had been taken.
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Section 7.02. Payments of Notes on Default; Suit Therefor. The Company
covenants that (a) in case default shall be made in the payment of any
installment of interest upon (including Liquidated Damages, if any) any of the
Notes as and when the same shall become due and payable, and such default shall
have continued for a period of thirty (30) days, or (b) in case default shall be
made in the payment of the principal of or premium, if any, on any of the Notes
as and when the same shall have become due and payable, whether at maturity of
the Notes or in connection with any redemption, by or under this Indenture
declaration or otherwise, then, upon demand of the Trustee, the Company will pay
to the Trustee, for the benefit of the holders of the Notes, the whole amount
that then shall have become due and payable on all such Notes for principal and
premium, if any, or interest (including Liquidated Damages, if any), as the case
may be, with interest upon the overdue principal and premium, if any, and (to
the extent that payment of such interest is enforceable under applicable law)
upon the overdue installments of interest (including Liquidated Damages, if any)
at the rate borne by the Notes, and, in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee, its agents, attorneys and counsel, and
all other amounts due the Trustee under Section 8.06. Until such demand by the
Trustee, the Company may pay the principal of and premium, if any, and interest
on (including Liquidated Damages, if any) the Notes to the registered holders,
whether or not the Notes are overdue.
In case the Company shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any actions or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceeding to judgment or final decree, and may enforce any such
judgment or final decree against the Company or any other obligor on the Notes
and collect in the manner provided by law out of the property of the Company or
any other obligor on the Notes wherever situated the monies adjudged or decreed
to be payable.
In case there shall be pending proceedings for the bankruptcy or for
the reorganization of the Company or any other obligor on the Notes under Title
11 of the United States Code, or any other applicable law, or in case a
receiver, assignee or trustee in bankruptcy or reorganization, liquidator,
sequestrator or similar official shall have been appointed for or taken
possession of the Company or such other obligor, the property of the Company or
such other obligor, or in the case of any other judicial proceedings relative to
the Company or such other obligor upon the Notes, or to the creditors or
property of the Company or such other obligor, the Trustee, irrespective of
whether the principal of the Notes shall then be due and payable as therein
expressed or by declaration or otherwise and irrespective of whether the Trustee
shall have made any demand pursuant to the provisions of this Section 7.02,
shall be entitled and empowered, by intervention in such proceedings or
otherwise, to file and prove a claim or claims for the whole amount of
principal, premium, if any, and interest (including Liquidated
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Damages, if any) owing and unpaid in respect of the Notes, and, in case of any
judicial proceedings, to file such proofs of claim and other papers or documents
as may be necessary or advisable in order to have the claims of the Trustee and
of the Noteholders allowed in such judicial proceedings relative to the Company
or any other obligor on the Notes, its or their creditors, or its or their
property, and to collect and receive any monies or other property payable or
deliverable on any such claims, and to distribute the same after the deduction
of any amounts due the Trustee under Section 8.06, and any receiver, assignee or
trustee in bankruptcy or reorganization, liquidator, custodian or similar
official is hereby authorized by each of the Noteholders 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 Noteholders, to pay to the Trustee any amount
due it for reasonable compensation, expenses, advances and disbursements,
including reasonable counsel fees incurred by it up to the date of such
distribution. To the extent that such payment of reasonable compensation,
expenses, advances and disbursements out of the estate in any such proceedings
shall be denied for any reason, payment of the same shall be secured by a lien
on, and shall be paid out of, any and all distributions, dividends, monies,
securities and other property which the holders of the Notes may be entitled to
receive in such proceedings, whether in liquidation or under any plan of
reorganization or arrangement or otherwise.
All rights of action and of asserting claims under this Indenture, or
under any of the Notes, may be enforced by the Trustee without the possession of
any of the Notes, or the production thereof at any trial or other proceeding
relative thereto, and any such suit or proceeding instituted by the Trustee
shall be brought in its own name as trustee of an express trust, and any
recovery of judgment shall, after provision for the payment of the reasonable
compensation, expenses, disbursements and advances of the Trustee, its agent and
counsel, be for the ratable benefit of the holders of the Notes.
In any proceedings brought by the Trustee (and in any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the holders
of the Notes, and it shall not be necessary to make any holders of the Notes
parties to any such proceedings.
Section 7.03. Application of Monies Collected by Trustee. Any monies
collected by the Trustee pursuant to this Article 7 shall be applied in the
order following, at the date or dates fixed by the Trustee for the distribution
of such monies, upon presentation of the several Notes, and stamping thereon 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 8.06;
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SECOND: Subject to the provisions of Article 4, in case the
principal of the outstanding Notes shall not have become due and be
unpaid, to the payment of interest on (including Liquidated Damages, if
any) the Notes in default in the order of the maturity of the
installments of such interest, with interest (to the extent that such
interest has been collected by the Trustee) upon the overdue
installments of interest (including Liquidated Damages, if any) at
the rate borne by the Notes, such payments to be made ratably to the
Persons entitled thereto;
THIRD: Subject to the provisions of Article 4, in case the
principal of the outstanding Notes shall have become due, by
declaration or otherwise, and be unpaid to the payment of the whole
amount then owing and unpaid upon the Notes for principal and premium,
if any, and interest (including Liquidated Damages, if any), with
interest on the overdue principal and premium, if any, and (to the
extent that such interest has been collected by the Trustee) upon
overdue installments of interest (including Liquidated Damages, if any)
at the rate borne by the Notes, and in case such monies shall be
insufficient to pay in full the whole amounts so due and unpaid upon
the Notes, then to the payment of such principal and premium, if any,
and interest (including Liquidated Damages, if any) without preference
or priority of principal and premium, if any, over interest (including
Liquidated Damages, if any), or of interest (including Liquidated
Damages, if any) over principal and premium, if any, or of any
installment of interest over any other installment of interest, or of
any Note over any other Note, ratably to the aggregate of such
principal and premium, if any, and accrued and unpaid interest; and
FOURTH: Subject to the provisions of Article 4, to the
payment of the remainder, if any, to the Company or any other Person
lawfully entitled thereto.
Section 7.04. Proceedings by Noteholder. No holder of any Note shall
have any right by virtue of or by reference to any provision of this Indenture
to institute any suit, action or proceeding in equity or at law upon or under or
with respect to this Indenture, or for the appointment of a receiver, trustee,
liquidator, custodian or other similar official, or for any other remedy
hereunder, unless such holder previously shall have given to the Trustee written
notice of an Event of Default and of the continuance thereof, as hereinbefore
provided, and unless also the holders of not less than twenty-five percent (25%)
in aggregate principal amount of the Notes then outstanding shall have made
written request upon the Trustee to institute such action, suit or proceeding in
its own name as Trustee hereunder and shall have offered to the Trustee such
reasonable indemnity as it may require against the costs, expenses and
liabilities to be incurred therein or thereby, and the Trustee for sixty (60)
days after its receipt of such notice, request and offer of indemnity, shall
have neglected or refused to institute any such action, suit or proceeding and
no direction inconsistent with such written request
47
shall have been given to the Trustee pursuant to Section 7.07; it being
understood and intended, and being expressly covenanted by the taker and holder
of every Note with every other taker and holder and the Trustee, that no one or
more holders of Notes shall have any right in any manner whatsoever by virtue of
or by reference to any provision of this Indenture to affect, disturb or
prejudice the rights of any other holder of Notes, or to obtain or seek to
obtain priority over or preference to any other such holder, or to enforce any
right under this Indenture, except in the manner herein provided and for the
equal, ratable and common benefit of all holders of Notes (except as otherwise
provided herein). For the protection and enforcement of this Section 7.04, each
and every Noteholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
Notwithstanding any other provision of this Indenture and any provision
of any Note, the right of any holder of any Note to receive payment of the
principal of and premium, if any (including the redemption price upon redemption
pursuant to Article 3), and accrued interest on (including Liquidated Damages,
if any) such Note, on or after the respective due dates expressed in such Note
or in the event of redemption, or to institute suit for the enforcement of any
such payment on or after such respective dates against the Company shall not be
impaired or affected without the consent of such holder.
Anything in this Indenture or the Notes to the contrary
notwithstanding, the holder of any Note, without the consent of either the
Trustee or the holder of any other Note, in its own behalf and for its own
benefit, may enforce, and may institute and maintain any proceeding suitable to
enforce, its rights of conversion as provided herein.
Section 7.05. Proceedings by Trustee. In case of an Event of Default,
the Trustee may, in its discretion, proceed to protect and enforce the rights
vested in it by this Indenture by such appropriate judicial proceedings as are
necessary to protect and enforce any of such rights, either by suit in equity or
by action at law or by proceeding in bankruptcy or otherwise, whether for the
specific enforcement of any covenant or agreement contained in this Indenture or
in aid of the exercise of any power granted in this Indenture, or to enforce any
other legal or equitable right vested in the Trustee by this Indenture or by
law.
Section 7.06. Remedies Cumulative and Continuing. Except as provided in
Section 2.06, all powers and remedies given by this Article 7 to the Trustee or
to the Noteholders shall, to the extent permitted by law, be deemed cumulative
and not exclusive of any thereof or of any other powers and remedies available
to the Trustee or the holders of the Notes, by judicial proceedings or
otherwise, to enforce the performance or observance of the covenants and
agreements contained in this Indenture, and no delay or omission of the Trustee
or of any holder of any of the Notes to exercise any right or power accruing
upon any default or Event of Default occurring and continuing as aforesaid shall
impair any such right or power, or shall be construed to be a waiver of any such
default or
48
any acquiescence therein, and, subject to the provisions of Section 7.04, every
power and remedy given by this Article 7 or by law to the Trustee or to the
Noteholders may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Noteholders.
Section 7.07 Direction of Proceedings and Waiver of Defaults by
Majority of Noteholders. The holders of a majority (more than fifty percent) in
aggregate principal amount of the Notes at the time outstanding determined in
accordance with Section 9.04 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; provided, however, that
(a) such direction shall be in writing, (b) such direction shall not be in
conflict with any rule of law or with this Indenture, (c) the Trustee may take
any other action which is not inconsistent with such direction and (d) the
Trustee may decline to take any action that would benefit some Noteholders to
the detriment of other Noteholders. The holders of a majority in aggregate
principal amount of the Notes at the time outstanding determined in accordance
with Section 9.04 may, on behalf of the holders of all of the Notes, waive any
past default or Event of Default hereunder and its consequences except (i) a
default in the payment of interest (including Liquidated Damages, if any) or
premium, if any, on, or the principal of, the Notes, (ii) a failure by the
Company to convert any Notes into Common Stock, (iii) a default in the payment
of redemption price pursuant to Article 3 or (iv) a default in respect of a
covenant or provisions hereof which under Article 11 cannot be modified or
amended without the consent of the holders of each or all Notes then outstanding
or affected thereby. Upon any such waiver, the Company, the Trustee and the
holders of the Notes shall be restored to their former positions and rights
hereunder, but no such waiver shall extend to any subsequent or other default or
Event of Default or impair any right consequent thereon. Whenever any default or
Event of Default hereunder shall have been waived as permitted by this Section
7.07, said default or Event of Default shall for all purposes of the Notes and
this Indenture be deemed to have been cured and to be not continuing, but no
such waiver shall extend to any subsequent or other default or Event of Default
or impair any right consequent thereon.
Section 7.08 . Notice of Defaults. The Trustee shall, within ninety
(90) days after a Responsible Officer of the Trustee has knowledge of the
occurrence of a default, mail to all Noteholders, as the names and addresses of
such holders appear upon the Note register, notice of all defaults known to a
Responsible Officer, unless such defaults shall have been cured or waived before
the giving of such notice; provided, however, that except in the case of default
in the payment of the principal of, or premium, if any, or interest (including
Liquidated Damages, if any) on any of the Notes, the Trustee shall be protected
in withholding such notice if and so long as a trust committee of directors
and/or Responsible Officers of the Trustee in good faith determines that the
withholding of such notice is in the interests of the Noteholders.
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Section 7.09. Undertaking to Pay Costs. All parties to this Indenture
agree, and each holder of any Note by such holder's acceptance thereof shall be
deemed to have agreed, that any court may, in its discretion, require, in any
suit for the enforcement of any right or remedy under this Indenture, or in any
suit against the Trustee for any action taken or omitted by it as Trustee, the
filing by any party litigant in such suit of an undertaking to pay the costs of
such suit and that such court may in its discretion assess reasonable costs,
including reasonable attorneys' fees and expenses, against any party litigant in
such suit, having due regard to the merits and good faith of the claims or
defenses made by such party litigant; provided, however, that the provisions of
this Section 7.09 (to the extent permitted by law) shall not apply to any suit
instituted by the Trustee, to any suit instituted by any Noteholder, or group of
Noteholders, holding in the aggregate more than ten percent in principal amount
of the Notes at the time outstanding determined in accordance with Section 9.04,
or to any suit instituted by any Noteholder for the enforcement of the payment
of the principal of or premium, if any, or interest on any Note on or after the
due date expressed in such Note or to any suit for the enforcement of the right
to convert any Note in accordance with the provisions of Article 15.
ARTICLE 8
The Trustee
Section 8.01 . Duties and Responsibilities of Trustee. The Trustee,
prior to the occurrence of an Event of Default and after the curing of all
Events of Default which may have occurred, undertakes to perform such duties and
only such duties as are specifically set forth in this Indenture. In case an
Event of Default has occurred (which has not been cured or waived), the Trustee
shall exercise such of the rights and powers vested in it by this Indenture, and
use the same degree of care and skill in their exercise, as a prudent person
would exercise or use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own willful misconduct, except that:
(a) prior to the occurrence of an Event of Default and after the curing
or waiving of all Events of Default which may have occurred:
(1) the duties and obligations of the Trustee shall
be determined solely by the express provisions of this
Indenture and the Trust Indenture Act, and the Trustee shall
not be liable except for the performance of such duties and
obligations as are specifically set forth in this Indenture
and no implied covenants or obligations shall be read into
this Indenture and the Trust Indenture Act against the
Trustee; and
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(2) in the absence of bad faith and willful
misconduct on the part of the Trustee, the Trustee may
conclusively rely as to the truth of the statements and
the correctness of the opinions expressed therein, upon
any certificates or opinions furnished to the Trustee and
conforming to the requirements of this Indenture; but, in
the case of any such certificates or opinions which by any
provisions hereof are specifically required to be
furnished to the Trustee, the Trustee shall be under a
duty to examine the same to determine whether or not they
conform to the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Officers of the Trustee, unless the
Trustee was negligent in ascertaining the pertinent facts;
(c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the written direction
of the holders of not less than a majority in principal amount of the Notes at
the time outstanding determined as provided in Section 9.04 relating to the
time, method and place of conducting any proceeding for any remedy available to
the Trustee, or exercising any trust or power conferred upon the Trustee, under
this Indenture;
(d) whether or not therein 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 8.01;
(e) the Trustee shall not be liable in respect of any payment (as to the
correctness of amount, entitlement to receive or any other matters relating to
payment) or notice effected by the Company or any paying agent or any records
maintained by any co-registrar with respect to the Notes; and
(f) if any party fails to deliver a notice relating to an event the fact
of which, pursuant to this Indenture, requires notice to be sent to the Trustee,
the Trustee may conclusively rely on its failure to receive such notice as
reason to act as if no such event occurred.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there is reasonable ground for believing that the
repayment of such funds or adequate indemnity against such risk or liability is
not reasonably assured to it.
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SECTION 8.02. Reliance on Documents, Opinions, Etc. Except as otherwise
provided in Section 8.01:
(a) the Trustee may rely and shall be protected in acting upon any
resolution, certificate, statement, instrument, opinion, report, notice,
request, consent, order, bond, debenture, note, coupon or other paper or
document (whether in its original or facsimile form) believed by it in good
faith to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request, direction, order or demand of the Company mentioned
herein shall be sufficiently evidenced by an Officers' Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the Secretary or an Assistant Secretary of the Company;
(c) the Trustee may consult with counsel of its own selection and any
advice or Opinion of Counsel shall be full and complete authorization and
protection in respect of any action taken or omitted by it hereunder in good
faith and in accordance with such advice or Opinion of Counsel;
(d) the Trustee shall be under no obligation to exercise any of the
rights or powers vested in it by this Indenture at the request, order or
direction of any of the Noteholders pursuant to the provisions of this
Indenture, unless such Noteholders shall have offered to the Trustee reasonable
security or indemnity against the costs, expenses and liabilities which may be
incurred therein or thereby;
(e) 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 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 reasonably determine to make such further inquiry or
investigation, it shall be entitled to examine the relevant books, records and
premises of the Company, personally or by agent or attorney; and
(f) 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 by it with due care
hereunder.
