Exhibit 4.C
$150,000,000 AGGREGATE PRINCIPAL AMOUNT
MENTOR GRAPHICS CORPORATION
6 7/8% CONVERTIBLE SUBORDINATED NOTES DUE 2007
Resale Registration Rights Agreement
Dated as of June 3, 2002
RESALE REGISTRATION RIGHTS AGREEMENT, dated as of June 3, 2002, among
Mentor Graphics Corporation, an Oregon corporation (together with any successor
entity, herein referred to as the "Company"), Banc of America Securities LLC,
Fleet Securities, Inc. and Scotia Capital (USA) Inc., as representatives of the
several initial purchasers (the "Initial Purchasers") under the Purchase
Agreement (as defined below).
Pursuant to the Purchase Agreement, dated as of May 29, 2002, among the
Company and Banc of America Securities LLC, Fleet Securities, Inc., Scotia
Capital (USA) Inc. and Xxxxxxx & Company, Inc., as representatives of the
Initial Purchasers (the "Purchase Agreement"), the Initial Purchasers have
agreed to purchase from the Company $150,000,000 ($172,500,000 if the Initial
Purchasers exercise their option in full) in aggregate principal amount of 6
7/8% Convertible Subordinated Notes Due 2007 (the "Notes"). The Notes will be
convertible into fully paid, nonassessable shares of common stock, no par value
per share, of the Company together with the rights (the "Rights") evidenced by
such common stock to the extent provided in the Rights Agreement, dated as of
February 10, 1999, between the Company and American Stock, Transfer & Trust Co.
(collectively, the "Common Stock"). The Notes will be convertible on the terms,
and subject to the conditions, set forth in the Indenture (as defined herein).
To induce the Initial Purchasers to purchase the Notes, the Company has agreed
to provide the registration rights set forth in this Agreement pursuant to
Section 5(g) of the Purchase Agreement.
The parties hereby agree as follows:
1. Definitions. Capitalized terms used in this Agreement without
definition shall have their respective meanings set forth in the Purchase
Agreement. As used in this Agreement, the following capitalized terms shall have
the following meanings:
"Affiliate" of any specified person means any other person which,
directly or indirectly, is in control of, is controlled by or is under common
control with, such specified person. For purposes of this definition, control of
a person means the power, direct or indirect, to direct or cause the direction
of the management and policies of such person whether by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"Agreement": This Resale Registration Rights Agreement.
"Amendment Effectiveness Deadline Date" has the meaning set forth in
Section 2(e) hereof.
"Blue Sky Application": As defined in Section 6(a)(i) hereof.
"Business Day": The definition of "Business Day" in the Indenture.
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"Commission": Securities and Exchange Commission.
"Common Stock": As defined in the preamble hereto.
"Company": As defined in the preamble hereto.
"Xxxxx": Electronic Data Gathering and Retrieval System.
"Effectiveness Period": As defined in Section 2(a)(iii) hereof.
"Effectiveness Target Date": As defined in Section 2(a)(ii) hereof.
"Exchange Act": Securities Exchange Act of 1934, as amended.
"Holder": A Person who owns, beneficially or otherwise, Transfer
Restricted Securities.
"Indemnified Holder": As defined in Section 6(a) hereof.
"Indenture": The Indenture, dated as of June 3, 2002 between the
Company and Wilmington Trust Company, as trustee (the "Trustee"), pursuant to
which the Notes are to be issued, as such Indenture is amended, modified or
supplemented from time to time in accordance with the terms thereof.
"Initial Purchasers": As defined in the preamble hereto.
"Liquidated Damages": As defined in Section 3(a) hereof.
"Liquidated Damages Payment Date": Each June 15 and December 15.
"Majority of Holders": Holders holding over 50% of the aggregate
principal amount of Notes outstanding; provided that, for the purpose of this
definition, a holder of shares of Common Stock which constitute Transfer
Restricted Securities and issued upon conversion of the Notes shall be deemed to
hold an aggregate principal amount of Notes (in addition to the principal amount
of Notes held by such holder) equal to the quotient of (x) the number of such
shares of Common Stock held by such holder and (y) the conversion rate in effect
at the time of such conversion as determined in accordance with the Indenture.
"NASD": National Association of Securities Dealers, Inc.
"Notes": As defined in the preamble hereto.
"Notice and Questionnaire" means a written notice executed by the
respective Holder and delivered to the Company containing substantially the
information called for by the Selling Securityholder Notice and Questionnaire
attached as Annex A to the Offering Memorandum of the Company issued May 29,
2002 relating to the Notes.
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"Notice Holder" means, on any date, any Holder that has delivered a
Notice and Questionnaire to the Company on such date.
"Person": An individual, partnership, corporation, company,
unincorporated organization, trust, joint venture or a government or agency or
political subdivision thereof.
"Prospectus": The prospectus included in a Shelf Registration
Statement, as amended or supplemented by any prospectus supplement and by all
other amendments thereto, including post-effective amendments, and all material
incorporated by reference into such prospectus.
"Purchase Agreement": As defined in the preamble hereto.
"Record Holder": With respect to any Liquidated Damages Payment Date,
each Person who is a Holder on the 15/th/ day preceding the relevant Liquidated
Damages Payment Date. In the case of a Holder of shares of Common Stock issued
upon conversion of the Notes, "Record Holder" shall mean each Person who is a
Holder of shares of Common Stock which constitute Transfer Restricted Securities
on the 15/th/ day preceding the relevant Liquidated Damages Payment Date.
"Registration Default": As defined in Section 3(a) hereof.
"Securities Act": Securities Act of 1933, as amended.
"Shelf Filing Deadline": As defined in Section 2(a)(i) hereof.
"Shelf Registration Statement": As defined in Section 2(a)(i) hereof.
"Subsequent Shelf Registration Statement" has the meaning set forth in
Section 2(c) hereof.
"Suspension Notice": As defined in Section 4(c) hereof.
"Suspension Period": As defined in Section 4(b)(i) hereof.
