<PAGE>
As filed with the Securities and Exchange Commission on March 29, 2000.
Registration No. 333-
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SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
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FORM S-3
REGISTRATION STATEMENT
Under
The Securities Act of 1933
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NVIDIA CORPORATION
(Exact name of registrant as specified in its charter)
---------------
Delaware 94-3177549
(State of incorporation ) (I.R.S. Employer Identification No.)
3535 Monroe Street
Santa Clara, CA 95051
(408) 615-2500
(Address, including zip code, and telephone number, including area code of
Registrant's principal executive offices)
---------------
Jen-Hsun Huang
Chief Executive Officer
NVIDIA Corporation
3535 Monroe Street
Santa Clara, CA 95051
(408) 615-2500
(Name, address, including zip code, and telephone number including area code,
of agent for service)
Copies to:
James C. Gaither
Eric C. Jensen
Karyn S. Tucker
Alyssa R. Harvey
Heather L. McCormick
Cooley Godward LLP
One Maritime Plaza, 20th Floor
San Francisco, CA 94111
(415) 693-2000
Approximate date of commencement of proposed sale to the public: From time
to time after the effective date of this Registration Statement.
If the only securities being registered on this form are being offered
pursuant to dividend or interest reinvestment plans, please check the
following box. [_]
If any of the securities being registered on this Form are to be offered on
a delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, other than securities offered only in connection with dividend or
interest reinvestment plans, check the following box. [X]
If this form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following
box and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. [_]
If this form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. [_]
If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. [_]
CALCULATION OF REGISTRATION FEE
<TABLE>
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<CAPTION>
Proposed Maximum
Title of Class of Aggregate Offering Amount of
Securities to be Registered Price(1) Registration Fee(2)
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<S> <C> <C>
Common Stock, par value $.001 per share(3)....................
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Debt Securities(4)............................................ (5) (5)
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Total...................................................... $400,000,000(6) $105,600
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</TABLE>
(1) The proposed maximum aggregate offering price per class of security will
be determined from time to time by the registrant in connection with the
issuance by the registrant of the securities registered hereunder.
(2) Calculated pursuant to Rule 457(o) under the Securities Act.
(3) Subject to note 6 below, there is being registered an indeterminate
number of shares of common stock of the registrant as may be sold from
time to time.
(4) Subject to note 6 below, there is being registered hereunder an
indeterminate principal amount of debt securities of the registrant as
may be sold, from time to time, by us. If any debt securities are issued
at an original issue discount, then the offering price shall be in such
greater principal amount at maturity as shall result in aggregate gross
proceeds to the registrant not to exceed $400 million less the gross
proceeds attributable to any securities previously issued pursuant to
this registration statement.
(5) Not required to be included in accordance with General Instructions II.D.
of Form S-3 under the Securities Act.
(6) In no event will the aggregate offering price of all securities issued
from time to time pursuant to this registration statement exceed $400
million. The securities registered hereunder may be sold separately or as
units with other securities registered hereunder.
---------------
The registrant hereby amends this Registration Statement on such date or
dates as may be necessary to delay its effective date until the registrant
shall file a further amendment which specifically states that this
Registration Statement shall thereafter become effective in accordance with
Section 8(a) of the Securities Act or until the Registration Statement shall
become effective on such date as the Commission, acting pursuant to said
Section 8(a), may determine.
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<PAGE>
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
+The information in this prospectus is not complete and may be changed. We may +
+not sell these securities or accept an offer to buy these securities until +
+the registration statement filed with the Securities and Exchange Commission +
+is effective. This prospectus is not an offer to sell these securities and we +
+are not soliciting offers to buy these securities in any state where such +
+offer or sale is not permitted. +
++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++++
PROSPECTUS (Subject to Completion)
Issued March 29, 2000
$400,000,000
NVIDIA CORPORATION
[NVIDIA LOGO]
Common Stock
Debt Securities
-----------
This prospectus relates to offerings from time to time by NVIDIA Corporation of
shares of its common stock and debt securities. Specific terms of these
securities will be provided in supplements to this prospectus. You should read
this prospectus and any supplements carefully before you invest.
-----------
Our common stock is quoted on the Nasdaq National Market under the symbol
"NVDA."
-----------
INVESTING IN THE COMMON STOCK OR DEBT SECURITIES INVOLVES A HIGH DEGREE OF
RISK. SEE "RISK FACTORS" BEGINNING ON PAGE 4.
-----------
Neither the Securities and Exchange Commission nor any state securities
commission has approved or disapproved of these securities or passed upon the
adequacy or accuracy of this prospectus. Any representation to the contrary is
a criminal offense.
-----------
If we sell the securities through agents or underwriters, we will include
their names and the fees, commissions and discounts they will receive, as well
as the net proceeds to us, in the applicable prospectus supplement.
, 2000
<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
About This Prospectus...................................................... i
Prospectus Summary......................................................... 1
The Securities We May Offer................................................ 3
Risk Factors............................................................... 4
Forward-Looking Information................................................ 14
Ratio of Earnings to Fixed Charges......................................... 14
Use of Proceeds............................................................ 15
Common Stock Price Range................................................... 15
Dividend Policy............................................................ 15
Selected Financial Data.................................................... 16
Management's Discussion and Analysis of Financial Condition and Results of
Operations................................................................ 17
Business................................................................... 23
Management................................................................. 32
Principal Stockholders..................................................... 35
Description Of Capital Stock............................................... 37
Description of Debt Securities............................................. 39
Plan of Distribution....................................................... 47
Legal Matters.............................................................. 48
Experts.................................................................... 48
Where You Can Find More Information........................................ 48
Index to Financial Statements.............................................. F-1
</TABLE>
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No dealer, salesperson or other person is authorized to give any information
or to represent anything not contained in this prospectus. You must not rely
on any unauthorized information or representation. This prospectus is an offer
to sell only the securities offered hereby, but only under circumstances and
in jurisdictions where it is lawful to do so. The information contained in
this prospectus is current only as of its date.
----------------
"NVIDIA," the NVIDIA logo, "GeForce 256," the GeForce 256 logo, "NVIDIA
Quadro," "NVIDIA Vanta" and "Vanta" are our trademarks. Other brands, names
and trademarks appearing in this prospectus are the property of their
respective owners.
----------------
ABOUT THIS PROSPECTUS
This prospectus is part of a registration statement that we filed with the
Securities and Exchange Commission utilizing a shelf registration process.
Under this shelf registration process, we may sell the common stock and debt
securities in one or more offerings up to a total dollar amount of
$400,000,000. This prospectus provides you with a general description of the
securities we may offer. Each time we sell common stock and debt securities,
we will provide a prospectus supplement that will contain more specific
information, as set forth below under "The Securities We May Offer." Please
carefully read both this prospectus and any prospectus supplement together
with the additional information described below under "Where You Can Find More
Information."
i
<PAGE>
PROSPECTUS SUMMARY
This summary highlights some information from this prospectus, and it may not
contain all of the information that is important to you. To understand the
terms of the securities, you should read this prospectus with the accompanying
prospectus supplement carefully. Together, these documents describe the
specific terms of the securities we are offering. You should also carefully
read the section titled "Risk Factors" in this prospectus and the accompanying
prospectus supplement and the documents identified under "Where You Can Find
More Information."
Overview
We design, develop and market a "top-to-bottom" family of award-winning 3D
graphics processors, graphics processing units, or GPUs, and related software
that set the standard for performance, quality and features for every type of
desktop personal computer, or PC, user, from professional workstations to low-
cost PCs. Our 3D graphics processors are used in a wide variety of
applications, including games, the Internet, industrial design, e-commerce,
enterprise visualization and education. Our graphics processors were the first
to incorporate a 128-bit multi-texturing graphics architecture designed to
deliver to users of our products a highly immersive, interactive 3D experience
with compelling visual quality, realistic imagery and motion, stunning effects,
and complex object and scene interaction at real-time frame rates. The NVIDIA
TNT2, TNT2 M64 and Vanta graphics processors deliver high performance 3D and 2D
graphics at an affordable price, making them the graphics hardware of choice
for a wide range of applications for both consumer and commercial use. Our
graphics processors are designed to be architecturally compatible backward and
forward, giving our original equipment manufacturer, or OEM, customers and end
users a low cost of ownership. We are recognized for developing the world's
first GPU, our latest generation graphics processor, which incorporates
independent hardware transform and lighting processing units along with a
complete rendering pipeline into a single-chip architecture. Our GPUs, the
GeForce 256 and NVIDIA Quadro, process over 200 billion operations per second
and increase the PC's ability to render high-definition 3D scenes in real-time.
Our GPU family provides superior processing and rendering power at competitive
prices and is architected to deliver the maximum performance from industry
standards such as Microsoft Corporation's Direct3D application programming
interface, or API, and Silicon Graphics Inc.'s, or SGI's, OpenGL API on Windows
98, Windows 2000 and Linux platforms alike. We are also developing an
integrated core logic/graphics chipset called Aladdin TNT2 through a
partnership with Acer Laboratories Inc., or ALi, one of the leading suppliers
of core logic chipsets for the PC. The Aladdin TNT2 chipset is intended to
bring NVIDIA-class industry-leading graphics performance and visual quality to
the value PC segment.
We designed our GPUs and graphics processors to enable PC OEMs and add-in
board manufacturers to build award-winning products by delivering state-of-the-
art interactive 3D graphics capability to end users while maintaining
affordable prices. We believe that a PC's interactive 3D graphics capability
represents one of the primary means by which users differentiate among various
systems. PC users today can easily differentiate the quality of graphics and
prefer personal computers that provide a superior visual experience. We believe
that by developing 3D graphics solutions that provide superior performance and
address the key requirements of the PC market, we will accelerate the adoption
of 3D graphics throughout this market. The benefits and performance of the
NVIDIA family of 3D graphics processors have received significant industry
validation and have enabled our customers to win over 400 industry awards. Our
graphics processors, GPUs and related software currently are designed into
products offered by virtually every leading branded PC OEM, including the Acer
Group, Compaq Computer Corporation, Dell Computer Corporation, eMachines, Inc.,
Gateway, Inc., Hewlett-Packard Company, International Business Machines
Corporation, Micron Technology, Inc., Packard Bell NEC, Inc. and Sony
Corporation, as well as leading contract electronics manufacturers, or CEMs,
including Celestica Hong Kong Ltd., Intel Corporation, Mitac International
Corporation, Micro-Star International Co., Ltd., SCI Systems, Inc. and
VisionTek, Inc. and leading add-in board manufacturers, including ASUSTeK
Computer Inc., Canopus Corporation, Creative Technology Ltd., ELSA AG, and
Guillemot Corporation. NVIDIA's products are distributed through a worldwide
channel that includes PC OEM, add-in card and motherboard partners in Europe,
Asia and North America. NVIDIA's products deliver leading-edge performance in
all areas of visual computing including: 3D and 2D graphics, VGA and digital
video.
1
<PAGE>
We were incorporated in California in April 1993 and reincorporated in
Delaware in April 1998. Our executive offices are located at 3535 Monroe
Street, Santa Clara, California 95051, and our telephone number is (408) 615-
2500. Our web site is located at www.nvidia.com. Information contained on our
web site should not be deemed to be part of this prospectus.
Recent Developments
On March 5, 2000, we entered into an agreement with Microsoft in which we
agreed to develop and sell graphics chips and to license certain technology to
Microsoft and its licensees for use in a product under development by
Microsoft. The agreement provides that in April 2000, Microsoft will pay us
$200 million as an advance against graphics chip purchases and for licensing
our technology. Microsoft may terminate the agreement at any time and if
termination occurs prior to offset in full of the advance payments, we would be
required to return to Microsoft up to $100 million of the prepayment and to
convert the remainder into our preferred stock at a 30% premium to the 30-day
average trading price of our common stock.
SUMMARY FINANCIAL DATA
<TABLE>
<CAPTION>
Year Ended December
31, Month Ended Year Ended Year Ended
----------------------- January 31, January 31, January 30,
1995 1996 1997 1998 1999 2000
------ ------ ------- ----------- ----------- -----------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Revenues................ $1,182 $3,912 $29,071 $13,331 $158,237 $374,505
Operating income (loss). (6,470) (2,993) (3,459) 1,499 4,516 54,412
Net income (loss)....... (6,377) (3,077) (3,589) 1,347 4,130 38,098
Diluted net income
(loss) per share....... (.56) (.27) (.28) .05 .15 1.06
Shares used in diluted
per share
computation(1)......... 11,365 11,383 12,677 26,100 27,393 36,098
Other Data:
Ratio of earnings to
fixed charges.......... -- -- -- 37x 8x 68x
<CAPTION>
December 31, January 31,
----------------------- ----------------------- January 30,
1995 1996 1997 1998 1999 2000
------ ------ ------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash
equivalents............ $3,872 $3,133 $ 6,551 $ 7,984 $ 50,257 $ 61,560
Total assets............ 6,793 5,525 25,039 30,172 113,332 202,250
Capital lease
obligations, less
current portion........ 1,137 617 1,891 1,756 1,995 962
Total stockholders'
equity................. 4,013 1,037 6,897 8,610 64,209 124,563
</TABLE>
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(1) See Note 1 to Financial Statements for an explanation of the determination
of the number of shares used in per share computations.
2
<PAGE>
THE SECURITIES WE MAY OFFER
We may offer shares of our common stock and various series of debt
securities, with a total value of up to $400 million, from time to time, under
this prospectus at prices and on terms to be determined by market conditions at
the time of offering. This prospectus provides you with a general description
of the securities we may offer. Each time we offer a type or series of
securities, we will provide a prospectus supplement that will describe the
specific amounts, prices and other important terms of the securities,
including, to the extent applicable:
. designation or classification;
. aggregate principal amount or aggregate offering price;
. maturity, if applicable;
. rates and times of payment of interest or dividends, if any;
. redemption, conversion or sinking fund terms, if any;
. voting or other rights, if any;
. conversion prices, if any; and
. important federal income tax considerations.
The prospectus supplement also may add, update or change information
contained in the prospectus or in documents we have incorporated by reference.
THIS PROSPECTUS MAY NOT BE USED TO COMPLETE ANY SALE OF SECURITIES UNLESS IT IS
ACCOMPANIED BY A PROSPECTUS SUPPLEMENT.
We may sell the securities directly to or through agents, underwriters or
dealers. We, and our agents or underwriters, reserve the right to accept or
reject all or part of any proposed purchase of securities. If we do offer
securities through agents or underwriters, we will include in the applicable
prospectus supplement:
. the names of those agents or underwriters;
. applicable fees, discounts and commissions to be paid to them; and
. the net proceeds to us.
Common Stock. We may issue shares of our common stock, from time to time.
Holders of common stock are entitled to one vote per share on all matters
submitted to a vote of stockholders, except those matters that are submitted
solely to a vote of the holders of preferred stock. Subject to any preferences
of outstanding shares of preferred stock, holders of common stock are entitled
to dividends when and if declared by the board of directors.
Debt Securities. We may offer debt securities from time to time, in one or
more series, as either senior or subordinated debt or as senior or subordinated
convertible debt. The senior debt securities will rank equally with all of our
other unsecured and unsubordinated debt. The subordinated debt securities will
be subordinate and junior in right of payment, to the extent and in the manner
described in the instrument governing the debt, to all of our senior
indebtedness. Convertible debt securities will be convertible into our common
stock. Conversion may be mandatory or at your option, and would be at
prescribed conversion rates.
The debt securities will be issued under indentures between us and Chase
Manhattan Bank and Trust Company, N.A., a national banking association. In this
prospectus, we have summarized certain general features of the debt securities.
We urge you, however, to read the prospectus supplements related to the series
of debt securities being offered, as well as the complete indentures, which
contain the terms of the debt securities. The indentures have been filed as
exhibits to the registration statement of which this prospectus is a part or
will be incorporated by reference from reports we file with the SEC.
3
<PAGE>
RISK FACTORS
You should carefully consider and evaluate all of the information in this
prospectus, including the risk factors listed below. Any of these risks could
materially and adversely affect our business, financial condition and results
of operations, which in turn could materially and adversely affect the price
of the debt securities and the common stock. The prospectus supplement
applicable to each type or series of securities also will contain a discussion
of risks applicable to an investment in our company and to the particular
types of securities that we are offering under that supplement. Prior to
making a decision about investing in our securities, you should carefully
consider the specific factors discussed under the caption "Risk Factors" in
both the prospectus and the applicable prospectus supplement, together with
all of the other information contained in this prospectus and the prospectus
supplement or appearing or incorporated by reference in the registration
statement of which this prospectus is a part.
Keep these risk factors in mind when you read "forward-looking" statements
elsewhere in this prospectus and in the applicable prospectus supplements and
in the documents incorporated by reference. Such statements relate to our
expectations about future events and time periods. Generally, the words
"anticipate," "expect," "intend" and similar expressions identify forward-
looking statements. Forward-looking statements involve risks and
uncertainties, and future events and circumstances could differ significantly
from those anticipated in the forward-looking statements.
Our operating results are unpredictable and may fluctuate.
Many of our revenue components fluctuate and are difficult to predict, and
our operating expenses are largely independent of revenue in any particular
period. It is therefore difficult for us to accurately forecast revenue and
profits or losses. We believe that our quarterly and annual results of
operations will be affected by a variety of factors that could adversely
affect our revenue, gross profit and results of operations.
Factors that have affected our results of operations in the past, and could
affect our results of operations in the future, include the following:
. demand and market acceptance for our products and/or our customers'
products;
. the successful development and volume production of next-generation
products;
. new product announcements or product introductions by our competitors;
. our ability to introduce new products in accordance with OEM design
requirements and design cycles;
. changes in the timing of product orders due to unexpected delays in the
introduction of our customers' products;
. fluctuations in the availability of manufacturing capacity or
manufacturing yields;
. competitive pressures resulting in lower than expected average selling
prices;
. rates of return in excess of those forecasted or expected;
. the rescheduling or cancellation of customer orders;
. the loss of a key customer or the termination of a strategic
relationship;
. seasonal fluctuations associated with the PC market;
. substantial disruption in our suppliers' operations, either as a result
of a natural disaster, equipment failure or other cause;
. supply constraints for and changes in the cost of the other components
incorporated into our customers' products, including memory devices;
4
<PAGE>
. our ability to reduce the manufacturing costs of our products;
. legal and other costs related to intellectual property matters;
. unexpected inventory write-downs; and
. introductions of enabling technologies to keep pace with faster
generations of processors and controllers.
Any one or more of the factors discussed above could prevent us from
achieving our expected future revenue or net income.
Because most operating expenses are relatively fixed in the short term, we
may be unable to adjust spending sufficiently in a timely manner to compensate
for any unexpected sales shortfall. We may be required to reduce prices in
response to competition or to pursue new market opportunities. If new
competitors, technological advances by existing competitors or other
competitive factors require us to invest significantly greater resources than
anticipated in research and development or sales and marketing efforts, our
business could suffer. Accordingly, we believe that period-to-period
comparisons of our results of operations should not be relied upon as an
indication of future performance. In addition, the results of any quarterly
period are not indicative of results to be expected for a full fiscal year.
Our 3D graphics solution may not continue to be accepted by the PC market.
Our success will depend in part upon continued broad adoption of our 3D
graphics processors for high performance 3D graphics in PC applications. The
market for 3D graphics processors has been characterized by unpredictable and
sometimes rapid shifts in the popularity of products, often caused by the
publication of competitive industry benchmark results, changes in dynamic
random memory devices pricing and other changes in the total system cost of
add-in boards, as well as by severe price competition and by frequent new
technology and product introductions. Only a small number of products have
achieved broad market acceptance and such market acceptance, if achieved, is
difficult to sustain due to intense competition. Since we have no other
product line, our business would suffer if for any reason our current or
future 3D graphics processors do not continue to achieve widespread acceptance
in the PC market. If we are unable to complete the timely development of or
successfully and cost-effectively manufacture and deliver products that meet
the requirements of the PC market, our business would be harmed.
Our integrated graphics product may not be accepted by the PC market.
We expect that integrated graphics chipset products will become an
increasing part of the lower cost segment of the PC graphics market. We have
only recently introduced a 3D graphics processor targeted at this segment. If
this product is not competitive in this segment and the integrated chipset
segment continues to account for an increasing percentage of the units sold in
the PC market, our business may suffer.
We need to develop new products and to manage product transitions in order
to succeed.
Our business will depend to a significant extent on our ability to
successfully develop new products for the 3D graphics market. Our add-in board
manufacturers and major OEM customers typically introduce new system
configurations as often as twice per year, typically based on spring and fall
design cycles. Accordingly, our existing products must have competitive
performance levels or we must timely introduce new products with such
performance characteristics in order to be included in new system
configurations. This requires that we do the following:
. anticipate the features and functionality that consumers will demand;
. incorporate those features and functionality into products that meet the
exacting design requirements of PC OEMs and add-in board manufacturers
or CEMs;
5
<PAGE>
. price our products competitively; and
. introduce the products to the market within the limited window for PC
OEM and add-in board manufacturer.
As a result, we believe that significant expenditures for research and
development will continue to be required in the future. The success of new
product introductions will depend on several factors, including the following:
. proper new product definition;
. timely completion and introduction of new product designs;
. the ability of Taiwan Semiconductor Manufacturing Co., or TSMC, our
primary manufacturer, WaferTech, a joint venture controlled by TSMC, and
any additional third-party manufacturers to effectively manufacture our
new products;
. the quality of any new products;
. differentiation of new products from those of our competitors; and
. market acceptance of our and our customers' products.
Our strategy is to utilize the most advanced process technology appropriate
for our products and available from commercial third-party foundries. Use of
advanced processes has in the past resulted in initial yield problems. New
products that we introduce may not incorporate the features and functionality
demanded by PC OEMs, add-in board manufacturers and consumers of 3D graphics.
In addition, we may not successfully develop or introduce new products in
sufficient volumes within the appropriate time to meet both the PC OEMs'
design cycles and market demand. We have in the past experienced delays in the
development of some new products. Our failure to successfully develop,
introduce or achieve market acceptance for new 3D graphics products would harm
our business.
Our failure to identify new product opportunities or to develop new products
may result in production delays.
As markets for our 3D graphics processors develop and competition increases,
we anticipate that product life cycles at the high end will remain short and
average selling prices, or ASPs, will continue to decline. In particular, we
expect ASPs and gross margins for our 3D graphics processors to decline as
each product matures and as unit volume increases. As a result, we will need
to introduce new products and enhancements to existing products to maintain
overall ASPs and gross margins. In order for our 3D graphics processors to
achieve high volumes, leading PC OEMs and add-in board manufacturers must
select our 3D graphics processor for design into their products, and then
successfully complete the designs of their products and sell them. We may be
unable to successfully identify new product opportunities or to develop and
bring to market in a timely fashion any new products. In addition, we cannot
guarantee that any new products we develop will be selected for design into
PC OEMs' and add-in board manufacturers' products, that any new designs will
be successfully completed or that any new products will be sold. As the
complexity of our products and the manufacturing process for products
increases, there is an increasing risk that we will experience problems with
the performance of products and that there will be delays in the development,
introduction or volume shipment of our products. We may experience
difficulties related to the production of current or future products or other
factors may delay the introduction or volume sale of new products we
developed. In addition, we may be unable to successfully manage the production
transition risks with respect to future products. Failure to achieve any of
the foregoing with respect to future products or product enhancements could
result in rapidly declining ASPs, reduced margins, and reduced demand for
products or loss of market share. In addition, technologies developed by
others may render our 3D graphics products non-competitive or obsolete or
result in our holding excess inventory, either of which would harm our
business.
6
<PAGE>
We rely on third-party vendors to supply us tools for the development of
our new products and we may be unable to obtain the tools necessary to develop
these products.
In the design and development of new products and product enhancements, we
rely on third-party software development tools. While we currently are not
dependent on any one vendor for the supply of these tools, some or all of
these tools may not be readily available in the future. For example, we have
experienced delays in the introduction of products in the past as a result of
the inability of then available software development tools to fully simulate
the complex features and functionalities of our products. The design
requirements necessary to meet consumer demands for more features and greater
functionality from 3D graphics products in the future may exceed the
capabilities of the software development tools available to us. If the
software development tools we use become unavailable or fail to produce
designs that meet consumer demands, our business could suffer.
Our industry is characterized by vigorous protection and pursuit of
intellectual property rights or positions that could result in substantial
costs to us.
The semiconductor industry is characterized by vigorous protection and
pursuit of intellectual property rights or positions, which has resulted in
protracted and expensive litigation. The 3D graphics market in particular has
been characterized recently by the aggressive pursuit of intellectual property
positions, and we expect our competitors to continue to pursue aggressive
intellectual property positions. In addition, from time to time we receive
notices alleging that we have infringed patents or other intellectual property
rights owned by third parties. We expect that, as the number of issued
hardware and software patents increases, and as competition in our markets
intensifies, the volume of intellectual property infringement claims will
increase. If infringement claims are made against us, we may seek licenses
under the claimant's patents or other intellectual property rights. However,
licenses may not be offered at all or on terms acceptable to us. The failure
to obtain a license from a third party for technology used by us could cause
us to incur substantial liabilities and to suspend the manufacture of
products. Furthermore, we may initiate claims or litigation against third
parties for infringement of our proprietary rights or to establish the
validity of our proprietary rights. We have agreed to indemnify certain
customers for claims of infringement arising out of sale of our products.
Litigation by or against us or our customers concerning infringement would
likely result in significant expense to us and divert the efforts of our
technical and management personnel, whether or not the litigation results in a
favorable determination for us.
We are subject to a patent infringement lawsuit that could divert our
resources and result in the payment of substantial damages.
On September 21, 1998, 3Dfx Interactive, Inc. filed a patent infringement
suit against us in the United States District Court for the Northern District
of California alleging infringement of a 3Dfx patent. On March 2, 1999, 3Dfx
added a second patent to the suit and on May 24, 1999, 3Dfx added a third
patent to the suit. The amended complaint alleges that our RIVA TNT, RIVA TNT2
and RIVA TNT2 Ultra products infringe the patents in suit and seeks
unspecified compensatory and trebled damages and attorney's fees. Our current
generation of products is not identified as infringing any of the patents in
suit. We have filed an answer and counter-claims asserting that the patents in
suit are invalid and not infringed. These assertions are supported by our
investigations to date and an opinion from our patent counsel in this suit. We
anticipate that the trial date will be set by the District Court after it
rules on claims construction issues. We have and will continue to defend
vigorously this suit. The litigation with 3Dfx has resulted, and we expect
that the 3Dfx litigation will continue to result, in significant legal
expenses, whether or not the litigation results in a favorable determination
for us. In the event of an adverse result in the 3Dfx suit, we might be
required to do one or more of the following:
. pay substantial damages (including treble damages);
. permanently cease the manufacture and sale of any of the infringing
products;
. expend significant resources to develop non-infringing products; or
. obtain a license from 3Dfx for infringing products.
We have in the past been subject to patent infringement suits with SGI and
S3 Incorporated, both of which were settled and resulted in cross-licenses
and, in the case of SGI, payments by us.
7
<PAGE>
We may be unable to adequately protect our intellectual property.
We rely primarily on a combination of patents, trademarks, copyrights, trade
secrets, employee and third-party nondisclosure agreements and licensing
arrangements to protect our intellectual property. We own 28 issued United
States patents, have 4 United States patent applications allowed, 25 United
States patent applications pending and have 15 United States patent
applications being drafted for filing. Our issued patents have expiration
dates from April 14, 2015 to March 30, 2018. Our issued patents and pending
patent applications relate to technology developed by us in connection with
the development of our 3D graphics processors. Our pending patent applications
and any future applications may not be approved. In addition, any issued
patents may not provide us with competitive advantages or may be challenged by
third parties. The enforcement of patents of others may harm our ability to
conduct our business. Others may independently develop substantially
equivalent intellectual property or otherwise gain access to our trade secrets
or intellectual property, or disclose our intellectual property or trade
secrets. Our failure to effectively protect our intellectual property could
harm our business. We have licensed technology from third parties for
incorporation in our graphics processors, and expect to continue to enter into
license agreements for future products. These licenses may result in royalty
payments to third parties, the cross-license of technology by us or payment of
other consideration. If these arrangements are not concluded on commercially
reasonable terms, our business could suffer.
Our failure to achieve one or more design wins would harm our business.
Our future success will depend in large part on achieving design wins, which
entails having our existing and future products chosen as the 3D graphics
processors for hardware components or subassemblies designed by PC OEMs and
motherboard and add-in board manufacturers. Our add-in board manufacturers and
major OEM customers typically introduce new system configurations as often as
twice per year, generally based on spring and fall design cycles. Accordingly,
our existing products must have competitive performance levels or we must
timely introduce new products with such performance characteristics in order
to be included in new system configurations. Our failure to achieve one or
more design wins would harm our business. The process of being qualified for
inclusion in a PC OEM's product can be lengthy and could cause us to miss a
cycle in the demand of end users for a particular product feature, which also
could harm our business.
Our ability to achieve design wins also depends in part on our ability to
identify and ensure compliance with evolving industry standards. Unanticipated
changes in industry standards could render our products incompatible with
products developed by major hardware manufacturers and software developers,
including Intel and Microsoft. This would require us to invest significant
time and resources to redesign our products to ensure compliance with relevant
standards. If our products are not in compliance with prevailing industry
standards for a significant period of time, our ability to achieve design wins
could suffer.
We are dependent on the PC market, which may not continue to grow.
In fiscal 2000, we derived all of our revenue from the sale of products for
use in PCs. We expect to continue to derive substantially all of our revenue
from the sale or license of products for use in PCs in the next several years.
The PC market is characterized by rapidly changing technology, evolving
industry standards, frequent new product introductions and significant price
competition. These factors result in short product life cycles and regular
reductions of ASPs over the life of a specific product. Although the PC market
has grown substantially in recent years, this growth may not continue. A
reduction in sales of PCs, or a reduction in the growth rate of PC sales,
would likely reduce demand for our products. Moreover, changes in demand could
be large and sudden. Since PC manufacturers often build inventories during
periods of anticipated growth, they may be left with excess inventories if
growth slows or if they have incorrectly forecast product transitions. In
these cases, PC manufacturers may abruptly suspend substantially all purchases
of additional inventory from suppliers like us until the excess inventory has
been absorbed. Any reduction in the demand for PCs generally, or for a
particular product that incorporates our 3D graphic processors, could harm our
business.
8
<PAGE>
The acceptance of next generation products in business PC 3D graphics may
not continue to develop.
Our success will depend in part upon the demand for performance 3D graphics
for business PC applications. The market for performance 3D graphics on
business PCs has only recently begun to emerge and is dependent on the future
development of, and substantial end-user and OEM demand for, 3D graphics
functionality. As a result, the market for business PC 3D graphics computing
may not continue to develop or may not grow at a rate sufficient to support
our business. The development of the market for performance 3D graphics on
business PCs will in turn depend on the development and availability of a
large number of business PC software applications that support or take
advantage of performance 3D graphics capabilities. Currently there are only a
limited number of software applications like this, most of which are games,
and a broader base of software applications may not develop in the near term
or at all. Consequently, a broad market for full function performance 3D
graphics on business PCs may not develop. Our business prospects will suffer
if the market for business PC 3D graphics fails to develop or develops more
slowly than expected.
We are dependent on a small number of customers and we are subject to order
and shipment uncertainties.
We have only a limited number of customers and our sales are highly
concentrated. We primarily sell our products to add-in board and motherboard
manufacturers and CEMs, which incorporate graphics products in the boards they
sell to PC OEMs. Sales to add-in board manufacturers and CEMs are primarily
dependent on achieving design wins with leading PC OEMs. We believe that a
substantial portion of our revenue in fiscal 2000 was attributable to products
that ultimately were incorporated into PCs sold by Compaq, Dell, Gateway, HP,
IBM and Micron. The number of add-in board manufacturers and CEMs and leading
PC OEMs is limited. We expect that a small number of add-in board
manufacturers and CEMs directly, and a small number of PC OEMs indirectly,
will continue to account for a substantial portion of our revenue for the
foreseeable future. As a result, our business could be harmed by the loss of
business from PC OEMs or add-in board manufacturers and CEMs. In addition,
revenue from add-in board manufacturers, motherboard manufacturers, CEMs and
PC OEMs that have directly or indirectly accounted for significant revenue in
past periods, individually or as a group, may not continue, or may not reach
or exceed historical levels in any future period. In October 1999, S3, a
supplier of graphics processors and a competitor, completed the acquisition of
Diamond Multimedia Systems, Inc., one of our largest customers. In the fourth
quarter of fiscal 2000, following the consummation of the acquisition, our
sales to Diamond declined significantly to only 3% of total revenue from 24%
of total revenue in the second quarter of fiscal 2000. 3Dfx, a 3D graphics
company and a competitor, completed the acquisition of STB Systems, Inc. in
May 1999. Sales to STB, another one of our largest customers, declined
significantly from prior levels following the acquisition and our relationship
with STB terminated in the fourth quarter of fiscal 2000.
We may be unable to manage our growth and, as a result, may be unable to
successfully implement our strategy.
Our rapid growth has placed, and is expected to continue to place, a
significant strain on our managerial, operational and financial resources. As
of January 30, 2000, we had 392 employees as compared to 248 employees as of
January 31, 1999. We expect that the number of our employees will increase
substantially over the next 12 months. Our future growth, if any, will depend
on our ability to continue to implement and improve operational, financial and
management information and control systems on a timely basis, as well as our
ability to maintain effective cost controls. Further, we will be required to
manage multiple relationships with various customers and other third parties.
Our systems, procedures or controls may not be adequate to support our
operations and our management may be unable to achieve the rapid execution
necessary to successfully implement our strategy.
We are dependent on key personnel and the loss of these employees could harm
our business.
Our performance will be substantially dependent on the performance of our
executive officers and key employees. None of our officers or employees is
bound by an employment agreement, and our relationships with
9
<PAGE>
these officers and employees are, therefore, at will. We do not have "key
person" life insurance policies on any of our employees. The loss of the
services of any of our executive officers, technical personnel or other key
employees, particularly Jen-Hsun Huang, our President and Chief Executive
Officer, would harm our business. Our success will depend on our ability to
identify, hire, train and retain highly qualified technical and managerial
personnel. Our failure to attract and retain the necessary technical and
managerial personnel would harm our business.
We depend on third-party fabrications to produce our products.
We do not manufacture the semiconductor wafers used for our products and do
not own or operate a wafer fabrication facility. Our products require wafers
manufactured with state-of-the-art fabrication equipment and techniques. We
utilize TSMC and WaferTech to produce our semiconductor wafers and utilize
independent contractors to perform assembly, test and packaging. We depend on
these suppliers to allocate to us a portion of their manufacturing capacity
sufficient to meet our needs, to produce products of acceptable quality and at
acceptable manufacturing yields, and to deliver those products to us on a
timely basis. These manufacturers may be unable to meet our near-term or long-
term manufacturing requirements. We obtain manufacturing services on a
purchase order basis and TSMC has no obligation to provide us with any
specified minimum quantities of product. TSMC fabricates wafers for other
companies, including certain of our competitors, and could choose to
prioritize capacity for other users or reduce or eliminate deliveries to us on
short notice. Because the lead time needed to establish a strategic
relationship with a new manufacturing partner could be several quarters, there
is no readily available alternative source of supply for any specific product.
We believe that long-term market acceptance for our products will depend on
reliable relationships with TSMC and any other manufacturers used by us to
ensure adequate product supply to respond to customer demand.
In September 1999, the earthquake in Taiwan contributed to a temporary
shortage of graphics processors in the third and fourth quarters of fiscal
2000. Any substantial disruption in our suppliers' operations, either as a
result of a natural disaster, equipment failure or other cause, could harm our
business.
We are dependent primarily on TSMC and we expect in the future to continue
to be dependent upon third-party manufacturers to do the following:
. produce wafers of acceptable quality and with acceptable manufacturing
yields;
. deliver those wafers to us and our independent assembly and testing
subcontractors on a timely basis; and;
. allocate to us a portion of their manufacturing capacity sufficient to
meet our needs.
Our wafer requirements represent a significant portion of the total
production capacity of TSMC. Although our products are designed using TSMC's
process design rules, TSMC may be unable to achieve or maintain acceptable
yields or deliver sufficient quantities of wafers on a timely basis or at an
acceptable cost. Additionally, TSMC may not continue to devote resources to
the production of our products, or to advance the process design technologies
on which the manufacturing of our products are based. Any difficulties like
these would harm our business.
Failure to achieve expected manufacturing yields would reduce our product
supply and harm our business.
Semiconductor manufacturing yields are a function both of product design,
which is developed largely by us, and process technology, which typically is
proprietary to the manufacturer. Since low yields may result from either
design or process technology failures, yield problems may not be effectively
determined or resolved until an actual product exists that can be analyzed and
tested to identify process sensitivities relating to the design rules that are
used. As a result, yield problems may not be identified until well into the
production process, and resolution of yield problems would require cooperation
by and communication between us and the manufacturer.
10
<PAGE>
The risk of low yields is compounded by the offshore location of most of our
manufacturers, increasing the effort and time required to identify,
communicate and resolve manufacturing yield problems. Because of our
potentially limited access to wafer fabrication capacity from our
manufacturers, any decrease in manufacturing yields could result in an
increase in our per unit costs and force us to allocate our available product
supply among our customers. This could potentially harm customer relationships
as well as revenue and gross profit. Our wafer manufacturers may be unable to
achieve or maintain acceptable manufacturing yields in the future. Our
inability to achieve planned yields from our wafer manufacturers could harm
our business. We also face the risk of product recalls or product returns
resulting from design or manufacturing defects that are not discovered during
the manufacturing and testing process. In the event of a significant number of
product returns due to a defect or recall, our business could suffer.
Failure to transition to new manufacturing process technologies could affect
our ability to compete effectively.
Our strategy is to utilize the most advanced process technology appropriate
for our products and available from commercial third-party foundries. Use of
advanced processes may have greater risk of initial yield problems.
Manufacturing process technologies are subject to rapid change and require
significant expenditures for research and development. We continuously
evaluate the benefits of migrating to smaller geometry process technologies in
order to improve performance and reduce costs. We have migrated to the .22
micron technology with the RIVA TNT2 and GeForce families of graphics
processors, and we believe that the transition of our products to increasingly
smaller geometries will be important to our competitive position. Other
companies in the industry have experienced difficulty in migrating to new
manufacturing processes and, consequently, have suffered reduced yields,
delays in product deliveries and increased expense levels. We may experience
similar difficulties and the corresponding negative effects. Moreover, we are
dependent on our relationships with our third-party manufacturers to migrate
to smaller geometry processes successfully. We may be unable to migrate to new
manufacturing process technologies successfully or on a timely basis.
The 3D graphics industry is highly competitive and we may be unable to
compete.
The market for 3D graphics processors for PCs in which we compete is
intensely competitive and is characterized by rapid technological change,
evolving industry standards and declining ASPs. We believe that the principal
competitive factors in this market are performance, breadth of product
offerings, access to customers and distribution channels, backward-forward
software support, conformity to industry standard APIs, manufacturing
capabilities, price of graphics processors and total system costs of add-in
boards and motherboards. We expect competition to increase both from existing
competitors and new market entrants with products that may be less costly than
our 3D graphics processors or may provide better performance or additional
features not provided by our products. We may be unable to compete
successfully in the emerging PC graphics market.
Our primary source of competition is from companies that provide or intend
to provide 3D graphics solutions for the PC market. Our competitors include
the following:
. suppliers of graphics add-in boards that utilize their internally
developed graphics chips, such as ATI Technologies Inc., Matrox
Electronics Systems Ltd. and S3;
. suppliers of integrated core logic chipsets that incorporate 2D and 3D
graphics functionality as part of their existing solutions, such as
Intel, Silicon Integrated Systems and Via Technologies;
. companies that have traditionally focused on the professional market and
provide high end 3D solutions for PCs and workstations, including 3Dlabs
Inc., Ltd., SGI, Evans and Sutherland Computer Corporation and
Intergraph Corporation; and
. companies with strength in the video game market, such as 3Dfx and
VideoLogic Group plc.
11
<PAGE>
We may compete with Intel in the integrated low-cost chipset market.
In June 1999, Intel began shipping the Intel 810, a 3D graphics chipset that
is targeted at the low-cost PC market. Intel has significantly greater
resources than we do, and our products may not compete effectively against
future products introduced by Intel. In addition, we may be unable to compete
effectively against Intel or Intel may introduce additional products that are
competitive with our products in either performance or price or both. We
expect Intel to continue to do the following:
. invest heavily in research and development and new manufacturing
facilities;
. maintain its position as the largest manufacturer of PC microprocessors
and one of the largest manufacturers of motherboards;
. increasingly dominate the PC platform; and
. promote its product offerings through advertising campaigns designed to
engender brand loyalty among PC users.
Intel may in the future develop graphics add-in cards or graphics-enabled
motherboards that could directly compete with graphics add-in cards or
graphics-enabled motherboards that our customers may develop. In addition, due
to the widespread industry acceptance of Intel's microprocessor architecture
and interface architecture, including its AGP, and Intel's intellectual
property position with respect to such architecture, Intel exercises
significant influence over the PC industry generally. Any significant
modifications by Intel to the AGP, the microprocessor or core logic components
or other aspects of the PC microprocessor architecture could result in
incompatibility with our technology, which would harm our business. In
addition, any delay in the public release of information relating to
modifications like this could harm our business.
We are dependent on third parties for assembly and testing of our products.
Our graphics processors are assembled and tested by Amkor Technology Inc.,
Siliconware Precision Industries Company Ltd., ChipPAC Incorporated and ASE.
We do not have long-term agreements with any of these subcontractors. As a
result of our dependence on third-party subcontractors for assembly and
testing of our products, we do not directly control product delivery schedules
or product quality. Any product shortages or quality assurance problems could
increase the costs of manufacture, assembly or testing of our products and
could harm our business. Due to the amount of time typically required to
qualify assemblers and testers, we could experience significant delays in the
shipment of our products if we are required to find alternative third parties
to assemble or test our products or components. Any delays in delivery of our
products could harm our business.
We are subject to risks associated with product defects and
incompatibilities.
Products as complex as those offered by us may contain defects or failures
when introduced or when new versions or enhancements to existing products are
released. We have in the past discovered software defects and
incompatibilities with customers' hardware in certain of our products and may
experience delays or lost revenue to correct any new defects in the future.
Errors in new products or releases after commencement of commercial shipments
could result in loss of market share or failure to achieve market acceptance.
Our products typically go through only one verification cycle prior to
beginning volume production and distribution. As a result, our products may
contain defects or flaws that are undetected prior to volume production and
distribution. The widespread production and distribution of defective products
could harm our business.
We are subject to risks associated with international operations.
Our reliance on foreign third-party manufacturing, assembly and testing
operations subjects us to a number of risks associated with conducting
business outside of the United States, including the following:
. unexpected changes in, or impositions of, legislative or regulatory
requirements;
12
<PAGE>
. delays resulting from difficulty in obtaining export licenses for
certain technology, tariffs, quotas and other trade barriers and
restrictions;
. longer payment cycles;
. potentially adverse taxes;
. the burdens of complying with a variety of foreign laws; and
. other factors beyond our control.
We also are subject to general political risks in connection with our
international trade relationships. In addition, the laws of certain foreign
countries in which our products are or may be manufactured or sold, including
various countries in Asia, may not protect our products or intellectual
property rights to the same extent as do the laws of the United States. This
makes the possibility of piracy of our technology and products more likely.
Currently, all of our arrangements with third-party manufacturers provide for
pricing and payment in U.S. dollars, and to date we have not engaged in any
currency hedging activities, although we may do so in the future. Fluctuations
in currency exchange rates could harm our business in the future.
The semiconductor industry is cyclical in nature.
The semiconductor industry historically has been characterized by the
following factors:
. rapid technological change;
. cyclical market patterns;
. significant ASP erosion;
. fluctuating inventory levels;
. alternating periods of overcapacity and capacity constraints; and
. variations in manufacturing costs and yields and significant
expenditures for capital equipment and product development.
In addition, the industry has experienced significant economic downturns at
various times, characterized by diminished product demand and accelerated
erosion of ASPs. We may experience substantial period-to-period fluctuations
in results of operations due to general semiconductor industry conditions.
Failure in implementation of our enterprise resource planning system could
adversely affect our operations.
In December 1999, we began the implementation of an SAP A.G. system as our
enterprise resource planning, or ERP, system to replace our information
systems in business, finance, operations and service. The implementation is
expected to occur in phases throughout fiscal 2001. We are heavily dependent
upon the proper functioning of our internal systems to conduct our business.
There is no assurance that we will be successful in the implementation of our
ERP system. Delays in the implementation, system failure or malfunctioning may
result in disruptions of operations and inability to process transactions. Our
results of operations and financial position could be adversely affected if we
encounter unforeseen problems with respect to this implementation.
13
<PAGE>
FORWARD-LOOKING INFORMATION
This prospectus contains forward-looking statements, within the meaning of
Section 27A of the Securities Act of 1933 and Section 21E of the Securities
Exchange Act of 1934, that are based on our current expectations about our
company and our industry. We use words such as "expect," "anticipate,"
"estimate," "believe," "intend," "plan" and other similar expressions to
identify some forward-looking statements, but not all forward-looking
statements include these words. All our forward-looking statements involve
risks and uncertainties. Our actual results may differ significantly from our
expectations and from the results expressed in or implied by these forward-
looking statements. The section captioned "Item 7A. Quantitative and
Qualitative Disclosures about Market Risk" that appears in our annual report
on Form 10-K, for the year ended January 31, 2000, as well as the section
captioned "Risk Factors" in this prospectus and that will appear in prospectus
supplements accompanying this prospectus describe some, but not necessarily
all, of the factors that could cause these differences. We urge you to read
those sections carefully. Except as may be required by law, we undertake no
obligation to publicly update any forward-looking statements for any reason,
even if new information becomes available or other events occur in the future.
RATIO OF EARNINGS TO FIXED CHARGES
Our earnings were insufficient to cover fixed charges in each of the years
in the three-year period ended December 31, 1997. Additional earnings of $6.4
million, $3.1 million and $3.6 million were necessary to provide a 1:1
coverage ratio for December 31, 1995, 1996 and 1997, respectively. For the
purpose of these calculations, "earnings" consist of income before taxes, plus
fixed charges, and "fixed charges" consist of interest expense incurred and
the portion of rental expense deemed by us to be representative of the
interest factor of rental payments under leases.
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, Month Ended -----------------------
-------------------- January 31, January 31, January 30,
1995 1996 1997 1998 1999 2000
------ ------ ------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Ratio of earnings to
fixed charges.......... -- -- -- 37x 8x 68x
</TABLE>
14
<PAGE>
USE OF PROCEEDS
Unless otherwise described in a prospectus supplement, the net proceeds from
the offering of the securities will be used to fund our anticipated growth,
including anticipated increases in inventory and accounts receivable; for
potential acquisitions; for costs associated with our expected move to new
facilities; and for general working capital.
COMMON STOCK PRICE RANGE
Our common stock is traded on the Nasdaq National Market under the symbol
NVDA. Public trading of our stock began on January 22, 1999. Prior to that,
there was no public market for our stock. We have never paid cash dividends on
our capital stock and do not anticipate paying cash dividends for the
foreseeable future. As of January 30, 2000, we had approximately 351
stockholders of record, not including those shares held in street or nominee
name.
The following table sets forth for the periods indicated the high and low
sales price for the common stock as quoted on the Nasdaq National Market:
<TABLE>
<CAPTION>
High Low
------ ------
<S> <C> <C>
Year ended January 31, 1999
Fourth Quarter (beginning January 22, 1999)...................... $23.44 $18.63
Year ended January 30, 2000
First Quarter.................................................... 26.25 16.00
Second Quarter................................................... 23.13 16.38
Third Quarter.................................................... 28.38 16.75
Fourth Quarter................................................... 48.25 21.75
Year ended January 28, 2001
First Quarter (through March 28, 2000)........................... 148.44 35.00
</TABLE>
On March 28, 2000, the last reported bid price of our common stock on the
Nasdaq National Market was $79.88 per share.
DIVIDEND POLICY
We have never paid any cash dividends on our common stock and do not expect
to pay cash dividends for the foreseeable future.
15
<PAGE>
SELECTED FINANCIAL DATA
The following selected financial data should be read in conjunction with our
financial statements and the notes thereto, and with Item 7, "Management's
Discussion and Analysis of Financial Condition and Results of Operations." The
statement of operations data for the years ended December 31, 1997, the one
month ended January 31, 1998, the year ended January 31, 1999 and the year
ended January 30, 2000 and the balance sheet data as of December 31, 1997,
January 31, 1998 and 1999 and January 30, 2000 have been derived from and
should be read in conjunction with our audited financial statements and the
notes included thereto. The statement of operations data for the years ended
December 31, 1995 and 1996 are derived from audited financial statements and
the notes thereto not included. The balance sheet data as of December 31, 1995
and 1996 are derived from audited financial statements and the notes thereto
not included.
<TABLE>
<CAPTION>
Year Ended December 31, Month Ended Year Ended Year Ended
------------------------- January 31, January 31, January 30,
1995 1996 1997 1998 1999 2000
------- ------- ------- ----------- ----------- -----------
(In thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C>
Statement of Operations
Data:
Revenue:
Product................ $ 1,103 $ 3,710 $27,280 $11,420 $151,413 $374,505
Royalty................ 79 202 1,791 1,911 6,824 --
------- ------- ------- ------- -------- --------
Total revenue......... 1,182 3,912 29,071 13,331 158,237 374,505
Cost of revenue......... 1,549 3,038 21,244 10,071 109,746 235,575
------- ------- ------- ------- -------- --------
Gross profit (loss)..... (367) 874 7,827 3,260 48,491 138,930
Operating expenses:
Research and
development........... 2,426 1,218 7,103 1,121 25,073 47,439
Sales, general and
administrative........ 3,677 2,649 4,183 640 18,902 37,079
------- ------- ------- ------- -------- --------
Total operating
expenses............. 6,103 3,867 11,286 1,761 43,975 84,518
------- ------- ------- ------- -------- --------
Operating income
(loss)............... (6,470) (2,993) (3,459) 1,499 4,516 54,412
Interest and other
income (expense), net.. 93 (84) (130) (18) (29) 1,754
------- ------- ------- ------- -------- --------
Income (loss) before
income tax expense..... (6,377) (3,077) (3,589) 1,481 4,487 56,166
Income tax expense...... -- -- -- 134 357 18,068
------- ------- ------- ------- -------- --------
Net income (loss)..... $(6,377) $(3,077) $(3,589) $ 1,347 $ 4,130 $ 38,098
======= ======= ======= ======= ======== ========
Basic net income (loss)
per share.............. $ (.56) $ (.27) $ (.28) $ .10 $ .28 $ 1.28
Diluted net income
(loss) per share....... $ (.56) $ (.27) $ (.28) $ .05 $ .15 $ 1.06
Shares used in basic per
share computation...... 11,365 11,383 12,677 14,141 14,565 29,872
Shares used in diluted
per share
computation(1)......... 11,365 11,383 12,677 26,100 27,393 36,098
<CAPTION>
December 31, January 31,
------------------------- ----------------------- January 30,
1995 1996 1997 1998 1999 2000
------- ------- ------- ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Balance Sheet Data:
Cash and cash
equivalents............ $ 3,872 $ 3,133 $ 6,551 $ 7,984 $ 50,257 $ 61,560
Total assets............ 6,793 5,525 25,039 30,172 113,332 202,250
Capital lease
obligations, less
current portion........ 1,137 617 1,891 1,756 1,995 962
Total stockholders'
equity................. 4,013 1,037 6,897 8,610 64,209 124,563
</TABLE>
- --------
(1) See Note 1 of Notes to Financial Statements for an explanation of the
determination of the number of shares used in per share computations.
16
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
The following discussion and analysis should be read in conjunction with our
financial statements and notes thereto. Our fiscal years ended on December 31
from 1993 to 1997. Effective January 31, 1998, we changed our fiscal year-end
financial reporting period to a 52- or 53- week year ending on the last Sunday
in January. We elected not to restate the previous reporting periods ending
December 31. As a result, the first and fourth quarters of fiscal 1999 (year
ended January 31, 1999) are 12- and 14-week periods, respectively, with the
remaining quarters being 13-week periods. All four quarters of fiscal 2000
(year ended January 30, 2000) are 13-week periods.
Overview
We design, develop and market a "top-to-bottom" family of award-winning 3D
graphics processors, GPUs and related software that set the standard for
performance, quality and features for every type of desktop PC user, from
professional workstations to low-cost PCs. In the first quarter of fiscal
2000, we began commercial shipment of the RIVA TNT2 family of graphics
processors. During the third quarter, we launched the NVIDIA GeForce 256 and
NVIDIA Quadro, the industry's first GPUs, which are the first products to
incorporate transform and lighting into a single chip. The GeForce 256 and
Quadro GPUs are graphics processors capable of building a new generation of e-
commerce, e-business, education and entertainment applications. We expect that
a significant portion of our revenue for the foreseeable future will be
derived from the sale of our 3D graphics processors in the PC market. We
recognize product sales revenue upon shipment, net of appropriate allowances.
Our policy on sales to distributors is to defer recognition of sales and
related gross profit until the distributors resell the product. Royalty
revenue is generally recognized upon shipment of product to the licensee's
customers. Currently, all of our product sales and our arrangements with
third-party manufacturers provide for pricing and payment in U.S. dollars. We
have not engaged in any foreign currency hedging activities, although we may
do so in the future. Since we have no other product line, our business would
suffer if for any reason our graphics processors do not achieve widespread
acceptance in the PC market.
A majority of our sales have been to a limited number of customers and sales
are highly concentrated. We sell graphics processors to add-in board and
motherboard manufacturers, primarily ASUSTeK, Canopus, Creative, ELSA and
Guillemot and CEMs, including Celestica, Intel, Mitac, MSI, SCI and VisionTek.
These manufacturers incorporate our processors in the boards they sell to PC
OEMs, retail outlets and systems integrators. The ASPs for our products, as
well as our customers' products, vary by distribution channel. Our four
largest customers accounted for approximately 57% of revenues for fiscal 2000.
Sales to Creative accounted for 17%, sales to Edom Technology Co., Ltd., an
Asian distributor, accounted for 15%, sales to Diamond accounted for 15%, and
sales to ASUSTeK accounted for 10% of our total revenue for fiscal 2000. Sales
to STB accounted for 35%, sales to Diamond accounted for 27%, sales to
Creative accounted for 13% and sales to Intel accounted for 12% of our total
revenue for fiscal 1999. The number of potential customers for our products is
limited, and we expect sales to be concentrated to a few major customers for
the foreseeable future. In October 1999, S3, a supplier of graphics processors
and a competitor, completed the acquisition of Diamond. Our sales to Diamond
declined significantly to only 3% of total revenue in the fourth quarter of
fiscal 2000 from 24% of total revenue in the second quarter of fiscal 2000 and
Diamond is no longer one of our significant customers. 3Dfx, a 3D graphics
company and a competitor, completed the acquisition of STB in May 1999. Sales
to STB declined significantly from prior levels following the merger and our
relationship terminated in the fourth quarter of fiscal 2000. Currently, the
loss of business from Diamond and STB did not have a material impact on our
revenues and profitability due to our ability to expand product sales to other
customers.
As markets for our 3D graphics processors develop and competition increases,
we anticipate that product life cycles in the high end will remain short and
ASPs will continue to decline. In particular, ASPs and gross margins are
expected to decline as each product matures. Our add-in board manufacturers
and major OEM customers typically introduce new system configurations as often
as twice per year for the high end, typically
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<PAGE>
based on spring and fall design cycles. Accordingly, our existing products
must have competitive performance levels in order to be included in new system
configurations, or we must timely introduce new products with such performance
characteristics at costs and in sufficient volumes to maintain overall average
selling prices and gross margins. Failure to achieve necessary costs and
volume shipments with respect to future products or product enhancements could
result in rapidly declining ASPs, reduced margins, reduced demand for products
or loss of market share.
We currently utilize TSMC and WaferTech to produce semiconductor wafers, and
utilize independent contractors to perform assembly, test and packaging. We
depend on these suppliers to allocate to us a portion of their manufacturing
capacity sufficient to meet our needs, to produce products of acceptable
quality and at acceptable manufacturing yields, and to deliver those products
to us on a timely basis. These manufacturers may not always be able to meet
our near-term or long-term manufacturing requirements. Yields or product
performance could suffer due to difficulties associated with adapting our
technology and product design to the proprietary process technology and design
rules of a new manufacturer. The level of finished goods inventory we maintain
may fluctuate and therefore a manufacturing disruption experienced by these
manufacturers would impact the production of our products, which could harm
our business. In addition, as the complexity of our products and the
accompanying manufacturing process increases, there is an increasing risk that
we will experience problems with the performance of new products and that
there will be yield problems or other delays in the development or
introduction of these products.
Substantially all of our sales are made on the basis of purchase orders
rather than long-term agreements. As a result, we may commit resources to the
production of products without having received advance purchase commitments
from customers. Any inability to sell products to which we have devoted
significant resources could harm our business. In addition, cancellation or
deferral of product orders could result in our holding excess inventory, which
could adversely affect our profit margins and restrict our ability to fund
operations. Product returns or delays or difficulties in collecting accounts
receivable could result in significant charges against income, which could
harm our business.
Results of Operations
The following table sets forth, for the periods indicated, certain items in
our statements of operations expressed as a percentage of total revenue.
<TABLE>
<CAPTION>
Year Ended Month Ended Year Ended Year Ended
December 31, January 31, January 31, January 30,
1997 1998 1999 2000
------------ ------------ ----------- -----------
<S> <C> <C> <C> <C>
Revenue:
Product.................... 93.8% 85.7 % 95.7% 100.0%
Royalty.................... 6.2 14.3 4.3 --
----- ----- ----- -----
Total revenue............ 100.0 100.0 100.0 100.0
Cost of revenue.............. 73.1 75.5 69.4 62.9
----- ----- ----- -----
Gross profit................. 26.9 24.5 30.6 37.1
Operating expenses:
Research and development... 24.4 8.4 15.8 12.7
Sales, general and
administrative............ 14.4 4.8 12.0 9.9
----- ----- ----- -----
Total operating
expenses................ 38.8 13.2 27.8 22.6
----- ----- ----- -----
Operating income (loss).. (11.9) 11.3 2.8 14.5
Interest and other income
(expense), net.............. (0.4) (0.1) -- 0.5
----- ----- ----- -----
Income (loss) before income
tax expense................. (12.3) 11.2 2.8 15.0
Income tax expense........... -- 1.0 0.2 4.8
----- ----- ----- -----
Net income (loss)........ (12.3)% 10.2 % 2.6% 10.2%
===== ===== ===== =====
</TABLE>
18
<PAGE>
Calendar Year Ended December 31, 1997 and Fiscal Years Ended January 31,
1999 and January 30, 2000
Revenue
Product Revenue. Product revenue was $27.3 million in 1997, $151.4 million
in fiscal 1999 and $374.5 million in fiscal 2000. Product revenues increased
by 455% from 1997 to fiscal 1999 and by 147% from fiscal 1999 to 2000. The
growth in both periods was primarily the result of increased sales of our
graphics processors and the strong demand for new products at higher unit
ASPs. Revenue derived from the bundling of DDR memories with a portion of our
new GeForce 256 GPU totaled $22.1 million in the second half of fiscal 2000.
Revenue from sales outside of the U.S. accounted for 72% and 24% of total
revenue for fiscal 2000 and 1999, respectively. Our international revenue
increased 623% to $270.9 million in fiscal 2000 from $37.4 million a year ago.
This increase in revenue from sales outside of the U.S. is primarily
attributable to (i) the geographic limitation of the worldwide license
agreement with ST Microelectronics, Inc. with respect to sales of the RIVA 128
and RIVA 128ZX graphics processors, which agreement did not restrict the sales
of the RIVA TNT, RIVA TNT2 and GeForce families of processors in fiscal 2000,
(ii) increased demand for our products in the Asia Pacific and European
regions, and (iii) expanded use of CEMs and add-in board manufacturers located
outside the US. Revenues by geographical region are allocated to individual
countries based on the location to which the products are initially shipped.
The portion of revenue derived from foreign CEMs and add-in board
manufacturers that are attributable to end customers in the U.S is not
separately disclosed. Substantially all of our revenue from product sales in
1997 was derived from sales in the U.S. Although we achieved substantial
growth in product revenue from fiscal 1999 to 2000, we do not expect to
sustain this rate of growth in future periods. In addition, we expect that the
ASPs of our products will decline over the lives of the products. The declines
in ASPs of 3D graphics processors generally may also accelerate as the market
develops and competition increases.
Royalty Revenue. ST has a worldwide license to sell the RIVA 128 and RIVA
128ZX graphics processors. Royalty revenue from sales by ST of the RIVA 128
graphics processor and a derivative of the RIVA 128ZX graphics processor
decreased to zero in fiscal 2000 due primarily to reduced sales of such
products and disputes with ST regarding payment. Royalty revenue from sales by
ST of the RIVA128 graphics processor represented approximately 6% of our total
revenue in 1997, and royalty revenue from sales by ST of the RIVA128 graphics
processor and a derivative of the RIVA128ZX graphics processor represented 4%
of our total revenue in fiscal 1999. We do not expect to record or receive
royalty revenue from ST in the future.
Gross Profit
Gross profit consists of total revenue net of allowances less cost of
revenue. Cost of revenue consists primarily of the costs of semiconductors
purchased from contract manufacturers (including assembly, test and
packaging), manufacturing support costs (labor and overhead associated with
such purchases), inventory provisions and shipping costs. Our gross profit
margin in any period varies depending on the mix of types of graphics
processors sold. Gross profit increased 187% from fiscal 1999 to 2000,
primarily due to significant increases in unit shipments and the favorable
impact of the higher margin RIVA TNT2 and GeForce graphics processors,
partially offset by declining profit margins in our older product families.
From 1997 to fiscal 1999, gross profit grew by 520% primarily due to the sales
of the higher margin RIVA TNT graphics processor and reductions to costs of
the RIVA128 graphics processor. Excluding royalty revenue, gross margin on
product revenue was 22% in 1997, 28% in fiscal 1999 and 37% in fiscal 2000. In
the second half of fiscal 2000, the inclusion of the DDR memories has reduced
the gross margin percentage but has no incremental impact on absolute margin
dollars as they are sold at cost. We expect to continue bundling DDR memories
with some of our high-performance products for at least the next six months.
Although we achieved substantial growth in gross profit and gross profit
margin from fiscal 1999 to 2000, we do not expect to sustain these rates of
growth in future periods.
Operating Expenses
Research and Development. Research and development expenses consist of
salaries and benefits, cost of development tools and software, costs of
prototypes of new products and consultant costs. Research and
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<PAGE>
development expenses increased by 89% from fiscal 1999 to 2000 and by 253%
from 1997 to 1999, primarily due to additional personnel and related
engineering costs to support our next generation products, such as
depreciation charges incurred on capital expenditures and software license and
maintenance fees. We anticipate that we will continue to devote substantial
resources to research and development, and we expect these expenses to
increase in absolute dollars in the foreseeable future. Research and
development expenses are likely to fluctuate from time to time to the extent
we make periodic incremental investments in research and development and our
level of revenue fluctuates.
As part of a strategic collaboration agreement with ST, we received contract
funding in support of research and development and marketing efforts for the
RIVA 128 and RIVA 128ZX graphics processors. Accordingly, we recorded
approximately $2.3 million and $2.3 million in 1997 and fiscal 1999,
respectively, as a reduction primarily to research and development, and to a
lesser extent, sales, general and administrative expenses. We were obligated
to provide continued development and support to ST through the end of calendar
1998.