Section 8.03. No Responsibility for Recitals, Etc. The recitals
contained herein and in the Notes (except in the Trustee's certificate of
authentication) shall be taken as the statements of the Company, and the Trustee
assumes no responsibility for the correctness of the same. The Trustee makes no
representations as to the validity or sufficiency of this Indenture or of the
Notes. The Trustee shall not be accountable for the use or application by the
Company of any Notes or the proceeds of any Notes authenticated and delivered by
the Trustee in conformity with the provisions of this Indenture.
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Section 8.04. Trustee, Paying Agents, Conversion Agents or Registrar May
Own Notes. The Trustee, any paying agent, any conversion agent or Note
registrar, in its individual or any other capacity, may become the owner or
pledgee of Notes with the same rights it would have if it were not Trustee,
paying agent, conversion agent or Note registrar.
Section 8.05. Monies to Be Held in Trust. Subject to the provisions of
Section 13.04 and Section 4.02, all monies received by the Trustee shall, until
used or applied as herein provided, be held in trust for the purposes for which
they were received. 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 may be agreed in writing from time to time by the Company and the
Trustee.
Section 8.06. Compensation and Expenses of Trustee. The Company
covenants and agrees to pay to the Trustee from time to time, and the Trustee
shall be entitled to, reasonable compensation for all services rendered by it
hereunder in any capacity (which shall not be limited by any provision of law in
regard to the compensation of a trustee of an express trust) as mutually agreed
to from time to time in writing between the Company and the Trustee, and the
Company will pay or reimburse the Trustee upon its request for all reasonable
expenses, disbursements and advances reasonably incurred or made by the Trustee
in accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all Persons not regularly in its employ) except any such expense, disbursement
or advance as may arise from its negligence, willful misconduct, recklessness or
bad faith. The Company also covenants to indemnify the Trustee (or any officer,
director or employee of the Trustee), in any capacity under this Indenture and
its agents and any authenticating agent for, and to hold them harmless against,
any and all loss, liability, claim or expense incurred without negligence,
willful misconduct, recklessness or bad faith on the part of the Trustee or such
officers, directors, employees and agent or authenticating agent, as the case
may be, and arising out of or in connection with the acceptance or
administration of this trust or in any other capacity hereunder, including the
reasonable costs and expenses of defending themselves against any claim of
liability in the premises. The obligations of the Company under this Section
8.06 to compensate or indemnify the Trustee and to pay or reimburse the Trustee
for expenses, disbursements and advances shall be secured by a lien prior to
that of the Notes upon all property and funds held or collected by the Trustee
as such, except funds held in trust for the benefit of the holders of particular
Notes. The obligation of the Company under this Section shall survive the
satisfaction and discharge of this Indenture.
When the Trustee and its agents and any authenticating agent incur
expenses or render services after an Event of Default specified in Section
7.01(e) or (f) with respect to the Company occurs, the expenses and the
compensation for the services are intended to constitute expenses of
administration under any bankruptcy, insolvency or similar laws.
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Section 8.07. Officers' Certificate as Evidence. Except as otherwise
provided in Section 8.01, whenever in the administration of the provisions of
this Indenture the Trustee shall deem it necessary or desirable that a matter be
proved or established prior to taking or omitting any action hereunder, such
matter (unless other evidence in respect thereof be herein specifically
prescribed) may, in the absence of negligence or willful misconduct on the part
of the Trustee, be deemed to be conclusively proved and established by an
Officers' Certificate delivered to the Trustee.
Section 8.08. Conflicting Interests of Trustee. 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 8.09. Eligibility of Trustee. There shall at all times be a
Trustee hereunder which shall be a Person that is eligible pursuant to the Trust
Indenture Act to act as such and has a combined capital and surplus of at least
$50,000,000 (or if such Person is a member of a bank holding company system, its
bank holding company shall have a combined capital and surplus of at least
$50,000,000). If such Person publishes reports of condition at least annually,
pursuant to law or to the requirements of any 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 8.09, it shall resign immediately in the manner and with the effect
hereinafter specified in this Article.
Section 8.10. Resignation Or Removal Of Trustee.
(a) The Trustee may at any time resign by giving written notice of such
resignation to the Company and to the holders of Notes. Upon receiving such
notice of resignation, the Company shall promptly appoint a successor trustee by
written instrument, in duplicate, executed by order of the Board of Directors,
one copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee. If no successor trustee shall have been so
appointed and have accepted appointment sixty (60) days after the mailing of
such notice of resignation to the Noteholders, the resigning Trustee may, upon
ten (10) business days' notice to the Company and the Noteholders, appoint a
successor identified in such notice or may petition, at the expense of the
Company, any court of competent jurisdiction for the appointment of a successor
trustee, or, if any Noteholder who has been a bona fide holder of a Note or
Notes for at least six (6) months may, subject to the provisions of Section
7.09, on behalf of himself and
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all others similarly situated, petition any such court for the appointment of a
successor trustee. Such court may thereupon, after such notice, if any, as it
may deem proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(1) the Trustee shall fail to comply with Section
8.08 after written request therefor by the Company or by any
Noteholder who has been a bona fide holder of a Note or Notes
for at least six (6) months; or
(2) the Trustee shall cease to be eligible in
accordance with the provisions of Section 8.09 and shall fail
to resign after written request therefor by the Company or by
any such Noteholder; 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, the Company may remove the Trustee and appoint a
successor trustee by written instrument, in duplicate, executed by order of the
Board of Directors, one copy of which instrument shall be delivered to the
Trustee so removed and one copy to the successor trustee, or, subject to the
provisions of Section 7.09, any Noteholder who has been a bona fide holder of a
Note or Notes for at least six (6) months may, on behalf of himself and all
others similarly situated, petition any court of competent jurisdiction for the
removal of the Trustee and the appointment of a successor trustee; provided,
however, that if no successor Trustee shall have been appointed and have
accepted appointment sixty (60) days after either the Company or the Noteholders
has removed the Trustee, the Trustee so removed may petition any court of
competent jurisdiction for an appointment of a successor trustee. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The holders of a majority in aggregate principal amount of the Notes
at the time outstanding may at any time remove the Trustee and nominate a
successor trustee which shall be deemed appointed as successor trustee unless,
within ten (10) days after notice to the Company of such nomination, the Company
objects thereto, in which case the Trustee so removed or any Noteholder, or if
such Trustee so removed or any Noteholder fails to act, the Company, upon the
terms and conditions and otherwise as in Section 8.10(a) provided, may petition
any court of competent jurisdiction for an appointment of a successor trustee.
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(d) Any resignation or removal of the Trustee and appointment of a
successor trustee pursuant to any of the provisions of this Section 8.10 shall
become effective upon acceptance of appointment by the successor trustee as
provided in Section 8.11.
Section 8.11. Acceptance by Successor Trustee. Any successor trustee
appointed as provided in Section 8.10 shall execute, acknowledge and deliver to
the Company and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, duties and obligations of its predecessor hereunder, with like effect as
if originally named as trustee herein; but, nevertheless, on the written request
of the Company or of the successor trustee, the trustee ceasing to act shall,
upon payment of any amount then due it pursuant to the provisions of Section
8.06, execute and deliver an instrument transferring to such successor trustee
all the rights and powers of the trustee so ceasing to act. Upon request of any
such successor trustee, the Company shall execute any and all instruments in
writing for more fully and certainly vesting in and confirming to such successor
trustee all such rights and powers. Any trustee ceasing to act shall,
nevertheless, retain a lien upon all property and funds held or collected by
such trustee as such, except for funds held in trust for the benefit of holders
of particular Notes, to secure any amounts then due it pursuant to the
provisions of Section 8.06.
No successor trustee shall accept appointment as provided in this
Section 8.11 unless, at the time of such acceptance, such successor trustee
shall be qualified under the provisions of Section 8.08 and be eligible under
the provisions of Section 8.09.
Upon acceptance of appointment by a successor trustee as provided in
this Section 8.11, the Company (or the former trustee, at the written direction
of the Company) shall mail or cause to be mailed notice of the succession of
such trustee hereunder to the holders of Notes at their addresses as they shall
appear on the Note register. If the Company fails to mail such notice within ten
(10) days after acceptance of appointment by the successor trustee, the
successor trustee shall cause such notice to be mailed at the expense of the
Company.
Section 8.12. Succession by Merger, Etc. Any corporation into which the
Trustee may be merged or converted or with which it may be consolidated, or any
corporation resulting from any merger, conversion or consolidation to which the
Trustee shall be a party, or any corporation succeeding to all or substantially
all of the corporate trust business of the Trustee (including any trust created
by this Indenture), shall be the successor to the Trustee hereunder without the
execution or filing of any paper or any further act on the part of any of the
parties hereto, provided that in the case of any corporation succeeding to all
or substantially all of the corporate trust business of the Trustee, such
corporation shall be qualified under the provisions of Section 8.08 and eligible
under the provisions of Section 8.09.
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In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture, any of the Notes shall have been authenticated
but not delivered, any such successor to the Trustee may adopt the certificate
of authentication of any predecessor trustee or authenticating agent appointed
by such predecessor trustee, and deliver such Notes so authenticated; and in
case at that time any of the Notes shall not have been authenticated, any
successor to the Trustee or any authenticating agent appointed by such successor
trustee may authenticate such Notes in the name of the successor trustee; and in
all such cases such certificates shall have the full force that is provided in
the Notes or in this Indenture; provided, however, that the right to adopt the
certificate of authentication of any predecessor Trustee or authenticate Notes
in the name of any predecessor Trustee shall apply only to its successor or
successors by merger, conversion or consolidation.
Section 8.13. Preferential Collection of Claims. If and when the Trustee
shall be or become a creditor of the Company (or any other obligor upon the
Notes), the Trustee shall be subject to the provisions of the Trust Indenture
Act regarding the collection of the claims against the Company (or any such
other obligor).
Section 8.14. Trustee's Application for Instructions from the Company.
Any application by the Trustee for written instructions from the Company (other
than with regard to any action proposed to be taken or omitted to be taken by
the Trustee that affects the rights of the holders of the Notes or holders of
Senior Debt under this Indenture, including, without limitation, under Article 4
hereof) may, at the option of the Trustee, set forth in writing any action
proposed to be taken or omitted by the Trustee under this Indenture and the date
on and/or after which such action shall be taken or such omission shall be
effective. The Trustee shall not be liable for any action taken by, or omission
of, the Trustee in accordance with a proposal included in such application on or
after the date specified in such application (which date shall not be less than
three (3) Business Days after the date any officer of the Company actually
receives such application, unless any such officer shall have consented in
writing to any earlier date) unless prior to taking any such action (or the
effective date in the case of an omission), the Trustee shall have received
written instructions in response to such application specifying the action to be
taken or omitted.
ARTICLE 9
The Noteholders
Section 9.01. Action by Noteholders. Whenever in this Indenture it is
provided that the holders of a specified percentage in aggregate principal
amount of the Notes may take any action (including the making of any demand or
request,
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the giving of any notice, consent or waiver or the taking of any other action),
the fact that at the time of taking any such action, the holders of such
specified percentage have joined therein may be evidenced (a) by any instrument
or any number of instruments of similar tenor executed by Noteholders in person
or by agent or proxy appointed in writing, or (b) by the record of the holders
of Notes voting in favor thereof at any meeting of Noteholders duly called and
held in accordance with the provisions of Article 10, or (c) by a combination of
such instrument or instruments and any such record of such a meeting of
Noteholders. Whenever the Company or the Trustee solicits the taking of any
action by the holders of the Notes, the Company or the Trustee may fix in
advance of such solicitation, a date as the record date for determining holders
entitled to take such action. The record date shall be not more than fifteen
(15) days prior to the date of commencement of solicitation of such action.
Section 9.02. Proof of Execution by Noteholders. Subject to the
provisions of Sections 8.01, 8.02 and 10.05, proof of the execution of any
instrument by a Noteholder or its agent or proxy shall be sufficient if made in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee or in such manner as shall be satisfactory to the Trustee. The
holding of Notes shall be proved by the registry of such Notes or by a
certificate of the Note registrar.
The record of any Noteholders' meeting shall be proved in the manner
provided in Section 10.06.
Section 9.03. Who Are Deemed Absolute Owners. The Company, the Trustee,
any paying agent, any conversion agent and any Note registrar may deem the
Person in whose name such Note shall be registered upon the Note register to be,
and may treat it as, the absolute owner of such Note (whether or not such Note
shall be overdue and notwithstanding any notation of ownership or other writing
thereon made by any Person other than the Company or any Note registrar) for the
purpose of receiving payment of or on account of the principal of, premium, if
any, and interest on such Note, for conversion of such Note and for all other
purposes; and neither the Company nor the Trustee nor any paying agent nor any
conversion agent nor any Note registrar shall be affected by any notice to the
contrary. All such payments so made to any holder for the time being, or upon
his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for monies payable upon any
such Note.
Section 9.04. Company-owned Notes Disregarded. In determining whether
the holders of the requisite aggregate principal amount of Notes have concurred
in any direction, consent, waiver or other action under this Indenture, Notes
which are owned by the Company or any other obligor on the Notes or any
Affiliate of the Company or any other obligor on the Notes shall be disregarded
and deemed not to be outstanding for the purpose of any such determination;
provided, however, that, for the purposes of determining whether the Trustee
shall be protected in relying on any such direction, consent, waiver or other
action, only
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Notes which a Responsible Officer knows are so owned shall be so disregarded.
Notes so owned which have been pledged in good faith may be regarded as
outstanding for the purposes of this Section 9.04 if the pledgee shall establish
to the satisfaction of the Trustee the pledgee's right to vote such Notes and
that the pledgee is not the Company, any other obligor on the Notes or any
Affiliate of the Company or any such other obligor. In the case of a dispute as
to such right, any decision by the Trustee taken upon the advice of counsel
shall be full protection to the Trustee. Upon request of the Trustee, the
Company shall furnish to the Trustee promptly an Officers' Certificate listing
and identifying all Notes, if any, known by the Company to be owned or held by
or for the account of any of the above described Persons, and, subject to
Section 8.01, the Trustee shall be entitled to accept such Officers' Certificate
as conclusive evidence of the facts therein set forth and of the fact that all
Notes not listed therein are outstanding for the purpose of any such
determination.
Section 9.05. Revocation of Consents; Future Holders Bound. At any time
prior to (but not after) the evidencing to the Trustee, as provided in Section
9.01, of the taking of any action by the holders of the percentage in aggregate
principal amount of the Notes specified in this Indenture in connection with
such action, any holder of a Note which is shown by the evidence to be included
in the Notes the holders of which have consented to such action may, by filing
written notice with the Trustee at its Corporate Trust Office and upon proof of
holding as provided in Section 9.02, revoke such action so far as concerns such
Note. Except as aforesaid, any such action taken by the holder of any Note shall
be conclusive and binding upon such holder and upon all future holders and
owners of such Note and of any Notes issued in exchange or substitution
therefor, irrespective of whether any notation in regard thereto is made upon
such Note or any Note issued in exchange or substitution therefor.
ARTICLE 10
Meetings of Noteholders
Section 10.01. Purpose of Meetings. A meeting of Noteholders may be
called at any time and from time to time pursuant to the provisions of this
Article 10 for any of the following purposes:
(1) to give any notice to the Company or to
the Trustee or to give any directions to the
Trustee permitted under this Indenture, or to
consent to the waiving of any default or Event of
Default hereunder and its consequences, or to take
any other action authorized to be taken by
Noteholders pursuant to any of the provisions of
Article 7;
(2) to remove the Trustee and nominate a
successor trustee pursuant to the provisions of
Article 8;
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(3) to consent to the execution of an
indenture or indentures supplemental hereto
pursuant to the provisions of Section 11.02; or
(4) to take any other action authorized to
be taken by or on behalf of the holders of any
specified aggregate principal amount of the Notes
under any other provision of this Indenture or
under applicable law.