"TIA": Trust Indenture Act of 1939, as amended, and the rules and
regulations of the Commission thereunder, in each case, as in effect on the date
the Indenture is qualified under the TIA.
"Transfer Restricted Securities": Each Note and each share of Common
Stock issued upon conversion of Notes until the earlier of:
(i) the date on which such Note or such share of Common Stock
issued upon conversion has been effectively registered under the
Securities Act and disposed of in accordance with the Shelf
Registration Statement;
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(ii) the date on which such Note or such share of Common
Stock issued upon conversion is transferred in compliance with Rule
144 under the Securities Act or may be sold or transferred by a person
who is not an affiliate of the Company pursuant to Rule 144 under the
Securities Act (or any other similar provision then in force) without
any volume or manner of sale restrictions thereunder; or
(iii) the date on which such Note or such share of Common
Stock issued upon conversion ceases to be outstanding (whether as a
result of redemption, repurchase and cancellation, conversion or
otherwise).
"Underwritten Registration": A registration in which Notes of the
Company are sold to an underwriter for reoffering to the public.
Unless the context otherwise requires, the singular includes the
plural, and words in the plural include the singular.
2. Shelf Registration.
(a) The Company shall:
(i) not later than 90 days after the date hereof (the
"Shelf Filing Deadline"), cause to be filed a registration
statement pursuant to Rule 415 under the Securities Act (the
"Shelf Registration Statement"), which Shelf Registration
Statement shall provide for resales of all Transfer Restricted
Securities held by Holders that have provided the information
required pursuant to the terms of Section 2(b) hereof;
(ii) use its reasonable efforts to cause the Shelf
Registration Statement to be declared effective by the Commission
not later than 180 days after the date hereof (the "Effectiveness
Target Date"); and
(iii) subject to Section 4(b)(i) hereof, use its reasonable
efforts to keep the Shelf Registration Statement continuously
effective, supplemented and amended as required by the provisions
of Section 4(b) hereof to the extent necessary to ensure that (A)
it is available for resales by the Holders of Transfer Restricted
Securities entitled, subject to Section 2(b), to the benefit of
this Agreement and (B) conforms with the requirements of this
Agreement and the Securities Act and the rules and regulations of
the Commission promulgated thereunder as announced from time to
time, for a period (the "Effectiveness Period") until the earliest
of:
(1) two years following the last date of
original issuance of any of the Notes;
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(2) the date when the Holders of
Transfer Restricted Securities are able to
sell all such Transfer Restricted Securities
immediately without restriction pursuant to
the volume limitation provisions of Rule 144
under the Securities Act or any successor
rule thereto; or
(3) the date when all of the Transfer
Restricted Securities are registered under
the Shelf Registration Statement and disposed
of in accordance with the Shelf Registration
Statement.
(b) At the time the Shelf Registration Statement is declared
effective, each Holder that became a Notice Holder on or prior to the
date five (5) Business Days prior to such time of effectiveness shall
be named as a selling securityholder in the Shelf Registration
Statement and the related Prospectus in such a manner as to permit such
Holder to deliver such Prospectus to purchasers of Transfer Restricted
Securities in accordance with applicable law. None of the Company's
security holders (other than the Holders of Transfer Restricted
Securities) shall have the right to include any of the Company's
securities in the Shelf Registration Statement.
(c) If the Shelf Registration Statement or any Subsequent
Shelf Registration Statement ceases to be effective for any reason at
any time during the Effectiveness Period (other than because all
Transfer Restricted Securities registered thereunder shall have been
resold pursuant thereto or shall have otherwise ceased to be Transfer
Restricted Securities), the Company shall use its reasonable efforts to
obtain the prompt withdrawal of any order suspending the effectiveness
thereof, and in any event shall within thirty (30) days of such
cessation of effectiveness amend the Shelf Registration Statement in a
manner reasonably expected to obtain the withdrawal of the order
suspending the effectiveness thereof, or file an additional Shelf
Registration Statement covering all of the securities that as of the
date of such filing are Transfer Restricted Securities (a "Subsequent
Shelf Registration Statement"). If a Subsequent Shelf Registration
Statement is filed, the Company shall use its reasonable efforts to
cause the Subsequent Shelf Registration Statement to become effective
as promptly as is practicable after such filing and to keep such
Registration Statement (or subsequent Shelf Registration Statement)
continuously effective until the end of the Effectiveness Period.
(d) The Company shall supplement and amend the Shelf
Registration Statement if required by the rules, regulations or
instructions applicable to the registration form used by the Company
for such Shelf Registration Statement, if required by the Securities
Act or as reasonably requested by the Initial Purchasers or by the
Trustee on behalf of the Holders of the Transfer Restricted Securities
covered by such Shelf Registration Statement.
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(e) Each Holder agrees that if such Holder wishes to sell
Transfer Restricted Securities pursuant to a Shelf Registration
Statement and related Prospectus, it will do so only in accordance with
this Section 2(e) and Section 4(b). Each Holder wishing to sell
Transfer Restricted Securities pursuant to a Shelf Registration
Statement and related Prospectus agrees to deliver a Notice and
Questionnaire to the Company at least five (5) Business Days prior to
any intended distribution of Transfer Restricted Securities under the
Shelf Registration Statement. From and after the date the Shelf
Registration Statement is declared effective, the Company shall, as
promptly as practicable after the date a Notice and Questionnaire is
delivered, and in any event upon the later of (x) five (5) Business
Days after such date (but no earlier than five (5) Business Days after
effectiveness) or (y) five (5) Business Days after the expiration of
any Suspension Period in effect when the Notice and Questionnaire is
delivered:
(i) if required by applicable law, file with the SEC
a post-effective amendment to the Shelf Registration Statement or
prepare and, if required by applicable law, file a supplement to
the related Prospectus or a supplement or amendment to any
document incorporated therein by reference or file any other
required document so that the Holder delivering such Notice and
Questionnaire is named as a selling securityholder in the Shelf
Registration Statement and the related Prospectus in such a manner
as to permit such Holder to deliver such Prospectus to purchasers
of the Transfer Restricted Securities in accordance with
applicable law and, if the Company shall file a post-effective
amendment to the Shelf Registration Statement, use its reasonable
efforts to cause such post-effective amendment to be declared
effective under the Securities Act as promptly as is practicable,
but in any event by the date (the "Amendment Effectiveness
Deadline Date") that is forty-five (45) days after the date such
post-effective amendment is required by this clause to be filed;
(ii) provide such Holder copies of any documents filed
pursuant to Section 2(e)(i); and
(iii) notify such Holder as promptly as practicable
after the effectiveness under the Securities Act of any
post-effective amendment filed pursuant to Section 2(e)(i);
provided that if such Notice and Questionnaire is delivered during a Suspension
Period, the Company shall so inform the Holder delivering such Notice and
Questionnaire and shall take the actions set forth in clauses (i), (ii) and
(iii) above
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upon expiration of the Suspension Period in accordance with Section 4(b).
