EXHIBIT 10.76
[JPMORGAN LOGO]
JPMorgan Xxxxx Xxxx
X.X. Xxx 000
00 Xxxxxxxx Embankment
Xxxxxx XX0X 0XX
England
August 27, 2003
TO: CADENCE DESIGN SYSTEMS, INC.
0000 Xxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attention: Treasurer
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
Re: Warrants
Reference:
The purpose of this letter agreement is to confirm the terms and
conditions of the Warrants issued by CADENCE DESIGN SYSTEMS, INC. ("COMPANY") to
JPMorgan Chase Bank, London Branch ("JPMORGAN") on the Trade Date specified
below (the "TRANSACTION"). This letter agreement constitutes a "Confirmation" as
referred to in the ISDA Master Agreement specified below. This Confirmation
shall replace any previous letter and serve as the final documentation for this
Transaction.
The definitions and provisions contained in the 1996 ISDA Equity
Derivatives Definitions (the "EQUITY DEFINITIONS"), as published by the
International Swaps and Derivatives Association, Inc., are incorporated into
this Confirmation. In the event of any inconsistency between the Equity
Definitions and this Confirmation, this Confirmation shall govern. This
Transaction shall be deemed to be a Share Option Transaction within the meaning
set forth in the Equity Definitions.
Each party is hereby advised, and each such party acknowledges, that
the other party has engaged in, or refrained from engaging in, substantial
financial transactions and has taken other material actions in reliance upon the
parties' entry into the Transaction to which this Confirmation relates on the
terms and conditions set forth below.
1. This Confirmation evidences a complete and binding agreement between
JPMorgan and the Company as to the terms of the Transaction to which this
Confirmation relates. In addition, JPMorgan and the Company agree to make all
reasonable efforts to promptly negotiate, execute, and deliver an agreement in
the form of the 1992 ISDA Master Agreement (Multicurrency-Cross Border) (the
"AGREEMENT"), with such modifications as JPMorgan and the Company will in good
faith agree together with related schedules. Upon the execution by JPMorgan and
the Company of such an agreement, this Confirmation will supplement, form a part
of, and be subject to, that agreement. All provisions contained or incorporated
by reference in that agreement upon its execution will govern this Confirmation
except as expressly modified below. Until JPMorgan and the Company execute such
agreement, this Confirmation, together with all other documents referring to an
Agreement (each a "CONFIRMATION") confirming transactions (each a "TRANSACTION")
entered into between JPMorgan and the Company (notwithstanding anything to the
contrary in a Confirmation), shall supplement, form a part of, and be subject to
an agreement in the form of the Agreement as if JPMorgan and the Company had
executed an agreement in such form (but without any Schedule except for the
election of the laws of the State of New York as the governing law and United
States dollars as the Termination Currency and Second Method and Loss as the
payments on early termination) on the Trade Date of the first such Transaction
between JPMorgan and the Company. In the event of any inconsistency between
provisions
A SUBSIDIARY OF X.X. XXXXXX XXXXX & CO.
INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE
CHARTERED COMMERCIAL BANK.
REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
REGISTERED BRANCH ADDRESS 000 XXXXXX XXXX, XXXXXX, XX0X 0XX. XXXX XXXXXX 000
XXXX XXXXXX, XXX XXXX, XXX.
of that agreement and this Confirmation, this Confirmation will prevail for the
purpose of the Transaction to which this Confirmation relates. The parties
hereby agree that if they have not executed an Agreement within 60 days from the
Trade Date it shall constitute an Additional Termination Event under the
Agreement in respect of which the Company is the sole Affected Party and this
Transaction is the sole Affected Transaction.
2. The terms of the particular Transaction to which this Confirmation
relates are as follows:
General Terms:
Trade Date: August 27, 2003
Warrants: American-style equity call warrants
to be issued by the Company to
JPMorgan, each giving the holder the
right to purchase one Share at the
Strike Price. For the purposes of
Equity Definitions, each Warrant
shall be deemed to be a Call Option.
Buyer: JPMorgan
Seller: Company
Shares: The common stock of Company, par
value USD 0.01 per Share (Exchange
symbol "CDN")
Number of Warrants: 4,471,530
Warrant Entitlement: One Share per Warrant
Multiple Exercise: Applicable
Minimum Number of Warrants: 1
Maximum Number of Warrants: 4,471,530
Strike Price: USD 23.08
Premium: USD 10,346,000
Premium Payment Date: August 29, 2003
Exchange: The New York Stock Exchange
Related Exchange(s): The principal exchange(s) for options
contracts or futures contracts, if
any, with respect to the Shares
Exercise and Valuation:
Expiration Time: The Valuation Time
Expiration Date: For any Daily Number of Warrants,
each date specified as such in Annex
A hereto. If there is a Market
Disruption Event on any Expiration
Date, then the Calculation Agent
shall determine the Reference Price
or
A SUBSIDIARY OF X.X. XXXXXX CHASE & CO.
INCORPORATED LIMITED WITH LIABILITY AS A NEW YORK STATE
CHARTERED COMMERCIAL BANK.
REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
REGISTERED BRANCH ADDRESS 000 XXXXXX XXXX, XXXXXX, XX0X 0XX. XXXX XXXXXX 000
XXXX XXXXXX, XXX XXXX, XXX.
2
Settlement Price for such Expiration
Date, as the case may be, on the
basis of its good faith estimate of
the trading value for the relevant
Shares.
Automatic Exercise: Applicable
Valuation applicable to each Warrant:
Valuation Time: At the close of trading of the
regular trading session on the
Exchange
Valuation Date: The Exercise Date
Settlement Terms applicable to
the Transaction:
Method of Settlement: Net Share Settlement; and means that,
on each Settlement Date, Company
shall deliver to JPMorgan, the Share
Delivery Quantity of Shares for such
Settlement Date to the account
specified hereto free of payment
through the Clearance System.