Section 10.02. Call of Meetings by Trustee. The Trustee may at any time
call a meeting of Noteholders to take any action specified in Section 10.01, to
be held at such time and at such place as the Trustee shall determine. Notice of
every meeting of the Noteholders, setting forth the time and the place of such
meeting and in general terms the action proposed to be taken at such meeting and
the establishment of any record date pursuant to Section 9.01, shall be mailed
to holders of Notes at their addresses as they shall appear on the Note
register. Such notice shall also be mailed to the Company. Such notices shall be
mailed not less than twenty (20) nor more than ninety (90) days prior to the
date fixed for the meeting.
Any meeting of Noteholders shall be valid without notice if the holders
of all Notes then outstanding are present in person or by proxy or if notice is
waived before or after the meeting by the holders of all Notes outstanding, and
if the Company and the Trustee are either present by duly authorized
representatives or have, before or after the meeting, waived notice.
Section 10.03. Call of Meetings by Company or Noteholders. In case at
any time the Company, pursuant to a resolution of its Board of Directors, or the
holders of at least ten percent (10%) in aggregate principal amount of the Notes
then outstanding, shall have requested the Trustee to call a meeting of
Noteholders, by written request setting forth in reasonable detail the action
proposed to be taken at the meeting, and the Trustee shall not have mailed the
notice of such meeting within twenty (20) days after receipt of such request,
then the Company or such Noteholders may determine the time and the place for
such meeting and may call such meeting to take any action authorized in Section
10.01, by mailing notice thereof as provided in Section 10.02.
Section 10.04. Qualifications for Voting. To be entitled to vote at any
meeting of Noteholders a person shall (a) be a holder of one or more Notes on
the record date pertaining to such meeting or (b) be a person appointed by an
instrument in writing as proxy by a holder of one or more Notes on the record
date pertaining to such meeting. The only persons who shall be entitled to be
present or to speak at any meeting of Noteholders shall be the persons entitled
to vote at such meeting and their counsel and any representatives of the Trustee
and its counsel and any representatives of the Company and its counsel.
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Section 10.05. Regulations. Notwithstanding any other provisions of this
Indenture, the Trustee may make such reasonable regulations as it may deem
advisable for any meeting of Noteholders, in regard to proof of the holding of
Notes and of the appointment of proxies, and in regard to the appointment and
duties of inspectors of votes, the submission and examination of proxies,
certificates and other evidence of the right to vote, and such other matters
concerning the conduct of the meeting as it shall think fit.
The Trustee shall, by an instrument in writing, appoint a temporary
chairman of the meeting, unless the meeting shall have been called by the
Company or by Noteholders as provided in Section 10.03, in which case the
Company or the Noteholders calling the meeting, as the case may be, shall in
like manner appoint a temporary chairman. A permanent chairman and a permanent
secretary of the meeting shall be elected by vote of the holders of a majority
in principal amount of the Notes represented at the meeting and entitled to vote
at the meeting.
Subject to the provisions of Section 9.04, at any meeting each
Noteholder or proxyholder shall be entitled to one vote for each $1,000
principal amount of Notes held or represented by him; provided, however, that no
vote shall be cast or counted at any meeting in respect of any Note challenged
as not outstanding and ruled by the chairman of the meeting to be not
outstanding. The chairman of the meeting shall have no right to vote other than
by virtue of Notes held by him or instruments in writing as aforesaid duly
designating him as the proxy to vote on behalf of other Noteholders. Any meeting
of Noteholders duly called pursuant to the provisions of Section 10.02 or 10.03
may be adjourned from time to time by the holders of a majority of the aggregate
principal amount of Notes represented at the meeting, whether or not
constituting a quorum, and the meeting may be held as so adjourned without
further notice.
Section 10.06. Voting. The vote upon any resolution submitted to any
meeting of Noteholders shall be by written ballot on which shall be subscribed
the signatures of the holders of Notes or of their representatives by proxy and
the outstanding principal amount of the Notes held or represented by them. The
permanent chairman of the meeting shall appoint two inspectors of votes who
shall count all votes cast at the meeting for or against any resolution and who
shall make and file with the secretary of the meeting their verified written
reports in duplicate of all votes cast at the meeting. A record in duplicate of
the proceedings of each meeting of Noteholders shall be prepared by the
secretary of the meeting and there shall be attached to said record the original
reports of the inspectors of votes on any vote by ballot taken thereat and
affidavits by one or more persons having knowledge of the facts setting forth a
copy of the notice of the meeting and showing that said notice was mailed as
provided in Section 10.02. The record shall show the principal amount of the
Notes voting in favor of or against any resolution. The record shall be signed
and verified by the affidavits of the permanent chairman and secretary of the
meeting and one of the duplicates shall be delivered to the Company and the
other to the Trustee to be preserved by the Trustee, the latter to have attached
thereto the ballots voted at the meeting.
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Any record so signed and verified shall be conclusive evidence of the
matters therein stated.
Section 10.07. No Delay of Rights by Meeting. Nothing contained in this
Article 10 shall be deemed or construed to authorize or permit, by reason of any
call of a meeting of Noteholders or any rights expressly or impliedly conferred
hereunder to make such call, any hindrance or delay in the exercise of any right
or rights conferred upon or reserved to the Trustee or to the Noteholders under
any of the provisions of this Indenture or of the Notes.
ARTICLE 11
Supplemental Indentures
Section 11.01. Supplemental Indentures Without Consent of Noteholders.
The Company, when authorized by the resolutions of the Board of Directors, and
the Trustee may, from time to time, and at any time enter into an indenture or
indentures supplemental hereto for one or more of the following purposes:
(a) make provision with respect to the conversion rights of the holders
of Notes pursuant to the requirements of Section 15.06;
(b) subject to Article 4, to convey, transfer, assign, mortgage or
pledge to the Trustee as security for the Notes, any property or assets;
(c) to evidence the succession of another Person to the Company, or
successive successions, and the assumption by the successor Person of the
covenants, agreements and obligations of the Company pursuant to Article 12;
(d) to add to the covenants of the Company such further covenants,
restrictions or conditions as the Board of Directors and the Trustee shall
consider to be for the benefit of the holders of Notes, and to make the
occurrence, or the occurrence and continuance, of a default in any such
additional covenants, restrictions or conditions a default or an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, however, that in
respect of any such additional covenant, restriction or condition, such
supplemental indenture may provide for a particular period of grace after
default (which period may be shorter or longer than that allowed in the case of
other defaults) or may provide for an immediate enforcement upon such default or
may limit the remedies available to the Trustee upon such default;
(e) to provide for the issuance under this Indenture of Notes in coupon
form (including Notes registrable as to principal only) and to provide for
exchangeability of such Notes with the Notes issued hereunder in fully
registered form and to make all appropriate changes for such purpose;
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(f) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture that may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, provided that such modification or amendment does not, in the good
faith opinion of the Company's Board of Directors and the Trustee materially
adversely affect the interests of the holders of the Notes;
(g) to evidence and provide for the acceptance of appointment hereunder
by a successor Trustee with respect to the Notes;
(h) to decrease the Conversion Price, provided that the decrease will
not adversely affect the interests of the holders of the Notes;
(i) to make any changes or modifications necessary in connection with
registration of the Notes under the Securities Act as contemplated in the
Registration Rights Agreement; provided that such change or modification does
not, in the good faith opinion of the Company's Board of Directors and the
Trustee, materially adversely affect the interests of the holders of the Notes;
(j) to surrender any right or power confined upon the Company;
(k) to modify, eliminate or add to the provisions of this Indenture to
such extent as shall be necessary to effect or maintain the qualifications of
this Indenture under the Trust Indenture Act, or under any similar federal
statute hereafter enacted; or
(l) to make such other provisions in regard to matters or questions
arising under this Indenture that the Company and the Trustee deem necessary and
advisable and that shall not materially adversely affect the interests of the
holders of the Notes.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any supplemental indenture, the Trustee
is hereby authorized to join with the Company in the execution of any such
supplemental indenture, to make any further appropriate agreements and
stipulations that may be therein contained and to accept the conveyance,
transfer and assignment of any property thereunder, but the Trustee shall not be
obligated to, but may in its discretion, enter into any supplemental indenture
that affects the Trustee's own rights, duties or immunities under this Indenture
or otherwise.
Any supplemental indenture authorized by the provisions of this Section
11.01 may be executed by the Company and the Trustee without the consent of the
holders of any of the Notes at the time outstanding, notwithstanding any of the
provisions of Section 11.02.
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Notwithstanding any other provision of the Indenture or the Notes, the
Registration Rights Agreement and the obligation to pay Liquidated Damages
thereunder may be amended, modified or waived in accordance with the provisions
of the Registration Rights Agreement.
Section 11.02. Supplemental Indenture with Consent of Noteholders. With
the consent (evidenced as provided in Article Nine) of the holders of not less
than a majority in aggregate principal amount of the Notes at the time
outstanding, the Company, when authorized by the resolutions of the Board of
Directors, and the Trustee may, from time to time and at any time, 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 any supplemental indenture or of modifying in any manner the
rights of the holders of the Notes; provided, however, that no such supplemental
indenture shall:
(i) extend the fixed maturity of any Note;
(ii) reduce the interest rate or extend the time of payment
of interest or Liquidated Damages on any Note;
(iii) reduce the principal amount of any Note or premium, if
any, thereon, or reduce any amount payable on redemption or repurchase
thereof in accordance with Article 3 hereof or reduce the amount of
Liquidated Damages payable thereon;
(iv) impair the right of any Noteholder to institute suit
for any payment on a Note or with respect to the conversion of a Note;
(v) make the principal of any Note or interest or premium,
if any, or Liquidated Damages on any Note payable in any coin or
currency other than that provided in the Notes;
(vi) modify the provisions of this Indenture with respect
to the redemption of the Notes in a manner adverse to the Noteholders
in any material respect;
(vii) change the obligation of the Company to repurchase any
Note upon the happening of a Change of Control in a manner adverse to
the holder of Notes;
(viii) impair the right to convert the Notes into Common
Stock subject to the terms set forth herein in each case, without the
consent of the holder of each Note so affected;
(ix) alter the manner of calculation or rate of accrual of
Liquidated Damages on any Note or extend the time for payment of such
amount; or
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(x) reduce the aforesaid percentage of Notes, the holders of
which are required to consent to any such supplemental indenture or the
percentage of Notes, the holders of which are required for any other
waiver under this Indenture.
Upon the written request of the Company, accompanied by a copy of the
resolutions of the Board of Directors certified by its Secretary or Assistant
Secretary authorizing the execution of any such supplemental indenture, and upon
the filing with the Trustee of evidence of the consent of Noteholders as
aforesaid, the Trustee shall join with the Company in the execution of such
supplemental indenture unless such supplemental indenture affects the Trustee's
own rights, duties or immunities under this Indenture or otherwise, in which
case the Trustee may in its discretion, but shall not be obligated to, enter
into such supplemental indenture.
It shall not be necessary for the consent of the Noteholders under this
Section 11.02 to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Section 11.03. Effect of Supplemental Indenture. Any supplemental
indenture executed pursuant to the provisions of this Article 11 shall comply
with the Trust Indenture Act, as then in effect, provided that this Section
11.03 shall not require such supplemental indenture or the Trustee to be
qualified under the Trust Indenture Act prior to the time such qualification is
in fact required under the terms of the Trust Indenture Act or the Indenture has
been qualified under the Trust Indenture Act, nor shall it constitute any
admission or acknowledgment by any party to such supplemental indenture that any
such qualification is required prior to the time such qualification is in fact
required under the terms of the Trust Indenture Act or the Indenture has been
qualified under the Trust Indenture Act. Upon the execution of any supplemental
indenture pursuant to the provisions of this Article 11, this Indenture shall be
and be deemed to be modified and amended in accordance therewith and the
respective rights, limitation of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Company and the holders of Notes shall
thereafter be determined, exercised and enforced hereunder, subject in all
respects to such modifications and amendments and all the terms and conditions
of any such supplemental indenture shall be and be deemed to be part of the
terms and conditions of this Indenture for any and all purposes.
Section 11.04. Notation on Notes. Notes authenticated and delivered
after the execution of any supplemental indenture pursuant to the provisions of
this Article 11 may bear a notation in form approved by the Trustee as to any
matter provided for in such supplemental indenture. If the Company or the
Trustee shall so determine, new Notes so modified as to conform, in the opinion
of the Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may, at the Company's expense, be
prepared and executed by the Company, authenticated by the Trustee (or an
authenticating
65
agent duly appointed by the Trustee pursuant to Section 16.11) and delivered in
exchange for the Notes then outstanding, upon surrender of such Notes then
outstanding.
Section 11.05. Evidence of Compliance of Supplemental Indenture to be
Furnished to Trustee. Prior to entering into any supplemental indenture, the
Trustee may request an Officers' Certificate and an Opinion of Counsel as
conclusive evidence that any supplemental indenture executed pursuant hereto
complies with the requirements of this Article 11.
ARTICLE 12
Consolidation, Merger, Sale, Conveyance and Lease
Section 12.01. Company May Consolidate, Etc, on Certain Terms. Subject
to the provisions of Section 12.02, nothing contained in this Indenture or in
any of the Notes shall prevent any consolidation or merger of the Company with
or into any other Person or Persons (whether or not affiliated with the
Company), or successive consolidations or mergers in which the Company or its
successor or successors shall be a party or parties, or shall prevent any sale,
conveyance or lease (or successive sales, conveyances or leases) of all or
substantially all of the property of the Company, to any other Person (whether
or not affiliated with the Company), authorized to acquire and operate the same
and that shall be organized under the laws of the United States of America, any
state thereof or the District of Columbia; provided, however, that upon any such
consolidation, merger, sale, conveyance or lease, the due and punctual payment
of the principal of and premium, if any, and interest (including Liquidated
Damages, if any) on all of the Notes, according to their tenor and the due and
punctual performance and observance of all of the covenants and conditions of
this Indenture to be performed by the Company, shall be expressly assumed, by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee by the Person (if other than the Company) formed by
such consolidation, or into which the Company shall have been merged, or by the
Person that shall have acquired or leased such property, and such supplemental
indenture shall provide for the applicable conversion rights set forth in
Section 15.06; and provided further that, immediately after giving effect to a
transaction described above, no Event of Default, and no event which, after
notice or lapse of time or both, would become an Event of Default, shall have
happened and be continuing.
Section 12.02. Successor Corporation to Be Substituted. In case of any
such consolidation, merger, sale, conveyance or lease and upon the assumption by
the successor Person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual payment
of the principal of and premium, if any, and interest on all of the Notes and
the due and punctual performance of all of the covenants and conditions of this
Indenture to be performed by the Company, such successor Person shall succeed
66
to and be substituted for the Company, with the same effect as if it had been
named herein as the party of this first part. Such successor Person thereupon
may cause to be signed, and may issue either in its own name or in the name of
Mentor Graphics Corporation any or all of the Notes, issuable hereunder that
theretofore shall not have been signed by the Company and delivered to the
Trustee; and, upon the order of such successor Person instead of the Company and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver, or cause to be
authenticated and delivered, any Notes that previously shall have been signed
and delivered by the officers of the Company to the Trustee for authentication,
and any Notes that such successor Person thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Notes so issued shall in all
respects have the same legal rank and benefit under this Indenture as the Notes
theretofore or thereafter issued in accordance with the terms of this Indenture
as though all of such Notes had been issued at the date of the execution hereof.
In the event of any such consolidation, merger, sale, conveyance or lease, the
Person named as the "Company" in the first paragraph of this Indenture or any
successor that shall thereafter have become such in the manner prescribed in
this Article 12 may be dissolved, wound up and liquidated at any time thereafter
and such Person shall be released from its liabilities as obligor and maker of
the Notes and from its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form (but not in substance) may be made in the
Notes thereafter to be issued as may be appropriate.
Section 12.03. Opinion of Counsel to Be Given Trustee. The Trustee shall
receive an Officers' Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance or lease and any
such assumption complies with the provisions of this Article 12.