Notwithstanding anything contained herein to the contrary, (i) the Company shall
be under no obligation to name any Holder that is not a Notice Holder as a
selling securityholder in any Registration Statement or related Prospectus and
(ii) the Amendment Effectiveness Deadline Date shall be extended by up to ten
(10) Business Days from the expiration of a Suspension Period (and the Company
shall incur no obligation to pay Liquidated Damages during such extension) if
such Suspension Period shall be in effect on the Amendment Effectiveness
Deadline Date; and provided further, that after the date that is 180 days after
the date of effectiveness of the Shelf Registration Statement, the Company shall
not be obligated to file more than one post-effective amendment or supplement in
any 30-day period for the purpose of naming Holders as selling securityholders
who were not so named in the Shelf Registration Statement at the time of
effectiveness.
3. Liquidated Damages.
(a) If:
(i) the Shelf Registration Statement is not filed with
the Commission prior to or on the Shelf Filing Deadline;
(ii) the Shelf Registration Statement has not been
declared effective by the Commission prior to or on the
Effectiveness Target Date;
(iii) the Company has failed to perform its obligations
set forth in Section 2(e) within the time period required
therein;
(iv) any post-effective amendment to a Shelf
Registration filed pursuant to Section 2(e)(i) has not become
effective under the Securities Act on or prior to the Amendment
Effectiveness Deadline Date;
(v) except as provided in Section 4(b)(i) hereof, the
Shelf Registration Statement is filed and declared effective but,
during the Effectiveness Period, shall thereafter cease to be
effective or fail to be usable for its intended purpose without
being succeeded within five (5) Business Days by a post-effective
amendment to the Shelf Registration Statement, a supplement to
the Prospectus or a report filed with the Commission pursuant to
Section 13(a), 13(c), 14 or 15(d) of the Exchange Act that cures
such failure and, in the case of a post-effective amendment, is
itself declared effective within such five (5) Business Day
period; or
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(vi) (A) prior to or on the 45th or 60th day, as applicable
under the provisions of Section 4(b), of any Suspension Period,
such suspension has not been terminated or (B) Suspension Periods
exceed an aggregate of 90 days in any 360 day period,
(each such event referred to in foregoing clauses (i) through (iv), a
"Registration Default"), the Company hereby agrees to pay interest ("Liquidated
Damages") with respect to the Transfer Restricted Securities from and including
the day following the Registration Default to but excluding the earlier of (1)
the day on which the Registration Default has been cured and (2) the date the
Shelf Registration Statement is no longer required to be kept effective,
accruing at a rate:
(A) in respect of the Notes, to each holder of
Notes, (x) with respect to the first 90-day period
during which a Registration Default shall have occurred
and be continuing, equal to 0.25% per annum of the
aggregate principal amount of the Notes, and (y) with
respect to the period commencing on the 91st day
following the day the Registration Default shall have
occurred and be continuing, equal to 0.50% per annum of
the aggregate principal amount of the Notes; provided
that in no event shall Liquidated Damages accrue at a
rate per year exceeding 0.50% of the aggregate
principal amount of the Notes; and
(B) in respect of any shares of Common Stock, to
each holder of shares of Common Stock issued upon
conversion of Notes, (x) with respect to the first
90-day period in which a Registration Default shall
have occurred and be continuing, equal to 0.25% per
annum of the aggregate principal amount of each Note
converted, and (y) with respect to the period
commencing on the 91st day following the day the
Registration Default shall have occurred and be
continuing, equal to 0.50% per annum of the aggregate
principal amount of each Note converted; provided that
in no event shall Liquidated Damages accrue at a rate
per year exceeding 0.50% of the aggregate principal
amount of the converted Notes.
(b) All accrued Liquidated Damages shall be paid in arrears
to Record Holders by the Company on each Liquidated Damages Payment
Date. Upon the cure of all Registration Defaults relating to any
particular Note or share of Common Stock, the accrual of Liquidated
Damages with respect to such Note or share of Common Stock will cease.
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All obligations of the Company set forth in this Section 3 that are
outstanding with respect to any Transfer Restricted Security at the time such
security ceases to be a Transfer Restricted Security shall survive until such
time as all such obligations with respect to such Transfer Restricted Security
shall have been satisfied in full.
The Liquidated Damages set forth above shall be the exclusive monetary
remedy available to the Holders of Transfer Restricted Securities for each
Registration Default.
4. Registration Procedures.
(a) In connection with the Shelf Registration Statement, the
Company shall comply with all the provisions of Section 4(b) hereof
and shall prepare and file with the Commission a Shelf Registration
Statement relating to the registration on any appropriate form under
the Securities Act in accordance with Section 2 hereof.