Sales, General and Administrative. Sales, general and administrative
expenses consist primarily of salaries, commissions and bonuses earned by
sales, marketing and administrative personnel, promotional and advertising
expenses, travel and entertainment expenses and legal and accounting expenses.
Sales, general and administrative expenses increased 96% from fiscal 1999 to
2000, primarily due to additional personnel and commissions and bonuses on
sales of the RIVA TNT2 and GeForce 256 graphics processors, legal expenses
associated with patent litigation and costs of being a public company. From
1997 to fiscal 1999, sales, general and administrative expenses grew 352%,
primarily due to increased promotional expenses, additional personnel and
commissions and bonuses on sales of the RIVA128 and RIVA TNT graphics
processors. We expect sales and marketing expenses to continue to increase in
absolute dollars as we expand sales and marketing efforts and increase
promotional activities. While we expect sales, general and administrative
expenses to continue to increase in absolute dollars as we expand our
operations, we do not expect significant changes in these expenses as a
percentage of revenue in future periods.
Interest and Other Income (Expense), Net
Interest income primarily consists of interest earned on cash and cash
equivalents. Interest expense primarily consists of interest incurred as a
result of capital lease obligations, and in fiscal 1999, in part, to interest
on borrowings under our line of credit agreement. Interest expense remained
unchanged and interest and other income increased $1.8 million from fiscal
1999 to 2000 due to higher average cash balances as a result of cash proceeds
received from the initial public offering of our common stock in January 1999.
For fiscal 1999 compared to 1997, interest expense was essentially unchanged,
and interest and other income increased slightly by $0.1 million.
Income Taxes
We recorded no income taxes in 1997. The income taxes for the one month
ended January 31, 1998, consisted entirely of current federal tax expense.
Income taxes for the year ended January 31, 1999 of $357,000 consisted of
$583,000 current federal tax expense and $226,000 deferred federal tax
benefit. We had an effective tax rate of 32% in fiscal 2000. We anticipate our
income tax rates for fiscal 2001 to be relatively constant, depending on the
income tax attributable to foreign operations and availability of research and
experimentation credits. See Note 5 of Notes to Financial Statements.
Stock-Based Compensation
With respect to stock options granted to employees, we recorded deferred
compensation of $4.3 million in 1997 and $361,000 in the one month ended
January 31, 1998. These amounts are being amortized over the vesting period of
the individual options, generally four years. We amortized approximately
$961,000 in 1997, $2.5 million in fiscal 1999 and $662,000 in fiscal 2000. We
anticipate total amortization of approximately $113,000 in fiscal 2001. See
Note 3 of Notes to Financial Statements.
20
<PAGE>
Quarterly Results of Operations
Selected quarterly financial data included in this table has been derived
from the internal quarterly financial reports for the periods shown. Effective
January 31, 1998, we changed our fiscal year-end financial reporting period to
a 52- or 53-week year ending on the last Sunday in January. We elected not to
restate our previous reporting periods ending December 31. Fiscal quarters for
fiscal 1999 ended April 26, 1998, July 26, 1998, October 25, 1998 and January
31, 1999. Fiscal quarters for fiscal 2000 ended on May 2, 1999, August 1,
1999, October 31, 1999 and January 30, 2000. This quarterly information is
unaudited, but has been prepared on the same basis as the audited annual
financial statements, and in the opinion of our management includes all
adjustments, consisting only of normal recurring adjustments, necessary for a
fair presentation of the information for the periods presented. The unaudited
quarterly information should be read in conjunction with our audited financial
statements and the notes thereto included elsewhere herein. The growth in
revenue and improvement in results of operations experienced by us in recent
quarters are not necessarily indicative of future results. In addition, in
light of our significant growth in recent quarters, we believe that period-to-
period comparisons of our financial results should not be relied upon as an
indication of future performance.
<TABLE>
<CAPTION>
Quarters Ended
------------------------------------------------------------------
April July Oct. Jan. Oct.
26, 26, 25, 31, May 2, Aug. 1, 31, Jan. 30,
1998 1998 1998 1999 1999 1999 1999 2000
------- ------- ------- ------- ------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Revenue................. $28,263 $12,134 $52,303 $65,537 $71,018 $78,017 $97,015 $128,455
Cost of revenue......... 20,873 12,961 33,566 42,346 45,946 49,625 60,195 79,809
------- ------- ------- ------- ------- ------- ------- --------
Gross profit (loss)..... 7,390 (827) 18,737 23,191 25,072 28,392 36,820 48,646
Net income (loss)....... (1,021) (9,652) 7,141 7,662 6,261 6,686 10,564 14,587
Basic net income (loss)
per share.............. $ (.07) $ (.68) $ .50 $ .48 $ .21 $ .23 $ .35 $ .47
Diluted net income
(loss) per share....... $ (.07) $ (.68) $ .26 $ .27 $ .18 $ .19 $ .29 $ .39
</TABLE>
Seasonality
Our quarterly operating results vary significantly depending on factors such
as the timing of new product introductions, adequacy of component supply,
changes in component costs, variations in our product mix, seasonal promotions
by us and our customers and competitive pricing pressures. Because the timing
of these factors may vary, the results of any particular quarter may not be
indicative of results for the entire year or any future period. In addition,
the PC market generally experiences weaker sales during the summer months.
Liquidity and Capital Resources
As of January 30, 2000, we had $61.6 million in cash and cash equivalents,
an increase of $11.3 million over the same balance at the end of fiscal 1999.
We historically have held our cash balances in cash equivalents such as money
market funds or as cash. We place the money market funds with high-quality
financial institutions and limit the amount of exposure with any one financial
institution. We had $124.6 million of noncancelable manufacturing commitments
outstanding at January 30, 2000. See Note 4 of Notes to Financial Statements.
In July 1999, we entered into an amended loan and security agreement with a
bank, which included a $10.0 million revolving loan agreement with a borrowing
base equal to 80% of eligible accounts. Borrowings under the line of credit
bear interest at the prime rate and are due in July 2000. Covenants governing
the loan agreement require the maintenance of certain financial ratios. As of
January 30, 2000, we had no outstanding borrowings against the line of credit.
Operating activities generated cash of $15.9 million during fiscal 2000 and
used cash of $1.9 million and $1.2 million, during fiscal 1999 and 1997,
respectively. The increase from fiscal 1999 to 2000 was due to a substantial
increase in net income, offset by changes in operating assets and liabilities.
Our accounts receivable
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<PAGE>
are highly concentrated. At January 30, 2000, the four largest customers
accounted for approximately 37% of accounts receivable. Although we have not
experienced any significant bad debt write-offs to date, we may be required to
write off bad debt in the future, which could harm our business. In June 1999,
we repurchased 428,572 shares of our common stock from a major customer in
settlement for a portion of then outstanding accounts receivable in the amount
of $7.5 million.
To date, our investing activities have consisted primarily of purchases of
property and equipment. Our capital expenditures, including capital leases,
increased from $5.8 million in 1997 to $10.1 million in fiscal 1999, and to
$22.9 million in fiscal 2000. The increase from fiscal 1999 to 2000 was
primarily attributable to a $10.0 million obligation pursuant to a long-term
licensing agreement with a supplier. For fiscal 1999 compared to 1997, the
increase was primarily due to additional capital leases and purchases of
computer equipment, including workstations and servers to support increased
research and development activities. We expect capital expenditures to
increase as we further expand research and development initiatives and as our
employee base grows. The timing and amount of future capital expenditures will
depend primarily on our future growth. We expect to spend approximately $30.0
million for capital expenditures in fiscal 2001, primarily for software
licenses, emulation equipment, purchase of computer and engineering
workstations, and enterprise resource planning system implementation.
Financing activities provided cash of $7.0 million during fiscal 2000,
compared to $52.0 million and $7.3 million during fiscal 1999 and 1997,
respectively, due primarily to proceeds of $37.5 million from the initial
public offering of 3.5 million shares of common stock in January 1999 and
$11.0 million in subordinated non-interest bearing notes issued in July and
August 1998. In March 1999, we used $5.0 million to repay in full amounts
outstanding under a bank line of credit.
On March 5, 2000, we entered into an agreement with Microsoft in which we
agreed to develop and sell graphics chips and to license certain technology to
Microsoft and its licensees for use in a product under development by
Microsoft. The agreement provides that in April 2000, Microsoft will pay us
$200 million as an advance against graphics chip purchases and for licensing
our technology. Microsoft may terminate the agreement at any time and if
termination occurs prior to offset in full of the advance payments, we would
be required to return to Microsoft up to $100 million of the prepayment and to
convert the remainder into preferred stock of NVIDIA at a 30% premium to the
30-day average trading price of our common stock.
We believe that our existing cash balances, anticipated cash flows from
operations and existing credit facilities, will be sufficient to meet our
operating and capital requirements for at least the next 12 months. However,
there is no assurance that we will not need to raise additional equity or debt
financing within this time frame. Additional financing may not be available on
favorable terms or at all and may be dilutive to our then-current
stockholders. We also may require additional capital for other purposes not
presently contemplated. If we are unable to obtain sufficient capital, we
could be required to curtail capital equipment purchases or research and
development expenditures, which could harm our business.
Year 2000 Compliance
The Year 2000 issue is the result of computer programs written using two
digits rather than four to define the applicable year. Computer programs that
have date-sensitive software like this may recognize a date using "00" as the
year 1900 rather than the year 2000. This could result in a system failure or
miscalculations causing disruptions of operations, including among other
things, a temporary inability to process transactions, send invoices or engage
in similar normal business activities.
Through the first two months of the year 2000, our operations were fully
functioning and we have not experienced any significant issues associated with
the Year 2000 problem. At our offices worldwide, we have not experienced any
significant Year 2000-related issue that would affect our ability to ship,
sell or service our products and our customers have not reported any
consequential Year 2000 incidents. While we are encouraged by the success of
our Year 2000 efforts and that of our customers and partners, we will continue
to offer Year 2000 support to customers and monitor our own operations.
22
<PAGE>
BUSINESS
Overview
We design, develop and market a "top-to-bottom" family of award-winning 3D
graphics processors, GPUs and related software that set the standard for
performance, quality and features for every type of desktop PC user, from
professional workstations to low-cost PCs. Our 3D graphics processors are used
in a wide variety of applications, including games, the Internet and
industrial design. Our graphics processors were the first to incorporate a
128-bit multi-texturing graphics architecture designed to deliver to users of
our products a highly immersive, interactive 3D experience with compelling
visual quality, realistic imagery and motion, stunning effects, and complex
object and scene interaction at real-time frame rates. The NVIDIA TNT2, TNT2
M64 and Vanta graphics processors deliver high performance 3D and 2D graphics
at an affordable price, making them the graphics hardware of choice for a wide
range of applications for both consumer and commercial use. Our graphics
processors are designed to be architecturally compatible backward and forward,
giving our OEM customers and end users a low cost of ownership. We are
recognized for developing the world's first GPU, our latest generation
graphics processor, which incorporates independent hardware transform and
lighting processing units along with a complete rendering pipeline into a
single-chip architecture. Our GPUs, the GeForce 256 and NVIDIA Quadro, process
over 200 billion operations per second and increase the PC's ability to render
high-definition 3D scenes in real-time. Our GPU family provides superior
processing and rendering power at competitive prices and is architected to
deliver the maximum performance from industry standards such as Microsoft's
Direct3D API and SGI's OpenGL API on Windows 98, Windows 2000 and Linux
platforms alike. We are also developing an integrated core logic/graphics
chipset called Aladdin TNT2 through a partnership with ALi, one of the leading
suppliers of core logic chipsets for the PC. The Aladdin TNT2 chipset is
intended to bring NVIDIA-class graphics performance and quality to the value
PC segment.
Our products currently are designed into products offered by virtually every
leading branded PC OEM, such as Acer, Compaq, Dell, eMachines, Gateway, HP,
IBM, Micron, Packard Bell NEC and Sony, as well as leading CEMs, including
Celestica, Intel, Mitac, MSI, SCI and VisionTek, and leading add-in board
manufacturers, including ASUSTek, Canopus, Creative, ELSA and Guillemot. The
benefits and performance of the NVIDIA family of 3D graphics processors have
received significant industry validation and have enabled our customers to win
over 400 industry awards, including PC Magazine's "Editor's Choice" award,
Edge Magazine's "Hardware Innovation of the Year" and MicroDesign Research's
"1999 Analyst's Choice for Best 3D Processor," all of which were for products
incorporating the GeForce processor.
Industry Background
Interactive 3D graphics technology is emerging as one of the significant new
computing developments since the introduction of the graphical user interface.
3D graphics is a powerful digital medium that enables the communication and
visualization of the simplest information to the most complex, whether it is
professional applications like CAD/CAM and digital content creation,
commercial applications like financial analysis and business-to-business
collaboration or simply surfing the internet or playing games. The visually
engaging and interactive nature of 3D graphics responds to consumers' demands
for a convincing simulation of reality beyond what is possible with
traditional 2D graphics. The fundamental interactive capability of 3D graphics
is expected to make it the visual portal to a digitally connected world.
Interactive 3D graphics is required across various computing and
entertainment platforms, such as workstations, consumer and commercial desktop
PCs, internet appliances, hand held devices and home gaming consoles.
Continuing advancements in semiconductor manufacturing have made available
more powerful and affordable microprocessors and 3D graphics processors, both
of which are essential to deliver interactive 3D graphics to the PC market.
Additionally, the industry has broadly adopted Microsoft's Direct3D API and
SGI's OpenGL API, which serve as a common and standard language between
software applications and 3D graphics processors, allowing the development of
numerous 3D games, which has, in turn, increased strong consumer demand.
We believe that a PC's interactive 3D graphics capability represents one of
the primary means by which users differentiate among various systems. PC users
today can easily differentiate the quality of graphics and
23
<PAGE>
prefer personal computers that provide a superior visual experience. These
factors have dramatically increased demand for 3D graphics processors. Mercury
Research estimates that 3D graphics will be standard in every PC unit shipped
by 2001. Mercury Research also estimates that 126.8 million 3D graphics
processors were sold worldwide in 1999 and 275.8 million will be sold
worldwide in 2004.
The technology required to create interactive and visually engaging 3D
graphics is algorithmically complex and computationally intensive. To deliver
high quality interactive 3D graphics, advanced 3D GPUs require millions of
transistors to process billions of arithmetic operations per second. Current
3D GPUs, like the GeForce 256, are over 100 times more complex than 2D
accelerators and comparable to the complexity of Intel Pentium(R) III
microprocessors. Yet despite these ongoing advances, PC 3D graphics available
today cannot deliver in real time the quality of graphics seen in digitally-
created films like "Toy Story 2." 3D graphics like those required over 1,400
powerful workstations to render 122,699 movie frames, each of which required
10 minutes to 3 days to complete. For PCs to provide this level of 3D graphics
capability, the performance of 3D graphics processors will need to be improved
by several more orders of magnitude, with the ultimate goal being to achieve
"real world" graphics performance even beyond that seen in "Toy Story 2."
We believe that a substantial market opportunity exists for providers of
performance 3D graphics processors for the PC market, particularly as
performance 3D graphics have become an increasingly important requirement and
point of differentiation for PC OEMs. Consumer PC users demand a compelling
visual experience and compatibility with existing and next-generation 3D
graphics applications at an affordable price. Application developers require
high-performance, standards-based 3D architectures with broad market
penetration. Since graphics is a key point of differentiation, PC OEMs
continually seek to incorporate leading-edge cost-effective 3D graphics
solutions to build award-winning products. We believe that providers of
interactive 3D graphics solutions will compete based on their ability to
leverage their technology expertise to simultaneously meet the needs of end
users, application developers and OEMs.
Our Solution
We designed our GPU's and graphics processors to enable PC OEMs and add-in
board manufacturers to build award-winning products by delivering state-of-
the-art interactive 3D graphics capability to end users while maintaining
affordable prices. We believe that a PC's interactive 3D graphics capability
represents one of the primary means by which users differentiate among various
systems. PC users today can easily differentiate the quality of graphics and
prefer personal computers that provide a superior visual experience. We
believe that by developing 3D graphics solutions that provide superior
performance and address the key requirements of the PC market, we will
accelerate the adoption of 3D graphics throughout this market. We combine
scalable architectural technology with mass market economies-of-scale to
deliver a complete family of products that span workstations to low-cost value
PCs.
The key features and benefits of our solution are as follows:
Advanced Scalable Single-Chip Graphics Architectures. In each of the past
three years, we have introduced a graphics processor that has subsequently
defined the 3D graphics standard widely adopted by the PC industry. In 1997,
we delivered the industry's first 128-bit graphics processor with the RIVA
128. In 1998, we introduced the industry's first dual pixel pipeline with the
RIVA TNT. In 1999, we introduced the world's first GPU by integrating
transform and lighting into the graphics processor with the GeForce 256. Each
of these generations then serves as a foundation for an architecturally
compatible family that is designed to offer additional products focused on
either enhanced performance and features or lower cost.
High-Performance, Forward-Backward Compatible Software Drivers. NVIDIA
graphics processors include an extensive set of reference drivers that
translate between the software API and hardware. The software driver is
designed to maximize performance of the graphics processor and to maintain
compatibility with each successive generation of our products. The software
drivers have the flexibility to be continually enhanced in order to further
improve the performance of the processors. We believe that the high
performance of our graphics processors provides a competitive advantage to our
OEM customers, enabling them to differentiate their systems from those of
other PC vendors.
24
<PAGE>
We are the only graphics vendor that offers a family of graphics processors
that are binary software compatible, enabling both forward and backward
compatibility and a top-to-bottom product family. This is achieved through an
innovative graphics architecture that virtualizes the software interface
allowing us to innovate below API. This compatibility provides OEMs and end
users with a great degree of flexibility.
Feature-Optimized, Standards-Based. The NVIDIA family of graphics processors
are architected to take full advantage of industry standards such as
Microsoft's Direct3D and SGI's OpenGL. By working closely with Microsoft and
SGI, our family of graphics processors provide the most feature complete,
performance optimized drivers from one generation to the next. The standards-
compliant design of our graphics processors provides OEMs maximum flexibility
in the design and use of the systems. In particular, we believe that our focus
on the industry standard API's positions us well in the PC market as these
standards proliferate and support more advanced 3D visuals. Direct3D and
OpenGL have gained broad developer support, with numerous 3D titles currently
using those APIs.
Our Strategy
Our objective is to ultimately be the leading supplier of performance
graphics processors for PCs, laptops, Internet appliances, handhelds and any
future computing device with a display. Our current focus is on the PC market
and we plan to expand into other segments. Our strategy to achieve this
objective includes the following key elements:
Build Award-Winning, Architecturally-Compatible 3D Graphics Product Families
for the PC Market. Our strategy is to achieve market share leadership in the
PC market by providing award-winning performance at every price point. By
developing 3D graphics solutions that provide superior performance and address
the key requirements of the PC market, we believe that we will accelerate the
adoption of 3D graphics throughout the PC market. As part of our strategy to
broadly address the PC market, we have closely aligned our product development
with Direct3D and OpenGL, which we believe maximizes third-party software
support.
Target Leading OEMs. Our strategy is to enable our leading OEM customers to
differentiate their products in a highly competitive marketplace by using our
3D graphics processors. We believe that design wins with these industry
leaders provide market validation of our products, increase brand awareness
and enhance our ability to penetrate additional leading customer accounts. In
addition, we believe that close relationships with OEMs will allow us to
better anticipate and address customer needs with our future generations of
products. Our products currently are designed into products offered by
virtually every leading branded PC OEM, such as Acer, Compaq, Dell, eMachines,
Gateway, HP, IBM, Micron, Packard Bell NEC and Sony.
Sustain Technology and Roadmap Leadership in 3D Graphics. We are focused on
leveraging our advanced engineering capabilities to accelerate the quality and
performance of 3D graphics in PCs. A fundamental aspect of our strategy is to
actively recruit the best 3D graphics engineers in the industry, and we
believe that we have assembled an exceptionally experienced and talented
engineering team. The number of our employees engaged in research and
development activities increased to 214 at January 30, 2000 from 117 at
January 31, 1999. Our research and development strategy is to focus on
concurrently developing multiple generations of graphics processors using
independent design teams. We have in the past and intend to continue to
leverage this advantage to achieve new levels of graphics features and
performance, enabling our customers to achieve award-winning performance in
their products.
Increase Market Share. We believe that substantial market share will be
important to achieving success in the 3D graphics business. We intend to
achieve a leading share of the market by devoting substantial resources
towards building award-winning families of products for a wide range of
applications.
25
<PAGE>
NVIDIA Architecture, Products and Products Under Development
3D Graphics Processing Architecture
3D graphics processors create two-dimensional images, which can be displayed
on computer monitors or other output devices, from computer specifications of
three-dimensional objects or "models." These two-dimensional images are
typically the perspective view of the objects from an eye-point that changes
with time, and as such are computationally very intensive. The 3D effect
arises from a variety of visual cues, such as perspective, occlusion, surface
shading, shadows, focus and motion. Convincing realism arises from precise
calculation of these and other effects, and these calculations require
dedicated processors, which provide far more power and bandwidth than
microprocessors can deliver.
The 3D graphics process is a series of specialized steps, often referred to
as the 3D graphics pipeline. Typically, the microprocessor chooses an eye-
point and decides which objects should be displayed. These are commonly
communicated to the graphics subsystem via a software interface, such as
Microsoft's Direct3D or SGI's OpenGL. The processing itself occurs in several
steps, as depicted and described below:
<TABLE>
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Model (right Transform and (right Polygon Setup (right Rasterization (right Display
arrow) Lighting arrow) arrow) arrow)
</TABLE>
Model. The model typically is expressed as a set of polygons, such as
triangles, that form the basic shape of a three-dimensional object and have
attributes such as position and color at each vertex.
Transform and Lighting. In the transform and lighting step, the original
position and orientation of the polygons are transformed to their new position
on the screen. Based on their position and orientation, some aspects of their
surface color and lighting can be computed. The 3D visual cues of perspective
and motion are handled during this stage. These calculations require very high
floating-point computation power and are performed either by the host
microprocessor or on a higher performance GPU. Lighting occurs after transform
and provides high visual impact. Lighting effects enhance the realism of a
scene and bring rendered images one step closer to a "real world" perception.
Polygon Setup. Polygon setup calculates the slopes of the polygon sides and
various other derivatives that greatly accelerate the rasterization process.
Although early graphics devices performed these calculations in the host
microprocessor, today's 3D graphics processor perform these calculations,
permitting significantly higher performance.
Rasterization. Rasterization computes the color and other information for
every pixel (dot on the screen) that a transformed polygon touches. A number
of complex algorithms compute the color uniquely for each pixel, as well as
perform the remaining visual cues, such as shading, shadows, focus and
occlusion. This is the most computationally intensive step of the graphics
pipeline and the processors are required to perform up to 1,000 calculations
per pixel, with this number increasing rapidly.
Display. Display consists of sequentially reading out the color of each
pixel at a rate matched to the monitor. Unlike the other stages in the 3D
graphics pipeline, which are purely digital, the signals to the monitor are
analog, and the frequencies are far higher.
The complexity of the different steps in the 3D graphics pipeline requires
billions of floating-point and integer operations in real time to deliver a
realistic and interactive experience. Image quality determines whether 3D
computer representation looks realistic, and 3D performance determines whether
a 3D system conveys a sense of fluid motion in real time. If the performance
is below a certain threshold, a 3D system can in fact reduce the productivity
or the enjoyment of the user, even if the image quality is high. The challenge
with high-quality 3D is to deliver the processing power required to perform
these computations without creating bottlenecks in the 3D graphics pipeline.
26
<PAGE>
Current Products
<TABLE>
<CAPTION>
Key
Architectural Performance Commercial
Product Desktop Segment End User Features Metrics Ship Date
------- --------------- -------- ------------- ----------- ----------
<C> <C> <S> <C> <C> <C>
NVIDIA Enthusiast Home users seeking Hardware 15 million August
GeForce Performance the best graphics transform and triangles per 1999
256 GPU performance and lighting second and
quality for digital engines, 480 million
multimedia and multi- pixels per
entertainment texturing second
applications. rendering
pipelines
designed to
deliver the
maximum
performance
for Direct3D
and OpenGL
applications.
NVIDIA Workstation Professionals 100% 17 million September
Quadro seeking high- hardware- triangles per 1999
GPU precision real-time accelerated second and
3D performance for OpenGL 540 million
CAD/CAM, digital transform and pixels per
content creation, lighting second
scientific analysis engines.
and life sciences
applications.
NVIDIA Mainstream Home and corporate 128-bit dual- 350 million April 1999
TNT2 users seeking pixel pixels per
performance and rendering second
features for pipeline for
business stunning
productivity and multi-textured
management. effects.
NVIDIA Value Home and corporate Low-cost 64- 286 million July 1999
TNT2 users seeking the bit memory pixels per
M64 optimal combination interface and second
of performance and package
features at an delivers good
affordable price. performance
and excellent
quality at a
lower cost.
NVIDIA Low-Cost Home and corporate Low-cost 64- 250 million July 1999
Vanta users seeking a bit memory pixels per
low-cost solution. interface and second
package
delivers good
performance
and excellent
quality at low
cost.
</TABLE>
NVIDIA GeForce 256 GPU
We began commercial shipment of the NVIDIA GeForce 256 GPU in August 1999.
The NVIDIA GeForce 256 is designed for the PC enthusiast and performance
markets, and is our fifth-generation graphics processor.
The world's first GPU, GeForce 256 was the first to incorporate hardware
transform and lighting engines along with four-pixel per clock rendering
pipelines in a single chip. Fabricated on a .22 micron process technology, the
23 million transistors GeForce 256 delivers a significant increase in geometry
processing power and delivers superior performance for interactive content.
The GeForce 256 supports up to 64 megabytes of single data rate, or SDR, or
double data rate, or DDR, frame buffer memory. Increased memory results in a
higher performance solution and the ability to run at very high color depths
and resolution for outstanding quality. Other key performance features include
support for a higher bandwidth connection between the processor and the
graphics processor called accelerated graphics port 4X with fast write
capability. This feature is now standardized on motherboard solutions from
Intel and others.
The GeForce 256 GPU also provides support for digital flat panel displays,
DVD playback and HDTV support, the latest display technology for consumers and
businesses. Additional support for extremely high resolution (and refresh
rate) monitors is also included in the GeForce 256 GPU via a 350 MHz RAMDAC.
The GeForce 256 achieves high performance through a high frequency,
QuadEngine/QuadPipe architecture.
27
<PAGE>
NVIDIA Quadro Workstation GPU
We began commercial shipment of the NVIDIA Quadro workstation GPU in
September 1999. The NVIDIA Quadro is designed for the professional
workstation, digital content creation and CAD/CAM markets. The Quadro GPU
integrates our QuadEngine/QuadPipe architecture for optimized transform and
lighting functions, critical for real-time visualization.
The Quadro is capable of processing over 200 billion operations per second,
delivering up to 17 million triangles per second and a peak texture fill rate
of 540 million pixels per second. Critical for supporting traditional
computer-aided design applications, the NVIDIA Quadro provides support for
anti-aliased points and lines and two-sided lighting as well as native support
for the OpenGL 3D API. The Quadro supports up to 128 megabytes of SDR or DDR
frame buffer memory.
NVIDIA TNT2 Graphics Processor
We began commercial shipment of the NVIDIA TNT2 graphics processor in April
1999. The NVIDIA TNT2 is designed for the mainstream PC market. The TNT2
features our fourth-generation, 128-bit multi-texturing 3D architecture. The
TNT2 extends the performance and function of the original RIVA TNT graphics
processor for PC OEMs and graphics card manufacturers. Fabricated on a .22
micron process technology, the TNT2 graphics processor delivers the highest
performance in its class through high frequency clock rates for the 3D
processor and memory. The TNT2 supports 32 megabytes of frame buffer memory.
NVIDIA TNT2 M64 and Vanta Graphics Processors
NVIDIA TNT2 M64 and Vanta graphics processors are designed for the value and
low-cost consumer and commercial desktop PC markets. Based on the award-
winning NVIDIA TNT2 architecture, these processors offer low-cost, highly
integrated choices for entry-level add-in card and motherboard solutions. The
TNT2 M64 and Vanta are manufactured on a .22 micron process technology and
offer good quality and performance at an affordable price. The TNT2 M64 and
Vanta support up to 32 and 16 megabytes of frame buffer memory, respectively.
Future Product and Projects
Aladdin TNT2 Integrated Chipset
The Aladdin TNT2 is a joint development with ALi. It combines the award
winning TNT2 core with ALi's M1631 North Bridge. This chipset is expected to
be sold with an ALi M1535D South Bridge and to bring NVIDIA graphics
performance and quality to the fast growing value PC segment. This chipset is
expected to reduce overall system cost without compromising graphics
performance. ALi will be responsible for the sale of this product. To our
knowledge, a commercial shipment date for this product has not yet been
announced.
Microsoft Product
On March 5, 2000, we entered into an agreement with Microsoft in which we
agreed to develop and sell graphics chips and to license certain technology to
Microsoft and its licensees for use in a product under development by
Microsoft. The agreement provides that in April 2000, Microsoft will pay us
$200 million as an advance against graphics chip purchases and for licensing
our technology. Microsoft may terminate the agreement at any time and if
termination occurs prior to offset in full of the advance payments, we would
be required to return to Microsoft up to $100 million of the prepayment and to
convert the remainder into preferred stock of NVIDIA at a 30% premium to the
30-day average trading price of our common stock. The graphics chip
contemplated by the agreement is highly complex and development and release of
the Microsoft product and its commercial success are dependent upon a number
of factors, many of which we cannot control. There can be no assurance that we
will be successful in developing the graphics chip for use by Microsoft or
that the product will be developed or released, or if released, will be
commercially successful.
28
<PAGE>
Sales and Marketing
Our worldwide sales strategy is a key part of our objective to become the
leading supplier of performance 3D graphics processors for PCs. Our sales team
works closely with PC OEMs, add-in board manufacturers and industry
trendsetters to define product features, performance, price and timing of new
products. Members of our sales team have a high level of technical expertise
and product and industry knowledge to support a competitive and complex design
win process. We also employ a highly skilled team of application engineers to
assist PC OEMs and add-in board manufacturers in designing, testing and
qualifying system designs that incorporate our products. We believe that the
depth and quality of our design support are key to improving PC OEMs' and add-
in board manufacturers' time-to-market, maintaining a high level of customer
satisfaction among PC OEMs and add-in board manufacturers and fostering
relationships that encourage customers to use the next generation of our
products.
In the 3D graphics market, the sales process involves influencing leading PC
OEMs' and add-in board manufacturers' graphics processor purchasing decisions,
achieving key design wins and supporting the product design into high volume
production. These design wins in turn influence the retail and system
integrator channel that is serviced by add-in board and motherboard
manufacturers. Our distribution strategy is to work with a number of leading
CEMs and add-in board manufacturers that have relationships with a broad range
of major PC OEMs and/or strong brand name recognition in the retail channel.
Currently, we sell our entire family of graphics processors directly to CEMs
and add-in board manufacturers, which then sell boards with our graphics
processor to leading OEMs, to retail outlets and to a large number of system
integrators.
To encourage software title developers and publishers to develop games
optimized for platforms utilizing our products, we seek to establish and
maintain strong relationships in the software development community.
Engineering and marketing personnel interact with and visit key software
developers to promote and discuss our products, as well as to ascertain
product requirements and solve technical problems. Our developer program makes
products available to partners prior to volume availability to encourage the
development of software titles that are optimized for our products.
Backlog
Our sales are primarily made pursuant to standard purchase orders that are
cancelable without significant penalties. The quantity actually purchased by
the customer as well as shipment schedules are subject to revisions to reflect
changes in the customer's requirements and manufacturing availability. The
semiconductor industry is characterized by short lead time orders and quick
delivery schedules. In light of industry practice and experience, we do not
believe that backlog as of any particular date is indicative of future
results.
Manufacturing
We have a "fabless" manufacturing strategy whereby we employ world class
suppliers for all phases of the manufacturing process, including fabrication,
assembly and testing. This strategy leverages the expertise of industry-
leading, ISO-certified suppliers in such areas as fabrication, assembly,
quality control and assurance, reliability and testing. In addition, we are
able to avoid the significant costs and risks associated with owning and
operating manufacturing operations. These suppliers are also responsible for
procurement of raw materials used in the production of our products. As a
result, we can focus resources on product design, additional quality
assurance, marketing and customer support.
Our graphics processors are fabricated by TSMC and WaferTech and assembled
and tested by Amkor, Siliconware, ChipPAC, and Advanced Semiconductor
Engineering. We receive semiconductor products from our subcontractors,
perform incoming quality assurance, and then ship them to CEMs, motherboard
and add-in board manufacturer customers, from our Santa Clara location in the
U.S. and a third-party warehouse in Singapore. These manufacturers assemble
and test the boards based on our design kit and test specifications, then ship
the products to the retail, system integrator or OEM markets as add-in board
solutions. Our hardware and software
29
<PAGE>
development teams work closely with certification agencies, Microsoft Windows
Hardware Quality Labs, and our OEM customers to ensure both our boards and
software drivers are certified for inclusion in the OEMs' products.
Research and Development
We believe that the continued introduction of new and enhanced products
designed to deliver leading 3D graphics performance and features will be
essential to our future success. Our research and development strategy is to
focus on concurrently developing multiple generations of graphics processors
using independent design teams. Our research and development efforts are
performed within specialized groups consisting of software engineering,
hardware engineering, VLSI design engineering, process engineering, and
architecture and algorithms. These groups act as a pipeline designed to allow
the efficient simultaneous development of multiple generations of products.
A critical component of our product development effort is our partnerships
with leaders in the CAD industry. We have invested significant resources to
develop relationships with industry leaders, including Avant! Corporation,
Cadence Design Systems, Inc., IKOS Systems, Inc. and Synopsys, Inc., often
assisting these companies in the product definition of their new products. We
believe that by forming these relationships, and utilizing next-generation
development tools to design, simulate and verify our products, we will be able
to remain at the forefront of the 3D graphics market and to continue to
develop products on a rapid basis that utilize leading-edge technology. We
believe this approach assists us in meeting the new design schedules of PC
manufacturers.
We have substantially increased our engineering and technical resources as
compared to prior years and have 214 full-time employees engaged in research
and development as of January 30, 2000, compared to 117 employees as of
January 31, 1999. Research and development expenses totaled $7.1 million in
1997, $25.1 million in the year ended January 31, 1999 and $47.4 million in
the year ended January 30, 2000.
Competition
The market for 3D graphics processors for PCs in which we compete is
intensely competitive and is characterized by rapid technological change,
evolving industry standards and declining ASPs. We believe that the principal
competitive factors in this market are performance, breadth of product
offerings, access to customers and distribution channels, backward-forward
software support, conformity to industry standard APIs, manufacturing
capabilities, price of graphics processors and total system costs of add-in
boards or motherboards. We expect competition to increase both from existing
competitors and new market entrants with products that may be less costly than
our 3D graphics processors or may provide better performance or additional
features not provided by our products.
Our primary source of competition is from companies that provide or intend
to provide 3D graphics solutions for the PC market. Our competitors include
the following:
. suppliers of graphics add-in boards that utilize their internally
developed graphics chips, such as ATI Technologies Inc., Matrox
Electronics Systems Ltd. and S3;
. suppliers of integrated core logic chipsets that incorporate 2D and 3D
graphics functionality as part of their existing solutions, such as
Intel, Silicon Integrated Systems and Via Technologies;
. companies that have traditionally focused on the professional market and
provide high end 3D solutions for PCs and workstations, including 3Dlabs
Inc., SGI, Evans and Sutherland Computer Corporation and Intergraph
Corporation; and
. companies with strength in the video game market, such as 3Dfx and
VideoLogic Group plc.
30
<PAGE>
Patents and Proprietary Rights
We rely primarily on a combination of patent, trademarks, copyrights, trade
secrets, employee and third-party nondisclosure agreements and licensing
arrangements to protect our intellectual property. We own 28 issued patents,
have 4 United States patent applications allowed, have 25 United States patent
applications pending and have 15 United States patent applications being
drafted for filing. Our issued patents have expiration dates from April 14,
2015 to March 30, 2018. Our issued patents and pending patent applications
relate to technology developed by us in connection with the development of our
3D graphics processors. We have no foreign patents or patent applications. We
seek patents that have broad application in the semiconductor industry and
that we believe will provide a competitive advantage. However, our pending
patent applications or any future applications may not be approved, and any
issued patents may not provide us with competitive advantages or may be
challenged by third parties. We have licensed technology from third parties
for incorporation in our graphics processors and expect to continue to enter
into agreements like this for future products. These licenses may result in
royalty payments to third parties, the cross-license of technology by us or
payment of other consideration. If these arrangements are not concluded on
commercially reasonable terms, our business could suffer. We attempt to
protect our trade secrets and other proprietary information through
confidentiality agreements with manufacturers and other partners, proprietary
information agreements with employees and consultants and other security
measures. We also rely on trademarks and trade secret laws to protect our
intellectual property.
Employees
As of January 30, 2000 we had 392 employees, 214 of whom were engaged in
research and development and 178 of whom were engaged in sales, marketing,
operations and administrative positions. None of our employees is covered by
collective bargaining agreements, and we believe our relationship with our
employees is good.
Facilities
We lease approximately 117,000 square feet for our headquarters in Santa
Clara, California, under leases expiring in 2002. We also lease a design
center consisting of approximately 2,900 square feet in one building in
Durham, North Carolina, pursuant to a lease that expires in March 2002. In
addition, we lease sales and administrative offices in Texas, Washington,
Arizona, Singapore and the United Kingdom to support our customers. We believe
that, while we currently have sufficient facilities to conduct our operations
for the next twelve months, we will continue to lease facilities throughout
the world as our business requires. In February 2000, we signed a letter of
intent to enter into an agreement with a developer to lease a larger facility
for our headquarters in fiscal 2002. There is no assurance that adequate space
would be available on favorable terms to meet our needs.
Legal Proceedings
On September 21, 1998, 3Dfx filed a patent infringement lawsuit against us
in the United States District Court for the Northern District of California
alleging infringement of a 3Dfx patent. On March 2, 1999, 3Dfx added a second
patent to the suit and on May 24, 1999, 3Dfx added a third patent to the suit.
The amended complaint alleges that our RIVA TNT, RIVA TNT2 and RIVA TNT2 Ultra
products infringe the patents in suit and seeks unspecified compensatory and
trebled damages and attorney's fees. Our current generation of products is not
identified as infringing any of the patents in suit. We have filed an answer
and counter-claims asserting that the patents in suit are invalid and not
infringed. These assertions are supported by our investigations to date and an
opinion from our patent counsel in this suit. We anticipate that the trial
date will be set by the District Court after it rules on claims construction
issues. We have and will continue to defend vigorously this suit. In the event
of an adverse result in the 3Dfx suit, we might be required to do one or more
of the following:
. pay substantial damages (including treble damages);
. permanently cease the manufacture and sale of any of the infringing
products;
. expend significant resources to develop non-infringing products; or
. obtain a license from 3Dfx for infringing products.
In addition to the above litigation, from time to time we are subject to
claims in the ordinary course of business, none of which in our view would
have a material adverse impact on our business or financial position if
resolved unfavorably.
31
<PAGE>
MANAGEMENT
The following table sets forth certain information regarding our executive
officers and directors as of March 20, 2000:
Executive Officers, Key Employees and Directors
<TABLE>
<CAPTION>
Name Age Position
---- --- --------
<C> <C> <S>
Jen-Hsun Huang 37 President, Chief Executive Officer and Director
Jeffrey D. Fisher 41 Executive Vice President, Worldwide Sales
Christine B. Hoberg 44 Chief Financial Officer
Chris A. Malachowsky 40 Vice President, Hardware Engineering
Curtis R. Priem 40 Chief Technical Officer
Tench Coxe (1) 42 Director
James C. Gaither 62 Director
Harvey C. Jones, Jr. (1) 47 Director
William J. Miller 54 Director
A. Brooke Seawell (2) 52 Director
Mark A. Stevens (2) 40 Director
</TABLE>
- --------
(1)Member of the Compensation Committee.
(2)Member of the Audit Committee.
Jen-Hsun Huang co-founded NVIDIA in April 1993 and has served as our
President, Chief Executive Officer and a member of the Board of Directors
since its inception. From 1985 to 1993, Mr. Huang was employed at LSI Logic
Corporation ("LSI"), a computer chip manufacturer, where he held a variety of
positions, most recently as Director of Coreware, the business unit
responsible for LSI's "system-on-a-chip" strategy. From 1983 to 1985, Mr.
Huang was a microprocessor designer for Advanced Micro Devices, a
semiconductor company. Mr. Huang holds a B.S.E.E. degree from Oregon State
University and an M.S.E.E. degree from Stanford University.
Jeffrey D. Fisher has been Executive Vice President, Worldwide Sales for
NVIDIA since July 1994. From September 1988 to July 1994, Mr. Fisher held
various positions at Weitek Corporation, a semiconductor technology company,
where his last position was as Director of Worldwide Sales. Mr. Fisher holds a
B.S.E.E. degree from Purdue University and an M.B.A. degree from Santa Clara
University.
Christine B. Hoberg has been Chief Financial Officer of NVIDIA since
December 1998. From June 1992 to December 1998, Ms. Hoberg held various
positions at Quantum Corporation, a mass storage company, where her last
position was as Vice President, Corporate Controller. Ms. Hoberg holds a B.A.
in German Studies from Stanford University and is a certified public
accountant.
Chris A. Malachowsky co-founded NVIDIA in April 1993 and has been our Vice
President, Hardware Engineering since that time. From 1987 until April 1993,
Mr. Malachowsky was a Senior Staff Engineer for Sun Microsystems, Inc., a
supplier of enterprise network computing products. From 1980 to 1986,
Mr. Malachowsky was a manufacturing design engineer at Hewlett-Packard
Company. Mr. Malachowsky was a co-inventor of Sun Microsystems' GX graphics
architecture and has authored 43 patents, most of which relate to graphics.
Mr. Malachowsky holds a B.S.E.E. degree from the University of Florida and an
M.S.C.S. degree from Santa Clara University.
Curtis R. Priem co-founded our company in April 1993 and has been our Chief
Technical Officer since that time. From 1986 to January 1993, Mr. Priem was
Senior Staff Engineer at Sun Microsystems where he architected the GX graphics
products, including the world's first single chip GUI accelerator. From 1984
to 1986,
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<PAGE>
Mr. Priem was a hardware engineer at GenRad, Inc., a supplier of diagnostic
equipment for electronic products. From 1982 to 1984, Mr. Priem was a staff
engineer for Vermont Microsystems, Inc., a personal computer company, where he
architected IBM's Professional Graphics Adapter, the PC industry's first
graphics processor. Mr. Priem has authored 87 U.S. and international patents,
all of which relate to graphics and Input/Output Systems. Mr. Priem holds a
B.S.E.E. degree from Rensselaer Polytechnic Institute.
Tench Coxe has served as a director of NVIDIA since June 1993. Mr. Coxe is a
managing director of Sutter Hill Ventures, a venture capital investment firm.
Prior to joining Sutter Hill Ventures in 1987, Mr. Coxe was Director of
Marketing and MIS at Digital Communication Associates. Mr. Coxe holds a B.A.
degree in Economics from Dartmouth College and an M.B.A. degree from the
Harvard Business School. Mr. Coxe also serves on the Board of Directors of
Edify Corporation, Alteon WebSystems Inc., Copper Mountain Networks Inc., E-
Loyalty Corp., Clarus Corporation, and several privately held companies.
James C. Gaither has served as a director of NVIDIA since December 1998. Mr.
Gaither has been a partner of the law firm of Cooley Godward llp since 1971.
Prior to beginning his law practice with the firm in 1969, Mr. Gaither served
as a law clerk to The Honorable Earl Warren, Chief Justice of the United
States, Special Assistant to the Assistant Attorney General in the United
States Department of Justice and Staff Assistant to the President of the
United States, Lyndon Johnson. Mr. Gaither is a former president of the Board
of Trustees at Stanford University and is a member of the Board of Trustees of
the Carnegie Endowment for International Peace, RAND, The William and Flora
Hewlett Foundation, and the James Irvine Foundation. Mr. Gaither currently
serves on the Board of Directors of Amylin Pharmaceuticals, Inc., a
biotechnology company, Basic American, Inc., a food processing company, Levi
Strauss & Company, a manufacturer and marketer of brand-name apparel, Blue
Martini, Inc., a customer interaction company, and Siebel Systems, Inc., an
information software systems company. Mr. Gaither received a B.A. in Economics
from Princeton University and a J.D. from Stanford University.
Harvey C. Jones, Jr. has served as a director of NVIDIA since November 1993.
From December 1987 through February 1998, Mr. Jones held various positions at
Synopsys, Inc., a developer of electronic design automation software products,
where he served as President through December 1992, as Chief Executive Officer
until January 1994 and as Executive Chairman of the Board until February 1998.
Prior to joining Synopsys, Mr. Jones served as President and Chief Executive
Officer of Daisy Systems Corporation, a computer-aided engineering company
that Mr. Jones co-founded in 1981. Mr. Jones currently serves on the Board of
Directors of Synopsys, Remedy Corporation, an enterprise software company, and
several privately held companies. Mr. Jones holds a B.S. degree in Mathematics
and Computer Sciences from Georgetown University and an M.S. degree in
Management from the Massachusetts Institute of Technology.
William J. Miller has served as a director of NVIDIA since November 1994.
From April 1996 through October 1999, Mr. Miller was Chief Executive Officer
and Chairman of the Board of Avid Technology, Inc., a provider of digital
tools for multimedia. Mr. Miller also served as President of Avid Technology
from September 1996 through October 1999. From March 1992 to October 1995, Mr.
Miller served as Chief Executive Officer of Quantum Corporation, a mass
storage company. He was a member of the Board of Directors, and Chairman
thereof, from, respectively, May 1992 and September 1993 to August 1995. From
1981 to March 1992, he served in various positions at Control Data
Corporation, a supplier of computer hardware, software and services, most
recently as Executive Vice President and President, Information Services. Mr.
Miller holds a B.A. and a J.D. degree from the University of Minnesota. Mr.
Miller serves on the Board of Directors of Waters Corporation, a scientific
instrument manufacturing company and on the Board of Directors of Innovex
Inc., a manufacturer of flexible circuits.
A. Brooke Seawell has served as a director of NVIDIA since December 1997.
Mr. Seawell has been a general partner of Technology Crossover Ventures since
February 2000. From 1997 to 1998, Mr. Seawell was Executive Vice President of
NetDynamics, Inc., an Internet application server software company. From 1991
to 1997, Mr. Seawell was Senior Vice President and Chief Financial Officer of
Synopsys, Inc., an electronic design automation software company. Mr. Seawell
holds a B.A. degree in economics and an M.B.A. degree in finance from Stanford
University. Mr. Seawell serves on the board of directors of Accrue Software,
Inc., an Internet data
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collection and analysis software company, Informatica Corporation, a data
integration software company, Mediaplex, Inc., a provider of e-business
advertising technology and services, and several privately held companies.
Mark A. Stevens has served as a director of NVIDIA since June 1993. Mr.
Stevens has been a managing member of Sequoia Capital, a venture capital
investment firm, since March 1993. Prior to that time, beginning in July 1989,
he was an associate at Sequoia Capital. Prior to joining Sequoia, he held
technical sales and marketing positions at Intel. Mr. Stevens holds a B.S.E.E.
degree, a B.A. degree in Economics and an M.S. degree in Computer Engineering
from the University of Southern California and an M.B.A. degree from the
Harvard Business School. Mr. Stevens currently serves on the Board of
Directors of Terayon Communication Systems, Inc., a broadband systems company,
MP3.com, Inc., an online music company, MedicaLogic, Inc., an online health
information company, and several privately held companies.
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PRINCIPAL STOCKHOLDERS
The following table sets forth certain information known to us with respect
to beneficial ownership of our common stock as of February 29, 2000 by (1)
each of our executive officers and directors; (2) all of our executive
officers and directors as a group; and (3) each stockholder known by us to be
the beneficial owner of more than 5% of our common stock.
<TABLE>
<CAPTION>
Number of
Shares
Beneficially Percentage of Shares
Name Owned(1) Beneficially Owned
---- ------------ --------------------
<S> <C> <C>
Jen-Hsun Huang(2)(3)......................... 2,759,500 8.7
Curtis Priem(2)(4)........................... 3,065,000 9.7
Chris Malachowsky(2)(5)...................... 2,115,490 6.7
Jeffrey D. Fisher(6)......................... 309,464 1.0
Christine B. Hoberg(7)....................... 20,796 *
Tench Coxe(8)................................ 174,204 *
James C. Gaither(9).......................... 77,076 *
Harvey C. Jones, Jr.(10)..................... 292,301 *
William J. Miller(11)........................ 203,094 *
A. Brooke Seawell(12)........................ 66,425 *
Mark A. Stevens(13).......................... 163,218 *
All directors and executive officers as a
group
(11 persons)(14)............................ 9,246,568 28.7
</TABLE>
- --------
* Less than one percent
(1) This table is based upon information supplied by officers, directors and
principal stockholders and Schedules 13D and 13G filed with the
Securities and Exchange Commission. Unless otherwise indicated in the
footnotes to this table and subject to community property laws where
applicable, we believe that each of the stockholders named in this table
has sole voting and investment power with respect to the shares indicated
as beneficially owned. Applicable percentages are based on 31,593,321
shares of common stock outstanding on February 29, 2000. In computing the
number of shares beneficially owned by a person and the percentage
ownership of that person, shares of common stock subject to options held
by that person that are exercisable within 60 days are deemed
outstanding. These shares, however, are not deemed outstanding for the
purpose of computing the percentage ownership of any other person.
(2) The address for Messrs. Huang, Fisher, Malachowsky and Priem is c/o
NVIDIA Corporation, 3535 Monroe Street, Santa Clara, California 95051.
(3) Includes 2,308,900 shares of common stock held by The Jen-Hsun and Lori
Huang Living Trust dated May 1, 1995, of which Mr. Huang is the trustee,
and 250,600 shares held by J. and L. Huang Investments, L.P., of which
Mr. Huang and his wife are general partners. Also includes 200,000 shares
of common stock issuable upon the exercise of vested options within 60
days of February 29, 2000.
(4) Includes 175,000 shares of common stock held by The Priem Family CRT and
1,970,000 shares held by The Priem Family Foundation. Mr. Priem disclaims
beneficial ownership over the shares of common stock held by the Priem
Family Foundation. Also includes 125,000 shares of common stock issuable
upon the exercise of vested options within 60 days of February 29, 2000.
(5) Includes 1,751,990 shares of common stock held by The Chris and Melody
Malachowsky Living Trust dated October 20, 1994, of which Mr. Malachowsky
is the trustee, and 238,500 shares of common stock held by C. and
M. Malachowsky Investments, L.P., of which Mr. Huang and his wife are
general partners. Also includes 125,000 shares of common stock issuable
upon exercise of vested options within 60 days of February 29, 2000.
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<PAGE>
(6) Includes 39,000 shares held by Jeffrey D. Fisher, as custodian for his
three minor children under the Uniform Gifts to Minors Act. Also includes
27,098 shares of common stock issuable upon exercise of vested options
within 60 days of February 29, 2000.
(7) Includes 18,437 shares of common stock issuable upon exercise of vested
options within 60 days of February 29, 2000.
(8) Includes 20,526 shares of common stock held in a retirement trust over
which Mr. Coxe exercises voting and investing power. Also includes 22,500
shares of common stock issuable upon exercise of vested options within 60
days of February 29, 2000.
(9) Includes 6,500 shares of common stock held by Cooley Godward LLP, of
which Mr. Gaither is a partner. Mr. Gaither disclaims beneficial
ownership of such shares held by such entity, except to the extent of his
pecuniary interest therein. Also includes 15,625 shares of common stock
issuable upon exercise of vested options within 60 days of February 29,
2000.
(10) Includes 22,500 shares of common stock issuable upon exercise of vested
options within 60 days of February 29, 2000.
(11) Includes 21,250 shares of common stock issuable upon exercise of vested
options within 60 days of February 29, 2000.
(12) Includes 66,425 shares of common stock issuable upon exercise of vested
options within 60 days of February 29, 2000.
(13) Includes 21,250 shares of common stock issuable upon exercise of vested
options within 60 days of February 29, 2000.
(14) Includes 665,085 shares of common stock issuable upon exercise of
options held by all current directors and executive officers within 60
days of February 29, 2000.
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<PAGE>
DESCRIPTION OF CAPITAL STOCK
Our authorized capital stock consists of 200,000,000 shares of common stock,
$.001 par value and 2,000,000 shares of preferred stock, $.001 par value. As
of February 29, 2000, there were 31,593,321 shares of common stock outstanding
and no shares of preferred stock outstanding.
Common Stock
The holders of common stock are entitled to one vote for each share held of
record on all matters submitted to a vote of the stockholders. Subject to
preferences that may be applicable to any outstanding shares of the Preferred
Stock, the holders of common stock are entitled to receive ratably such
dividends as may be declared by the Board of Directors out of funds legally
available therefor. See "Dividend Policy." In the event of our liquidation,
dissolution, or winding up, holders of the common stock are entitled to share
ratably in all assets remaining after payment of liabilities and the
liquidation preferences of any outstanding shares of preferred stock. Holders
of common Stock have no preemptive rights and no right to convert their common
stock into any other securities. There are no redemption or sinking fund
provisions applicable to the common stock. All outstanding shares of common
stock are, and all shares of common stock to be outstanding upon the
completion of this offering will be, fully paid and non-assessable.
Preferred Stock
Pursuant to our Amended and Restated Certificate of Incorporation, or
Certificate, the Board of Directors has the authority, without further action
by the stockholders, to issue up to 2,000,000 shares of preferred stock in one
or more series and to fix the designations, powers, preferences, privileges,
and relative participating, optional, or special rights and the
qualifications, limitations, or restrictions thereof, including dividend
rights, conversion rights, voting rights, terms of redemption and liquidation
preferences, any or all of which may be greater than the rights of the common
stock. The Board of Directors, without stockholder approval, can issue
preferred Stock with voting, conversion, or other rights that could adversely
affect the voting power and other rights of the holders of common stock.
Preferred stock could thus be issued quickly with terms calculated to delay or
prevent our having a change in control or make removal of management more
difficult. Additionally, the issuance of preferred Stock may have the effect
of decreasing the market price of the common stock, and may adversely affect
the voting and other rights of the holders of common stock. We have no current
plans to issue any of the authorized preferred stock.
Registration Rights
In addition to the registration rights to be granted to the holder of the
notes, the holders (or their permitted transferees), or Holders of
approximately 958,187 shares of our common stock are entitled to certain
rights with respect to the registration of such shares under the Securities
Act. If we propose to register our common stock, subject to certain
exceptions, under the Securities Act, the Holders are entitled to notice of
the registration and are entitled at our expense to include such shares
therein, provided that the managing underwriters have the right to limit the
number of such shares included in the registration. In addition, certain of
the Holders may require us, at our expense, on no more than one occasion, to
file a registration statement under the Securities Act with respect to their
shares of common stock. Further, certain Holders may require us, once every 12
months and, on no more than two occasions, at our expense to register the
shares on Form S-3, subject to certain conditions and limitations. These
rights expire in January 2004.
Anti-Takeover Effects of Provisions of Charter Documents and Delaware Law
Charter Documents
Our Certificate and Bylaws include a number of provisions that may have the
effect of deterring hostile takeovers or delaying or preventing changes in
control or management. First, the Certificate provides that all
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stockholder action must be effected at a duly called meeting of holders and
not by a consent in writing. Second, the Bylaws provide that special meetings
of the holders may be called only by (i) the Chairman of the Board of
Directors, (ii) the Chief Executive Officer, or (iii) the Board of Directors
pursuant to a resolution adopted by the Board of Directors. Third, the
Certificate and the Bylaws provide for a classified Board of Directors. The
Certificate includes a provision requiring cumulative voting for directors
only if required by applicable California law. Under cumulative voting, a
minority stockholder holding a sufficient percentage of a class of shares may
be able to ensure the election of one or more directors. As a result of the
provisions of the Certificate and applicable California and Delaware law, at
any annual meeting whereby we had at least 800 stockholders as of the end of
the fiscal year prior to the record date for the annual meeting, stockholders
will not be able to cumulate votes for directors. Finally, the Bylaws
establish procedures, including advance notice procedures with regard to the
nomination of candidates for election as directors and stockholder proposals.
These provisions of the Certificate and Bylaws could discourage potential
acquisition proposals and could delay or prevent our having a change in
control or management. These provisions also may have the effect of preventing
changes in our management.
Delaware Takeover Statute
We are subject to the provisions of Section 203 of the Delaware General
Corporation Law. In general, Section 203 prohibits a publicly held Delaware
corporation from engaging in a "business combination" with a person
characterized as an "interested stockholder" for a period of three years after
the date of the transaction pursuant to which such person became an interested
stockholder, unless the business combination is approved in a manner
prescribed by Delaware law. For purposes of Section 203, a business
combination includes a merger, asset sale or other transaction resulting in a
financial benefit to the interested stockholder, and an "interested
stockholder" is a person who, together with affiliates and associates, owns
(or within three years prior, did own) 15% or more of the company's voting
stock.
Transfer Agent and Registrar
The transfer agent and registrar for the common stock is ChaseMellon
Shareholder Services, L.L.C. Its address is 235 Montgomery Street, 23rd Floor,
San Francisco, California 94104 and its telephone number is (415) 743-1444.
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<PAGE>
DESCRIPTION OF DEBT SECURITIES
We may issue either senior or subordinated debt securities. Senior debt or
senior convertible debt securities and subordinated debt or subordinated
convertible debt securities will be issued in one or more series under either
a senior indenture or a subordinated indenture between us and Chase Manhattan
Bank and Trust Company, N.A., a national banking association, as Trustee. In
the following discussion, we sometimes refer to the two indentures as the
"indentures".
This prospectus briefly outlines the provisions of the indentures. The
indentures are filed as exhibits to the registration statement and you should
read the indentures for provisions that may be important to you. The
indentures are substantially identical except for the subordination and
negative pledge provisions described below.
Issuances in Series
The indentures do not limit the amount of debt we may issue. We may issue
the debt securities in one or more series with the same or various maturities,
at a price of 100% of their principal amount or at a premium or a discount.
The debt securities will not be secured by any of our property or assets.
The prospectus supplement relating to any series of debt securities being
offered will contain the specific terms relating to the offering. These terms
will include some or all of the following:
. whether the debt securities are senior or subordinated;
. the total principal amount of the debt securities;
. the percentage of the principal amount at which the debt securities will
be issued and whether the debt securities will be "original issue
discount" securities for U.S. federal income tax purposes. If we issue
original issue discount debt securities (securities that are issued at a
substantial discount below their principal amount because they pay no
interest or pay interest that is below market rates at the time of
issuance), we will describe the special United States federal income tax
and other considerations of a purchase of original issue discount debt
securities in the prospectus supplement;
. the date or dates on which principal will be payable and whether the
debt securities will be payable on demand by the holders on any date;
. the manner in which we will calculate payments of principal, premium or
interest and whether any payment will be fixed or based on an index or
formula or the value of another security, commodity or other asset;
. the interest payment dates;
. optional or mandatory redemption terms;
. authorized denominations, if other than $1,000 and integral multiples of
$1,000;
. the terms on which holders of the debt securities may convert or
exchange these securities into or for our stock or other securities or
another entity and any specific terms relating to the conversion or
exchange feature;
. the currency in which the debt securities will be denominated or
principal, premium or interest will be payable, if other than U.S.
dollars;
. whether the debt securities are to be issued as individual certificates
to each holder or in the form of global securities held by a depositary
on behalf of holders;
. information describing any book-entry features;
. whether and under what circumstances we will pay additional amounts on
any debt securities held by a person who is not a United States person
for tax purposes and whether we can redeem the debt securities if we
have to pay additional amounts;
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<PAGE>
. the names and duties of any co-trustees, depositories, authenticating
agents, paying agents, transfer agents or registrars for any series; and
. any other terms consistent with the above.
Payment and Transfer
We may issue debt securities as registered securities, which means that the
name of the holder will be entered in a register which will be kept by the
Trustee or another of our agents, or unregistered securities.
Unless we state otherwise in a prospectus supplement, we will make principal
and interest payments at the office of the paying agent or agents we name in
the prospectus supplement or by mailing a check to you at the address we have
for you in the register.
Unless we describe other procedures in a prospectus supplement, you will be
able to transfer registered debt securities at the office of the transfer
agent or agents we name in the prospectus supplement. You may also exchange
registered debt securities at the office of the transfer agent for an equal
aggregate principal amount of registered debt securities of the same series
having the same maturity date, interest rate and other terms as long as the
debt securities are issued in authorized denominations.
Neither we nor the Trustee will impose any service charge for any transfer
or exchange of a debt security; however, we may ask you to pay any taxes or
other governmental charges in connection with a transfer or exchange of debt
securities.
Book Entry System
We may issue debt securities under a book-entry system in the form of one or
more global securities. We will register the global securities in the name of
a depositary or its nominee and deposit the global securities with that
depositary. Unless we state otherwise in the prospectus supplement, The
Depository Trust Company, New York, New York will be the depositary if we use
a depositary.
DTC has advised us as follows:
. DTC is;
. a limited purpose trust company organized under the laws of the
State of New York;
. a "banking organization" within the meaning of the New York banking
law;
. a member of the Federal Reserve System;
. a "clearing corporation" within the meaning of the New York Uniform
Commercial Code; and
. a "clearing agency" registered pursuant to the provisions of Section
17A of the Exchange Act.
. DTC was created to hold securities of its participants and to facilitate
the clearance and settlement of securities transactions among its
participants through electronic book entry changes in accounts of its
participants, eliminating the need for physical movements of securities
certificates.
. DTC's participants include securities brokers and dealers, banks, trust
companies, clearing corporations and others, some of whom own DTC.
. Access to DTC's book-entry system is also available to others that clear
through or maintain a custodial relationship with a participant, either
directly or indirectly.
Following the issuance of a global security in registered form, the
depositary will credit the accounts of its participants with the debt
securities upon our instructions. Only persons who hold directly or indirectly
through financial institutions that are participants in the depositary can
hold beneficial interests in the global securities. Since the laws of some
jurisdictions require certain types of purchasers to take physical delivery of
such securities in definitive form, you may encounter difficulties in your
ability to own, transfer or pledge beneficial interests in a global security.
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So long as the depositary or its nominee is the registered owner of a global
security, we and the Trustee will treat the depositary as the sole owner or
holder of the debt securities for purposes of the applicable indenture.
Therefore, except as set forth below, you will not be entitled to have debt
securities registered in your name or to receive physical delivery of
certificates representing the debt securities. Accordingly, you will have to
rely on the procedures of the depositary and the participant in the depositary
through whom you hold your beneficial interest in order to exercise any rights
of a holder under the indenture. We understand that under existing practices,
the depositary would act upon the instructions of a participant or authorize
that participant to take any action that a holder is entitled to take.
We will make all payments of principal, premium and interest on the debt
securities to the depositary. We expect that the depositary will then credit
participants' accounts proportionately with these payments on the payment date
and that the participants will in turn credit their customers in accordance
with their customary practices. Neither we nor the Trustee will be responsible
for making any payments to participants or customers of participants or for
maintaining any records relating to the holdings of participants and their
customers and you will have to rely on the procedures of the depositary and
its participants.