ARTICLE 13
Satisfaction and Discharge of Indenture
Section 13.01. Discharge of Indenture. When (a) the Company shall
deliver to the Trustee for cancellation all Notes theretofore authenticated
(other than any Notes that have been destroyed, lost or stolen and in lieu of or
in substitution for which other Notes shall have been authenticated and
delivered) and not theretofore canceled, or (b) all the Notes not theretofore
canceled or delivered to the Trustee for cancellation shall have become due and
payable, and the Company shall deposit with the Trustee, funds sufficient to pay
principal and premium, if any, and interest and Liquidated Damages, if any, due
on any outstanding Notes, accompanied by a verification report, as to the
sufficiency of the deposited amount, from an independent certified accountant or
other financial professional reasonably satisfactory to the Trustee, and if the
Company shall also pay or cause to be paid all other sums payable hereunder by
the Company, then
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this Indenture shall cease to be of further effect (except as to (i) remaining
rights of registration of transfer, substitution and exchange and conversion of
Notes, (ii) rights hereunder of Noteholders to receive payments of principal of
and premium, if any, and interest and Liquidated Damages, if any on, the Notes
and the other rights, duties and obligations of Noteholders, as beneficiaries
hereof with respect to the amounts, if any, so deposited with the Trustee and
(iii) the rights, obligations and immunities of the Trustee hereunder), and the
Trustee, on written demand of the Company accompanied by an Officers'
Certificate and an Opinion of Counsel as required by Section 16.05 and at the
cost and expense of the Company, shall execute proper instruments acknowledging
satisfaction of and discharging this Indenture; the Company, however, hereby
agrees to reimburse the Trustee for any costs or expenses thereafter reasonably
and properly incurred by the Trustee and to compensate the Trustee for any
services thereafter reasonably and properly rendered by the Trustee in
connection with this Indenture or the Notes.
Section 13.02. Deposited Monies to Be Held in Trust by Trustee. Subject
to Section 13.04, all monies deposited with the Trustee pursuant to Section
13.01, provided such deposit was not in violation of Article 4, shall be held in
trust for the sole benefit of the Noteholders and not to be subject to the
subordination provisions of Article 4, and such monies shall be applied by the
Trustee to the payment, either directly or through any paying agent (including
the Company if acting as its own paying agent), to the holders of the particular
Notes for the payment or redemption of which such monies have been deposited
with the Trustee, of all sums due and to become due thereon for principal and
interest and premium, if any.
Section 13.03. Paying Agent to Repay Monies Held. Upon the satisfaction
and discharge of this Indenture, all monies then held by any paying agent of the
Notes (other than the Trustee) shall, upon written request of the Company, be
repaid to it or paid to the Trustee, and thereupon such paying agent shall be
released from all further liability with respect to such monies.
Section 13.04. Return of Unclaimed Monies. Subject to the requirements
of applicable law, any monies deposited with or paid to the Trustee for payment
of the principal of, premium, if any, or interest on Notes and not applied but
remaining unclaimed by the holders of Notes for six months after the date upon
which the principal of, premium, if any, or interest on such Notes, as the case
may be, shall have become due and payable, shall be repaid to the Company by the
Trustee on demand and all liability of the Trustee shall thereupon cease with
respect to such monies; and the holder of any of the Notes shall thereafter look
only to the Company for any payment that such holder may be entitled to collect
unless an applicable abandoned property law designates another Person.
Section 13.05. Reinstatement. If the Trustee or the paying agent is
unable to apply any money in accordance with Section 13.02 by reason of any
order or judgment of any court or governmental authority enjoining, restraining
or
68
otherwise prohibiting such application, the Company's obligations under this
Indenture and the Notes shall be revived and reinstated as though no deposit had
occurred pursuant to Section 13.01 until such time as the Trustee or the paying
agent is permitted to apply all such money in accordance with Section 13.02;
provided, however, that if the Company makes any payment of interest on or
principal of any Note following the reinstatement of its obligations, the
Company shall be subrogated to the rights of the holders of such Notes to
receive such payment from the money held by the Trustee or paying agent.
ARTICLE 14
Immunity of Incorporators, Stockholders, Officers and Directors
Section 14.01. Indenture and Notes Solely Corporate Obligations. No
recourse for the payment of the principal of or premium, if any, or interest on
any Note, or for any claim based thereon or otherwise in respect thereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
this Indenture or in any supplemental indenture or in any Note, or because of
the creation of any indebtedness represented thereby, shall be had against any
incorporator, stockholder, employee, agent, officer, director or subsidiary, as
such, past, present or future, of the Company or of any successor corporation,
either directly or through the Company or any successor corporation, whether by
virtue of any constitution, statute or rule of law, or by the enforcement of any
assessment or penalty or otherwise; it being expressly understood that all such
liability is hereby expressly waived and released as a condition of, and as a
consideration for, the execution of this Indenture and the issuance of the
Notes.
ARTICLE 15
Conversion of Notes
Section 15.01. Right to Convert. Subject to and upon compliance with the
provisions of this Indenture, including, without limitation, Article 4, the
holder of any Note shall have the right, at its option, at any time after the
original issuance of the Notes hereunder through the close of business on the
final maturity date of the Notes (except that, with respect to any Note or
portion of a Note that shall be called for redemption, such right shall
terminate, except as provided in Section 15.02, Section 3.03 or Section 3.04, at
the close of business on the Business Day next preceding the date fixed for
redemption of such Note or portion of a Note unless the Company shall default in
payment due upon redemption thereof) to convert the principal amount of any such
Note, or any portion of such principal amount which is $1,000 or an integral
multiple thereof, into that number of fully paid and non-assessable shares of
Common Stock (as such shares shall then be constituted) obtained by dividing the
principal amount of the Note or portion thereof surrendered for conversion by
the Conversion Price in effect at such time, by surrender of the Note so to be
converted in whole or in part
69
in the manner provided, together with any required funds, in Section 15.02. A
Note in respect of which a holder is exercising its option to require repurchase
upon a Change of Control pursuant to Section 3.05 may be converted only if such
holder withdraws its election to exercise in accordance with Section 3.05. A
holder of Notes is not entitled to any rights of a holder of Common Stock until
such holder has converted such holder's Notes to Common Stock, and only to the
extent such Notes are deemed to have been converted to Common Stock under this
Article 15.
Section 15.02. Exercise of Conversion Privilege; Issuance of Common
Stock on Conversion; No Adjustment for Interest or Dividends. In order to
exercise the conversion privilege with respect to any Note in certificated form,
the holder of any such Note to be converted in whole or in part shall surrender
such Note, duly endorsed, at an office or agency maintained by the Company
pursuant to Section 5.02, accompanied by the funds, if any, required by the
penultimate paragraph of this Section 15.02, and shall give written notice of
conversion in the form provided on the Notes (or such other notice which is
acceptable to the Company) to the office or agency that the holder elects to
convert such Note or the portion thereof specified in said notice. Such notice
shall also state the name or names (with address or addresses) in which the
certificate or certificates for shares of Common Stock which shall be issuable
on such conversion shall be issued, and shall be accompanied by transfer taxes,
if required pursuant to Section 15.07. Each such Note surrendered for conversion
shall, unless the shares issuable on conversion are to be issued in the same
name as the registration of such Note, be duly endorsed by, or be accompanied by
instruments of transfer in form satisfactory to the Company duly executed by,
the holder or his duly authorized attorney.
In order to exercise the conversion privilege with respect to any
interest in a Note in global form, the beneficial holder must complete, or cause
to be completed, the appropriate instruction form for conversion pursuant to the
Depository's book-entry conversion program, deliver, or cause to be delivered,
by book-entry delivery an interest in such Note in global form, furnish
appropriate endorsements and transfer documents if required by the Company or
the Trustee or conversion agent, and pay the funds, if any, required by this
Section 15.02 and any transfer taxes, if required pursuant to Section 15.07.
As promptly as practicable after satisfaction of the requirements for
conversion set forth above, subject to compliance with any restrictions on
transfer if shares issuable on conversion are to be issued in a name other than
that of the Noteholder (as if such transfer were a transfer of the Note or Notes
(or portion thereof) so converted), the Company shall issue and shall deliver to
such Noteholder at the office or agency maintained by the Company for such
purpose pursuant to Section 5.02, a certificate or certificates for the number
of full shares of Common Stock issuable upon the conversion of such Note or
portion thereof as determined by the Company in accordance with the provisions
of this Article 15 and a check or cash in respect of any fractional interest in
respect of a share of
70
Common Stock arising upon such conversion, calculated by the Company as provided
in Section 15.03. In case any Note of a denomination greater than $1,000 shall
be surrendered for partial conversion, and subject to Section 2.03, the Company
shall execute and the Trustee shall authenticate and deliver to the holder of
the Note so surrendered, without charge to such holder, a new Note or Notes in
authorized denominations in an aggregate principal amount equal to the
unconverted portion of the surrendered Note.
Each conversion shall be deemed to have been effected as to any such Note
(or portion thereof) on the date on which the requirements set forth above in
this Section 15.02 have been satisfied as to such Note (or portion thereof), and
the Person in whose name any certificate or certificates for shares of Common
Stock shall be issuable upon such conversion shall be deemed to have become on
said date the holder of record of the shares represented thereby; provided,
however, that any such surrender on any date when the stock transfer books of
the Company shall be closed shall constitute the Person in whose name the
certificates are to be issued as the record holder thereof for all purposes on
the next succeeding day on which such stock transfer books are open, but such
conversion shall be at the Conversion Price in effect on the date upon which
such Note shall be surrendered.
No adjustment in respect of interest on any Note converted or dividends
on any shares issued upon conversion of such Note will be made upon any
conversion except as set forth in the next sentence. If this Note (or portion
hereof) is surrendered for conversion during the period from the close of
business on any record date for the payment of interest to the close of business
on the Business Day preceding the following interest payment date and either (x)
has not been called for redemption on a redemption date that occurs during such
period or (y) is not to be repurchased in connection with a Change of Control on
a Repurchase Date that occurs during such period, this Note (or portion hereof
being converted) must be accompanied by an amount, in New York Clearing House
funds or other funds acceptable to the Company, equal to the interest payable on
such interest payment date on the principal amount being converted; provided,
however, that no such payment shall be required if there shall exist at the time
of conversion a default in the payment of interest on the Notes.
Upon the conversion of an interest in a Note in global form, the Trustee
(or other conversion agent appointed by the Company), or the Custodian at the
direction of the Trustee (or other conversion agent appointed by the Company),
shall make a notation on such Note in global form as to the reduction in the
principal amount represented thereby. The Company shall notify the Trustee in
writing of any conversions of Notes effected through any conversion agent other
than the Trustee.
Section 15.03. Cash Payments in Lieu of Fractional Shares. No fractional
shares of Common Stock or scrip representing fractional shares shall be issued
upon conversion of Notes. If more than one Note shall be surrendered for
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conversion at one time by the same holder, the number of full shares that shall
be issuable upon conversion shall be computed on the basis of the aggregate
principal amount of the Notes (or specified portions thereof to the extent
permitted hereby) so surrendered. If any fractional share of stock would be
issuable upon the conversion of any Note or Notes, the Company shall make an
adjustment and payment therefor in cash at the current market price thereof to
the holder of Notes. The current market price of a share of Common Stock shall
be the Closing Price on the last Business Day immediately preceding the day on
which the Notes (or specified portions thereof) are deemed to have been
converted.
Section 15.04. Conversion Price. The conversion price shall be as
specified in the form of Note (herein called the "Conversion Price") attached as
Exhibit A hereto, subject to adjustment as provided in this Article 15.
Section 15.05. Adjustment of Conversion Price. The Conversion Price shall
be adjusted from time to time by the Company as follows:
(a) In case the Company shall hereafter pay a dividend or make a
distribution to all holders of the outstanding Common Stock in shares of Common
Stock, the Conversion Price shall be reduced so that the same shall equal the
price determined by multiplying the Conversion Price in effect at the opening of
business on the date following the date fixed for the determination of
stockholders entitled to receive such dividend or other distribution by a
fraction, the numerator of which shall be the number of shares of the Common
Stock outstanding at the close of business on the date fixed for such
determination, and the denominator of which shall be the sum of such number of
shares and the total number of shares constituting such dividend or other
distribution, such reduction to become effective immediately after the opening
of business on the day following the date fixed for such determination. For the
purpose of this paragraph (a), the number of shares of Common Stock at any time
outstanding shall not include shares held in the treasury of the Company. The
Company will not pay any dividend or make any distribution on shares of Common
Stock held in the treasury of the Company. If any dividend or distribution of
the type described in this Section 15.05(a) is declared but not so paid or made,
the Conversion Price shall again be adjusted to the Conversion Price that would
then be in effect if such dividend or distribution had not been declared.
(b) In case the Company shall issue rights or warrants to all holders of
its outstanding shares of Common Stock entitling them (for a period expiring
within forty-five (45) days after the date fixed for determination of
stockholders entitled to receive such rights or warrants) to subscribe for or
purchase shares of Common Stock at a price per share less than the Current
Market Price (as defined below) on the date fixed for determination of
stockholders entitled to receive such rights or warrants, the Conversion Price
shall be adjusted so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to the date fixed
for determination of stockholders entitled to
72
receive such rights or warrants by a fraction, the numerator of which shall be
the number of shares of Common Stock outstanding at the close of business on the
date fixed for determination of stockholders entitled to receive such rights or
warrants plus the number of shares that the aggregate offering price of the
total number of shares so offered would purchase at such Current Market Price,
and the denominator of which shall be the number of shares of Common Stock
outstanding on the date fixed for determination of stockholders entitled to
receive such rights or warrants plus the total number of additional shares of
Common Stock offered for subscription or purchase. Such adjustment shall be
successively made whenever any such rights or warrants are issued, and shall
become effective immediately after the opening of business on the day following
the date fixed for determination of stockholders entitled to receive such rights
or warrants. To the extent that shares of Common Stock are not delivered after
the expiration of such rights or warrants, the Conversion Price shall be
readjusted to the Conversion Price that would then be in effect had the
adjustments made upon the issuance of such rights or warrants been made on the
basis of delivery of only the number of shares of Common Stock actually
delivered. In the event that such rights or warrants are not so issued, the
Conversion Price shall again be adjusted to be the Conversion Price that would
then be in effect if such date fixed for the determination of stockholders
entitled to receive such rights or warrants had not been fixed. In determining
whether any rights or warrants entitle the holders to subscribe for or purchase
shares of Common Stock at less than such Current Market Price, and in
determining the aggregate offering price of such shares of Common Stock, there
shall be taken into account any consideration received by the Company for such
rights or warrants and any amount payable on exercise or conversion thereof, the
value of such consideration, if other than cash, to be determined by the Board
of Directors.
(c) In case outstanding shares of Common Stock shall be subdivided into a
greater number of shares of Common Stock, the Conversion Price in effect at the
opening of business on the day following the day upon which such subdivision
becomes effective shall be proportionately reduced, and conversely, in case
outstanding shares of Common Stock shall be combined into a smaller number of
shares of Common Stock, the Conversion Price in effect at the opening of
business on the day following the day upon which such combination becomes
effective shall be proportionately increased, such reduction or increase, as the
case may be, to become effective immediately after the opening of business on
the day following the day upon which such subdivision or combination becomes
effective.
(d) In case the Company shall, by dividend or otherwise, distribute to
all holders of its Common Stock shares of any class of capital stock of the
Company (other than any dividends or distributions to which Section 15.05(a)
applies) or evidences of its indebtedness or assets (including securities, but
excluding any rights or warrants referred to in Section 15.05(b), and excluding
any dividend or distribution (x) paid exclusively in cash or (y) referred to in
Section 15.05(a)) (any of the foregoing hereinafter in this Section 15.05(d)
called the "Securities"),
73
then, in each such case (unless the Company elects to reserve such Securities
for distribution to the Noteholders upon the conversion of the Notes so that any
such holder converting Notes will receive upon such conversion, in addition to
the shares of Common Stock to which such holder is entitled, the amount and kind
of such Securities which such holder would have received if such holder had
converted its Notes into Common Stock immediately prior to the Record Date (as
defined in Section 15.05(h)(4) for such distribution of the Securities)), the
Conversion Price shall be reduced so that the same shall be equal to the price
determined by multiplying the Conversion Price in effect on the Record Date with
respect to such distribution by a fraction, the numerator of which shall be the
Current Market Price per share of the Common Stock on such Record Date less the
fair market value (as determined by the Board of Directors, whose determination
shall be conclusive, and described in a resolution of the Board of Directors) on
the Record Date of the portion of the Securities so distributed applicable to
one share of Common Stock and the denominator of which shall be the Current
Market Price per share of the Common Stock, such reduction to become effective
immediately prior to the opening of business on the day following such Record
Date; provided, however, that in the event the then fair market value (as so
determined) of the portion of the Securities so distributed applicable to one
share of Common Stock is equal to or greater than the Current Market Price of
the Common Stock on the Record Date, in lieu of the foregoing adjustment,
adequate provision shall be made so that each Noteholder shall have the right to
receive upon conversion the amount of Securities such holder would have received
had such holder converted each Note on the Record Date. In the event that such
dividend or distribution is not so paid or made, the Conversion Price shall
again be adjusted to be the Conversion Price that would then be in effect if
such dividend or distribution had not been declared. If the Board of Directors
determines the fair market value of any distribution for purposes of this
Section 15.05(d) by reference to the actual or when issued trading market for
any securities, it must in doing so consider the prices in such market over the
same period used in computing the Current Market Price of the Common Stock.