(b) In connection with the Shelf Registration Statement and
any Prospectus required by this Agreement to permit the sale or resale
of Transfer Restricted Securities, the Company shall:
(i) Subject to any notice by the Company in
accordance with this Section 4(b) of the existence of any fact
or event of the kind described in Section 4(b)(iii)(D), use its
reasonable efforts to keep the Shelf Registration Statement
continuously effective during the Effectiveness Period; upon the
occurrence of any event that would cause the Shelf Registration
Statement or the Prospectus contained therein (A) to contain a
material misstatement or omission or (B) not to be effective and
usable for resale of Transfer Restricted Securities during the
Effectiveness Period, the Company shall file promptly an
appropriate amendment to the Shelf Registration Statement, a
supplement to the Prospectus or a report filed with the
Commission pursuant to Section 13(a), 13(c), 14 or 15(d) of the
Exchange Act, in the case of clause (A), correcting any such
misstatement or omission, and, in the case of either clause (A)
or (B), use its reasonable efforts to cause such amendment to be
declared effective and the Shelf Registration Statement and the
related Prospectus to become usable for resale of Transfer
Restricted Securities during the Effectiveness Period as soon as
practicable thereafter. Notwithstanding the foregoing, the
Company may suspend the use of the Prospectus and may elect to
suspend the effectiveness of the Shelf Registration Statement by
written notice to the Holders for a period not to exceed an
aggregate of 45 days in any 90-day period (each such period, a
"Suspension Period") if:
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(x) an event occurs and is continuing as a result of
which the Shelf Registration Statement, the Prospectus, any
amendment or supplement thereto, or any document incorporated by
reference therein would, in the Company's judgment, contain an
untrue statement of a material fact or omit to state a material
fact required to be stated therein or necessary to make the
statements therein not misleading; and
(y) the Company determines in good faith that the
disclosure of such event at such time would be seriously
detrimental to the Company and its subsidiaries;
provided that, in the event the disclosure relates to a previously
undisclosed proposed or pending material business transaction, the
disclosure of which the Company determines in good faith would be
reasonably likely to impede the Company's ability to consummate such
transaction, the Company may extend a Suspension Period from 45 days to
60 days; provided, however, that Suspension Periods shall not exceed an
aggregate of 90 days in any 360-day period. The Company shall not be
required to specify in the written notice to the Holders the nature of
the event giving rise to the Suspension Period.
(ii) Prepare and file with the Commission such amendments
and post-effective amendments to the Shelf Registration
Statement as may be necessary to keep the Shelf Registration
Statement effective during the Effectiveness Period; cause the
Prospectus to be supplemented by any required Prospectus
supplement, and as so supplemented to be filed pursuant to Rule
424 under the Securities Act, and to comply fully with the
applicable provisions of Rules 424 and 430A under the Securities
Act in a timely manner; and comply with the provisions of the
Securities Act with respect to the disposition of all securities
covered by the Shelf Registration Statement during the
applicable period in accordance with the intended method or
methods of distribution by the sellers thereof set forth in the
Shelf Registration Statement or supplement to the Prospectus.
(iii) Advise the selling Holders promptly and, if
requested by such selling Holders, to confirm such advice in
writing, except as provided in clause (D) below:
(A) when the Prospectus or any Prospectus
supplement or post-effective amendment has been filed, and,
with respect to the Shelf Registration Statement or any
post-effective amendment thereto, when the same has become
effective;
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(B) of any request by the Commission for amendments
to the Shelf Registration Statement or amendments or
supplements to the Prospectus or for additional information
relating thereto;
(C) of the issuance by the Commission of any stop
order suspending the effectiveness of the Shelf
Registration Statement under the Securities Act or of the
suspension by any state securities commission of the
qualification of the Transfer Restricted Securities for
offering or sale in any jurisdiction, or the initiation of
any proceeding for any of the preceding purposes; or
(D) of the existence of any fact or the happening
of any event, during the Effectiveness Period, that makes
any statement of a material fact made in the Shelf
Registration Statement, the Prospectus, any amendment or
supplement thereto, or any document incorporated by
reference therein untrue, or that requires the making of
any additions to or changes in the Shelf Registration
Statement or the Prospectus in order to make the statements
therein not misleading.
If at any time the Commission shall issue any stop order suspending the
effectiveness of the Shelf Registration Statement, or any state
securities commission or other regulatory authority shall issue an
order suspending the qualification or exemption from qualification of
the Transfer Restricted Securities under state securities or Blue Sky
laws, the Company shall use its reasonable efforts to obtain the
withdrawal or lifting of such order at the earliest possible time and
will provide to each Holder who is named in the Shelf Registration
Statement prompt notice of the withdrawal of any such order.
(iv) Make available at reasonable times for inspection by
one or more representatives of the selling Holders, designated
in writing by a Majority of Holders whose Transfer Restricted
Securities are included in the Shelf Registration Statement, and
any attorney or accountant retained by such selling Holders, all
financial and other records, pertinent corporate documents and
properties of the Company as shall be reasonably necessary to
enable them to conduct a reasonable investigation within the
meaning of Section 11 of the Securities Act, and cause the
Company's officers, directors, managers and employees to supply
all information reasonably requested by any such representative
or representatives of the selling Holders, attorney or
accountant in connection therewith; provided, however, that the
Company shall have no obligation to deliver information to any
selling Holder or
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representative pursuant to this Section 4(b)(iv) unless such selling
Holder or representative shall have executed and delivered a
confidentiality agreement in a form reasonably acceptable to the
Company relating to such information.
(v) If requested by any selling Holders, promptly
incorporate in the Shelf Registration Statement or Prospectus,
pursuant to a supplement or post-effective amendment if necessary,
such information as such selling Holders may reasonably request to
have included therein, including, without limitation, information
relating to the "Plan of Distribution" of the Transfer Restricted
Securities.
(vi) Furnish to each selling Holder upon such Xxxxxx's
written request, without charge, at least one copy of the Shelf
Registration Statement, as first filed with the Commission, and of each
amendment thereto (and any documents incorporated by reference therein
or exhibits thereto (or exhibits incorporated in such exhibits by
reference) as such Person may request).