Global securities are generally not transferable. We will issue physical
certificates to beneficial owners of a global security if:
. the depositary notifies us that it is unwilling or unable to continue as
depositary and we do not appoint a successor within 90 days;
. the depositary ceases to be a clearing agency registered under the
Exchange Act and we do not appoint a successor within 90 days; or
. we decide in our sole discretion that we do not want to have the debt
securities of that series represented by global securities.
Subordination
Payment on the subordinated debt securities will, to the extent provided in
the subordinated indenture, be subordinated in right of payment to the prior
payment in full of all of our senior indebtedness. The subordinated debt
securities also are effectively subordinated to all debt and other
liabilities, including trade payables and lease obligations, if any, of our
subsidiaries.
Upon any distribution of our assets upon any dissolution, winding up,
liquidation or reorganization, the payment of the principal of, or premium, if
any, interest, and liquidated damages, if any, on the subordinated debt
securities will be subordinated in right of payment to the prior payment in
full in cash or other payment satisfactory to the holders of senior
indebtedness of all senior indebtedness. In the event of any acceleration of
the subordinated debt securities because of an event of default, the holders
of any outstanding senior indebtedness would be entitled to payment in full in
cash or other payment satisfactory to the holders of senior indebtedness of
all senior indebtedness obligations before the holders of the subordinated
debt securities are entitled to receive any payment or distribution. We are
required under the subordinated indenture to promptly notify holders of senior
indebtedness if payment of the subordinated debt securities is accelerated
because of an event of default.
We may not make any payment on the subordinated debt securities if:
. a default in the payment of designated senior indebtedness occurs and is
continuing beyond any applicable period of grace (called a "payment
default"); or
. a default other than a payment default on any designated senior
indebtedness occurs and is continuing that permits holders of designated
senior indebtedness to accelerate its maturity, or in the case of a
lease, a default occurs and is continuing that permits the lessor to
either terminate the lease or require us to make an irrevocable offer to
terminate the lease following an event of default under the lease,
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and the trustee receives a notice of such default (called a "payment
blockage notice") from us or any other person permitted to give such
notice under the indenture (called a "non-payment default").
We may resume payments and distributions on the subordinated debt
securities:
. in case of a payment default, upon the date on which such default is
cured or waived or ceases to exist; and
. in case of a non-payment default, the earlier of the date on which such
nonpayment default is cured or waived or ceases to exist or 179 days
after the date on which the payment blockage notice is received, if the
maturity of the designated senior indebtedness has not been accelerated,
or in the case of any lease, 179 days after notice is received if we
have not received notice that the lessor under such lease has exercised
its right to terminate the lease or require us to make an irrevocable
offer to terminate the lease following an event of default under the
lease.
No new period of payment blockage may be commenced pursuant to a payment
blockage notice unless 365 days have elapsed since the initial effectiveness
of the immediately prior payment blockage notice. No non-payment default that
existed or was continuing on the date of delivery of any payment blockage
notice shall be the basis for any later payment blockage notice.
If the trustee or any holder of the subordinated debt securities receives
any payment or distribution of our assets in contravention of the
subordination provisions on the subordinated debt securities before all senior
indebtedness is paid in full in cash or other payment satisfactory to holders
of senior indebtedness then such payment or distribution will be held in trust
for the benefit of holders of senior indebtedness or their representatives to
the extent necessary to make payment in full in cash or payment satisfactory
to the holders of senior indebtedness of all unpaid senior indebtedness.
In the event of our bankruptcy, dissolution or reorganization, holders of
senior indebtedness may receive more, ratably, and holders of the subordinated
debt securities may receive less, ratably, than our other creditors. This
subordination will not prevent the occurrence of any event of default under
the indenture.
As of January 30, 2000, no senior indebtedness was outstanding. We are not
prohibited from incurring debt, including senior indebtedness, under the
indentures. We may from time to time incur additional debt, including senior
indebtedness.
We are obligated to pay reasonable compensation to the Trustee and to
indemnify the Trustee against certain losses, liabilities or expenses incurred
by the Trustee in connection with its duties relating to the debt securities.
The Trustee's claims for these payments will generally be senior to those of
holders of debt securities in respect of all funds collected or held by the
Trustee.
Conversion Rights
The prospectus supplement will describe, if applicable, the terms on which
the holders may convert debt securities into common stock. The conversion may
be mandatory or may be at the option of the holder of debt securities. The
prospectus supplement will describe how the number of shares of common stock
to be received upon conversion would be calculated.
Certain Definitions
"designated senior indebtedness" shall mean senior indebtedness under the
loan agreement and our obligations under any other particular senior
indebtedness that expressly provides that such senior indebtedness shall be
"designated senior indebtedness" for purposes of the subordinated indenture.
The instrument or agreement for designated senior indebtedness may place
limitations and conditions on the right of senior indebtedness to exercise the
rights of designated senior indebtedness.
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"indebtedness" means:
(1) all indebtedness, obligations and other liabilities for borrowed
money, including overdrafts, foreign exchange contracts, currency
exchange agreements, interest rate protection agreements, and any
loans or advances from banks, or evidenced by bonds, debentures, notes
or similar instruments, other than any account payable or other
accrued current liability or obligation incurred in the ordinary
course of business in connection with the obtaining of materials or
services;
(2) all reimbursement obligations and other liabilities with respect to
letters of credit, bank guarantees or bankers' acceptances;
(3) all obligations and liabilities in respect of leases required in
conformity with generally accepted accounting principles to be
accounted for as capitalized lease obligations on our balance sheet;
(4) all obligations and other liabilities under any lease or related
document in connection with the lease of real property which provides
that we are contractually obligated to purchase or cause a third party
to purchase the leased property and thereby guarantee a minimum
residual value of the leased property to the lessor and our
obligations under the lease or related document to purchase or to
cause a third party to purchase the leased property;
(5) all obligations with respect to an interest rate or other swap, cap or
collar agreement or other similar instrument or agreement or foreign
currency hedge, exchange, purchase agreement or other similar
instrument or agreement;
(6) all direct or indirect guaranties or similar agreements, our
obligations or liabilities to purchase, acquire or otherwise assure a
creditor against loss in respect of, indebtedness, obligations or
liabilities of others of the type described in (1) through (5) above;
(7) any indebtedness or other obligations described in (1) through (6)
above secured by any mortgage, pledge, lien or other encumbrance
existing on property which is owned or held by us; and
(8) any and all refinancings, replacements, deferrals, renewals,
extensions and refundings of, or amendments, modifications or
supplements to, any indebtedness, obligation or liability of the kind
described in clauses (1) through (7) above.
"loan agreement" means the loan and security agreement, dated as of
September 3, 1998, as amended by the amendment to loan and security agreement
dated as of July 30, 1999, between NVIDIA and Imperial Bank.
"senior indebtedness" means the principal, premium, if any, interest,
including any interest accruing after bankruptcy and rent or termination
payment on or other amounts due on our current or future indebtedness, whether
created, incurred, assumed, guaranteed or in effect guaranteed by us,
including any refinancings, replacements, deferrals, renewals, extensions,
refundings, amendments, modifications or supplements to the above. However,
senior indebtedness does not include:
. indebtedness that expressly provides that it shall not be senior in
right of payment to the subordinated debt securities or expressly
provides that it is on the same basis or junior to the subordinated debt
securities;
. our indebtedness to any of our majority-owned subsidiaries; and
. the subordinated debt securities.
Negative Pledge
We have agreed in the senior indenture for the benefit of the holders of the
senior debt securities that, with some exceptions, neither we nor our
subsidiaries will create a lien to secure debt that is the same seniority with
or subordinated to the senior debt securities, unless we secure the senior
debt securities equally with the secured debt.
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Consolidation, Merger, Sale or Conveyance
The indentures do not prevent us from any consolidation or merger with any
other person or the sale of all of the property of our property to any other
person. In the event we undertake a consolidation, merger or sale of all of
our property, however, the person with which we consolidate, merge or sell all
of our property must agree:
. to pay the principal, premium and interest on the debt securities; and
. to the due and punctual performance of all of the covenants and
conditions of the indentures to be performed by us.
If the debt securities are convertible for our other securities or other
entities, the person with whom we consolidate, merge or sell all of our
property must make provisions for the conversion of the debt securities into
securities which the holders of the debt securities would have received if
they had converted the debt securities before the consolidation, merger or
sale.
We must deliver to the trustee an officer's certificate and an opinion of
counsel that the consolidation, merger or sale complies with the indentures.
Modification of the Indenture
In general, our rights and obligations and the rights of the holders under
the indenture may be modified if the holders of a majority in aggregate
principal amount of the outstanding debt securities of each series affected by
the modification consent to it. However, under the terms of the indentures,
each indenture provides that, unless each affected holder agrees, we cannot
make any adverse change to any payment term of a debt security such as:
. extending the maturity date;
. extending the date on which we have to pay interest or make a sinking
fund payment;
. reducing the interest rate;
. reducing the amount of principal we have to repay;
. changing the currency in which we have to make any payment of principal,
premium or interest;
. modifying any redemption or repurchase right to the detriment of the
holder;
. modifying any right to convert or exchange the debt securities for
another security to the detriment of the holder;
. impairing any right of a holder to bring suit for payment;
. reduce the percentage of the aggregate principal amount of debt
securities needed to make any amendment to the indenture or to waive any
covenant or default;
. waive any payment default; or
. make any change to such sections of either indenture.
However, if we and the Trustee agree, we can amend the indenture without
notifying any holders or seeking their consent if the amendment does not
materially and adversely affect any holder.
Events of Default
When we use the term "event of default" in the indenture, here are some
examples of what we mean.
Unless otherwise specified in a prospectus supplement, an event of default
with respect to a series of debt securities occurs if:
. we fail to pay the principal or any premium on any debt security of that
series when due;
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. we fail to pay interest when due on any debt security of that series for
30 days;
. we fail to perform any other covenant in the indenture and this failure
continues for 60 days after we receive written notice of it from the
Trustee or from the holders of 25% in principal amount of the
outstanding debt securities of such series;
. a creditor commences involuntary bankruptcy, insolvency or similar
proceedings against us and we are unable to obtain a stay or a dismissal
of that proceeding within 90 days; or
. we voluntarily seek relief under bankruptcy, insolvency or similar laws
or a court enters an order for relief against us under these laws.
The supplemental indenture or the form of security for a particular series
of debt securities may include additional events of default or changes to the
events of default described above. For any additional or different events of
default applicable to a particular series of debt securities, see the
prospectus supplement relating to such series.
The Trustee may withhold notice to the holders of debt securities of any
default (except in the payment of principal or interest) if it considers such
withholding of notice to be in the best interests of the holders. By default
we mean any event which is an event of default described above or would be an
event of default but for the giving of notice or the passage of time.
If an event of default occurs and continues, the Trustee or the holders of
the aggregate principal amount of the debt securities specified below may
require us to repay immediately (or "accelerate"):
. the entire principal of the debt securities of such series; or
. if the debt securities are original issue discount securities, such
portion of the principal as may be described in the applicable
prospectus supplement.
If the event of default occurs because we defaulted in a payment of
principal or interest on the debt securities, then the Trustee or the holders
of at least 25% of the aggregate principal amount of debt securities of that
series can accelerate that series of debt securities. If the event of default
occurs because we failed to perform any other covenant in the Indenture or any
covenant that we agreed to for the benefit of one or more series of debt
securities, then the Trustee or the holders of at least 25% of the aggregate
principal amount of debt securities of all series affected, voting as one
class, can accelerate all of the affected series of debt securities. If the
event of default occurs because we become involved in bankruptcy proceedings
then all of the debt securities under the indenture will be accelerated
automatically. If the event of default occurs because we defaulted on some of
our other indebtedness or because that indebtedness becomes accelerated as
described above, then the Trustee or the holders of at least 25% of the
aggregate principal amount of the debt securities outstanding under the
indenture, voting as one class, can accelerate all of the debt securities
outstanding under the indenture. Therefore, except in the case of a default by
us on a payment of principal or interest on the debt securities of your series
or a default due to our bankruptcy or insolvency, it is possible that you may
not be able to accelerate the debt securities of your series because of the
failure of holders of other series to take action.
The holders of a majority of the aggregate principal amount of the debt
securities of all affected series, voting as one class, can rescind this
accelerated payment requirement or waive any past default or event of default
or allow us to not comply with any provision of the indenture. However, they
cannot waive a default in payment of principal of, premium, if any, or
interest on, any of the debt securities.
Other than its duties in case of a default, the Trustee is not obligated to
exercise any of its rights or powers under the indenture at the request, order
or direction of any holders, unless the holders offer the Trustee reasonable
indemnity. If they provide this reasonable indemnity, the holders of a
majority in principal amount of all affected series of debt securities, voting
as one class, may direct the time, method and place of conducting any
proceeding or any remedy available to the Trustee, or exercising any power
conferred upon the Trustee, for any series of debt securities.
45
<PAGE>
We are not required to provide the Trustee with any certificate or other
document saying that we are in compliance with the indenture or that there are
no defaults.
Defeasance
When we use the term defeasance, we mean discharge from some or all of our
obligations under the indenture. Unless otherwise specified in a prospectus
supplement, if we deposit with the Trustee sufficient cash or U.S. government
securities to pay the principal, interest, any premium and any other sums due
to the stated maturity date or a redemption date of the debt securities of a
particular series, then at our option:
. we will be discharged from our obligations with respect to the debt
securities of such series, except as to any surviving rights of
registration or transfer or exchange or conversion of debt securities of
that series expressly provided for; or
. we will no longer be under any obligation to comply with the negative
pledge contained in the senior indenture, and the Events of Default
relating to failures to comply with covenants will no longer apply to
us.
If we are discharged from our obligations with respect to the debt
securities of a particular series, the holders of the debt securities of the
affected series will not be entitled to the benefits of the indenture except
for registration of transfer and exchange of debt securities and replacement
of lost, stolen or mutilated debt securities. Instead the holders will only be
able to rely on the deposited funds or obligations for payment.
We must deliver to the Trustee an opinion of counsel to the effect that the
deposit and related defeasance would not cause the holders of the debt
securities to recognize income, gain or loss for Federal income tax purposes.
We must also deliver a ruling to such effect received from or published by the
United States Internal Revenue Service if we are discharged from our
obligations with respect to the debt securities.
Concerning the Trustee
We have appointed Chase Manhattan Bank and Trust Company, N.A., a national
banking association, the trustee under the indentures. The trustee or its
affiliates may provide banking and other services to us in the ordinary course
of their business.
Governing Law
The laws of the State of New York will govern the indentures and the debt
securities.
46
<PAGE>
PLAN OF DISTRIBUTION
We may sell the securities being offered by this prospectus through agents,
underwriters or dealers.
Agents designated by us from time to time may solicit offers to purchase the
securities offered by this prospectus. Any agent involved in the offer or sale
of those securities may be deemed to be an underwriter under the Securities
Act and we will name that agent and describe any commissions payable by us to
that agent in a prospectus supplement. Any agent appointed by us will be
acting on a reasonable efforts basis for the period of its appointment or, if
indicated in the applicable prospectus supplement, on a firm commitment basis.
We may be obligated under agreements with these agents to indemnify them
against civil liabilities, including liabilities under the Securities Act.
These agents may also engage in transactions with or perform services for us
in the ordinary course of business.
If we utilize any underwriters in any sale of the securities in respect of
which this prospectus is delivered, we will enter into an underwriting
agreement with those underwriters at the time of sale to them and the names of
the underwriters and the terms of the transaction will be set forth in the
prospectus supplement. That prospectus supplement will be used by the
underwriters to make resales of the securities in respect of which this
prospectus is delivered to the public. We may be obligated under the
underwriting agreements with these underwriters to indemnify them against
civil liabilities, including liabilities under the Securities Act. These
underwriters may also engage in transactions with or perform services for us
in the ordinary course of business.
If we utilize a dealer in any sale of the securities in respect of which the
prospectus is delivered, we will sell the securities to the dealer, as
principal. The dealer may then resell those securities to the public at
varying prices to be determined by the dealer at the time of resale. We may be
obligated under agreements with these dealers to indemnify them against civil
liabilities, including liabilities under the Securities Act. These dealers may
also engage in transactions with or perform services for us in the ordinary
course of business.
If so indicated in the applicable prospectus supplement, we will authorize
agents, underwriters or dealers to solicit offers from purchasers to purchase
the securities from us at the public offering price set forth in the
prospectus supplement under delayed delivery contracts providing for payment
and delivery of those securities on a specified date in the future. These
delayed delivery contracts will be subject to only those conditions set forth
in the prospectus supplement, and we will set forth the commission payable for
solicitation of these offers in the prospectus supplement.
47
<PAGE>
LEGAL MATTERS
Cooley Godward LLP, San Francisco, California will provide us with an
opinion as to the legality of the securities we are offering.
Mr. Gaither, one of our directors and a partner of Cooley Godward LLP, owns
54,951 shares of our common stock and options to purchase 55,000 shares of our
common stock. In addition, Cooley Godward LLP owns 6,500 shares and attorneys
with Cooley Godward LLP own an aggregate of 71,803 shares of our common stock.
EXPERTS
The financial statements and schedule of NVIDIA Corporation as of January
31, 1999 and January 30, 2000 and for the year ended December 31, 1997, the
one-month period ended January 31, 1998 and each of the years in the two-year
period ended January 30, 2000, have been included herein and in the
registration statement in reliance upon the report of KPMG LLP, independent
certified public accountants, appearing elsewhere herein, and upon the
authority of said firm as experts in accounting and auditing.
WHERE YOU CAN GET MORE INFORMATION
We are a reporting company and file annual, quarterly and current reports,
proxy statements and other information with the SEC. We have filed with the
SEC a registration statement on Form S-3 under the Securities Act with respect
to the shares of common stock and debt securities we are offering under this
prospectus. This prospectus does not contain all of the information set forth
in the registration statement and the exhibits to the registration statement.
For further information with respect to us and the securities we are offering
under this prospectus, we refer you to the registration statement and the
exhibits and schedules filed as a part of the registration statement. You may
read and copy the registration statement, as well as our reports, proxy
statements and other information at the SEC's public reference rooms at Room
1024, 450 Fifth Street, N.W., Washington, D.C. 20549, as well as at the SEC's
regional offices at 500 West Madison Street, Suite 1400, Chicago, Illinois,
60661, and at Seven World Trade Center, New York, New York 10048. You can
request copies of these documents by writing to the SEC and paying a fee for
the copying cost. Please call the SEC at 1-800-SEC-0330 for more information
about the operation of the public reference rooms. Our SEC filings are also
available at the SEC's web site at "http://www.sec.gov." In addition, you can
read and copy our SEC filings at the office of the National Association of
Securities Dealers, Inc at 1735 K Street, N.W., Washington, D.C. 20006.
The SEC allows us to "incorporate by reference" information that we file
with it, which means that we can disclose important information to you by
referring you to those documents. The information incorporated by reference is
an important part of this prospectus. This prospectus and the information that
we file later with the SEC may update and supersede the information
incorporated by reference. We incorporate by reference the documents listed
below and any future filings we make with the SEC under Sections 13(a), 13(c),
14 or 15(d) of the Securities Exchange Act of 1934:
. Annual Report on Form 10-K for the year ended January 30, 2000; and
. The description of our common stock contained in our registration
statement on Form 8-A filed with the SEC on January 12, 1999.
You may request of copy of these filings at no cost, by writing or
telephoning us at the following address:
Corporate Secretary
NVIDIA Corporation
3535 Monroe Street
Santa Clara, California 95051
(408) 615-2500
48
<PAGE>
INDEX TO FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
Report of KPMG LLP, Independent Auditors.................................. F-2
Balance Sheets as of January 31, 1999 and January 30, 2000................ F-3
Statements of Operations for the year ended December 31, 1997, one month
ended January 31, 1998, year ended January 31, 1999 and year ended
January 30, 2000......................................................... F-4
Statements of Stockholders' Equity for the year ended December 31, 1997,
one month ended January 31, 1998, year ended January 31, 1999 and year
ended January 30, 2000................................................... F-5
Statements of Cash Flows for the year ended December 31, 1997, one month
ended January 31, 1998, year ended January 31, 1999 and year ended
January 30, 2000......................................................... F-6
Notes to Financial Statements............................................. F-7
</TABLE>
F-1
<PAGE>
INDEPENDENT AUDITORS' REPORT
The Board of Directors and Stockholders
NVIDIA Corporation:
We have audited the accompanying balance sheets of NVIDIA Corporation (the
Company) as of January 31, 1999 and January 30, 2000 and the related
statements of operations, stockholders' equity and cash flows for the year
ended December 31, 1997, the one-month period ended January 31, 1998, and each
of the years in the two-year period ended January 30, 2000. In connection with
our audits of the financial statements, we have also audited the accompanying
financial statement schedule. These financial statements and financial
statement schedule are the responsibility of the Company's management. Our
responsibility is to express an opinion on these financial statements and
financial statement schedule based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audits provide a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of NVIDIA Corporation as of
January 31, 1999 and January 30, 2000 and the results of its operations and
its cash flows for the year ended December 31, 1997, the one-month period
ended January 31, 1998, and each of the years in the two-year period ended
January 30, 2000, in conformity with generally accepted accounting principles.
Also in our opinion, the related financial statement schedule, when considered
in relation to the basic financial statements taken as a whole, presents
fairly, in all material respects, the information set forth therein.
/s/ KPMG LLP
Mountain View, California
March 6, 2000
F-2
<PAGE>
NVIDIA CORPORATION
BALANCE SHEETS
(in thousands, except share data)
<TABLE>
<CAPTION>
January 31, January 30,
1999 2000
----------- -----------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents............................ $ 50,257 $ 61,560
Accounts receivable, less allowances of $2,627 and
$6,443 in 1999 and 2000, respectively............... 20,633 67,224
Inventory............................................ 28,623 37,631
Prepaid expenses and other current assets............ 1,599 6,760
-------- --------
Total current assets............................... 101,112 173,175
Property and equipment, net............................ 11,650 25,886
Deposits and other assets.............................. 570 3,189
-------- --------
$113,332 $202,250
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable..................................... $ 35,730 $ 64,910
Line of credit....................................... 5,000 --
Accrued liabilities.................................. 5,012 9,529
Current portion of capital lease obligations......... 1,386 1,786
-------- --------
Total current liabilities.......................... 47,128 76,225
Capital lease obligations, less current portion........ 1,995 962
Long-term payable...................................... -- 500
Commitments and contingencies
Stockholders' equity:
Common stock, $.001 par value; 200,000,000 shares
authorized; 28,743,001 and 31,100,157 shares issued
and outstanding in 1999 and 2000, respectively...... 29 31
Additional paid-in capital........................... 74,372 95,964
Deferred compensation................................ (780) (118)
Retained earnings (accumulated deficit).............. (9,412) 28,686
-------- --------
Total stockholders' equity......................... 64,209 124,563
-------- --------
$113,332 $202,250
======== ========
</TABLE>
See accompanying notes to financial statements.
F-3
<PAGE>
NVIDIA CORPORATION
STATEMENTS OF OPERATIONS
(in thousands, except per share data)
<TABLE>
<CAPTION>
Year Ended Month Ended Year Ended Year Ended
December 31, January 31, January 31, January 30,
1997 1998 1999 2000
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Revenue:
Product..................... $27,280 $11,420 $151,413 $374,505
Royalty..................... 1,791 1,911 6,824 --
------- ------- -------- --------
Total revenue............. 29,071 13,331 158,237 374,505
Cost of revenue............... 21,244 10,071 109,746 235,575
------- ------- -------- --------
Gross profit.................. 7,827 3,260 48,491 138,930
------- ------- -------- --------
Operating expenses:
Research and development.... 7,103 1,121 25,073 47,439
Sales, general and
administrative............. 4,183 640 18,902 37,079
------- ------- -------- --------
Total operating expenses.. 11,286 1,761 43,975 84,518
------- ------- -------- --------
Operating income (loss)... (3,459) 1,499 4,516 54,412
Interest and other income
(expense), net............... (130) (18) (29) 1,754
------- ------- -------- --------
Income (loss) before tax
expense...................... (3,589) 1,481 4,487 56,166
Income tax expense............ -- 134 357 18,068
------- ------- -------- --------
Net income (loss)......... $(3,589) $ 1,347 $ 4,130 $ 38,098
======= ======= ======== ========
Basic net income (loss) per
share........................ $ (.28) $ .10 $ .28 $ 1.28
======= ======= ======== ========
Diluted net income (loss) per
share........................ $ (.28) $ .05 $ .15 $ 1.06
======= ======= ======== ========
Shares used in basic per share
computation.................. 12,677 14,141 14,565 29,872
Shares used in diluted per
share computation............ 12,677 26,100 27,393 36,098
</TABLE>
See accompanying notes to financial statements.
F-4
<PAGE>
NVIDIA CORPORATION
STATEMENTS OF STOCKHOLDERS' EQUITY
(in thousands, except share data)
<TABLE>
<CAPTION>
Retained
Earnings
Preferred Stock Common Stock Additional Deferred (Accumu- Total
------------------ ------------------ Paid-in Compen- lated Stockholders'
Shares Amount Shares Amount Capital sation Deficit) Equity
---------- ------ ---------- ------ ---------- -------- -------- -------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Balances, December 31,
1996................... 7,888,275 $ 8 11,567,374 $12 $12,317 -- $(11,300) $ 1,037
Issuance of Series D
preferred stock, net of
issuance costs of $30.. 1,438,812 1 -- -- 7,537 -- -- 7,538
Grant of common stock
options for lease
financing and
consulting services.... -- -- -- -- 120 -- -- 120
Issuance of common stock
upon exercise of stock
options................ -- -- 2,573,211 2 828 -- -- 830
Deferred compensation
related to grant of
common stock options... -- -- -- -- 4,277 (4,277) -- --
Amortization of deferred
compensation........... -- -- -- -- -- 961 -- 961
Net loss................ -- -- -- -- -- -- (3,589) (3,589)
---------- --- ---------- --- ------- ------ -------- --------
Balances, December 31,
1997................... 9,327,087 9 14,140,585 14 25,079 (3,316) (14,889) 6,897
Issuance of common stock
upon exercise of stock
options................ -- -- 1,125 -- 6 -- -- 6
Deferred compensation
related to grant of
common stock options... -- -- -- -- 361 (361) -- --
Amortization of deferred
compensation........... -- -- -- -- -- 360 -- 360
Net income.............. -- -- -- -- -- -- 1,347 1,347
---------- --- ---------- --- ------- ------ -------- --------
Balances, January 31,
1998................... 9,327,087 9 14,141,710 14 25,446 (3,317) (13,542) 8,610
Issuance of common stock
upon exercise of stock
options................ -- -- 202,775 -- 348 -- -- 348
Tax benefit from stock
options................ -- -- -- -- 45 -- -- 45
Sale of common stock
under public offering,
net of issuance costs
of $4.5 million........ -- -- 3,500,000 4 37,535 -- -- 37,539
Issuance and conversion
of mandatorily
convertible notes into
common stock........... -- -- 1,571,429 2 10,998 -- -- 11,000
Conversion of preferred
stock into common
stock.................. (9,327,087) (9) 9,327,087 9 -- -- -- --
Amortization of deferred
compensation........... -- -- -- -- -- 2,537 -- 2,537
Net income.............. -- -- -- -- -- -- 4,130 4,130
---------- --- ---------- --- ------- ------ -------- --------
Balances, January 31,
1999................... -- -- 28,743,001 $29 $74,372 $ (780) $ (9,412) $ 64,209
Sale of common stock
under public offering
(over-allotment), net
of issuance costs of
$0.6 million........... -- -- 525,000 1 5,740 -- -- 5,741
Issuance of common stock
in connection with
long-term software
license................ -- -- 243,902 -- 5,000 -- -- 5,000
Repurchase of common
stock in settlement of
accounts receivable.... -- -- (438,572) -- (7,452) -- -- (7,452)
Issuance of common stock
from stock plans....... -- -- 2,016,826 1 7,676 -- -- 7,677
Tax benefit from stock
plans.................. -- -- -- -- 10,613 -- -- 10,613
Grant of common stock
options for consulting
services............... -- -- -- -- 15 -- -- 15
Amortization of deferred
compensation........... -- -- -- -- -- 662 -- 662
Net income.............. -- -- -- -- -- -- 38,098 38,098
---------- --- ---------- --- ------- ------ -------- --------
Balances, January 30,
2000................... -- -- 31,100,157 $31 $95,964 $ (118) $ 28,686 $124,563
========== === ========== === ======= ====== ======== ========
</TABLE>
See accompanying notes to financial statements.
F-5
<PAGE>
NVIDIA CORPORATION
STATEMENTS OF CASH FLOWS
(in thousands)
<TABLE>
<CAPTION>
Year Ended Month Ended Year Ended Year Ended
December 31, January 31, January 31, January 30,
1997 1998 1999 2000
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Cash flows from operating
activities:
Net income (loss)............. $(3,589) $1,347 $ 4,130 $38,098
Adjustments to reconcile net
income (loss) to net cash
provided by (used in)
operating activities:
Depreciation and
amortization................ 1,363 219 4,006 9,006
Stock options granted in
exchange for lease
financing and services...... 120 -- -- 15
Amortization of deferred
compensation................ 961 360 2,537 662
Tax benefit from employee
stock plans................. -- -- 45 10,613
Changes in operating assets
and liabilities:
Accounts receivable......... (11,446) (2,912) (5,234) (54,043)
Inventory................... 38 (496) (28,102) (9,008)
Prepaid expenses and other
current assets............. (237) (316) (1,005) (5,161)
Deposits and other assets... (59) -- (408) (3,008)
Accounts payable............ 11,295 3,740 20,418 24,180
Accrued liabilities......... 373 21 1,746 4,517
------- ------ ------- -------
Net cash provided by (used
in) operating
activities............... (1,181) 1,963 (1,867) 15,871
------- ------ ------- -------
Cash flows used in investing
activities:
Purchase of property and
equipment.................... (2,732) (163) (7,899) (11,589)
------- ------ ------- -------
Cash flows from financing
activities:
Borrowings (payments) under
line of credit............... -- -- 5,000 (5,000)
Common stock issued under
employee stock plans......... 830 6 348 7,677
Sale of common stock under
public offering, net of
issuance costs -- -- 37,539 5,741
Issuance and conversion of
mandatorily convertible
notes into common stock...... -- -- 11,000 --
Long-term payable related to
patent license agreement..... -- -- -- 500
Net proceeds from sale of
preferred stock.............. 7,538 -- -- --
Payments under capital
leases....................... (1,037) (373) (1,848) (1,897)
------- ------ ------- -------
Net cash provided by (used
in) financing
activities............... 7,331 (367) 52,039 7,021
------- ------ ------- -------
Change in cash and cash
equivalents................... 3,418 1,433 42,273 11,303
Cash and cash equivalents at
beginning of period........... 3,133 6,551 7,984 50,257
------- ------ ------- -------
Cash and cash equivalents at
end of period................. $ 6,551 $7,984 $50,257 $61,560
======= ====== ======= =======
Cash paid for interest......... $ 267 $ 31 $ 471 $ 332
======= ====== ======= =======
Cash paid for taxes............ $ -- $ -- $ -- $15,965
======= ====== ======= =======
Noncash financing and investing
activities:
Assets recorded under capital
lease........................ $ 3,023 $ 32 $ 2,245 $ 1,264
======= ====== ======= =======
Deferred compensation related
to grant of common stock
options...................... $ 4,277 $ 361 $ -- $ --
======= ====== ======= =======
Repurchase of common stock in
settlement of accounts
receivable................... $ -- $ -- $ -- $ 7,452
======= ====== ======= =======
Issuance of common stock in
connection with long-term
software license............. $ -- $ -- $ -- $ 5,000
======= ====== ======= =======
Liabilities assumed in
connection with long-term
software license............. $ -- $ -- $ -- $ 5,000
======= ====== ======= =======
</TABLE>
See accompanying notes to financial statements.
F-6
<PAGE>
NVIDIA CORPORATION
NOTES TO FINANCIAL STATEMENTS
(1) Organization and Significant Accounting Policies
Organization
NVIDIA Corporation (the "Company") designs, develops and markets 3D graphics
processors for the PC market. The Company operates primarily in one industry
segment in the United States, Asia and Europe. In April 1998, the Company was
reincorporated as a Delaware corporation.
Fiscal Year
Effective January 1, 1998, the Company changed its fiscal year-end financial
reporting period to January 31. The Company elected not to restate its
previous reporting periods ending December 31. In addition, effective February
1, 1998, the Company changed its fiscal year end from January 31 to a 52- or
53-week year ending on the last Sunday in January. As a result, the first and
fourth quarters of fiscal 1999 are 12- and 14-week periods, respectively, with
the remaining quarters being 13-week periods. All four quarters of fiscal 2000
are 13-week periods.
Cash and Cash Equivalents
The Company considers all highly liquid investments purchased with a
maturity of three months or less at the time of purchase to be cash
equivalents. Currently, the Company's cash equivalents consist of $54.3
million invested in money market funds.
Inventories
Inventories are stated at the lower of first-in first-out, cost or market.
Write-downs to reduce the carrying value of obsolete, slow moving and non-
usable inventory to net realizable value are charged to cost of revenue.
Property and Equipment
Property and equipment are stated at cost. Depreciation is computed using
the straight-line method based on estimated useful lives, generally three to
four years. Depreciation expense includes the amortization of assets recorded
under capital leases. Leasehold improvements and assets recorded under capital
leases are amortized over the shorter of the lease term or the estimated
useful life of the asset.
Software Development Costs
Software development costs are expensed as incurred until the technological
feasibility of the related product has been established. After technological
feasibility is established, any additional software development costs would be
capitalized in accordance with Financial Accounting Standards Board Statement
of Financial Accounting Standards ("SFAS") No. 86, Capitalization of Software
Development Costs. Through January 30, 2000, the Company's process for
developing software was completed concurrently with the establishment of
technological feasibility, and, accordingly, no software costs have been
capitalized to date. Software development costs incurred prior to achieving
technological feasibility are charged to research and development expense as
incurred.
Revenue Recognition
Revenue from product sales to all customers (excluding distributors) is
recognized upon shipment, net of appropriate allowances. The Company's policy
on sales to distributors is to defer recognition of sales and related gross
profit until the distributors resell the product. Royalty revenue is
recognized upon shipment of product by the licensee to its customers. The
Company believes that the software sold with its products is incidental to the
product as a whole.
F-7
<PAGE>
NVIDIA CORPORATION
NOTES TO FINANCIAL STATEMENTS--(Continued)
Concentration of Credit Risk
Financial instruments that potentially subject the Company to concentrations
of credit risk consist primarily of cash equivalents and trade accounts
receivable. The Company invests primarily in money market funds and limits the
amount of exposure to any one financial institution. Four customers accounted
for approximately 37% of the Company's accounts receivable balance at January
30, 2000. The Company performs ongoing credit evaluations of its customers'
financial condition and maintains an allowance for potential credit losses.
Research and Development Arrangements
The Company entered into contractual agreements to provide design,
development and support services on a best efforts basis. All amounts funded
to the Company under these agreements are non-refundable once paid. The
Company recorded reductions to research and development expense after the
services were performed based on the achievement of contractually specified
milestones and the collectability of amounts was assured.
Accounting for Stock-Based Compensation
The Company uses the intrinsic value method to account for its stock-based
employee compensation plans. Deferred compensation arising from stock-based
awards is amortized in accordance with Financial Accounting Standards Board
Interpretation No. 28.
Income Taxes
The Company records income taxes using the asset and liability method.
Deferred tax assets and liabilities are recognized for the estimated future
tax consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax
rates in effect for the year in which those temporary differences are expected
to be recorded or settled. The effect on deferred tax assets and liabilities
of a change in tax rates is recognized in income in the period that includes
the enactment date.
Fair Value of Financial Instruments
The carrying value of cash, cash equivalents, accounts receivable, accounts
payable and accrued liabilities approximate fair value due to the short
maturity of those instruments.
Comprehensive Income
In June 1997, the Financial Accounting Standards Board issued SFAS No. 130,
"Reporting Comprehensive Income." SFAS No. 130 establishes standards for
reporting and displaying comprehensive income and its components in financial
statements. The Company had no other components of comprehensive income other
than the reported amounts of net income (loss) in all periods presented.
Use of Estimates
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the recorded amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from these estimates.
Reclassifications
Certain prior year amounts in the financial statements have been
reclassified to conform to the current year presentation. Such
reclassifications had no effect on net income (loss) or stockholders' equity.
F-8
<PAGE>
NVIDIA CORPORATION
NOTES TO FINANCIAL STATEMENTS--(Continued)
New Accounting Pronouncement
In March 1998, the AICPA issued SOP 98-1, "Accounting for the Costs of
Computer Software Developed or Obtained for Internal Use," which provides
guidance on accounting for the costs of computer software intended for
internal use. Effective February 1, 1999, the Company adopted SOP 98-1. There
was no material change to the Company's results of operations or financial
position as a result of the adoption of SOP 98-1.
Net Income (Loss) Per Share
Basic net income (loss) per share is computed using the weighted average
number of common shares outstanding during the period. Diluted net income
(loss) per share is computed using the weighted average number of common and
dilutive common equivalent shares outstanding during the period, using either
the as-if-converted method for mandatorily convertible notes and convertible
preferred stock or the treasury stock method for options and warrants. The
following is a reconciliation of the numerators and denominators of the basic
and diluted net income (loss) per share computations for the periods
presented:
<TABLE>
<CAPTION>
Income/(Loss) Shares Per Share
(Numerator) (Denominator) Amount
------------- ------------- ---------
<S> <C> <C> <C>
(in thousands)
Year ended December 31, 1997
Basic and diluted net loss............. $(3,589) 12,677 $(0.28)
======= ====== ======
One month ended January 31, 1998
Basic net income....................... $ 1,347 14,141 $ 0.10
Effect of dilutive securities:
Stock options outstanding........... 2,531
Warrants............................ 101
Convertible preferred stock......... 9,327
------- ------
Diluted net income..................... $ 1,347 26,100 $ 0.05
======= ====== ======
Year ended January 31, 1999
Basic net income....................... $ 4,130 14,565 $ 0.28
Effect of dilutive securities:
Stock options outstanding........... 2,906
Warrants............................ 116
Mandatorily convertible notes....... 717
Convertible preferred stock......... 9,089
------
Diluted net income..................... $ 4,130 27,393 $ 0.15
======= ====== ======
Year ended January 30, 2000
Basic net income....................... $38,098 29,872 $ 1.28
Effect of dilutive securities:
Stock options outstanding........... 6,003
Warrants............................ 71
Common stock issuable in connection
with long-term software license..... 152
------- ------
Diluted net income..................... $38,098 36,098 $ 1.06
======= ====== ======
</TABLE>
As of January 31, 1999 and 1998, options to acquire 642,750 and 149,032
shares of common stock with weighted-average exercise prices of $8.86 and
$5.50, respectively, were not included in the computation of
F-9
<PAGE>
NVIDIA CORPORATION
NOTES TO FINANCIAL STATEMENTS--(Continued)
diluted earnings per share because the options' exercise price was greater
than the average market price of the Company's common shares and, therefore,
the effect would be antidilutive. Options to purchase 3,735,458 shares of
common stock with a weighted-average exercise price of $1.78, warrants to
purchase 158,806 shares of common stock as well as 9,327,087 shares of
convertible preferred stock were outstanding for the year ended December 31,
1997 but were not included in the calculation of diluted earnings per share
because the Company had a net loss for that year and to do so would have been
antidilutive.
(2) Balance Sheet Components
Certain balance sheet components are as follows:
<TABLE>
<CAPTION>
January 31, January 30,
1999 2000
----------- -----------
(in thousands)
<S> <C> <C>
Inventory:
Work in-process......................................... $15,385 $ 6,446
Finished goods.......................................... 13,238 31,185
------- -------
Total inventory....................................... $28,623 $37,631
======= =======
</TABLE>
At January 30, 2000, the Company had noncancelable inventory purchase
commitments totaling $124.6 million.
<TABLE>
<CAPTION>
January 31, January 30,
1999 2000
----------- -----------
<S> <C> <C>
(in thousands)
Property and Equipment:
Purchased engineering software.......................... $ 4,102 $17,013
Test equipment.......................................... 3,625 8,103
Computer equipment...................................... 9,028 14,194
Leasehold improvements.................................. 475 878
Office furniture and equipment.......................... 1,361 1,142
------- -------
18,591 41,330
Accumulated depreciation and amortization............... (6,941) (15,444)
------- -------
Property and equipment, net............................. $11,650 $25,886
======= =======
</TABLE>
Assets recorded under capital leases included in property and equipment were
$6,637,000 and $6,892,000 as of January 31, 1999 and January 30, 2000,
respectively. Accumulated amortization thereon was $3,238,000 and $5,285,000
as of January 31, 1999 and January 30, 2000, respectively.
<TABLE>
<CAPTION>
January 31, January 30,
1999 2000
----------- -----------
(in thousands)
<S> <C> <C>
Accrued Liabilities:
Accrued sales and marketing allowances.................. $1,973 $5,377
Other................................................... 3,039 4,152
------ ------
Total accrued liabilities............................. $5,012 $9,529
====== ======
</TABLE>
F-10
<PAGE>
NVIDIA CORPORATION
NOTES TO FINANCIAL STATEMENTS--(Continued)
(3) Stockholders' Equity
Mandatorily Convertible Notes
Convertible subordinated non-interest bearing notes were issued to three
major customers in July and August 1998 for a total of $11.0 million. The
notes were subordinated to certain senior indebtedness. On January 15, 1999,
the outstanding principal balance of these notes automatically converted into
1,571,429 shares of common stock of the Company at a conversion price equal to
$7.00 per share.
Convertible Preferred Stock
On January 22, 1999, 9,327,087 shares of preferred stock were automatically
converted into common stock upon the completion of the initial public offering
of common stock. As of January 31, 2000, there are no shares of preferred
stock outstanding and the Company has no current plans to issue any of the
authorized preferred stock.
1998 Equity Incentive Plan
The Equity Incentive Plan (the "Plan"), as amended and restated on February
17, 1998, provides for the issuance of up to 15,000,000 shares of the
Company's common stock to directors, employees and consultants. The Plan
provides for the issuance of stock bonuses, restricted stock purchase rights,
incentive stock options or nonstatutory stock options. Each year on the last
day of each fiscal year, starting with the year ending January 31, 1999, the
aggregate number of shares of common stock that are available for issuance
will automatically be increased by a number of shares equal to five percent
(5%) of the Company's outstanding common stock on such date, including on an
as-if-converted basis preferred stock and convertible notes, and outstanding
options and warrants, calculated using the treasury stock method. In January
2000, the shares of common stock available for issuance were increased by
1,930,962 shares pursuant to this provision.
Pursuant to the Plan, the exercise price for incentive stock options is at
least 100% of the fair market value on the date of grant or for employees
owning in excess of 10% of the voting power of all classes of stock, 110% of
the fair market value on the date of grant. For nonstatutory stock options,
the exercise price is no less than 85% of the fair market value on the date of
grant.
Options generally expire in 10 years. Vesting periods are determined by the
Board of Directors. However, options generally vest ratably over a four year
period, with 25% becoming vested approximately one year from the date of grant
and the remaining 75% vesting on a quarterly basis over the next three years.
Options granted prior to December 1997 could be exercised prior to full
vesting. Any unvested shares so purchased were subject to a repurchase right
in favor of the Company at a repurchase price per share that was equal to the
original per share purchase price. The right to repurchase at the original
price would lapse at the rate of 25% per year over the four-year period from
the date of grant. As of January 30, 2000, there were 499,611 such shares
subject to repurchase.
The Company accounts for the plan using the intrinsic value method. As such,
compensation expense is recorded if on the date of grant the current fair
value per share of the underlying stock exceeds the exercise price per share.
With respect to certain options granted during 1997 and the one month ended
January 31, 1998, the Company recorded deferred compensation of $4,277,000 and
$361,000, respectively, for the difference at the grant date between the
exercise price per share and the fair value per share, based upon independent
valuations and management's estimate of the fair value of the Company's stock
on the various grant dates of the common stock underlying the options. This
amount is being amortized over the vesting period of the individual options,
generally four years.
F-11
<PAGE>
NVIDIA CORPORATION
NOTES TO FINANCIAL STATEMENTS--(Continued)
Non-Employee Directors' Stock Option Plan
In February 1998, the Board adopted the 1998 Non-Employee Directors' Stock
Option Plan (the "Directors' Plan") to provide for the automatic grant of
options to purchase shares of common stock to directors of the Company who are
not employees of or consultants to the Company or an affiliate of the Company
(a "Non-Employee Director"). The Compensation Committee administers the
Directors' Plan. The aggregate number of shares of common stock that may be
issued pursuant to options granted under the Directors' Plan is 300,000
shares.
Stock-Based Compensation
As permitted under Statement of Financial Accounting Standards No. 123,
("SFAS 123"), the Company has elected to follow Accounting Principles Board
Opinion No. 25 ("APB 25") and related Interpretations in accounting for stock-
based awards to employees. Compensation cost for the Company's stock-based
compensation plans as determined consistent with SFAS 123, would have
increased net loss and would have decreased net income to the pro forma
amounts indicated below:
<TABLE>
<CAPTION>
Year Ended Month Ended Year Ended Year Ended
December 31, January 31, January January
1997 1998 31, 1999 30, 2000
------------ ----------- ---------- ----------
<S> <C> <C> <C> <C>
Net income (loss)--as reported.. $(3,589) $1,347 $4,130 $38,098
Net income (loss)--pro forma.... $(3,694) $1,046 $ (256) $30,697
Basic net income (loss) per
share--as reported............. $ (0.28) $ 0.10 $ 0.28 $ 1.28
Basic net income (loss)--pro
forma.......................... $ (0.29) $ 0.07 $(0.02) $ 1.03
Diluted net income (loss) per
share--as reported............. $ (0.28) $ 0.05 $ 0.15 $ 1.06
Diluted net income (loss)--pro
forma.......................... $ (0.29) $ 0.04 $(0.01) $ 0.85
</TABLE>
The fair value of options granted in fiscal 2000 has been estimated at the
date of grant using the Black-Scholes option pricing model with the following
weighted-average assumptions: no dividend yield, risk free interest rate of
5.84% , expected life for the option of five years and volatility of 70%. The
fair value of options granted prior to the initial public offering is
estimated on the date of grant using the minimum value method with the
following weighted-average assumptions: no dividend yield; risk free interest
rate of 5.0% to 6.5%; expected life for the option of five years; and
volatility of 0%. The weighted-average per share fair value of options granted
during the year ended 1997, the one month ended January 31, 1998, the years
ended January 31, 1999 and January 30, 2000 was approximately $.08, $1.43,
$1.74, $1.45 and $13.53, respectively.
F-12
<PAGE>
NVIDIA CORPORATION
NOTES TO FINANCIAL STATEMENTS--(Continued)
The following summarizes the transactions under the equity incentive and
non-employee director plans:
<TABLE>
<CAPTION>
Shares
Number Weighted
Available of Shares Average Price
for Grant Under Option Per Share
---------- ------------ -------------
<S> <C> <C> <C>
Balances, December 31, 1996.............. 3,506,606 2,176,020 0.27
Authorized............................. 2,000,000 -- --
Granted................................ (4,950,857) 5,000,857 1.43
Exercised.............................. -- (2,603,836) 0.32
Cancelled.............................. 868,208 (837,583) 0.29
---------- ----------
Balances, December 31, 1997.............. 1,423,957 3,735,458 1.78
Authorized............................. -- -- --
Granted................................ (605,000) 605,000 5.01
Exercised.............................. -- (1,125) 3.15
---------- ----------
Balances, January 31, 1998............... 818,957 4,339,333 2.23
Authorized............................. 6,878,606 -- --
Granted................................ (6,592,550) 6,612,550 7.22
Exercised.............................. -- (202,775) 1.91
Cancelled.............................. 1,692,688 (1,692,688) 6.35
---------- ----------
Balances, January 31, 1999............... 2,797,701 9,056,420 5.12
Authorized............................. 1,930,962 -- --
Granted................................ (3,394,600) 3,394,600 21.60
Exercised.............................. -- (1,789,469) 3.57
Cancelled.............................. 815,751 (815,751) 6.34
---------- ----------
Balances, January 30, 2000............... 2,149,814 9,845,800 10.97
---------- ----------
</TABLE>
In July 1998, the Board of Directors adopted a resolution allowing employees
to exchange some or all of their existing unvested options to purchase common
stock of the Company for options having an exercise price of $6.30 per share.
The repriced options retain the same vesting schedule as the originally issued
options, but the repriced options did not become exercisable until July 1999.
Options to purchase approximately 1,253,500 shares of common stock were
repriced under this program. Stock options held by executive officers and
directors were not eligible for such repricing.
During 1997 and fiscal 2000, the Company granted common stock options within
the Plan to consultants for services rendered. The fair value of all option
grants to non-employees has been estimated using the Black-Scholes option
pricing model using the following assumptions: dividend yield--none; expected
life--contractual term; risk free interest rates--6.0% to 6.5%; volatility--
60%. The estimated fair value of these options was $120,000 and $22,000 in
1997 and fiscal 2000, respectively.
In 1997, options to purchase 50,000 shares of common stock were granted to
an outside investor during the Series D preferred stock offering. In 1998,
options to purchase 20,000 shares of common stock were granted to an outside
investor. As of January 30, 2000, options to purchase 35,625 shares of common
stock were outstanding, of which 2,500 shares were vested.
F-13
<PAGE>
NVIDIA CORPORATION
NOTES TO FINANCIAL STATEMENTS--(Continued)
The following table summarizes information about stock options outstanding
as of January 30, 2000:
<TABLE>
<CAPTION>
Options Outstanding Options Exercisable
------------------------------------------- --------------------------
Weighted Average Weighted Weighted
Range of Exercise Number Remaining Average Number Average
Prices Outstanding Contractual Life Exercise Price Exercisable Exercise Price
----------------- ----------- ---------------- -------------- ----------- --------------
<S> <C> <C> <C> <C> <C>
$ 0.18 -- $ 1.30 832,798 7.26 $ 0.80 339,708 $ 0.68
2.64 -- 3.15 955,650 7.85 2.83 349,461 2.87
4.15 -- 6.30 2,006,818 8.45 6.08 537,108 5.98
6.65 -- 9.00 2,720,340 8.52 7.48 838,525 7.60
16.38 -- 20.13 1,820,194 9.43 17.93 45,901 17.01
20.50 -- 23.50 1,023,500 9.75 21.45 38,591 20.50
34.63 -- 37.38 486,500 9.89 35.98 -- --
--------- ---------
$ 0.18 -- $37.38 9,845,800 8.70 $10.97 2,149,294 $ 5.77
--------- ---------
</TABLE>
Employee Stock Purchase Plan
In February 1998, the Board approved the 1998 Employee Stock Purchase Plan
(the "Purchase Plan"), covering an aggregate of 500,000 shares of common
stock. The Purchase Plan is intended to qualify as an "employee stock purchase
plan" within the meaning of Section 423 of the Code. Under the Purchase Plan,
the Board may authorize participation by eligible employees, including
officers, in periodic offerings following the adoption of the Purchase Plan.
Under the Purchase Plan, the offering period for any offering will be no
longer than 27 months. Under the plan offering adopted pursuant to the
Purchase Plan, each offering period has been set at six months. In June 1999,
the plan was amended to increase the number of shares reserved for issuance
automatically each year at the end of the Company's fiscal year for the next
10 years (commencing at the end of fiscal 2000 and ending 10 years later in
2009) by an amount equal to 2% of the outstanding shares of the Company on
each date, including on an as-if-converted basis preferred stock and
convertible notes, and outstanding options and warrants, calculated using the
treasury stock method, up to a maximum aggregate increase of 6 million shares
over the 10-year period. In January 2000, the shares of common stock available
for issuance were increased by 772,385 shares pursuant to this provision.
Employees are eligible to participate if they are employed by the Company or
an affiliate of the Company designated by the Board. Employees who participate
in an offering generally can have up to 10% of their earnings withheld
pursuant to the Purchase Plan and applied, on specified dates determined by
the Board, to the purchase of shares of common stock. The Board may increase
this percentage at its discretion, up to 15%. The price of common stock
purchased under the Purchase Plan will be equal to 85% of the lower of the
fair market value of the common stock on the commencement date of each
offering period or the relevant purchase date. Employees may end their
participation in the offering at any time during the offering period, and
participation ends automatically on termination of employment with the
Company. At January 30, 2000, 128,827 shares have been issued under the
Purchase Plan and 1,143,558 shares have been reserved for further issuance.
The fair value of options granted under the Purchase Plan in fiscal 2000 has
been estimated at the date of grant using the Black-Scholes option pricing
model with the following weighted-average assumptions: no dividend yield, risk
free interest rate of 5.21% , expected life for the option of 0.5 years and
volatility of 70%. The weighted-average fair value of shares granted under the
Purchase Plan during the year ended January 30, 2000 was approximately $3.92
per share.
F-14
<PAGE>
NVIDIA CORPORATION
NOTES TO FINANCIAL STATEMENTS--(Continued)
(4) Financial Arrangements, Commitments and Contingencies
Short-term Borrowings
In July 1999, the Company entered into an amended loan and security
agreement with a bank, which included a $10.0 million revolving loan agreement
with a borrowing base equal to 80% of eligible accounts. Borrowings under the
line of credit bear interest at the prime rate, which was 8.5% at January 30,
2000, and are due in July 2000. Covenants governing the loan agreement require
the maintenance of certain financial ratios. As of January 30, 2000, the
Company had no outstanding borrowings against the line of credit.
Lease Obligations
The Company leases certain office facilities under operating leases expiring
through 2003. Future minimum lease payments under the Company's noncancelable
capital and operating leases as of January 30, 2000, are as follows (in
thousands):
<TABLE>
<CAPTION>
Year ending January Operating Capital
------------------- ----------- -----------
<S> <C> <C>
2001............................................... $ 2,614 $2,000
2002............................................... 2,722 705
2003............................................... 2,431 418
------- ------
Total payments..................................... $ 7,767 3,123
=======
Less amount representing interest, at rates ranging
from 8% to 10%.................................... 375
------
Present value of minimum debt payments............. 2,748
Less current portion............................... 1,786
------
Long term portion.................................. $ 962
======
The following is an analysis of the property and equipment under capital
leases by major classes:
<CAPTION>
January 31, January 30,
1999 2000
----------- -----------
(in thousands)
<S> <C> <C>
Classes of Property and Equipment:
Computer equipment................................. $ 4,450 $4,192
Test equipment..................................... 1,192 1,915
Software and other................................. 995 785
------- ------
6,637 6,892
Accumulated depreciation and amortization.......... (3,238) (5,285)
------- ------
Leased property and equipment, net................. $ 3,399 $1,607
======= ======
</TABLE>
Rent expense for 1997, one month ended January 31, 1998, the years ended
January 31, 1999 and January 30, 2000 was approximately $425,000, $52,000,
$1,555,000 and $2,501,000, respectively.
Litigation
On April 9, 1998, the Company was notified that SGI had filed a patent
infringement lawsuit against it in the United States District Court for the
District of Delaware. The suit alleged that the sale and use of the Company's
RIVA family of 3D graphics processors infringed a United States patent held by
SGI. The suit sought unspecified damages (including treble damages), an order
permanently enjoining further alleged infringement and attorneys' fees. In
July 1999, the matter settled during trial and it has been dismissed. As part
of the settlement, the Company entered into agreements with SGI to create a
broad strategic alliance to collaborate on future graphics technologies. As
part of the agreements, SGI dismissed its patent infringement suit against the
Company
F-15
<PAGE>
NVIDIA CORPORATION
NOTES TO FINANCIAL STATEMENTS--(Continued)
and the Company licensed SGI's 3D graphics patent portfolio. Additionally, SGI
agreed to incorporate the Company's graphics technology into new desktop
graphics systems and transfer engineering personnel to the Company during the
third quarter of fiscal 2000. The Company agreed to pay SGI a total of $3.0
million in nine quarterly installments with the final payment due in May 2001.
The rights to patents recorded under other assets are amortized using the
straight-line method over five years.
On May 11, 1998, S3 filed a patent infringement suit against the Company in
the United States District Court for the Northern District of California. The
suit alleged that the Company's sale of RIVA 128, 128ZX and TNT graphics
processors infringed three United States patents owned by S3. The suit sought
unspecified damages (including treble damages), an order permanently enjoining
further alleged infringement and attorneys' fees. The Company and S3 agreed to
settle this case on February 1, 2000, on the basis of mutual patent cross-
licenses and on February 7, 2000, the District Court entered a final judgment
in the Company's favor, dismissing all of S3's claims.
On September 21, 1998, 3Dfx filed a patent infringement lawsuit against the
Company in the United States District Court for the Northern District of
California alleging infringement of a 3Dfx patent. On March 2, 1999, 3Dfx
added a second patent to the suit and on May 24, 1999, 3Dfx added a third
patent to the suit. The amended complaint alleges that the Company's RIVA TNT,
RIVA TNT2 and RIVA TNT2 Ultra products infringe the patents in suit and seeks
unspecified compensatory and trebled damages and attorney's fees. The
Company's current generation of products is not identified as infringing any
of the patents in suit. The Company has filed an answer and counter-claims
asserting that the patents in suit are invalid and not infringed. These
assertions are supported by the Company's investigations to date and an
opinion from the Company's patent counsel in this suit. The Company
anticipates that the trial date will be set by the District Court after it
rules on claims construction issues. The Company has and will continue to
defend vigorously this suit. In the event of an adverse result in the 3Dfx
suit, the Company might be required to do one or more of the following: (i)
pay substantial damages (including treble damages); (ii) permanently cease the
manufacture and sale of any of the infringing products; (iii) expend
significant resources to develop non-infringing products; or (iv) obtain a
license from 3Dfx for infringing products.
In addition to the above litigation, from time to time the Company is
subject to claims in the ordinary course of business, none of which in the
Company's view, would have a material adverse impact on the Company's business
or financial position if resolved unfavorably.
(5) Income Taxes
The components of income tax expense are as follows:
<TABLE>
<CAPTION>
Year Ended Month Ended Year Ended Year Ended
December 31, January 31, January 31, January 30,
1997 1998 1999 2000
------------ ----------- ----------- -----------
<S> <C> <C> <C> <C>
Current:
Federal..................... $-- $134 $538 $11,624
State....................... -- -- -- 824
---- ---- ---- -------
Total current............... -- 134 538 12,448
Deferred:
Federal..................... -- -- (226) (3,923)
State....................... -- -- -- (1,070)
---- ---- ---- -------
Total deferred.............. -- -- (226) (4,993)
Charge in lieu of taxes
attributable to employer
stock option plans........... -- -- 45 10,613
---- ---- ---- -------
Total income taxes.......... $-- $134 $357 $18,068
==== ==== ==== =======
</TABLE>
F-16
<PAGE>
NVIDIA CORPORATION
NOTES TO FINANCIAL STATEMENTS--(Continued)
The provision for income taxes differs from the amount computed by applying
the federal statutory income tax rate of 35% to income before taxes as
follows:
<TABLE>
<CAPTION>
Year Ended Month Ended Year Ended Year Ended
December 31, January 31, January January
1997 1998 31, 1999 30, 2000
------------ ----------- ---------- ----------
<S> <C> <C> <C> <C>
Tax expense (benefit)
computed at federal
statutory rate............. $(1,256) $518 $ 1,570 $19,658
Loss carryforward........... 1,256 (518) (1,570) --
Alternate Minimum Tax....... -- 134 357 --
State income taxes, net of
federal tax benefit........ -- -- -- 1,531
Research and experimentation
credit..................... -- -- -- (1,389)
Change in valuation
allowance.................. -- -- -- (4,784)
Other....................... -- -- -- 3,052
------- ---- ------- -------
Total income taxes........ $ -- $134 $ 357 $18,068
======= ==== ======= =======
</TABLE>
The tax effect of temporary differences that gives rise to significant
portions of the deferred tax assets are presented below:
<TABLE>
<CAPTION>
January 31, January 31, January 30,
1998 1999 2000
----------- ----------- -----------
<S> <C> <C> <C>
Net operating loss carryforwards........ $3,380 $ -- $ --
Accruals and reserves, not currently
taken for tax purposes................. 228 2,323 4,996
Research credit carryforwards........... 1,095 1,775 --
Advances on development contract........ 996 138 --
Other................................... 383 774 223
------ ------ ------
Total gross deferred tax assets......... 6,082 5,010 5,219
Less valuation allowance................ (6,082) (4,784) --
------ ------ ------
Net deferred tax assets................. $ -- $ 226 $5,219
====== ====== ======
</TABLE>
The valuation allowance had decreases of $1,298,000 and $4,784,000 for the
year ended January 31, 1999 and the year ended January 30, 2000, respectively.
Management believes that it is more likely than not that future operations
will generate sufficient taxable income to realize the deferred tax assets.
(6) Development Agreement
The Company had a strategic collaboration agreement with ST for the
manufacture, marketing, and sale of certain of the Company's products. In
1996, ST paid the Company $2,500,000 for advanced royalty payments and agreed
to partially support the research and development and marketing efforts for
certain of the Company's products. In connection with this agreement, the
Company recorded royalty revenue of $1,791,000, $1,911,000, and $6,824,000, in
1997, the one month ended January 31, 1998, and the year ended January 31,
1999, respectively. Royalty revenue decreased to zero in fiscal 2000 due
primarily to reduced sales of RIVA 128 graphics processor and derivative
products and disputes with ST regarding payment. The Company does not expect
to record or receive royalty revenue from ST in the future. The Company also
recorded a reduction to research and development cost of $1,936,000 and a
reduction to sales, general and administrative expense of $314,000 in 1997. In
January of 1998, ST agreed to forgive the $2,500,000 in advanced royalty
payments in exchange for the Company's obligation to provide ST continued
development and support on certain products developed through December 31,
1998 which was recorded as a reduction to research and development expense in
fiscal 1999. Accordingly, $2,500,000 is included in accrued liabilities at
December 31, 1997. The costs incurred under the development agreement
approximated the amounts recorded as reduction to expenses.
F-17
<PAGE>
NVIDIA CORPORATION
NOTES TO FINANCIAL STATEMENTS--(Continued)
(7) Long-term Software Licensing Agreement
On April 12, 1999, the Company entered into a $10.0 million five-year
software licensing agreement with a supplier in the electronic design
automation industry. Under this agreement, the $10.0 million is due in two
installments. The first installment was settled in June 1999 for 243,902
shares of the Company's common stock valued at $5.0 million. The second
installment is due on or before March 31, 2000 and may be settled in cash or
in stock at the option of the Company.
(8) Stock Repurchase Agreement
In June 1999, the Company repurchased 428,572 shares of the Company's common
stock from a major customer in settlement for a portion of then outstanding
accounts receivable, in the amount of $7.5 million.