Share Delivery Quantity: For any Settlement Date, a number of
Shares, as calculated by the
Calculation Agent, equal to the Net
Share Settlement Amount for such
Settlement Date divided by the
Settlement Price for such Settlement
Date, plus cash in lieu of any
fractional shares.
Net Share Settlement Amount: For any Settlement Date, the Daily
Number of Warrants specified in Annex
A with respect to the Expiration Date
corresponding to such Settlement Date
multiplied by the Strike Price
Differential for such Settlement
Date.
Strike Price Differential: (a) If the Settlement Price for any
Expiration Date is greater than the
Strike Price, an amount equal to the
excess of such Settlement Price over
the Strike Price; or
(b) If such Settlement Price is less
than or equal to the Strike Price,
zero.
Settlement Price: For any Expiration Date, the closing
price per Share on the Exchange at
the Valuation Time on the Valuation
Date.
Settlement Date: For any Expiration Date, the date
defined as such in Section 6.2 of the
Equity Definitions, subject to
Section 8(q)(i) hereof.
Failure to Deliver: Applicable
Other Applicable Provisions: The provisions of Sections 6.6, 6.7,
6.8 and 6.10 of the Equity
Definitions will be applicable,
except that all references in such
provisions to "Physically-Settled"
shall be read as references to "Net
Share Settled". "Net
A SUBSIDIARY OF X.X. XXXXXX XXXXX & CO.
INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE
CHARTERED COMMERCIAL BANK.
REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
REGISTERED BRANCH ADDRESS 000 XXXXXX XXXX, XXXXXX, XX0X 0XX. XXXX XXXXXX 000
XXXX XXXXXX,XXX XXXX, XXX.
3
Share Settled" in relation to any
Warrant means that Net Share
Settlement is applicable to that
Warrant.
3. Additional Terms applicable to the
Transaction:
Adjustments applicable to the
Warrants:
Method of Adjustment: Calculation Agent Adjustment
Extraordinary Events applicable to the
Transaction:
Consequence of Merger Events
(a) Share-for-Share: Alternative Obligation; provided that
the Calculation Agent will determine
if the Merger Event affects the
theoretical value of the Transaction
and if so JPMorgan in its sole
discretion may elect to make
adjustments to the Strike Price and
any other term necessary to reflect
the characteristics (including
volatility, dividend practice and
policy and liquidity) of the New
Shares. Notwithstanding the
foregoing, Cancellation and Payment
shall apply in the event the New
Shares are not publicly traded on a
United States national securities
exchange or quoted on the Nasdaq
National Market System.
(b) Share-for-Other: Cancellation and Payment
(c) Share-for-Combined: Cancellation and Payment
Nationalization or Insolvency: Cancellation and Payment
Nationalization or Insolvency: Cancellation and Payment
Payments on Early Termination: Second Method and Loss
4. Calculation Agent: JPMorgan, whose calculations
and determinations shall be made in
good faith and in a commercially
reasonable manner, including with
respect to calculations and
determinations that are made in its
sole discretion.
5. Account Details:
(a) Account for payments to Company:
Cadence Design Systems, Inc.
_________________________________
_________________________________
_________________________________
_________________________________
_________________________________
A SUBSIDIARY OF X.X. XXXXXX CHASE & CO.
INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE
CHARTERED COMMERCIAL BANK.
REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
REGISTERED BRANCH ADDRESS 000 XXXXXX XXXX, XXXXXX, XX0X 0XX. XXXX XXXXXX 000
XXXX XXXXXX, XXX XXXX, XXX.
4
Account for delivery of Shares to Counterparty:
Mellon Investor Services
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Cadence Design Systems Book Memo Treasury Reserve Account
Comment: When you are ready to deliver Shares contact Cadence
FIRST.
(b) Account for payments to JPMorgan:
JPMorgan Chase Bank, New York
_________________________________
_________________________________
_________________________________
_________________________________
Account for delivery of Shares from JPMorgan:
DTC 060
6. Offices:
The Office of Company for the Transaction is: Inapplicable, Company is not a
Multibranch Party.
The Office of JPMorgan for the Transaction is: New York
JPMorgan Chase Bank
London Branch
P.O. Box 161
60 Victoria Embankment
Xxxxxx XX0X 0XX, Xxxxxxx
7. Notices: For purposes of this Confirmation:
(a) Address for notices or communications to Company:
Cadence Design Systems, Inc.
Attention: Treasurer
Telephone No.: (000) 000-0000
Facsimile No.: (000)000-0000
Address for notices or communications to JPMorgan:
JPMorgan Chase Bank
000 Xxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxx
EDG Corporate Marketing
Telephone No.: (000) 000-0000
Facsimile No.: (000) 000-0000
A SUBSIDIARY OF X.X. XXXXXX CHASE & CO.
INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE
CHARTERED COMMERCIAL BANK.
REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
REGISTERED BRANCH ADDRESS 000 XXXXXX XXXX, XXXXXX, XX0X 0XX. XXXX XXXXXX 000
XXXX XXXXXX, XXX XXXX, XXX.
5
8. Other Provisions:
(a) No Reliance, etc. Each party represents that (i) it is
entering into the Transaction evidenced hereby as principal
(and not as agent or in any other capacity); (ii) neither the
other party nor any of its agents are acting as a fiduciary
for it; (iii) it is not relying upon any representations
except those expressly set forth in the Agreement or this
Confirmation; (iv) it has not relied on the other party for
any legal, regulatory, tax, business, investment, financial,
and accounting advice, and it has made its own investment,
hedging, and trading decisions based upon its own judgment and
upon any view expressed by the other party or any of its
agents; and (v) it is entering into this Transaction with a
full understanding of the terms, conditions and risks thereof
and it is capable of and willing to assume those risks.