Under the provisions of the Company's Rights Plan (the "Rights Plan"),
upon conversion of the Notes into Common Stock, to the extent that the Rights
Plan is still in effect upon such conversion, the holders of Notes will receive,
in addition to the Common Stock, the rights described therein (whether or not
the rights have separated from the Common Stock at the time of conversion),
subject to the limitations set forth in the Rights Plan.
Rights or warrants distributed by the Company to all holders of Common
Stock entitling the holders thereof to subscribe for or purchase shares of the
Company's capital stock (either initially or under certain circumstances), which
rights or warrants, until the occurrence of a specified event or events
("Trigger Event"): (i) are deemed to be transferred with such shares of Common
Stock; (ii) are not exercisable; and (iii) are also issued in respect of future
issuances of Common Stock, shall be deemed not to have been distributed for
purposes of this Section 15.05 (and no adjustment to the Conversion Price under
this
74
Section 15.05 will be required) until the occurrence of the earliest Trigger
Event, whereupon such rights and warrants shall be deemed to have been
distributed and an appropriate adjustment (if any is required) to the Conversion
Price shall be made under this Section 15.05(d). If any such right or warrant,
including any such existing rights or warrants distributed prior to the date of
this Indenture, are subject to events, upon the occurrence of which such rights
or warrants become exercisable to purchase different securities, evidences of
indebtedness or other assets, then the date of the occurrence of any and each
such event shall be deemed to be the date of distribution and record date with
respect to new rights or warrants with such rights (and a termination or
expiration of the existing rights or warrants without exercise by any of the
holders thereof). In addition, in the event of any distribution (or deemed
distribution) of rights or warrants, or any Trigger Event or other event (of the
type described in the preceding sentence) with respect thereto that was counted
for purposes of calculating a distribution amount for which an adjustment to the
Conversion Price under this Section 15.05 was made, (1) in the case of any such
rights or warrants that shall all have been redeemed or repurchased without
exercise by any holders thereof, the Conversion Price shall be readjusted upon
such final redemption or repurchase to give effect to such distribution or
Trigger Event, as the case may be, as though it were a cash distribution, equal
to the per share redemption or repurchase price received by a holder or holders
of Common Stock with respect to such rights or warrants (assuming such holder
had retained such rights or warrants), made to all holders of Common Stock as of
the date of such redemption or repurchase, and (2) in the case of such rights or
warrants that shall have expired or been terminated without exercise by any
holders thereof, the Conversion Price shall be readjusted as if such rights and
warrants had not been issued.
No adjustment of the Conversion Price shall be made pursuant to this
Section 15.05(d) in respect of rights or warrants distributed or deemed
distributed on any Trigger Event to the extent that such rights or warrants are
actually distributed, or reserved by the Company for distribution to holders of
Notes upon conversion by such holders of Notes to Common Stock.
For purposes of this Section 15.05(d) and Sections 15.05(a) and (b), any
dividend or distribution to which this Section 15.05(d) is applicable that also
includes shares of Common Stock, or rights or warrants to subscribe for or
purchase shares of Common Stock (or both), shall be deemed instead to be (1) a
dividend or distribution of the evidences of indebtedness, assets or shares of
capital stock other than such shares of Common Stock or rights or warrants (and
any Conversion Price reduction required by this Section 15.05(d) with respect to
such dividend or distribution shall then be made) immediately followed by (2) a
dividend or distribution of such shares of Common Stock or such rights or
warrants (and any further Conversion Price reduction required by Sections
15.05(a) and (b) with respect to such dividend or distribution shall then be
made), except (A) the Record Date of such dividend or distribution shall be
substituted as "the date fixed for the determination of
75
stockholders entitled to receive such dividend or other distribution", "the date
fixed for the determination of stockholders entitled to receive such rights or
warrants" and "the date fixed for such determination" within the meaning of
Sections 15.05(a) and (b), and (B) any shares of Common Stock included in such
dividend or distribution shall not be deemed "outstanding at the close of
business on the date fixed for such determination" within the meaning of Section
15.05(a).
(e) In case the Company shall, by dividend or otherwise, distribute to
all Holders of its Common Stock cash (excluding any cash that is distributed
upon a merger or consolidation to which Section 15.06 applies or as part of a
distribution referred to in Section 15.05(d)), in an aggregate amount that,
combined together with (1) the aggregate amount of any other such distributions
to all Holders of its Common Stock made exclusively in cash within the 12 months
preceding the date of payment of such distribution, and in respect of which no
adjustment pursuant to this Section 15.05(e) has been made, and (2) the
aggregate of any cash plus the fair market value (as determined by the Board of
Directors, whose good faith determination shall be conclusive and described in a
resolution of the Board of Directors) of consideration payable in respect of any
tender offer by the Company or any of its subsidiaries for all or any portion of
the Common Stock concluded within the 12 months preceding the date of payment of
such distribution, and in respect of which no adjustment pursuant to Section
15.05(f) has been made, exceeds ten percent (10%) of the product of the Current
Market Price on the Record Date with respect to such distribution and the number
of shares of Common Stock outstanding on such date, then, and in each such case,
immediately after the close of business on such date, the Conversion Price shall
be reduced so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the close of business on such
Record Date by a fraction (i) the numerator of which shall be equal to the
Current Market Price on the Record Date less an amount equal to the quotient of
(x) the excess of such combined amount over such ten percent (10%) and (y) the
number of shares of Common Stock outstanding on the Record Date and (ii) the
denominator of which shall be equal to the Current Market Price on such date;
provided, however, that in the event the portion of the cash so distributed
applicable to one share of Common Stock is equal to or greater than the Current
Market Price of the Common Stock on the Record Date, in lieu of the foregoing
adjustment, adequate provision shall be made so that each Security holder shall
have the right to receive upon conversion of a Security (or any portion thereof)
the amount of cash such Holder would have received had such Holder converted
such Security (or portion thereof) immediately prior to such Record Date. In the
event that such dividend or distribution is not so paid or made, the Conversion
Price shall again be adjusted to be the Conversion Price which would then be in
effect if such dividend or distribution had not been declared. Any cash
distribution to all holders of Common Stock as to which the Company makes the
election permitted by Section 15.05(n) and as to which the Company has complied
with the requirements of such Section shall be treated as not having been made
for all purposes of this Section 15.05(e)
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(f) In case a tender offer made by the Company or any of its subsidiaries
for all or any portion of the Common Stock shall expire and such tender offer
(as amended upon the expiration thereof) shall require the payment to
stockholders (based on the acceptance (up to any maximum specified in the terms
of the tender offer) of Purchased Shares (as defined below)) of an aggregate
consideration having a fair market value (as determined by the Board of
Directors, whose good faith determination shall be conclusive and described in a
resolution of the Board of Directors) that combined together with (1) the
aggregate of the cash plus the fair market value (as determined by the Board of
Directors, whose good faith determination shall be conclusive and described in a
resolution of the Board of Directors), as of the expiration of such tender
offer, of consideration payable in respect of any other tender offers, by the
Company or any of its subsidiaries for all or any portion of the Common Stock
expiring within the 12 months preceding the expiration of such tender offer and
in respect of which no adjustment pursuant to this Section 15.05(f) has been
made and (2) the aggregate amount of any distributions to all Holders of the
Common Stock made exclusively in cash within 12 months preceding the expiration
of such tender offer and in respect of which no adjustment pursuant to Section
15.05(e) has been made, exceeds ten percent (10%) of the product of the Current
Market Price as of the last time (the "Expiration Time") tenders could have been
made pursuant to such tender offer (as it may be amended) and the number of
shares of Common Stock outstanding (including any tendered shares) at the
Expiration Time, then, and in each such case, immediately prior to the opening
of business on the day after the date of the Expiration Time, the Conversion
Price shall be reduced so that the same shall equal the price determined by
multiplying the Conversion Price in effect immediately prior to close of
business on the date of the Expiration Time by a fraction of which the numerator
shall be the number of shares of Common Stock outstanding (including any
tendered shares) at the Expiration Time multiplied by the Current Market Price
of the Common Stock on the Trading Day next succeeding the Expiration Time and
the denominator shall be the sum of (x) the fair market value (determined as
aforesaid) of the aggregate consideration payable to stockholders based on the
acceptance (up to any maximum specified in the terms of the tender offer) of all
shares validly tendered and not withdrawn as of the Expiration Time (the shares
deemed so accepted, up to any such maximum, being referred to as the "Purchased
Shares") and (y) the product of the number of shares of Common Stock outstanding
(less any Purchased Shares) at the Expiration Time and the Current Market Price
of the Common Stock on the Trading Day next succeeding the Expiration Time, such
reduction (if any) to become effective immediately prior to the opening of
business on the day following the Expiration Time. In the event that the Company
is obligated to purchase shares pursuant to any such tender offer, but the
Company is permanently prevented by applicable law from effecting any such
purchases or all such purchases are rescinded, the Conversion Price shall again
be adjusted to be the Conversion Price which would then be in effect if such
tender offer had not been made. If the application of this Section 15.05(f) to
any tender offer would result in an increase in the Conversion Price, no
adjustment shall be
77
made for such tender offer under this Section 15.05(f). Any cash distribution to
all holders of Common Stock as to which the Company makes the election permitted
by Section 15.05(n) and as to which the Company has complied with the
requirements of such Section shall be treated as not having been made for all
purposes of this Section 15.05(f).
(g) In case of a tender or exchange offer made by a Person other than the
Company or any Subsidiary for an amount that increases the offeror's ownership
of Common Stock to more than twenty-five percent (25%) of the Common Stock
outstanding and shall involve the payment by such Person of consideration per
share of Common Stock having a fair market value (as determined by the Board of
Directors, whose determination shall be conclusive, and described in a
resolution of the Board of Directors) that as of the last time (the "Offer
Expiration Time") tenders or exchanges may be made pursuant to such tender or
exchange offer (as it shall have been amended) that exceeds the Current Market
Price of the Common Stock on the Trading Day next succeeding the Offer
Expiration Time, and in which, as of the Offer Expiration Time the Board of
Directors is not recommending rejection of the offer, the Conversion Price shall
be reduced so that the same shall equal the price determined by multiplying the
Conversion Price in effect immediately prior to the Offer Expiration Time by a
fraction the numerator of which shall be the number of shares of Common Stock
outstanding (including any tendered or exchanged shares) at the Offer Expiration
Time multiplied by the Current Market Price of the Common Stock on the Trading
Day next succeeding the Offer Expiration Time and the denominator of which shall
be the sum of (x) the fair market value (determined as aforesaid) of the
aggregate consideration payable to stockholders based on the acceptance (up to
any maximum specified in the terms of the tender or exchange offer) of all
shares validly tendered or exchanged and not withdrawn as of the Offer
Expiration Time (the shares deemed so accepted, up to any such maximum, being
referred to as the "Accepted Purchased Shares") and (y) the product of the
number of shares of Common Stock outstanding (less any Accepted Purchased
Shares) at the Offer Expiration Time and the Current Market Price of the Common
Stock on the Trading Day next succeeding the Offer Expiration Time, such
reduction to become effective immediately prior to the opening of business on
the Trading Day following the Offer Expiration Time. In the event that such
Person is obligated to purchase shares pursuant to any such tender or exchange
offer, but such Person is permanently prevented by applicable law from effecting
any such purchases or all such purchases are rescinded, the Conversion Price
shall again be adjusted to be the Conversion Price that would then be in effect
if such tender or exchange offer had not been made. Notwithstanding the
foregoing, the adjustment described in this Section 15.05(g) shall not be made
if, as of the Offer Expiration Time, the offering documents with respect to such
offer disclose a plan or intention to cause the Company to engage in any
transaction described in Article 12.
(h) For purposes of this Section 15.05, the following terms shall have
the meaning indicated:
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(1) "Closing Price" with respect to
any security on any day shall mean the
closing sale price, regular way, on such
day or, in case no such sale takes place on
such day, the average of the reported
closing bid and asked prices, regular way,
in each case as quoted on the Nasdaq
National Market or, if such security is not
quoted or listed or admitted to trading on
such Nasdaq National Market, on the
principal national securities exchange or
quotation system on which such security is
quoted or listed or admitted to trading or,
if not quoted or listed or admitted to
trading on any national securities exchange
or quotation system, the average of the
closing bid and asked prices of such
security on the over-the-counter market on
the day in question as reported by the
National Quotation Bureau Incorporated, or
a similar generally accepted reporting
service, or if not so available, in such
manner as furnished by any New York Stock
Exchange member firm selected from time to
time by the Board of Directors for that
purpose, or a price determined in good
faith by the Board of Directors or, to the
extent permitted by applicable law, a duly
authorized committee thereof, whose
determination shall be conclusive.
(2) "Current Market Price" shall
mean the average of the daily Closing
Prices per share of Common Stock for the
ten (10) consecutive Trading Days
immediately prior to the Record Date (or if
earlier, the ex-dividend date) with respect
to any dividend, issuance or other event
requiring such computation.
(3) "fair market value" shall mean
the amount which a willing buyer would pay
a willing seller in an arm's-length
transaction.
(4) "Record Date" shall mean, with
respect to any dividend, distribution or
other transaction or event in which the
holders of Common Stock have the right to
receive any cash, securities or other
property or in which the Common Stock (or
other applicable security) is exchanged for
or converted into any combination of cash,
securities or other property, the date
fixed for determination of stockholders
entitled to receive such cash, securities
or other property (whether such date is
fixed by the Board of Directors or by
statute, contract or otherwise).
79
(5) "Trading Day" shall mean (x) if
the applicable security is quoted on the
Nasdaq National Market, a day on which
trades may be made thereon or (y) if the
applicable security is listed or admitted
for trading on the New York Stock Exchange
or another national securities exchange, a
day on which the New York Stock Exchange or
another national securities exchange is
open for business or (z) if the applicable
security is not so listed, admitted for
trading or quoted, any day other than a
Saturday or Sunday or a day on which
banking institutions in the State of New
York are authorized or obligated by law or
executive order to close.
(i) The Company may make such reductions in the Conversion Price, in
addition to those required by Sections 15.05(a), (b), (c), (d), (e), (f) or (g)
as the Board of Directors considers to be advisable to avoid or diminish any
income tax to holders of Common Stock or rights to purchase Common Stock
resulting from any dividend or distribution of stock (or rights to acquire
stock) or from any event treated as such for income tax purposes.
To the extent permitted by applicable law, the Company from time to time
may reduce the Conversion Price by any amount for any period of time if the
period is at least twenty (20) days, the reduction is irrevocable during the
period and the Board of Directors shall have made a determination that such
reduction would be in the best interests of the Company, which determination
shall be conclusive. Whenever the Conversion Price is reduced pursuant to the
preceding sentence, the Company shall mail to holders of record of the Notes a
notice of the reduction at least fifteen (15) days prior to the date the reduced
Conversion Price takes effect, and such notice shall state the reduced
Conversion Price and the period during which it will be in effect.
(j) No adjustment in the Conversion Price shall be required unless such
adjustment would require an increase or decrease of at least one percent (1%) in
such price; provided, however, that any adjustments that by reason of this
Section 15.05(j) are not required to be made shall be carried forward and taken
into account in any subsequent adjustment. All calculations under this Article
15 shall be made by the Company and shall be made to the nearest cent or to the
nearest one-hundredth (1/100) of a share, as the case may be. No adjustment need
be made for rights to purchase Common Stock pursuant to a Company plan for
reinvestment of dividends or interest. To the extent the Notes become
convertible into cash, assets, property or securities (other than capital stock
of the Company), no adjustment need be made thereafter as to the cash, assets,
property or such securities. Interest will not accrue on the cash.