(9) Segment Information
The Company operates in a single industry segment: the design, development
and marketing of 3D graphics processors for the PC market. The Company's chief
operating decision maker, the Chief Executive Officer, reviews financial
information presented on a consolidated basis for purposes of making operating
decisions and assessing financial performance. The following table summarizes
geographic information on net sales:
<TABLE>
<CAPTION>
Year Ended Year Ended
Year Ended Month Ended January January
December 31, January 31, 31, 30,
1997 1998 1999 2000
------------ ----------- ---------- ----------
<S> <C> <C> <C> <C>
U.S........................... $29,071 $13,331 $120,788 $103,609
Asia Pacific.................. -- -- 29,649 208,832
Europe........................ -- -- 7,800 62,064
------- ------- -------- --------
Total revenue................. $29,071 $13,331 $158,237 $374,505
======= ======= ======== ========
</TABLE>
Revenues to significant customers, those representing approximately 10% or
more of total revenue for the respective periods, are summarized as follows:
<TABLE>
<CAPTION>
Year Ended Month Ended Year Ended Year Ended
December 31, January 31, January January
1997 1998 31, 1999 30, 2000
------------ ----------- ---------- ----------
<S> <C> <C> <C> <C>
Sales
Customer A.................. 63% 59% 35% 3%
Customer B.................. 31% 39% 27% 15%
Customer C.................. -- -- 13% 17%
Customer D.................. -- -- 12% 2%
Customer E.................. -- -- -- 15%
Customer F.................. -- -- 4% 10%
</TABLE>
<TABLE>
<CAPTION>
As of As of As of
January 31, 1998 January 31, 1999 January 30, 2000
---------------- ---------------- ----------------
<S> <C> <C> <C>
Accounts Receivable
Customer A.............. 57% 19% --
Customer B.............. 43% 28% 4%
Customer C.............. -- 18% 15%
Customer D.............. -- 14% --
Customer E.............. -- -- 12%
Customer F.............. -- -- 6%
Customer G.............. -- -- 13%
</TABLE>
F-18
<PAGE>
NVIDIA CORPORATION
NOTES TO FINANCIAL STATEMENTS--(Continued)
(10) Quarterly Summary (Unaudited)
<TABLE>
<CAPTION>
Quarters Ended
------------------------------------------------------------------
April July Oct. Jan. Oct.
26, 26, 25, 31, May 2, Aug. 1, 31, Jan. 30,
1998 1998 1998 1999 1999 1999 1999 2000
------- ------- ------- ------- ------- ------- ------- --------
(in thousands, except per share data)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Statement of Operations Data:
Revenue................. $28,263 $12,134 $52,303 $65,537 $71,018 $78,017 $97,015 $128,455
Cost of revenue......... 20,873 12,961 33,566 42,346 45,946 49,625 60,195 79,809
Gross profit (loss)..... 7,390 (827) 18,737 23,191 25,072 28,392 36,820 48,646
Net income (loss)....... (1,021) (9,652) 7,141 7,662 6,261 6,686 10,564 14,587
Basic net income (loss)
per share.............. $ (.07) $ (.68) $ .50 $ .48 $ .21 $ .23 $ .35 $ .47
Diluted net income
(loss)
per share.............. $ (.07) $ (.68) $ .26 $ .27 $ .18 $ .19 $ .29 $ .39
</TABLE>
(11) Subsequent Events
On March 5, 2000, the Company entered into an agreement with Microsoft in
which the Company agreed to develop and sell graphics chips and to license
certain technology to Microsoft and its licensees for use in a product under
development by Microsoft. The agreement provides that in April 2000, Microsoft
will pay the Company $200 million as an advance against graphics chip
purchases and for licensing the Company's technology. Microsoft may terminate
the agreement at any time and if termination occurs prior to offset in full of
the advance payments, the Company would be required to return to Microsoft up
to $100 million of the prepayment and to convert the remainder into preferred
stock of the Company at a 30% premium to the 30-day average trading price of
the common stock. The graphics chip and the game console contemplated by the
agreement is highly complex and development and release of the Microsoft
product and its commercial success are dependent upon a number of factors,
many of which the Company cannot control. There can be no assurance that the
Company will be successful in developing the graphics chip for use by
Microsoft or that the product will be developed or released, or if released,
will be commercially successful.
F-19
<PAGE>
NVIDIA CORPORATION
SCHEDULE II--VALUATION AND QUALIFYING ACCOUNTS
(in thousands)
<TABLE>
<CAPTION>
Additions
Balance Charged to Charged Balance
Beginning Costs and to Other at End
Description of Period Expenses Accounts Deductions of Period
----------- --------- ---------- -------- ---------- ---------
<S> <C> <C> <C> <C> <C>
Year ended January 30, 2000
Allowance for sales returns
and allowances............ $2,627 4,546 -- 3,081(1) $4,092
====== ===== ===== ===== ======
Allowance for doubtful
accounts.................. $ -- 2,395 -- 44(2) $2,351
====== ===== ===== ===== ======
Year ended January 31, 1999
Allowance for sales returns
and allowances............ $ 349 6,261 -- 3,983(1) $2,627
====== ===== ===== ===== ======
One month ended January 31,
1998
Allowances for sales
returns and accounts...... $ 100 249 -- -- $ 349
====== ===== ===== ===== ======
Year ended December 31, 1997
Allowances for sales
returns and accounts...... $ -- 100 -- -- $ 100
====== ===== ===== ===== ======
</TABLE>
- --------
(1) Represents amounts written off against the allowance for sales returns.
(2) Uncollectible accounts written off.
F-20
<PAGE>
PART II
INFORMATION NOT REQUIRED IN PROSPECTUS
Item 14. Other Expenses Of Issuance And Distribution.
The following table sets forth the estimated costs and expenses, other than
the underwriting discounts and commissions, payable by the registrant in
connection with the offering of the Securities being registered. All the
amounts shown are estimates, except for the registration fee.
<TABLE>
<S> <C>
SEC registration fee............................................... $105,600
*Accounting fees and expenses......................................
*Legal fees and expenses...........................................
*Miscellaneous.....................................................
--------
Total............................................................ $
========
</TABLE>
*To be provided by amendment.
We will pay all fees and expenses associated with filing this registration
statement.
Item 15. Indemnification of Officers and Directors.
Section 145 of the Delaware General Corporation Law, or the DGCL, authorizes
a court to award or a corporation's board of directors to grant
indemnification to directors and officers in terms sufficiently broad to
permit such indemnification under certain circumstances for liabilities
(including reimbursement for expenses incurred) arising under the Securities
Act. Our Amended and Restated Certificate of Incorporation and our Bylaws
provide for mandatory indemnification of our directors and permissive
indemnification of officers, employees and other agents to the maximum extent
permitted by the DGCL. We have entered into indemnification agreements with
our directors. The indemnification agreements provide the registrant's
directors with further indemnification to the maximum extent permitted by the
DGCL. We also have obtained directors and officers insurance to insure our
directors and officers against certain liabilities, including liabilities
under the securities laws.
The underwriting agreement filed as Exhibit 1.1 to the registration
statement provides for indemnification by the underwriters of the registrant
and its officers and directors for certain liabilities under the Securities
Act or otherwise.
Item 16. Exhibits And Financial Statement Schedules.
(a)Exhibits
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
------- -----------------------
<C> <S>
1.1 Form of Underwriting Agreement.*
4.1 Amended and Restated Certificate of Incorporation. Filed as an exhibit
to our registration statement on Form S-8 filed on March 23, 1999
(Registration No. 333-74905) and incorporated herein by reference.
4.2 Bylaws. Filed as an exhibit to our registration statement on Form S-8
filed on March 23, 1999 (Registration No. 333-74905) and incorporated
herein by reference.
4.3 Form of Senior Debt Indenture to be entered into between NVIDIA and a
trustee to be named.
4.4 Form of Subordinated Debt Indenture to be entered between NVIDIA and a
trustee to be named.
4.5 Form of Senior Note.
4.6 Form of Subordinated Note.
5.1 Opinion of Cooley Godward LLP.*
12.1 Calculation of Ratio of Earnings to Fixed Charges.
23.1 Consent of KPMG LLP.
</TABLE>
II-1
<PAGE>
<TABLE>
<CAPTION>
Exhibit
Number Description of Document
------- -----------------------
<C> <S>
23.2 Consent of Cooley Godward LLP (included in Exhibit 5.1).*
24.1 Power of Attorney (included on signature page).
25.1 Statement of Eligibility and Qualification on Form T-1 of trustee to
act as trustee under indenture.*
</TABLE>
- --------
* To be filed by amendment or as an exhibit to a report pursuant to Section
13(a) or 15(d) of the Securities Exchange Act of 1934.
Item 17. Undertakings
The undersigned registrant undertakes that, for purposes of determining any
liability under the Securities Act of 1933, each filing of the registrant's
annual report pursuant to Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 that is incorporated by reference in the registration statement
shall be deemed to be a new registration statement relating to the securities
offered therein, and the offering of such securities at that time shall be
deemed to be the initial bona fide offering thereof.
Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers, and controlling persons of
the registrant pursuant to the provisions described in Item 15 or otherwise,
the registrant has been advised that in the opinion of the Securities and
Exchange Commission such indemnification is against public policy as expressed
in the Securities Act and is, therefore, unenforceable. In the event that a
claim for indemnification against such liabilities (other than the payment by
the registrant of expenses incurred or paid by a director, officer or
controlling person of the registrant in the successful defense of any action,
suit, or proceeding) is asserted by such director, officer, or controlling
person in connection with the securities being registered, the registrant
will, unless in the opinion of its counsel the matter has been settled by
controlling precedent, submit to a court of appropriate jurisdiction the
question whether such indemnification by it is against public policy as
expressed in the Securities Act and will be governed by the final adjudication
of such issue.
The undersigned registrant undertakes to file an application for the purpose
of determining the eligibility of the trustee to act under subsection (a) of
Section 310 of the Trust Indenture Act in accordance with the rules and
regulations prescribed by the Commission under Section 305(b)(2) of the Act.
The undersigned registrant further undertakes:
(1) To file, during any period in which offers or sales are being made, a
post-effective amendment to this registration statement:
(i) to include any prospectus required by Section 10(a)(3) of the
Securities Act of 1933,
(ii) to reflect in the prospectus any facts or events arising after the
effective date of the registration statement (or the most recent
post-effective amendment thereof) which, individually or in the
aggregate, represent a fundamental change in the information set
forth in the registration statement. Notwithstanding the
foregoing, any increase or decrease in volume of securities
offered (if the total dollar value of securities offered would not
exceed that which was registered) and any deviation from the low
or high end of the estimated maximum offering range may be
reflected in the form of a prospectus filed with the Commission
pursuant to Rule 424(b) if, in the aggregate, the changes in
volume and price represent no more than a 20 percent change in the
maximum aggregate offering price set forth in the "Calculation of
Registration Fee" table in the effective registration statement,
and
(iii) to include any material information with respect to the plan of
distribution not previously disclosed in the registration
statement or any material change to such information in the
registration statement;
II-2
<PAGE>
provided, however, that paragraphs (a)(1)(i) and (a)(1)(ii) do not
apply if the registration statement is on Forms S-3, Form S-8 or Form
F-3, and the information required to be included in a post-effective
amendment by those paragraphs is contained in periodic reports filed
with or furnished to the Commission by the registrant pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 that are
incorporated by reference in the registration statement.
(2) That, for the purpose of determining any liability under the Securities
Act of 1933, each such post-effective amendment shall be deemed to be a
new registration statement relating to the securities offered therein,
and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof; and
(3) To remove from registration by means of a post-effective amendment any
of the securities being registered which remain unsold at the
termination of the offering.
II-3
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933, as amended, the
registrant certifies that it has reasonable grounds to believe that it meets
all of the requirements for filing on Form S-3 and has duly caused this
registration statement to be signed on its behalf by the undersigned,
thereunto duly authorized, in the City of Santa Clara, State of California, on
March 29, 2000.
NVIDIA Corporation
/s/ Jen-Hsun Huang
By: _________________________________
Jen-Hsun Huang
Chief Executive Officer
Know All Persons By These Presents, that each person whose signature appears
below constitutes and appoints Jen-Hsun Huang and Christine Hoberg and each or
both of them, his true and lawful attorney-in-fact and agent, with full power
of substitution and resubstitution, for him and in his name, place and stead,
in any and all capacities, to sign any and all amendments (including post-
effective amendments and registration statements filed pursuant to Rule 462)
to this registration statement, and to file the same, with all exhibits
thereto, and other documents in connection therewith, with the Securities and
Exchange Commission, granting unto said attorneys-in-fact and agents, and each
of them, full power and authority to do and perform each and every act and
thing requisite and necessary to be done in connection therewith, as fully to
all intents and purposes as he might or could do in person, ratifying and
confirming all that said attorneys-in-fact and agents, or any of them, or
their or his substitutes or substitute, may lawfully do or cause to be done by
virtue hereof.
Pursuant to the requirements of the Securities Act of 1933, as amended, this
registration statement has been signed below by the following persons in the
capacities and on the dates indicated.
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Jen-Hsun Huang President, Chief Executive March 29, 2000
____________________________________ Officer and Director
Jen-Hsun Huang (Principal Executive
Officer)
/s/ Christine B. Hoberg Chief Financial Officer March 29, 2000
____________________________________ (Principal Financial and
Christine B. Hoberg Accounting Officer)
/s/ Tench Coxe Director March 29, 2000
____________________________________
Tench Coxe
/s/ Harvey C. Jones, Jr. Director March 29, 2000
____________________________________
Harvey C. Jones, Jr.
/s/ Mark A. Stevens Director March 29, 2000
____________________________________
Mark A. Stevens
/s/ A. Brooke Seawell Director March 29, 2000
____________________________________
A. Brooke Seawell
/s/ James C. Gaither Director March 29, 2000
____________________________________
James C. Gaither
/s/ William J. Miller Director March 29, 2000
____________________________________
William J. Miller
</TABLE>
II-4
<PAGE>
EXHIBIT 4.3
- --------------------------------------------------------------------------------
NVIDIA CORPORATION
AND
CHASE MANHATTAN BANK AND TRUST COMPANY, N.A., as Trustee
Indenture
Dated as of March _, 2000
------------------
- --------------------------------------------------------------------------------
<PAGE>
CROSS REFERENCE SHEET/1/
----------
Provisions of Trust Indenture Act of 1939 and Indenture to be dated as of March
_, 2000, between NVIDIA CORPORATION and CHASE MANHATTAN BANK AND TRUST COMPANY,
N.A., as Trustee:
Section of the Act Section of Indenture
310(a)(1) and (2)....................................6.09
310(a)(3) and (4)....................................Inapplicable
310(b)...............................................6.08, 6.09, 6.10(a),
6.10(b), 6.10(d) and 6.11
310(c)...............................................Inapplicable
311(a)...............................................6.13
311(b)...............................................6.13
311(c)...............................................Inapplicable
312(a)...............................................4.01 and 4.02(a)
312(b)...............................................4.02(a) and 4.02(a)
312(c)...............................................4.02(c)
313(a)...............................................4.04
313(b)(1)............................................Inapplicable
313(b)(2)............................................4.04
313(c)...............................................4.04
313(d)...............................................4.04
314(a)...............................................4.03
314(b)...............................................Inapplicable
314(c)(1) and (2)....................................11.05
314(c)(3)............................................Inapplicable
314(d)...............................................Inapplicable
314(e)...............................................11.05
314(f)...............................................Inapplicable
315(a), (c) and (d)..................................6.01
315(b)...............................................5.11
315(e)...............................................5.12
316(a)(1)............................................5.09 and 5.10
316(a)(2)............................................Not required
316(a) (last sentence)...............................7.04
316(b)...............................................5.07
317(a)...............................................5.02
317(b)...............................................3.04(a) and 3.04(b)
318(a)...............................................11.07
- ---------------
/1/ This Cross Reference Sheet is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
----------------------
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Certain Terms Defined.......................................1
ARTICLE 2
SECURITIES
SECTION 2.01. Forms Generally.............................................9
SECTION 2.02. Form of Trustee's Certificate of Authentication............10
SECTION 2.03. Amount Unlimited; Issuable in Series.......................11
SECTION 2.04. Authentication and Delivery of Securities..................13
SECTION 2.05. Execution of Securities....................................17
SECTION 2.06. Certificate of Authentication..............................17
SECTION 2.07. Denomination and Date of Securities; Payments of
Interest...............................................17
SECTION 2.08. Registration, Transfer and Exchange........................18
SECTION 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen
Securities.............................................22
SECTION 2.10. Cancellation of Securities; Disposition Thereof............23
SECTION 2.11. Temporary Securities.......................................24
ARTICLE 3
COVENANTS OF THE ISSUER
SECTION 3.01. Payment of Principal and Interest..........................25
SECTION 3.02. Offices for Payments, etc..................................25
SECTION 3.03. Appointment to Fill a Vacancy in Office of Trustee.........26
SECTION 3.04. Paying Agents..............................................26
SECTION 3.05. [INTENTIONALLY OMITTED]....................................28
SECTION 3.06. Negative Pledge............................................28
SECTION 3.07. Luxembourg Publications....................................28
SECTION 3.08. Existence..................................................28
SECTION 3.09. Maintenance of Properties..................................28
SECTION 3.10. Payment of Taxes and Other Claims..........................29
SECTION 3.11. Stay, Extension and Usury Laws.............................29
SECTION 3.12. Compliance Certificate.....................................29
ii
<PAGE>
PAGE
ARTICLE 4
SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE
SECTION 4.01. Issuer to Furnish Trustee Information as to Names
and Addresses of Securityholders.......................30
SECTION 4.02. Preservation and Disclosure of Lists.......................30
SECTION 4.03. Reports by the Issuer......................................31
SECTION 4.04. Reports by the Trustee.....................................31
ARTICLE 5
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
SECTION 5.01. Event of Default Defined; Acceleration of
Maturity; Waiver of Default............................31
SECTION 5.02. Collection of Indebtedness by Trustee; Trustee
May Prove Debt.........................................34
SECTION 5.03. Application of Proceeds....................................37
SECTION 5.04. Suits for Enforcement......................................38
SECTION 5.05. Restoration of Rights on Abandonment of
Proceedings............................................38
SECTION 5.06. Limitations on Suits by Securityholders....................38
SECTION 5.07. Unconditional Right of Securityholders to Institute
Certain Suits..........................................39
SECTION 5.08. Powers and Remedies Cumulative; Delay or
Omission Not Waiver of Default.........................39
SECTION 5.09. Control by Holders of Securities...........................40
SECTION 5.10. Waiver of Past Defaults...................................40
SECTION 5.11. Trustee to Give Notice of Default; But May
Withhold in Certain Circumstances......................41
SECTION 5.12. Right of Court to Require Filing of Undertaking to
Pay Costs..............................................41
ARTICLE 6
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of the Trustee; During
Default; Prior to Default..............................42
SECTION 6.02. Certain Rights of the Trustee..............................43
SECTION 6.03. Trustee Not Responsible for Recitals, Disposition
of Securities or Application of Proceeds Thereof.......45
SECTION 6.04. Trustee and Agents May Hold Securities or
Coupons; Collections, etc..............................45
iii
<PAGE>
PAGE
SECTION 6.05. Moneys Held by Trustee.....................................45
SECTION 6.06. Compensation and Indemnification of Trustee and
Its Prior Claim........................................45
SECTION 6.07. Right of Trustee to Rely on Officer's Certificate,
etc....................................................46
SECTION 6.08. Conflicting Interests of Trustee...........................46
SECTION 6.09. Persons Eligible for Appointment as Trustee................46
SECTION 6.10. Resignation and Removal; Appointment of
Successor Trustee......................................47
SECTION 6.11. Acceptance of Appointment by Successor Trustee.............48
SECTION 6.12. Merger, Conversion, Consolidation or Succession
to Business of Trustee.................................50
SECTION 6.13. Preferential Collection of Claims..........................50
SECTION 6.14. Appointment of Authenticating Agent........................50
ARTICLE 7
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Evidence of Action Taken by Securityholders................52
SECTION 7.02. Proof of Execution of Instruments and of Holding
of Securities..........................................52
SECTION 7.03. Holders to Be Treated as Owners............................53
SECTION 7.04. Securities Owned by Issuer Deemed Not
Outstanding............................................54
SECTION 7.05. Right of Revocation of Action Taken........................54
ARTICLE 8
SUPPLEMENTAL INDENTURES
SECTION 8.01. Supplemental Indentures Without Consent of
Securityholders........................................55
SECTION 8.02. Supplemental Indentures with Consent of
Securityholders........................................56
SECTION 8.03. Effect of Supplemental Indenture...........................58
SECTION 8.04. Documents to Be Given to Trustee...........................59
SECTION 8.05. Notation on Securities in Respect of Supplemental
Indentures.............................................59
iv
<PAGE>
PAGE
ARTICLE 9
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.01. Issuer May Consolidate, Etc. on Certain Terms..............59
SECTION 9.02. Successor Corporation to be Substituted....................60
SECTION 9.03. Opinion of Counsel to be Given Trustee.....................60
ARTICLE 10
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.01. Satisfaction and Discharge of Indenture...................61
SECTION 10.02. Application by Trustee of Funds Deposited for
Payment of Securities..................................63
SECTION 10.03. Repayment of Moneys Held by Paying Agent..................64
SECTION 10.04. Return of Moneys Held by Trustee and Paying
Agent Unclaimed for Two Years..........................64
SECTION 10.05. Indemnity for U.S. Government Obligations.................65
ARTICLE 11
MISCELLANEOUS PROVISIONS
SECTION 11.01. Incorporators, Stockholders, Officers and
Directors of Issuer Exempt from Individual
Liability..............................................65
SECTION 11.02. Provisions of Indenture for the Sole Benefit of
Parties and Holders of Securities and Coupons..........65
SECTION 11.03. Successors and Assigns of Issuer Bound by
Indenture..............................................65
SECTION 11.04. Notices and Demands on Issuer, Trustee and
Holders of Securities and Coupons......................65
SECTION 11.05. Officer's Certificates and Opinions of Counsel;
Statements to Be Contained Therein.....................66
SECTION 11.06. Payments Due on Saturdays, Sundays or
Holidays...............................................67
SECTION 11.07. Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939..................................68
SECTION 11.08. New York Law to Govern....................................68
SECTION 11.09. Counterparts..............................................68
SECTION 11.10. Effect of Headings........................................68
SECTION 11.11. Securities in a Foreign Currency..........................68
SECTION 11.12. Judgment Currency.........................................69
v
<PAGE>
PAGE
ARTICLE 12
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.01. Applicability of Article..................................70
SECTION 12.02. Notice of Redemption; Partial Redemptions.................70
SECTION 12.03. Payment of Securities Called for Redemption...............72
SECTION 12.04. Exclusion of Certain Securities from Eligibility
for Selection for Redemption...........................73
SECTION 12.05. Mandatory and Optional Sinking Funds......................73
vi
<PAGE>
Exhibit 4.3
THIS INDENTURE, dated as of March _, 2000 between NVIDIA CORPORATION, a
Delaware corporation (the "Issuer"), and CHASE MANHATTAN BANK AND TRUST COMPANY,
N.A., a national banking association, as trustee (the "Trustee"),
W I T N E S S E T H :
WHEREAS, the Issuer has duly authorized the issue from time to time of
its debentures, notes or other evidences of indebtedness to be issued in one or
more series (the "Securities") up to such principal amount or amounts as may
from time to time be authorized in accordance with the terms of this Indenture
and to provide, among other things, for the authentication, delivery and
administration thereof, the Issuer has duly authorized the execution and
delivery of this Indenture; and
WHEREAS, the Issuer has duly authorized the execution and delivery of
this Indenture to provide, among other things, for the authentication, delivery
and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid indenture
and agreement according to its terms have been done.
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities by
the holders thereof, the Issuer and the Trustee mutually covenant and agree for
the equal and proportionate benefit of the respective holders from time to time
of the Securities or of series thereof and of the coupons, if any, appertaining
thereto as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Certain Terms Defined. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section. All other terms
used in this Indenture that are defined in the Trust Indenture Act of 1939 or
the definitions of which in the Securities Act of 1933 are referred to in the
Trust Indenture Act of 1939, including terms defined therein by reference to the
Securities Act of 1933
<PAGE>
(except as herein otherwise expressly provided or unless the context otherwise
requires), shall have the meanings assigned to such terms in said Trust
Indenture Act and in said Securities Act as in force at the date of this
Indenture. All accounting terms used herein and not expressly defined shall have
the meanings assigned to such terms in accordance with generally accepted
accounting principles, and the term "generally accepted accounting principles"
means such accounting principles as are generally accepted at the time of any
computation. The words "herein", "hereof" and "hereunder" and other words of
similar import refer to this Indenture as a whole and not to any particular
Article, Section or other subdivision. The terms defined in this Article have
the meanings assigned to them in this Article and include the plural as well as
the singular.
"Authenticating Agent" shall have the meaning set forth in Section
6.14.
"Authorized Newspaper" means a newspaper (which, in the case of The
City of New York, will, if practicable, be The Wall Street Journal (Eastern
Edition), in the case of the United Kingdom, will, if practicable, be the
Financial Times (London Edition) and, in the case of Luxembourg, will, if
practicable, be the Luxemburger Wort) published in an official language of the
country of publication customarily published at least once a day for at least
five days in each calendar week and of general circulation in The City of New
York, the United Kingdom or in Luxembourg, as applicable. If it shall be
impractical in the opinion of the Trustee to make any publication of any notice
required hereby in an Authorized Newspaper, any publication or other notice in
lieu thereof which is made or given with the approval of the Trustee shall
constitute a sufficient publication of such notice.
"Board of Directors" means either the Board of Directors of the Issuer
or any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means a copy of one or more resolutions, certified
by the secretary or an assistant secretary of the Issuer to have been duly
adopted or consented to by the Board of Directors and to be in full force and
effect, and delivered to the Trustee.
"Business Day" means, with respect to any Security, a day that in the
city (or in any of the cities, if more than one) in which amounts are payable,
as specified in the form of such Security, is not a day on which banking
institutions are authorized or required by law or regulation to close.
"Capital Lease" means, with respect to any Person, any lease of any
property which, in conformity with GAAP, is required to be capitalized on the
balance sheet of such Person.
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"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or if at
any time after the execution and delivery of this Indenture such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 101 California Street, Suite 2700, San
Francisco, California 94111.
"Coupon" means any interest coupon appertaining to a Security.
"covenant defeasance" shall have the meaning set forth in Section
10.01(c).
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of one or more Registered Global Securities, the
Person designated as Depositary by the Issuer pursuant to Section 2.03 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or include
each Person who is then a Depositary hereunder, and if at any time there is more
than one such Person, "Depositary" as used with respect to the Securities of any
such series shall mean the Depositary with respect to the Registered Global
Securities of that series.
"Dollar" means the coin or currency of the United States of America as
at the time of payment is legal tender for the payment of public and private
debts.
"Event of Default" means any event or condition specified as such in
Section 5.01.
"Foreign Currency" means a currency issued by the government of a
country other than the United States (or any currency unit comprised of any such
currencies).
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time.
"Holder", "Holder of Securities", "Securityholder" or other similar
terms mean (a) in the case of any Registered Security, the Person in whose name
such Security is registered in the security register kept by the Issuer for that
purpose in accordance with the terms hereof, and (b) in the case of any
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Unregistered Security, the bearer of such Security, or any Coupon appertaining
thereto, as the case may be.
"Indebtedness" means, with respect to any Person, and without
duplication, (a) all indebtedness, obligations and other liabilities (contingent
or otherwise) of such Person for borrowed money (including obligations of such
Person in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of such Person or to only a portion
thereof), other than any account payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with the
obtaining of materials or services; (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers' acceptances; (c) all obligations and
liabilities (contingent or otherwise) in respect of leases of such Person
required, in conformity with generally accepted accounting principles, to be
accounted for as capitalized lease obligations on the balance sheet of such
Person; (d) all obligations and other liabilities (contingent or otherwise)
under any lease or related document (including a purchase agreement) in
connection with the lease of real property which provides that such Person is
contractually obligated to purchase or cause a third party to purchase the
leased property and thereby guarantee a minimum residual value of the leased
property to the lessor and the obligations of such Person under such lease or
related document to purchase or to cause a third party to purchase such leased
property; (e) all obligations of such Person (contingent or otherwise) with
respect to an interest rate or other swap, cap or collar agreement or other
similar instrument or agreement or foreign currency hedge, exchange, purchase or
similar instrument or agreement; (f) all direct or indirect guaranties or
similar agreements by such Person in respect of, and obligations or liabilities
(contingent or otherwise) of such Person to purchase or otherwise acquire or
otherwise assure a creditor against loss in respect of, indebtedness,
obligations or liabilities of another Person of the kind described in clauses
(a) through (e); (g) any indebtedness or other obligations described in clauses
(a) through (f) secured by any mortgage, pledge, lien or other encumbrance
existing on property which is owned or held by such Person, regardless of
whether the indebtedness or other obligation secured thereby shall have been
assumed by such Person; and (g) any and all refinancings, replacements,
deferrals, renewals, extensions and refundings of, or amendments, modifications
or supplements to, any indebtedness, obligation or liability of the kind
described in clauses (a) through (g).
"Indenture" means this instrument as originally executed and delivered
or, if amended or supplemented as herein provided, as so amended or
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supplemented or both, and shall include the forms and terms of particular series
of Securities established as contemplated hereunder.
"Interest" means, when used with respect to non-interest bearing
Securities, interest payable after maturity.
"Issuer" means (except as otherwise provided in Article 6) NVIDIA
Corporation, a Delaware corporation and, subject to Article 9, its successors
and assigns.
"Issuer Order" means a written statement, request or order of the
Issuer signed in its name by any one of the following: the Chairman of the
Board, the President, the Chief Financial Officer, the Chief Legal Officer, the
Treasurer, any Assistant Treasurer or any other person authorized by the Board
of Directors to execute any such written statement, request or order.
"Judgment Currency" shall have the meaning set forth in Section 11.12.
"Lien" means any mortgage, pledge, security interest, encumbrance, lien
or charge of any kind (including any conditional sale or other title retention
agreement or Capital Lease).
"Officer's Certificate" means a certificate (i) signed by any one of
the following: the Chairman of the Board, the President, the Chief Financial
Officer, the Chief Legal Officer, the Treasurer, any Assistant Treasurer or any
other person authorized by the Board of Directors to execute any such
certificate and (ii) delivered to the Trustee. Each such certificate shall
comply with Section 314 of the Trust Indenture Act of 1939 and include the
statements provided for in Section 11.05.
"Opinion of Counsel" means an opinion in writing, subject to customary
exceptions, signed by the Chief Legal Officer of the Issuer or by such other
legal counsel who may be an employee of or counsel to the Issuer and who shall
be reasonably satisfactory to the Trustee. Each such opinion shall comply with
Section 314 of the Trust Indenture Act of 1939 and include the statements
provided for in Section 11.05.
"original issue date" of any Security (or portion thereof) means the
earlier of (a) the date of such Security or (b) the date of any Security (or
portion thereof) for which such Security was issued (directly or indirectly) on
registration of transfer, exchange or substitution.
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"Original Issue Discount Security" means any Security that provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof pursuant to Section 5.01.
"Outstanding" when used with reference to Securities, shall, subject to
the provisions of Section 7.04, mean, as of any particular time, all Securities
authenticated and delivered by the Trustee under this Indenture, except
(a) Securities theretofore cancelled by the Trustee or delivered to
the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption of
which moneys or U.S. Government Obligations (as provided for in Section 10.01)
in the necessary amount shall have been deposited in trust with the Trustee or
with any paying agent (other than the Issuer) or shall have been set aside,
segregated and held in trust by the Issuer for the Holders of such Securities
(if the Issuer shall act as its own paying agent), provided that if such
Securities, or portions thereof, are to be redeemed prior to the maturity
thereof, notice of such redemption shall have been given as herein provided, or
provision reasonably satisfactory to the Trustee shall have been made for giving
such notice; and
(c) Securities which shall have been paid or in substitution for which
other Securities shall have been authenticated and delivered pursuant to the
terms of Section 2.09 (except with respect to any such Security as to which
proof reasonably satisfactory to the Trustee is presented that such Security is
held by a person in whose hands such Security is a legal, valid and binding
obligation of the Issuer).
In determining whether the Holders of the requisite principal amount of
Outstanding Securities of any or all series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a declaration
of acceleration of the maturity thereof pursuant to Section 5.01.
"Periodic Offering" means an offering of Securities of a series from
time to time, the specific terms of which Securities, including, without
limitation, the rate or rates of interest, if any, thereon, the stated maturity
or maturities thereof and the redemption provisions, if any, with respect
thereto, are to be determined by the Issuer or its agents upon the issuance of
such Securities.
"Permitted Liens" means
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(1) Liens existing on the original issue date of Securities of a
particular series;
(2) Liens securing the Securities;
(3) Liens incurred as pledges or deposits under worker's compensation
laws, unemployment insurance laws or similar legislation, or Liens incurred as
good faith deposits in connection with bids, tenders, contracts or leases, or
Liens incurred to secure public, regulatory or statutory obligations, surety and
appeal bonds, customs duties, government contracts, performance bonds and the
like, or for the payment of rent, in each case incurred in the ordinary course
of business;
(4) statutory and common law Liens imposed by law, such as landlords'
suppliers', materialmens', repairmens', carriers', vendors', warehousemen's,
mechanics' liens or other similar Liens, in each case for sums not yet overdue
for a period in excess of 60 days or being contested in good faith and by
appropriate proceedings;
(5) Liens in respect of taxes and other governmental assessments,
claims and charges which are being contested in good faith and by appropriate
proceedings;
(6) minor survey exceptions, minor encumbrances, easements or
reservations of, or rights of others for, licenses, rights of way, sewers,
electric lines, telegraph and telephone lines and other similar purposes, or
zoning or other restrictions as to the use of real property, not interfering in
any material respect with the conduct of the business of the Issuer and its
Subsidiaries;
(7) Liens (including the interest of a lessor under a Capital Lease)
on property that secure Indebtedness incurred for the purpose of financing all
or any part of the purchase price or cost of construction or improvement of such
property;
(8) Liens on property of a Person at the time such Person becomes a
Subsidiary of the Issuer, provided such Liens were not created in contemplation
thereof and do not extend to any other property of the Issuer or any Subsidiary;
(9) Liens on property at the time the Issuer or any of the
Subsidiaries acquires such property, including any acquisition by means of a
merger or consolidation with or into the Issuer or a Subsidiary of such Person,
provided such Liens were not created in contemplation thereof and do not extend
to any other property of the Issuer or any Subsidiary;
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(10) leases or subleases granted to others that do not materially
interfere with the ordinary course of business of the Issuer and its
Subsidiaries, taken as a whole;
(11) any interest or title of a lessor in the property subject to any
operating lease;
(12) Liens arising from filing Uniform Commercial Code financing
statements regarding leases;
(13) Liens in favor of the Issuer or any Subsidiary;
(14) Liens arising from the rendering of a final judgement or order
against the Issuer or any Subsidiary that the Issuer or a Subsidiary shall at
any time in good faith be prosecuting an appeal or proceeding for a review;
(15) Liens securing reimbursement obligations with respect to letters
of credit that encumber documents and other property relating to such letters of
credit and the products and proceeds thereof;
(16) Liens encumbering customary initial deposits and margin deposits,
and other Liens that are within the general parameters customary in the industry
and incurred in the ordinary course of business, in each case, securing
Indebtedness under interest rate agreements, currency agreements and forward
contracts, options, future contracts, futures, options or similar agreements or
arrangements designed solely to protect the Issuer or any of its Subsidiaries
from fluctuations in interest rates, currencies or the price of commodities;
(17) Liens arising out of conditional sale, title retention,
consignment or similar arrangements for the sale of goods entered into by the
Issuer or any of its Subsidiaries;
(18) Liens on shares of capital stock of any Subsidiary to secure
Indebtedness of such Subsidiary;
(19) licenses or similar rights granted by the Issuer or any Subsidiary
in the ordinary course of business;
(20) any interest or title of a licensor in the property subject to a
license;
(21) Liens on or sales of receivables; and
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(22) extensions, renewals or replacements of any Liens referred to in
clauses (1), (2), (7), (8), (9) through (13), or (15) through (21) in connection
with the refinancing of the obligations secured thereby, provided that such Lien
does not extend to any other property and the amount secured by such Lien is not
increased.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"principal" whenever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include "and premium, if
any".
"record date" shall have the meaning set forth in Section 2.07.
"Redemption Notice Period" shall have the meaning set forth in Section
12.02.
"Registered Global Security", means a Security evidencing all or a part
of a series of Registered Securities, issued to the Depositary for such series
in accordance with Section 2.04, and bearing the legend prescribed in Section
2.04.
"Registered Security" means any Security registered on the Security
register of the Issuer.
"Required Currency" shall have the meaning set forth in Section 11.12.
"Responsible Officer" when used with respect to the Trustee means the
chairman of the Board of Directors, any vice chairman of the board of directors,
the chairman of the trust committee, the chairman of the executive committee,
any vice chairman of the executive committee, the president, any vice president,
(whether or not designated by numbers or words added before or after the title
"vice president") the cashier, the secretary, the treasurer, any trust officer,
any assistant trust officer, any assistant vice president, any assistant
cashier, any assistant secretary, any assistant treasurer, or any other officer
or assistant officer of the Trustee assigned and duly authorized by the Trustee
to administer this Indenture.
"Security" or "Securities" has the meaning stated in the fourth recital
of this Indenture, or, as the case may be, Securities that have been
authenticated and delivered under this Indenture.
"Significant Subsidiary" means, as of any date of determination, a
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Subsidiary of the Issuer, if as of such date of determination either (a) the
assets of such subsidiary equal 10% or more of the Issuer's total consolidated
assets or (b) the total revenue of which represented 10% or more of the Issuer's
consolidated total revenue for the most recently completed fiscal year.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other subsidiaries
of that Person (or a combination thereof) and (ii) any partnership (a) the sole
general partner or managing general partner of which is such Person or a
subsidiary of such Person or (b) the only general partners of which are such
Person or of one or more subsidiaries of such Person (or any combination
thereof).
"Trust Indenture Act of 1939" means the Trust Indenture Act of 1939.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article 6, shall also include
any successor trustee. "Trustee" shall also mean or include each Person who is
then a trustee hereunder and if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean the
trustee with respect to the Securities of such series.
"Unregistered Security" means any Security other than a Registered
Security.
"U.S. Government Obligations" shall have the meaning set forth in
Section 10.01(a).
"Yield to Maturity" means the yield to maturity on a series of
securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated in accordance with accepted financial practice.
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ARTICLE 2
SECURITIES
SECTION 2.01. Forms Generally. The Securities of each series and the
Coupons, if any, to be attached thereto shall be substantially in such form (not
inconsistent with this Indenture) as shall be established by or pursuant to one
or more Board Resolutions (as set forth in a Board Resolution or, to the extent
established pursuant to rather than set forth in a Board Resolution, an
Officer's Certificate detailing such establishment) or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have imprinted or otherwise reproduced thereon such legend or
legends or endorsements, not inconsistent with the provisions of this Indenture,
as may be required to comply with any law or with any rules or regulations
pursuant thereto, or with any rules of any securities exchange or to conform to
general usage, all as may be determined by the officers executing such
Securities and Coupons, if any, as evidenced by their execution of such
Securities and Coupons.
The definitive Securities and Coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities and
Coupons, if any, as evidenced by their execution of such Securities and Coupons,
if any.
SECTION 2.02. Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
"This is one of the Securities referred to in the within-mentioned
Senior Indenture.
------------------------------
as Trustee
By:
---------------------------
Authorized Officer
If at any time there shall be an Authenticating Agent appointed with
respect to any series of Securities, then the Trustee's Certificate of
Authentication to be borne by the Securities of each such series shall be
substantially as follows:
"This is one of the Securities referred to in the
within-mentioned Senior Indenture.
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-----------------------------
as Authenticating Agent
By:
--------------------------
Authorized Officer
SECTION 2.03. Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series and each such series
shall rank equally and pari passu with all other unsecured and unsubordinated
debt of the Issuer. There shall be established in or pursuant to one or more
Board Resolutions (and to the extent established pursuant to rather than set
forth in a Board Resolution, in an Officer's Certificate detailing such
establishment) or established in one or more indentures supplemental hereto,
prior to the initial issuance of Securities of any series,
(a) the designation of the Securities of the series, which shall
distinguish the Securities of the series from the Securities of all other
series;
(b) any limit upon the aggregate principal amount of the Securities of
the series that may be authenticated and delivered under this Indenture (except
for Securities authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities of the series pursuant to
Section 2.08, 2.09, 2.11, 8.05 or 12.03);
(c) if other than Dollars, the coin or currency in which the
Securities of that series are denominated (including, but not limited to, any
Foreign Currency);
(d) the date or dates on which the principal of the Securities of the
series is payable;
(e) the rate or rates at which the Securities of the series shall bear
interest, if any, the date or dates from which such interest shall accrue, on
which such interest shall be payable and (in the case of Registered Securities)
on which a record shall be taken for the determination of Holders to whom
interest is payable and/or the method by which such rate or rates or date or
dates shall be determined;
(f) the place or places where the principal of and any interest on
Securities of the series shall be payable (if other than as provided in Section
3.02);
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(g) the right, if any, of the Issuer to redeem Securities, in whole or
in part, at its option and the period or periods within which, the price or
prices at which and any terms and conditions, including the Redemption Notice
Period, upon which Securities of the series may be so redeemed, pursuant to any
sinking fund or otherwise;
(h) the obligation, if any, of the Issuer to redeem, purchase or repay
Securities of the series pursuant to any mandatory redemption, sinking fund or
analogous provisions or at the option of a Holder thereof and the price or
prices at which and the period or periods within which and any terms and
conditions upon which Securities of the series shall be redeemed, purchased or
repaid, in whole or in part, pursuant to such obligation;
(i) if other than denominations of $1,000 and any integral multiple
thereof in the case of Registered Securities, or $1,000 and $5,000 in the case
of Unregistered Securities, the denominations in which Securities of the series
shall be issuable;
(j) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof;
(k) if other than the coin or currency in which the Securities of that
series are denominated, the coin or currency in which payment of the principal
of or interest on the Securities of such series shall be payable;
(l) if the principal of or interest on the Securities of such series
are to be payable, at the election of the Issuer or a Holder thereof, in a coin
or currency other than that in which the Securities are denominated, the period
or periods within which, and the terms and conditions upon which, such election
may be made;
(m) if the amount of payments of principal of and interest on the
Securities of the series may be determined with reference to an index based on a
coin or currency other than that in which the Securities of the series are
denominated, or with reference to any currencies, securities or baskets of
securities, commodities or indices, the manner in which such amounts shall be
determined;
(n) if the Holders of the Securities of the series may convert or
exchange the Securities of the series into or for securities of the Issuer or of
other entities or other property (or the cash value thereof), the specific terms
of and period during which such conversion or exchange may be made;
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(o) whether the Securities of the series will be issuable as
Registered Securities (and if so, whether such Securities will be issuable as
Registered Global Securities) or Unregistered Securities (with or without
Coupons), or any combination of the foregoing, any restrictions applicable to
the offer, sale, transfer, exchange or delivery of Unregistered Securities or
Registered Securities or the payment of interest thereon and, if other than as
provided in Section 2.08, the terms upon which Unregistered Securities of any
series may be exchanged for Registered Securities of such series and vice versa;
(p) whether and under what circumstances the Issuer will pay
additional amounts on the Securities of the series held by a Person who is not a
U.S. Person in respect of any tax, assessment or governmental charge withheld or
deducted and, if so, whether the Issuer will have the option to redeem such
Securities rather than pay such additional amounts;
(q) if the Securities of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security of
such series) only upon receipt of certain certificates or other documents or
satisfaction of other conditions, the form and terms of such certificates,
documents or conditions;
(r) any trustees, depositaries, authenticating or paying agents,
transfer agents or registrars or any other agents with respect to the Securities
of such series;
(s) any other events of default or covenants with respect to the
Securities of such series; and
(t) any other terms of the series.
All Securities of any one series and Coupons, if any, appertaining
thereto, shall be substantially identical, except in the case of Registered
Securities as to denomination and except as may otherwise be provided by or
pursuant to the Board Resolution or Officer's Certificate referred to above or
as set forth in any such indenture supplemental hereto. All Securities of any
one series need not be issued at the same time and may be issued from time to
time, consistent with the terms of this Indenture, if so provided by or pursuant
to such Board Resolution, such Officer's Certificate or in any such indenture
supplemental hereto.
SECTION 2.04. Authentication and Delivery of Securities. The Issuer may
deliver Securities of any series having attached thereto appropriate Coupons, if
any, executed by the Issuer to the Trustee for authentication together with the
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applicable documents referred to below in this Section, and the Trustee shall
thereupon authenticate and deliver such Securities to or upon the order of the
Issuer (contained in the Issuer Order referred to below in this Section) or
pursuant to such procedures reasonably acceptable to the Trustee and to such
recipients as may be specified from time to time by an Issuer Order. The
maturity date, original issue date, interest rate and any other terms of the
Securities of such series and Coupons, if any, appertaining thereto (including
Redemption Notice Periods) shall be determined by or pursuant to such Issuer
Order and procedures. If provided for in such procedures, such Issuer Order may
authorize authentication and delivery pursuant to oral instructions from the
Issuer or its duly authorized agent, which instructions shall be promptly
confirmed in writing. In authenticating such Securities and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive (in the case of subparagraphs
2.04(a)(ii), 2.04(a)(iii) and 2.04(a)(iv) below only at or before the time of
the first request of the Issuer to the Trustee to authenticate Securities of
such series) and (subject to Section 6.01) shall be fully protected in relying
upon, unless and until such documents have been superceded or revoked:
(a) an Issuer Order requesting such authentication and setting forth
delivery instructions if the Securities and Coupons, if any, are not to be
delivered to the Issuer, provided that, with respect to Securities of a series
subject to a Periodic Offering, (i) such Issuer Order may be delivered by the
Issuer to the Trustee prior to the delivery to the Trustee of such Securities
for authentication and delivery, (ii) the Trustee shall authenticate and deliver
Securities of such series for original issue from time to time, in an aggregate
principal amount not exceeding the aggregate principal amount established for
such series, pursuant to an Issuer Order or pursuant to procedures reasonably
acceptable to the Trustee as may be specified from time to time by an Issuer
Order, (iii) the maturity date or dates, original issue date or dates, interest
rate or rates and any other terms of Securities of such series (including
Redemption Notice Periods) shall be determined by an Issuer Order or pursuant to
such procedures and (iv) if provided for in such procedures, such Issuer Order
may authorize authentication and delivery pursuant to oral or electronic
instructions from the Issuer or its duly authorized agent or agents, which oral
instructions shall be promptly confirmed in writing;
(b) any Board Resolution, Officer's Certificate and/or executed
supplemental indenture referred to in Sections 2.01 and 2.03 by or pursuant to
which the forms and terms of the Securities and Coupons, if any, were
established;
(c) an Officer's Certificate setting forth the form or forms and terms
of the Securities and Coupons, if any, stating that the form or forms and terms
of the
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Securities and Coupons, if any, have been established pursuant to Sections 2.01
and 2.03 and comply with this Indenture, and covering such other matters as the
Trustee may reasonably request; and
(d) at the option of the Issuer, either an Opinion of Counsel, or a
letter addressed to the Trustee permitting it to rely on an Opinion of Counsel,
substantially to the effect that:
(i) the forms of the Securities and Coupons, if any, have been duly
authorized and established in conformity with the provisions of this
Indenture;
(ii) in the case of an underwritten offering, the terms of the
Securities have been duly authorized and established in conformity with
the provisions of this Indenture, and, in the case of an offering that
is not underwritten, certain terms of the Securities have been
established pursuant to a Board Resolution, an Officer's Certificate or
a supplemental indenture in accordance with this Indenture, and when
such other terms as are to be established pursuant to procedures set
forth in an Issuer Order shall have been established, all such terms
will have been duly authorized by the Issuer and will have been
established in conformity with the provisions of this Indenture;
(iii) when the Securities and Coupons, if any, have been executed by
the Issuer and authenticated by the Trustee in accordance with the
provisions of this Indenture and delivered to and duly paid for by the
purchasers thereof, they will have been duly issued under this
Indenture and will be valid and binding obligations of the Issuer,
enforceable in accordance with their respective terms, and will be
entitled to the benefits of this Indenture; and
(iv) the execution and delivery by the Issuer of, and the performance
by the Issuer of its obligations under, the Securities and Coupons, if
any, will not contravene any provision of applicable law or the
certificate of incorporation or by-laws of the Issuer or any agreement
or other instrument binding upon the Issuer or any of its consolidated
subsidiaries that is material to the Issuer and its subsidiaries, taken
as a whole, or, to the best of such counsel's knowledge, any judgment,
order or decree of any U.S. governmental body, agency or court having
jurisdiction over the Issuer or any of its consolidated subsidiaries,
and no consent, approval or authorization of any U.S. governmental body
or agency is required for the performance by the Issuer of its
obligations under the Securities and Coupons, if any, except such as
are specified and have been
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obtained and such as may be required by the securities or blue sky laws
of the various states in connection with the offer and sale of the
Securities and Coupons, if any.
In rendering such opinions, such counsel may qualify any opinions as to
enforceability by stating that such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium and other similar laws
affecting the rights and remedies of creditors and is subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law). Such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the State of New York and the
federal law of the United States, upon opinions of other counsel (copies of
which shall be delivered to the Trustee), who shall be counsel reasonably
satisfactory to the Trustee, in which case the opinion shall state that such
counsel believes he and the Trustee are entitled so to rely. Such counsel may
also state that, insofar as such opinion involves factual matters, he has
relied, to the extent he deems proper, upon certificates of officers of the
Issuer and its subsidiaries and certificates of public officials.
The Trustee shall have the right to decline to authenticate and deliver
any Securities under this Section if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken by the Issuer or if the
Trustee in good faith by its board of directors or board of trustees, executive
committee, or a trust committee of directors or trustees or Responsible Officers
shall reasonably determine that such action would expose the Trustee to personal
liability to existing Holders or would affect the Trustee's own rights, duties
or immunities under the Securities, this Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.03 that the
Securities of a series are to be issued in the form of one or more Registered
Global Securities, then the Issuer shall execute and the Trustee shall, in
accordance with this Section and the Issuer Order with respect to such series,
authenticate and deliver one or more Registered Global Securities that (i) shall
represent and shall be denominated in an amount equal to the aggregate principal
amount of all of the Securities of such series issued and not yet cancelled,
(ii) shall be registered in the name of the Depositary for such Registered
Global Security or Securities or the nominee of such Depositary, (iii) shall be
delivered by the Trustee to such Depositary or pursuant to such Depositary's
instructions and (iv) shall bear a legend substantially to the following effect:
"Unless and until it is exchanged in whole or in part for Securities in
definitive registered form, this Security may not be transferred except as a
whole by the Depositary to the nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a
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successor Depositary or a nominee of such successor Depositary."
Each Depositary designated pursuant to Section 2.03 must, at the time
of its designation and at all times while it serves as Depositary, be a clearing
agency registered under the Securities Exchange Act of 1934 and any other
applicable statute or regulation.
SECTION 2.05. Execution of Securities. The Securities and, if
applicable, each Coupon appertaining thereto shall be signed on behalf of the
Issuer by any one of the following: the Chairman of the Board, the President,
the Chief Financial Officer, the Chief Legal Officer, the Treasurer, any
Assistant Treasurer or any other person authorized by the Board of Directors to
execute Securities or, if applicable, Coupons, which Securities or Coupons may,
but need not, be attested. Such signatures may be the manual or facsimile
signatures of the present or any future such officers. Minor errors or defects
in any such reproduction of any such signature shall not affect the validity or
enforceability of any Security that has been duly authenticated and delivered by
the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities or Coupons, if any, shall cease to be such officer before the
Security or Coupon so signed (or the Security to which the Coupon so signed
appertains) shall be authenticated and delivered by the Trustee or disposed of
by the Issuer, such Security or Coupon nevertheless may be authenticated and
delivered or disposed of as though the person who signed such Security or Coupon
had not ceased to be such officer of the Issuer; and any Security or Coupon may
be signed on behalf of the Issuer by such persons as, at the actual date of the
execution of such Security or Coupon, shall be the proper officers of the
Issuer, although at the date of the execution and delivery of this Indenture any
such person was not such an officer.
SECTION 2.06. Certificate of Authentication. Only such Securities as
shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its authorized officers, shall be entitled to the benefits of this Indenture or
be valid or obligatory for any purpose. No Coupon shall be entitled to the
benefits of this Indenture or shall be valid and obligatory for any purpose
until the certificate of authentication on the Security to which such Coupon
appertains shall have been duly executed by the Trustee. The execution of such
certificate by the Trustee upon any Security executed by the Issuer shall be
conclusive evidence that the Security so authenticated has been duly
authenticated and delivered hereunder and that the Holder is entitled to the
benefits of this Indenture.
SECTION 2.07. Denomination and Date of Securities; Payments of
Interest. The Securities of each series shall be issuable as Registered
Securities or
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Unregistered Securities in denominations established as contemplated by Section
2.03 or, with respect to the Registered Securities of any series, if not so
established, in denominations of $1,000 and any integral multiple thereof. If
denominations of Unregistered Securities of any series are not so established,
such Securities shall be issuable in denominations of $1,000 and $5,000. The
Securities of each series shall be numbered, lettered or otherwise distinguished
in such manner or in accordance with such plan as the officers of the Issuer
executing the same may determine with the approval of the Trustee, as evidenced
by the execution and authentication thereof.
Each Registered Security shall be dated the date of its authentication.
Each Unregistered Security shall be dated as provided in the resolution or
resolutions of the Board of Directors of the Issuer referred to in Section 2.03.
The Securities of each series shall bear interest, if any, from the date, and
such interest shall be payable on the dates, established as contemplated by
Section 2.03.
The Person in whose name any Registered Security of any series is
registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Registered
Security subsequent to the record date and prior to such interest payment date,
except if and to the extent the Issuer shall default in the payment of the
interest due on such interest payment date for such series, in which case such
defaulted interest shall be paid to the Persons in whose names Outstanding
Registered Securities for such series are registered at the close of business on
a subsequent record date (which shall be not less than five Business Days prior
to the date of payment of such defaulted interest) established by notice given
by mail by or on behalf of the Issuer to the Holders of Registered Securities
not less than 15 days preceding such subsequent record date. The term "record
date" as used with respect to any interest payment date (except a date for
payment of defaulted interest) for the Securities of any series shall mean the
date specified as such in the terms of the Registered Securities of such series
established as contemplated by Section 2.03, or, if no such date is so
established, if such interest payment date is the first day of a calendar month,
the fifteenth day of the next preceding calendar month or, if such interest
payment date is the fifteenth day of a calendar month, the first day of such
calendar month, whether or not such record date is a Business Day.
SECTION 2.08. Registration, Transfer and Exchange. The Issuer will keep
at each office or agency to be maintained for the purpose as provided in Section
3.02 for each series of Securities a register or registers in which, subject to
such reasonable regulations as it may prescribe, it will provide for the
registration of Registered Securities of such series and the registration of
transfer of Registered
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Securities of such series. Such register shall be in written form in the English
language or in any other form capable of being converted into such form within a
reasonable time. At all reasonable times such register or registers shall be
open for inspection by the Trustee.
Upon due presentation for registration of transfer of any Registered
Security of any series at any such office or agency to be maintained for the
purpose as provided in Section 3.02, the Issuer shall execute and the Trustee
shall authenticate and deliver in the name of the transferee or transferees a
new Registered Security or Registered Securities of the same series, maturity
date, interest rate and original issue date in authorized denominations for a
like aggregate principal amount.
Unregistered Securities (except for any temporary global Unregistered
Securities) and Coupons (except for Coupons attached to any temporary global
Unregistered Securities) shall be transferable by delivery.
At the option of the Holder thereof, Registered Securities of any
series (other than a Registered Global Security, except as set forth below) may
be exchanged for a Registered Security or Registered Securities of such series
having authorized denominations and an equal aggregate principal amount, upon
surrender of such Registered Securities to be exchanged at the agency of the
Issuer that shall be maintained for such purpose in accordance with Section 3.02
and upon payment, if the Issuer shall so require, of the charges hereinafter
provided. If the Securities of any series are issued in both registered and
unregistered form, except as otherwise specified pursuant to Section 2.03, at
the option of the Holder thereof, Unregistered Securities of any series may be
exchanged for Registered Securities of such series having authorized
denominations and an equal aggregate principal amount, upon surrender of such
Unregistered Securities to be exchanged at the agency of the Issuer that shall
be maintained for such purpose in accordance with Section 3.02, with, in the
case of Unregistered Securities that have Coupons attached, all unmatured
Coupons and all matured Coupons in default thereto appertaining, and upon
payment, if the Issuer shall so require, of the charges hereinafter provided. At
the option of the Holder thereof, if Unregistered Securities of any series,
maturity date, interest rate and original issue date are issued in more than one
authorized denomination, except as otherwise specified pursuant to Section 2.03,
such Unregistered Securities may be exchanged for Unregistered Securities of
such series having authorized denominations and an equal aggregate principal
amount, upon surrender of such Unregistered Securities to be exchanged at the
agency of the Issuer that shall be maintained for such purpose in accordance
with Section 3.02 or as specified pursuant to Section 2.03, with, in the case of
Unregistered Securities that have Coupons attached, all unmatured Coupons and
all matured Coupons in default thereto appertaining, and
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upon payment, if the Issuer shall so require, of the charges hereinafter
provided. Unless otherwise specified pursuant to Section 2.03, Registered
Securities of any series may not be exchanged for Unregistered Securities of
such series. Whenever any Securities are so surrendered for exchange, the Issuer
shall execute, and the Trustee shall authenticate and deliver, the Securities
which the Holder making the exchange is entitled to receive. All Securities and
Coupons surrendered upon any exchange or transfer provided for in this Indenture
shall be promptly cancelled and disposed of by the Trustee and the Trustee will
deliver a certificate of disposition thereof to the Issuer.
All Registered Securities presented for registration of transfer,
exchange, redemption or payment shall (if so required by the Issuer or the
Trustee) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer in form satisfactory to the Issuer and the Trustee duly
executed by the Holder or his attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any exchange or
registration of transfer of Securities. No service charge shall be made for any
such transaction.
The Issuer shall not be required to exchange or register a transfer of
(a) any Securities of any series for a period of 15 days next preceding the
first mailing of notice of redemption of Securities of such series to be
redeemed or (b) any Securities selected, called or being called for redemption,
in whole or in part, except, in the case of any Security to be redeemed in part,
the portion thereof not so to be redeemed or (c) any Securities if the Holder
thereof has exercised any right to require the Issuer to repurchase such
Securities, in whole or in part, except, in the case of any Security to be
repurchased in part, the portion thereof not so to be repurchased.
Notwithstanding any other provision of this Section 2.08, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Registered Global Security representing all or a portion of
the Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series or
a nominee of such successor Depositary.
If at any time the Depositary for any Registered Securities of a series
represented by one or more Registered Global Securities notifies the Issuer that
it is unwilling or unable to continue as Depositary for such Registered
Securities or
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if at any time the Depositary for such Registered Securities shall no longer be
eligible under Section 2.04, the Issuer shall appoint a successor Depositary
eligible under Section 2.04 with respect to such Registered Securities. If a
successor Depositary eligible under Section 2.04 for such Registered Securities
is not appointed by the Issuer within 90 days after the Issuer receives such
notice or becomes aware of such ineligibility, the Issuer's election pursuant to
Section 2.03 that such Registered Securities be represented by one or more
Registered Global Securities shall no longer be effective and the Issuer will
execute, and the Trustee, upon receipt of an Officer's Certificate for the
authentication and delivery of definitive Securities of such series, will
authenticate and deliver, Securities of such series in definitive registered
form without coupons, in any authorized denominations, in an aggregate principal
amount equal to the principal amount of the Registered Global Security or
Securities representing such Registered Securities in exchange for such
Registered Global Security or Securities.
The Issuer may at any time and in its sole discretion determine that
the Registered Securities of any series issued in the form of one or more
Registered Global Securities shall no longer be represented by a Registered
Global Security or Securities. In such event the Issuer will execute, and the
Trustee, upon receipt of an Officer's Certificate for the authentication and
delivery of definitive Securities of such series, will authenticate and deliver,
Securities of such series in definitive registered form without coupons, in any
authorized denominations, in an aggregate principal amount equal to the
principal amount of the Registered Global Security or Securities representing
such Registered Securities, in exchange for such Registered Global Security or
Securities.
If specified by the Issuer pursuant to Section 2.03 with respect to
Securities represented by a Registered Global Security, the Depositary for such
Registered Global Security may surrender such Registered Global Security in
exchange in whole or in part for Securities of the same series in definitive
registered form on such terms as are acceptable to the Issuer and such
Depositary. Thereupon, the Issuer shall execute, and the Trustee shall
authenticate and deliver, without service charge,
(a) to the Person specified by such Depositary a new Registered
Security or Securities of the same series, of any authorized denominations as
requested by such Person, in an aggregate principal amount equal to and in
exchange for such Person's beneficial interest in the Registered Global
Security; and
(b) to such Depositary a new Registered Global Security in a
denomination equal to the difference, if any, between the principal amount of
the surrendered Registered Global Security and the aggregate principal amount of
Registered Securities authenticated and delivered pursuant to clause (a) above.
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Upon the exchange of a Registered Global Security for Securities in
definitive registered form without coupons, in authorized denominations, such
Registered Global Security shall be cancelled by the Trustee or an agent of the
Issuer or the Trustee. Securities in definitive registered form without coupons
issued in exchange for a Registered Global Security pursuant to this Section
2.08 shall be registered in such names and in such authorized denominations as
the Depositary for such Registered Global Security, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee or an agent of the Issuer or the Trustee. The Trustee or such agent
shall deliver such Securities to or as directed by the Persons in whose names
such Securities are so registered.
All Securities issued upon any transfer or exchange of Securities shall
be valid obligations of the Issuer, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Securities surrendered upon such
transfer or exchange.
Notwithstanding anything herein or in the terms of any series of
Securities to the contrary, none of the Issuer, the Trustee or any agent of the
Issuer or the Trustee (any of which, other than the Issuer, shall rely on an
Officer's Certificate and an Opinion of Counsel) shall be required to exchange
any Unregistered Security for a Registered Security if such exchange would
result in adverse Federal income tax consequences to the Issuer (such as, for
example, the inability of the Issuer to deduct from its income, as computed for
Federal income tax purposes, the interest payable on the Unregistered
Securities) under then applicable United States Federal income tax laws.
SECTION 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security or any Coupon
appertaining to any Security shall become mutilated, defaced or be destroyed,
lost or stolen, the Issuer in its discretion may execute, and upon the written
request of any officer of the Issuer, the Trustee shall authenticate and deliver
a new Security of the same series, maturity date, interest rate and original
issue date, bearing a number or other distinguishing symbol not
contemporaneously outstanding, in exchange and substitution for the mutilated or
defaced Security, or in lieu of and in substitution for the Security so
destroyed, lost or stolen with Coupons corresponding to the Coupons appertaining
to the Securities so mutilated, defaced, destroyed, lost or stolen, or in
exchange or substitution for the Security to which such mutilated, defaced,
destroyed, lost or stolen Coupon appertained, with Coupons appertaining thereto
corresponding to the Coupons so mutilated, defaced, destroyed, lost or stolen.
In every case the applicant for a substitute Security or Coupon shall furnish to
the Issuer and to the Trustee and any agent of the Issuer or the Trustee such
security or indemnity as may be required by them to indemnify and defend and to
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save each of them harmless and, in every case of destruction, loss or theft,
evidence to their satisfaction of the destruction, loss or theft of such
Security or Coupon and of the ownership thereof and in the case of mutilation or
defacement shall surrender the Security and related Coupons to the Trustee or
such agent.