(b) Share De-listing Event. If at any time during the period from
and including the Trade Date, to and including the final
Valuation Date, the Shares cease to be listed on the Exchange
for any reason (other than a Merger Event) and are not
immediately re-listed as of the date of such de-listing on The
New York Stock Exchange, The American Stock Exchange or the
Nasdaq National Market System (or their respective successors)
(the "SUCCESSOR EXCHANGE"), then Cancellation and Payment
shall apply, and the date of the de-listing shall be deemed
the date of termination for purposes of calculating any
payment due from one party to the other in connection with the
cancellation of this Transaction. If the Shares are
immediately re-listed on a Successor Exchange upon their
de-listing from the Exchange, this Transaction shall continue
in full force and effect, provided that the Successor Exchange
shall be deemed to be the Exchange for all purposes hereunder.
In addition, the Calculation Agent shall make any adjustments
it deems necessary to the terms of the Transaction in
accordance with Calculation Agent Adjustment method as defined
under Section 9.1(c) of the Equity Definitions.
(c) Repurchase Notices. Company shall, on any day on which Company
effects any repurchase of Shares, promptly give JPMorgan a
written notice of such repurchase (a "REPURCHASE NOTICE") if
following such repurchase, the Warrants Equity Percentage as
determined on such day is (i) greater than 5% and (ii) greater
by 0.5% than the Warrants Equity Percentage included in the
immediately preceding Repurchase Notice (or, in the case of
the first such Repurchase Notice, greater than the Warrants
Equity Percentage as of the date hereof). The "WARRANTS EQUITY
PERCENTAGE" as of any day is the fraction (A) the numerator of
which is the sum of (1) the product of the Number of Warrants
and the Warrant Entitlement and (2) the product of the Number
of Warrants as defined in the Confirmation dated August 11,
2003 between Counterparty and JPMorgan relating to 22,357,646
Warrants of the Company (the "INITIAL TRANSACTION") and the
Warrant Entitlement as defined in the Initial Transaction, and
(B) the denominator of which is the number of Shares
outstanding on such day. Company agrees to indemnify and hold
harmless JPMorgan and its affiliates and their respective
officers, directors, employees, affiliates, advisors, agents
and controlling persons (each, an "INDEMNIFIED PERSON") from
and against any and all losses (including losses relating to
JPMorgan's hedging activities as a consequence of becoming, or
of the risk of becoming, a Section 16 "insider", including
without limitation, any forbearance from hedging activities or
cessation of hedging activities and any losses in connection
therewith with respect to this Transaction), claims, damages,
judgments, liabilities and expenses (including reasonable
attorney's fees), joint or several, which an Indemnified
Person actually incurs as a result of Company's failure to
provide JPMorgan with a Repurchase Notice on the day and in
the manner specified in this Section 8(c), and to reimburse,
within 30 days, upon written request, each of such Indemnified
Persons for any reasonable legal or other expenses incurred in
connection with investigating, preparing for, providing
testimony or other evidence in connection with or defending
any of the foregoing. If any suit, action,
A SUBSIDIARY OF X.X. XXXXXX XXXXX & CO.
INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
COMMERCIAL BANK.
REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
REGISTERED BRANCH ADDRESS 000 XXXXXX XXXX, XXXXXX, XX0X 0XX. XXXX XXXXXX 000
XXXX XXXXXX, XXX XXXX, XXX.
6
proceeding (including any governmental or regulatory
investigation), claim or demand shall be brought or asserted
against the Indemnified Person, such Indemnified Person shall
promptly notify the Company in writing, and the Company, upon
request of the Indemnified Person, shall retain counsel
reasonably satisfactory to the Indemnified Person to represent
the Indemnified Person and any others the Company may
designate in such proceeding and shall pay the fees and
expenses of such counsel related to such proceeding. Company
shall not be liable for any settlement of any proceeding
effected without its written consent, but if settled with such
consent or if there be a final judgment for the plaintiff,
Company agrees to indemnify any Indemnified Person from and
against any loss or liability by reason of such settlement or
judgment. Company shall not, without the prior written consent
of the Indemnified Person, effect any settlement of any
pending or threatened proceeding in respect of which any
Indemnified Person is or could have been a party and indemnity
could have been sought hereunder by such Indemnified Person,
unless such settlement includes an unconditional release of
such Indemnified Person from all liability on claims that are
the subject matter of such proceeding on terms reasonably
satisfactory to such Indemnified Person. If the
indemnification provided for in this paragraph (c) is
unavailable to an Indemnified Person or insufficient in
respect of any losses, claims, damages or liabilities referred
to therein, then Company under such paragraph, in lieu of
indemnifying such Indemnified Person thereunder, shall
contribute to the amount paid or payable by such Indemnified
Person as a result of such losses, claims, damages or
liabilities. The remedies provided for in this paragraph (c)
are not exclusive and shall not limit any rights or remedies
which may otherwise be available to any Indemnified Party at
law or in equity. The indemnity and contribution agreements
contained in this paragraph (c) shall remain operative and in
full force and effect regardless of the termination of this
Transaction.
(d) Material Non-Public Information. Company represents and
warrants that each of it and its Affiliates is not, on the
date hereof, in possession of any material non-public
information with respect to Company.