(k) Whenever the Conversion Price is adjusted as herein provided, the
Company shall promptly file with the Trustee and any conversion agent other than
the Trustee an Officers' Certificate setting forth the Conversion Price after
such
80
adjustment and setting forth a brief statement of the facts requiring such
adjustment. Unless and until a Responsible Officer of the Trustee shall have
received such Officers' Certificate, the Trustee shall not be deemed to have
knowledge of any adjustment of the Conversion Price and may assume that the last
Conversion Price of which it has knowledge is still in effect. Promptly after
delivery of such certificate, the Company shall prepare a notice of such
adjustment of the Conversion Price setting forth the adjusted Conversion Price
and the date on which each adjustment becomes effective and shall mail such
notice of such adjustment of the Conversion Price to the holder of each Note at
his last address appearing on the Note register provided for in Section 2.05 of
this Indenture, within twenty (20) days after execution thereof. Failure to
deliver such notice shall not affect the legality or validity of any such
adjustment.
(l) In any case in which this Section 15.05 provides that an adjustment
shall become effective immediately after (1) a record date or Record Date for an
event, (2) the date fixed for the determination of stockholders entitled to
receive a dividend or distribution pursuant to Section 15.05(a), (3) a date
fixed for the determination of stockholders entitled to receive rights or
warrants pursuant to Section 15.05(b), (4) the Expiration Time for any tender or
exchange offer pursuant to Section 15.05(f), or (5) the Offer Expiration Time
for a tender or exchange offer pursuant to Section 15.05(g) (each a
"Determination Date"), the Company may elect to defer until the occurrence of
the relevant Adjustment Event (as hereinafter defined) (x) issuing to the holder
of any Note converted after such Determination Date and before the occurrence of
such Adjustment Event, the additional shares of Common Stock or other securities
issuable upon such conversion by reason of the adjustment required by such
Adjustment Event over and above the Common Stock issuable upon such conversion
before giving effect to such adjustment and (y) paying to such holder any amount
in cash in lieu of any fraction pursuant to Section 15.03. For purposes of this
Section 15.05(l), the term "Adjustment Event" shall mean:
(i) in any case referred to in clause (1) hereof, the occurrence
of such event,
(ii) in any case referred to in clause (2) hereof, the date any
such dividend or distribution is paid or made,
(iii) in any case referred to in clause (3) hereof, the date of
expiration of such rights or warrants, and
(iv) in any case referred to in clause (4) or clause (5) hereof,
the date a sale or exchange of Common Stock pursuant to such tender or
exchange offer is consummated and becomes irrevocable.
(m) For purposes of this Section 15.05, the number of shares of Common
Stock at any time outstanding shall not include shares held in the treasury of
the Company but shall include shares issuable in respect of scrip
81
certificates issued in lieu of fractions of shares of Common Stock. The Company
will not pay any dividend or make any distribution on shares of Common Stock
held in the treasury of the Company.
(n) In lieu of making any adjustment to the Conversion Price pursuant to
Section 15.05(e) or 15.05(f), the Company may elect to reserve an amount of cash
for distribution to the holders of the Notes upon the conversion of the Notes so
that any such holder converting Notes will receive upon such conversion, in
addition to the shares of Common Stock and other items to which such holder is
entitled, the full amount of cash which such holder would have received if such
holder had, immediately prior to the Record Date for such distribution of cash
or the Expiration Time of the tender offer, as the case may be, converted its
Notes into Common Stock, together with any interest accrued with respect to such
amount, in accordance with this Section 15.05(n). The Company may make such
election by providing an Officers' Certificate to the Trustee to such effect on
or prior to the payment date for any such distribution and depositing with the
Trustee on or prior to such date an amount of cash equal to the aggregate amount
the holders of the Notes would have received if such holders had, immediately
prior to the Record Date for such distribution or the Expiration Time, as the
case may be, converted all of the Notes into Common Stock. Any such funds so
deposited by the Company with the Trustee shall be invested by the Trustee
pursuant to written direction by the Company in marketable obligations issued or
fully guaranteed by the United States government with a maturity not more than 3
months from the date of issuance. Upon conversion of Notes by a holder, the
holder will be entitled to receive, in addition to the Common Stock issuable
upon conversion, an amount of cash equal to the amount such holder would have
received if such holder had, immediately prior to the Record Date for such
distribution or the Expiration Time, as the case may be, converted its Note into
Common Stock, along with such holder's pro rata share of any accrued interest
earned as a consequence of the investment of such funds. Promptly after making
an election pursuant to this Section 15.05(n), the Company shall give or shall
cause to be given notice to all Noteholders of such election, which notice shall
state the amount of cash per $1,000 principal amount of Notes such holders shall
be entitled to receive (excluding interest) upon conversion of the Notes as a
consequence of the Company having made such election.
Section 15.06. Effect of Reclassification, Consolidation, Merger or
Sale. If any of the following events occur, namely (i) any reclassification or
change of the outstanding shares of Common Stock (other than a subdivision or
combination to which Section 15.05(c) applies), (ii) any consolidation, merger
or combination of the Company with another Person as a result of which holders
of Common Stock shall be entitled to receive stock, other securities or other
property or assets (including cash) with respect to or in exchange for such
Common Stock, or (iii) any sale or conveyance of all or substantially all of the
properties and assets of the Company to any other Person as a result of which
holders of Common Stock shall be entitled to receive stock, other securities or
other property or assets (including cash) with respect to or in exchange for
such Common Stock, then the
82
Company or the successor or purchasing Person, as the case may be, shall execute
with the Trustee a supplemental indenture (which shall comply with the Trust
Indenture Act as in force at the date of execution of such supplemental
indenture) providing that each Note shall be convertible into the kind and
amount of shares of stock, other securities or other property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance by a holder of a number of shares of
Common Stock issuable upon conversion of such Note (assuming, for such purposes,
a sufficient number of authorized shares of Common Stock are available to
convert all such Notes) immediately prior to such reclassification, change,
consolidation, merger, combination, sale or conveyance assuming such holder of
Common Stock did not exercise such holder's rights of election, if any, as to
the kind or amount of stock, other securities or other property or assets
(including cash) receivable upon such reclassification, change, consolidation,
merger, combination, sale or conveyance (provided that, if the kind or amount of
stock, other securities or other property or assets (including cash) receivable
upon such reclassification, change, consolidation, merger, combination, sale or
conveyance is not the same for each share of Common Stock in respect of which
such rights of election shall not have been exercised ("non-electing share"),
then for the purposes of this Section 15.06 the kind and amount of stock, other
securities or other property or assets (including cash) receivable upon such
reclassification, change, consolidation, merger, combination, sale or conveyance
for each non-electing share shall be deemed to be the kind and amount so
receivable per share by a plurality of the non-electing shares). Such
supplemental indenture shall provide for adjustments which shall be as nearly
equivalent as may be practicable to the adjustments provided for in this Article
15.
The Company shall cause notice of the execution of such supplemental
indenture to be mailed to each holder of Notes, at its address appearing on the
Note register provided for in Section 2.05 of this Indenture, within twenty (20)
days after execution thereof. Failure to deliver such notice shall not affect
the legality or validity of such supplemental indenture.
The above provisions of this Section shall similarly apply to successive
reclassifications, changes, consolidations, mergers, combinations, sales and
conveyances.
If this Section 15.06 applies to any event or occurrence, Section 15.05
shall not apply.
Section 15.07. Taxes on Shares Issued. The issue of stock certificates
on conversions of Notes shall be made without charge to the converting
Noteholder for any tax in respect of the issue thereof. The Company shall not,
however, be required to pay any tax which may be payable in respect of any
transfer involved in the issue and delivery of stock in any name other than that
of the holder of any Note converted, and the Company shall not be required to
issue or deliver any such stock certificate unless and until the Person or
Persons requesting the issue thereof shall have paid to the Company the amount
of such tax or shall have established to the satisfaction of the Company that
such tax has been paid.
83
Section 15.08. Reservation of Shares; Shares to Be Fully Paid;
Compliance with Governmental Requirements; Listing of Common Stock. The Company
shall provide, free from preemptive rights, out of its authorized but unissued
shares or shares held in treasury, sufficient shares of Common Stock to provide
for the conversion of the Notes from time to time as such Notes are presented
for conversion.
Before taking any action which would cause an adjustment reducing the
Conversion Price below the then par value, if any, of the shares of Common Stock
issuable upon conversion of the Notes, the Company will take all corporate
action which may, in the opinion of its counsel, be necessary in order that the
Company may validly and legally issue shares of such Common Stock at such
adjusted Conversion Price.
The Company covenants that all shares of Common Stock which may be
issued upon conversion of Notes will upon issue be fully paid and non-assessable
by the Company and free from all taxes, liens and charges with respect to the
issue thereof.
The Company covenants that, if any shares of Common Stock to be provided
for the purpose of conversion of Notes hereunder require registration with or
approval of any governmental authority under any federal or state law before
such shares may be validly issued upon conversion, the Company will in good
faith and as expeditiously as possible, to the extent then permitted by the
rules and interpretations of the Commission (or any successor thereto), endeavor
to secure such registration or approval, as the case may be.
The Company further covenants that, if at any time the Common Stock
shall be listed on the Nasdaq National Market or any other national securities
exchange or automated quotation system, the Company will, if permitted by the
rules of such exchange or automated quotation system, list and keep listed, so
long as the Common Stock shall be so listed on such exchange or automated
quotation system, all Common Stock issuable upon conversion of the Notes;
provided, however, that, if the rules of such exchange or automated quotation
system permit the Company to defer the listing of such Common Stock until the
first conversion of the Notes into Common Stock in accordance with the
provisions of this Indenture, the Company covenants to list such Common Stock
issuable upon conversion of the Notes in accordance with the requirements of
such exchange or automated quotation system at such time.
Section 15.09. Responsibility of Trustee. The Trustee and any other
conversion agent shall not at any time be under any duty or responsibility to
any holder of Notes to determine the Conversion Price or whether any facts exist
which may require any adjustment of the Conversion Price, or with respect to the
84
nature or extent or calculation of any such adjustment when made, or with
respect to the method employed, or herein or in any supplemental indenture
provided to be employed, in making the same. The Trustee and any other
conversion agent shall not be accountable with respect to the validity or value
(or the kind or amount) of any shares of Common Stock, or of any securities or
property, which may at any time be issued or delivered upon the conversion of
any Note; and the Trustee and any other conversion agent make no representations
with respect thereto. Neither the Trustee nor any conversion agent shall be
responsible for any failure of the Company to issue, transfer or deliver any
shares of Common Stock or stock certificates or other securities or property or
cash upon the surrender of any Note for the purpose of conversion or to comply
with any of the duties, responsibilities or covenants of the Company contained
in this Article 15. Without limiting the generality of the foregoing, neither
the Trustee nor any conversion agent shall be under any responsibility to
determine the correctness of any provisions contained in any supplemental
indenture entered into pursuant to Section 15.06 relating either to the kind or
amount of shares of stock or securities or property (including cash) receivable
by Noteholders upon the conversion of their Notes after any event referred to in
such Section 15.06 or to any adjustment to be made with respect thereto, but,
subject to the provisions of Section 8.01, may accept as conclusive evidence of
the correctness of any such provisions, and shall be protected in relying upon,
the Officers' Certificate (which the Company shall be obligated to file with the
Trustee prior to the execution of any such supplemental indenture) with respect
thereto.
Section 15.10. Notice To Holders Prior To Certain Actions. In case:
(a) the Company shall declare a dividend (or any other distribution) on
its Common Stock that would require an adjustment in the Conversion Price
pursuant to Section 15.05; or
(b) the Company shall authorize the granting to the holders of all or
substantially all of its Common Stock of rights or warrants to subscribe for or
purchase any share of any class or any other rights or warrants; or
(c) of any reclassification or reorganization of the Common Stock of the
Company (other than a subdivision or combination of its outstanding Common
Stock, or a change in par value, or from par value to no par value, or from no
par value to par value), or of any consolidation or merger to which the Company
is a party and for which approval of any stockholders of the Company is
required, or of the sale or transfer of all or substantially all of the assets
of the Company or any Designated Subsidiary; or
(d) of the voluntary or involuntary dissolution, liquidation or winding
up of the Company or any Designated Subsidiary;
85
the Company shall cause to be filed with the Trustee and to be mailed to
each holder of Notes at his address appearing on the Note register provided for
in Section 2.05 of this Indenture, as promptly as possible but in any event at
least ten (10) days prior to the applicable date hereinafter specified, a notice
stating (x) the date on which a record is to be taken for the purpose of such
dividend, distribution or rights or warrants, or, if a record is not to be
taken, the date as of which the holders of Common Stock of record to be entitled
to such dividend, distribution or rights are to be determined, or (y) the date
on which such reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up is expected to become effective or occur,
and the date as of which it is expected that holders of Common Stock of record
shall be entitled to exchange their Common Stock for securities or other
property deliverable upon such reclassification, consolidation, merger, sale,
transfer, dissolution, liquidation or winding up. Failure to give such notice,
or any defect therein, shall not affect the legality or validity of such
dividend, distribution, reclassification, consolidation, merger, sale, transfer,
dissolution, liquidation or winding up.
ARTICLE 16
Miscellaneous Provisions
Section 16.01. Provisions Binding on Company's Successors. All the
covenants, stipulations, promises and agreements by the Company contained in
this Indenture shall bind its successors and assigns whether so expressed or
not.
Section 16.02. Official Acts by Successor Corporation. Any act or
proceeding by any provision of this Indenture authorized or required to be done
or performed by any board, committee or officer of the Company shall and may be
done and performed with like force and effect by the like board, committee or
officer of any Person that shall at the time be the lawful sole successor of the
Company.
Section 16.03. Addresses for Notices, Etc. Any notice or demand which by
any provision of this Indenture is required or permitted to be given or served
by the Trustee or by the holders of Notes on the Company shall be deemed to have
been sufficiently given or made, for all purposes, if given or served by being
deposited postage prepaid by registered or certified mail in a post office
letter box addressed (until another address is filed by the Company with the
Trustee) to Mentor Graphics Corporation, ▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇ Attention: General Counsel. Any notice, direction, request or
demand hereunder to or upon the Trustee shall be deemed to have been
sufficiently given or made, for all purposes, if given or served by being
deposited, postage prepaid, by registered or certified mail in a post office
letter box addressed to the Corporate Trust Office, which office is, at the date
as of which this Indenture is dated, located at ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇, Attention: Corporate Trust
Department (Mentor Graphics Corporation, 6 7/8% Convertible Subordinated Notes
Due 2007).
86
The Trustee, by notice to the Company, may designate additional or
different addresses for subsequent notices or communications.
Any notice or communication mailed to a Noteholder shall be mailed to
such Noteholder by first class mail, postage prepaid, at his address as it
appears on the Note register and shall be sufficiently given to such Noteholder
if so mailed within the time prescribed.
Failure to mail a notice or communication to a Noteholder or any defect
in it shall not affect its sufficiency with respect to other Noteholders. If a
notice or communication is mailed in the manner provided above, it is duly
given, whether or not the addressee receives it.
Section 16.04. Governing Law. This Indenture and each Note shall be
deemed to be a contract made under the laws of the State of New York, and for
all purposes shall be construed in accordance with the laws of the State of New
York, without regard to the conflict of laws provisions thereof.
Section 16.05. Evidence of Compliance with Conditions Precedent;
Certificates to Trustee. Upon any application or demand by the Company to the
Trustee to take any action under any of the provisions of this Indenture, the
Company shall furnish to the Trustee an Officers' Certificate stating that all
conditions precedent, if any, provided for in this Indenture relating to the
proposed action have been complied with, and, if requested by Trustee, an
Opinion of Counsel stating that, in the opinion of such counsel, all such
conditions precedent have been complied with.
Each certificate or opinion provided for in this Indenture and delivered
to the Trustee with respect to compliance with a condition or covenant provided
for in this Indenture shall include: (1) a statement that the person making such
certificate or opinion has read such covenant or condition; (2) a brief
statement as to the nature and scope of the examination or investigation upon
which the statement or opinion contained in such certificate or opinion is
based; (3) a statement that, in the opinion of such person, he or she has made
such examination or investigation as is necessary to enable him or her 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 or not, in the opinion of
such person, such condition or covenant has been complied with.
Section 16.06. Legal Holidays. In any case in which the date of maturity
of interest on or principal of the Notes or the date fixed for redemption of any
Note will not be a Business Day, then payment of such interest on or principal
of the Notes need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period from and after such date.