Upon the issuance of any substitute Security or Coupon, the Issuer may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee or its agent) connected therewith. In case
any Security or Coupon which has matured or is about to mature or has been
called for redemption in full shall become mutilated or defaced or be destroyed,
lost or stolen, the Issuer may instead of issuing a substitute Security, pay or
authorize the payment of the same or the relevant Coupon (without surrender
thereof except in the case of a mutilated or defaced Security or Coupon), if the
applicant for such payment shall furnish to the Issuer and to the Trustee and
any agent of the Issuer or the Trustee such security or indemnity as any of them
may require to save each of them harmless, and, in every case of destruction,
loss or theft, the applicant shall also furnish to the Issuer and the Trustee
and any agent of the Issuer or the Trustee evidence to their satisfaction of the
destruction, loss or theft of such Security or Coupon and of the ownership
thereof.
Every substitute Security or Coupon of any series issued pursuant to
the provisions of this Section by virtue of the fact that any such Security or
Coupon is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the destroyed, lost or stolen Security
or Coupon shall be at any time enforceable by anyone and shall be entitled to
all the benefits of (but shall be subject to all the limitations of rights set
forth in) this Indenture equally and proportionately with any and all other
Securities or Coupons of such series duly authenticated and delivered hereunder.
All Securities and Coupons shall be held and owned upon the express condition
that, to the extent permitted by law, the foregoing provisions are exclusive
with respect to the replacement or payment of mutilated, defaced or destroyed,
lost or stolen Securities and Coupons and shall preclude any and all other
rights or remedies notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
SECTION 2.10. Cancellation of Securities; Disposition Thereof. All
Securities and Coupons surrendered for payment, redemption, registration of
transfer or exchange, or for credit against any payment in respect of a sinking
or analogous fund, if surrendered to the Issuer or any agent of the Issuer or
the Trustee or any agent of the Trustee, shall be delivered to the Trustee or
its agent for cancellation or, if surrendered to the Trustee, shall be cancelled
by it; and no Securities or Coupons shall be issued in lieu thereof except as
expressly permitted
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by any of the provisions of this Indenture. The Trustee or its agent shall
dispose of cancelled Securities and Coupons held by it and deliver promptly a
certificate of disposition to the Issuer. If the Issuer or its agent shall
acquire any of the Securities or Coupons, such acquisition shall not operate as
a redemption or satisfaction of the indebtedness represented by such Securities
or Coupons unless and until the same are delivered to the Trustee or its agent
for cancellation.
SECTION 2.11. Temporary Securities. Pending the preparation of
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable as Registered Securities without coupons, or as Unregistered Securities
with or without coupons attached thereto, of any authorized denomination, and
substantially in the form of the definitive Securities of such series but with
such omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Issuer with the concurrence of the
Trustee as evidenced by the execution and authentication thereof. Temporary
Securities may contain such references to any provisions of this Indenture as
may be appropriate. Every temporary Security shall be executed by the Issuer and
be authenticated by the Trustee upon the same conditions and in substantially
the same manner, and with like effect, as the definitive Securities. Without
unreasonable delay the Issuer shall execute and shall furnish definitive
Securities of such series and thereupon temporary Registered Securities of such
series may be surrendered in exchange therefor without charge at each office or
agency to be maintained by the Issuer for that purpose pursuant to Section 3.02
and, in the case of Unregistered Securities, at any agency maintained by the
Issuer for such purpose as specified pursuant to Section 2.03, and the Trustee
shall authenticate and deliver in exchange for such temporary Securities of such
series an equal aggregate principal amount of definitive Securities of the same
series having authorized denominations and, in the case of Unregistered
Securities, having attached thereto any appropriate Coupons. Until so exchanged,
the temporary Securities of any series shall be entitled to the same benefits
under this Indenture as definitive Securities of such series, unless otherwise
established pursuant to Section 2.03. The provisions of this Section are subject
to any restrictions or limitations on the issue and delivery of temporary
Unregistered Securities of any series that may be established pursuant to
Section 2.03 (including any provision that Unregistered Securities of such
series initially be issued in the form of a single global Unregistered Security
to be delivered to a depositary or agency located outside the United States and
the procedures pursuant to which definitive or global Unregistered Securities of
such series would be issued in exchange for such temporary global Unregistered
Security).
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ARTICLE 3
COVENANTS OF THE ISSUER
SECTION 3.01. Payment of Principal and Interest. The Issuer covenants
and agrees for the benefit of each series of Securities that it will duly and
punctually pay or cause to be paid the principal of, and interest on, each of
the Securities of such series (together with any additional amounts payable
pursuant to the terms of such Securities) at the place or places, at the
respective times and in the manner provided in such Securities and in the
Coupons, if any, appertaining thereto and in this Indenture. The interest on
Securities with Coupons attached (together with any additional amounts payable
pursuant to the terms of such Securities) shall be payable only upon
presentation and surrender of the several Coupons for such interest installments
as are evidenced thereby as they severally mature. If any temporary Unregistered
Security provides that interest thereon may be paid while such Security is in
temporary form, the interest on any such temporary Unregistered Security
(together with any additional amounts payable pursuant to the terms of such
Security) shall be paid, as to the installments of interest evidenced by Coupons
attached thereto, if any, only upon presentation and surrender thereof, and, as
to the other installments of interest, if any, only upon presentation of such
Securities for notation thereon of the payment of such interest, in each case
subject to any restrictions that may be established pursuant to Section 2.03.
The interest on Registered Securities (together with any additional amounts
payable pursuant to the terms of such Securities) shall be payable only to or
upon the written order of the Holders thereof and, at the option of the Issuer,
may be paid by wire transfer or by mailing checks for such interest payable to
or upon the written order of such Holders at their last addresses as they appear
on the registry books of the Issuer.
SECTION 3.02. Offices for Payments, etc. So long as any Registered
Securities are authorized for issuance pursuant to this Indenture or are
outstanding hereunder, the Issuer will maintain in the Borough of Manhattan, The
City of New York, an office or agency where the Registered Securities of each
series may be presented for payment, where the Securities of each series may be
presented for exchange as is provided in this Indenture and, if applicable,
pursuant to Section 2.03 and where the Registered Securities of each series may
be presented for registration of transfer as in this Indenture provided.
The Issuer will maintain one or more offices or agencies in a city or
cities located outside the United States as required to be maintained under the
rules of any stock exchange on which the Securities of such series are listed.
No payment on any Unregistered Security or Coupon will be made upon presentation
of such Unregistered Security or Coupon at an agency of the Issuer within the
United States nor will any payment be made by transfer to an account in, or by
mail to an
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address in, the United States unless pursuant to applicable United States laws
and regulations then in effect such payment can be made without adverse tax
consequences to the Issuer. Notwithstanding the foregoing, payments in Dollars
of Unregistered Securities of any series and Coupons appertaining thereto which
are payable in Dollars may be made at an agency of the Issuer maintained in the
Borough of Manhattan, The City of New York if such payment in Dollars at each
agency maintained by the Issuer outside the United States for payment on such
Unregistered Securities is illegal or effectively precluded by exchange controls
or other similar restrictions.
The Issuer will maintain in the Borough of Manhattan, The City of New
York, an office or agency where notices and demands to or upon the Issuer in
respect of the Securities of any series, the Coupons appertaining thereto or
this Indenture may be served.
The Issuer will give to the Trustee written notice of the location of
each such office or agency and of any change of location thereof. In case the
Issuer shall fail to maintain any agency required by this Section to be located
in the Borough of Manhattan, The City of New York, or shall fail to give such
notice of the location or of any change in the location of any of the above
agencies, presentations and demands may be made and notices may be served at the
Corporate Trust Office of the Trustee.
The Issuer may from time to time designate one or more additional
offices or agencies where the Securities of a series and any Coupons
appertaining thereto may be presented for payment, where the Securities of that
series may be presented for exchange as provided in this Indenture and pursuant
to Section 2.03 and where the Registered Securities of that series may be
presented for registration of transfer as in this Indenture provided, and the
Issuer may from time to time rescind any such designation, as the Issuer may
deem desirable or expedient; provided, however, that no such designation or
rescission shall in any manner relieve the Issuer of its obligation to maintain
the agencies provided for in this Section. The Issuer will give to the Trustee
prompt written notice of any such designation or rescission thereof.
SECTION 3.03. Appointment to Fill a Vacancy in Office of Trustee. The
Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 6.10, a Trustee, so that there
shall at all times be a Trustee with respect to each series of Securities
hereunder.
SECTION 3.04. Paying Agents. Whenever the Issuer shall appoint a paying
agent other than the Trustee with respect to the Securities of any series, it
will cause such paying agent to execute and deliver to the Trustee an instrument
in
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which such agent shall agree with the Trustee, subject to the provisions of this
Section,
(a) that it will hold all sums received by it as such agent for the
payment of the principal of or interest on the Securities of such series
(whether such sums have been paid to it by the Issuer or by any other obligor on
the Securities of such series) in trust for the benefit of the Holders of the
Securities of such series, or Coupons appertaining thereto, if any, or of the
Trustee,
(b) that it will give the Trustee notice of any failure by the Issuer
(or by any other obligor on the Securities of such series) to make any payment
of the principal of or interest on the Securities of such series when the same
shall be due and payable, and
(c) that it will pay any such sums so held in trust by it to the
Trustee upon the Trustee's written request at any time during the continuance of
the failure referred to in clause 3.04(b) above.
The Issuer will, on or prior to each due date of the principal of or
interest on the Securities of such series, deposit with the paying agent a sum
sufficient to pay such principal or interest so becoming due, and (unless such
paying agent is the Trustee) the Issuer will promptly notify the Trustee of any
failure to take such action.
If the Issuer shall act as its own paying agent with respect to the
Securities of any series, it will, on or before each due date of the principal
of or interest on the Securities of such series, set aside, segregate and hold
in trust for the benefit of the Holders of the Securities of such series or the
Coupons appertaining thereto a sum sufficient to pay such principal or interest
so becoming due. The Issuer will promptly notify the Trustee of any failure to
take such action.
Anything in this Section to the contrary notwithstanding, but subject
to Section 10.01, the Issuer may at any time, for the purpose of obtaining a
satisfaction and discharge with respect to one or more or all series of
Securities hereunder, or for any other reason, pay or cause to be paid to the
Trustee all sums held in trust for any such series by the Issuer or any paying
agent hereunder, as required by this Section, such sums to be held by the
Trustee upon the trusts herein contained.
Anything in this Section to the contrary notwithstanding, the agreement
to hold sums in trust as provided in this Section is subject to the provisions
of Sections 10.03 and 10.04.
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SECTION 3.05. [INTENTIONALLY OMITTED].
SECTION 3.06. Negative Pledge. Neither the Issuer nor any successor
corporation will, or permit any Subsidiary to, directly or indirectly, incur or
permit to exist any Lien of any nature whatsoever on any of its properties or
assets, whether owned at the original issue date of a Security of a particular
series or thereafter acquired, to secure Indebtedness or other obligations that
are pari passu with or subordinated in right of payment to the Securities, other
than Permitted Liens, without effectively providing that the Securities are
secured equally and ratably with (or, if the obligation to be secured by the
Lien is subordinated in right of payment to the Securities, prior to) the
obligations so secured for so long as such obligations are so secured.
SECTION 3.07. Luxembourg Publications. In the event the Securities are
listed on the Luxembourg Stock Exchange, and in the event of the publication of
any notice pursuant to Section 5.11, 6.10(a), 6.11, 8.02, 10.04, 12.02 or 12.05,
the party making such publication in the Borough of Manhattan, The City of New
York (if so required) shall also, to the extent that notice is required to be
given to Holders of Securities of any series by applicable Luxembourg law or
stock exchange regulation, as evidenced by an Officer's Certificate delivered to
such party, make a similar publication in Luxembourg.
SECTION 3.08. Existence. Subject to Article 9, the Issuer will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided, however, that
the Issuer shall not be required to preserve any such right if the Issuer shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Issuer and that the loss thereof is not disadvantageous in
any material respect to the Securityholders.
SECTION 3.09. Maintenance of Properties. The Issuer will cause all
properties used or useful in the conduct of its business or the business of any
Significant Subsidiary to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Issuer may be necessary in the conduct of
its business or the business of any Subsidiary; provided, however, that nothing
in this Section shall prevent the Issuer from discontinuing the operation or
maintenance of any of such properties if such discontinuance is, in the judgment
of the Issuer, desirable in the conduct of its business or the business of any
Subsidiary and not disadvantageous in any material respect to the
Securityholders.
SECTION 3.10. Payment of Taxes and Other Claims. The Issuer will pay
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or discharge, or cause to be paid or discharged, before the same may become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Issuer or any Significant Subsidiary or upon the income,
profits or property of the Issuer or any Significant Subsidiary, (ii) all claims
for labor, materials and supplies which, if unpaid, might by law become a lien
or charge upon the property of the Issuer or any Significant Subsidiary and
(iii) all stamps and other duties, if any, which may be imposed by the United
States or any political subdivision thereof or therein in connection with the
issuance, transfer, exchange or conversion of any Securities or with respect to
this Indenture; provided, however, that, in the case of clauses (i) and (ii),
the Issuer shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim (A) if the failure to do so
will not, in the aggregate, have a material adverse impact on the Issuer, or (B)
if the amount, applicability or validity is being contested in good faith by
appropriate proceedings.
SECTION 3.11. Stay, Extension and Usury Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the Issuer from paying all or any portion of the principal of, premium,
if any, or interest on the Securities as contemplated herein, wherever enacted,
now or at any time hereafter in force, or which may affect the covenants or the
performance of this Indenture and the Issuer (to the extent it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.
SECTION 3.12. Compliance Certificate. The Issuer shall deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year
of the Issuer, a certificate signed by either the principal executive officer,
principal financial officer or principal accounting officer of the Issuer,
stating whether or not to the best knowledge of the signer thereof the Issuer is
in default in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Issuer shall be in
default, specifying all such defaults and the nature and the status thereof of
which the signer may have knowledge.
The Issuer will deliver to the Trustee so long as any of the Securities
are Oustanding, forthwith upon becoming aware of (i) any default in the
performance or observance of any covenant, agreement or condition contained in
this Indenture that is, or after notice or passage of time or both would be, an
Event of Default, or (ii) any Event of Default, an Officer's Certificate
specifying with particularity
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such default or Event of Default and further stating what action the Issuer has
taken, is taking or proposes to take with respect thereto.
Any notice required to be given under this Section 3.12 shall be
delivered to a Responsible Officer of the Trustee at its Corporate Trust Office.
In the event that the payment of the Securities of any series is accelerated
because of an Event of Default, the Issuer shall promptly provide written notice
to the Trustee specifying the names and addresses of the holders of Senior
Indebtedness if the Trustee (and not the Issuer) is to provide holders of Senior
Indebtedness notice of such acceleration.
ARTICLE 4
SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE
SECTION 4.01. Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders. If and so long as the Trustee shall not be the
Security registrar for the Securities of any series, the Issuer and any other
obligor on the Securities will furnish or cause to be furnished to the Trustee a
list in such form as the Trustee may reasonably require of the names and
addresses of the Holders of the Registered Securities of such series pursuant to
Section 312 of the Trust Indenture Act of 1939 (a) semi-annually not more than
15 days after each record date for the payment of interest on such Registered
Securities, as hereinabove specified, as of such record date and on dates to be
determined pursuant to Section 2.03 for non-interest bearing Registered
Securities in each year, and (b) at such other times as the Trustee may
reasonably request in writing, within thirty days after receipt by the Issuer of
any such request as of a date not more than 15 days prior to the time such
information is furnished.
SECTION 4.02. Preservation and Disclosure of Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Securities of each series contained in the most recent list furnished to it as
provided in Section 4.01 or maintained by the Trustee in its capacity as
Security registrar or co-registrar in respect of the Securities of any series,
if so acting. The Trustee may destroy any list furnished to it as provided in
Section 4.01 upon receipt of a new list so furnished.
(b) The rights of Securityholders to communicate with other holders of
Securities of any series with respect to their rights under this Indenture or
under the Securities, and the corresponding rights and duties of the Trustee,
shall be as
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provided by the Trust Indenture Act.
(c) Every Securityholder, by receiving and holding the same, agrees
with the Issuer and the Trustee that neither the Issuer nor the Trustee nor any
agent of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of holders of Securities made pursuant to
the Trust Indenture Act.
SECTION 4.03. Reports by the Issuer. The Issuer covenants to file with
the Trustee, copies of the annual reports and of the information, documents, and
other reports that the Issuer may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
or pursuant to Section 314 of the Trust Indenture Act of 1939.
SECTION 4.04. Reports by the Trustee. Any Trustee's report required
under Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted on
or before May 1 in each year beginning May 1, 2001, as provided in Section
313(c) of the Trust Indenture Act of 1939, so long as any Securities are
Outstanding hereunder, and shall be dated as of a date convenient to the Trustee
no more than 60 days prior thereto. The Trustee shall also comply with Section
313(b)(2) of the Trust Indenture Act of 1939. A copy of each report at the time
of its mailing to the Securityholders shall be mailed to the Issuer and filed
with the Commission and each stock exchange on which the Securities are listed
in accordance with Section 313(d) of the Trust Indenture Act of 1939.
ARTICLE 5
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
SECTION 5.01. Event of Default Defined; Acceleration of Maturity;
Waiver of Default. Unless otherwise set forth in a supplemental indenture,
"Event of Default" with respect to Securities of any series wherever used
herein, means each one of the following events which shall have occurred and be
continuing (whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(a) default in the payment of any installment of interest upon any of
the Securities of such series as and when the same shall become due and payable,
and continuance of such default for a period of 30 days; or
(b) default in the payment of all or any part of the principal on any
of the Securities of such series as and when the same shall become due and
payable
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either at maturity, upon any redemption, by declaration or otherwise; or
(c) failure on the part of the Issuer duly to observe or perform any
other of the covenants or agreements on the part of the Issuer in the Securities
of such series (other than a covenant or warranty in respect of the Securities
of such series a default in the performance or breach of which is elsewhere in
this Section specifically dealt with) or in this Indenture contained for a
period of 60 days after the date on which written notice specifying such
failure, stating that such notice is a "Notice of Default" hereunder and
demanding that the Issuer remedy the same, shall have been given by registered
or certified mail, return receipt requested, to the Issuer by the Trustee, or to
the Issuer and the Trustee by the holders of at least 25% in aggregate principal
amount of the Outstanding Securities of all series affected thereby; or
(d) a court having jurisdiction in the premises shall enter a decree
or order for relief in respect of the Issuer in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Issuer or for any substantial part of
its property or ordering the winding up or liquidation of its affairs, and such
decree or order shall remain unstayed and in effect for a period of 90
consecutive days; or
(e) the Issuer shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under any
such law, or consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
the Issuer or for any substantial part of its property, or make any general
assignment for the benefit of creditors; or
(f) any other Event of Default provided in the supplemental indenture
under which such series of Securities is issued or in the form of Security for
such series.
If an Event of Default described in clauses 5.01(a), 5.01(b), 5.01(c)
or 5.01(f) (if the Event of Default under clause 5.01(c) or 5.01(f), as the case
may be, is with respect to less than all series of Securities then Outstanding)
occurs and is continuing, then, and in each and every such case, except for any
series of Securities the principal of which shall have already become due and
payable, either the Trustee or the Holders of not less than 25% in aggregate
principal amount of the Securities of each such affected series then Outstanding
hereunder (voting as a single class) by notice in writing to the Issuer (and to
the Trustee if given by Securityholders), may declare the entire principal (or,
if the Securities of
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any such affected series are Original Issue Discount Securities, such portion of
the principal amount as may be specified in the terms of such series) of all
Securities of all such affected series, and the interest accrued thereon, if
any, to be due and payable immediately, and upon any such declaration, the same
shall become immediately due and payable. If an Event of Default described in
clause 5.01(c) or 5.01(f) (if the Event of Default under clause 5.01(c) or
5.01(f), as the case may be, is with respect to all series of Securities then
Outstanding), 5.01(d) or 5.01(e) occurs and is continuing, then and in each and
every such case, unless the principal of all the Securities shall have already
become due and payable, either the Trustee or the Holders of not less than 25%
in aggregate principal amount of all the Securities then Outstanding hereunder
(treated as one class), by notice in writing to the Issuer (and to the Trustee
if given by Securityholders), may declare the entire principal (or, if any
Securities are Original Issue Discount Securities, such portion of the principal
as may be specified in the terms thereof) of all the Securities then
Outstanding, and interest accrued thereon, if any, to be due and payable
immediately, and upon any such declaration the same shall become immediately due
and payable.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if the Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms thereof) of the Securities of any series (or of all the Securities, as the
case may be) shall have been so declared due and payable, and before any
judgment or decree for the payment of the moneys due shall have been obtained or
entered as hereinafter provided, the Issuer shall pay or shall deposit with the
Trustee a sum sufficient to pay all matured installments of interest upon all
the Securities of each such series (or of all the Securities, as the case may
be) and the principal of any and all Securities of each such series (or of all
the Securities, as the case may be) which shall have become due otherwise than
by acceleration (with interest upon such principal and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
installments of interest, at the same rate as the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) specified in the
Securities of each such series (or at the respective rates of interest or Yields
to Maturity of all the Securities, as the case may be) to the date of such
payment or deposit) and such amount as shall be sufficient to cover reasonable
compensation to the Trustee and each predecessor Trustee, its agents, attorneys
and counsel, and all other reasonable expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee except as a result of
negligence, willful misconduct, recklessness or bad faith, and if any and all
Events of Default under the Indenture, other than the non-payment of the
principal of Securities which shall have become due by acceleration, shall have
been cured, waived or otherwise remedied as provided herein--then and in every
such case the Holders of a majority in aggregate principal amount of all the
Securities of
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each such series, or of all the Securities, in each case voting as a single
class, then Outstanding, by written notice to the Issuer and to the Trustee, may
waive all defaults with respect to each such series (or with respect to all the
Securities, as the case may be) and rescind and annul such declaration and its
consequences, but no such waiver or rescission and annulment shall extend to or
shall affect any subsequent default or shall impair any right consequent
thereon.
For all purposes under this Indenture, if a portion of the principal of
any Original Issue Discount Securities shall have been accelerated and declared
due and payable pursuant to the provisions hereof, then, from and after such
declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Securities shall be deemed, for
all purposes hereunder, to be such portion of the principal thereof as shall be
due and payable as a result of such acceleration, and payment of such portion of
the principal thereof as shall be due and payable as a result of such
acceleration, together with interest, if any, thereon and all other amounts
owing thereunder, shall constitute payment in full of such Original Issue
Discount Securities.
SECTION 5.02. Collection of Indebtedness by Trustee; Trustee May Prove
Debt. The Issuer covenants that (a) in case default shall be made in the payment
of any installment of interest on any of the Securities of any series when such
interest shall have become due and payable, and such default shall have
continued for a period of 30 days or (b) in case default shall be made in the
payment of all or any part of the principal of any of the Securities of any
series when the same shall have become due and payable, whether upon maturity of
the Securities of such series or upon any redemption or by declaration or
otherwise -- then upon demand of the Trustee, the Issuer will pay to the Trustee
for the benefit of the Holders of the Securities of such series the whole amount
that then shall have become due and payable on all Securities of such series,
and such Coupons, for principal or interest, as the case may be (with interest
to the date of such payment upon the overdue principal and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
installments of interest at the same rate as the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) specified in the
Securities of such series); and in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee and each predecessor Trustee, their
respective agents, attorneys and counsel, and any reasonable expenses and
liabilities incurred, and all advances made, by the Trustee and each predecessor
Trustee except as a result of its negligence, willful misconduct, recklessness
or bad faith.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the Securities of any series to the registered
holders,
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whether or not the Securities of such Series be overdue.
In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or other obligor upon the Securities
and collect in the manner provided by law out of the property of the Issuer or
other obligor upon the Securities, wherever situated the moneys adjudged or
decreed to be payable.
In case there shall be pending proceedings relative to the Issuer or
any other obligor upon the Securities under Title 11 of the United States Code
or any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor, or in case
of any other comparable judicial proceedings relative to the Issuer or other
obligor upon the Securities, or to the creditors or property of the Issuer or
such other obligor, the Trustee, irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest (or, if the Securities of any series are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of such series) owing and unpaid in respect of the Securities of any
series, and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all expenses
and liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee, except as a result of negligence or bad faith) and of the
Securityholders allowed in any judicial proceedings relative to the Issuer or
other obligor upon the Securities, or to the creditors or property of the Issuer
or such other obligor,
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the holders of the Securities of any series in any election of a
trustee or a standby trustee in arrangement, reorganization, liquidation or
other bankruptcy or insolvency proceedings or Person performing similar
functions in comparable
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proceedings, and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Securityholders and of the Trustee on their behalf;
and any trustee, receiver, or liquidator, custodian or other similar official is
hereby authorized by each of the Securityholders to make payments to the
Trustee, and, in the event that the Trustee shall consent to the making of
payments directly to the Securityholders, to pay to the Trustee such amounts as
shall be sufficient to cover reasonable compensation to the Trustee, each
predecessor Trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities incurred, and all advances made, by the Trustee
and each predecessor Trustee except as a result of negligence, willful
misconduct, recklessness or bad faith.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any series or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar Person.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities of any series or Coupons appertaining to such
Securities, may be enforced by the Trustee without the possession of any of the
Securities of such series or Coupons appertaining to such Securities or the
production thereof on any trial or other proceedings relative thereto, and any
such action or proceedings instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Securities or Coupons appertaining to such
Securities in respect of which such action was taken.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the Holders
of the Securities or Coupons appertaining to such Securities in respect to which
such action was taken, and it shall not be necessary to make any Holders of such
Securities or Coupons appertaining to such Securities parties to any such
proceedings.
SECTION 5.03. Application of Proceeds. Any moneys collected by the
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Trustee pursuant to this Article in respect of any series shall be applied in
the following order at the date or dates fixed by the Trustee and, in case of
the distribution of such moneys on account of principal or interest, upon
presentation of the several Securities and Coupons appertaining to such
Securities in respect of which monies have been collected and stamping (or
otherwise noting) thereon the payment, or issuing Securities of such series in
reduced principal amounts in exchange for the presented Securities of like
series if only partially paid, or upon surrender thereof if fully paid:
FIRST: To the payment of costs and expenses applicable to
such series in respect of which monies have been
collected, including reasonable compensation to the
Trustee and each predecessor Trustee and their
respective agents and attorneys and of all reasonable
expenses and liabilities incurred, and all advances
made, by the Trustee and each predecessor Trustee
except as a result of negligence, willful misconduct,
recklessness or bad faith;
SECOND: In case the principal of the Securities of such
series in respect of which moneys have been collected
shall not have become and be then due and payable, to
the payment of interest on the Securities of such
series in default in the order of the maturity of the
installments of such interest, with interest (to the
extent that such interest has been collected by the
Trustee) upon the overdue installments of interest at
the same rate as the rate of interest or Yield to
Maturity (in the case of Original Issue Discount
Securities) specified in such Securities, such
payments to be made ratably to the Persons entitled
thereto, without discrimination or preference;
THIRD: In case the principal of the Securities of such
series in respect of which moneys have been collected
shall have become and shall be then due and payable,
to the payment of the whole amount then owing and
unpaid upon all the Securities of such series for
principal and interest, with interest upon the
overdue principal, and (to the extent that such
interest has been collected by the Trustee) upon
overdue installments of interest at the same rate as
the rate of interest or Yield to Maturity (in the
case of Original Issue Discount Securities) specified
in the Securities of such series; and in case such
moneys shall be insufficient to pay in full the whole
amount so due and unpaid upon the
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Securities of such series, then to the payment of
such principal and interest or Yield to Maturity,
without preference or priority of principal over
interest or Yield to Maturity, or of interest or
Yield to Maturity over principal, or of any
installment of interest over any other installment of
interest, or of any Security of such series over any
other Security of such series, ratably to the
aggregate of such principal and accrued and unpaid
interest or Yield to Maturity; and
FOURTH: To the payment of the remainder, if any, to the
Issuer or any other Person lawfully entitled thereto.
SECTION 5.04. Suits for Enforcement. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to protect and enforce any of such rights, either at law or in
equity or in bankruptcy or otherwise, whether for the specific enforcement of
any covenant or agreement contained in this Indenture or in aid of the exercise
of any power granted in this Indenture or to enforce any other legal or
equitable right vested in the Trustee by this Indenture or by law.
SECTION 5.05. Restoration of Rights on Abandonment of Proceedings. In
case the Trustee shall have proceeded to enforce any right under this Indenture
and such proceedings shall have been discontinued or abandoned for any reason,
or shall have been determined adversely to the Trustee, then and in every such
case the Issuer and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Issuer, the Trustee and the Securityholders shall continue as though no such
proceedings had been taken.
SECTION 5.06. Limitations on Suits by Securityholders. No Holder of any
Security of any series or of any Coupon appertaining thereto shall have any
right by virtue or by availing of any provision of this Indenture to institute
any action or proceeding at law or in equity or in bankruptcy or otherwise upon
or under or with respect to this Indenture, or for the appointment of a trustee,
receiver, liquidator, custodian or other similar official or for any other
remedy hereunder, unless such Holder previously shall have given to the Trustee
written notice of default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of not less than 25% in aggregate
principal amount of the Securities of each affected series then Outstanding
(treated as a single class) shall have made written request upon the Trustee to
institute such action or proceedings in its own name as trustee
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hereunder and shall have offered to the Trustee such reasonable indemnity as it
may require against the costs, expenses and liabilities to be incurred therein
or thereby and the Trustee for 60 days after its receipt of such notice, request
and offer of indemnity shall have failed to institute any such action or
proceeding and no direction inconsistent with such written request shall have
been given to the Trustee pursuant to Section 5.09; it being understood and
intended, and being expressly covenanted by the taker and Holder of every
Security or Coupon with every other taker and Holder and the Trustee, that no
one or more Holders of Securities of any series or Coupons appertaining to such
Securities shall have any right in any manner whatever by virtue or by availing
of any provision of this Indenture to affect, disturb or prejudice the rights of
any other such Holder of Securities or Coupons appertaining to such Securities,
or to obtain or seek to obtain priority over or preference to any other such
Holder or to enforce any right under this Indenture, except in the manner herein
provided and for the equal, ratable and common benefit of all Holders of
Securities of the applicable series and Coupons appertaining to such Securities.
For the protection and enforcement of the provisions of this Section, each and
every Securityholder and the Trustee shall be entitled to such relief as can be
given either at law or in equity.
SECTION 5.07. Unconditional Right of Securityholders to Institute
Certain Suits. Notwithstanding any other provision in this Indenture and any
provision of any Security, the right of any Holder of any Security or Coupon to
receive payment of the principal of and interest on such Security or Coupon on
or after the respective due dates expressed in such Security or Coupon, or to
institute suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
SECTION 5.08. Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Section 5.06, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders of Securities or
Coupons is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of Securities or
Coupons to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to Section 5.06, every power and remedy given
by this Indenture or by law to the Trustee or to the Holders of Securities or
Coupons may
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be exercised from time to time, and as often as shall be deemed expedient, by
the Trustee or by the Holders of Securities or Coupons.
SECTION 5.09. Control by Holders of Securities. The Holders of a
majority in aggregate principal amount of the Securities of each series affected
(with all such series voting as a single class) at the time Outstanding shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee with respect to the Securities of such series by
this Indenture; provided that such direction shall not be otherwise than in
accordance with law and the provisions of this Indenture and provided further
that (subject to the provisions of Section 6.01) the Trustee shall have the
right to decline to follow any such direction if the Trustee, being advised by
nationally recognized counsel in writing or by an opinion of counsel, shall
reasonably determine that the action or proceeding so directed may not lawfully
be taken or if the Trustee in good faith by its board of directors, the
executive committee, or a trust committee of directors or Responsible Officers
of the Trustee shall determine that the action or proceedings so directed would
involve the Trustee in personal liability or if the Trustee in good faith shall
so determine that the actions or forebearances specified in or pursuant to such
direction would be unduly prejudicial to the interests of Holders of the
Securities of all series so affected not joining in the giving of said
direction, it being understood that (subject to Section 6.01) the Trustee shall
have no duty to ascertain whether or not such actions or forebearances are
unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action reasonably deemed proper by the Trustee and which
is not inconsistent with such direction or directions by Securityholders.
SECTION 5.10. Waiver of Past Defaults. Prior to the acceleration of the
maturity of any Securities as provided in Section 5.01, the Holders of a
majority in aggregate principal amount of the Securities of all series at the
time Outstanding with respect to which an Event of Default shall have occurred
and be continuing (voting as a single class) may on behalf of the Holders of all
such Securities waive any past default or Event of Default described in Section
5.01 and its consequences, except a default in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of the
Holder of each Security affected. In the case of any such waiver, the Issuer,
the Trustee and the Holders of all such Securities shall be restored to their
former positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other default or impair any right consequent
thereon.
Upon any such waiver, such default shall cease to exist and be deemed
to
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have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 5.11. Trustee to Give Notice of Default; But May Withhold in
Certain Circumstances. The Trustee shall, within ninety (90) days after the
occurrence of a default with respect to the Securities of any series, give
notice of all defaults with respect to that series known to the Trustee (i) if
any Unregistered Securities of a series affected are then Outstanding, to the
Holders thereof, (A) by mail to such Holders who have filed their names and
addresses with the Trustee within the two years preceding the notice at such
addresses as were so furnished to the Trustee and (B) either through the
customary notice provisions of the clearing system or systems through which
beneficial interests in such Unregistered Securities are owned if such
Unregistered Securities are held only in global form or by publication at least
once in an Authorized Newspaper in the Borough of Manhattan, The City of New
York, and at least once in an Authorized Newspaper in London (and, if required
by Section 3.07, at least once in an Authorized Newspaper in Luxembourg), and
(ii) if any Registered Securities of a series affected are then Outstanding, by
mailing notice to the Holders of then Outstanding Registered Securities of each
series affected at their addresses as they shall appear on the registry books,
unless in each case such defaults shall have been cured before the mailing or
publication of such notice (the term "defaults" for the purpose of this Section
being hereby defined to mean any event or condition which is, or with notice or
lapse of time or both would become, an Event of Default); provided that, except
in the case of default in the payment of the principal of or interest on any of
the Securities of such series, or in the payment of any sinking fund installment
on such series, the Trustee shall be protected in withholding such notice if and
so long as the board of directors, the executive committee, or a trust committee
of directors or trustees and/or Responsible Officers of the Trustee in good
faith determines that the withholding of such notice is in the interests of the
Securityholders of such series.
SECTION 5.12. Right of Court to Require Filing of Undertaking to Pay
Costs. All parties to this Indenture agree, and each Holder of any Security or
Coupon by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this
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Section shall not apply to any suit instituted by the Trustee, to any suit
instituted by any Securityholder or group of Securityholders of any series
holding in the aggregate more than 10% in aggregate principal amount of the
Securities of such series, or, in the case of any suit relating to or arising
under clause 5.01(c) or 5.01(f) (if the suit relates to Securities of more than
one but less than all series), 10% in aggregate principal amount of Securities
then Outstanding and affected thereby, or in the case of any suit relating to or
arising under clause 5.01(c) or 5.01(f) (if the suit under clause 5.01(c) or
5.01(f) relates to all the Securities then Outstanding), 5.01(d) or 5.01(e), 10%
in aggregate principal amount of all Securities then Outstanding, or to any suit
instituted by any Securityholder for the enforcement of the payment of the
principal of or interest on any Security on or after the due date expressed in
such Security or any date fixed for redemption.
ARTICLE 6
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of the Trustee; During
Default; Prior to Default. With respect to the Holders of any series of
Securities issued hereunder, the Trustee, prior to the occurrence of an Event of
Default with respect to the Securities of a particular series and after the
curing or waiving of all Events of Default which may have occurred with respect
to such series, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default with
respect to the Securities of a series has occurred (which has not been cured or
waived) the Trustee shall exercise with respect to such series of Securities
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default with respect to the
Securities of any series and after the curing or waiving of all such Events of
Default with respect to such series which may have occurred:
(i) the duties and obligations of the Trustee with respect to the
Securities of any series shall be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth
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in this Indenture, and no implied covenants or obligations shall be
read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any statements,
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such statements,
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken
or omitted to be taken by it in good faith in accordance with the direction of
the Holders pursuant to Section 5.09 relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that the
repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
The provisions of this Section 6.01 are in furtherance of and subject
to Section 315 of the Trust Indenture Act of 1939.
SECTION 6.02. Certain Rights of the Trustee. In furtherance of and
subject to the Trust Indenture Act of 1939, and subject to Section 6.01:
(a) the Trustee may rely and shall be protected in acting or
refraining from acting upon any resolution, Officer's Certificate or any other
certificate, statement, instrument, opinion, report, notice, request, consent,
order, bond, debenture, note, coupon, security or other paper or document
reasonably believed by it to be genuine and to have been signed or presented by
the proper party or parties;
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(b) any request, direction, order or demand of the Issuer mentioned
herein shall be sufficiently evidenced by an Officer's Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the secretary or an assistant secretary of the Issuer;
(c) the Trustee may consult with nationally recognized counsel and any
written advice or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
to be taken by it hereunder in good faith and in reliance thereon in accordance
with such advice or Opinion of Counsel; provided, however, that this provision
shall not protect the Trustee from liability for its own gross negligence,
willful misconduct, recklessness or bad faith or if the Trustee knows that such
written advice or Opinion of Counsel is based on erroneous information or in the
exercise of reasonable care should know that the same is erroneous;
(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all Events of Default, the Trustee shall not be bound
to make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, appraisal, bond, debenture, note, coupon, security, or other
paper or document unless requested in writing so to do by the Holders of not
less than a majority in aggregate principal amount of the Securities of all
series affected then Outstanding; provided that, if the payment within a
reasonable time to the Trustee of the reasonable costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such investigation shall be paid by
the Issuer or, if paid by the Trustee or any predecessor Trustee, shall be
repaid by the Issuer upon demand; and
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(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder.
SECTION 6.03. Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein and
in the Securities, except the Trustee's certificates of authentication, shall be
taken as the statements of the Issuer, and the Trustee assumes no responsibility
for the correctness of the same. The Trustee makes no representation as to the
validity or sufficiency of this Indenture or of the Securities or Coupons. The
Trustee shall not be accountable for the use or application by the Issuer of any
of the Securities or of the proceeds thereof.
SECTION 6.04. Trustee and Agents May Hold Securities or Coupons;
Collections, etc. The Trustee or any agent of the Issuer or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
or Coupons with the same rights it would have if it were not the Trustee or such
agent and may otherwise deal with the Issuer and receive, collect, hold and
retain collections from the Issuer with the same rights it would have if it were
not the Trustee or such agent.
SECTION 6.05. Moneys Held by Trustee. Subject to the provisions of
Section 10.04 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
SECTION 6.06. Compensation and Indemnification of Trustee and Its Prior
Claim. The Issuer covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, reasonable compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust) and the Issuer covenants and agrees to pay or reimburse the
Trustee and each predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other Persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence, willful
misconduct,
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recklessness or bad faith. The Issuer also covenants to indemnify the Trustee
and each predecessor Trustee for, and to hold it harmless against, any loss,
liability or expense incurred without negligence or bad faith on its part,
arising out of or in connection with the acceptance or administration of this
Indenture or the trusts hereunder and its duties hereunder, including the
reasonable costs and expenses of defending itself against or investigating any
claim of liability in the premises. The obligations of the Issuer under this
Section to compensate and indemnify the Trustee and each predecessor Trustee and
to pay or reimburse the Trustee and each predecessor Trustee for reasonable
expenses, disbursements and advances shall constitute additional indebtedness
hereunder and shall survive the satisfaction and discharge of this Indenture.
Such additional indebtedness shall be a senior claim to that of the Securities
upon all property and funds held or collected by the Trustee as such, except
funds held in trust for the benefit of the Holders of particular Securities or
Coupons, and the Securities are hereby subordinated to such senior claim.
SECTION 6.07. Right of Trustee to Rely on Officer's Certificate, etc.
Subject to Sections 6.01 and 6.02, whenever in the administration of the trusts
of this Indenture the Trustee shall deem it necessary or desirable that a matter
be proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence, willful misconduct,
recklessness or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officer's Certificate delivered to the
Trustee, and such certificate, in the absence of negligence, willful misconduct,
recklessness or bad faith on the part of the Trustee, shall be full warrant to
the Trustee for any action taken, suffered or omitted by it under the provisions
of this Indenture upon the faith thereof.
SECTION 6.08. Conflicting Interests of Trustee. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.
SECTION 6.09. Persons Eligible for Appointment as Trustee. The Trustee
for each series of Securities hereunder shall at all times be a corporation
organized and doing business under the laws of the United States of America or
of any State or the District of Columbia having a combined capital and surplus
of at least $5,000,000, and which is authorized under such laws to exercise
corporate trust powers and is subject to supervision or examination by Federal,
State or District of Columbia authority. Such corporation shall have a
principal place of business in the Borough of Manhattan, The City of New York if
there be such a corporation
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in such location willing to act upon reasonable and customary terms and
conditions. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 6.10.
The provisions of this Section 6.09 are in furtherance of and subject
to Section 310(a) of the Trust Indenture Act of 1939.
SECTION 6.10. Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed, may at
any time resign with respect to one or more or all series of Securities by
giving written notice of resignation to the Issuer and by mailing notice of such
resignation to the Holders of then Outstanding Registered Securities of each
series affected at their addresses as they shall appear on the registry books.
Upon receiving such notice of resignation, the Issuer shall promptly appoint a
successor trustee or trustees with respect to the applicable series by written
instrument in duplicate, executed by authority of the Board of Directors, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee or trustees. If no successor trustee shall have
been so appointed with respect to any series and have accepted appointment
within 30 days after the mailing of such notice of resignation, the resigning
trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee, or any Securityholder who has been a bona fide Holder of a
Security or Securities of the applicable series for at least six months may,
subject to the provisions of Section 5.12, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of Section
310(b) of the Trust Indenture Act of 1939 with respect to any series of
Securities after written request therefor by the Issuer or by any
Securityholder who has been a bona fide Holder of a Security or
Securities of such series for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 6.09 and Section 310(a) of the Trust Indenture
Act
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of 1939 and shall fail to resign after written request therefor by the
Issuer or by any Securityholder; or
(iii) the Trustee shall become incapable of acting with respect to any
series of Securities, or shall be adjudged a bankrupt or insolvent, or
a receiver or liquidator of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such series
by written instrument, in duplicate, executed by order of the Board of Directors
of the Issuer, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions of
Section 315(e) of the Trust Indenture Act of 1939, any Securityholder who has
been a bona fide Holder of a Security or Securities of such series for at least
six months may on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee with respect to such series. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities of each series at the time outstanding may at any time remove the
Trustee with respect to Securities of such series and appoint a successor
trustee with respect to the Securities of such series by delivering to the
Trustee so removed, to the successor trustee so appointed and to the Issuer the
evidence provided for in Section 7.01 of the action in that regard taken by the
Securityholders.
(d) Any resignation or removal of the Trustee with respect to any
series and any appointment of a successor trustee with respect to such series
pursuant to any of the provisions of this Section 6.10 shall become effective
upon acceptance of appointment by the successor trustee as provided in Section
6.11.
SECTION 6.11. Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 6.10 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and obligations
with respect to
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such series of its predecessor hereunder, with like effect as if originally
named as trustee for such series hereunder; but, nevertheless, on the written
request of the Issuer or of the successor trustee, upon payment of its charges
then unpaid, the trustee ceasing to act shall, subject to Section 10.04, pay
over to the successor trustee all moneys at the time held by it hereunder and
shall execute and deliver an instrument transferring to such successor trustee
all such rights, powers, duties and obligations. Upon reasonable request of any
such successor trustee, the Issuer shall execute any and all reasonable
instruments in writing for more fully and certainly vesting in and confirming to
such successor trustee all such rights and powers. Any trustee ceasing to act
shall, nevertheless, retain a prior claim upon all property or funds held or
collected by such trustee to secure any amounts then due it pursuant to the
provisions of Section 6.06.
If a successor trustee is appointed with respect to the Securities of
one or more (but not all) series, the Issuer, the predecessor trustee and each
successor trustee with respect to the Securities of any applicable series shall
execute and deliver an indenture supplemental hereto which shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the predecessor trustee with respect to the
Securities of any series as to which the predecessor trustee is not retiring
shall continue to be vested in the predecessor trustee, and shall add to or
change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust and that
each such Trustee shall be trustee of a trust or trusts under separate
indentures.
No successor trustee with respect to any series of Securities shall
accept appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be qualified under Section 310(b) of the
Trust Indenture Act of 1939 and eligible under the provisions of Section 6.09.
Upon acceptance of appointment by any successor trustee as provided in
this Section 6.11, the successor trustee shall give notice thereof (i) if any
Unregistered Securities of a series affected are then Outstanding, to the
Holders thereof, (A) by mail to such Holders who have filed their names and
addresses with the Trustee within the two years preceding the notice at such
addresses as were so furnished to the Trustee and (B) either through the
customary notice provisions of the clearing system or systems through which
beneficial interests in such Unregistered Securities are owned if such
Unregistered Securities are held only in global form or by publication at least
once in an Authorized Newspaper in the Borough of Manhattan, The City of New
York and at least once in an Authorized Newspaper in London (and, if required by
Section 3.07, at least once
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in an Authorized Newspaper in Luxembourg), and (ii) if any Registered Securities
of a series affected are then Outstanding, by mailing notice to the Holders of
then Outstanding Registered Securities of each series affected at their
addresses as they shall appear on the registry books. If the acceptance of
appointment is substantially contemporaneous with the resignation, then the
notice called for by the preceding sentence may be combined with the notice
called for by Section 6.10.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business of Trustee. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding by sale or otherwise to all or
substantially all of the corporate trust business of the Trustee, shall be the
successor of the Trustee hereunder, provided that such corporation shall be
qualified under Section 310(b) of the Trust Indenture Act of 1939 and eligible
under the provisions of Section 6.09, without the execution or filing of any
paper or any further act on the part of any of the parties hereto, anything
herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities of any series shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities of any series shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificate shall have the full force which it is anywhere in the Securities of
such series or in this Indenture provided that the certificate of the Trustee
shall have; provided, that the right to adopt the certificate of authentication
of any predecessor Trustee or to authenticate Securities of any series in the
name of any predecessor Trustee shall apply only to its successor or successors
by merger, conversion or consolidation.
SECTION 6.13. Preferential Collection of Claims. If and when the
Trustee shall be or become a creditor of the Issuer (or any other obligor upon
the Securities of any series), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of the claims against the
Issuer (or any such other obligor).
SECTION 6.14. Appointment of Authenticating Agent. As long as any
Securities of a series remain Outstanding, the Trustee may, by an instrument in
writing, appoint with the approval of the Issuer an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
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Trustee to authenticate Securities, including Securities issued upon exchange,
registration of transfer, partial redemption or pursuant to Section 2.09.
Securities of each such series authenticated by such Authenticating Agent shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee. Whenever reference is made
in this Indenture to the authentication and delivery of Securities of any series
by the Trustee or to the Trustee's Certificate of Authentication, such reference
shall be deemed to include authentication and delivery on behalf of the Trustee
by an Authenticating Agent for such series and a Certificate of Authentication
executed on behalf of the Trustee by such Authenticating Agent. Such
Authenticating Agent shall at all times be a corporation organized and doing
business under the laws of the United States of America or of any State,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least $5,000,000 (determined as provided in Section
6.09 with respect to the Trustee) and subject to supervision or examination by
Federal or State authority.
Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding by sale or otherwise to the
corporate agency business of any Authenticating Agent, shall continue to be
the Authenticating Agent with respect to all series of Securities for which it
served as Authenticating Agent without the execution or filing of any paper or
any further act on the part of the Trustee or such Authenticating Agent. Any
Authenticating Agent may at any time, and if it shall cease to be eligible
shall, resign by giving written notice of resignation to the Trustee and to
the Issuer.
Upon receiving such a notice of resignation or upon such a termination,
or in case at any time any Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.14 with respect to one or more
series of Securities, the Trustee shall upon receipt of an Issuer Order appoint
a successor Authenticating Agent and the Issuer shall provide notice of such
appointment to all Holders of Securities of such series in the manner and to the
extent provided in Section 11.04. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all rights,
powers, duties and responsibilities of its predecessor hereunder, with like
effect as if originally named as Authenticating Agent. The Issuer agrees to pay
to the Authenticating Agent for such series from time to time reasonable
compensation. The Authenticating Agent for the Securities of any series shall
have no responsibility or liability for any action taken by it as such at the
direction of the Trustee.
Sections 6.02, 6.03, 6.04, 6.06, 6.09 and 7.03 shall be applicable to
any
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Authenticating Agent.
ARTICLE 7
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Evidence of Action Taken by Securityholders. Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by a specified percentage in
principal amount of the Securityholders of any or all series may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such specified percentage of Securityholders in person or by agent duly
appointed in writing; and, except as herein otherwise expressly provided, such
action shall become effective when such instrument or instruments are delivered
to the Trustee. Proof of execution of any instrument or of a writing appointing
any such agent shall be sufficient for any purpose of this Indenture and
(subject to Sections 6.01 and 6.02) conclusive in favor of the Trustee and the
Issuer, if made in the manner provided in this Article.
SECTION 7.02. Proof of Execution of Instruments and of Holding of
Securities. Subject to Sections 6.01 and 6.02, the execution of any instrument
by a Securityholder or his agent or proxy may be proved in the following manner:
(a) The fact and date of the execution by any Holder of any instrument
may be proved by the certificate of any notary public or other officer of any
jurisdiction authorized to take acknowledgments of deeds or administer oaths
that the person executing such instruments acknowledged to him the execution
thereof, or by an affidavit of a witness to such execution sworn to before any
such notary or other such officer. Where such execution is by or on behalf of
any legal entity other than an individual, such certificate or affidavit shall
also constitute sufficient proof of the authority of the person executing the
same. The fact of the holding by any Holder of an Unregistered Security of any
series, and the identifying number of such Security and the date of his holding
the same, may be proved by the production of such Security or by a certificate
executed by any trust company, bank, banker or recognized securities dealer
wherever situated satisfactory to the Trustee, if such certificate shall be
deemed by the Trustee to be satisfactory. Each such certificate shall be dated
and shall state that on the date thereof a Security of such series bearing a
specified identifying number was deposited with or exhibited to such trust
company, bank, banker or recognized securities dealer by the Person named in
such certificate. Any such certificate may be issued in respect of one or more
Unregistered Securities of one or more series specified therein. The holding by
the Person named in any such certificate of any
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Unregistered Securities of any series specified therein shall be presumed to
continue for a period of one year from the date of such certificate unless at
the time of any determination of such holding (1) another certificate bearing a
later date issued in respect of the same Securities shall be produced, or (2)
the Security of such series specified in such certificate shall be produced by
some other Person, or (3) the Security of such series specified in such
certificate shall have ceased to be Outstanding. Subject to Sections 6.01 and
6.02, the fact and date of the execution of any such instrument and the amount
and numbers of Securities of any series held by the Person so executing such
instrument and the amount and numbers of any Security or Securities for such
series may also be proven in accordance with such reasonable rules and
regulations as may be prescribed by the Trustee for such series or in any other
manner which the Trustee for such series may deem sufficient.
(b) In the case of Registered Securities, the ownership of such
Securities shall be proved by the Security register or by a certificate of the
Security registrar.
The Issuer may set a record date for purposes of determining the
identity of Holders of Registered Securities of any series entitled to vote or
consent to any action referred to in Section 7.01, which record date may be set
at any time or from time to time by notice to the Trustee, for any date or dates
(in the case of any adjournment or reconsideration) not more than 60 days nor
less than five days prior to the proposed date of such vote or consent, and
thereafter, notwithstanding any other provisions hereof, with respect to
Registered Securities of any series, only Holders of Registered Securities of
such series of record on such record date shall be entitled to so vote or give
such consent or revoke such vote or consent.
SECTION 7.03. Holders to Be Treated as Owners. The Issuer, the Trustee
and any agent of the Issuer or the Trustee may deem and treat the Person in
whose name any Security shall be registered upon the Security register for such
series as the absolute owner of such Security (whether or not such Security
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of and, subject to the provisions of this Indenture, interest on such Security
and for all other purposes; and neither the Issuer nor the Trustee nor any agent
of the Issuer or the Trustee shall be affected by any notice to the contrary.
The Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Holder of any Unregistered Security and the Holder of any Coupon as the absolute
owner of such Unregistered Security or Coupon (whether or not such Unregistered
Security or Coupon shall be overdue) for the purpose of receiving payment
thereof or on account thereof and for all other purposes and neither the Issuer,
the Trustee, nor any agent of the Issuer or the Trustee shall be affected by any
notice to the contrary. All such payments so made to any such Person, or upon
his order, shall
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be valid, and, to the extent of the sum or sums so paid, effectual to satisfy
and discharge the liability for moneys payable upon any such Unregistered
Security or Coupon.
SECTION 7.04. Securities Owned by Issuer Deemed Not Outstanding. In
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all series have concurred in any direction,
consent or waiver under this Indenture, Securities which are owned by the Issuer
or any other obligor on the Securities with respect to which such determination
is being made or by any Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Issuer or any other
obligor on the Securities with respect to which such determination is being made
shall be disregarded and deemed not to be Outstanding for the purpose of any
such determination, except that for the purpose of determining whether the
Trustee shall be protected in relying on any such direction, consent or waiver
only Securities which the Trustee knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Issuer or any other obligor upon the Securities or any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer or any other obligor on the Securities. In case
of a dispute as to such right, the advice of nationally recognized counsel shall
be full protection in respect of any decision made by the Trustee in accordance
with such advice; provided, however, that this provision shall not protect the
Trustee from liability for its own gross negligence, willful misconduct,
recklessness or bad faith or if the Trustee knows that such written advice is
based on erroneous information, or in the exercise of reasonable care should
know that the same is erroneous. Upon request of the Trustee, the Issuer shall
furnish to the Trustee promptly an Officer's Certificate listing and identifying
all Securities, if any, known by the Issuer to be owned or held by or for the
account of any of the above-described Persons; and, subject to Sections 6.01 and
6.02, the Trustee shall be entitled to accept such Officer's Certificate as
conclusive evidence of the facts therein set forth and of the fact that all
Securities not listed therein are Outstanding for the purpose of any such
determination.
SECTION 7.05. Right of Revocation of Action Taken. At any time prior to
(but not after) the evidencing to the Trustee, as provided in Section 7.01, of
the taking of any action by the Holders of the percentage in aggregate principal
amount of the Securities of any or all series, as the case may be, specified in
this Indenture in connection with such action, any Holder of a Security the
serial number of which is shown by the evidence to be included among the serial
numbers of the Securities the Holders of which have consented to such action
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may, by filing written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article, revoke such action so far as concerns such
Security. Except as aforesaid any such action taken by the Holder of any
Security shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Security and of any Securities issued in exchange or
substitution therefor or on registration of transfer thereof, irrespective of
whether or not any notation in regard thereto is made upon any such Security.
Any action taken by the Holders of the percentage in aggregate principal amount
of the Securities of any or all series, as the case may be, specified in this
Indenture in connection with such action shall be conclusively binding upon the
Issuer, the Trustee and the Holders of all the Securities affected by such
action.
ARTICLE 8
SUPPLEMENTAL INDENTURES
SECTION 8.01. Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a resolution of its Board of
Directors (which resolution may provide general terms or parameters for such
action and may provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order), and the Trustee may from
time to time and at any time enter into an indenture or indentures supplemental
hereto for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Securities of one or more series any property or assets;
(b) to evidence the succession of another corporation to the Issuer,
or successive successions, and the assumption by the successor corporation of
the covenants, agreements and obligations of the Issuer pursuant to Article 9;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as the Issuer and the Trustee shall
consider to be for the protection of the Holders of Securities or Coupons, and
to make the occurrence, or the occurrence and continuance, of a default in any
such additional covenants, restrictions, conditions or provisions an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, that in respect of any
such additional covenant, restriction, condition or provision such supplemental
indenture may provide for a particular period of grace after default (which
period may be shorter or longer than that allowed in the case of other defaults)
or may provide for an immediate enforcement upon such an Event of Default or may
limit the remedies available to
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the Trustee upon such an Event of Default or may limit the right of the Holders
of a majority in aggregate principal amount of the Securities of such series to
waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make any other provisions as the Issuer may deem necessary or
desirable, provided that no such action shall adversely affect the interests of
the Holders of the Securities or Coupons;
(e) to establish the forms or terms of Securities of any series or of
the Coupons appertaining to such Securities as permitted by Sections 2.01 and
2.03; and
(f) to evidence and provide for the acceptance of appointment
hereunder by a successor trustee with respect to the Securities of one or more
series and to add to or change any of the provisions of this Indenture as shall
be necessary to provide for or facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of Section
6.11.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property thereunder,
but the Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
may be executed without the consent of the Holders of any of the Securities at
the time outstanding, notwithstanding any of the provisions of Section 8.02.
SECTION 8.02. Supplemental Indentures with Consent of Securityholders.
With the consent (evidenced as provided in Article 7) of the Holders of not less
than a majority in aggregate principal amount of the Securities at the time
Outstanding of all series affected by such supplemental indenture (voting as one
class), the Issuer, when authorized by a resolution of its Board of Directors
(which resolution may provide general terms or parameters for such action and
may provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may, from time
to time and at any time, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any
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of the provisions of this Indenture or of any supplemental indenture or of
modifying in any manner the rights of the Holders of the Securities of each such
series or of the Coupons appertaining to such Securities; provided, that no such
supplemental indenture shall (a)(i) extend the final maturity of any Security,
(ii) reduce the principal amount thereof, (iii) reduce the rate or extend the
time of payment of interest thereon, (iv) reduce any amount payable on
redemption thereof, (v) make the principal thereof (including any amount in
respect of original issue discount), or interest thereon payable in any coin or
currency other than that provided in the Securities and Coupons or in accordance
with the terms thereof, (vi) modify or amend any provisions for converting any
currency into any other currency as provided in the Securities or Coupons or in
accordance with the terms thereof, (vii) reduce the amount of the principal of
an Original Issue Discount Security that would be due and payable upon an
acceleration of the maturity thereof pursuant to Section 5.01 or the amount
thereof provable in bankruptcy pursuant to Section 5.02, (viii) modify or amend
any provisions relating to the conversion or exchange of the Securities or
Coupons for securities of the Issuer or of other entities or other property (or
the cash value thereof), including the determination of the amount of securities
or other property (or cash) into which the Securities shall be converted or
exchanged, other than as provided in the antidilution provisions or other
similar adjustment provisions of the Securities or Coupons or otherwise in
accordance with the terms thereof, (ix) alter the provisions of Section 11.11 or
11.12 or impair or affect the right of any Securityholder to institute suit for
the payment thereof or, if the Securities provide therefor, any right of
repayment at the option of the Securityholder, in each case without the consent
of the Holder of each Security so affected, or (b) reduce the aforesaid
percentage of Securities of any series, the consent of the Holders of which is
required for any such supplemental indenture, without the consent of the Holders
of each Security so affected.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of Holders of Securities of such series, or of Coupons appertaining
to such Securities, with respect to such covenant or provision, shall be deemed
not to affect the rights under this Indenture of the Holders of Securities of
any other series or of the Coupons appertaining to such Securities.
Upon the request of the Issuer, accompanied by a copy of a resolution
of the Board of Directors (which resolution may provide general terms or
parameters for such action and may provide that the specific terms of such
action may be determined in accordance with or pursuant to an Issuer Order)
certified by the secretary or an assistant secretary of the Issuer authorizing
the execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of
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the consent of the Holders of the Securities as aforesaid and other documents,
if any, required by Section 7.01, the Trustee shall join with the Issuer in the
execution of such supplemental indenture unless such supplemental indenture
affects the Trustee's own rights, duties or immunities under this Indenture or
otherwise, in which case the Trustee may in its discretion, but shall not be
obligated to, enter into such supplemental indenture.
It shall not be necessary for the consent of the Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall give notice thereof (i) if any Unregistered Securities of a series
affected are then Outstanding, to the Holders thereof, (A) by mail to such
Holders who have filed their names and addresses with the Trustee within the two
years preceding the notice at such addresses as were so furnished to the Trustee
and (B) either through the customary notice provisions of the clearing system or
systems through which beneficial interests in such Unregistered Securities are
owned if such Unregistered Securities are held only in global form or by
publication at least once in an Authorized Newspaper in the Borough of
Manhattan, The City of New York, and at least once in an Authorized Newspaper in
London (and, if required by Section 3.07, at least once in an Authorized
Newspaper in Luxembourg), (ii) if any Registered Securities of a series affected
are then Outstanding, by mailing notice thereof by first class mail to the
Holders of then Outstanding Registered Securities of each series affected at
their addresses as they shall appear on the registry books, and in each case
such notice shall set forth in general terms the substance of such supplemental
indenture. Any failure of the Issuer to give such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.
SECTION 8.03. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Issuer and the Holders of Securities of
each series affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
SECTION 8.04. Documents to Be Given to Trustee. The Trustee, subject
to
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the provisions of Sections 6.01 and 6.02, may receive an Officer's Certificate
and an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article 8 complies with the applicable provisions of
this Indenture.
SECTION 8.05. Notation on Securities in Respect of Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear a notation in form approved by the Trustee for such series as
to any matter provided for by such supplemental indenture or as to any action
taken by Securityholders. If the Issuer or the Trustee shall so determine, new
Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Issuer,
authenticated by the Trustee and delivered in exchange for the Securities of
such series then Outstanding.
ARTICLE 9
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.01. Issuer May Consolidate, Etc. on Certain Terms. Subject
to the provisions of Section 9.02, nothing contained in this Indenture or in any
of the Securities shall prevent any consolidation or merger of the Issuer with
or into any other Person or Persons (whether or not affiliated with the Issuer),
or successive consolidations or mergers in which the Issuer or its successor or
successors shall be a party or parties, or shall prevent any sale, conveyance or
lease (or successive sales, conveyances or leases) of all or substantially all
of the property of the Issuer, to any other Person (whether or not affiliated
with the Issuer), authorized to acquire and operate the same and that shall be
organized under the laws of the United States of America, any state thereof or
the District of Columbia; provided, however, that upon any such consolidation,
merger, sale, conveyance or lease, the due and punctual payment of the principal
of and premium, if any, and interest on all of the Securities, according to
their tenor and the due and punctual performance and observance of all of the
covenants and conditions of this Indenture to be performed by the Issuer, shall
be expressly assumed, by supplemental indenture satisfactory in form to the
Trustee, executed and delivered to the Trustee by the Person (if other than the
Issuer) formed by such consolidation, or into which the Issuer shall have been
merged, or by the Person that shall have acquired or leased such property, and
such supplemental indenture shall provide for conversion rights (if applicable).