(e) Eligible Contract Participant. Company represents and warrants
that it is an "eligible contract participant" (as such term is
defined in Section 1(a)(12) of the Commodity Exchange Act, as
amended (the "CEA")) because one or more of the following is
true:
Company is a corporation, partnership, proprietorship,
organization, trust or other entity and:
(A) Company has total assets in excess of USD
10,000,000;
(B) the obligations of Company hereunder are
guaranteed, or otherwise supported by a
letter of credit or keepwell, support or
other agreement, by an entity of the type
described in Section 1a(12)(A)(i) through
(iv), 1a(12)(A)(v)(I), 1a(12)(A)(vii) or
1a(12)(C) of the CEA; or
(C) Company has a net worth in excess of USD
1,000,000 and has entered into this
Agreement in connection with the conduct of
Company's business or to manage the risk
associated with an asset or liability owned
or incurred or reasonably likely to be owned
or incurred by Company in the conduct of
Company's business.
(f) Regulation M. The Company was not on the Trade Date and is not
on the date hereof engaged in a distribution, as such term is
used in Regulation M under the Securities Exchange Act of
1934, as amended ("EXCHANGE ACT"), of any securities of
Company, other than a distribution meeting the requirements of
the exception set forth in sections 101(b)(10) and 102(b)(7)
of Regulation M. The Company shall not, until the fifth
A SUBSIDIARY OF X.X. XXXXXX CHASE & CO.
INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
COMMERCIAL BANK.
REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
REGISTERED BRANCH ADDRESS 000 XXXXXX XXXX, XXXXXX, XX0X 0XX. XXXX XXXXXX 000
XXXX XXXXXX, XXX XXXX, XXX.
7
Exchange Business Day immediately following the Trade Date,
engage in any such distribution.
(g) No Manipulation. The Company is not entering into this
Transaction to create actual or apparent trading activity in
the Shares (or any security convertible into or exchangeable
for the Shares) or to raise or depress or otherwise manipulate
the price of the Shares (or any security convertible into or
exchangeable for the Shares).
(h) Board Authorization. Company represents that it is entering
into the Transaction, solely for the purposes stated in the
board resolution authorizing this Transaction and in its
public disclosure. Company further represents that there is no
internal policy, whether written or oral, of Company that
would prohibit Company from entering into any aspect of this
Transaction, including, but not limited to, the purchases of
Shares to be made pursuant hereto.
(i) Transfer or Assignment. Company may not transfer any of its
rights or obligations under this Transaction without the prior
written consent of JPMorgan. JPMorgan may transfer or assign
all or any portion of its rights or obligations under this
Transaction without consent of the Company. If JPMorgan, in
its sole discretion, determines that its "beneficial
ownership" with respect to the Initial Transaction and this
Transaction (within the meaning of Section 16 of the Exchange
Act and rules promulgated thereunder) exceeds 8% or more of
the Company's outstanding Shares and, in its sole discretion,
JPMorgan is unable after its commercially reasonable efforts
to effect a transfer or assignment on pricing terms and in a
time period reasonably acceptable to JPMorgan that would
reduce its "beneficial ownership" to 7.5%, JPMorgan may
designate any Exchange Business Day as an Early Termination
Date with respect to a portion (the "TERMINATED PORTION") of
this Transaction or the Initial Transaction, such that the its
"beneficial ownership" following such partial termination will
be equal to or less than 8%. In the event that JPMorgan so
designates an Early Termination Date with respect to a portion
of this Transaction, a payment shall be made pursuant to
Section 6 of the Agreement as if (i) an Early Termination Date
had been designated in respect of a Transaction having terms
identical to this Transaction and a Number of Warrants equal
to the Terminated Portion, (ii) the Company and JPMorgan shall
both be Affected Parties with respect to such partial
termination and (iii) such Transaction shall be the only
Terminated Transaction. For the avoidance of doubt, if
JPMorgan assigns or terminates any Warrants hereunder, each
Daily Number of Warrants not previously settled as set forth
in Annex A hereto shall be reduced proportionally, as
calculated by the Calculation Agent. Notwithstanding any other
provision in this Confirmation to the contrary requiring or
allowing JPMorgan to purchase, sell, receive or deliver any
shares or other securities to or from Company, JPMorgan may
designate any of its affiliates to purchase, sell, receive or
deliver such shares or other securities and otherwise to
perform JPMorgan's obligations in respect of this Transaction
and any such designee may assume such obligations. JPMorgan
shall be discharged of its obligations to Company to the
extent of any such performance.
(j) Amendment. Paragraph (i) of Section 9.7(b) of the Equity
Definitions is hereby amended for purposes of this Transaction
by replacing "two-year" with "90 calendar day".
(k) Damages. Neither party shall be liable under Section 6.10 of
the Equity Definitions for special, indirect or consequential
damages, even if informed of the possibility thereof.
(1) Dividends. If at any time during the period from and including
the Trade Date, but excluding the Expiration Date, an
ex-dividend date for a cash dividend occurs with respect to
the Shares (an "EX-DIVIDEND DATE"), and that dividend is
greater than the Regular Dividend on a per share basis then
the forward value of the difference between the Regular
Dividend and the per share cash dividend corresponding to that
Ex-Dividend
A SUBSIDIARY OF X.X. XXXXXX XXXXX & CO.
INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE
CHARTERED COMMERCIAL BANK.
REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
REGISTERED BRANCH ADDRESS 000 XXXXXX XXXX, XXXXXX, XX0X 0XX. XXXX XXXXXX 000
XXXX XXXXXX, XXX XXXX, XXX.
8
Date shall be subtracted from the Strike Price. "REGULAR
DIVIDEND" shall mean USD 0.00 per Share per quarter. The
forward value of any such amount shall be calculated from the
Ex-Dividend Date through and including the Settlement Date.
The interest rate used for the calculation of such forward
values shall be the mid-market interpolated Eurodollar zero
coupon swap rate with a maturity corresponding to the
Settlement Date, as determined by JPMorgan.