(vii) Deliver to each selling Holder, without charge, as
many copies of the Prospectus (including each preliminary Prospectus)
and any amendment or supplement thereto as such Persons reasonably may
request; subject to any notice by the Company in accordance with this
Section 4(b) of the existence of any fact or event of the kind
described in Section 4(b)(iii)(D) or 4(b)(i), the Company hereby
consents to the use of the Prospectus and any amendment or supplement
thereto by each of the selling Holders in connection with the offering
and the sale of the Transfer Restricted Securities covered by the
Prospectus or any amendment or supplement thereto.
(viii) Before any public offering of Transfer Restricted
Securities, cooperate with the selling Holders and their counsel in
connection with the registration and qualification of the Transfer
Restricted Securities under the securities or Blue Sky laws of such
jurisdictions in the United States as the selling Holders may
reasonably request and do any and all other acts or things necessary or
advisable to enable the disposition in such jurisdictions of the
Transfer Restricted Securities covered by the Shelf Registration
Statement; provided, however, that the Company shall not be required
(A) to register or qualify as a foreign corporation or a dealer of
securities where it is not now so qualified or to take any action that
would subject it to the service of process in any jurisdiction where it
is not now so subject or (B) to subject itself to general or unlimited
service of process or to taxation in any such jurisdiction if it is not
now so subject.
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(ix) Cooperate with the selling Holders to facilitate the
timely preparation and delivery of certificates representing Transfer
Restricted Securities to be sold and not bearing any restrictive
legends (unless required by applicable securities laws); and enable
such Transfer Restricted Securities to be in such denominations and
registered in such names as the Holders may reasonably request at
least two Business Days before any sale of Transfer Restricted
Securities made by such Holders.
(x) Subject to Section 4(b)(i) hereof and the provision in
clause (viii) above, use its reasonable efforts to cause the Transfer
Restricted Securities covered by the Shelf Registration Statement to
be registered with or approved by such other U.S. governmental
agencies or authorities as may be necessary to enable the seller or
sellers thereof to consummate the disposition of such Transfer
Restricted Securities.
(xi) Subject to Section 4(b)(i) hereof, if any fact or
event contemplated by Section 4(b)(iii)(D) hereof shall exist or have
occurred, use its reasonable efforts to prepare a supplement or
post-effective amendment to the Shelf Registration Statement or
related Prospectus or any document incorporated therein by reference
or file any other required document so that, as thereafter delivered
to the purchasers of Transfer Restricted Securities, the Prospectus
will not contain an untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in which
they are made, not misleading.
(xii) Provide CUSIP numbers for all Transfer Restricted
Securities not later than the effective date of the Shelf Registration
Statement and provide the Trustee under the Indenture with
certificates for the Notes that are in a form eligible for deposit
with The Depository Trust Company.
(xiii) Cooperate and assist in any filings required to be
made with the NASD and in the performance of any due diligence
investigation by any underwriter that is required to be retained in
accordance with the rules and regulations of the NASD.
(xiv) Subject to Section 4(b)(i) hereof, otherwise use its
reasonable efforts to comply with all applicable rules and regulations
of the Commission and all reporting requirements under the rules and
regulations of the Exchange Act.
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(xv) Cause the Indenture to be qualified under the
TIA not later than the effective date of the Shelf
Registration Statement required by this Agreement, and, in
connection therewith, cooperate with the Trustee and the
holders of Notes to effect such changes to the Indenture as
may be required for such Indenture to be so qualified in
accordance with the terms of the TIA; and execute and use
its reasonable efforts to cause the Trustee thereunder to
execute all documents that may be required to effect such
changes and all other forms and documents required to be
filed with the Commission to enable such Indenture to be so
qualified in a timely manner.
(xvi) Cause all Common Stock covered by the Shelf
Registration Statement to be listed or quoted, as the case
may be, on each securities exchange or automated quotation
system on which Common Stock is then listed or quoted.
(xvii) Provide to each Holder upon written request
each document filed with the Commission pursuant to the
requirements of Section 13 and Section 15 of the Exchange Act
after the effective date of the Shelf Registration Statement,
unless such document is available through the Commission's
XXXXX system.
(c) Each Holder agrees by acquisition of a Transfer
Restricted Security that, upon receipt of any notice (a "Suspension
Notice") from the Company of the existence of any fact of the kind
described in Section 4(b)(iii)(D) or 4(b)(i) hereof, such Holder will
forthwith discontinue disposition of Transfer Restricted Securities
pursuant to the Shelf Registration Statement until:
(i) such Holder has received copies of the
supplemented or amended Prospectus contemplated by Section
4(b)(xi) hereof; or
(ii) such Holder is advised in writing by the Company
that the use of the Prospectus may be resumed, and has
received copies of any additional or supplemental filings
that are incorporated by reference in the Prospectus.
If so directed by the Company, each Holder will deliver to the Company (at the
Company's expense) all copies, other than permanent file copies then in such
Xxxxxx's possession, of the Prospectus covering such Transfer Restricted
Securities that was current at the time of receipt of such Suspension Notice.
(d) Each Holder agrees, by acquisition of the Transfer
Restricted Securities, that no Holder shall be entitled to sell any of
such Transfer Restricted Securities pursuant to a Registration
Statement or to receive a Prospectus relating thereto, unless such
Holder has furnished the Company with a Notice and Questionnaire as
required pursuant to Section
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2(e) hereof (including the information required to be included in such
Notice and Questionnaire) and the information set forth in the next
sentence. Each Notice Holder agrees promptly to furnish to the Company
all information required to be disclosed in order to make the
information previously furnished to the Company by such Notice Holder
not misleading and any other information regarding such Notice Holder
and the distribution of such Transfer Restricted Securities as the
Company may from time to time reasonably request in writing. Any sale
of any Transfer Restricted Securities by any Holder shall constitute a
representation and warranty by such Holder that the information
relating to such Holder and its plan of distribution is as set forth in
the Prospectus delivered by such Holder in connection with such
disposition, that such Prospectus does not as of the time of such sale
contain any untrue statement of a material fact relating to or provided
by such Holder or its plan of distribution and that such Prospectus
does not as of the time of such sale omit to state any material fact
relating to or provided by such Holder or its plan of distribution
necessary to make the statements in such Prospectus, in the light of
the circumstances under which they were made, not misleading.