SECTION 9.02. Successor Corporation to be Substituted. In case of any
such consolidation, merger, sale, conveyance or lease and upon the assumption by
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the successor Person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual payment
of the principal of and premium, if any, and interest on all of the Securities
and the due and punctual performance of all of the covenants and conditions of
this Indenture to be performed by the Issuer, such successor Person shall
succeed to and be substituted for the Issuer, with the same effect as if it had
been named herein as the party of this first part. Such successor Person
thereupon may cause to be signed, and may issue either in its own name or in the
name of NVIDIA Corporation any or all of the Securities, issuable hereunder that
theretofore shall not have been signed by the Issuer and delivered to the
Trustee; and, upon the order of such successor Person instead of the Issuer and
subject to all the terms, conditions and limitations in this Indenture
prescribed, the Trustee shall authenticate and shall deliver, or cause to be
authenticated and delivered, any Securities that previously shall have been
signed and delivered by the officers of the Issuer to the Trustee for
authentication, and any Securities that such successor Person thereafter shall
cause to be signed and delivered to the Trustee for that purpose. All the
Securities so issued shall in all respects have the same legal rank and benefit
under this Indenture as the Securities theretofore or thereafter issued in
accordance with the terms of this Indenture as though all of such Securities had
been issued at the date of the execution hereof. In the event of any such
consolidation, merger, sale, conveyance or lease, the Person named as the
"Issuer" in the first paragraph of this Indenture or any successor that shall
thereafter have become such in the manner prescribed in this Article 9 may be
dissolved, wound up and liquidated at any time thereafter and such Person shall
be released from its liabilities as obligor and maker of the Securities and from
its obligations under this Indenture.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 9.03. Opinion of Counsel to be Given Trustee. The Trustee shall
receive an Officer's Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance or lease and any
such assumption complies with the provisions of this Article 9.
ARTICLE 10
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.01. Satisfaction and Discharge of Indenture. Unless
otherwise set forth in a supplemental indenture, (a) if at any time (i) the
Issuer shall have paid or caused to be paid the principal of and interest on all
the Securities of any series Outstanding hereunder and all unmatured Coupons
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appertaining thereto (other than Securities of such series and Coupons
appertaining thereto which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 2.09) as and when the same shall
have become due and payable, or (ii) the Issuer shall have delivered to the
Trustee for cancellation all Securities of any series theretofore authenticated
and all unmatured Coupons appertaining thereto (other than any Securities of
such series and Coupons appertaining thereto which shall have been destroyed,
lost or stolen and which shall have been replaced or paid as provided in Section
2.09) or (iii) in the case of any series of Securities where the exact amount
(including the currency of payment) of principal of and interest due on which
can be determined at the time of making the deposit referred to in clause (B)
below, (A) all the Securities of such series and all unmatured Coupons
appertaining thereto not theretofore delivered to the Trustee for cancellation
shall have become due and payable, or are by their terms to become due and
payable within one year or are to be called for redemption within one year under
arrangements satisfactory to the Trustee for the giving of notice of redemption,
and (B) the Issuer shall have irrevocably deposited or caused to be deposited
with the Trustee as trust funds the entire amount in cash (other than moneys
repaid by the Trustee or any paying agent to the Issuer in accordance with
Section 10.04) or, in the case of any series of Securities the payments on which
may only be made in Dollars, direct obligations of the United States of America,
backed by its full faith and credit ("U.S. Government Obligations"), maturing as
to principal and interest at such times and in such amounts as will insure the
availability of cash, or a combination thereof, sufficient in the opinion of a
nationally recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (1) the principal
and interest on all Securities of such series and Coupons appertaining thereto
on each date that such principal or interest is due and payable and (2) any
mandatory sinking fund payments on the dates on which such payments are due and
payable in accordance with the terms of the Indenture and the Securities of such
series; and if, in any such case, the Issuer shall also pay or cause to be paid
all other sums payable hereunder by the Issuer, then this Indenture shall cease
to be of further effect (except as to (i) rights of registration of transfer and
exchange of Securities of such Series and of Coupons appertaining thereto and
the Issuer's right of optional redemption, if any, (ii) substitution of
mutilated, defaced, destroyed, lost or stolen Securities or Coupons, (iii)
rights of holders of Securities and Coupons appertaining thereto to receive
payments of principal thereof and interest thereon, upon the original stated due
dates therefor (but not upon acceleration), and remaining rights of the Holders
to receive mandatory sinking fund payments, if any, (iv) the rights,
obligations, duties and immunities of the Trustee hereunder, (v) the rights of
the Holders of Securities of such series and Coupons appertaining thereto as
beneficiaries hereof with respect to the property so deposited with the Trustee
payable to all or any of them, and (vi) the obligations of the Issuer under
Section 3.02) and the Trustee, on demand
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of the Issuer accompanied by an Officer's Certificate and an Opinion of Counsel
and at the cost and expense of the Issuer, shall execute proper instruments
acknowledging such satisfaction of and discharging this Indenture; provided,
that the rights of Holders of the Securities and Coupons to receive amounts in
respect of principal of and interest on the Securities and Coupons held by them
shall not be delayed longer than required by then-applicable mandatory rules or
policies of any securities exchange upon which the Securities are listed. The
Issuer agrees to reimburse the Trustee for any costs or expenses thereafter
reasonably and properly incurred and to compensate the Trustee for any services
thereafter reasonably and properly rendered by the Trustee in connection with
this Indenture or the Securities of such series.
(b) The following provisions shall apply to the Securities of each
series unless specifically otherwise provided in a Board Resolution, Officer's
Certificate or indenture supplemental hereto provided pursuant to Section 2.03.
In addition to discharge of the Indenture pursuant to the next preceding
paragraph, in the case of any series of Securities the exact amounts (including
the currency of payment) of principal of and interest due on which can be
determined at the time of making the deposit referred to in clause (i) below,
the Issuer shall be deemed to have paid and discharged the entire indebtedness
on all the Securities of such a series and the Coupons appertaining thereto on
the 91st day after the date of the deposit referred to in clause (i) below, and
the provisions of this Indenture with respect to the Securities of such series
and Coupons appertaining thereto shall no longer be in effect (except as to (A)
rights of registration of transfer and exchange of Securities of such series and
of Coupons appertaining thereto and the Issuer's right of optional redemption,
if any, (B) substitution of mutilated, defaced, destroyed, lost or stolen
Securities or Coupons, (C) rights of Holders of Securities and Coupons
appertaining thereto to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders to receive mandatory sinking
fund payments, if any, (D) the rights, obligations, duties and immunities of the
Trustee hereunder, (E) the rights of the Holders of Securities of such series
and Coupons appertaining thereto as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any of them and (F) the
obligations of the Issuer under Section 3.02) and the Trustee, at the expense of
the Issuer, shall at the Issuer's request, execute proper instruments
acknowledging the same, if
(i) with reference to this provision the Issuer has irrevocably
deposited or caused to be irrevocably deposited with the Trustee as
trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of the Securities of
such series and Coupons appertaining thereto (A) cash in an amount, or
(B) in the case of any series of Securities the payments on which may
only be made in Dollars, U.S.
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Government Obligations, maturing as to principal and interest at such
times and in such amounts as will insure the availability of cash or
(C) a combination thereof, sufficient, in the opinion of a nationally
recognized firm of independent public accountants expressed in a
written certification thereof delivered to the Trustee, to pay (1) the
principal and interest on all Securities of such series and Coupons
appertaining thereto on each date that such principal or interest is
due and payable and (2) any mandatory sinking fund payments on the
dates on which such payments are due and payable in accordance with the
terms of the Indenture and the Securities of such series;
(ii) such deposit will not result in a breach or violation of, or
constitute a default under, any agreement or instrument to which the
Issuer is a party or by which it is bound;
(iii) the Issuer has delivered to the Trustee an Opinion of Counsel
based on the fact that (x) the Issuer has received from, or there has
been published by, the Internal Revenue Service a ruling or (y) since
the date hereof, there has been a change in the applicable Federal
income tax law, in either case to the effect that, and such opinion
shall confirm that, the Holders of the Securities of such series and
Coupons appertaining thereto will not recognize income, gain or loss
for Federal income tax purposes as a result of such deposit, defeasance
and discharge and will be subject to Federal income tax on the same
amount and in the same manner and at the same times, as would have been
the case if such deposit, defeasance and discharge had not occurred;
and
(iv) the Issuer has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that all conditions precedent
provided for relating to the defeasance contemplated by this provision
have been complied with.
(c) The Issuer shall be released from its obligations under Section
3.06 with respect to the Securities of any Series, and any Coupons appertaining
thereto, Outstanding on and after the date the conditions set forth below are
satisfied (hereinafter, "covenant defeasance"). For this purpose, such covenant
defeasance means that, with respect to the Outstanding Securities of any series,
the Issuer may omit to comply with and shall have no liability in respect of any
term, condition or limitation set forth in such Section, whether directly or
indirectly by reason of any reference elsewhere herein to such Section or by
reason of any reference in such Section to any other provision herein or in any
other document and such omission to comply shall not constitute an Event of
Default under Section 5.01, but the remainder of this Indenture and such
Securities and Coupons shall be unaffected
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thereby. The following shall be the conditions to application of this subsection
(c) of this Section 10.01:
(i) The Issuer has irrevocably deposited or caused to be deposited
with the Trustee as trust funds in trust for the purpose of making the
following payments, specifically pledged as security for, and dedicated
solely to, the benefit of the holders of the Securities of such series
and Coupons appertaining thereto, (A) cash in an amount, or (B) in the
case of any series of Securities the payments on which may only be made
in Dollars, U.S. Government Obligations maturing as to principal and
interest at such times and in such amounts as will insure the
availability of cash or (C) a combination thereof, sufficient, in the
opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, to pay (1) the principal and interest on all Securities of
such series and Coupons appertaining thereto and (2) any mandatory
sinking fund payments on the day on which such payments are due and
payable in accordance with the terms of the Indenture and the
Securities of such series.
(ii) No Event of Default or event which with notice or lapse of time or
both would become an Event of Default with respect to the Securities
shall have occurred and be continuing on the date of such deposit.
(iii) Such covenant defeasance shall not cause the Trustee to have a
conflicting interest for purposes of the Trust Indenture Act of 1939
with respect to any securities of the Issuer.
(iv) Such covenant defeasance shall not result in a breach or violation
of, or constitute a default under, this Indenture or any other
agreement or instrument to which the Issuer is a party or by which it
is bound.
(v) Such covenant defeasance shall not cause any Securities then
listed on any registered national securities exchange under the
Securities Exchange Act of 1934, as amended, to be delisted.
(vi) The Issuer shall have delivered to the Trustee an Officer's
Certificate and Opinion of Counsel to the effect that the Holders of
the Securities of such series and Coupons appertaining thereto will not
recognize income, gain or loss for Federal income tax purposes as a
result of such covenant defeasance and will be subject to Federal
income tax on the same amounts, in the same manner and at the same
times as would
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have been the case if such covenant defeasance had not occurred.
(vii) The Issuer shall have delivered to the Trustee an Officer's
Certificate and an Opinion of Counsel, each stating that all
conditions precedent provided for relating to the covenant defeasance
contemplated by this provision have been complied with.
SECTION 10.02. Application by Trustee of Funds Deposited for Payment of
Securities. Subject to Section 10.04, all moneys deposited with the Trustee (or
other trustee) pursuant to Section 10.01 shall be held in trust and applied by
it to the payment, either directly or through any paying agent (including the
Issuer acting as its own paying agent), to the Holders of the particular
Securities of such series and of Coupons appertaining thereto for the payment or
redemption of which such moneys have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest; but such money
need not be segregated from other funds except to the extent required by law.
SECTION 10.03. Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to Securities
of any series, all moneys then held by any paying agent under the provisions of
this Indenture with respect to such series of Securities shall, upon demand of
the Issuer, be repaid to it or paid to the Trustee and thereupon such paying
agent shall be released from all further liability with respect to such moneys.
SECTION 10.04. Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or any
paying agent for the payment of the principal of or interest on any Security of
any series or Coupons attached thereto and not applied but remaining unclaimed
for two years after the date upon which such principal or interest shall have
become due and payable, shall, upon the written request of the Issuer and unless
otherwise required by mandatory provisions of applicable escheat or abandoned or
unclaimed property law, be repaid to the Issuer by the Trustee for such series
or such paying agent, and the Holder of the Securities of such series and of any
Coupons appertaining thereto shall, unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property laws,
thereafter look only to the Issuer for any payment which such Holder may be
entitled to collect, and all liability of the Trustee or any paying agent with
respect to such moneys shall thereupon cease; provided, however, that the
Trustee or such paying agent, before being required to make any such repayment
with respect to moneys deposited with it for any payment (a) in respect of
Registered Securities of any series, shall at the expense of the Issuer, mail by
first-class mail to Holders of such Securities at their addresses as they shall
appear on the Security register,
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and (b) in respect of Unregistered Securities of any series, shall at the
expense of the Issuer either give through the customary notice provisions of the
clearing system or systems through which beneficial interests in such
Unregistered Securities are owned if such Unregistered Securities are held only
in global form or cause to be published once, in an Authorized Newspaper in the
Borough of Manhattan, The City of New York and once in an Authorized Newspaper
in London (and if required by Section 3.07, once in an Authorized Newspaper in
Luxembourg), notice, that such moneys remain and that, after a date specified
therein, which shall not be less than thirty days from the date of such mailing
or publication, any unclaimed balance of such money then remaining will be
repaid to the Issuer.
SECTION 10.05. Indemnity for U.S. Government Obligations. The Issuer
shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the U.S. Government Obligations deposited pursuant to
Section 10.01 or the principal or interest received in respect of such
obligations.
ARTICLE 11
MISCELLANEOUS PROVISIONS
SECTION 11.01. Incorporators, Stockholders, Officers and Directors of
Issuer Exempt from Individual Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such or against any past, present or future stockholder,
officer, employee or director, as such, of the Issuer or of any successor,
either directly or through the Issuer or any successor, under any rule of law,
statute or constitutional provision or by the enforcement of any assessment or
by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of the Securities and the
Coupons appertaining thereto by the Holders thereof and as part of the
consideration for the issue of the Securities and the Coupons appertaining
thereto.
SECTION 11.02. Provisions of Indenture for the Sole Benefit of Parties
and Holders of Securities and Coupons. Nothing in this Indenture, in the
Securities or in the Coupons appertaining thereto, expressed or implied, shall
give or be construed to give to any person, firm or corporation, other than the
parties hereto and their successors and the Holders of the Securities or
Coupons, if any, any legal or equitable right, remedy or claim under this
Indenture or under any covenant or provision herein contained, all such
covenants and provisions being for the sole benefit of the parties hereto and
their successors and of the Holders of
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the Securities or Coupons, if any.
SECTION 11.03. Successors and Assigns of Issuer Bound by Indenture. All
the covenants, stipulations, promises and agreements in this Indenture contained
by or in behalf of the Issuer shall bind its successors and assigns, whether so
expressed or not.
SECTION 11.04. Notices and Demands on Issuer, Trustee and Holders of
Securities and Coupons. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the Holders of Securities or Coupons to or on the Issuer may be given or served
by being deposited postage prepaid, first-class mail (except as otherwise
specifically provided herein) addressed (until another address of the Issuer is
filed by the Issuer with the Trustee) to NVIDIA Corporation, 3535 Monroe Street,
Santa Clara, California 95051, Attention: _. Any notice, direction, request or
demand by the Issuer or any Holder of Securities or Coupons to or upon the
Trustee shall be deemed to have been sufficiently given or served by being
deposited postage prepaid, first-class mail (except as otherwise specifically
provided herein) addressed (until another address of the Trustee is filed by the
Trustee with the Issuer) to Chase Manhattan Bank and Trust Company, N.A.,
101 California Street, Suite 2700, San Francisco, California 94111, Attention:
James Nagy.
Where this Indenture provides for notice to Holders of Registered
Securities, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder entitled thereto, at his last address as it appears in the Security
register. In any case where notice to such Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer when such
notice is required to be given pursuant to any provision of this Indenture, then
any manner of giving such notice as shall be reasonably satisfactory to the
Trustee shall be deemed to be a sufficient giving of such notice.
SECTION 11.05. Officer's Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the
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Issuer to the Trustee to take any action under any of the provisions of this
Indenture, the Issuer shall furnish to the Trustee an Officer's Certificate
stating that all conditions precedent provided for in this Indenture relating to
the proposed action have been complied with and an Opinion of Counsel stating
that in the opinion of such counsel all such conditions precedent have been
complied with, except that in the case of any such application or demand as to
which the furnishing of such documents is specifically required by any provision
of this Indenture relating to such particular application or demand, no
additional certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (b) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an
informed opinion as to whether or not such covenant or condition has been
complied with and (d) a statement as to whether or not, in the opinion of such
person, such condition or covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of or representations by counsel, unless such officer knows that the certificate
or opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters, information with respect to which is in the possession of
the Issuer, upon the certificate, statement or opinion of or representations by
an officer or officers of the Issuer, unless such counsel knows that the
certificate, statement or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of the Issuer or of
counsel may be based, insofar as it relates to accounting matters, upon a
certificate or opinion of or representations by an accountant or firm of
accountants in the employ of the Issuer, unless such officer or counsel, as the
case may be, knows that the certificate or opinion or representations with
respect to the accounting matters upon which his certificate, statement or
opinion may be based as aforesaid are erroneous, or in the exercise of
reasonable care should know that the same are
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erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.
SECTION 11.06. Payments Due on Saturdays, Sundays or Holidays. If the
date of maturity of interest on or principal of the Securities of any series or
any Coupons appertaining thereto or the date fixed for redemption or repayment
of any such Security or Coupon shall not be a Business Day, then payment of
interest or principal need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period after such date.
SECTION 11.07. Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with the duties imposed by, or with another
provision (an "incorporated provision") included in this Indenture by operation
of, Sections 310 to 318, inclusive, of the Trust Indenture Act of 1939, such
imposed duties or incorporated provision shall control.
SECTION 11.08. New York Law to Govern. This Indenture and each Security
and Coupon shall be deemed to be a contract under the laws of the State of New
York, and for all purposes shall be construed in accordance with the laws of
such State, except as may otherwise be required by mandatory provisions of law.
SECTION 11.09. Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
SECTION 11.11. Securities in a Foreign Currency. Unless otherwise
specified in an Officer's Certificate delivered pursuant to Section 2.03 of this
Indenture with respect to a particular series of Securities, whenever for
purposes of this Indenture any action may be taken by the Holders of a specified
percentage in aggregate principal amount of Securities of all series or all
series affected by a particular action at the time Outstanding and, at such
time, there are Outstanding Securities of any series which are denominated in a
coin or currency other than
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Dollars, then the principal amount of Securities of such series which shall be
deemed to be Outstanding for the purpose of taking such action shall be that
amount of Dollars that could be obtained for such amount at the Market Exchange
Rate. For purposes of this Section 11.11, Market Exchange Rate shall mean the
noon Dollar buying rate in New York City for cable transfers of that currency as
published by the Federal Reserve Bank of New York. If such Market Exchange Rate
is not available for any reason with respect to such currency, the Trustee shall
use, in its sole discretion and without liability on its part, such quotation of
the Federal Reserve Bank of New York as of the most recent available date, or
quotations from one or more major banks in The City of New York or in the
country of issue of the currency in question, or such other quotations as the
Trustee shall deem appropriate. The provisions of this paragraph shall apply in
determining the equivalent principal amount in respect of Securities of a series
denominated in a currency other than Dollars in connection with any action taken
by Holders of Securities pursuant to the terms of this Indenture.
All decisions and determinations of the Trustee regarding the Market
Exchange Rate or any alternative determination provided for in the preceding
paragraph shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive to the extent permitted by law for all purposes and
irrevocably binding upon the Issuer and all Holders.
SECTION 11.12. Judgment Currency. The Issuer agrees, to the fullest
extent that it may effectively do so under applicable law, that (a) if for the
purpose of obtaining judgment in any court it is necessary to convert the sum
due in respect of the principal of or interest on the Securities of any series
(the "Required Currency") into a currency in which a judgment will be rendered
(the "Judgment Currency"), the rate of exchange used shall be the rate at which
in accordance with normal banking procedures the Trustee could purchase in The
City of New York the Required Currency with the Judgment Currency on the day on
which final unappealable judgment is entered, unless such day is not a New York
Banking Day, then, to the extent permitted by applicable law, the rate of
exchange used shall be the rate at which in accordance with normal banking
procedures the Trustee could purchase in The City of New York the Required
Currency with the Judgment Currency on the New York Banking Day preceding the
day on which final unappealable judgment is entered and (b) its obligations
under this Indenture to make payments in the Required Currency (i) shall not be
discharged or satisfied by any tender, or any recovery pursuant to any judgment
(whether or not entered in accordance with subsection (a)), in any currency
other than the Required Currency, except to the extent that such tender or
recovery shall result in the actual receipt, by the payee, of the full amount of
the Required Currency expressed to be payable in respect of such payments, (ii)
shall be enforceable as an alternative or additional cause of action for the
purpose of
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recovering in the Required Currency the amount, if any, by which such actual
receipt shall fall short of the full amount of the Required Currency so
expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York or a day on which banking institutions in
The City of New York are authorized or required by law or executive order to
close.
ARTICLE 12
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.01. Applicability of Article. The provisions of this Article
shall be applicable to the Securities of any series which are redeemable before
their maturity or to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 2.03 for
Securities of such series.
SECTION 12.02. Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Registered Securities of any series to be redeemed
as a whole or in part at the option of the Issuer shall be given by mailing
notice of such redemption by first class mail, postage prepaid, to such Holders
of Securities of such series at their last addresses as they shall appear upon
the registry books at least 30 days and not more than 60 days prior to the date
fixed for redemption, or within such other redemption notice period as has been
designated for any Securities of such series pursuant to Section 2.03 or 2.04
(the "Redemption Notice Period"). Notice of redemption to the Holders of
Unregistered Securities to be redeemed as a whole or in part, who have filed
their names and addresses with the Trustee within two years preceding such
notice of redemption, shall be given by mailing notice of such redemption, by
first class mail, postage prepaid, at least 30 and not more than 60 days prior
to the date fixed for redemption or within any applicable Redemption Notice
Period to such Holders at such addresses as were so furnished to the Trustee
(and, in the case of any such notice given by the Issuer, the Trustee shall make
such information available to the Issuer for such purpose). Notice of redemption
to all other Holders of Unregistered Securities shall be published in an
Authorized Newspaper in the Borough of Manhattan, The City of New York and in an
Authorized Newspaper in London (and, if required by Section 3.07, in an
Authorized Newspaper in Luxembourg), in each case, once in each of three
successive calendar weeks, the first publication to be not less than 30 nor more
than 60 days prior to the date fixed for redemption or within any applicable
Redemption Notice Period; provided that notice to Holders of Unregistered
Securities held only in global form may be made, at the option of the
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Issuer, through the customary notice provisions of the clearing system or
systems through which beneficial interests in such Unregistered Securities are
owned. Any notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives the notice. Failure to give notice by mail, or any defect in the notice
to the Holder of any Security of a series designated for redemption as a whole
or in part shall not affect the validity of the proceedings for the redemption
of any other Security of such series.
The notice of redemption to each such Holder shall specify, the
principal amount of each Security of such series held by such Holder to be
redeemed, the date fixed for redemption, the redemption price (or if not then
ascertainable, the manner of calculation thereof), the place or places of
payment, that payment will be made upon presentation and surrender of such
Securities and, in the case of Securities with Coupons attached thereto, of all
Coupons appertaining thereto maturing after the date fixed for redemption, that
such redemption is pursuant to the mandatory or optional sinking fund, or both,
if such be the case, that interest accrued to the date fixed for redemption will
be paid as specified in such notice and that on and after said date interest
thereon or on the portions thereof to be redeemed will cease to accrue. In case
any Security of a series is to be redeemed in part only the notice of redemption
shall state the portion of the principal amount thereof to be redeemed and shall
state that on and after the date fixed for redemption, upon surrender of such
Security, a new Security or Securities of such series in principal amount equal
to the unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to be redeemed at
the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of redemption
given as provided in this Section, the Issuer will deposit with the Trustee or
with one or more paying agents (or, if the Issuer is acting as its own paying
agent, set aside, segregate and hold in trust as provided in Section 3.04) an
amount of money or other property sufficient to redeem on the redemption date
all the Securities of such series so called for redemption at the appropriate
redemption price, together with accrued interest to the date fixed for
redemption. The Issuer will deliver to the Trustee at least 70 days prior to the
date fixed for redemption or at least 10 days prior to the first day of any
applicable Redemption Notice Period an Officer's Certificate stating the
aggregate principal amount of Securities to be redeemed. In case of a redemption
at the election of the Issuer prior to the expiration of any restriction on such
redemption, the Issuer shall deliver to the Trustee, prior to the giving of any
notice of redemption to Holders pursuant to this Section, an Officer's
Certificate stating that such restriction has been complied
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with.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select, in such manner as it shall deem appropriate and fair,
Securities of such Series to be redeemed in whole or in part. Securities may be
redeemed in part in multiples equal to the minimum authorized denomination for
Securities of such series or any multiple thereof. The Trustee shall promptly
notify the Issuer in writing of the Securities of such series selected for
redemption and, in the case of any Securities of such series selected for
partial redemption, the principal amount thereof to be redeemed. For all
purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities of any series shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 12.03. Payment of Securities Called for Redemption. If notice
of redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption, and on and after said
date (unless the Issuer shall default in the payment of such Securities at the
redemption price, together with interest accrued to said date) interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue, and the unmatured Coupons, if any, appertaining thereto shall be void,
and, except as provided in Sections 6.05 and 10.04, such Securities shall cease
from and after the date fixed for redemption to be entitled to any benefit or
security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price
thereof and unpaid interest to the date fixed for redemption. On presentation
and surrender of such Securities at a place of payment specified in said notice,
together with all Coupons, if any, appertaining thereto maturing after the date
fixed for redemption, said Securities or the specified portions thereof shall be
paid and redeemed by the Issuer at the applicable redemption price, together
with interest accrued thereon to the date fixed for redemption; provided that
payment of interest becoming due on or prior to the date fixed for redemption
shall be payable in the case of Securities with Coupons attached thereto, to the
Holders of the Coupons for such interest upon surrender thereof, and in the case
of Registered Securities, to the Holders of such Registered Securities
registered as such on the relevant record date subject to the terms and
provisions of Sections 2.03 and 2.07 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest or Yield to
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Maturity (in the case of an Original Issue Discount Security) borne by such
Security.
If any Security with Coupons attached thereto is surrendered for
redemption and is not accompanied by all appurtenant Coupons maturing after the
date fixed for redemption, the surrender of such missing Coupon or Coupons may
be waived by the Issuer and the Trustee, if there be furnished to each of them
such security or indemnity as they may require to save each of them harmless.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the order
of the Holder thereof, at the expense of the Issuer, a new Security or
Securities of such series, of authorized denominations, in principal amount
equal to the unredeemed portion of the Security so presented.
SECTION 12.04. Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in an Officer's Certificate delivered to the Trustee at least 40 days
prior to the last date on which notice of redemption may be given as being owned
of record and beneficially by, and not pledged or hypothecated by either (a) the
Issuer or (b) an entity specifically identified in such written statement as
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer.
SECTION 12.05. Mandatory and Optional Sinking Funds. The minimum amount
of any sinking fund payment provided for by the terms of the Securities of any
series is herein referred to as a "mandatory sinking fund payment", and any
payment in excess of such minimum amount provided for by the terms of the
Securities of any series is herein referred to as an "optional sinking fund
payment". The date on which a sinking fund payment is to be made is herein
referred to as the "sinking fund payment date".
In lieu of making all or any part of any mandatory sinking fund payment
with respect to any series of Securities in cash, the Issuer may at its option
(a) deliver to the Trustee Securities of such series theretofore purchased or
otherwise acquired (except upon redemption pursuant to the mandatory sinking
fund) by the Issuer or receive credit for Securities of such series (not
previously so credited) theretofore purchased or otherwise acquired (except as
aforesaid) by the Issuer and delivered to the Trustee for cancellation pursuant
to Section 2.10, (b) receive credit for optional sinking fund payments (not
previously so credited) made pursuant to this Section, or (c) receive credit for
Securities of such series (not previously so credited) redeemed by the Issuer
through any optional redemption
75
<PAGE>
provision contained in the terms of such series. Securities so delivered or
credited shall be received or credited by the Trustee at the sinking fund
redemption price specified in such Securities.
On or before the 60th day next preceding each sinking fund payment date
or the 30th day next preceding the last day of any applicable Redemption Notice
Period relating to a sinking fund payment date for any series, the Issuer will
deliver to the Trustee an Officer's Certificate (which need not contain the
statements required by Section 11.05) (a) specifying the portion of the
mandatory sinking fund payment to be satisfied by payment of cash and the
portion to be satisfied by credit of Securities of such series and the basis for
such credit, (b) stating that none of the Securities of such series has
theretofore been so credited, (c) stating that no defaults in the payment of
interest or Events of Default with respect to such series have occurred (which
have not been waived or cured) and are continuing and (d) stating whether or not
the Issuer intends to exercise its right to make an optional sinking fund
payment with respect to such series and, if so, specifying the amount of such
optional sinking fund payment which the Issuer intends to pay on or before the
next succeeding sinking fund payment date. Any Securities of such series to be
credited and required to be delivered to the Trustee in order for the Issuer to
be entitled to credit therefor as aforesaid which have not theretofore been
delivered to the Trustee shall be delivered for cancellation pursuant to Section
2.10 to the Trustee with such Officer's Certificate (or reasonably promptly
thereafter if acceptable to the Trustee). Such Officer's Certificate shall be
irrevocable and upon its receipt by the Trustee the Issuer shall become
unconditionally obligated to make all the cash payments or payments therein
referred to, if any, on or before the next succeeding sinking fund payment date.
Failure of the Issuer, on or before any such 60th day or 30th day, if
applicable, to deliver such Officer's Certificate and Securities specified in
this paragraph, if any, shall not constitute a default but shall constitute, on
and as of such date, the irrevocable election of the Issuer (i) that the
mandatory sinking fund payment for such series due on the next succeeding
sinking fund payment date shall be paid entirely in cash without the option to
deliver or credit Securities of such series in respect thereof and (ii) that the
Issuer will make no optional sinking fund payment with respect to such series as
provided in this Section.
If the sinking fund payment or payments (mandatory or optional or both)
to be made in cash on the next succeeding sinking fund payment date plus any
unused balance of any preceding sinking fund payments made in cash shall exceed
$50,000 (or the equivalent thereof in any Foreign Currency) or a lesser sum in
Dollars (or the equivalent thereof in any Foreign Currency) if the Issuer shall
so request with respect to the Securities of any particular series, such cash
shall be applied on the next succeeding sinking fund payment date to the
redemption of Securities of such series at the sinking fund redemption price
together with
76
<PAGE>
accrued interest to the date fixed for redemption. If such amount shall be
$50,000 (or the equivalent thereof in any Foreign Currency) or less and the
Issuer makes no such request then it shall be carried over until a sum in excess
of $50,000 (or the equivalent thereof in any Foreign Currency) is available. The
Trustee shall select, in the manner provided in Section 12.02, for redemption on
such sinking fund payment date a sufficient principal amount of Securities of
such series to absorb said cash, as nearly as may be, and shall (if requested in
writing by the Issuer) inform the Issuer of the serial numbers of the Securities
of such series (or portions thereof) so selected. Securities shall be excluded
from eligibility for redemption under this Section if they are identified by
registration and certificate number in an Officer's Certificate delivered to the
Trustee at least 60 days prior to the sinking fund payment date or at least 30
days prior to the last day of any applicable Redemption Notice Period relating
to a sinking fund payment date as being owned of record and beneficially by, and
not pledged or hypothecated by either (a) the Issuer or (b) an entity
specifically identified in such Officer's Certificate as directly or indirectly
controlling or controlled by or under direct or indirect common control with the
Issuer. The Trustee, in the name and at the expense of the Issuer (or the
Issuer, if it shall so request the Trustee in writing) shall cause notice of
redemption of the Securities of such series to be given in substantially the
manner provided in Section 12.02 (and with the effect provided in Section 12.03)
for the redemption of Securities of such series in part at the option of the
Issuer. The amount of any sinking fund payments not so applied or allocated to
the redemption of Securities of such series shall be added to the next cash
sinking fund payment for such series and, together with such payment, shall be
applied in accordance with the provisions of this Section. Any and all sinking
fund moneys held on the stated maturity date of the Securities of any particular
series (or earlier, if such maturity is accelerated), which are not held for the
payment or redemption of particular Securities of such series shall be applied,
together with other moneys, if necessary, sufficient for the purpose, to the
payment of the principal of, and interest on, the Securities of such series at
maturity.
On or before each sinking fund payment date, the Issuer shall pay to
the Trustee in cash or shall otherwise provide for the payment of all interest
accrued to the date fixed for redemption on Securities to be redeemed on the
next following sinking fund payment date.
The Trustee shall not redeem or cause to be redeemed any Securities of
a series with sinking fund moneys or give any notice of redemption of Securities
for such series by operation of the sinking fund during the continuance of a
default in payment of interest on such Securities or of any Event of Default
except that, where the giving of notice of redemption of any Securities shall
theretofore have been made, the Trustee shall redeem or cause to be redeemed
such Securities,
77
<PAGE>
provided that it shall have received from the Issuer a sum sufficient for such
redemption. Except as aforesaid, any moneys in the sinking fund for such series
at the time when any such default or Event of Default shall occur, and any
moneys thereafter paid into the sinking fund, shall, during the continuance of
such default or Event of Default, be deemed to have been collected under Article
5 and held for the payment of all such Securities. In case such Event of Default
shall have been waived as provided in Section 5.10 or the default cured on or
before the sixtieth day preceding the sinking fund payment date in any year,
such moneys shall thereafter be applied on the next succeeding sinking fund
payment date in accordance with this Section to the redemption of such
Securities.
78
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of March ___, 2000.
NVIDIA CORPORATION
[CORPORATE SEAL]
By:
----------------------------
Name:
Title:
Attest:
By:
----------------------------
CHASE MANHATTAN BANK AND
TRUST COMPANY, N.A., TRUSTEE
[CORPORATE SEAL]
By:
----------------------------
Name:
Title:
Attest:
By:
----------------------------
79
<PAGE>
STATE OF CALIFORNIA )
) ss.:
COUNTY OF SAN MATEO )
On this ____ of ________, 2000 before me personally came , to me
personally known, who, being by me duly sworn, did depose and say that he
resides at that he is the of NVIDIA Corporation, one of the corporations
described in and which executed the above instrument; that he knows the
corporate seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
[NOTARIAL SEAL]
----------------------------
Notary Public
80
<PAGE>
STATE OF CALIFORNIA )
) ss.:
COUNTY OF SAN MATEO )
On this ____ of _________, 2000 before me personally came , to me
personally known, who, being by me duly sworn, did depose and say that he
resides at that he is a ___________ of _________________________, one of the
corporations described in and which executed the above instrument; that he knows
the corporate seal of said corporation; that the seal affixed to said instrument
is such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
[NOTARIAL SEAL]
----------------------------
Notary Public
81
<PAGE>
EXHIBIT 4.4
- --------------------------------------------------------------------------------
NVIDIA CORPORATION
AND
CHASE MANHATTAN BANK AND TRUST COMPANY, N.A., as Trustee
Indenture
Dated as of March _, 2000
------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
CROSS REFERENCE SHEET/1/
---------------------------
Between
Provisions of Trust Indenture Act of 1939 and Indenture dated as of
March _, 2000 between NVIDIA CORPORATION and CHASE MANHATTAN BANK AND TRUST
COMPANY, N.A., as Trustee:
Section of the Act Section of the Indenture
- ------------------ ------------------------
310(a)(1) and (2).................................... 6.09
310(a)(3) and (4).................................... Inapplicable
310(b)............................................... 6.08, 6.09, 6.10(a),
6.10(b), 6.10(d) and 6.11
310(c)............................................... Inapplicable
311(a)............................................... 6.13
311(b)............................................... 6.13
312(a)............................................... 4.01 and 4.02(a)
312(b)............................................... 4.02(a) and 4.02(b)
312(c)............................................... 4.02(c)
313(a)............................................... 4.04
313(b)(1)............................................ Inapplicable
313(b)(2)............................................ 4.04
313(c)............................................... 4.04
313(d)............................................... 4.04
314(a)............................................... 4.03
314(b)............................................... Inapplicable
314(c)(1) and (2).................................... 11.05
314(c)(3)............................................ Inapplicable
314(d)............................................... Inapplicable
314(e)............................................... 11.05
314(f)............................................... Inapplicable
315(a), (c) and (d).................................. 6.01
315(b)............................................... 5.11
315(e)............................................... 5.12
316(a)(1)............................................ 5.09 and 5.10
- --------
(1) This Cross Reference Sheet is not part of the Indenture.
<PAGE>
TABLE OF CONTENTS
----------------------
PAGE
ARTICLE 1
DEFINITIONS
SECTION 1.01. Certain Terms Defined...........................................1
ARTICLE 2
SECURITIES
SECTION 2.01. Forms Generally.................................................9
SECTION 2.02. Form of Trustee's Certificate of Authentication................10
SECTION 2.03. Amount Unlimited; Issuable in Series...........................10
SECTION 2.04. Authentication and Delivery of Securities......................13
SECTION 2.05. Execution of Securities........................................17
SECTION 2.06. Certificate of Authentication..................................17
SECTION 2.07. Denomination and Date of Securities; Payments of Interest......17
SECTION 2.08. Registration, Transfer and Exchange............................18
SECTION 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen Securities......22
SECTION 2.10. Cancellation of Securities; Disposition Thereof................23
SECTION 2.11. Temporary Securities...........................................24
ARTICLE 3
COVENANTS OF THE ISSUER
SECTION 3.01. Payment of Principal and Interest..............................25
SECTION 3.02. Offices for Payments, etc......................................25
SECTION 3.03. Appointment to Fill a Vacancy in Office of Trustee.............26
SECTION 3.04. Paying Agents..................................................26
SECTION 3.05. [INTENTIONALLY OMITTED]........................................28
SECTION 3.06. Luxembourg Publications........................................28
SECTION 3.07. Existence......................................................28
SECTION 3.08. Maintenance of Properties......................................28
SECTION 3.09. Payment of Taxes and Other Claims..............................28
SECTION 3.10. Stay, Extension and Usury Laws.................................29
SECTION 3.11. Compliance Certificate.........................................29
i
<PAGE>
PAGE
ARTICLE 4
SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE
SECTION 4.01. Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders.........................................30
SECTION 4.02. Preservation and Disclosure of Securityholders Lists...........30
SECTION 4.03. Reports by the Issuer..........................................30
SECTION 4.04. Reports by the Trustee.........................................31
ARTICLE 5
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
SECTION 5.01. Event of Default Defined; Acceleration of Maturity;
Waiver of Default....................................................31
SECTION 5.02. Collection of Indebtedness by Trustee; Trustee May Prove
Debt.................................................................34
SECTION 5.03. Application of Proceeds........................................36
SECTION 5.04. Suits for Enforcement..........................................37
SECTION 5.05. Restoration of Rights on Abandonment of Proceedings............38
SECTION 5.06. Limitations on Suits by Securityholders........................38
SECTION 5.07. Unconditional Right of Securityholders to Institute Certain
Suits................................................................39
SECTION 5.08. Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default....................................................39
SECTION 5.09. Control by Holders of Securities...............................39
SECTION 5.10. Waiver of Past Defaults........................................40
SECTION 5.11. Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances................................................40
SECTION 5.12. Right of Court to Require Filing of Undertaking to Pay
Costs................................................................41
ARTICLE 6
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of the Trustee; During Default;
Prior to Default.....................................................42
SECTION 6.02. Certain Rights of the Trustee..................................43
SECTION 6.03. Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof........................44
SECTION 6.04. Trustee and Agents May Hold Securities or Coupons;
Collections, etc.....................................................45
SECTION 6.05. Moneys Held by Trustee.........................................45
ii
<PAGE>
PAGE
SECTION 6.06. Compensation and Indemnification of Trustee and Its
Prior Claim..........................................................45
SECTION 6.07. Right of Trustee to Rely on Officer's Certificate, etc.........46
SECTION 6.08. Conflicting Interests of Trustee...............................46
SECTION 6.09. Persons Eligible for Appointment as Trustee....................46
SECTION 6.10. Resignation and Removal; Appointment of Successor
Trustee..............................................................47
SECTION 6.11. Acceptance of Appointment by Successor Trustee.................48
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business of Trustee..................................................49
SECTION 6.13. Preferential Collection of Claims..............................50
SECTION 6.14. Appointment of Authenticating Agent............................50
ARTICLE 7
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Evidence of Action Taken by Securityholders....................51
SECTION 7.02. Proof of Execution of Instruments and of Holding of
Securities...........................................................52
SECTION 7.03. Holders to Be Treated as Owners................................53
SECTION 7.04. Securities Owned by Issuer Deemed Not Outstanding..............53
SECTION 7.05. Right of Revocation of Action Taken............................54
ARTICLE 8
SUPPLEMENTAL INDENTURES
SECTION 8.01. Supplemental Indentures Without Consent of
Securityholders......................................................55
SECTION 8.02. Supplemental Indentures with Consent of Securityholders........56
SECTION 8.03. Effect of Supplemental Indenture...............................58
SECTION 8.04. Documents to Be Given to Trustee...............................58
SECTION 8.05. Notation on Securities in Respect of Supplemental
Indentures...........................................................58
SECTION 8.06. Subordination Unimpaired.......................................59
ARTICLE 9
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.01. Issuer May Consolidate, Etc. on Certain Terms..................59
SECTION 9.02. Successor Corporation to be Substituted........................59
SECTION 9.03. Opinion of Counsel to be Given Trustee.........................60
iii
<PAGE>
PAGE
ARTICLE 10
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.01. Satisfaction and Discharge of Indenture.......................60
SECTION 10.02. Application by Trustee of Funds Deposited for Payment
of Securities........................................................64
SECTION 10.03. Repayment of Moneys Held by Paying Agent......................64
SECTION 10.04. Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Two Years..............................................64
SECTION 10.05. Indemnity for U.S. Government Obligations.....................65
ARTICLE 11
MISCELLANEOUS PROVISIONS
SECTION 11.01. Incorporators, Stockholders, Officers and Directors of
Issuer Exempt from Individual Liability..............................65
SECTION 11.02. Provisions of Indenture for the Sole Benefit of Parties
and Holders of Securities and Coupons................................65
SECTION 11.03. Successors and Assigns of Issuer Bound by Indenture...........66
SECTION 11.04. Notices and Demands on Issuer, Trustee and Holders of
Securities and Coupons...............................................66
SECTION 11.05. Officer's Certificates and Opinions of Counsel;
Statements to Be Contained Therein...................................67
SECTION 11.06. Payments Due on Saturdays, Sundays and Holidays...............68
SECTION 11.07. Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939................................................68
SECTION 11.08. New York Law to Govern........................................68
SECTION 11.09. Counterparts..................................................68
SECTION 11.10. Effect of Headings............................................68
SECTION 11.11. Securities in a Foreign Currency..............................68
SECTION 11.12. Judgment Currency.............................................69
ARTICLE 12
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.01. Applicability of Article......................................70
SECTION 12.02. Notice of Redemption; Partial Redemptions.....................70
SECTION 12.03. Payment of Securities Called for Redemption...................72
SECTION 12.04. Exclusion of Certain Securities from Eligibility for
Selection for Redemption.............................................73
SECTION 12.05. Mandatory and Optional Sinking Funds..........................73
iv
<PAGE>
PAGE
ARTICLE 13
SUBORDINATION
SECTION 13.01. Agreement of Subordination....................................76
SECTION 13.02. Payments to Securityholders...................................76
SECTION 13.03. Subrogation...................................................80
SECTION 13.04. Authorization to Effect Subordination.........................81
SECTION 13.05. Notice to Trustee.............................................81
SECTION 13.06. Trustee's Relation to Senior Indebtedness.....................82
SECTION 13.07. No Impairment of Subordination................................83
SECTION 13.08. Article Applicable to Paying Agents...........................83
SECTION 13.09. Senior Indebtedness Entitled to Rely..........................84
SECTION 13.10. Reliance on Judicial Order or Certificate of Liquidating
Agent................................................................84
v
<PAGE>
Exhibit 4.4
THIS INDENTURE, dated as of March _, 2000 between NVIDIA CORPORATION, a
Delaware corporation (the "Issuer"), and CHASE MANHATTAN BANK AND TRUST COMPANY,
N.A., a national banking association, as trustee (the "Trustee"),
WHEREAS, the Issuer has duly authorized the issue from time to time of
its unsecured debentures, notes or other evidences of indebtedness to be issued
in one or more series (the "Securities") up to such principal amount or amounts
as may from time to time be authorized in accordance with the terms of this
Indenture and to provide, among other things, for the authentication, delivery
and administration thereof, the Issuer has duly authorized the execution and
delivery of this Indenture; and
WHEREAS, the Issuer has duly authorized the execution and delivery of
this Indenture to provide, among other things, for the authentication, delivery
and administration of the Securities; and
WHEREAS, all things necessary to make this Indenture a valid indenture
and agreement according to its terms have been done.
NOW, THEREFORE:
In consideration of the premises and the purchases of the Securities by
the holders thereof, the Issuer and the Trustee mutually covenant and agree for
the equal and proportionate benefit of the respective holders from time to time
of the Securities or of series thereof and of the coupons, if any, appertaining
thereto as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.01. Certain Terms Defined. The following terms (except as
otherwise expressly provided or unless the context otherwise clearly requires)
for all purposes of this Indenture and of any indenture supplemental hereto
shall have the respective meanings specified in this Section. All other terms
used in this Indenture that are defined in the Trust Indenture Act of 1939 or
the definitions of which in the Securities Act of 1933 are referred to in the
Trust Indenture Act of 1939, including terms defined therein by reference to the
Securities Act of 1933 (except as herein otherwise expressly provided or unless
the context otherwise requires), shall have the meanings assigned to such terms
in said Trust Indenture Act and in said Securities Act as in force at the date
of this Indenture. All
<PAGE>
accounting terms used herein and not expressly defined shall have the meanings
assigned to such terms in accordance with generally accepted accounting
principles, and the term "generally accepted accounting principles" means such
accounting principles as are generally accepted at the time of any computation.
The words "herein", "hereof" and "hereunder" and other words of similar import
refer to this Indenture as a whole and not to any particular Article, Section or
other subdivision. The terms defined in this Article have the meanings assigned
to them in this Article and include the plural as well as the singular.
"Authenticating Agent" shall have the meaning set forth in Section
6.14.
"Authorized Newspaper" means a newspaper (which, in the case of The
City of New York, will, if practicable, be The Wall Street Journal (Eastern
Edition), in the case of the United Kingdom, will, if practicable, be the
Financial Times (London Edition) and, in the case of Luxembourg, will, if
practicable, be the Luxemburger Wort) published in an official language of the
country of publication customarily published at least once a day for at least
five days in each calendar week and of general circulation in The City of New
York, the United Kingdom or in Luxembourg, as applicable. If it shall be
impractical in the opinion of the Trustee to make any publication of any notice
required hereby in an Authorized Newspaper, any publication or other notice in
lieu thereof which is made or given with the approval of the Trustee shall
constitute a sufficient publication of such notice.
"Board of Directors" means either the Board of Directors of the Issuer
or any committee of such Board duly authorized to act on its behalf.
"Board Resolution" means a copy of one or more resolutions, certified
by the secretary or an assistant secretary of the Issuer to have been duly
adopted or consented to by the Board of Directors and to be in full force and
effect, and delivered to the Trustee.
"Business Day" means, with respect to any Security, a day that in the
city (or in any of the cities, if more than one) in which amounts are payable,
as specified in the form of such Security, is not a day on which banking
institutions are authorized or required by law or regulation to close.
"Commission" means the Securities and Exchange Commission, as from time
to time constituted, created under the Securities Exchange Act of 1934, or if at
any time after the execution and delivery of this Indenture such Commission is
not existing and performing the duties now assigned to it under the Trust
Indenture Act, then the body performing such duties on such date.
2
<PAGE>
"Corporate Trust Office" means the office of the Trustee at which the
corporate trust business of the Trustee shall, at any particular time, be
principally administered, which office is, at the date as of which this
Indenture is dated, located at 101 California Street, Suite 2700, San
Francisco, California 94111.
"Coupon" means any interest coupon appertaining to a Security.
"Depositary" means, with respect to the Securities of any series
issuable or issued in the form of one or more Registered Global Securities, the
Person designated as Depositary by the Issuer pursuant to Section 2.03 until a
successor Depositary shall have become such pursuant to the applicable
provisions of this Indenture, and thereafter "Depositary" shall mean or include
each Person who is then a Depositary hereunder, and if at any time there is more
than one such Person, "Depositary" as used with respect to the Securities of any
such series shall mean the Depositary with respect to the Registered Global
Securities of that series.
"Designated Senior Indebtedness" means Senior Indebtedness under the
Loan Agreement and the Issuer's obligations under any other particular Senior
Indebtedness in which the instrument creating or evidencing the same or the
assumption or guarantee thereof (or related agreements or documents to which the
Issuer is a party) expressly provides that such Senior Indebtedness shall be
"Designated Senior Indebtedness" for purposes of this Indenture (provided that
such instrument, agreement or other document may place limitations and
conditions on the right of such Senior Indebtedness to exercise the rights of
Designated Senior Indebtedness). If any payment made to any holder of any
Designated Senior Indebtedness or its Representative with respect to such
Designated Senior Indebtedness is rescinded or must otherwise be returned by
such holder or Representative upon the insolvency, bankruptcy or reorganization
of the Issuer or otherwise, the reinstated Indebtedness of the Issuer arising as
a result of such rescission or return shall constitute Designated Senior
Indebtedness effective as of the date of such rescission or return.
"Dollar" means the coin or currency of the United States of America as
at the time of payment is legal tender for the payment of public and private
debts.
"Event of Default" means any event or condition specified as such in
Section 5.01.
"Foreign Currency" means a currency issued by the government of a
country other than the United States (or any currency unit comprised of any such
currencies).
3
<PAGE>
"Holder", "Holder of Securities", "Securityholder" or other similar
terms mean (a) in the case of any Registered Security, the Person in whose name
such Security is registered in the security register kept by the Issuer for that
purpose in accordance with the terms hereof, and (b) in the case of any
Unregistered Security, the bearer of such Security, or any Coupon appertaining
thereto, as the case may be.
"Indebtedness" means, with respect to any Person, and without
duplication, (a) all indebtedness, obligations and other liabilities (contingent
or otherwise) of such Person for borrowed money (including obligations of such
Person in respect of overdrafts, foreign exchange contracts, currency exchange
agreements, interest rate protection agreements, and any loans or advances from
banks, whether or not evidenced by notes or similar instruments) or evidenced by
bonds, debentures, notes or similar instruments (whether or not the recourse of
the lender is to the whole of the assets of such Person or to only a portion
thereof), other than any account payable or other accrued current liability or
obligation incurred in the ordinary course of business in connection with the
obtaining of materials or services; (b) all reimbursement obligations and other
liabilities (contingent or otherwise) of such Person with respect to letters of
credit, bank guarantees or bankers' acceptances; (c) all obligations and
liabilities (contingent or otherwise) in respect of leases of such Person
required, in conformity with generally accepted accounting principles, to be
accounted for as capitalized lease obligations on the balance sheet of such
Person; (d) all obligations and other liabilities (contingent or otherwise)
under any lease or related document (including a purchase agreement) in
connection with the lease of real property which provides that such Person is
contractually obligated to purchase or cause a third party to purchase the
leased property and thereby guarantee a minimum residual value of the leased
property to the lessor and the obligations of such Person under such lease or
related document to purchase or to cause a third party to purchase such leased
property; (e) all obligations of such Person (contingent or otherwise) with
respect to an interest rate or other swap, cap or collar agreement or other
similar instrument or agreement or foreign currency hedge, exchange, purchase or
similar instrument or agreement; (f) all direct or indirect guaranties or
similar agreements by such Person in respect of, and obligations or liabilities
(contingent or otherwise) of such Person to purchase or otherwise acquire or
otherwise assure a creditor against loss in respect of, indebtedness,
obligations or liabilities of another Person of the kind described in clauses
(a) through (e); (g) any indebtedness or other obligations described in clauses
(a) through (f) secured by any mortgage, pledge, lien or other encumbrance
existing on property which is owned or held by such Person, regardless of
whether the indebtedness or other obligation secured thereby shall have been
assumed by such Person; and (g) any and all refinancings, replacements,
deferrals, renewals, extensions and refundings
4
<PAGE>
of, or amendments, modifications or supplements to, any indebtedness, obligation
or liability of the kind described in clauses (a) through (g).
"Indenture" means this instrument as originally executed and delivered
or, if amended or supplemented as herein provided, as so amended or supplemented
or both, and shall include the forms and terms of particular series of
Securities established as contemplated hereunder.
"Interest" means, when used with respect to non-interest bearing
Securities, interest payable after maturity.
"Issuer" means (except as otherwise provided in Article 6) NVIDIA
Corporation, a Delaware corporation and, subject to Article 9, its successors
and assigns.
"Issuer Order" means a written statement, request or order of the
Issuer signed in its name by any one of the following: the Chairman of the
Board, the President, the Chief Financial Officer, the Chief Legal Officer, the
Treasurer, any Assistant Treasurer or any other person authorized by the Board
of Directors to execute any such written statement, request or order.
"Judgment Currency" shall have the meaning set forth in Section 11.12.
"Loan Agreement" means that certain Loan and Security Agreement dated
as of September 3, 1998, as amended by the amendment dated as of July 30, 1999,
between the Issuer and Imperial Bank (including all refinancings, replacements,
deferrals, renewals, extensions or refundings of, or amendments, modifications
or supplements to, the foregoing).
"Officer's Certificate" means a certificate (i) signed by any one of
the following: the Chairman of the Board, the President, the Chief Financial
Officer, the Chief Legal Officer, the Treasurer, any Assistant Treasurer or any
other person authorized by the Board of Directors to execute any such
certificate and (ii) delivered to the Trustee. Each such certificate shall
comply with Section 314 of the Trust Indenture Act of 1939 and include the
statements provided for in Section 11.05.
"Opinion of Counsel" means an opinion in writing, subject to customary
exceptions, signed by the Chief Legal Officer of the Issuer, or by such other
legal counsel who may be an employee of or counsel to the Issuer and who shall
be reasonably satisfactory to the Trustee. Each such opinion shall comply with
Section 314 of the Trust Indenture Act of 1939 and include the statements
provided for in Section 11.05.
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"original issue date" of any Security (or portion thereof) means the
earlier of (a) the date of such Security or (b) the date of any Security (or
portion thereof) for which such Security was issued (directly or indirectly) on
registration of transfer, exchange or substitution.
"Original Issue Discount Security" means any Security that provides for
an amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof pursuant to Section 5.01.
"Outstanding" when used with reference to Securities, shall, subject to
the provisions of Section 7.04, mean, as of any particular time, all Securities
authenticated and delivered by the Trustee under this Indenture, except
(a) Securities theretofore cancelled by the Trustee or delivered
to the Trustee for cancellation;
(b) Securities, or portions thereof, for the payment or redemption of
which moneys or U.S. Government Obligations (as provided for in Section 10.01)
in the necessary amount shall have been deposited in trust with the Trustee or
with any paying agent (other than the Issuer) or shall have been set aside,
segregated and held in trust by the Issuer for the Holders of such Securities
(if the Issuer shall act as its own paying agent), provided that if such
Securities, or portions thereof, are to be redeemed prior to the maturity
thereof, notice of such redemption shall have been given as herein provided, or
provision reasonably satisfactory to the Trustee shall have been made for giving
such notice; and
(c) Securities which shall have been paid or in substitution for which
other Securities shall have been authenticated and delivered pursuant to the
terms of Section 2.09 (except with respect to any such Security as to which
proof reasonably satisfactory to the Trustee is presented that such Security is
held by a person in whose hands such Security is a legal, valid and binding
obligation of the Issuer).
In determining whether the Holders of the requisite principal amount of
Outstanding Securities of any or all series have given any request, demand,
authorization, direction, notice, consent or waiver hereunder, the principal
amount of an Original Issue Discount Security that shall be deemed to be
Outstanding for such purposes shall be the amount of the principal thereof that
would be due and payable as of the date of such determination upon a declaration
of acceleration of the maturity thereof pursuant to Section 5.01.
"Periodic Offering" means an offering of Securities of a series from
time to time, the specific terms of which Securities, including, without
limitation, the
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rate or rates of interest, if any, thereon, the stated maturity or maturities
thereof and the redemption provisions, if any, with respect thereto, are to be
determined by the Issuer or its agents upon the issuance of such Securities.
"Person" means any individual, corporation, partnership, joint venture,
association, joint stock company, trust, unincorporated organization or
government or any agency or political subdivision thereof.
"principal" whenever used with reference to the Securities or any
Security or any portion thereof, shall be deemed to include "and premium, if
any".
"record date" shall have the meaning set forth in Section 2.07.
"Redemption Notice Period" shall have the meaning set forth in Section
12.02.
"Registered Global Security", means a Security evidencing all or a part
of a series of Registered Securities, issued to the Depositary for such series
in accordance with Section 2.04, and bearing the legend prescribed in Section
2.04.
"Registered Security" means any Security registered on the Security
register of the Issuer.
"Representative" means (a) the indenture trustee or other trustee,
agent or representative for holders of Senior Indebtedness or (b) with respect
to any Senior Indebtedness that does not have any such trustee, agent or other
representative, (i) in the case of such Senior Indebtedness issued pursuant to
an agreement providing for voting arrangements as among the holders or owners of
such Senior Indebtedness, any holder or owner of such Senior Indebtedness acting
with the consent of the required persons necessary to bind such holders or
owners of such Senior Indebtedness and (ii) in the case of all other such Senior
Indebtedness, the holder or owner of such Senior Indebtedness.
"Required Currency" shall have the meaning set forth in Section 11.12.
"Responsible Officer" when used with respect to the Trustee means the
chairman of the Board of Directors, any vice chairman of the board of directors,
the chairman of the trust committee, the chairman of the executive committee,
any vice chairman of the executive committee, the president, any vice president,
(whether or not designated by numbers or words added before or after the title
"vice president") the cashier, the secretary, the treasurer, any trust officer,
any assistant trust officer, any assistant vice president, any assistant
cashier, any assistant secretary, any assistant treasurer, or any other officer
or assistant officer
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of the Trustee assigned and duly authorized by the Trustee to administer this
Indenture.
"Security" or "Securities" has the meaning stated in the fourth recital
of this Indenture, or, as the case may be, Securities that have been
authenticated and delivered under this Indenture.
"Senior Indebtedness" means the principal of, premium, if any, interest
(including all interest accruing subsequent to the commencement of any
bankruptcy or similar proceeding, whether or not a claim for post-petition
interest is allowable as a claim in any such proceeding) and rent or termination
payment payable on or in connection with, and all fees, costs, expenses and
other amounts accrued or due on or in connection with, Indebtedness of the
Issuer, whether outstanding on the date of this Indenture or thereafter created,
incurred, assumed, guaranteed or in effect guaranteed by the Issuer (including
all refinancings, replacements, deferrals, renewals, extensions or refundings
of, or amendments, modifications or supplements to, the foregoing), unless in
the case of any particular Indebtedness the instrument creating or evidencing
the same or the assumption or guarantee thereof expressly provides that such
Indebtedness shall not be senior in right of payment to the Securities or
expressly provides that such Indebtedness is "pari passu" or "junior" to the
Securities. Notwithstanding the foregoing, the term Senior Indebtedness shall
not include any Indebtedness of the Issuer to any subsidiary of the Issuer, a
majority of the voting stock of which is owned, directly or indirectly, by the
Issuer. If any payment made to any holder of any Senior Indebtedness or its
Representative with respect to such Senior Indebtedness is rescinded or must
otherwise be returned by such holder or Representative upon the insolvency,
bankruptcy or reorganization of the Issuer or otherwise, the reinstated
Indebtedness of the Issuer arising as a result of such rescission or return
shall constitute Senior Indebtedness effective as of the date of such rescission
or return.
"Significant Subsidiary" means, as of any date of determination, a
Subsidiary of the Issuer, if as of such date of determination either (a) the
assets of such subsidiary equal 10% or more of the Issuer's total consolidated
assets or (b) the total revenue of which represented 10% or more of the Issuer's
consolidated total revenue for the most recently completed fiscal year.
"Subsidiary" means, with respect to any Person, (i) any corporation,
association or other business entity of which more than 50% of the total voting
power of shares of capital stock or other equity interest entitled (without
regard to the occurrence of any contingency) to vote in the election of
directors, managers or trustees thereof is at the time owned or controlled,
directly or indirectly, by such Person or one or more of the other subsidiaries
of that Person (or a
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combination thereof) and (ii) any partnership (a) the sole general partner or
managing general partner of which is such Person or a subsidiary of such Person
or (b) the only general partners of which are such Person or of one or more
subsidiaries of such Person (or any combination thereof).
"Trust Indenture Act of 1939" means the Trust Indenture Act of 1939.
"Trustee" means the Person identified as "Trustee" in the first
paragraph hereof and, subject to the provisions of Article 6, shall also include
any successor trustee. "Trustee" shall also mean or include each Person who is
then a trustee hereunder and if at any time there is more than one such Person,
"Trustee" as used with respect to the Securities of any series shall mean the
trustee with respect to the Securities of such series.
"Unregistered Security" means any Security other than a Registered
Security.
"U.S. Government Obligations" shall have the meaning set forth in
Section 10.01(a).
"Yield to Maturity" means the yield to maturity on a series of
securities, calculated at the time of issuance of such series, or, if
applicable, at the most recent redetermination of interest on such series, and
calculated in accordance with accepted financial practice.
ARTICLE 2
SECURITIES
SECTION 2.01. Forms Generally. The Securities of each series and the
Coupons, if any, to be attached thereto shall be substantially in such form (not
inconsistent with this Indenture) as shall be established by or pursuant to one
or more Board Resolutions (as set forth in a Board Resolution or, to the extent
established pursuant to rather than set forth in a Board Resolution, an
Officer's Certificate detailing such establishment) or in one or more indentures
supplemental hereto, in each case with such appropriate insertions, omissions,
substitutions and other variations as are required or permitted by this
Indenture and may have imprinted or otherwise reproduced thereon such legend or
legends or endorsements, not inconsistent with the provisions of this Indenture,
as may be required to comply with any law or with any rules or regulations
pursuant thereto, or with any rules of any securities exchange or to conform to
general usage, all as
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may be determined by the officers executing such Securities and Coupons, if any,
as evidenced by their execution of such Securities and Coupons.
The definitive Securities and Coupons, if any, shall be printed,
lithographed or engraved on steel engraved borders or may be produced in any
other manner, all as determined by the officers executing such Securities and
Coupons, if any, as evidenced by their execution of such Securities and Coupons,
if any.
SECTION 2.02. Form of Trustee's Certificate of Authentication. The
Trustee's certificate of authentication on all Securities shall be in
substantially the following form:
"This is one of the Securities referred to in the
within-mentioned Subordinated Indenture.
---------------------------
as Trustee
By:
------------------------
Authorized Officer
If at any time there shall be an Authenticating Agent appointed with
respect to any series of Securities, then the Trustee's Certificate of
Authentication to be borne by the Securities of each such series shall be
substantially as follows:
"This is one of the Securities referred to in the
within-mentioned Subordinated Indenture.
---------------------------
as Authenticating Agent
By:
------------------------
Authorized Officer
SECTION 2.03. Amount Unlimited; Issuable in Series. The aggregate
principal amount of Securities which may be authenticated and delivered under
this Indenture is unlimited.