(m) Netting and Setoff. Notwithstanding Section 2(c) of the
Agreement, Company waives its rights to net and offset against
its obligations hereunder any rights Company might have
against JPMorgan under any other transactions.
(n) Role of Agent. Each party agrees and acknowledges that (i)
X.X. Xxxxxx Securities Inc., an affiliate of JPMorgan
("JPMSI"), has acted solely as agent and not as principal with
respect to this Transaction and (ii) JPMSI has no obligation
or liability, by way of guaranty, endorsement or otherwise, in
any manner in respect of this Transaction (including, if
applicable, in respect of the settlement thereof). Each party
agrees it will look solely to the other party (or any
guarantor in respect thereof) for performance of such other
party's obligations under this Transaction.
(o) Additional Provisions.
(i) The first paragraph of Section 9.1(c) of the Equity
Definitions is hereby amended to read as follows: (c) 'If
"Calculation Agent Adjustment" is specified as the method of
adjustment in the Confirmation of a Share Option Transaction,
then following the declaration by the Issuer of the terms of
any Potential Adjustment Event, the Calculation Agent will
determine whether such Potential Adjustment Event has a
material effect on the theoretical value of the relevant
Shares or Warrants and, if so, will (i) make appropriate
adjustment(s), if any, to any one or more of:' and, the
sentence immediately preceding Section 9.1(c)(ii) is hereby
amended by deleting the words "diluting or concentrative".
(ii) Section 9.1(e)(vi) of the Equity Definitions is hereby
amended by deleting the words "other similar" between "any"
and "event"; deleting the words "diluting or concentrative"
and replacing them with "material"; and adding the following
words at the end of the sentence "or Warrants".
(iii) Section 9.6(a)(ii) of the Equity Definitions is hereby
amended by (1) deleting from the third line thereof the word
"or" after the word "official" and inserting a comma therefor,
and (2) deleting the period at the end of subsection (ii)
thereof and inserting the following words therefor " or (C) at
JPMorgan's option, the occurrence of any of the events
specified in Section 5(a)(vii) (1) through (9) of the ISDA
Master Agreement with respect to that Issuer."
(iv) Notwithstanding Section 9.7 of the Equity Definitions,
everything in the first paragraph of Section 9.7(b) of the
Equity Definitions after the words "Calculation Agent" in the
third line through the remainder of such Section 9.7 shall be
deleted and replaced with the following:
"based on an amount representing the Calculation Agent's
determination of the fair value to Buyer of an option with
terms that would preserve for Buyer the economic equivalent of
any payment or delivery (assuming satisfaction of each
applicable condition precedent) by the parties in respect of
the relevant Transaction that would have been required after
that date but for the occurrence of the Merger Event,
Nationalization, Insolvency or De-Listing Event, as the case
may be."
A SUBSIDIARY OF X.X. XXXXXX XXXXX & CO.
INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
COMMERCIAL BANK.
REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
REGISTERED BRANCH ADDRESS 000 XXXXXX XXXX, XXXXXX, XX0X 0XX. XXXX XXXXXX 000
XXXX XXXXXX, XXX XXXX, XXX.
9
(p) Alternative Calculations and Payment on Early Termination and
on Certain Extraordinary Events. If Company shall owe
JPMorgan any amount pursuant to Sections 9.3, 9.6 or 9.7 of
the Equity Definitions (except in the event of a
Nationalization or a Merger Event in which the merger
consideration to be paid to holders of Shares consists solely
of cash) or pursuant to Section 6(d)(ii) of the Agreement
(except in the event of an Event of Default in which Company
is the Defaulting Party or a Termination Event in which
Company is the Affected Party, other than an Event of Default
of the type described in Section 5(a)(iii), (v), (vi) or
(vii) of the Agreement or a Termination Event of the type
described in Section 5(b)(i), (ii), (iii), (iv), or (v) of
the Agreement that resulted from an event or events outside
Company's control) (a "PAYMENT OBLIGATION"), Company may, in
its sole discretion, satisfy any such Payment Obligation by
the Share Termination Alternative (as defined below) and
shall give irrevocable telephonic notice to JPMorgan,
confirmed in writing within one Currency Business Day,
between the hours of 9:00 a.m. and 4:00 p.m. New York local
time on the Announcement Date or Early Termination Date, as
applicable ("NOTICE OF SHARE TERMINATION"). Upon Notice of
Share Termination no later than 8:00 a.m. on the Exchange
Business Day immediately following the Merger Date,
Announcement Date or Early Termination Date, as applicable,
the following provisions shall apply:
Share Termination Alternative: Applicable and means
that Company shall
deliver to JPMorgan
the Share Termination
Delivery Property on
the date (the "SHARE
TERMINATION PAYMENT
DATE") when the
Payment Obligation
would otherwise be
due, subject to
paragraph (q)(i)
below, in
satisfaction, subject
to paragraph (q)(ii)
below, of the Payment
Obligation in the
manner reasonably
requested by JPMorgan
free of payment.
Share Termination Delivery Property: A number of Share
Termination Delivery
Units, as calculated
by the Calculation
Agent, equal to the
Payment Obligation
divided by the Share
Termination Unit
Price. The
Calculation Agent
shall adjust the
Share Termination
Delivery Property by
replacing any
fractional portion of
a security therein
with an amount of
cash equal to the
value of such
fractional security
based on the values
used to calculate the
Share Termination
Unit Price.
Share Termination Unit Price: The value to JPMorgan
of property contained
in one Share
Termination Delivery
Unit on the date such
Share Termination
Delivery Units are to
be delivered as Share
Termination Delivery
Property, as
determined by the
Calculation Agent in
its discretion by
commercially
reasonable means and
notified by the
Calculation Agent to
Company at the time
of notification of
the Payment
Obligation. In the
case of a Private
Placement of Share
Termination Delivery
Units that are
A SUBSIDIARY OF X.X. XXXXXX CHASE & CO.
INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
COMMERCIAL BANK.
REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
REGISTERED BRANCH ADDRESS 000 XXXXXX XXXX, XXXXXX, XX0X 0XX. XXXX XXXXXX 000
XXXX XXXXXX, XXX XXXX, XXX.
10
Restricted Shares (as
defined below) as set
for in paragraph
(q)(i) below, the
Share Termination
Unit Price shall be
determined by the
discounted price
applicable to such
Share Termination
Delivery Units. In
the case of a
Registered Settlement
of Share Termination
Delivery Units that
are Restricted Shares
(as defined below) as
set forth in
paragraph (q)(ii)
below, the Share
Termination Unit
Price shall be the
Settlement Price.
Share Termination Delivery Unit: In the case of a
Termination Event or
Event of Default, one
Share or, in the case
of a Merger Event, a
unit consisting of
the number or amount
of each type of
property received by
a holder of one Share
(without
consideration of any
requirement to pay
cash or other
consideration in lieu
of fractional amounts
of any securities) in
such Merger Event. If
a Share Termination
Delivery Unit
consists of property
other than cash or
New Shares, the
Calculation Agent
will replace such
property with cash,
New Shares or a
combination thereof
as components of a
Share Termination
Delivery Unit in such
amounts, as
determined by the
Calculation Agent in
its discretion by
commercially
reasonable means, as
shall have a value
equal to the value of
the property so
replaced. If such
Merger Event involves
a choice of
consideration to be
received by holders,
such holder shall be
deemed to have
elected to receive
the maximum possible
amount of cash.
Failure to Deliver: Applicable
Other applicable provisions: If this Transaction
is to be Share
Termination Settled,
the provisions of
Sections 6.6, 6.7,
6.8 and 6.10 (as
modified above) of
the Equity
Definitions will be
applicable, except
that all references
in such provisions to
"Physically-Settled"
shall be read as
references to "Share
Termination Settled"
and all references to
"Shares" shall be
read as references to
"Share Termination
Delivery Units".
"Share Termination
Settled" in relation
to this Transaction
means that Share
Termination
Settlement is
applicable to this
Transaction.
(q) Registration/Private Placement Procedures. If, in the
reasonable opinion of JPMorgan, following any delivery of
Shares or Share Termination Delivery Property to JPMorgan
A SUBSIDIARY OF X.X. XXXXXX XXXXX & CO.
INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
COMMERCIAL BANK.
REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
REGISTERED BRANCH ADDRESS 000 XXXXXX XXXX, XXXXXX, XX0X 0XX. XXXX XXXXXX 000
XXXX XXXXXX, XXX XXXX, XXX.
11
hereunder, such Shares or Share Termination Delivery Property
would be in the hands of JPMorgan subject to any applicable
restrictions with respect to any registration or qualification
requirement or prospectus delivery requirement for such Shares
or Share Termination Delivery Property pursuant to any
applicable federal or state securities law (including, without
limitation, any such requirement arising under Section 5 of
the Securities Act as a result of such Shares or Share
Termination Delivery Property being a "restricted securities",
as such term is defined in Rule 144 under the Securities Act,
or as a result of the sale of such Shares or Share Termination
Delivery Property being subject to paragraph (c) of Rule 145
under the Securities Act) (such Shares or Share Termination
Delivery Property, "RESTRICTED SHARES"), then delivery of such
Restricted Shares shall be effected pursuant to either clause
(i) or (ii) below at the election of Company, unless waived by
JPMorgan. Notwithstanding the foregoing, the Company shall
elect, prior to the first Settlement Date under Section 2
above, a Private Placement Settlement or Registered Settlement
for all deliveries of Restricted Shares pursuant to Section 2
above which election shall be applicable to all Settlement
Dates and the procedures in clause (i) or clause (ii) below
shall apply for all such delivered Restricted Shares on
aggregate basis commencing after the first Settlement Date.
The Calculation Agent shall make reasonable adjustments to
settlement terms and provisions under this Confirmation to
reflect a single Private Placement or Registered Settlement
for such aggregate Restricted Shares delivered hereunder.
(i) If the Company elects to settle the Transaction
pursuant to this clause (i) (a "PRIVATE PLACEMENT
SETTLEMENT"), then deliveries of Restricted Shares by
the Company shall be effected in customary private
placement procedures with respect to such Restricted
Shares reasonably acceptable to JPMorgan; provided
that the Company may not elect a Private Placement
Settlement if, on the date of its election, it has
taken, or caused to be taken, any action that would
make unavailable either the exemption pursuant to
Section 4(2) of the Securities Act for the sale by
the Company to JPMorgan (or any affiliate designated
by JPMorgan) of the Restricted Shares or the
exemption pursuant to Section 4(1) or Section 4(3) of
the Securities Act for resales of the Restricted
Shares by JPMorgan (or any such affiliate of
JPMorgan). The Private Placement Settlement of such
Registered Shares shall include customary
representations, covenants, blue sky and other
governmental filings and/or registrations,
indemnities to JPMorgan, due diligence rights (for
JPMorgan or any designated buyer of the Restricted
Shares by JPMorgan), opinions and certificates, and
such other documentation as is customary for private
placement agreements, all reasonably acceptable to
JPMorgan. In the case of a Private Placement
Settlement, JPMorgan shall determine the appropriate
discount to the Share Termination Unit Price (in the
case of settlement of Share Termination Delivery
Units pursuant to paragraph (p) above) or any
Settlement Price (in the case of settlement of Shares
pursuant to Section 2 above) applicable to such
Restricted Shares in a commercially reasonable manner
and appropriately adjust the amount of such
Restricted Shares to be delivered to JPMorgan
hereunder; provided that in no event such number
shall be greater than 328,513,388 (the "MAXIMUM
AMOUNT"). Notwithstanding the Agreement or this
Confirmation, the date of delivery of such Restricted
Shares shall be the Exchange Business Day following
notice by JPMorgan to the Company, of such applicable
discount and the number of Restricted Shares to be
delivered pursuant to this clause (i). For the
avoidance of doubt, delivery of Restricted Shares
shall be due as set forth in the previous sentence
and not be due on the Share Termination Payment Date
(in the case of settlement of Share Termination
Delivery Units pursuant to paragraph (p) above) or on
the Settlement Date for such Restricted Shares (in
the case of settlement of Shares pursuant to Section
2 above).