87
Section 16.07. Trust Indenture Act. This Indenture is hereby made
subject to, and shall be governed by, the provisions of the Trust Indenture Act
required to be part of and to govern indentures qualified under the Trust
Indenture Act; provided, however, that, unless otherwise required by law,
notwithstanding the foregoing, this Indenture and the Notes issued hereunder
shall not be subject to the provisions of subsections (a)(1), (a)(2), and (a)(3)
of Section 314 of the Trust Indenture Act as now in effect or as hereafter
amended or modified; provided further that this Section 16.07 shall not require
this Indenture or the Trustee to be qualified under the Trust Indenture Act
prior to the time such qualification is in fact required under the terms of the
Trust Indenture Act, nor shall it constitute any admission or acknowledgment by
any party to the Indenture that any such qualification is required prior to the
time such qualification is in fact required under the terms of the Trust
Indenture Act. If any provision hereof limits, qualifies or conflicts with
another provision hereof which is required to be included in an indenture
qualified under the Trust Indenture Act, such required provision shall control.
Section 16.08. No Security Interest Created. Nothing in this Indenture
or in the Notes, expressed or implied, shall be construed to constitute a
security interest under the Uniform Commercial Code or similar legislation, as
now or hereafter enacted and in effect, in any jurisdiction in which property of
the Company or its subsidiaries is located.
Section 16.09. Benefits of Indenture. Nothing in this Indenture or in
the Notes, express or implied, shall give to any Person, other than the parties
hereto, any paying agent, any authenticating agent, any Note registrar and their
successors hereunder, the holders of Notes and the holders of Senior Debt, any
benefit or any legal or equitable right, remedy or claim under this Indenture.
Section 16.10. Table of Contents, Headings, Etc. The table of contents
and the titles and headings of the articles and Sections of this Indenture have
been inserted for convenience of reference only, are not to be considered a part
hereof, and shall in no way modify or restrict any of the terms or provisions
hereof.
Section 16.11. Authenticating Agent. The Trustee may appoint an
authenticating agent that shall be authorized to act on its behalf, and subject
to its direction, in the authentication and delivery of Notes in connection with
the original issuance thereof and transfers and exchanges of Notes hereunder,
including under Sections 2.04, 2.05, 2.06, 2.07, 3.03 and 3.05, as fully to all
intents and purposes as though the authenticating agent had been expressly
authorized by this Indenture and those Sections to authenticate and deliver
Notes. For all purposes of this Indenture, the authentication and delivery of
Notes by the authenticating agent shall be deemed to be authentication and
delivery of such Notes "by the Trustee" and a certificate of authentication
executed on behalf of the Trustee by an authenticating agent shall be deemed to
satisfy any requirement hereunder or in the Notes for the Trustee's certificate
of authentication. Such authenticating agent shall at all times be a Person
eligible to serve as trustee hereunder pursuant to Section 8.09.
88
Any corporation into which any authenticating agent may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, consolidation or conversion to which any authenticating agent
shall be a party, or any corporation succeeding to the corporate trust business
of any authenticating agent, shall be the successor of the authenticating agent
hereunder, if such successor corporation is otherwise eligible under this
Section 16.11, without the execution or filing of any paper or any further act
on the part of the parties hereto or the authenticating agent or such successor
corporation.
Any authenticating agent may at any time resign by giving written notice
of resignation to the Trustee and to the Company. The Trustee may at any time
terminate the agency of any authenticating agent by giving written notice of
termination 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 any
authenticating agent shall cease to be eligible under this Section, the Trustee
shall either promptly appoint a successor authenticating agent or itself assume
the duties and obligations of the former authenticating agent under this
Indenture and, upon such appointment of a successor authenticating agent, if
made, shall give written notice of such appointment of a successor
authenticating agent to the Company and shall mail notice of such appointment of
a successor authenticating agent to all holders of Notes as the names and
addresses of such holders appear on the Note register.
The Company agrees to pay to the authenticating agent from time to time
such reasonable compensation for its services as shall be agreed upon in writing
between the Company and the authenticating agent.
The provisions of Sections 8.02, 8.03, 8.04, 9.03 and this Section 16.11
shall be applicable to any authenticating agent.
Section 16.12. Execution in Counterparts. This Indenture may be executed
in any number of counterparts, each of which shall be an original, but such
counterparts shall together constitute but one and the same instrument.
Section 16.13. Severability. In case any provision in this Indenture or
in the Notes shall be invalid, illegal or unenforceable, then (to the extent
permitted by law) the validity, legality and enforceability of the remaining
provisions shall not in any way be affected or impaired thereby.
89
Wilmington Trust Company hereby accepts the trusts in this Indenture
declared and provided, upon the terms and conditions herein above set forth.
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed.
MENTOR GRAPHICS CORPORATION
As Issuer
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
WILMINGTON TRUST COMPANY,
as Trustee
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇
--------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇
Title: Senior Financial Services Officer
90
EXHIBIT A
For Global Note only: UNLESS THIS CERTIFICATE IS PRESENTED BY AN
AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY (55 ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇, ▇▇▇ ▇▇▇▇) (THE "DEPOSITARY", WHICH TERM INCLUDES ANY SUCCESSOR DEPOSITARY
FOR THE CERTIFICATES) TO THE COMPANY OR ITS AGENT FOR REGISTRATION OF TRANSFER,
EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF
CEDE & CO. OR IN SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITARY (AND ANY PAYMENT HEREIN IS MADE TO CEDE & CO. OR TO SUCH OTHER
ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITARY), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
THE SECURITY EVIDENCED BY THIS CERTIFICATE HAS NOT BEEN REGISTERED UNDER THE
SECURITIES ACT OF 1933, AS AMENDED (THE "SECURITIES ACT OF 1933"), OR ANY STATE
SECURITIES LAWS, AND MAY NOT BE OFFERED OR SOLD EXCEPT AS SET FORTH IN THE
FOLLOWING SENTENCE. BY ACQUISITION HEREOF, THE HOLDER:
(1) REPRESENTS THAT IT IS A "QUALIFIED INSTITUTIONAL BUYER" AS DEFINED IN
RULE 144A UNDER THE SECURITIES ACT OF 1933;
(2) AGREES THAT IT WILL NOT WITHIN TWO YEARS AFTER THE ORIGINAL ISSUANCE OF
THIS SECURITY RESELL OR OTHERWISE TRANSFER THE SECURITY EVIDENCED HEREBY
OR THE COMMON STOCK ISSUABLE UPON CONVERSION OF SUCH SECURITY EXCEPT (A)
TO THE COMPANY OR ANY SUBSIDIARY THEREOF, (B) TO A QUALIFIED
INSTITUTIONAL BUYER IN COMPLIANCE WITH RULE 144A UNDER THE SECURITIES ACT
OF 1933, (C) PURSUANT TO THE EXEMPTION FROM REGISTRATION PROVIDED BY RULE
144 UNDER THE SECURITIES ACT OF 1933 (IF AVAILABLE), (D) TO AN
INSTITUTIONAL INVESTOR THAT IS AN ACCREDITED INVESTOR WITHIN THE MEANING
OF RULE 501(a)(1), (2), (3) OR (7) OF REGULATION D UNDER THE SECURITIES
ACT PURSUANT TO AN EXEMPTION FROM REGISTRATION UNDER THE SECURITIES ACT
(IF AVAILABLE), OR (E) PURSUANT TO A REGISTRATION STATEMENT WHICH HAS
BEEN DECLARED EFFECTIVE UNDER THE SECURITIES ACT OF 1933 AND WHICH
CONTINUES TO BE EFFECTIVE AT THE TIME OF SUCH TRANSFER; AND
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(3) AGREES THAT IT WILL DELIVER TO EACH PERSON TO WHOM THE SECURITY EVIDENCED
HEREBY IS TRANSFERRED (OTHER THAN A TRANSFER PURSUANT TO CLAUSE 2(C) OR
2(E) ABOVE) A NOTICE SUBSTANTIALLY TO THE EFFECT OF THIS LEGEND.
MENTOR GRAPHICS CORPORATION
6 7/8% CONVERTIBLE SUBORDINATED NOTE DUE 2007
CUSIP:
No.: __________ $_____________
Mentor Graphics Corporation, a corporation duly organized and validly
existing under the laws of the State of Oregon (herein called the "Company",
which term includes any successor corporation under the Indenture referred to on
the reverse hereof), for value received hereby promises to pay to
___________________________ or registered assigns, the principal sum of
__________________________ ($______________) on June 15, 2007, at the office or
agency of the Company maintained for that purpose in accordance with the terms
of the Indenture, in such coin or currency of the United States of America as at
the time of payment shall be legal tender for the payment of public and private
debts, and to pay interest, semi-annually on June 15 and December 15 of each
year, commencing December 15, 2002, on said principal sum at said office or
agency, in like coin or currency, at the rate per annum of 6 7/8%, from the most
recent date to which interest has been paid or duly provided for, or if no
interest has been paid or duly provided for, from June 3, 2002, until payment of
said principal sum has been made or duly provided for. Except as otherwise
provided in the Indenture, the interest payable on the Note pursuant to the
Indenture on any June 15 or December 15 will be paid to the Person entitled
thereto as it appears in the Note register at the close of business on the
record date, which shall be the June 1 or December 1 (whether or not a Business
Day) next preceding such June 15 or December 15, as provided in the Indenture;
provided, however, that any such interest not punctually paid or duly provided
for shall be payable as provided in the Indenture. Interest may, at the option
of the Company, be paid either (i) by check mailed to the registered address of
such Person (provided that the holder of Notes with an aggregate principal
amount in excess of $5,000,000 shall, at the written election of such holder, be
paid by wire transfer of immediately available funds) or (ii) by transfer to an
account maintained by such Person located in the United States; provided,
however, that payments to the Depositary will be made by wire transfer of
immediately available funds to the account of the Depositary or its nominee.
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Reference is made to the further provisions of this Note set forth on the
reverse hereof, including, without limitation, provisions subordinating the
payment of principal of and premium, if any, and interest on the Notes to the
prior payment in full of all Senior Debt, as defined in the Indenture, and
provisions giving the holder of this Note the right to convert this Note into
Common Stock of the Company on the terms and subject to the limitations referred
to on the reverse hereof and as more fully specified in the Indenture. Such
further provisions shall for all purposes have the same effect as though fully
set forth at this place.
This Note shall be deemed to be a contract made under the laws of the
State of New York, and for all purposes shall be construed in accordance with
and governed by the laws of the State of New York, without regard to principles
of conflicts of laws.
This Note shall not be valid or become obligatory for any purpose until
the certificate of authentication hereon shall have been manually signed by the
Trustee or a duly authorized authenticating agent under the Indenture.
IN WITNESS WHEREOF, the Company has caused this Note to be duly executed.
MENTOR GRAPHICS CORPORATION
By: ________________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
Title: President
Attest: ____________________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇▇
Title: Secretary
Date: __________
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TRUSTEE'S CERTIFICATE OF AUTHENTICATION
This is one of the Notes described in the within-named Indenture.
WILMINGTON TRUST COMPANY,
as Trustee
By: _________________________
Name:
Title:
By: _________________________
As Authenticating Agent
(if different from Trustee)
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FORM OF REVERSE OF NOTE
MENTOR GRAPHICS CORPORATION
6 7/8% CONVERTIBLE SUBORDINATED NOTE DUE, 2007
This Note is one of a duly authorized issue of Notes of the Company,
designated as its 6 7/8% Convertible Subordinated Notes Due 2007 (herein called
the "Notes"), limited to the aggregate principal amount of $150,000,000 (or
$172,500,000 if the option set forth in Section 2 of the Purchase Agreement
dated as of May 29, 2002 (as amended from time to time by the parties thereto)
by and between the Company and the Initial Purchasers is exercised in full) all
issued or to be issued under and pursuant to an Indenture dated as of June 3,
2002 (herein called the "Indenture"), between the Company and Wilmington Trust
Company, as trustee (herein called the "Trustee"), to which Indenture and all
indentures supplemental thereto reference is hereby made for a description of
the rights, limitations of rights, obligations, duties and immunities thereunder
of the Trustee, the Company and the holders of the Notes.
In case an Event of Default (as defined in the Indenture) shall have
occurred and be continuing, the principal of, premium, if any, and accrued
interest (including Liquidated Damages (as defined in the Registration Rights
Agreement), if any) on all Notes may be declared by either the Trustee or the
holders of not less than 25% in aggregate principal amount of the Notes then
outstanding, and upon said declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions permitting the Company and the Trustee,
with the consent of the holders of not less than a majority in aggregate
principal amount of the Notes at the time outstanding, to execute supplemental
indentures adding any provisions to or changing in any manner or eliminating any
of the provisions of the Indenture or of any supplemental indenture or modifying
in any manner the rights of the holders of the Notes; provided, however, that no
such supplemental indenture shall (i) extend the fixed maturity of any Note;
(ii) reduce the rate or extend the time of payment of interest or Liquidated
Damages on any Note; (iii) reduce the principal amount of any Note or premium,
if any, thereon, or reduce any amount payable on redemption or repurchase
thereof or reduce the amount of Liquidated Damages payable thereon; (iv) impair
the right of any Noteholder to institute suit for any payment on a Note or with
respect to the conversion of a Note; (v) make the principal of any Note or
interest or premium, if any, or Liquidated Damages on any Note payable in any
coin or currency other than that provided in the Notes; (vi) modify the
provisions of this Indenture with respect to the redemption of the Notes in a
manner adverse to the Noteholders in any material respect; (vii) change the
obligation of the Company to repurchase any Note upon the happening of a Change
of Control in a manner adverse to the holder of Notes; (viii) impair the right
to convert the Notes into Common Stock subject to the terms set forth herein
without the consent of the
A-5
holder of each Note so affected; (ix) alter the manner of calculation or rate of
accrual of Liquidated Damages on any Note or extend the time for payment of such
amount; or (x) reduce the percentage of Notes, the holders of which are required
to consent to any supplemental indenture or the percentage of Notes, or the
holders of which are required for any other waiver under the Indenture. Subject
to the provisions of the Indenture, the holders of a majority in aggregate
principal amount of the Notes at the time outstanding may on behalf of the
holders of all of the Notes waive any past default or Event of Default under the
Indenture and its consequences except a default in the payment of interest
(including Liquidated Damages, if any) or any premium on, or the principal of,
any of the Notes, or a failure by the Company to convert any Notes into Common
Stock of the Company, or a default in the payment of the redemption price
pursuant to Article 3 of the Indenture, or a default in respect of a covenant or
provisions of the Indenture which under Article 11 of the Indenture cannot be
modified without the consent of the holders of each or all Notes then
outstanding or affected thereby. Any such consent or waiver by the holder of
this Note (unless revoked as provided in the Indenture) shall be conclusive and
binding upon such holder and upon all future holders and owners of this Note and
any Notes which may be issued in exchange or substitution hereof, irrespective
of whether or not any notation thereof is made upon this Note or such other
Notes.
The indebtedness evidenced by the Notes is, to the extent and in the
manner provided in the Indenture, expressly subordinated and subject in right of
payment to the prior payment in full of all Senior Debt of the Company, whether
outstanding at the date of the Indenture or thereafter incurred, and this Note
is issued subject to the provisions of the Indenture with respect to such
subordination. Each holder of this Note, by accepting the same, agrees to and
shall be bound by such provisions and authorizes the Trustee on its behalf to
take such action as may be necessary or appropriate to effectuate the
subordination so provided and appoints the Trustee his attorney-in-fact for such
purpose.
No reference herein to the Indenture and no provision of this Note 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
(including Liquidated Damages, if any) on this Note at the place, at the
respective times, at the rate and in the coin or currency herein prescribed.
Interest on the Notes shall be computed on the basis of a 360-day year of
twelve 30-day months.
The Notes are issuable in fully registered form, without coupons, in
denominations of $1,000 principal amount and any integral multiple of $1,000. At
the office or agency of the Company referred to on the face hereof, and in the
manner and subject to the limitations provided in the Indenture, without payment
of any service charge but with payment of a sum sufficient to cover any tax,
assessment or other governmental charge that may be imposed in connection with
any registration or exchange of Notes, Notes may be exchanged for a like
aggregate principal amount of Notes of any other authorized denominations.