5. Registration Expenses.
All expenses incident to the Company's performance of or compliance
with this Agreement shall be borne by the Company regardless of whether a Shelf
Registration Statement becomes effective, including, without limitation:
(i) all registration and filing fees and expenses
(including filings made with the NASD);
(ii) all fees and expenses of compliance with federal
securities and state Blue Sky or securities laws;
(iii) all expenses of printing (including printing of
Prospectuses and certificates for the Common Stock to be issued
upon conversion of the Notes) and the Company's expenses for
messenger and delivery services and telephone;
(iv) all fees and disbursements of counsel to the
Company;
(v) all application and filing fees in connection
with listing (or authorizing for quotation) the Common Stock on a
national securities exchange or automated quotation system
pursuant to the requirements hereof; and
(vi) all fees and disbursements of independent
certified public accountants of the Company.
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The Company shall bear its internal expenses (including, without
limitation, all salaries and expenses of their officers and employees performing
legal, accounting or other duties), the expenses of any annual audit and the
fees and expenses of any Person, including special experts, retained by the
Company.
6. Indemnification And Contribution.
(a) The Company agrees to indemnify and hold harmless each
Holder of Transfer Restricted Securities (including each Initial
Purchaser), such Holder's directors, officers, and employees and each
person, if any, who controls any such Holder within the meaning of the
Securities Act (each, an "Indemnified Holder"), against any loss,
claim, damage, liability or expense, joint or several, or any action in
respect thereof (including, but not limited to, any loss, claim,
damage, liability or action relating to resales of the Transfer
Restricted Securities), to which such Indemnified Holder may become
subject, insofar as any such loss, claim, damage, liability or action
arises out of, or is based upon:
(i) any untrue statement or alleged untrue statement of
a material fact contained in (A) the Shelf Registration
Statement as originally filed or in any amendment thereof, in
any Prospectus, or in any amendment or supplement thereto or
(B) any blue sky application or other document or any amendment
or supplement thereto prepared or executed by the Company (or
based upon written information furnished by or on behalf of the
Company expressly for use in such blue sky application or other
document or amendment on supplement) filed in any jurisdiction
specifically for the purpose of qualifying any or all of the
Transfer Restricted Securities under the securities law of any
state or other jurisdiction (such application or document being
hereinafter called a "Blue Sky Application"); or
(ii) the omission or alleged omission to state therein
any material fact required to be stated therein or necessary to
make the statements therein, in the light of the circumstances
under which they were made, not misleading,
and agrees to reimburse each Indemnified Holder promptly upon demand for any
legal or other expenses reasonably incurred by such Indemnified Holder in
connection with investigating, defending, settling, compromising or paying any
such loss, claim, damage, liability, expense or action; provided, however, that
the Company shall not be liable in any such case to the extent that any such
loss, claim, damage, liability, expense or action arises out of, or is based
upon, any untrue statement or alleged untrue statement or omission or alleged
omission made in reliance upon and in conformity with written information
furnished to the Company by or on behalf of such Holder (or its related
Indemnified Holder) specifically for use therein. The foregoing indemnity
agreement is in addition to any liability which the Company may otherwise have.
16
(b) Each Holder, severally and not jointly, agrees to indemnify
and hold harmless the Company, its directors, officers and employees
and each person, if any, who controls the Company within the meaning of
the Securities Act to the same extent as the foregoing indemnity from
the Company to each such Holder, but only with reference to written
information relating to such Holder furnished to the Company by or on
behalf of such Holder specifically for inclusion in the documents
referred to in the foregoing indemnity. This indemnity agreement set
forth in this Section shall be in addition to any liabilities which any
such Holder may otherwise have. In no event shall any Holder, its
directors, officers or any person who controls such Holder be liable or
responsible for any amount in excess of the amount by which the net
proceeds received by such Holder with respect to its sale of Transfer
Restricted Securities pursuant to a Shelf Registration Statement
exceeds the amount of any damages that such Holder, its directors,
officers or any person who controls such Holder has otherwise been
required to pay by reason of such untrue or alleged untrue statement or
omission or alleged omission.
(c) Promptly after receipt by an indemnified party under this
Section 6 of notice of any claim or the commencement of any action, the
indemnified party shall, if a claim in respect thereof is to be made
against the indemnifying party under this Section 6, notify the
indemnifying party in writing of the claim or the commencement of that
action; provided, however, that the failure to notify the indemnifying
party shall not relieve it from any liability which it may have under
this Section 6 except to the extent it has been materially prejudiced
by such failure and, provided, further, that the failure to notify the
indemnifying party shall not relieve it from any liability which it may
have to an indemnified party otherwise than under this Section 6. If
any such claim or action is brought against an indemnified party, and
it notifies the indemnifying party thereof, the indemnifying party
shall be entitled to participate therein and, to the extent that it
wishes, jointly with any other similarly notified indemnifying party,
to assume the defense thereof with counsel satisfactory to the
indemnified party. After notice from the indemnifying party to the
indemnified party of its election to assume the defense of such claim
or action, the indemnifying party shall not be liable to the
indemnified party under this Section 6 for any legal or other expenses
subsequently incurred by the indemnified party in connection with the
defense thereof other than reasonable costs of investigation; provided,
however, that the indemnified parties shall have the right to employ a
single counsel to represent jointly the indemnified parties and their
officers, employees and controlling persons who may be subject to
liability arising out of any claim in respect of which indemnity may be
sought by the indemnified parties against the indemnifying party under
this Section 6 if the indemnified party shall have
17
been advised by legal counsel that there may be one or more legal
defenses available to such indemnified party and their respective
officers, employees and controlling persons that are different from or
additional to those available to the indemnifying party, and in that
event, the fees and expenses of such separate counsel shall be paid by
the indemnifying party. No indemnifying party shall:
(i) without the prior written consent of the
indemnified parties (which consent shall not be unreasonably
withheld) settle or compromise or consent to the entry of any
judgment with respect to any pending or threatened claim,
action, suit or proceeding in respect of which
indemnification or contribution may be sought hereunder
(whether or not the indemnified parties are actual or
potential parties to such claim or action), unless such
settlement, compromise or consent includes an unconditional
release of such indemnified party from all liability arising
out of such claim, action, suit or proceeding, or
(ii) be liable for any settlement of any such action
effected without its written consent (which consent shall not
be unreasonably withheld), but if settled with its written
consent or if there be a final judgment for the plaintiff in
any such action, the indemnifying party agrees to indemnify
and hold harmless any indemnified party from and against any
loss of liability by reason of such settlement or judgment in
accordance with this Section 6.