A SUBSIDIARY OF X.X. XXXXXX CHASE & CO.
INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
COMMERCIAL BANK.
REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
REGISTERED BRANCH ADDRESS 000 XXXXXX XXXX, XXXXXX, XX0X 0XX. XXXX XXXXXX 000
XXXX XXXXXX, XXX XXXX, XXX.
12
(ii) If the Company elects to settle the Transaction
pursuant to this clause (ii) (a "REGISTRATION
SETTLEMENT"), then the Company shall file and use its
reasonable best efforts to make effective under the
Securities Act a registration statement or supplement
or amend an outstanding registration statement in
form and substance reasonably satisfactory to
JPMorgan, to cover the resale of such Restricted
Shares in accordance with customary resale
registration procedures, including covenants,
conditions, representations, underwriting discounts
(if applicable), commissions (if applicable),
indemnities due diligence rights, opinions and
certificates, and such other documentation as is
customary for equity resale underwriting agreements,
all reasonably acceptable to JPMorgan. If JPMorgan is
satisfied with such procedures and documentation, it
shall sell the Restricted Shares pursuant to such
registration statement during a period (the "RESALE
PERIOD") commencing on the Exchange Business Day
following delivery of such Restricted Shares (which,
for the avoidance of doubt, shall be any Settlement
Date in the case of settlement of Shares pursuant to
Section 2 above or the Share Termination Payment Date
in case of settlement of Share Termination Delivery
Units pursuant to paragraph (p) above) and ending on
the earliest of (i) the Exchange Business Day on
which JPMorgan completes the sale of all Restricted
Shares or, in the case of settlement of Share
Termination Delivery Units, a sufficient number of
Restricted Shares so that the realized net proceeds
of such sales exceed the Payment Obligation (as
defined above), (ii) the date upon which all
Restricted Shares have been sold or transferred
pursuant to Rule 144 (or similar provisions then in
force) or Rule 145(d)(1) or (2) (or any similar
provision then in force) under the Securities Act and
(iii) the date upon which all Restricted Shares may
be sold or transferred by a non-affiliate pursuant to
Rule 144(k) (or any similar provision then in force)
or Rule 145(d)(3) (or any similar provision then in
force under the Securities Act. If the Payment
Obligation exceeds the realized net proceeds from
such resale, Company shall transfer to JPMorgan by
the open of the regular trading session on the
Exchange on the Exchange Trading Day immediately
following the last day of the Resale Period the
amount of such excess (the "ADDITIONAL AMOUNT") in
cash or in a number of Shares ("MAKE-WHOLE SHARES")
in an amount that, based on the Settlement Price on
the last day of the Resale Period (as if such day was
the "Valuation Date" for purposes of computing such
Settlement Price), has a dollar value equal to the
Additional Amount. The Resale Period shall continue
to enable the sale of the Make-whole Shares. If
Company elects to pay the Additional Amount in
Shares, the requirements and provisions for
Registration Settlement shall apply. This provision
shall be applied successively until the Additional
Amount is equal to zero. In no even shall the Company
deliver a number of Restricted Shares greater than
the Maximum Amount.
(iii) Without limiting the generality of the foregoing,
Company agrees that any Restricted Shares delivered
to JPMorgan, as purchaser of such Restricted Shares,
(i) may be transferred by and among JPMorgan Chase
Bank and its affiliates and Company shall effect such
transfer without any further action by JPMorgan and
(ii) after the minimum "holding period" within the
meaning of Rule 144(d) under the Securities Act has
elapsed after any Settlement Date for such Restricted
Shares, Company shall promptly remove, or cause the
transfer agent for such Restricted Shares to remove,
any legends referring to any such restrictions or
requirements from such Restricted Shares upon
delivery by JPMorgan (or such affiliate of JPMorgan)
to Company or such transfer agent of seller's and
broker's representation letters and an opinion of
counsel customarily delivered by JPMorgan in
connection with resales of restricted
A SUBSIDIARY OF X.X. XXXXXX XXXXX & CO.
INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
COMMERCIAL BANK.
REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
REGISTERED BRANCH ADDRESS 000 XXXXXX XXXX, XXXXXX, XX0X 0XX. XXXX XXXXXX 000
XXXX XXXXXX, XXX XXXX, XXX.
13
securities pursuant to Rule 144 under the Securities
Act, without any further requirement for the delivery
of any certificate, consent, agreement, opinion of
counsel, notice or any other document, any transfer
tax stamps or payment of any other amount or any
other action by JPMorgan (or such affiliate of
JPMorgan).
If the Private Placement Settlement or the Registration
Settlement shall not be effected as set forth in clauses (i)
or (ii), as applicable, then failure to effect such Private
Placement Settlement or such Registration Settlement shall
constitute an Event of Default with respect to which Company
shall be the Defaulting Party.