The Securities may be issued in one or more series and the Securities
of each such series shall rank equally and pari passu with the Securities of
each other series, but all Securities issued hereunder shall be subordinate and
junior in right of payment, to the extent and in the manner set forth in Article
13, to all Senior
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Indebtedness of the Issuer. There shall be established in or pursuant to one or
more Board Resolutions (and, to the extent established pursuant to rather than
set forth in a Board Resolution, in an Officer's Certificate detailing such
establishment) or established in one or more indentures supplemental hereto,
prior to the initial issuance of Securities of any series,
(a) the designation of the Securities of the series, which shall
distinguish the Securities of the series from the Securities of all other
series;
(b) any limit upon the aggregate principal amount of the Securities of
the series that may be authenticated and delivered under this Indenture (except
for Securities authenticated and delivered upon registration of transfer of, or
in exchange for, or in lieu of, other Securities of the series pursuant to
Section 2.08, 2.09, 2.11, 8.05 or 12.03);
(c) if other than Dollars, the coin or currency in which the Securities
of that series are denominated (including, but not limited to, any Foreign
Currency);
(d) the date or dates on which the principal of the Securities of the
series is payable;
(e) the rate or rates at which the Securities of the series shall bear
interest, if any, the date or dates from which such interest shall accrue, on
which such interest shall be payable and (in the case of Registered Securities)
on which a record shall be taken for the determination of Holders to whom
interest is payable and/or the method by which such rate or rates or date or
dates shall be determined;
(f) the place or places where the principal of and any interest on
Securities of the series shall be payable (if other than as provided in Section
3.02);
(g) the right, if any, of the Issuer to redeem Securities, in whole or
in part, at its option and the period or periods within which, the price or
prices at which and any terms and conditions, including the Redemption Notice
Period, upon which Securities of the series may be so redeemed, pursuant to any
sinking fund or otherwise;
(h) the obligation, if any, of the Issuer to redeem, purchase or repay
Securities of the series pursuant to any mandatory redemption, sinking fund or
analogous provisions or at the option of a Holder thereof and the price or
prices at which and the period or periods within which and any terms and
conditions upon which Securities of the series shall be redeemed, purchased or
repaid, in whole or in part, pursuant to such obligation;
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(i) if other than denominations of $1,000 and any integral multiple
thereof in the case of Registered Securities, or $1,000 and $5,000 in the case
of Unregistered Securities, the denominations in which Securities of the series
shall be issuable;
(j) if other than the principal amount thereof, the portion of the
principal amount of Securities of the series which shall be payable upon
declaration of acceleration of the maturity thereof;
(k) if other than the coin or currency in which the Securities of that
series are denominated, the coin or currency in which payment of the principal
of or interest on the Securities of such series shall be payable;
(l) if the principal of or interest on the Securities of such series
are to be payable, at the election of the Issuer or a Holder thereof, in a coin
or currency other than that in which the Securities are denominated, the period
or periods within which, and the terms and conditions upon which, such election
may be made;
(m) if the amount of payments of principal of and interest on the
Securities of the series may be determined with reference to an index based on a
coin or currency other than that in which the Securities of the series are
denominated, or with reference to any currencies, securities or baskets of
securities, commodities or indices, the manner in which such amounts shall be
determined;
(n) if the Holders of the Securities of the series may convert or
exchange the Securities of the series into or for securities of the Issuer or of
other entities or other property (or the cash value thereof), the specific terms
of and period during which such conversion or exchange may be made;
(o) whether the Securities of the series will be issuable as Registered
Securities (and if so, whether such Securities will be issuable as Registered
Global Securities) or Unregistered Securities (with or without Coupons), or any
combination of the foregoing, any restrictions applicable to the offer, sale,
transfer, exchange or delivery of Unregistered Securities or Registered
Securities or the payment of interest thereon and, if other than as provided in
Section 2.08, the terms upon which Unregistered Securities of any series may be
exchanged for Registered Securities of such series and vice versa;
(p) whether and under what circumstances the Issuer will pay additional
amounts on the Securities of the series held by a Person who is not a U.S.
Person in respect of any tax, assessment or governmental charge withheld or
deducted
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and, if so, whether the Issuer will have the option to redeem such Securities
rather than pay such additional amounts;
(q) if the Securities of such series are to be issuable in definitive
form (whether upon original issue or upon exchange of a temporary Security of
such series) only upon receipt of certain certificates or other documents or
satisfaction of other conditions, the form and terms of such certificates,
documents or conditions;
(r) any trustees, depositaries, authenticating or paying agents,
transfer agents or registrars or any other agents with respect to the Securities
of such series;
(s) any other events of default or covenants with respect to the
Securities of such series; and
(t) any other terms of the series.
All Securities of any one series and Coupons, if any, appertaining
thereto, shall be substantially identical, except in the case of Registered
Securities as to denomination and except as may otherwise be provided by or
pursuant to the Board Resolution or Officer's Certificate referred to above or
as set forth in any such indenture supplemental hereto. All Securities of any
one series need not be issued at the same time and may be issued from time to
time, consistent with the terms of this Indenture, if so provided by or pursuant
to such Board Resolution, such Officer's Certificate or in any such indenture
supplemental hereto.
SECTION 2.04. Authentication and Delivery of Securities. The Issuer may
deliver Securities of any series having attached thereto appropriate Coupons, if
any, executed by the Issuer to the Trustee for authentication together with the
applicable documents referred to below in this Section, and the Trustee shall
thereupon authenticate and deliver such Securities to or upon the order of the
Issuer (contained in the Issuer Order referred to below in this Section) or
pursuant to such procedures reasonably acceptable to the Trustee and to such
recipients as may be specified from time to time by an Issuer Order. The
maturity date, original issue date, interest rate and any other terms of the
Securities of such series and Coupons, if any, appertaining thereto (including
Redemption Notice Periods) shall be determined by or pursuant to such Issuer
Order and procedures. If provided for in such procedures, such Issuer Order may
authorize authentication and delivery pursuant to oral instructions from the
Issuer or its duly authorized agent, which instructions shall be promptly
confirmed in writing. In authenticating such Securities and accepting the
additional responsibilities under this Indenture in relation to such Securities,
the Trustee shall be entitled to receive (in the case of
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subparagraphs (b), (c) and (d) below only at or before the time of the first
request of the Issuer to the Trustee to authenticate Securities of such series)
and (subject to Section 6.01) shall be fully protected in relying upon, unless
and until such documents have been superceded or revoked:
(a) an Issuer Order requesting such authentication and setting forth
delivery instructions if the Securities and Coupons, if any, are not to be
delivered to the Issuer, provided that, with respect to Securities of a series
subject to a Periodic Offering, (i) such Issuer Order may be delivered by the
Issuer to the Trustee prior to the delivery to the Trustee of such Securities
for authentication and delivery, (ii) the Trustee shall authenticate and deliver
Securities of such series for original issue from time to time, in an aggregate
principal amount not exceeding the aggregate principal amount established for
such series, pursuant to an Issuer Order or pursuant to procedures reasonably
acceptable to the Trustee as may be specified from time to time by an Issuer
Order, (iii) the maturity date or dates, original issue date or dates, interest
rate or rates and any other terms of Securities of such series (including
Redemption Notice Periods) shall be determined by an Issuer Order or pursuant to
such procedures and (iv) if provided for in such procedures, such Issuer Order
may authorize authentication and delivery pursuant to oral or electronic
instructions from the Issuer or its duly authorized agent or agents, which oral
instructions shall be promptly confirmed in writing;
(b) any Board Resolution, Officer's Certificate and/or executed
supplemental indenture referred to in Sections 2.01 and 2.03 by or pursuant to
which the forms and terms of the Securities and Coupons, if any, were
established;
(c) an Officer's Certificate setting forth the form or forms and terms
of the Securities and Coupons, if any, stating that the form or forms and terms
of the Securities and Coupons, if any, have been established pursuant to
Sections 2.01 and 2.03 and comply with this Indenture, and covering such other
matters as the Trustee may reasonably request; and
(d) at the option of the Issuer, either an Opinion of Counsel, or a
letter addressed to the Trustee permitting it to rely on an Opinion of Counsel,
substantially to the effect that:
(i) the forms of the Securities and Coupons, if any, have been duly
authorized and established in conformity with the provisions of this
Indenture;
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(ii) in the case of an underwritten offering, the terms of the
Securities have been duly authorized and established in conformity with
the provisions of this Indenture, and, in the case of an offering that
is not underwritten, certain terms of the Securities have been
established pursuant to a Board Resolution, an Officer's Certificate or
a supplemental indenture in accordance with this Indenture, and when
such other terms as are to be established pursuant to procedures set
forth in an Issuer Order shall have been established, all such terms
will have been duly authorized by the Issuer and will have been
established in conformity with the provisions of this Indenture;
(iii) when the Securities and Coupons, if any, have been executed by
the Issuer and authenticated by the Trustee in accordance with the
provisions of this Indenture and delivered to and duly paid for by the
purchasers thereof, they will have been duly issued under this
Indenture and will be valid and binding obligations of the Issuer,
enforceable in accordance with their respective terms, and will be
entitled to the benefits of this Indenture; and
(iv) the execution and delivery by the Issuer of, and the performance
by the Issuer of its obligations under, the Securities and Coupons, if
any, will not contravene any provision of applicable law or the
certificate of incorporation or by-laws of the Issuer or any agreement
or other instrument binding upon the Issuer or any of its consolidated
subsidiaries that is material to the Issuer and its subsidiaries, taken
as a whole, or, to the best of such counsel's knowledge, any judgment,
order or decree of any U.S. governmental body, agency or court having
jurisdiction over the Issuer or any of its consolidated subsidiaries,
and no consent, approval or authorization of any U.S. governmental body
or agency is required for the performance by the Issuer of its
obligations under the Securities and Coupons, if any, except such as
are specified and have been obtained and such as may be required by the
securities or blue sky laws of the various states in connection with
the offer and sale of the Securities and Coupons, if any.
In rendering such opinions, such counsel may qualify any opinions as to
enforceability by stating that such enforceability may be limited by bankruptcy,
insolvency, reorganization, liquidation, moratorium and other similar laws
affecting the rights and remedies of creditors and is subject to general
principles of equity (regardless of whether such enforceability is considered in
a proceeding in equity or at law). Such counsel may rely, as to all matters
governed by the laws of jurisdictions other than the State of New York and the
federal law of the United States, upon opinions of other counsel (copies of
which shall be delivered to the
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Trustee), who shall be counsel reasonably satisfactory to the Trustee, in which
case the opinion shall state that such counsel believes he and the Trustee are
entitled so to rely. Such counsel may also state that, insofar as such opinion
involves factual matters, he has relied, to the extent he deems proper, upon
certificates of officers of the Issuer and its subsidiaries and certificates of
public officials.
The Trustee shall have the right to decline to authenticate and deliver
any Securities under this Section if the Trustee, being advised by counsel,
determines that such action may not lawfully be taken by the Issuer or if the
Trustee in good faith by its board of directors or board of trustees, executive
committee, or a trust committee of directors or trustees or Responsible Officers
shall reasonably determine that such action would expose the Trustee to personal
liability to existing Holders or would affect the Trustee's own rights, duties
or immunities under the Securities, this Indenture or otherwise.
If the Issuer shall establish pursuant to Section 2.03 that the
Securities of a series are to be issued in the form of one or more Registered
Global Securities, then the Issuer shall execute and the Trustee shall, in
accordance with this Section and the Issuer Order with respect to such series,
authenticate and deliver one or more Registered Global Securities that (i) shall
represent and shall be denominated in an amount equal to the aggregate principal
amount of all of the Securities of such series issued and not yet cancelled,
(ii) shall be registered in the name of the Depositary for such Registered
Global Security or Securities or the nominee of such Depositary, (iii) shall be
delivered by the Trustee to such Depositary or pursuant to such Depositary's
instructions and (iv) shall bear a legend substantially to the following effect:
"Unless and until it is exchanged in whole or in part for Securities in
definitive registered form, this Security may not be transferred except as a
whole by the Depositary to the nominee of the Depositary or by a nominee of the
Depositary to the Depositary or another nominee of the Depositary or by the
Depositary or any such nominee to a successor Depositary or a nominee of such
successor Depositary."
Each Depositary designated pursuant to Section 2.03 must, at the time
of its designation and at all times while it serves as Depositary, be a clearing
agency registered under the Securities Exchange Act of 1934 and any other
applicable statute or regulation.
SECTION 2.05. Execution of Securities. The Securities and, if
applicable, each Coupon appertaining thereto shall be signed on behalf of the
Issuer by any one of the following: the Chairman of the Board, the President,
the Chief Financial Officer, the Chief Legal Officer, the Treasurer, any
Assistant Treasurer or any other person authorized by the Board of Directors to
execute Securities or,
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if applicable, Coupons, which Securities or Coupons may, but need not, be
attested. Such signatures may be the manual or facsimile signatures of the
present or any future such officers. Minor errors or defects in any such
reproduction of any such signature shall not affect the validity or
enforceability of any Security that has been duly authenticated and delivered by
the Trustee.
In case any officer of the Issuer who shall have signed any of the
Securities or Coupons, if any, shall cease to be such officer before the
Security or Coupon so signed (or the Security to which the Coupon so signed
appertains) shall be authenticated and delivered by the Trustee or disposed of
by the Issuer, such Security or Coupon nevertheless may be authenticated and
delivered or disposed of as though the person who signed such Security or Coupon
had not ceased to be such officer of the Issuer; and any Security or Coupon may
be signed on behalf of the Issuer by such persons as, at the actual date of the
execution of such Security or Coupon, shall be the proper officers of the
Issuer, although at the date of the execution and delivery of this Indenture any
such person was not such an officer.
SECTION 2.06. Certificate of Authentication. Only such Securities as
shall bear thereon a certificate of authentication substantially in the form
hereinbefore recited, executed by the Trustee by the manual signature of one of
its authorized officers, shall be entitled to the benefits of this Indenture or
be valid or obligatory for any purpose. No Coupon shall be entitled to the
benefits of this Indenture or shall be valid and obligatory for any purpose
until the certificate of authentication on the Security to which such Coupon
appertains shall have been duly executed by the Trustee. The execution of such
certificate by the Trustee upon any Security executed by the Issuer shall be
conclusive evidence that the Security so authenticated has been duly
authenticated and delivered hereunder and that the Holder is entitled to the
benefits of this Indenture.
SECTION 2.07. Denomination and Date of Securities; Payments of
Interest. The Securities of each series shall be issuable as Registered
Securities or Unregistered Securities in denominations established as
contemplated by Section 2.03 or, with respect to the Registered Securities of
any series, if not so established, in denominations of $1,000 and any integral
multiple thereof. If denominations of Unregistered Securities of any series are
not so established, such Securities shall be issuable in denominations of $1,000
and $5,000. The Securities of each series shall be numbered, lettered or
otherwise distinguished in such manner or in accordance with such plan as the
officers of the Issuer executing the same may determine with the approval of the
Trustee, as evidenced by the execution and authentication thereof.
Each Registered Security shall be dated the date of its authentication.
Each Unregistered Security shall be dated as provided in the resolution or
resolutions of
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the Board of Directors of the Issuer referred to in Section 2.03. The Securities
of each series shall bear interest, if any, from the date, and such interest
shall be payable on the dates, established as contemplated by Section 2.03.
The Person in whose name any Registered Security of any series is
registered at the close of business on any record date applicable to a
particular series with respect to any interest payment date for such series
shall be entitled to receive the interest, if any, payable on such interest
payment date notwithstanding any transfer or exchange of such Registered
Security subsequent to the record date and prior to such interest payment date,
except if and to the extent the Issuer shall default in the payment of the
interest due on such interest payment date for such series, in which case such
defaulted interest shall be paid to the Persons in whose names Outstanding
Registered Securities for such series are registered at the close of business on
a subsequent record date (which shall be not less than five Business Days prior
to the date of payment of such defaulted interest) established by notice given
by mail by or on behalf of the Issuer to the Holders of Registered Securities
not less than 15 days preceding such subsequent record date. The term "record
date" as used with respect to any interest payment date (except a date for
payment of defaulted interest) for the Securities of any series shall mean the
date specified as such in the terms of the Registered Securities of such series
established as contemplated by Section 2.03, or, if no such date is so
established, if such interest payment date is the first day of a calendar month,
the fifteenth day of the next preceding calendar month or, if such interest
payment date is the fifteenth day of a calendar month, the first day of such
calendar month, whether or not such record date is a Business Day.
SECTION 2.08. Registration, Transfer and Exchange. The Issuer will keep
at each office or agency to be maintained for the purpose as provided in Section
3.02 for each series of Securities a register or registers in which, subject to
such reasonable regulations as it may prescribe, it will provide for the
registration of Registered Securities of such series and the registration of
transfer of Registered Securities of such series. Such register shall be in
written form in the English language or in any other form capable of being
converted into such form within a reasonable time. At all reasonable times such
register or registers shall be open for inspection by the Trustee.
Upon due presentation for registration of transfer of any Registered
Security of any series at any such office or agency to be maintained for the
purpose as provided in Section 3.02, the Issuer shall execute and the Trustee
shall authenticate and deliver in the name of the transferee or transferees a
new Registered Security or Registered Securities of the same series, maturity
date, interest rate and original issue date in authorized denominations for a
like aggregate principal amount.
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Unregistered Securities (except for any temporary global Unregistered
Securities) and Coupons (except for Coupons attached to any temporary global
Unregistered Securities) shall be transferable by delivery.
At the option of the Holder thereof, Registered Securities of any
series (other than a Registered Global Security, except as set forth below) may
be exchanged for a Registered Security or Registered Securities of such series
having authorized denominations and an equal aggregate principal amount, upon
surrender of such Registered Securities to be exchanged at the agency of the
Issuer that shall be maintained for such purpose in accordance with Section 3.02
and upon payment, if the Issuer shall so require, of the charges hereinafter
provided. If the Securities of any series are issued in both registered and
unregistered form, except as otherwise specified pursuant to Section 2.03, at
the option of the Holder thereof, Unregistered Securities of any series may be
exchanged for Registered Securities of such series having authorized
denominations and an equal aggregate principal amount, upon surrender of such
Unregistered Securities to be exchanged at the agency of the Issuer that shall
be maintained for such purpose in accordance with Section 3.02, with, in the
case of Unregistered Securities that have Coupons attached, all unmatured
Coupons and all matured Coupons in default thereto appertaining, and upon
payment, if the Issuer shall so require, of the charges hereinafter provided. At
the option of the Holder thereof, if Unregistered Securities of any series,
maturity date, interest rate and original issue date are issued in more than one
authorized denomination, except as otherwise specified pursuant to Section 2.03,
such Unregistered Securities may be exchanged for Unregistered Securities of
such series having authorized denominations and an equal aggregate principal
amount, upon surrender of such Unregistered Securities to be exchanged at the
agency of the Issuer that shall be maintained for such purpose in accordance
with Section 3.02 or as specified pursuant to Section 2.03, with, in the case of
Unregistered Securities that have Coupons attached, all unmatured Coupons and
all matured Coupons in default thereto appertaining, and upon payment, if the
Issuer shall so require, of the charges hereinafter provided. Unless otherwise
specified pursuant to Section 2.03, Registered Securities of any series may not
be exchanged for Unregistered Securities of such series. Whenever any Securities
are so surrendered for exchange, the Issuer shall execute, and the Trustee shall
authenticate and deliver, the Securities which the Holder making the exchange is
entitled to receive. All Securities and Coupons surrendered upon any exchange or
transfer provided for in this Indenture shall be promptly cancelled and disposed
of by the Trustee and the Trustee will deliver a certificate of disposition
thereof to the Issuer.
All Registered Securities presented for registration of transfer,
exchange, redemption or payment shall (if so required by the Issuer or the
Trustee) be duly endorsed by, or be accompanied by a written instrument or
instruments of transfer
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in form satisfactory to the Issuer and the Trustee duly executed by the Holder
or his attorney duly authorized in writing.
The Issuer may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection with any exchange or
registration of transfer of Securities. No service charge shall be made for any
such transaction.
The Issuer shall not be required to exchange or register a transfer of
(a) any Securities of any series for a period of 15 days next preceding the
first mailing of notice of redemption of Securities of such series to be
redeemed or (b) any Securities selected, called or being called for redemption,
in whole or in part, except, in the case of any Security to be redeemed in part,
the portion thereof not so to be redeemed or (c) any Securities if the Holder
thereof has exercised any right to require the Issuer to repurchase such
Securities, in whole or in part, except, in the case of any Security to be
repurchased in part, the portion thereof not so to be repurchased.
Notwithstanding any other provision of this Section 2.08, unless and
until it is exchanged in whole or in part for Securities in definitive
registered form, a Registered Global Security representing all or a portion of
the Securities of a series may not be transferred except as a whole by the
Depositary for such series to a nominee of such Depositary or by a nominee of
such Depositary to such Depositary or another nominee of such Depositary or by
such Depositary or any such nominee to a successor Depositary for such series or
a nominee of such successor Depositary.
If at any time the Depositary for any Registered Securities of a series
represented by one or more Registered Global Securities notifies the Issuer that
it is unwilling or unable to continue as Depositary for such Registered
Securities or if at any time the Depositary for such Registered Securities shall
no longer be eligible under Section 2.04, the Issuer shall appoint a successor
Depositary eligible under Section 2.04 with respect to such Registered
Securities. If a successor Depositary eligible under Section 2.04 for such
Registered Securities is not appointed by the Issuer within 90 days after the
Issuer receives such notice or becomes aware of such ineligibility, the Issuer's
election pursuant to Section 2.03 that such Registered Securities be represented
by one or more Registered Global Securities shall no longer be effective and the
Issuer will execute, and the Trustee, upon receipt of an Officer's Certificate
for the authentication and delivery of definitive Securities of such series,
will authenticate and deliver, Securities of such series in definitive
registered form without coupons, in any authorized denominations, in an
aggregate principal amount equal to the principal amount of
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the Registered Global Security or Securities representing such Registered
Securities in exchange for such Registered Global Security or Securities.
The Issuer may at any time and in its sole discretion determine that
the Registered Securities of any series issued in the form of one or more
Registered Global Securities shall no longer be represented by a Registered
Global Security or Securities. In such event the Issuer will execute, and the
Trustee, upon receipt of an Officer's Certificate for the authentication and
delivery of definitive Securities of such series, will authenticate and deliver,
Securities of such series in definitive registered form without coupons, in any
authorized denominations, in an aggregate principal amount equal to the
principal amount of the Registered Global Security or Securities representing
such Registered Securities, in exchange for such Registered Global Security or
Securities.
If specified by the Issuer pursuant to Section 2.03 with respect to
Securities represented by a Registered Global Security, the Depositary for such
Registered Global Security may surrender such Registered Global Security in
exchange in whole or in part for Securities of the same series in definitive
registered form on such terms as are acceptable to the Issuer and such
Depositary. Thereupon, the Issuer shall execute, and the Trustee shall
authenticate and deliver, without service charge,
(a) to the Person specified by such Depositary a new Registered
Security or Securities of the same series, of any authorized denominations as
requested by such Person, in an aggregate principal amount equal to and in
exchange for such Person's beneficial interest in the Registered Global
Security; and
(b) to such Depositary a new Registered Global Security in a
denomination equal to the difference, if any, between the principal amount of
the surrendered Registered Global Security and the aggregate principal amount of
Registered Securities authenticated and delivered pursuant to clause (a) above.
Upon the exchange of a Registered Global Security for Securities in
definitive registered form without coupons, in authorized denominations, such
Registered Global Security shall be cancelled by the Trustee or an agent of the
Issuer or the Trustee. Securities in definitive registered form without coupons
issued in exchange for a Registered Global Security pursuant to this Section
2.08 shall be registered in such names and in such authorized denominations as
the Depositary for such Registered Global Security, pursuant to instructions
from its direct or indirect participants or otherwise, shall instruct the
Trustee or an agent of the Issuer or the Trustee. The Trustee or such agent
shall deliver such Securities to or as directed by the Persons in whose names
such Securities are so registered.
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All Securities issued upon any transfer or exchange of Securities shall
be valid obligations of the Issuer, evidencing the same debt, and entitled to
the same benefits under this Indenture, as the Securities surrendered upon such
transfer or exchange.
Notwithstanding anything herein or in the terms of any series of
Securities to the contrary, none of the Issuer, the Trustee or any agent of the
Issuer or the Trustee (any of which, other than the Issuer, shall rely on an
Officer's Certificate and an Opinion of Counsel) shall be required to exchange
any Unregistered Security for a Registered Security if such exchange would
result in adverse Federal income tax consequences to the Issuer (such as, for
example, the inability of the Issuer to deduct from its income, as computed for
Federal income tax purposes, the interest payable on the Unregistered
Securities) under then applicable United States Federal income tax laws.
SECTION 2.09. Mutilated, Defaced, Destroyed, Lost and Stolen
Securities. In case any temporary or definitive Security or any Coupon
appertaining to any Security shall become mutilated, defaced or be destroyed,
lost or stolen, the Issuer in its discretion may execute, and upon the written
request of any officer of the Issuer, the Trustee shall authenticate and deliver
a new Security of the same series, maturity date, interest rate and original
issue date, bearing a number or other distinguishing symbol not
contemporaneously outstanding, in exchange and substitution for the mutilated or
defaced Security, or in lieu of and in substitution for the Security so
destroyed, lost or stolen with Coupons corresponding to the Coupons appertaining
to the Securities so mutilated, defaced, destroyed, lost or stolen, or in
exchange or substitution for the Security to which such mutilated, defaced,
destroyed, lost or stolen Coupon appertained, with Coupons appertaining thereto
corresponding to the Coupons so mutilated, defaced, destroyed, lost or stolen.
In every case the applicant for a substitute Security or Coupon shall furnish to
the Issuer and to the Trustee and any agent of the Issuer or the Trustee such
security or indemnity as may be required by them to indemnify and defend and to
save each of them harmless and, in every case of destruction, loss or theft,
evidence to their satisfaction of the destruction, loss or theft of such
Security or Coupon and of the ownership thereof and in the case of mutilation or
defacement shall surrender the Security and related Coupons to the Trustee or
such agent.
Upon the issuance of any substitute Security or Coupon, the Issuer may
require the payment of a sum sufficient to cover any tax or other governmental
charge that may be imposed in relation thereto and any other expenses (including
the fees and expenses of the Trustee or its agent) connected therewith. In case
any Security or Coupon which has matured or is about to mature or has been
called for redemption in full shall become mutilated or defaced or be destroyed,
lost or stolen, the Issuer may instead of issuing a substitute Security, pay or
authorize the
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payment of the same or the relevant Coupon (without surrender thereof except in
the case of a mutilated or defaced Security or Coupon), if the applicant for
such payment shall furnish to the Issuer and to the Trustee and any agent of the
Issuer or the Trustee such security or indemnity as any of them may require to
save each of them harmless, and, in every case of destruction, loss or theft,
the applicant shall also furnish to the Issuer and the Trustee and any agent of
the Issuer or the Trustee evidence to their satisfaction of the destruction,
loss or theft of such Security or Coupon and of the ownership thereof.
Every substitute Security or Coupon of any series issued pursuant to
the provisions of this Section by virtue of the fact that any such Security or
Coupon is destroyed, lost or stolen shall constitute an additional contractual
obligation of the Issuer, whether or not the destroyed, lost or stolen Security
or Coupon shall be at any time enforceable by anyone and shall be entitled to
all the benefits of (but shall be subject to all the limitations of rights set
forth in) this Indenture equally and proportionately with any and all other
Securities or Coupons of such series duly authenticated and delivered hereunder.
All Securities and Coupons shall be held and owned upon the express condition
that, to the extent permitted by law, the foregoing provisions are exclusive
with respect to the replacement or payment of mutilated, defaced or destroyed,
lost or stolen Securities and Coupons and shall preclude any and all other
rights or remedies notwithstanding any law or statute existing or hereafter
enacted to the contrary with respect to the replacement or payment of negotiable
instruments or other securities without their surrender.
SECTION 2.10. Cancellation of Securities; Disposition Thereof. All
Securities and Coupons surrendered for payment, redemption, registration of
transfer or exchange, or for credit against any payment in respect of a sinking
or analogous fund, if surrendered to the Issuer or any agent of the Issuer or
the Trustee or any agent of the Trustee, shall be delivered to the Trustee or
its agent for cancellation or, if surrendered to the Trustee, shall be cancelled
by it; and no Securities or Coupons shall be issued in lieu thereof except as
expressly permitted by any of the provisions of this Indenture. The Trustee or
its agent shall dispose of cancelled Securities and Coupons held by it and
deliver promptly a certificate of disposition to the Issuer. If the Issuer or
its agent shall acquire any of the Securities or Coupons, such acquisition shall
not operate as a redemption or satisfaction of the indebtedness represented by
such Securities or Coupons unless and until the same are delivered to the
Trustee or its agent for cancellation.
SECTION 2.11. Temporary Securities. Pending the preparation of
definitive Securities for any series, the Issuer may execute and the Trustee
shall authenticate and deliver temporary Securities for such series (printed,
lithographed, typewritten or otherwise reproduced, in each case in form
satisfactory to the Trustee). Temporary Securities of any series shall be
issuable as
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Registered Securities without coupons, or as Unregistered Securities with or
without coupons attached thereto, of any authorized denomination, and
substantially in the form of the definitive Securities of such series but with
such omissions, insertions and variations as may be appropriate for temporary
Securities, all as may be determined by the Issuer with the concurrence of the
Trustee as evidenced by the execution and authentication thereof. Temporary
Securities may contain such references to any provisions of this Indenture as
may be appropriate. Every temporary Security shall be executed by the Issuer and
be authenticated by the Trustee upon the same conditions and in substantially
the same manner, and with like effect, as the definitive Securities. Without
unreasonable delay the Issuer shall execute and shall furnish definitive
Securities of such series and thereupon temporary Registered Securities of such
series may be surrendered in exchange therefor without charge at each office or
agency to be maintained by the Issuer for that purpose pursuant to Section 3.02
and, in the case of Unregistered Securities, at any agency maintained by the
Issuer for such purpose as specified pursuant to Section 2.03, and the Trustee
shall authenticate and deliver in exchange for such temporary Securities of such
series an equal aggregate principal amount of definitive Securities of the same
series having authorized denominations and, in the case of Unregistered
Securities, having attached thereto any appropriate Coupons. Until so exchanged,
the temporary Securities of any series shall be entitled to the same benefits
under this Indenture as definitive Securities of such series, unless otherwise
established pursuant to Section 2.03. The provisions of this Section are subject
to any restrictions or limitations on the issue and delivery of temporary
Unregistered Securities of any series that may be established pursuant to
Section 2.03 (including any provision that Unregistered Securities of such
series initially be issued in the form of a single global Unregistered Security
to be delivered to a depositary or agency located outside the United States and
the procedures pursuant to which definitive or global Unregistered Securities of
such series would be issued in exchange for such temporary global Unregistered
Security).
ARTICLE 3
COVENANTS OF THE ISSUER
SECTION 3.01. Payment of Principal and Interest. The Issuer covenants
and agrees for the benefit of each series of Securities that it will duly and
punctually pay or cause to be paid the principal of, and interest on, each of
the Securities of such series (together with any additional amounts payable
pursuant to the terms of such Securities) at the place or places, at the
respective times and in the manner provided in such Securities and in the
Coupons, if any, appertaining thereto and in this Indenture. The interest on
Securities with Coupons attached
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(together with any additional amounts payable pursuant to the terms of such
Securities) shall be payable only upon presentation and surrender of the several
Coupons for such interest installments as are evidenced thereby as they
severally mature. If any temporary Unregistered Security provides that interest
thereon may be paid while such Security is in temporary form, the interest on
any such temporary Unregistered Security (together with any additional amounts
payable pursuant to the terms of such Security) shall be paid, as to the
installments of interest evidenced by Coupons attached thereto, if any, only
upon presentation and surrender thereof, and, as to the other installments of
interest, if any, only upon presentation of such Securities for notation thereon
of the payment of such interest, in each case subject to any restrictions that
may be established pursuant to Section 2.03. The interest on Registered
Securities (together with any additional amounts payable pursuant to the terms
of such Securities) shall be payable only to or upon the written order of the
Holders thereof and, at the option of the Issuer, may be paid by wire transfer
or by mailing checks for such interest payable to or upon the written order of
such Holders at their last addresses as they appear on the registry books of the
Issuer.
SECTION 3.02. Offices for Payments, etc. So long as any Registered
Securities are authorized for issuance pursuant to this Indenture or are
outstanding hereunder, the Issuer will maintain in the Borough of Manhattan, The
City of New York, an office or agency where the Registered Securities of each
series may be presented for payment, where the Securities of each series may be
presented for exchange as is provided in this Indenture and, if applicable,
pursuant to Section 2.03 and where the Registered Securities of each series may
be presented for registration of transfer as in this Indenture provided.
The Issuer will maintain one or more offices or agencies in a city or
cities located outside the United States as may be required to be maintained
under the rules of any stock exchange on which the Securities of such series are
listed. No payment on any Unregistered Security or Coupon will be made upon
presentation of such Unregistered Security or Coupon at an agency of the Issuer
within the United States nor will any payment be made by transfer to an account
in, or by mail to an address in, the United States unless pursuant to applicable
United States laws and regulations then in effect such payment can be made
without adverse tax consequences to the Issuer. Notwithstanding the foregoing,
payments in Dollars of Unregistered Securities of any series and Coupons
appertaining thereto which are payable in Dollars may be made at an agency of
the Issuer maintained in the Borough of Manhattan, The City of New York if such
payment in Dollars at each agency maintained by the Issuer outside the United
States for payment on such Unregistered Securities is illegal or effectively
precluded by exchange controls or other similar restrictions.
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The Issuer will maintain in the Borough of Manhattan, The City of New
York, an office or agency where notices and demands to or upon the Issuer in
respect of the Securities of any series, the Coupons appertaining thereto or
this Indenture may be served.
The Issuer will give to the Trustee written notice of the location of
each such office or agency and of any change of location thereof. In case the
Issuer shall fail to maintain any agency required by this Section to be located
in the Borough of Manhattan, The City of New York, or shall fail to give such
notice of the location or of any change in the location of any of the above
agencies, presentations and demands may be made and notices may be served at the
Corporate Trust Office of the Trustee.
The Issuer may from time to time designate one or more additional
offices or agencies where the Securities of a series and any Coupons
appertaining thereto may be presented for payment, where the Securities of that
series may be presented for exchange as provided in this Indenture and pursuant
to Section 2.03 and where the Registered Securities of that series may be
presented for registration of transfer as in this Indenture provided, and the
Issuer may from time to time rescind any such designation, as the Issuer may
deem desirable or expedient; provided, however, that no such designation or
rescission shall in any manner relieve the Issuer of its obligation to maintain
the agencies provided for in this Section. The Issuer will give to the Trustee
prompt written notice of any such designation or rescission thereof.
SECTION 3.03. Appointment to Fill a Vacancy in Office of Trustee. The
Issuer, whenever necessary to avoid or fill a vacancy in the office of Trustee,
will appoint, in the manner provided in Section 6.10, a Trustee, so that there
shall at all times be a Trustee with respect to each series of Securities
hereunder.
SECTION 3.04. Paying Agents. Whenever the Issuer shall appoint a paying
agent other than the Trustee with respect to the Securities of any series, it
will cause such paying agent to execute and deliver to the Trustee an instrument
in which such agent shall agree with the Trustee, subject to the provisions of
this Section,
(a) that it will hold all sums received by it as such agent for the
payment of the principal of or interest on the Securities of such series
(whether such sums have been paid to it by the Issuer or by any other obligor on
the Securities of such series) in trust for the benefit of the Holders of the
Securities of such series, or Coupons appertaining thereto, if any, or of the
Trustee,
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(b) that it will give the Trustee notice of any failure by the Issuer
(or by any other obligor on the Securities of such series) to make any payment
of the principal of or interest on the Securities of such series when the same
shall be due and payable, and
(c) that it will pay any such sums so held in trust by it to the
Trustee upon the Trustee's written request at any time during the continuance of
the failure referred to in clause (b) above.
The Issuer will, on or prior to each due date of the principal of or
interest on the Securities of such series, deposit with the paying agent a sum
sufficient to pay such principal or interest so becoming due, and (unless such
paying agent is the Trustee) the Issuer will promptly notify the Trustee of any
failure to take such action.
If the Issuer shall act as its own paying agent with respect to the
Securities of any series, it will, on or before each due date of the principal
of or interest on the Securities of such series, set aside, segregate and hold
in trust for the benefit of the Holders of the Securities of such series or the
Coupons appertaining thereto a sum sufficient to pay such principal or interest
so becoming due. The Issuer will promptly notify the Trustee of any failure to
take such action.
Anything in this Section to the contrary notwithstanding, but subject
to Section 10.01, the Issuer may at any time, for the purpose of obtaining a
satisfaction and discharge with respect to one or more or all series of
Securities hereunder, or for any other reason, pay or cause to be paid to the
Trustee all sums held in trust for any such series by the Issuer or any paying
agent hereunder, as required by this Section, such sums to be held by the
Trustee upon the trusts herein contained.
Anything in this Section to the contrary notwithstanding, the agreement
to hold sums in trust as provided in this Section is subject to the provisions
of Sections 10.03 and 10.04.
SECTION 3.05. [INTENTIONALLY OMITTED].
SECTION 3.06. Luxembourg Publications. In the event the Securities are
listed on the Luxembourg Stock Exchange, and in the event of the publication of
any notice pursuant to Section 5.11, 6.10(a), 6.11, 8.02, 10.04, 12.02 or 12.05,
the party making such publication in the Borough of Manhattan, The City of New
York (if so required) shall also, to the extent that notice is required to be
given to Holders of Securities of any series by applicable Luxembourg law or
stock
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exchange regulation, as evidenced by an Officer's Certificate delivered to such
party, make a similar publication in Luxembourg.
SECTION 3.07. Existence. Subject to Article 9, the Issuer will do or
cause to be done all things necessary to preserve and keep in full force and
effect its existence and rights (charter and statutory); provided, however, that
the Issuer shall not be required to preserve any such right if the Issuer shall
determine that the preservation thereof is no longer desirable in the conduct of
the business of the Issuer and that the loss thereof is not disadvantageous in
any material respect to the Securityholders.
SECTION 3.08. Maintenance of Properties. The Issuer will cause all
properties used or useful in the conduct of its business or the business of any
Significant Subsidiary to be maintained and kept in good condition, repair and
working order and supplied with all necessary equipment and will cause to be
made all necessary repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of the Issuer may be necessary in the conduct of
its business or the business of any Subsidiary; provided, however, that nothing
in this Section shall prevent the Issuer from discontinuing the operation or
maintenance of any of such properties if such discontinuance is, in the judgment
of the Issuer, desirable in the conduct of its business or the business of any
Subsidiary and not disadvantageous in any material respect to the
Securityholders.
SECTION 3.09. Payment of Taxes and Other Claims. The Issuer will pay or
discharge, or cause to be paid or discharged, before the same may become
delinquent, (i) all taxes, assessments and governmental charges levied or
imposed upon the Issuer or any Significant Subsidiary or upon the income,
profits or property of the Issuer or any Significant Subsidiary, (ii) all claims
for labor, materials and supplies which, if unpaid, might by law become a lien
or charge upon the property of the Issuer or any Significant Subsidiary and
(iii) all stamps and other duties, if any, which may be imposed by the United
States or any political subdivision thereof or therein in connection with the
issuance, transfer, exchange or conversion of any Securities or with respect to
this Indenture; provided, however, that, in the case of clauses (i) and (ii),
the Issuer shall not be required to pay or discharge or cause to be paid or
discharged any such tax, assessment, charge or claim (A) if the failure to do so
will not, in the aggregate, have a material adverse impact on the Issuer, or (B)
if the amount, applicability or validity is being contested in good faith by
appropriate proceedings.
SECTION 3.10. Stay, Extension and Usury Laws. The Issuer covenants (to
the extent that it may lawfully do so) that it shall not at any time insist
upon, plead, or in any manner whatsoever claim or take the benefit or advantage
of, any stay, extension or usury law or other law which would prohibit or
forgive the
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Issuer from paying all or any portion of the principal of, premium, if any, or
interest on the Securities as contemplated herein, wherever enacted, now or at
any time hereafter in force, or which may affect the covenants or the
performance of this Indenture and the Issuer (to the extent it may lawfully do
so) hereby expressly waives all benefit or advantage of any such law, and
covenants that it will not, by resort to any such law, hinder, delay or impede
the execution of any power herein granted to the Trustee, but will suffer and
permit the execution of every such power as though no such law had been enacted.
SECTION 3.11. Compliance Certificate. The Issuer shall deliver to the
Trustee, within one hundred twenty (120) days after the end of each fiscal year
of the Issuer, a certificate signed by either the principal executive officer,
principal financial officer or principal accounting officer of the Issuer,
stating whether or not to the best knowledge of the signer thereof the Issuer is
in default in the performance and observance of any of the terms, provisions and
conditions of this Indenture (without regard to any period of grace or
requirement of notice provided hereunder) and, if the Issuer shall be in
default, specifying all such defaults and the nature and the status thereof of
which the signer may have knowledge.
The Issuer will deliver to the Trustee, so long as any of the
Securities are Outstanding, forthwith upon becoming aware of (i) any default in
the performance or observance of any covenant, agreement or condition contained
in this Indenture that is, or after notice or passage of time or both would be,
and Event of Default, or (ii) any Event of Default, an Officer's Certificate
specifying with particularity such default or Event of Default and further
stating what action the Issuer has taken, is taking or proposes to take with
respect thereto.
Any notice required to be given under this Section 3.11 shall be
delivered to a Responsible Officer of the Trustee at its Corporate Trust Office.
In the event that the payment of the Securities of any series is accelerated
because of an Event of Default, the Issuer shall promptly provide written notice
to the Trustee specifying the names and addresses of the holders of Senior
Indebtedness if the Trustee (and not the Issuer) is to provide holders of Senior
Indebtedness notice of such acceleration.
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ARTICLE 4
SECURITYHOLDERS LISTS AND REPORTS BY THE ISSUER AND THE TRUSTEE
SECTION 4.01. Issuer to Furnish Trustee Information as to Names and
Addresses of Securityholders. If and so long as the Trustee shall not be the
Security registrar for the Securities of any series, the Issuer and any other
obligor on the Securities will furnish or cause to be furnished to the Trustee a
list in such form as the Trustee may reasonably require of the names and
addresses of the Holders of the Registered Securities of such series pursuant to
Section 312 of the Trust Indenture Act of 1939 (a) semi-annually not more than
15 days after each record date for the payment of interest on such Registered
Securities, as hereinabove specified, as of such record date and on dates to be
determined pursuant to Section 2.03 for non-interest bearing Registered
Securities in each year and (b) at such other times as the Trustee may
reasonably request in writing, within 30 days after receipt by the Issuer of any
such request as of a date not more than 15 days prior to the time such
information is furnished.
SECTION 4.02. Preservation and Disclosure of Securityholders Lists.
(a) The Trustee shall preserve, in as current a form as is reasonably
practicable, all information as to the names and addresses of the holders of
Securities of each series contained in the most recent list furnished to it as
provided in Section 4.01 or maintained by the Trustee in its capacity as
Security registrar or co-registrar in respect of the Securities of any series,
if so acting. The Trustee may destroy any list furnished to it as provided in
Section 4.01 upon receipt of a new list so furnished.
(b) The rights of Securityholders to communicate with other holders of
Securities of any series with respect to their rights under this Indenture or
under the Securities, and the corresponding rights and duties of the Trustee,
shall be as provided by the Trust Indenture Act.
(c) Every Securityholder, by receiving and holding the same, agrees
with the Issuer and the Trustee that neither the Issuer nor the Trustee nor any
agent of either of them shall be held accountable by reason of any disclosure of
information as to names and addresses of holders of Securities made pursuant to
the Trust Indenture Act.
SECTION 4.03. Reports by the Issuer. The Issuer covenants to file with
the Trustee, copies of the annual reports and of the information, documents, and
other reports that the Issuer may be required to file with the Commission
pursuant to Section 13 or Section 15(d) of the Securities Exchange Act of 1934
or pursuant to Section 314 of the Trust Indenture Act of 1939.
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SECTION 4.04. Reports by the Trustee. Any Trustee's report required
under Section 313(a) of the Trust Indenture Act of 1939 shall be transmitted on
or before May 1 in each year beginning May 1, 2001, as provided in Section
313(c) of the Trust Indenture Act of 1939, so long as any Securities are
Outstanding hereunder, and shall be dated as of a date convenient to the Trustee
no more than 60 days prior thereto. The Trustee shall also comply with Section
313(b)(2) of the Trust Indenture Act of 1939. A copy of each report at the time
of its mailing to the Securityholders shall be mailed to the Issuer and filed
with the Commission and each stock exchange on which the Securities are listed
in accordance with Section 313(d) of the Trust Indenture Act of 1939.
ARTICLE 5
REMEDIES OF THE TRUSTEE AND SECURITYHOLDERS ON EVENT OF DEFAULT
SECTION 5.01. Event of Default Defined; Acceleration of Maturity;
Waiver of Default. Unless otherwise set forth in a supplemental indenture,
"Event of Default" with respect to Securities of any series wherever used
herein, means each one of the following events which shall have occurred and be
continuing (whatever the reason for such Event of Default and whether it shall
be voluntary or involuntary or be effected by operation of law or pursuant to
any judgment, decree or order of any court or any order, rule or regulation of
any administrative or governmental body):
(a) default in the payment of any installment of interest upon any of
the Securities of such series as and when the same shall become due and payable,
and continuance of such default for a period of 30 days; or
(b) default in the payment of all or any part of the principal on any
of the Securities of such series as and when the same shall become due and
payable either at maturity, upon any redemption, by declaration or otherwise; or
(c) failure on the part of the Issuer duly to observe or perform any
other of the covenants or agreements on the part of the Issuer in the Securities
of such series (other than a covenant or warranty in respect of the Securities
of such series a default in the performance or breach of which is elsewhere in
this Section specifically dealt with) or in this Indenture contained for a
period of 60 days after the date on which written notice specifying such
failure, stating that such notice is a "Notice of Default" hereunder and
demanding that the Issuer remedy the same, shall have been given by registered
or certified mail, return receipt requested, to the Issuer by the Trustee, or to
the Issuer and the Trustee by the holders of at least
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25% in aggregate principal amount of the Outstanding Securities of all series
affected thereby; or
(d) a court having jurisdiction in the premises shall enter a decree or
order for relief in respect of the Issuer in an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or appointing a receiver, liquidator, assignee, custodian, trustee,
sequestrator (or similar official) of the Issuer or for any substantial part of
its property or ordering the winding up or liquidation of its affairs, and such
decree or order shall remain unstayed and in effect for a period of 90
consecutive days; or
(e) the Issuer shall commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
consent to the entry of an order for relief in an involuntary case under any
such law, or consent to the appointment or taking possession by a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar official) of
the Issuer or for any substantial part of its property, or make any general
assignment for the benefit of creditors; or
(f) any other Event of Default provided in the supplemental indenture
under which such series of Securities is issued or in the form of Security for
such series.
If an Event of Default described in clauses (a), (b), (c) or (f) (if
the Event of Default under clause (c) or (f), as the case may be, is with
respect to less than all series of Securities then Outstanding) occurs and is
continuing, then, and in each and every such case, except for any series of
Securities the principal of which shall have already become due and payable,
either the Trustee or the Holders of not less than 25% in aggregate principal
amount of the Securities of each such affected series then Outstanding hereunder
(voting as a single class) by notice in writing to the Issuer (and to the
Trustee if given by Securityholders), may declare the entire principal (or, if
the Securities of any such affected series are Original Issue Discount
Securities, such portion of the principal amount as may be specified in the
terms of such series) of all Securities of all such affected series, and the
interest accrued thereon, if any, to be due and payable immediately, and upon
any such declaration, the same shall become immediately due and payable. If an
Event of Default described in clause (c) or (f) (if the Event of Default under
clause (c) or (f), as the case may be, is with respect to all series of
Securities then Outstanding), (d) or (e) occurs and is continuing, then and in
each and every such case, unless the principal of all the Securities shall have
already become due and payable, either the Trustee or the Holders of not less
than 25% in aggregate principal amount of all the Securities then Outstanding
hereunder (treated as one class), by notice in writing to the Issuer (and to the
Trustee if given by
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Securityholders), may declare the entire principal (or, if any Securities are
Original Issue Discount Securities, such portion of the principal as may be
specified in the terms thereof) of all the Securities then Outstanding, and
interest accrued thereon, if any, to be due and payable immediately, and upon
any such declaration the same shall become immediately due and payable.
The foregoing provisions, however, are subject to the condition that
if, at any time after the principal (or, if the Securities are Original Issue
Discount Securities, such portion of the principal as may be specified in the
terms thereof) of the Securities of any series (or of all the Securities, as the
case may be) shall have been so declared due and payable, and before any
judgment or decree for the payment of the moneys due shall have been obtained or
entered as hereinafter provided, the Issuer shall pay or shall deposit with the
Trustee a sum sufficient to pay all matured installments of interest upon all
the Securities of each such series (or of all the Securities, as the case may
be) and the principal of any and all Securities of each such series (or of all
the Securities, as the case may be) which shall have become due otherwise than
by acceleration (with interest upon such principal and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
installments of interest, at the same rate as the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) specified in the
Securities of such series (or at the respective rates of interest or Yields to
Maturity of all the Securities, as the case may be) to the date of such payment
or deposit) and such amount as shall be sufficient to cover reasonable
compensation to the Trustee and each predecessor Trustee, its agents, attorneys
and counsel, and all other reasonable expenses and liabilities incurred, and all
advances made, by the Trustee and each predecessor Trustee except as a result of
negligence, willful misconduct, recklessness or bad faith, and if any and all
Events of Default under the Indenture, other than the non-payment of the
principal of Securities which shall have become due by acceleration, shall have
been cured, waived or otherwise remedied as provided herein -- then and in every
such case the Holders of a majority in aggregate principal amount of all the
Securities of each such series or of all the Securities, in each case voting as
a single class, then Outstanding, by written notice to the Issuer and to the
Trustee, may waive all defaults with respect to each such series (or with
respect to all the Securities, as the case may be) and rescind and annul such
declaration and its consequences, but no such waiver or rescission and annulment
shall extend to or shall affect any subsequent default or shall impair any right
consequent thereon.
For all purposes under this Indenture, if a portion of the principal of
any Original Issue Discount Securities shall have been accelerated and declared
due and payable pursuant to the provisions hereof, then, from and after such
declaration, unless such declaration has been rescinded and annulled, the
principal amount of such Original Issue Discount Securities shall be deemed, for
all
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purposes hereunder, to be such portion of the principal thereof as shall be due
and payable as a result of such acceleration, and payment of such portion of the
principal thereof as shall be due and payable as a result of such acceleration,
together with interest, if any, thereon and all other amounts owing thereunder,
shall constitute payment in full of such Original Issue Discount Securities.
SECTION 5.02. Collection of Indebtedness by Trustee; Trustee May Prove
Debt. The Issuer covenants that (a) in case default shall be made in the payment
of any installment of interest on any of the Securities of any series when such
interest shall have become due and payable, and such default shall have
continued for a period of 30 days or (b) in case default shall be made in the
payment of all or any part of the principal of any of the Securities of any
series when the same shall have become due and payable, whether upon maturity of
the Securities of such series or upon any redemption or by declaration or
otherwise -- then upon demand of the Trustee, the Issuer will pay to the Trustee
for the benefit of the Holders of the Securities of such series the whole amount
that then shall have become due and payable on all Securities of such series,
and such Coupons, for principal or interest, as the case may be (with interest
to the date of such payment upon the overdue principal and, to the extent that
payment of such interest is enforceable under applicable law, on overdue
installments of interest at the same rate as the rate of interest or Yield to
Maturity (in the case of Original Issue Discount Securities) specified in the
Securities of such series); and in addition thereto, such further amount as
shall be sufficient to cover the costs and expenses of collection, including
reasonable compensation to the Trustee and each predecessor Trustee, their
respective agents, attorneys and counsel, and any reasonable expenses and
liabilities incurred, and all advances made, by the Trustee and each predecessor
Trustee except as a result of its negligence, willful misconduct, recklessness
or bad faith.
Until such demand is made by the Trustee, the Issuer may pay the
principal of and interest on the Securities of any series to the registered
holders, whether or not the Securities of such Series be overdue.
In case the Issuer shall fail forthwith to pay such amounts upon such
demand, the Trustee, in its own name and as trustee of an express trust, shall
be entitled and empowered to institute any action or proceedings at law or in
equity for the collection of the sums so due and unpaid, and may prosecute any
such action or proceedings to judgment or final decree, and may enforce any such
judgment or final decree against the Issuer or other obligor upon the Securities
and collect in the manner provided by law out of the property of the Issuer or
other obligor upon the Securities, wherever situated the moneys adjudged or
decreed to be payable.
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In case there shall be pending proceedings relative to the Issuer or
any other obligor upon the Securities under Title 11 of the United States Code
or any other applicable Federal or state bankruptcy, insolvency or other similar
law, or in case a receiver, assignee or trustee in bankruptcy or reorganization,
liquidator, sequestrator or similar official shall have been appointed for or
taken possession of the Issuer or its property or such other obligor, or in case
of any other comparable judicial proceedings relative to the Issuer or other
obligor upon the Securities, or to the creditors or property of the Issuer or
such other obligor, the Trustee, irrespective of whether the principal of the
Securities shall then be due and payable as therein expressed or by declaration
or otherwise and irrespective of whether the Trustee shall have made any demand
pursuant to the provisions of this Section, shall be entitled and empowered, by
intervention in such proceedings or otherwise:
(a) to file and prove a claim or claims for the whole amount of
principal and interest (or, if the Securities of any series are Original Issue
Discount Securities, such portion of the principal amount as may be specified in
the terms of such series) owing and unpaid in respect of the Securities of any
series, and to file such other papers or documents as may be necessary or
advisable in order to have the claims of the Trustee (including any claim for
reasonable compensation to the Trustee and each predecessor Trustee, and their
respective agents, attorneys and counsel, and for reimbursement of all expenses
and liabilities incurred, and all advances made, by the Trustee and each
predecessor Trustee, except as a result of negligence or bad faith) and of the
Securityholders allowed in any judicial proceedings relative to the Issuer or
other obligor upon the Securities, or to the creditors or property of the Issuer
or such other obligor,
(b) unless prohibited by applicable law and regulations, to vote on
behalf of the holders of the Securities of any series in any election of a
trustee or a standby trustee in arrangement, reorganization, liquidation or
other bankruptcy or insolvency proceedings or Person performing similar
functions in comparable proceedings, and
(c) to collect and receive any moneys or other property payable or
deliverable on any such claims, and to distribute all amounts received with
respect to the claims of the Securityholders and of the Trustee on their behalf;
and any trustee, receiver, or liquidator, custodian or other similar official is
hereby authorized by each of the Securityholders to make payments to the
Trustee, and, in the event that the Trustee shall consent to the making of
payments directly to the Securityholders, to pay to the Trustee such amounts as
shall be sufficient to cover reasonable compensation to the Trustee, each
predecessor Trustee and their respective agents, attorneys and counsel, and all
other expenses and liabilities
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incurred, and all advances made, by the Trustee and each predecessor Trustee
except as a result of negligence, willful misconduct, recklessness or bad faith.
Nothing herein contained shall be deemed to authorize the Trustee to
authorize or consent to or vote for or accept or adopt on behalf of any
Securityholder any plan of reorganization, arrangement, adjustment or
composition affecting the Securities of any series or the rights of any Holder
thereof, or to authorize the Trustee to vote in respect of the claim of any
Securityholder in any such proceeding except, as aforesaid, to vote for the
election of a trustee in bankruptcy or similar Person.
All rights of action and of asserting claims under this Indenture, or
under any of the Securities of any series or Coupons appertaining to such
Securities, may be enforced by the Trustee without the possession of any of the
Securities of such series or Coupons appertaining to such Securities or the
production thereof on any trial or other proceedings relative thereto, and any
such action or proceedings instituted by the Trustee shall be brought in its own
name as trustee of an express trust, and any recovery of judgment, subject to
the payment of the expenses, disbursements and compensation of the Trustee, each
predecessor Trustee and their respective agents and attorneys, shall be for the
ratable benefit of the Holders of the Securities or Coupons appertaining to such
Securities in respect of which such action was taken.
In any proceedings brought by the Trustee (and also any proceedings
involving the interpretation of any provision of this Indenture to which the
Trustee shall be a party) the Trustee shall be held to represent all the Holders
of the Securities or Coupons appertaining to such Securities in respect to which
such action was taken, and it shall not be necessary to make any Holders of such
Securities or Coupons appertaining to such Securities parties to any such
proceedings.
SECTION 5.03. Application of Proceeds. Any moneys collected by the
Trustee pursuant to this Article in respect of any series shall, subject to the
subordination provisions hereof, be applied in the following order at the date
or dates fixed by the Trustee and, in case of the distribution of such moneys on
account of principal or interest, upon presentation of the several Securities
and Coupons appertaining to such Securities in respect of which monies have been
collected and stamping (or otherwise noting) thereon the payment, or issuing
Securities of such series in reduced principal amounts in exchange for the
presented Securities of like series if only partially paid, or upon surrender
thereof if fully paid:
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FIRST: To the payment of costs and expenses applicable to such
series in respect of which monies have been collected, including
reasonable compensation to the Trustee and each predecessor Trustee and
their respective agents and attorneys and of all reasonable expenses
and liabilities incurred, and all advances made, by the Trustee and
each predecessor Trustee except as a result of negligence, willful
misconduct, recklessness or bad faith;
SECOND: In case the principal of the Securities of such series
in respect of which moneys have been collected shall not have become
and be then due and payable, to the payment of interest on the
Securities of such series in default in the order of the maturity of
the installments of such interest, with interest (to the extent that
such interest has been collected by the Trustee) upon the overdue
installments of interest at the same rate as the rate of interest or
Yield to Maturity (in the case of Original Issue Discount Securities)
specified in such Securities, such payments to be made ratably to the
Persons entitled thereto, without discrimination or preference;
THIRD: In case the principal of the Securities of such series
in respect of which moneys have been collected shall have become and
shall be then due and payable, to the payment of the whole amount then
owing and unpaid upon all the Securities of such series for principal
and interest, with interest upon the overdue principal, and (to the
extent that such interest has been collected by the Trustee) upon
overdue installments of interest at the same rate as the rate of
interest or Yield to Maturity (in the case of Original Issue Discount
Securities) specified in the Securities of such series; and in case
such moneys shall be insufficient to pay in full the whole amount so
due and unpaid upon the Securities of such series, then to the payment
of such principal and interest or Yield to Maturity, without preference
or priority of principal over interest or Yield to Maturity, or of
interest or Yield to Maturity over principal, or of any installment of
interest over any other installment of interest, or of any Security of
such series over any other Security of such series, ratably to the
aggregate of such principal and accrued and unpaid interest or Yield to
Maturity; and
FOURTH: To the payment of the remainder, if any, to the
Issuer or any other Person lawfully entitled thereto.
SECTION 5.04. Suits for Enforcement. In case an Event of Default has
occurred, has not been waived and is continuing, the Trustee may in its
discretion proceed to protect and enforce the rights vested in it by this
Indenture by such appropriate judicial proceedings as the Trustee shall deem
most effectual to
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protect and enforce any of such rights, either at law or in equity or in
bankruptcy or otherwise, whether for the specific enforcement of any covenant or
agreement contained in this Indenture or in aid of the exercise of any power
granted in this Indenture or to enforce any other legal or equitable right
vested in the Trustee by this Indenture or by law.
SECTION 5.05. Restoration of Rights on Abandonment of Proceedings. In
case the Trustee shall have proceeded to enforce any right under this Indenture
and such proceedings shall have been discontinued or abandoned for any reason,
or shall have been determined adversely to the Trustee, then and in every such
case the Issuer and the Trustee shall be restored respectively to their former
positions and rights hereunder, and all rights, remedies and powers of the
Issuer, the Trustee and the Securityholders shall continue as though no such
proceedings had been taken.
SECTION 5.06. Limitations on Suits by Securityholders. No Holder of any
Security of any series or of any Coupon appertaining thereto shall have any
right by virtue or by availing of any provision of this Indenture to institute
any action or proceeding at law or in equity or in bankruptcy or otherwise upon
or under or with respect to this Indenture, or for the appointment of a trustee,
receiver, liquidator, custodian or other similar official or for any other
remedy hereunder, unless such Holder previously shall have given to the Trustee
written notice of default and of the continuance thereof, as hereinbefore
provided, and unless also the Holders of not less than 25% in aggregate
principal amount of the Securities of each affected series then Outstanding
(treated as a single class) shall have made written request upon the Trustee to
institute such action or proceedings in its own name as trustee hereunder and
shall have offered to the Trustee such reasonable indemnity as it may require
against the costs, expenses and liabilities to be incurred therein or thereby
and the Trustee for 60 days after its receipt of such notice, request and offer
of indemnity shall have failed to institute any such action or proceeding and no
direction inconsistent with such written request shall have been given to the
Trustee pursuant to Section 5.09; it being understood and intended, and being
expressly covenanted by the taker and Holder of every Security or Coupon with
every other taker and Holder and the Trustee, that no one or more Holders of
Securities of any series or Coupons appertaining to such Securities shall have
any right in any manner whatever by virtue or by availing of any provision of
this Indenture to affect, disturb or prejudice the rights of any other such
Holder of Securities or Coupons appertaining to such Securities, or to obtain or
seek to obtain priority over or preference to any other such Holder or to
enforce any right under this Indenture, except in the manner herein provided and
for the equal, ratable and common benefit of all Holders of Securities of the
applicable series and Coupons appertaining to such Securities. For the
protection and enforcement
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of the provisions of this Section, each and every Securityholder and the Trustee
shall be entitled to such relief as can be given either at law or in equity.
SECTION 5.07. Unconditional Right of Securityholders to Institute
Certain Suits. Notwithstanding any other provision in this Indenture and any
provision of any Security, the right of any Holder of any Security or Coupon to
receive payment of the principal of and interest on such Security or Coupon on
or after the respective due dates expressed in such Security or Coupon, or to
institute suit for the enforcement of any such payment on or after such
respective dates, shall not be impaired or affected without the consent of such
Holder.
SECTION 5.08. Powers and Remedies Cumulative; Delay or Omission Not
Waiver of Default. Except as provided in Section 5.06, no right or remedy herein
conferred upon or reserved to the Trustee or to the Holders of Securities or
Coupons is intended to be exclusive of any other right or remedy, and every
right and remedy shall, to the extent permitted by law, be cumulative and in
addition to every other right and remedy given hereunder or now or hereafter
existing at law or in equity or otherwise. The assertion or employment of any
right or remedy hereunder, or otherwise, shall not prevent the concurrent
assertion or employment of any other appropriate right or remedy.
No delay or omission of the Trustee or of any Holder of Securities or
Coupons to exercise any right or power accruing upon any Event of Default
occurring and continuing as aforesaid shall impair any such right or power or
shall be construed to be a waiver of any such Event of Default or an
acquiescence therein; and, subject to Section 5.06, every power and remedy given
by this Indenture or by law to the Trustee or to the Holders of Securities or
Coupons may be exercised from time to time, and as often as shall be deemed
expedient, by the Trustee or by the Holders of Securities or Coupons.