(d) The indemnifying party under this Section shall not be
liable for any settlement of any proceeding effected without its
written consent, which shall not be withheld unreasonably, but if
settled with such consent or if there is a final judgment for the
plaintiff, the indemnifying party agrees to indemnify the indemnified
party against any loss, claim, damage, liability or expense by reason
of such settlement or judgment. Notwithstanding the foregoing sentence,
if at any time an indemnified party shall have validly requested an
indemnifying party to reimburse the indemnified party for fees and
expenses of counsel as contemplated by Section 6(c) hereof, the
indemnifying party agrees that it shall be liable for any settlement of
any proceeding effected without its written consent if (i) such
settlement is entered into more than 30 days after receipt by such
indemnifying party of the aforesaid valid request and (ii) such
indemnifying party shall not have reimbursed the indemnified party in
accordance with such valid request prior to the date of such
settlement. No indemnifying party shall, without the prior written
consent of the indemnified party, effect any settlement, compromise or
consent to the entry of judgment in any pending or threatened action,
suit or proceeding in respect of which any indemnified party is or
could have been a party and indemnity was or could have been sought
hereunder by such indemnified party, unless such settlement, compromise
or consent (x)
18
includes an unconditional release of such indemnified party from all
liability on claims that are the subject matter of such action, suit or
proceeding and (y) does not include a statement as to or an admission
of fault, culpability or a failure to act by or on behalf of any
indemnified party.
(e) If the indemnification provided for in this Section 6
shall for any reason be unavailable or insufficient to hold harmless an
indemnified party under Section 6(a) or 6(b) in respect of any loss,
claim, damage or liability (or action in respect thereof) referred to
therein, each indemnifying party shall, in lieu of indemnifying such
indemnified party, contribute to the amount paid or payable by such
indemnified party as a result of such loss, claim, damage or liability
(or action in respect thereof):
(i) in such proportion as is appropriate to reflect
the relative benefits received by the Company from the
offering and sale of the Transfer Restricted Securities on the
one hand and a Holder with respect to the sale by such Holder
of the Transfer Restricted Securities on the other, or
(ii) if the allocation provided by Section (6)(e)(i)
is not permitted by applicable law, in such proportion as is
appropriate to reflect not only the relative benefits referred
to in Section 6(e)(i) but also the relative fault of the
Company on the one hand and the Holders on the other in
connection with the statements or omissions or alleged
statements or alleged omissions that resulted in such loss,
claim, damage or liability (or action in respect thereof), as
well as any other relevant equitable considerations.
The relative benefits received by the Company on the one hand and a Holder on
the other with respect to such offering and such sale shall be deemed to be in
the same proportion as the total net proceeds from the offering of the Notes
purchased under the Purchase Agreement (before deducting expenses) received by
the Company, on the one hand, bear to the total proceeds received by such Holder
with respect to its sale of Transfer Restricted Securities on the other. The
relative fault of the parties shall be determined by reference to whether the
untrue or alleged untrue statement of a material fact or the omission or alleged
omission to state a material fact relates to information supplied by the Company
on the one hand or the Holders on the other, the intent of the parties and their
relative knowledge, access to information and opportunity to correct or prevent
such statement or omission. The Company and each Holder agree that it would not
be just and equitable if the amount of contribution pursuant to this Section
6(e) were determined by pro rata allocation or by any other method of allocation
that does not take into account the equitable considerations referred to in the
first sentence of this paragraph (e).
19
The amount paid or payable by an indemnified party as a result of the
loss, claim, damage or liability, or action in respect thereof, referred to
above in this Section 6 shall be deemed to include, for purposes of this Section
6, any legal or other expenses reasonably incurred by such indemnified party in
connection with investigating or defending or preparing to defend any such
action or claim.
Notwithstanding the provisions of this Section 6, no Holder shall be
required to contribute any amount in excess of the amount by which the net
proceeds received by such Holder with respect to its sale of Transfer Restricted
Securities exceeds the amount of any damages which such Holder has otherwise
been required to pay by reason of any untrue or alleged untrue statement or
omission or alleged omission. No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled to
contribution from any Person who was not guilty of such fraudulent
misrepresentation. The Holders' obligations to contribute as provided in this
Section 6(d) are several and not joint.
(f) The provisions of this Section 6 shall remain in full force
and effect, regardless of any investigation made by or on behalf of any
Holder or the Company or any of the officers, directors or controlling
persons referred to in Section 6 hereof, and will survive the sale by a
Holder of Transfer Restricted Securities.
7. Rule 144A and Rule 144. The Company agrees with each Holder, for so
long as any Transfer Restricted Securities remain outstanding and during any
period in which the Company (i) is not subject to Section 13 or 15(d) of the
Exchange Act, to make available, upon request of any Holder, to such Holder or
beneficial owner of Transfer Restricted Securities in connection with any sale
thereof and any prospective purchaser of such Transfer Restricted Securities
designated by such Holder or beneficial owner, the information required by Rule
144A(d)(4) under the Securities Act in order to permit resales of such Transfer
Restricted Securities pursuant to Rule 144A, and (ii) is subject to Section 13
or 15 (d) of the Exchange Act, to make all filings required thereby in a timely
manner in order to permit resales of such Transfer Restricted Securities
pursuant to Rule 144.