A-6
The Notes will not be redeemable at the option of the Company prior to
June 20, 2005. At any time on or after June 20, 2005, and prior to maturity, the
Notes may be redeemed at the option of the Company, in whole or in part, upon
mailing a notice of such redemption not less than 30 days but not more than 60
days before the date fixed for redemption to the holders of Notes at their last
registered addresses, all as provided in the Indenture, at the following
optional redemption prices (expressed as percentages of the principal amount),
together in each case with accrued and unpaid interest (including Liquidated
Damages (as defined in the Indenture), if any) to, but excluding, the date fixed
for redemption:
Period Redemption Price
Beginning on June 20, 2005 and ending on June 14, 2006 102.750%
Beginning on June 15, 2006 and ending on June 14, 2007 101.375%
and 100% on June 15, 2007; provided, however, that if the date fixed for
redemption is on a June 15 or December 15, then the interest payable on such
date shall be paid to the holder of record on the preceding June 1 or December
1, respectively.
The Company may not give notice of any redemption of the Notes if a
default in the payment of interest or premium, if any, on the Notes has occurred
and is continuing.
The Notes are not subject to redemption through the operation of any
sinking fund.
If a Change of Control occurs at any time prior to maturity of the Notes,
the holders of the Notes shall have the right to require the Company to
repurchase at such holder's option all of such holders' Notes, or any portion
thereof that is an integral multiple of $1,000 principal amount, on the
Repurchase Date (as defined in the Indenture) at a repurchase price equal to
100% of the principal amount thereof, together with accrued interest (including
Liquidated Damages, if any) to, but excluding, the date of repurchase; provided,
however, that, if such Repurchase Date is a June 15 or December 15, the interest
payable on such date shall be paid to the holder of record of the Notes on the
preceding June 1 or December 1, respectively. The Company shall mail to all
holders of record of the Notes a notice of the occurrence of a Change of Control
and of the repurchase right arising as a result thereof on or before the 10th
day after the occurrence of such Change of Control. For a Note to be so
repurchased at the option of the holder,
A-7
the Company must receive at the office or agency of the Company maintained for
that purpose in accordance with the terms of the Indenture, such Note with the
form entitled "Option to Elect Repayment Upon a Change of Control" on the
reverse thereof duly completed, together with such Note, duly endorsed for
transfer, on or before the close of business on the Business Day that is five
(5) Business Days prior to the Repurchase Date.
Subject to the provisions of the Indenture, the holder hereof has the
right, at its option, at any time after the original issuance of any Notes
through the close of business on the final maturity date of the Notes, or, as to
all or any portion hereof called for redemption, prior to the close of business
on the Business Day immediately preceding the date fixed for redemption (unless
the Company shall default in payment due upon redemption thereof), to convert
the principal hereof or any portion of such principal which is $1,000 or an
integral multiple thereof into that number of shares of the Company's Common
Stock (as such shares shall be constituted at the date of conversion) obtained
by dividing the principal amount of this Note or portion thereof to be converted
by the Conversion Price of $23.27, as may adjusted from time to time as provided
in the Indenture, upon surrender of this Note, together with a conversion notice
as provided in the Indenture (the form entitled "Conversion Notice" on the
reverse hereof), to the Company at the office or agency of the Company
maintained for that purpose in accordance with the terms of the Indenture, or at
the option of such holder, the Corporate Trust Office, and, unless the shares
issuable on conversion are to be issued in the same name as this Note, duly
endorsed by, or accompanied by instruments of transfer in form satisfactory to
the Company duly executed by, the holder or by his duly authorized attorney. No
adjustment in respect of interest on any Note converted or dividends on any
shares issued upon conversion of such Note will be made upon any conversion
except as set forth in the next sentence. If this Note (or portion hereof) is
surrendered for conversion during the period from the close of business on any
record date for the payment of interest to the close of business on the Business
Day preceding the following interest payment date and either (x) has not been
called for redemption on a redemption date that occurs during such period or (y)
is not to be redeemed in connection with a Change of Control on a Repurchase
Date that occurs during such period, this Note (or portion hereof being
converted) must be accompanied by an amount, in New York Clearing House funds or
other funds acceptable to the Company, equal to the interest payable on such
interest payment date on the principal amount being converted; provided,
however, that no such payment shall be required if there shall exist at the time
of conversion a default in the payment of interest on the Notes. No fractional
shares will be issued upon any conversion, but an adjustment and payment in cash
will be made, as provided in the Indenture, in respect of any fraction of a
share which would otherwise be issuable upon the surrender of any Note or Notes
for conversion. A Note in respect of which a holder is exercising its right to
require redemption upon a Change of Control may be converted only if such holder
withdraws its election to exercise such right in accordance with the terms of
the Indenture. Any Notes called for redemption, unless surrendered for
conversion by the holders thereof on or before the close of
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business on the Business Day preceding the date fixed for redemption, may be
deemed to be redeemed from the holders of such Notes for an amount equal to the
applicable redemption price, together with accrued but unpaid interest
(including Liquidated Damages, if any) to (but excluding) the date fixed for
redemption, by one or more investment banks or other purchasers who may agree
with the Company (i) to purchase such Notes from the holders thereof and convert
them into shares of the Company's Common Stock and (ii) to make payment for such
Notes as aforesaid to the Trustee in trust for the holders.
Upon due presentment for registration of transfer of this Note at the
office or agency of the Company maintained for that purpose in accordance with
the terms of the Indenture, a new Note or Notes of authorized denominations for
an equal aggregate principal amount will be issued to the transferee in exchange
thereof; subject to the limitations provided in the Indenture, without charge
except for any tax, assessment or other governmental charge imposed in
connection therewith.
The Company, the Trustee, any authenticating agent, any paying agent, any
conversion agent and any Note registrar may deem and treat the registered holder
hereof as the absolute owner of this Note (whether or not this Note shall be
overdue and notwithstanding any notation of ownership or other writing hereon
made by anyone other than the Company or any Note registrar) for the purpose of
receiving payment hereof, or on account hereof, for the conversion hereof and
for all other purposes, and neither the Company nor the Trustee nor any other
authenticating agent nor any paying agent nor other conversion agent nor any
Note registrar shall be affected by any notice to the contrary. All payments
made to or upon the order of such registered holder shall, to the extent of the
sum or sums paid, satisfy and discharge liability for monies payable on this
Note.
No recourse for the payment of the principal of or any premium or
interest on this Note, or for any claim based hereon or otherwise in respect
hereof, and no recourse under or upon any obligation, covenant or agreement of
the Company in the Indenture or any supplemental indenture or in any Note, or
because of the creation of any indebtedness represented thereby, shall be had
against any incorporator, stockholder, employee, agent, officer or director or
subsidiary, as such, past, present or future, of the Company or of any successor
corporation, either directly or through the Company or any successor
corporation, whether by virtue of any constitution, statute or rule of law or by
the enforcement of any assessment or penalty or otherwise, all such liability
being, by acceptance hereof and as part of the consideration for the issue
hereof, expressly waived and released.
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This Note shall be deemed to be a contract made under the laws of New
York, and for all purposes shall be construed in accordance with the laws of New
York, without regard to principles of conflicts of laws.
Terms used in this Note and defined in the Indenture are used herein as
therein defined.
A-10
ABBREVIATIONS
The following abbreviations, when used in the inscription of the face
of this Note, shall be construed as though they were written out in full
according to applicable laws or regulations.
TEN COM - as tenants in common UNIF GIFT MIN ACT - _______
Custodian_____
TEN ENT - as tenant by the entireties (Cust) (Minor)
JT TEN - as joint tenants with right under Uniform Gifts to Minors Act
of survivorship and not _________________________________
asunder Uniform Gifts to (state)
Minors Act tenants in common
Additional abbreviations may also be used though not in the above list.
A-11
CONVERSION NOTICE
TO: MENTOR GRAPHICS CORPORATION
The undersigned registered owner of this Note hereby irrevocably
exercises the option to convert this Note, or the portion thereof (which is
$1,000 or an integral multiple thereof) below designated, into shares of Common
Stock of Mentor Graphics Corporation in accordance with the terms of the
Indenture referred to in this Note, and directs that the shares issuable and
deliverable upon such conversion, together with any check in payment for
fractional shares and any Notes representing any unconverted principal amount
hereof, be issued and delivered to the registered holder hereof unless a
different name has been indicated below. If shares or any portion of this Note
not converted are to be issued in the name of a person other than the
undersigned, the undersigned will provide the appropriate information below and
pay all transfer taxes payable with respect thereto. Any amount required to be
paid by the undersigned on account of interest accompanies this Note.
Dated: ____________________
__________________________________
__________________________________
Signature(s)
Signature(s) must be guaranteed by
an "eligible guarantor
institution" meeting the
requirements of the Note
registrar, which requirements
include membership or
participation in the Security
Transfer Agent Medallion Program
("STAMP") or such other "signature
guarantee program" as may be
determined by the Note registrar
in addition to, or in substitution
for, STAMP, all in accordance with
the Securities Exchange Act of
1934, as amended.
__________________________________
Signature Guarantee
________________________________________________________________________________
Fill in the registration of shares of Common Stock if to be issued, and
Notes if to be delivered, other than to and in the name of the registered
holder:
A-12
____________________________________
(Name)
____________________________________
(Street Address)
____________________________________
(City, State and Zip Code)
____________________________________
Please print name and address
Principal amount to be converted
(if less than all):
$___________________________________
Social Security or Other Taxpayer
Identification Number:
____________________________________
A-13
OPTION TO ELECT REPAYMENT
UPON A CHANGE OF CONTROL
TO: MENTOR GRAPHICS CORPORATION
The undersigned registered owner of this Note hereby irrevocably
acknowledges receipt of a notice from Mentor Graphics Corporation (the
"Company") as to the occurrence of a Change of Control with respect to the
Company and requests and instructs the Company to repay the entire principal
amount of this Note, or the portion thereof (which is $1,000 or an integral
multiple thereof) below designated, in accordance with the terms of the
Indenture referred to in this Note at the price of 100% of such entire principal
amount or portion thereof, together with accrued interest to, but excluding,
such repayment date, to the registered holder hereof.
Dated: ____________________
_________________________________
_________________________________
Signature(s)
NOTICE: The above signatures
of the holder(s) hereof must
correspond with the name as
written upon the face of the
Note in every particular
without alteration or
enlargement or any change
whatever.
Principal amount to be repaid
(if less than all):
$_______________________________
_________________________________
Social Security or Other
Tax Identification Number
A-14
ASSIGNMENT
For value received ____________________________________________ hereby
sell(s) assign(s) and transfer(s) unto ______________________________ (Please
insert social security or other Taxpayer Identification Number of assignee) the
within Note, and hereby irrevocably constitutes and appoints
____________________________________ attorney to transfer said Note on the books
of the Company, with full power of substitution in the premises.
In connection with any transfer of the Note within the United States or
to, or for the account of, U.S. persons and within the period prior to the
expiration of the holding period applicable to sales thereof under Rule 144(k)
under the Securities Act (or any successor provision) (other than any transfer
pursuant to a registration statement that has been declared effective under the
Securities Act), the undersigned confirms that such Note is being transferred:
[_] To Mentor Graphics Corporation or a subsidiary thereof; or
[_] To a "qualified institutional buyer" pursuant to and in
compliance with Rule 144A under the Securities Act of 1933, as
amended; or
[_] To an Institutional Accredited Investor pursuant to and in
compliance with the Securities Act of 1933, as amended; or
[_] Pursuant to and in compliance with Rule 144 under the
Securities Act of 1933, as amended;
[_] Pursuant to a registration statement which has been declared
effective under the Securities Act of 1933, as amended, and
which continues to be effective at the time of such transfer;
and unless the box below is checked, the undersigned confirms that such Note is
not being transferred to an "affiliate" of the Company as defined in Rule 144
under the Securities Act of 1933, as amended (an "Affiliate").
[_] The transferee is an Affiliate of the Company.
Dated: ____________________
A-15
__________________________________
__________________________________
Signature(s) must be guaranteed by
an "eligible guarantor
institution" meeting the
requirements of the Note
registrar, which requirements
include membership or
participation in the Security
Transfer Agent Medallion Program
("STAMP") or such other "signature
guarantee program" as may be
determined by the Note registrar
in addition to, or in substitution
for, STAMP, all in accordance with
the Securities Exchange Act of
1934, as amended.
__________________________________
Signature Guarantee
NOTICE: The signature of the conversion notice, the option to elect repayment
upon a Change of Control or the assignment must correspond with the name as
written upon the face of the Note in every particular without alteration or
enlargement or any change whatever.
A-16
EXHIBIT B
Mentor Graphics Corporation
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Attention: General Counsel
Wilmington Trust Company
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Attention: Corporate Trust Administration
Ladies and Gentlemen:
In connection with our proposed purchase of 6 7/8% Convertible
Subordinated Notes Due 2007 (the "Notes") of Mentor Graphics Corporation, an
Oregon corporation (the "Company") we confirm that:
(i) we are an "accredited investor" within the meaning of
Rule 501(a)(1), (2) or (3) under the Securities Act of 1933, as amended
(the "Securities Act"), or an entity in which all of the equity owners
are accredited investors within the meaning of Rule 501(a)(1), (2) or
(3) under the Securities Act (an "Institutional Accredited Investor");
(ii) (A) any purchase of Notes by us will be for our own
account or for the account of one or more other Institutional
Accredited Investors or as fiduciary for the account of one or more
trusts, each of which is an "accredited investor" within the meaning of
Rule 501(a)(7) under the Securities Act and for each of which we
exercise sole investment discretion or (B) we are a "bank," within the
meaning of Section 3(a)(2) of the Securities Act, or a "savings and
loan association" or other institution described in Section 3(a)(5)(A)
of the Securities Act that is acquiring Notes as fiduciary for the
account of one or more institutions for which we exercise sole
investment discretion;
(iii) the event that we purchase any Notes, we will acquire
Notes having a minimum purchase price of not less than $100,000 for our
own account or for any separate account for which we are acting;
(iv) we have such knowledge and experience in financial and
business matters that we are capable of evaluating the merits and risks
of purchasing Notes; and
B-1
(v) we are not acquiring Notes with a view to distribution
thereof or with any present intention of offering or selling Notes or
the Common Stock of the Company issuable upon conversion thereof,
except as permitted below; provided that the disposition of our
property and property of any accounts for which we are acting as
fiduciary shall remain at all times within our control.
We understand that the Notes are being offered in a transaction not
involving any public offering within the United States within the meaning of the
Securities Act and that the Notes and the Common Stock of the Company issuable
upon conversion thereof have not been registered under the Securities Act, and
we agree, on our own behalf and on behalf of each account for which we acquire
any Notes, that if in the future we decide to resell or otherwise transfer such
Notes or the Common Stock of the Company issuable upon conversion thereof, such
Notes or Common Stock of the Company may be resold or otherwise transferred only
(i) to the Company or any subsidiary thereof, (ii) a "qualified institutional
buyer" (as defined in Rule 144A under the Securities Act) in compliance with
Rule 144A under the Securities Act, (iii) pursuant to exemption from
registration provided by Rule 144 under the Securities Act; (iv) to an
institutional investor that is an "accredited investor" within the meaning of
rule 501(a)(1), (2), (3) or (7) of Regulation D under the Securities Act
pursuant to an exemption from registration under the Securities Act (if
available), or (v) pursuant to a registration statement that has been declared
effective under the Securities Act and which continues to be effective at the
time of such transfer, and in each case, in accordance with any applicable
securities law of any state of the United States and in accordance with the
legends set forth on the Notes or the Common Stock of the Company issuable upon
conversion thereof. We further agree to provide any person purchasing any of the
Notes or the Common Stock of the Company issuable upon conversion thereof (other
than pursuant to clause (iii) or (v) above) from us a notice advising such
purchaser that resales of such securities are restricted as stated herein. We
understand that the Trustee and transfer agent for the Notes and the Common
Stock of the Company will not be required to accept for registration of transfer
any Notes or any Common Stock of the Company issued upon conversion of the
Notes, except upon presentation of evidence satisfactory to the Company that the
foregoing restrictions on transfer have been complied with. We further
understand that any Notes and any Common Stock of the Company issued upon
conversion of the Notes will be in the form of definitive physical certificates
and that such certificates will bear a legend reflecting the substance of this
paragraph other than certificates transferred pursuant to (iii) or (v) above.
The Company and the Trustee and their respective counsel are entitled
to rely upon this letter and are irrevocably authorized to produce this letter
or a copy hereof to any interested party in any administrative or legal
proceeding or official inquiry with respect to the matters covered hereby.
B-2
THIS LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
INTERNAL LAWS OF THE STATE OF NEW YORK.
(Name of Purchaser)
By: ________________________________
Name: ______________________________
Title: _____________________________
Address: ___________________________
____________________________________
____________________________________
B-3