(r) DTC-Eligible Deliveries. Notwithstanding anything to the
contrary herein, the Company agrees that any delivery of
Shares or Share Termination Delivery Property shall be
effected by book-entry transfer through the facilities of DTC,
or any successor depositary, if at the time of delivery, such
class of Shares or class of Share Termination Delivery
Property is eligible to be in book-entry form at DTC or such
successor depositary.
(s) Governing Law. New York law (without reference to choice of
law doctrine).
A SUBSIDIARY OF X.X. XXXXXX CHASE & CO.
INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
COMMERCIAL BANK.
REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
REGISTERED BRANCH ADDRESS 000 XXXXXX XXXX, XXXXXX, XX0X 0XX. XXXX XXXXXX 000
XXXX XXXXXX, XXX XXXX, XXX.
14
[JPMORGAN LOGO]
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to EDG Confirmation
Group, X.X. Xxxxxx Securities Inc., 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX
00000-0000. or by fax on 000 000 0000 (PLEASE NOTE THIS NEW FAX NUMBER).
Very truly yours,
X.X. XXXXXX SECURITIES INC., AS AGENT
FOR JPMORGAN CHASE BANK
By: _______________________________
Authorized Signatory
Name:
Accepted and confirmed
as of the Trade Date:
CADENCE DESIGN SYSTEMS, INC.
By: -s- Xxxxxxx Xxxxxx
-----------------------------
Authorized Signatory
Name: Xxxxxxx Xxxxxx
Senior Vice President and
Chief Financial Officer
A SUBSIDIARY OF X.X. XXXXXX XXXXX & CO.
INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
COMMERCIAL BANK.
REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
REGISTERED BRANCH ADDRESS 000 XXXXXX XXXX, XXXXXX, XX0X 0XX. XXXX XXXXXX 000
XXXX XXXXXX, XXX XXXX, XXX.
[JPMORGAN LOGO]
Please confirm that the foregoing correctly sets forth the terms of our
agreement by executing this Confirmation and returning it to EDG Confirmation
Group, J.P, Xxxxxx Securities Inc., 000 Xxxx Xxxxxx, 00xx Xxxxx, Xxx Xxxx, XX
00000-0000, or by fax on 000 000 0000 (PLEASE NOTE THIS NEW FAX NUMBER).
Very truly yours,
X.X. XXXXXX SECURITIES INC., AS AGENT
FOR JPMORGAN CHASE BANK
By: -s- Xxxxxx Xxxxx
---------------------------
Authorized Signatory
Name: Xxxxxx Xxxxx
Accepted and confirmed
as of the Trade Date:
CADENCE DESIGN SYSTEMS, INC.
By: ________________________
Authorized Signatory
Name:
A SUBSIDIARY OF X.X. XXXXXX XXXXX & CO.
INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
COMMERCIAL BANK.
REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
REGISTERED BRANCH ADDRESS 000 XXXXXX XXXX, XXXXXX, XX0X 0XX. XXXX XXXXXX 000
XXXX XXXXXX, XXX XXXX, XXX.
ANNEX A
NUMBER EXPIRATION DATE DAILY NUMBER OF WARRANTS
------ --------------- ------------------------
l. February 21, 2008 74,525
2. February 22, 2008 74,525
3. February 25, 2008 74,525
4. February 26, 2008 74,525
5. February 27, 2008 74,525
6. February 28, 2008 74,525
7. February 29, 2008 74,525
8. March 3, 2008 74,525
9. March 4, 2008 74,525
10. March 5, 2008 74,525
11. March 6, 2008 74,525
12. March 7, 2008 74,525
13. March 10, 2008 74,525
14. March 11, 2008 74,525
15. March 12, 2008 74,525
16. March 13, 2008 74,525
17. March 14, 2008 74,525
18. March 17, 2008 74,525
19. March 18, 2008 74,525
20. March 19, 2008 74,525
21. March 20, 2008 74,525
22. March 24, 2008 74,525
23. March 25, 2008 74,525
24. March 26, 2008 74,525
25. March 27, 2008 74,525
26. March 28, 2008 74,525
27. March 31, 2008 74,525
28. April 1, 2008 74,525
29. April 2, 2008 74,525
30. April 3, 2008 74,525
31. April 4, 2008 74,525
32. April 7, 2008 74,525
33. April 8, 2008 74,525
34. April 9, 2008 74,525
35. April 10, 2008 74,525
36. April 11, 2008 74,525
37. April 14, 2008 74,525
38. April 15, 2008 74,525
39. April 16, 2008 74,525
40. April 17, 2008 74,525
41. April 18, 2008 74,525
42. April 21, 2008 74,525
43. April 22, 2008 74,525
44. April 23, 2008 74,525
45. April 24, 2008 74,525
46. April 25, 2008 74,525
47. April 28, 2008 74,525
48. April 29, 2008 74,525
49. April 30, 2008 74,525
50. May 1, 2008 74,525
51. May 2, 2008 74,525
52. May 5, 2008 74,525
53. May 6, 2008 74,525
54. May 7, 2008 74,525
55. May 8, 2008 74,525
56. May 9, 2008 74,525
57. May 12, 2008 74,525
58. May 13, 2008 74,525
59. May 14, 2008 74,525
60. May 15, 2008 74,555
A SUBSIDIARY OF X.X. XXXXXX CHASE & CO.
INCORPORATED WITH LIMITED LIABILITY AS A NEW YORK STATE CHARTERED
COMMERCIAL BANK.
REGISTERED IN ENGLAND BRANCH NUMBER BR000746. AUTHORISED BY THE FSA.
REGISTERED BRANCH ADDRESS 000 XXXXXX XXXX, XXXXXX, XX0X 0XX. XXXX XXXXXX 000
XXXX XXXXXX, XXX XXXX, XXX.
16