8. Miscellaneous.
(a) Remedies. The Company acknowledges and agrees that any
failure by the Company to comply with its obligations under Section 2
hereof may result in material irreparable injury to the Initial
Purchasers or the Holders for which there is no adequate remedy at law,
that it will not be possible to measure damages for such injuries
precisely, and that, in the event of any such failure, the Initial
Purchasers or any Holder may seek such relief as may be required to
specifically enforce the Company's obligations under Section 2 hereof.
20
(b) No Inconsistent Agreements. The Company will not on or
after the date hereof, enter into any agreement with respect to its
securities that is inconsistent with the rights granted to the Holders
in this Agreement or otherwise conflicts with the provisions hereof. In
addition, the Company shall not grant to any of its securityholders
(other than the Holders of Transfer Restricted Securities in such
capacity) the right to include any of its securities in the Shelf
Registration Statement provided for in this Agreement other than the
Transfer Restricted Securities. The Company has not previously entered
into any agreement (which has not expired or been terminated) granting
any registration rights with respect to its securities to any Person,
which rights conflict with the provisions hereof.
(c) Amendments and Waivers. This Agreement may not be amended,
modified or supplemented, and waivers or consents to or departures from
the provisions hereof may not be given, unless the Company has obtained
the written consent of a Majority of Holders. Notwithstanding the
foregoing, a waiver or consent to depart from the provisions hereof,
with respect to a matter, which relates exclusively to the rights of
Holders whose securities are being sold pursuant to a Shelf
Registration Statement and does not directly or indirectly adversely
affect the rights of other Holders, may be given by the Majority
Holders, determined on the basis of Notes being sold rather than
registered under such Shelf Registration Statement.
(d) Notices. All notices and other communications provided for
or permitted hereunder shall be made in writing by hand-delivery,
first-class mail (registered or certified, return receipt requested),
telex, facsimile transmission, or air courier guaranteeing overnight
delivery:
(i) if to a Holder, at the address set forth on the
records of the registrar under the Indenture or the transfer
agent of the Common Stock, as the case may be; and
(ii) if to the Company, initially at its address set
forth in the Purchase Agreement,
With a copy to:
Xxxxxx & Xxxxxxx
000 Xxxxxxxxxxxx Xxxxx
Xxxxx Xxxx, Xxxxxxxxxx 00000
Fax No.: (000) 000-0000
Attn: Xxxxxxxxxxx X. Xxxxxxx
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All such notices and communications shall be deemed to have been duly
given: at the time delivered by hand, if personally delivered; five Business
Days after being deposited in the mail, postage prepaid, if mailed; when
answered back, if telexed; when receipt acknowledged, if transmitted by
facsimile; and on the next Business Day, if timely delivered to an air courier
guaranteeing overnight delivery.
Any party hereto may change the address for receipt of communications
by giving written notice to the others.
(e) Successors and Assigns. This Agreement shall inure to the
benefit of and be binding upon the successors, assigns and transferees
of each of the parties, including without limitation and without the
need for an express assignment, subsequent Holders of Transfer
Restricted Securities, provided, however, that nothing contained herein
shall be deemed to permit any assignment, transfer or other disposition
of Transfer Restricted Securities in violation of the terms of the
Purchase Agreement or the Indenture. If any transferee of any Holder
shall acquire Transfer Restricted Securities, in any manner, whether by
operation of law or otherwise, such Transfer Restricted Securities
shall be held subject to all the terms of this Agreement, and by taking
and holding such Transfer Restricted Securities such person shall be
conclusively deemed to have agreed to be bound by and to perform all of
the terms and provisions of this Agreement.
(f) Counterparts. This Agreement may be executed in any number
of counterparts and by the parties hereto in separate counterparts,
each of which when so executed shall be deemed to be an original and
all of which taken together shall constitute one and the same
agreement.
(g) Notes Held by the Company or Their Affiliates. Whenever the
consent or approval of Holders of a specified percentage of Transfer
Restricted Securities is required hereunder, Transfer Restricted
Securities held by the Company or its Affiliates (other than subsequent
Holders if such subsequent Holders are deemed to be Affiliates solely
by reason of their holding of such Notes) shall not be counted in
determining whether such consent or approval was given by the Holders
of such required percentage.
(h) Headings. The headings in this Agreement are for
convenience of reference only and shall not limit or otherwise affect
the meaning hereof.
(i) Governing Law. This Agreement shall be governed by and
construed in accordance with the law of the State of New York.
(j) Severability. If any one or more of the provisions
contained herein, or the application thereof in any circumstance, is
held invalid, illegal or unenforceable, the validity, legality and
enforceability of
22
any such provision in every other respect and of the remaining
provisions contained herein shall not be affected or impaired thereby,
it being intended that all of the rights and privileges of the parties
shall be enforceable to the fullest extent permitted by law.
(k) Entire Agreement. This Agreement, together with the
Purchase Agreement and the Indenture, is intended by the parties as a
final expression of their agreement and intended to be a complete and
exclusive statement of the agreement and understanding of the parties
hereto in respect of the subject matter contained herein. There are no
restrictions, promises, warranties or undertakings, other than those
set forth or referred to herein with respect to the registration rights
granted by the Company with respect to the Transfer Restricted
Securities. This Agreement supersedes all prior agreements and
understandings between the parties with respect to such subject matter.
23
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first written above.
MENTOR GRAPHICS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
------------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: President
BANC OF AMERICA SECURITIES LLC
FLEET SECURITIES, INC.
SCOTIA CAPITAL (USA) INC.
XXXXXXX & COMPANY, INC.
Acting severally on behalf of themselves
and the several Initial Purchasers
BANC OF AMERICA SECURITIES LLC
By: /s/ Xxxxxx Xxxxxxx
------------------------------------
Name: Xxxxxx Xxxxxxx
Title: Managing Director
24