SECTION 5.09. Control by Holders of Securities. The Holders of a
majority in aggregate principal amount of the Securities of each series affected
(with all such series voting as a single class) at the time Outstanding shall
have the right to direct the time, method, and place of conducting any
proceeding for any remedy available to the Trustee, or exercising any trust or
power conferred on the Trustee with respect to the Securities of such series by
this Indenture; provided that such direction shall not be otherwise than in
accordance with law and the provisions of this Indenture and provided further
that (subject to the provisions of Section 6.01) the Trustee shall have the
right to decline to follow any such direction if the Trustee, being advised by
nationally recognized counsel in writing or by an opinion of counsel, shall
reasonably determine that the action or proceeding so directed may not lawfully
be taken or if the Trustee in good faith by its board of directors, the
executive committee, or a trust committee of directors or
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Responsible Officers of the Trustee shall determine that the action or
proceedings so directed would involve the Trustee in personal liability or if
the Trustee in good faith shall so determine that the actions or forebearances
specified in or pursuant to such direction would be unduly prejudicial to the
interests of Holders of the Securities of all series so affected not joining in
the giving of said direction, it being understood that (subject to Section 6.01)
the Trustee shall have no duty to ascertain whether or not such actions or
forebearances are unduly prejudicial to such Holders.
Nothing in this Indenture shall impair the right of the Trustee in its
discretion to take any action reasonably deemed proper by the Trustee and which
is not inconsistent with such direction or directions by Securityholders.
SECTION 5.10. Waiver of Past Defaults. Prior to the acceleration of the
maturity of any Securities as provided in Section 5.01, the Holders of a
majority in aggregate principal amount of the Securities of all series at the
time Outstanding with respect to which an Event of Default shall have occurred
and be continuing (voting as a single class) may on behalf of the Holders of all
such Securities waive any past default or Event of Default described in Section
5.01 and its consequences, except a default in respect of a covenant or
provision hereof which cannot be modified or amended without the consent of the
Holder of each Security affected. In the case of any such waiver, the Issuer,
the Trustee and the Holders of all such Securities shall be restored to their
former positions and rights hereunder, respectively; but no such waiver shall
extend to any subsequent or other default or impair any right consequent
thereon.
Upon any such waiver, such default shall cease to exist and be deemed
to have been cured and not to have occurred, and any Event of Default arising
therefrom shall be deemed to have been cured, and not to have occurred for every
purpose of this Indenture; but no such waiver shall extend to any subsequent or
other default or Event of Default or impair any right consequent thereon.
SECTION 5.11. Trustee to Give Notice of Default, But May Withhold in
Certain Circumstances. The Trustee shall, within ninety (90) days after the
occurrence of a default with respect to the Securities of any series, give
notice of all defaults with respect to that series known to the Trustee (i) if
any Unregistered Securities of a series affected are then Outstanding, to the
Holders thereof, (A) by mail to such Holders who have filed their names and
addresses with the Trustee within the two years preceding the notice at such
addresses as were so furnished to the Trustee and (B) either through the
customary notice provisions of the clearing system or systems through which
beneficial interests in such Unregistered Securities are owned if such
Unregistered Securities are held only in global form or by publication at least
once in an Authorized Newspaper in the Borough of
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Manhattan, The City of New York, and at least once in an Authorized Newspaper in
London (and, if required by Section 3.06, at least once in an Authorized
Newspaper in Luxembourg), and (ii) if any Registered Securities of a series
affected are then Outstanding, by mailing notice to the Holders of then
Outstanding Registered Securities of each series affected at their addresses as
they shall appear on the registry books, unless in each case such defaults shall
have been cured before the mailing or publication of such notice (the term
"defaults" for the purpose of this Section being hereby defined to mean any
event or condition which is, or with notice or lapse of time or both would
become, an Event of Default); provided that, except in the case of default in
the payment of the principal of or interest on any of the Securities of such
series, or in the payment of any sinking fund installment on such series, the
Trustee shall be protected in withholding such notice if and so long as the
board of directors, the executive committee, or a trust committee of directors
or trustees and/or Responsible Officers of the Trustee in good faith determines
that the withholding of such notice is in the interests of the Securityholders
of such series.
SECTION 5.12. Right of Court to Require Filing of Undertaking to Pay
Costs. All parties to this Indenture agree, and each Holder of any Security or
Coupon by his acceptance thereof shall be deemed to have agreed, that any court
may in its discretion require, in any suit for the enforcement of any right or
remedy under this Indenture or in any suit against the Trustee for any action
taken, suffered or omitted by it as Trustee, the filing by any party litigant in
such suit of an undertaking to pay the costs of such suit, and that such court
may in its discretion assess reasonable costs, including reasonable attorneys'
fees, against any party litigant in such suit, having due regard to the merits
and good faith of the claims or defenses made by such party litigant; but the
provisions of this Section shall not apply to any suit instituted by the
Trustee, to any suit instituted by any Securityholder or group of
Securityholders of any series holding in the aggregate more than 10% in
aggregate principal amount of the Securities of such series, or, in the case of
any suit relating to or arising under clause (c) or (f) of Section 5.01 (if the
suit relates to Securities of more than one but less than all series), 10% in
aggregate principal amount of Securities then Outstanding and affected thereby,
or in the case of any suit relating to or arising under clause (c) or (f) (if
the suit under clause (c) or (f) relates to all the Securities then
Outstanding), (d) or (e) of Section 5.01, 10% in aggregate principal amount of
all Securities then Outstanding, or to any suit instituted by any Securityholder
for the enforcement of the payment of the principal of or interest on any
Security on or after the due date expressed in such Security or any date fixed
for redemption.
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ARTICLE 6
CONCERNING THE TRUSTEE
SECTION 6.01. Duties and Responsibilities of the Trustee; During
Default; Prior to Default. With respect to the Holders of any series of
Securities issued hereunder, the Trustee, prior to the occurrence of an Event of
Default with respect to the Securities of a particular series and after the
curing or waiving of all Events of Default which may have occurred with respect
to such series, undertakes to perform such duties and only such duties as are
specifically set forth in this Indenture. In case an Event of Default with
respect to the Securities of a series has occurred (which has not been cured or
waived) the Trustee shall exercise with respect to such series of Securities
such of the rights and powers vested in it by this Indenture, and use the same
degree of care and skill in their exercise, as a prudent man would exercise or
use under the circumstances in the conduct of his own affairs.
No provision of this Indenture shall be construed to relieve the
Trustee from liability for its own negligent action, its own negligent failure
to act or its own wilful misconduct, except that
(a) prior to the occurrence of an Event of Default with respect to the
Securities of any series and after the curing or waiving of all such Events of
Default with respect to such series which may have occurred:
(i) the duties and obligations of the Trustee with respect to the
Securities of any series shall be determined solely by the express
provisions of this Indenture, and the Trustee shall not be liable
except for the performance of such duties and obligations as are
specifically set forth in this Indenture, and no implied covenants or
obligations shall be read into this Indenture against the Trustee; and
(ii) in the absence of bad faith on the part of the Trustee, the
Trustee may conclusively rely, as to the truth of the statements and
the correctness of the opinions expressed therein, upon any statements,
certificates or opinions furnished to the Trustee and conforming to the
requirements of this Indenture; but in the case of any such statements,
certificates or opinions which by any provision hereof are specifically
required to be furnished to the Trustee, the Trustee shall be under a
duty to examine the same to determine whether or not they conform to
the requirements of this Indenture;
(b) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer or Responsible Officers of the Trustee,
unless
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it shall be proved that the Trustee was negligent in ascertaining the
pertinent facts; and
(c) the Trustee shall not be liable with respect to any action taken or
omitted to be taken by it in good faith in accordance with the direction of the
Holders pursuant to Section 5.09 relating to the time, method and place of
conducting any proceeding for any remedy available to the Trustee, or exercising
any trust or power conferred upon the Trustee, under this Indenture.
None of the provisions contained in this Indenture shall require the
Trustee to expend or risk its own funds or otherwise incur personal financial
liability in the performance of any of its duties or in the exercise of any of
its rights or powers, if there shall be reasonable ground for believing that the
repayment of such funds or adequate indemnity against such liability is not
reasonably assured to it.
The provisions of this Section 6.01 are in furtherance of and subject
to Section 315 of the Trust Indenture Act of 1939.
SECTION 6.02. Certain Rights of the Trustee. In furtherance of and
subject to the Trust Indenture Act of 1939, and subject to Section 6.01:
(a) the Trustee may rely and shall be protected in acting or refraining
from acting upon any resolution, Officer's Certificate or any other certificate,
statement, instrument, opinion, report, notice, request, consent, order, bond,
debenture, note, coupon, security or other paper or document reasonably believed
by it to be genuine and to have been signed or presented by the proper party or
parties;
(b) any request, direction, order or demand of the Issuer mentioned
herein shall be sufficiently evidenced by an Officer's Certificate (unless other
evidence in respect thereof be herein specifically prescribed); and any
resolution of the Board of Directors may be evidenced to the Trustee by a copy
thereof certified by the secretary or an assistant secretary of the Issuer;
(c) the Trustee may consult with nationally recognized counsel and any
written advice or any Opinion of Counsel shall be full and complete
authorization and protection in respect of any action taken, suffered or omitted
to be taken by it hereunder in good faith and in reliance thereon in accordance
with such advice or Opinion of Counsel; provided, however, that this provision
shall not protect the Trustee from liability for its own gross negligence,
willful misconduct, recklessness or bad faith or if the Trustee knows that such
written advice or
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Opinion of Counsel is based on erroneous information or in the exercise of
reasonable care should know that the same is erroneous;
(d) the Trustee shall be under no obligation to exercise any of the
trusts or powers vested in it by this Indenture at the request, order or
direction of any of the Securityholders pursuant to the provisions of this
Indenture, unless such Securityholders shall have offered to the Trustee
reasonable security or indemnity against the costs, expenses and liabilities
which might be incurred therein or thereby;
(e) the Trustee shall not be liable for any action taken or omitted by
it in good faith and believed by it to be authorized or within the discretion,
rights or powers conferred upon it by this Indenture;
(f) prior to the occurrence of an Event of Default hereunder and after
the curing or waiving of all Events of Default, the Trustee shall not be bound
to make any investigation into the facts or matters stated in any resolution,
certificate, statement, instrument, opinion, report, notice, request, consent,
order, approval, appraisal, bond, debenture, note, coupon, security, or other
paper or document unless requested in writing so to do by the Holders of not
less than a majority in aggregate principal amount of the Securities of all
series affected then Outstanding; provided that, if the payment within a
reasonable time to the Trustee of the reasonable costs, expenses or liabilities
likely to be incurred by it in the making of such investigation is, in the
opinion of the Trustee, not reasonably assured to the Trustee by the security
afforded to it by the terms of this Indenture, the Trustee may require
reasonable indemnity against such expenses or liabilities as a condition to
proceeding; the reasonable expenses of every such investigation shall be paid by
the Issuer or, if paid by the Trustee or any predecessor Trustee, shall be
repaid by the Issuer upon demand; and
(g) the Trustee may execute any of the trusts or powers hereunder or
perform any duties hereunder either directly or by or through agents or
attorneys not regularly in its employ and the Trustee shall not be responsible
for any misconduct or negligence on the part of any such agent or attorney
appointed with due care by it hereunder.
SECTION 6.03. Trustee Not Responsible for Recitals, Disposition of
Securities or Application of Proceeds Thereof. The recitals contained herein and
in the Securities, except the Trustee's certificates of authentication, shall be
taken as the statements of the Issuer, and the Trustee assumes no responsibility
for the correctness of the same. The Trustee makes no representation as to the
validity or sufficiency of this Indenture or of the Securities or Coupons. The
Trustee shall not
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be accountable for the use or application by the Issuer of any of the
Securities or of the proceeds thereof.
SECTION 6.04. Trustee and Agents May Hold Securities or Coupons;
Collections, etc. The Trustee or any agent of the Issuer or the Trustee, in its
individual or any other capacity, may become the owner or pledgee of Securities
or Coupons with the same rights it would have if it were not the Trustee or such
agent and may otherwise deal with the Issuer and receive, collect, hold and
retain collections from the Issuer with the same rights it would have if it were
not the Trustee or such agent.
SECTION 6.05. Moneys Held by Trustee. Subject to the provisions of
Section 10.04 hereof, all moneys received by the Trustee shall, until used or
applied as herein provided, be held in trust for the purposes for which they
were received, but need not be segregated from other funds except to the extent
required by mandatory provisions of law. Neither the Trustee nor any agent of
the Issuer or the Trustee shall be under any liability for interest on any
moneys received by it hereunder.
SECTION 6.06. Compensation and Indemnification of Trustee and Its Prior
Claim. The Issuer covenants and agrees to pay to the Trustee from time to time,
and the Trustee shall be entitled to, reasonable compensation (which shall not
be limited by any provision of law in regard to the compensation of a trustee of
an express trust) and the Issuer covenants and agrees to pay or reimburse the
Trustee and each predecessor Trustee upon its request for all reasonable
expenses, disbursements and advances incurred or made by or on behalf of it in
accordance with any of the provisions of this Indenture (including the
reasonable compensation and the expenses and disbursements of its counsel and of
all agents and other Persons not regularly in its employ) except any such
expense, disbursement or advance as may arise from its negligence, willful
misconduct, recklessness or bad faith. The Issuer also covenants to indemnify
the Trustee and each predecessor Trustee for, and to hold it harmless against,
any loss, liability or expense incurred without negligence or bad faith on its
part, arising out of or in connection with the acceptance or administration of
this Indenture or the trusts hereunder and its duties hereunder, reasonable
costs and expenses of defending itself against or investigating any claim of
liability in the premises. The obligations of the Issuer under this Section to
compensate and indemnify the Trustee and each predecessor Trustee and to pay or
reimburse the Trustee and each predecessor Trustee for reasonable expenses,
disbursements and advances shall constitute additional indebtedness hereunder
and shall survive the satisfaction and discharge of this Indenture. Such
additional indebtedness shall be a senior claim to that of the Securities upon
all property and funds held or collected by the Trustee as such, except funds
held in trust for the benefit of the
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Holders of particular Securities or Coupons, and the Securities are hereby
subordinated to such senior claim.
SECTION 6.07. Right of Trustee to Rely on Officer's Certificate, etc.
Subject to Sections 6.01 and 6.02, whenever in the administration of the trusts
of this Indenture the Trustee shall deem it necessary or desirable that a matter
be proved or established prior to taking or suffering or omitting any action
hereunder, such matter (unless other evidence in respect thereof be herein
specifically prescribed) may, in the absence of negligence, willful misconduct,
recklessness or bad faith on the part of the Trustee, be deemed to be
conclusively proved and established by an Officer's Certificate delivered to the
Trustee, and such certificate, in the absence of negligence, willful misconduct,
recklessness or bad faith on the part of the Trustee, shall be full warrant to
the Trustee for any action taken, suffered or omitted by it under the provisions
of this Indenture upon the faith thereof.
SECTION 6.08. Conflicting Interests of Trustee. If the Trustee has or
shall acquire a conflicting interest within the meaning of the Trust Indenture
Act, the Trustee shall either eliminate such interest or resign, to the extent
and in the manner provided by, and subject to the provisions of, the Trust
Indenture Act and this Indenture.
SECTION 6.09. Persons Eligible for Appointment as Trustee. The Trustee
for each series of Securities hereunder shall at all times be a corporation
organized and doing business under the laws of the United States of America or
of any State or the District of Columbia having a combined capital and surplus
of at least $5,000,000, and which is authorized under such laws to exercise
corporate trust powers and is subject to supervision or examination by Federal,
State or District of Columbia authority. Such corporation shall have a place of
business in the Borough of Manhattan, The City of New York if there be such a
corporation in such location willing to act upon reasonable and customary terms
and conditions. If such corporation publishes reports of condition at least
annually, pursuant to law or to the requirements of the aforesaid supervising or
examining authority, then for the purposes of this Section, the combined capital
and surplus of such corporation shall be deemed to be its combined capital and
surplus as set forth in its most recent report of condition so published. In
case at any time the Trustee shall cease to be eligible in accordance with the
provisions of this Section, the Trustee shall resign immediately in the manner
and with the effect specified in Section 6.10.
The provisions of this Section 6.09 are in furtherance of and subject
to Section 310(a) of the Trust Indenture Act of 1939.
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SECTION 6.10. Resignation and Removal; Appointment of Successor
Trustee. (a) The Trustee, or any trustee or trustees hereafter appointed, may at
any time resign with respect to one or more or all series of Securities by
giving written notice of resignation to the Issuer and by mailing notice of such
resignation to the Holders of then Outstanding Registered Securities of each
series affected at their addresses as they shall appear on the registry books.
Upon receiving such notice of resignation, the Issuer shall promptly appoint a
successor trustee or trustees with respect to the applicable series by written
instrument in duplicate, executed by authority of the Board of Directors, one
copy of which instrument shall be delivered to the resigning Trustee and one
copy to the successor trustee or trustees. If no successor trustee shall have
been so appointed with respect to any series and have accepted appointment
within 30 days after the mailing of such notice of resignation, the resigning
trustee may petition any court of competent jurisdiction for the appointment of
a successor trustee, or any Securityholder who has been a bona fide Holder of a
Security or Securities of the applicable series for at least six months may,
subject to the provisions of Section 5.12, on behalf of himself and all others
similarly situated, petition any such court for the appointment of a successor
trustee. Such court may thereupon, after such notice, if any, as it may deem
proper and prescribe, appoint a successor trustee.
(b) In case at any time any of the following shall occur:
(i) the Trustee shall fail to comply with the provisions of Section
310(b) of the Trust Indenture Act of 1939 with respect to any series of
Securities after written request therefor by the Issuer or by any
Securityholder who has been a bona fide Holder of a Security or
Securities of such series for at least six months; or
(ii) the Trustee shall cease to be eligible in accordance with the
provisions of Section 6.09 and Section 310(a) of the Trust Indenture
Act of 1939 and shall fail to resign after written request therefor by
the Issuer or by any Securityholder; or
(iii) the Trustee shall become incapable of acting with respect to any
series of Securities, or shall be adjudged a bankrupt or insolvent, or
a receiver or liquidator of the Trustee or of its property shall be
appointed, or any public officer shall take charge or control of the
Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation;
then, in any such case, the Issuer may remove the Trustee with respect to the
applicable series of Securities and appoint a successor trustee for such series
by written instrument, in duplicate, executed by order of the Board of Directors
of the
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Issuer, one copy of which instrument shall be delivered to the Trustee so
removed and one copy to the successor trustee, or, subject to the provisions of
Section 315(e) of the Trust Indenture Act of 1939, any Securityholder who has
been a bona fide Holder of a Security or Securities of such series for at least
six months may on behalf of himself and all others similarly situated, petition
any court of competent jurisdiction for the removal of the Trustee and the
appointment of a successor trustee with respect to such series. Such court may
thereupon, after such notice, if any, as it may deem proper and prescribe,
remove the Trustee and appoint a successor trustee.
(c) The Holders of a majority in aggregate principal amount of the
Securities of each series at the time outstanding may at any time remove the
Trustee with respect to Securities of such series and appoint a successor
trustee with respect to the Securities of such series by delivering to the
Trustee so removed, to the successor trustee so appointed and to the Issuer the
evidence provided for in Section 7.01 of the action in that regard taken by the
Securityholders.
(d) Any resignation or removal of the Trustee with respect to any
series and any appointment of a successor trustee with respect to such series
pursuant to any of the provisions of this Section 6.10 shall become effective
upon acceptance of appointment by the successor trustee as provided in Section
6.11.
SECTION 6.11. Acceptance of Appointment by Successor Trustee. Any
successor trustee appointed as provided in Section 6.10 shall execute and
deliver to the Issuer and to its predecessor trustee an instrument accepting
such appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee with respect to all or any applicable series shall become
effective and such successor trustee, without any further act, deed or
conveyance, shall become vested with all rights, powers, duties and obligations
with respect to such series of its predecessor hereunder, with like effect as if
originally named as trustee for such series hereunder; but, nevertheless, on the
written request of the Issuer or of the successor trustee, upon payment of its
charges then unpaid, the trustee ceasing to act shall, subject to Section 10.04,
pay over to the successor trustee all moneys at the time held by it hereunder
and shall execute and deliver an instrument transferring to such successor
trustee all such rights, powers, duties and obligations. Upon reasonable request
of any such successor trustee, the Issuer shall execute any and all reasonable
instruments in writing for more fully and certainly vesting in and confirming to
such successor trustee all such rights and powers. Any trustee ceasing to act
shall, nevertheless, retain a prior claim upon all property or funds held or
collected by such trustee to secure any amounts then due it pursuant to the
provisions of Section 6.06.
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If a successor trustee is appointed with respect to the Securities of
one or more (but not all) series, the Issuer, the predecessor trustee and each
successor trustee with respect to the Securities of any applicable series shall
execute and deliver an indenture supplemental hereto which shall contain such
provisions as shall be deemed necessary or desirable to confirm that all the
rights, powers, trusts and duties of the predecessor trustee with respect to the
Securities of any series as to which the predecessor trustee is not retiring
shall continue to be vested in the predecessor trustee, and shall add to or
change any of the provisions of this Indenture as shall be necessary to provide
for or facilitate the administration of the trusts hereunder by more than one
Trustee, it being understood that nothing herein or in such supplemental
indenture shall constitute such Trustees co-trustees of the same trust and that
each such Trustee shall be trustee of a trust or trusts under separate
indentures.
No successor trustee with respect to any series of Securities shall
accept appointment as provided in this Section 6.11 unless at the time of such
acceptance such successor trustee shall be qualified under Section 310(b) of the
Trust Indenture Act of 1939 and eligible under the provisions of Section 6.09.
Upon acceptance of appointment by any successor trustee as provided in
this Section 6.11, the successor trustee shall give notice thereof (i) if any
Unregistered Securities of a series affected are then Outstanding, to the
Holders thereof, (A) by mail to such Holders who have filed their names and
addresses with the Trustee within the two years preceding the notice at such
addresses as were so furnished to the Trustee and (B) either through the
customary notice provisions of the clearing system or systems through which
beneficial interests in such Unregistered Securities are owned if such
Unregistered Securities are held only in global form or by publication at least
once in an Authorized Newspaper in the Borough of Manhattan, The City of New
York, and at least once in an Authorized Newspaper in London (and, if required
by Section 3.06, at least once in an Authorized Newspaper in Luxembourg), and
(ii) if any Registered Securities of a series affected are then Outstanding, by
mailing notice to the Holders of then Outstanding Registered Securities of each
series affected at their addresses as they shall appear on the registry books.
If the acceptance of appointment is substantially contemporaneous with the
resignation, then the notice called for by the preceding sentence may be
combined with the notice called for by Section 6.10.
SECTION 6.12. Merger, Conversion, Consolidation or Succession to
Business of Trustee. Any corporation into which the Trustee may be merged or
converted or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which the Trustee shall be a
party, or any corporation succeeding by sale or otherwise to all or
substantially all of the corporate trust
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business of the Trustee, shall be the successor of the Trustee hereunder,
provided that such corporation shall be qualified under Section 310(b) of the
Trust Indenture Act of 1939 and eligible under the provisions of Section 6.09,
without the execution or filing of any paper or any further act on the part of
any of the parties hereto, anything herein to the contrary notwithstanding.
In case at the time such successor to the Trustee shall succeed to the
trusts created by this Indenture any of the Securities of any series shall have
been authenticated but not delivered, any such successor to the Trustee may
adopt the certificate of authentication of any predecessor Trustee and deliver
such Securities so authenticated; and, in case at that time any of the
Securities of any series shall not have been authenticated, any successor to the
Trustee may authenticate such Securities either in the name of any predecessor
hereunder or in the name of the successor Trustee; and in all such cases such
certificate shall have the full force which it is anywhere in the Securities of
such series or in this Indenture provided that the certificate of the Trustee
shall have; provided, that the right to adopt the certificate of authentication
of any predecessor Trustee or to authenticate Securities of any series in the
name of any predecessor Trustee shall apply only to its successor or successors
by merger, conversion or consolidation.
SECTION 6.13. Preferential Collection of Claims. If and when the
Trustee shall be or become a creditor of the Issuer (or any other obligor upon
the Securities of any series), the Trustee shall be subject to the provisions of
the Trust Indenture Act regarding the collection of the claims against the
Issuer (or any such other obligor).
SECTION 6.14. Appointment of Authenticating Agent. As long as any
Securities of a series remain Outstanding, the Trustee may, by an instrument in
writing, appoint with the approval of the Issuer an authenticating agent (the
"Authenticating Agent") which shall be authorized to act on behalf of the
Trustee to authenticate Securities, including Securities issued upon exchange,
registration of transfer, partial redemption or pursuant to Section 2.09.
Securities of each such series authenticated by such Authenticating Agent shall
be entitled to the benefits of this Indenture and shall be valid and obligatory
for all purposes as if authenticated by the Trustee. Whenever reference is made
in this Indenture to the authentication and delivery of Securities of any series
by the Trustee or to the Trustee's Certificate of Authentication, such reference
shall be deemed to include authentication and delivery on behalf of the Trustee
by an Authenticating Agent for such series and a Certificate of Authentication
executed on behalf of the Trustee by such Authenticating Agent. Such
Authenticating Agent shall at all times be a corporation organized and doing
business under the laws of the United States of America or of any State,
authorized under such laws to exercise corporate trust powers, having a combined
capital and surplus of at least
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$5,000,000 (determined as provided in Section 6.09 with respect to the Trustee)
and subject to supervision or examination by Federal or State authority.
Any corporation into which any Authenticating Agent may be merged or
converted, or with which it may be consolidated, or any corporation resulting
from any merger, conversion or consolidation to which any Authenticating Agent
shall be a party, or any corporation succeeding by sale or otherwise to the
corporate agency business of any Authenticating Agent, shall continue to be
the Authenticating Agent with respect to all series of Securities for which it
served as Authenticating Agent without the execution or filing of any paper or
any further act on the part of the Trustee or such Authenticating Agent. Any
Authenticating Agent may at any time, and if it shall cease to be eligible
shall, resign by giving written notice of resignation to the Trustee and to
the Issuer.
Upon receiving such a notice of resignation or upon such a termination,
or in case at any time any Authenticating Agent shall cease to be eligible in
accordance with the provisions of this Section 6.14 with respect to one or more
series of Securities, the Trustee shall upon receipt of an Issuer Order appoint
a successor Authenticating Agent and the Issuer shall provide notice of such
appointment to all Holders of Securities of such series in the manner and to the
extent provided in Section 11.04. Any successor Authenticating Agent upon
acceptance of its appointment hereunder shall become vested with all rights,
powers, duties and responsibilities of its predecessor hereunder, with like
effect as if originally named as Authenticating Agent. The Issuer agrees to pay
to the Authenticating Agent for such series from time to time reasonable
compensation. The Authenticating Agent for the Securities of any series shall
have no responsibility or liability for any action taken by it as such at the
direction of the Trustee.
Sections 6.02, 6.03, 6.04, 6.06, 6.09 and 7.03 shall be applicable to
any Authenticating Agent.
ARTICLE 7
CONCERNING THE SECURITYHOLDERS
SECTION 7.01. Evidence of Action Taken by Securityholders. Any request,
demand, authorization, direction, notice, consent, waiver or other action
provided by this Indenture to be given or taken by a specified percentage in
principal amount of the Securityholders of any or all series may be embodied in
and evidenced by one or more instruments of substantially similar tenor signed
by such specified percentage of Securityholders in person or by agent duly
appointed
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in writing; and, except as herein otherwise expressly provided, such action
shall become effective when such instrument or instruments are delivered to the
Trustee. Proof of execution of any instrument or of a writing appointing any
such agent shall be sufficient for any purpose of this Indenture and (subject to
Sections 6.01 and 6.02) conclusive in favor of the Trustee and the Issuer, if
made in the manner provided in this Article.
SECTION 7.02. Proof of Execution of Instruments and of Holding of
Securities. Subject to Sections 6.01 and 6.02, the execution of any instrument
by a Securityholder or his agent or proxy may be proved in the following manner:
(a) The fact and date of the execution by any Holder of any instrument
may be proved by the certificate of any notary public or other officer of any
jurisdiction authorized to take acknowledgments of deeds or administer oaths
that the person executing such instruments acknowledged to him the execution
thereof, or by an affidavit of a witness to such execution sworn to before any
such notary or other such officer. Where such execution is by or on behalf of
any legal entity other than an individual, such certificate or affidavit shall
also constitute sufficient proof of the authority of the person executing the
same. The fact of the holding by any Holder of an Unregistered Security of any
series, and the identifying number of such Security and the date of his holding
the same, may be proved by the production of such Security or by a certificate
executed by any trust company, bank, banker or recognized securities dealer
wherever situated satisfactory to the Trustee, if such certificate shall be
deemed by the Trustee to be satisfactory. Each such certificate shall be dated
and shall state that on the date thereof a Security of such series bearing a
specified identifying number was deposited with or exhibited to such trust
company, bank, banker or recognized securities dealer by the Person named in
such certificate. Any such certificate may be issued in respect of one or more
Unregistered Securities of one or more series specified therein. The holding by
the Person named in any such certificate of any Unregistered Securities of any
series specified therein shall be presumed to continue for a period of one year
from the date of such certificate unless at the time of any determination of
such holding (i) another certificate bearing a later date issued in respect of
the same Securities shall be produced, or (ii) the Security of such series
specified in such certificate shall be produced by some other Person, or (iii)
the Security of such series specified in such certificate shall have ceased to
be Outstanding. Subject to Sections 6.01 and 6.02, the fact and date of the
execution of any such instrument and the amount and numbers of Securities of any
series held by the Person so executing such instrument and the amount and
numbers of any Security or Securities for such series may also be proven in
accordance with such reasonable rules and regulations as may be prescribed by
the Trustee for such series or in any other manner which the Trustee for such
series may deem sufficient.
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(b) In the case of Registered Securities, the ownership of such
Securities shall be proved by the Security register or by a certificate of the
Security registrar.
The Issuer may set a record date for purposes of determining the
identity of Holders of Registered Securities of any series entitled to vote or
consent to any action referred to in Section 7.01, which record date may be set
at any time or from time to time by notice to the Trustee, for any date or dates
(in the case of any adjournment or reconsideration) not more than 60 days nor
less than five days prior to the proposed date of such vote or consent, and
thereafter, notwithstanding any other provisions hereof, with respect to
Registered Securities of any series, only Holders of Registered Securities of
such series of record on such record date shall be entitled to so vote or give
such consent or revoke such vote or consent.
SECTION 7.03. Holders to Be Treated as Owners. The Issuer, the Trustee
and any agent of the Issuer or the Trustee may deem and treat the Person in
whose name any Security shall be registered upon the Security register for such
series as the absolute owner of such Security (whether or not such Security
shall be overdue and notwithstanding any notation of ownership or other writing
thereon) for the purpose of receiving payment of or on account of the principal
of and, subject to the provisions of this Indenture, interest on such Security
and for all other purposes; and neither the Issuer nor the Trustee nor any agent
of the Issuer or the Trustee shall be affected by any notice to the contrary.
The Issuer, the Trustee and any agent of the Issuer or the Trustee may treat the
Holder of any Unregistered Security and the Holder of any Coupon as the absolute
owner of such Unregistered Security or Coupon (whether or not such Unregistered
Security or Coupon shall be overdue) for the purpose of receiving payment
thereof or on account thereof and for all other purposes and neither the Issuer,
the Trustee, nor any agent of the Issuer or the Trustee shall be affected by any
notice to the contrary. All such payments so made to any such Person, or upon
his order, shall be valid, and, to the extent of the sum or sums so paid,
effectual to satisfy and discharge the liability for moneys payable upon any
such Unregistered Security or Coupon.
SECTION 7.04. Securities Owned by Issuer Deemed Not Outstanding. In
determining whether the Holders of the requisite aggregate principal amount of
Outstanding Securities of any or all series have concurred in any direction,
consent or waiver under this Indenture, Securities which are owned by the Issuer
or any other obligor on the Securities with respect to which such determination
is being made or by any Person directly or indirectly controlling or controlled
by or under direct or indirect common control with the Issuer or any other
obligor on the Securities with respect to which such determination is being made
shall be disregarded and deemed not to be Outstanding for the purpose of any
such
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determination, except that for the purpose of determining whether the Trustee
shall be protected in relying on any such direction, consent or waiver only
Securities which the Trustee knows are so owned shall be so disregarded.
Securities so owned which have been pledged in good faith may be regarded as
Outstanding if the pledgee establishes to the satisfaction of the Trustee the
pledgee's right so to act with respect to such Securities and that the pledgee
is not the Issuer or any other obligor upon the Securities or any Person
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer or any other obligor on the Securities. In case
of a dispute as to such right, the advice of nationally recognized counsel shall
be full protection in respect of any decision made by the Trustee in accordance
with such advice; provided, however, that this provision shall not protect the
Trustee from liability for its own gross negligence, willful misconduct,
recklessness or bad faith or if the Trustee knows that such written advice is
based on erroneous information, or in the exercise of reasonable care should
know that the same is erroneous. Upon request of the Trustee, the Issuer shall
furnish to the Trustee promptly an Officer's Certificate listing and identifying
all Securities, if any, known by the Issuer to be owned or held by or for the
account of any of the above-described Persons; and, subject to Sections 6.01 and
6.02, the Trustee shall be entitled to accept such Officer's Certificate as
conclusive evidence of the facts therein set forth and of the fact that all
Securities not listed therein are Outstanding for the purpose of any such
determination.
SECTION 7.05. Right of Revocation of Action Taken. At any time prior to
(but not after) the evidencing to the Trustee, as provided in Section 7.01, of
the taking of any action by the Holders of the percentage in aggregate principal
amount of the Securities of any or all series, as the case may be, specified in
this Indenture in connection with such action, any Holder of a Security the
serial number of which is shown by the evidence to be included among the serial
numbers of the Securities the Holders of which have consented to such action
may, by filing written notice at the Corporate Trust Office and upon proof of
holding as provided in this Article, revoke such action so far as concerns such
Security. Except as aforesaid any such action taken by the Holder of any
Security shall be conclusive and binding upon such Holder and upon all future
Holders and owners of such Security and of any Securities issued in exchange or
substitution therefor or on registration of transfer thereof, irrespective of
whether or not any notation in regard thereto is made upon any such Security.
Any action taken by the Holders of the percentage in aggregate principal amount
of the Securities of any or all series, as the case may be, specified in this
Indenture in connection with such action shall be conclusively binding upon the
Issuer, the Trustee and the Holders of all the Securities affected by such
action.
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ARTICLE 8
SUPPLEMENTAL INDENTURES
SECTION 8.01. Supplemental Indentures Without Consent of
Securityholders. The Issuer, when authorized by a resolution of its Board of
Directors (which resolution may provide general terms or parameters for such
action and may provide that the specific terms of such action may be determined
in accordance with or pursuant to an Issuer Order), and the Trustee may from
time to time and at any time enter into an indenture or indentures supplemental
hereto for one or more of the following purposes:
(a) to convey, transfer, assign, mortgage or pledge to the Trustee as
security for the Securities of one or more series any property or assets;
(b) to evidence the succession of another corporation to the Issuer, or
successive successions, and the assumption by the successor corporation of the
covenants, agreements and obligations of the Issuer pursuant to Article 9;
(c) to add to the covenants of the Issuer such further covenants,
restrictions, conditions or provisions as the Issuer and the Trustee shall
consider to be for the protection of the Holders of Securities or Coupons, and
to make the occurrence, or the occurrence and continuance, of a default in any
such additional covenants, restrictions, conditions or provisions an Event of
Default permitting the enforcement of all or any of the several remedies
provided in this Indenture as herein set forth; provided, that in respect of any
such additional covenant, restriction, condition or provision such supplemental
indenture may provide for a particular period of grace after default (which
period may be shorter or longer than that allowed in the case of other defaults)
or may provide for an immediate enforcement upon such an Event of Default or may
limit the remedies available to the Trustee upon such an Event of Default or may
limit the right of the Holders of a majority in aggregate principal amount of
the Securities of such series to waive such an Event of Default;
(d) to cure any ambiguity or to correct or supplement any provision
contained herein or in any supplemental indenture which may be defective or
inconsistent with any other provision contained herein or in any supplemental
indenture, or to make any other provisions as the Issuer may deem necessary or
desirable, provided that no such action shall adversely affect the interests of
the Holders of the Securities or Coupons;
(e) to establish the forms or terms of Securities of any series or of
the Coupons appertaining to such Securities as permitted by Sections 2.01 and
2.03; and
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(f) to evidence and provide for the acceptance of appointment hereunder
by a successor trustee with respect to the Securities of one or more series and
to add to or change any of the provisions of this Indenture as shall be
necessary to provide for or facilitate the administration of the trusts
hereunder by more than one trustee, pursuant to the requirements of Section
6.11.
The Trustee is hereby authorized to join with the Issuer in the
execution of any such supplemental indenture, to make any further appropriate
agreements and stipulations which may be therein contained and to accept the
conveyance, transfer, assignment, mortgage or pledge of any property thereunder,
but the Trustee shall not be obligated to enter into any such supplemental
indenture which affects the Trustee's own rights, duties or immunities under
this Indenture or otherwise.
Any supplemental indenture authorized by the provisions of this Section
may be executed without the consent of the Holders of any of the Securities at
the time outstanding, notwithstanding any of the provisions of Section 8.02.
SECTION 8.02. Supplemental Indentures with Consent of Securityholders.
With the consent (evidenced as provided in Article 7) of the Holders of not less
than a majority in aggregate principal amount of the Securities at the time
Outstanding of all series affected by such supplemental indenture (voting as one
class), the Issuer, when authorized by a resolution of its Board of Directors
(which resolution may provide general terms or parameters for such action and
may provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may, from time
to time and at any time, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders of the
Securities of each such series or of the Coupons appertaining to such
Securities; provided, that no such supplemental indenture shall (a)(i) extend
the final maturity of any Security, (ii) reduce the principal amount thereof,
(iii) reduce the rate or extend the time of payment of interest thereon, (iv)
reduce any amount payable on redemption thereof, (v) make the principal thereof
(including any amount in respect of original issue discount), or interest
thereon payable in any coin or currency other than that provided in the
Securities and Coupons or in accordance with the terms thereof, (vi) modify or
amend any provisions for converting any currency into any other currency as
provided in the Securities or Coupons or in accordance with the terms thereof,
(vii) reduce the amount of the principal of an Original Issue Discount Security
that would be due and payable upon an acceleration of the maturity thereof
pursuant to Section 5.01 or the amount thereof provable in
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bankruptcy pursuant to Section 5.02, (viii) modify or amend any provisions
relating to the conversion or exchange of the Securities or Coupons for
securities of the Issuer or of other entities or other property (or the cash
value thereof), including the determination of the amount of securities or other
property (or cash) into which the Securities shall be converted or exchanged,
other than as provided in the antidilution provisions or other similar
adjustment provisions of the Securities or Coupons or otherwise in accordance
with the terms thereof, (ix) alter the provisions of Section 11.11 or 11.12 or
impair or affect the right of any Securityholder to institute suit for the
payment thereof or, if the Securities provide therefor, any right of repayment
at the option of the Securityholder, in each case without the consent of the
Holder of each Security so affected, or (b) reduce the aforesaid percentage of
Securities of any series, the consent of the Holders of which is required for
any such supplemental indenture, without the consent of the Holders of each
Security so affected.
A supplemental indenture which changes or eliminates any covenant or
other provision of this Indenture which has expressly been included solely for
the benefit of one or more particular series of Securities, or which modifies
the rights of Holders of Securities of such series, or of Coupons appertaining
to such Securities, with respect to such covenant or provision, shall be deemed
not to affect the rights under this Indenture of the Holders of Securities of
any other series or of the Coupons appertaining to such Securities.
Upon the request of the Issuer, accompanied by a copy of a resolution
of the Board of Directors (which resolution may provide general terms or
parameters for such action and may provide that the specific terms of such
action may be determined in accordance with or pursuant to an Issuer Order)
certified by the secretary or an assistant secretary of the Issuer authorizing
the execution of any such supplemental indenture, and upon the filing with the
Trustee of evidence of the consent of the Holders of the Securities as aforesaid
and other documents, if any, required by Section 7.01, the Trustee shall join
with the Issuer in the execution of such supplemental indenture unless such
supplemental indenture affects the Trustee's own rights, duties or immunities
under this Indenture or otherwise, in which case the Trustee may in its
discretion, but shall not be obligated to, enter into such supplemental
indenture.
It shall not be necessary for the consent of the Securityholders under
this Section to approve the particular form of any proposed supplemental
indenture, but it shall be sufficient if such consent shall approve the
substance thereof.
Promptly after the execution by the Issuer and the Trustee of any
supplemental indenture pursuant to the provisions of this Section, the Trustee
shall give notice thereof (i) if any Unregistered Securities of a series
affected are
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then Outstanding, to the Holders thereof, (A) by mail to such Holders who have
filed their names and addresses with the Trustee within the two years preceding
the notice at such addresses as were so furnished to the Trustee and (B) either
through the customary notice provisions of the clearing system or systems
through which beneficial interests in such Unregistered Securities are owned if
such Unregistered Securities are held only in global form or by publication at
least once in an Authorized Newspaper in the Borough of Manhattan, The City of
New York, and at least once in an Authorized Newspaper in London (and, if
required by Section 3.06, at least once in an Authorized Newspaper in
Luxembourg), and (ii) if any Registered Securities of a series affected are then
Outstanding, by mailing notice thereof by first class mail to the Holders of
then Outstanding Registered Securities of each series affected at their
addresses as they shall appear on the registry books, and in each case such
notice shall set forth in general terms the substance of such supplemental
indenture. Any failure of the Issuer to give such notice, or any defect therein,
shall not, however, in any way impair or affect the validity of any such
supplemental indenture.
SECTION 8.03. Effect of Supplemental Indenture. Upon the execution of
any supplemental indenture pursuant to the provisions hereof, this Indenture
shall be and be deemed to be modified and amended in accordance therewith and
the respective rights, limitations of rights, obligations, duties and immunities
under this Indenture of the Trustee, the Issuer and the Holders of Securities of
each series affected thereby shall thereafter be determined, exercised and
enforced hereunder subject in all respects to such modifications and amendments,
and all the terms and conditions of any such supplemental indenture shall be and
be deemed to be part of the terms and conditions of this Indenture for any and
all purposes.
SECTION 8.04. Documents to Be Given to Trustee. The Trustee, subject to
the provisions of Sections 6.01 and 6.02, may receive an Officer's Certificate
and an Opinion of Counsel as conclusive evidence that any supplemental indenture
executed pursuant to this Article 8 complies with the applicable provisions of
this Indenture.
SECTION 8.05. Notation on Securities in Respect of Supplemental
Indentures. Securities of any series authenticated and delivered after the
execution of any supplemental indenture pursuant to the provisions of this
Article may bear a notation in form approved by the Trustee for such series as
to any matter provided for by such supplemental indenture or as to any action
taken by Securityholders. If the Issuer or the Trustee shall so determine, new
Securities of any series so modified as to conform, in the opinion of the
Trustee and the Board of Directors, to any modification of this Indenture
contained in any such supplemental indenture may be prepared by the Issuer,
authenticated by the
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Trustee and delivered in exchange for the Securities of such series then
Outstanding.
SECTION 8.06. Subordination Unimpaired. This Indenture may not be
amended to alter the subordination of any of the Outstanding Securities without
the written consent of each holder of Senior Indebtedness then outstanding that
would be adversely affected thereby.
ARTICLE 9
CONSOLIDATION, MERGER, SALE OR CONVEYANCE
SECTION 9.01. Issuer May Consolidate, Etc. on Certain Terms. Subject
to the provisions of Section 9.02, nothing contained in this Indenture or in
any of the Securities shall prevent any consolidation or merger of the Issuer
with or into any other Person or Persons (whether or not affiliated with the
Issuer), or successive consolidations or mergers in which the Issuer or its
successor or successors shall be a party or parties, or shall prevent any
sale, conveyance or lease (or successive sales, conveyances or leases) of all
or substantially all of the property of the Issuer, to any other Person
(whether or not affiliated with the Issuer), authorized to acquire and operate
the same and that shall be organized under the laws of the United States of
America, any state thereof or the District of Columbia; provided, however,
that upon any such consolidation, merger, sale, conveyance or lease, the due
and punctual payment of the principal of and premium, if any, and interest on
all of the Securities, according to their tenor and the due and punctual
performance and observance of all of the covenants and conditions of this
Indenture to be performed by the Issuer, shall be expressly assumed, by
supplemental indenture satisfactory in form to the Trustee, executed and
delivered to the Trustee by the Person (if other than the Issuer) formed by
such consolidation, or into which the Issuer shall have been merged, or by the
Person that shall have acquired or leased such property, and such supplemental
indenture shall provide for conversion rights (if applicable).
SECTION 9.02. Successor Corporation to be Substituted. In case of any
such consolidation, merger, sale, conveyance or lease and upon the assumption by
the successor Person, by supplemental indenture, executed and delivered to the
Trustee and satisfactory in form to the Trustee, of the due and punctual payment
of the principal of and premium, if any, and interest on all of the Securities
and the due and punctual performance of all of the covenants and conditions of
this Indenture to be performed by the Issuer, such successor Person shall
succeed to and be substituted for the Issuer, with the same effect as if it had
been named herein as the party of this first part. Such successor Person
thereupon may cause to
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be signed, and may issue either in its own name or in the name of NVIDIA
Corporation any or all of the Securities, issuable hereunder that theretofore
shall not have been signed by the Issuer and delivered to the Trustee; and, upon
the order of such successor Person instead of the Issuer and subject to all the
terms, conditions and limitations in this Indenture prescribed, the Trustee
shall authenticate and shall deliver, or cause to be authenticated and
delivered, any Securities that previously shall have been signed and delivered
by the officers of the Issuer to the Trustee for authentication, and any
Securities that such successor Person thereafter shall cause to be signed and
delivered to the Trustee for that purpose. All the Securities so issued shall in
all respects have the same legal rank and benefit under this Indenture as the
Securities theretofore or thereafter issued in accordance with the terms of this
Indenture as though all of such Securities had been issued at the date of the
execution hereof. In the event of any such consolidation, merger, sale,
conveyance or lease, the Person named as the "Issuer" in the first paragraph of
this Indenture or any successor that shall thereafter have become such in the
manner prescribed in this Article 9 may be dissolved, wound up and liquidated at
any time thereafter and such Person shall be released from its liabilities as
obligor and maker of the Securities and from its obligations under this
Indenture.
In case of any such consolidation, merger, sale, conveyance or lease,
such changes in phraseology and form (but not in substance) may be made in the
Securities thereafter to be issued as may be appropriate.
SECTION 9.03. Opinion of Counsel to be Given Trustee. The Trustee shall
receive an Officer's Certificate and an Opinion of Counsel as conclusive
evidence that any such consolidation, merger, sale, conveyance or lease and any
such assumption complies with the provisions of this Article 9.
ARTICLE 10
SATISFACTION AND DISCHARGE OF INDENTURE; UNCLAIMED MONEYS
SECTION 10.01. Satisfaction and Discharge of Indenture. Unless
otherwise set forth in a supplemental indenture, (a) if at any time (i) the
Issuer shall have paid or caused to be paid the principal of and interest on all
the Securities of any series Outstanding hereunder and all unmatured Coupons
appertaining thereto (other than Securities of such series and Coupons
appertaining thereto which have been destroyed, lost or stolen and which have
been replaced or paid as provided in Section 2.09) as and when the same shall
have become due and payable, or (ii) the Issuer shall have delivered to the
Trustee for cancellation all Securities of any series theretofore authenticated
and all unmatured Coupons appertaining thereto (other than any Securities of
such series and Coupons appertaining thereto which shall have been destroyed,
lost or stolen
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and which shall have been replaced or paid as provided in Section 2.09) or (iii)
in the case of any series of Securities where the exact amount (including the
currency of payment) of principal of and interest due on which can be determined
at the time of making the deposit referred to in clause (B) below, (A) all the
Securities of such series and all unmatured Coupons appertaining thereto not
theretofore delivered to the Trustee for cancellation shall have become due and
payable, or are by their terms to become due and payable within one year or are
to be called for redemption within one year under arrangements satisfactory to
the Trustee for the giving of notice of redemption, and (B) the Issuer shall
have irrevocably deposited or caused to be deposited with the Trustee as trust
funds the entire amount in cash (other than moneys repaid by the Trustee or any
paying agent to the Issuer in accordance with Section 10.04) or, in the case of
any series of Securities the payments on which may only be made in Dollars,
direct obligations of the United States of America, backed by its full faith and
credit ("U.S. Government Obligations"), maturing as to principal and interest at
such times and in such amounts as will insure the availability of cash, or a
combination thereof, sufficient in the opinion of a nationally recognized firm
of independent public accountants expressed in a written certification thereof
delivered to the Trustee, to pay (1) the principal and interest on all
Securities of such series and Coupons appertaining thereto on each date that
such principal or interest is due and payable and (2) any mandatory sinking fund
payments on the dates on which such payments are due and payable in accordance
with the terms of the Indenture and the Securities of such series; and if, in
any such case, the Issuer shall also pay or cause to be paid all other sums
payable hereunder by the Issuer, then this Indenture shall cease to be of
further effect (except as to (i) rights of registration of transfer and exchange
of Securities of such Series and of Coupons appertaining thereto and the
Issuer's right of optional redemption, if any, (ii) substitution of mutilated,
defaced, destroyed, lost or stolen Securities or Coupons, (iii) rights of
holders of Securities and Coupons appertaining thereto to receive payments of
principal thereof and interest thereon, upon the original stated due dates
therefor (but not upon acceleration), and remaining rights of the Holders to
receive mandatory sinking fund payments, if any, (iv) the rights, obligations,
duties and immunities of the Trustee hereunder, (v) the rights of the Holders of
Securities of such series and Coupons appertaining thereto as beneficiaries
hereof with respect to the property so deposited with the Trustee payable to all
or any of them, and (vi) the obligations of the Issuer under Section 3.02) and
the Trustee, on demand of the Issuer accompanied by an Officer's Certificate and
an Opinion of Counsel and at the cost and expense of the Issuer, shall execute
proper instruments acknowledging such satisfaction of and discharging this
Indenture; provided, that the rights of Holders of the Securities and Coupons to
receive amounts in respect of principal of and interest on the Securities and
Coupons held by them shall not be delayed longer than required by
then-applicable mandatory rules or policies of any securities exchange upon
which the Securities are listed. The Issuer agrees to
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reimburse the Trustee for any costs or expenses thereafter reasonably and
properly incurred and to compensate the Trustee for any services thereafter
reasonably and properly rendered by the Trustee in connection with this
Indenture or the Securities of such series.
(b) The following provisions shall apply to the Securities of each
series unless specifically otherwise provided in a Board Resolution, Officer's
Certificate or indenture supplemental hereto provided pursuant to Section 2.03.
In addition to discharge of the Indenture pursuant to the next preceding
paragraph, in the case of any series of Securities the exact amounts (including
the currency of payment) of principal of and interest due on which can be
determined at the time of making the deposit referred to in clause (i) below,
the Issuer shall be deemed to have paid and discharged the entire indebtedness
on all the Securities of such a series and the Coupons appertaining thereto on
the 91st day after the date of the deposit referred to in clause (i) below, and
the provisions of this Indenture with respect to the Securities of such series
and Coupons appertaining thereto shall no longer be in effect (except as to (A)
rights of registration of transfer and exchange of Securities of such series and
of Coupons appertaining thereto and the Issuer's right of optional redemption,
if any, (B) substitution of mutilated, defaced, destroyed, lost or stolen
Securities or Coupons, (C) rights of Holders of Securities and Coupons
appertaining thereto to receive payments of principal thereof and interest
thereon, upon the original stated due dates therefor (but not upon
acceleration), and remaining rights of the Holders to receive mandatory sinking
fund payments, if any, (D) the rights, obligations, duties and immunities of the
Trustee hereunder, (E) the rights of the Holders of Securities of such series
and Coupons appertaining thereto as beneficiaries hereof with respect to the
property so deposited with the Trustee payable to all or any of them and (F) the
obligations of the Issuer under Section 3.02) and the Trustee, at the expense of
the Issuer, shall at the Issuer's request, execute proper instruments
acknowledging the same, if
(i) with reference to this provision the Issuer has irrevocably
deposited or caused to be irrevocably deposited with the Trustee as
trust funds in trust, specifically pledged as security for, and
dedicated solely to, the benefit of the Holders of the Securities of
such series and Coupons appertaining thereto (A) cash in an amount, or
(B) in the case of any series of Securities the payments on which may
only be made in Dollars, U.S. Government Obligations, maturing as to
principal and interest at such times and in such amounts as will insure
the availability of cash or (C) a combination thereof, sufficient, in
the opinion of a nationally recognized firm of independent public
accountants expressed in a written certification thereof delivered to
the Trustee, to pay (1) the principal and interest on all Securities of
such series and Coupons appertaining thereto on each date that such
principal or interest is due and payable and (2) any mandatory
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sinking fund payments on the dates on which such payments are due and
payable in accordance with the terms of the Indenture and the
Securities of such series;
(ii) such deposit will not result in a breach or violation of, or
constitute a default under, any agreement or instrument to which the
Issuer is a party or by which it is bound;
(iii) the Issuer has delivered to the Trustee an Opinion of Counsel
based on the fact that (x) the Issuer has received from, or there has
been published by, the Internal Revenue Service a ruling or (y) since
the date hereof, there has been a change in the applicable Federal
income tax law, in either case to the effect that, and such opinion
shall confirm that, the Holders of the Securities of such series and
Coupons appertaining thereto will not recognize income, gain or loss
for Federal income tax purposes as a result of such deposit, defeasance
and discharge and will be subject to Federal income tax on the same
amount and in the same manner and at the same times, as would have been
the case if such deposit, defeasance and discharge had not occurred;
(iv) the Issuer has delivered to the Trustee an Officer's Certificate
and an Opinion of Counsel, each stating that all conditions precedent
provided for relating to the defeasance contemplated by this provision
have been complied with;
(v) no event or condition shall exist that, pursuant to the provisions
of Section 13.01, would prevent the Issuer from making payments of the
principal of or interest on the Securities of such series and Coupons
appertaining thereto on the date of such deposit or at any time during
the period ending on the 91st day after the date of such deposit (it
being understood that this condition shall not be deemed satisfied
until the expiration of such period); and
(vi) the Issuer has delivered to the Trustee an Opinion of Counsel to
the effect that (x) the trust funds will not be subject to any rights
of holders of Senior Indebtedness, including without limitation those
arising under Article 13 of this Indenture, and (y) after the 91st day
following the deposit, the trust funds will not be subject to the
effect of any applicable bankruptcy, insolvency, reorganization or
similar laws affecting creditors' rights generally, except that if a
court were to rule under any such law in any case or proceeding that
the trust funds remained property of the Issuer, no opinion is given as
to the effect of such laws on the trust funds except the following: (A)
assuming such trust funds remained in the Trustee's
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possession prior to such court ruling to the extent not paid to Holders
of Securities of such series and Coupons appertaining thereto, the
Trustee will hold, for the benefit of such Holders, a valid and
perfected security interest in such trust funds that is not avoidable
in bankruptcy or otherwise, (B) such Holders will be entitled to
receive adequate protection of their interests in such trust funds if
such trust funds are used, and (C) no property, rights in property or
other interests granted to the Trustee or such Holders in exchange for
or with respect to any of such funds will be subject to any prior
rights of holders of Senior Indebtedness, including without limitation
those arising under Article 13 of this Indenture.
SECTION 10.02. Application by Trustee of Funds Deposited for Payment of
Securities. Subject to Section 10.04, all moneys deposited with the Trustee (or
other trustee) pursuant to Section 10.01 shall be held in trust and applied by
it to the payment, either directly or through any paying agent (including the
Issuer acting as its own paying agent), to the Holders of the particular
Securities of such series and of Coupons appertaining thereto for the payment or
redemption of which such moneys have been deposited with the Trustee, of all
sums due and to become due thereon for principal and interest; but such money
need not be segregated from other funds except to the extent required by law.
SECTION 10.03. Repayment of Moneys Held by Paying Agent. In connection
with the satisfaction and discharge of this Indenture with respect to Securities
of any series, all moneys then held by any paying agent under the provisions of
this Indenture with respect to such series of Securities shall, upon demand of
the Issuer, be repaid to it or paid to the Trustee and thereupon such paying
agent shall be released from all further liability with respect to such moneys.
SECTION 10.04. Return of Moneys Held by Trustee and Paying Agent
Unclaimed for Two Years. Any moneys deposited with or paid to the Trustee or any
paying agent for the payment of the principal of or interest on any Security of
any series or Coupons attached thereto and not applied but remaining unclaimed
for two years after the date upon which such principal or interest shall have
become due and payable, shall, upon the written request of the Issuer and unless
otherwise required by mandatory provisions of applicable escheat or abandoned or
unclaimed property law, be repaid to the Issuer by the Trustee for such series
or such paying agent, and the Holder of the Securities of such series and of any
Coupons appertaining thereto shall, unless otherwise required by mandatory
provisions of applicable escheat or abandoned or unclaimed property laws,
thereafter look only to the Issuer for any payment which such Holder may be
entitled to collect, and all liability of the Trustee or any paying agent with
respect to such moneys shall thereupon cease; provided, however, that the
Trustee or such
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paying agent, before being required to make any such repayment with respect to
moneys deposited with it for any payment (a) in respect of Registered Securities
of any series, shall at the expense of the Issuer, mail by first-class mail to
Holders of such Securities at their addresses as they shall appear on the
Security register, and (b) in respect of Unregistered Securities of any series,
shall at the expense of the Issuer either give through the customary notice
provisions of the clearing system or systems through which beneficial interests
in such Unregistered Securities are owned if such Unregistered Securities are
held only in global form or cause to be published once, in an Authorized
Newspaper in the Borough of Manhattan, The City of New York and once in an
Authorized Newspaper in London (and if required by Section 3.06, once in an
Authorized Newspaper in Luxembourg), notice, that such moneys remain and that,
after a date specified therein, which shall not be less than thirty days from
the date of such mailing or publication, any unclaimed balance of such money
then remaining will be repaid to the Issuer.
SECTION 10.05. Indemnity for U.S. Government Obligations. The Issuer
shall pay and indemnify the Trustee against any tax, fee or other charge imposed
on or assessed against the U.S. Government Obligations deposited pursuant to
Section 10.01 or the principal or interest received in respect of such
obligations.
ARTICLE 11
MISCELLANEOUS PROVISIONS
SECTION 11.01. Incorporators, Stockholders, Officers and Directors of
Issuer Exempt from Individual Liability. No recourse under or upon any
obligation, covenant or agreement contained in this Indenture, or in any
Security, or because of any indebtedness evidenced thereby, shall be had against
any incorporator, as such or against any past, present or future stockholder,
officer, employee or director, as such, of the Issuer or of any successor,
either directly or through the Issuer or any successor, under any rule of law,
statute or constitutional provision or by the enforcement of any assessment or
by any legal or equitable proceeding or otherwise, all such liability being
expressly waived and released by the acceptance of the Securities and the
Coupons appertaining thereto by the Holders thereof and as part of the
consideration for the issue of the Securities and the Coupons appertaining
thereto.
SECTION 11.02. Provisions of Indenture for the Sole Benefit of Parties
and Holders of Securities and Coupons. Nothing in this Indenture, in the
Securities or in the Coupons appertaining thereto, expressed or implied, shall
give or be construed to give to any person, firm or corporation, other than the
parties
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hereto and their successors and the holders of Senior Indebtedness and the
Holders of the Securities or Coupons, if any, any legal or equitable right,
remedy or claim under this Indenture or under any covenant or provision herein
contained, all such covenants and provisions being for the sole benefit of the
parties hereto and their successors, the holders of the Senior Indebtedness and
the Holders of the Securities or Coupons, if any.
SECTION 11.03. Successors and Assigns of Issuer Bound by Indenture. All
the covenants, stipulations, promises and agreements in this Indenture contained
by or in behalf of the Issuer shall bind its successors and assigns, whether so
expressed or not.
SECTION 11.04. Notices and Demands on Issuer, Trustee and Holders of
Securities and Coupons. Any notice or demand which by any provision of this
Indenture is required or permitted to be given or served by the Trustee or by
the Holders of Securities or Coupons to or on the Issuer may be given or served
by being deposited postage prepaid, first-class mail (except as otherwise
specifically provided herein) addressed (until another address of the Issuer is
filed by the Issuer with the Trustee) to NVIDIA Corporation, 3535 Monroe Street,
Santa Clara, California 95051, Attention: _. Any notice, direction, request or
demand by the Issuer or any Holder of Securities or Coupons to or upon the
Trustee shall be deemed to have been sufficiently given or served by being
deposited postage prepaid, first-class mail (except as otherwise specifically
provided herein) addressed (until another address of the Trustee is filed by the
Trustee with the Issuer) to Chase Manhattan Bank and Trust Company, N.A.,
101 California Street, Suite 2700, San Francisco, California 94111,
Attention: James Nagy.
Where this Indenture provides for notice to Holders of Registered
Securities, such notice shall be sufficiently given (unless otherwise herein
expressly provided) if in writing and mailed, first-class postage prepaid, to
each Holder entitled thereto, at his last address as it appears in the Security
register. In any case where notice to such Holders is given by mail, neither the
failure to mail such notice, nor any defect in any notice so mailed, to any
particular Holder shall affect the sufficiency of such notice with respect to
other Holders. Where this Indenture provides for notice in any manner, such
notice may be waived in writing by the Person entitled to receive such notice,
either before or after the event, and such waiver shall be the equivalent of
such notice. Waivers of notice by Holders shall be filed with the Trustee, but
such filing shall not be a condition precedent to the validity of any action
taken in reliance upon such waiver.
In case, by reason of the suspension of or irregularities in regular
mail service, it shall be impracticable to mail notice to the Issuer when such
notice is required to be given pursuant to any provision of this Indenture, then
any manner
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of giving such notice as shall be reasonably satisfactory to the Trustee shall
be deemed to be a sufficient giving of such notice.
SECTION 11.05. Officer's Certificates and Opinions of Counsel;
Statements to Be Contained Therein. Upon any application or demand by the Issuer
to the Trustee to take any action under any of the provisions of this Indenture,
the Issuer shall furnish to the Trustee an Officer's Certificate stating that
all conditions precedent provided for in this Indenture relating to the proposed
action have been complied with and an Opinion of Counsel stating that in the
opinion of such counsel all such conditions precedent have been complied with,
except that in the case of any such application or demand as to which the
furnishing of such documents is specifically required by any provision of this
Indenture relating to such particular application or demand, no additional
certificate or opinion need be furnished.
Each certificate or opinion provided for in this Indenture and
delivered to the Trustee with respect to compliance with a condition or covenant
provided for in this Indenture shall include (a) a statement that the person
making such certificate or opinion has read such covenant or condition, (b) a
brief statement as to the nature and scope of the examination or investigation
upon which the statements or opinions contained in such certificate or opinion
are based, (c) a statement that, in the opinion of such person, he has made such
examination or investigation as is necessary to enable him to express an opinion
as to whether or not such covenant or condition has been complied with and (d) a
statement as to whether or not, in the opinion of such person, such condition or
covenant has been complied with.
Any certificate, statement or opinion of an officer of the Issuer may
be based, insofar as it relates to legal matters, upon a certificate or opinion
of or representations by counsel, unless such officer knows that the certificate
or opinion or representations with respect to the matters upon which his
certificate, statement or opinion may be based as aforesaid are erroneous, or in
the exercise of reasonable care should know that the same are erroneous. Any
certificate, statement or opinion of counsel may be based, insofar as it relates
to factual matters, information with respect to which is in the possession of
the Issuer, upon the certificate, statement or opinion of or representations by
an officer or officers of the Issuer, unless such counsel knows that the
certificate, statement or opinion or representations with respect to the matters
upon which his certificate, statement or opinion may be based as aforesaid are
erroneous, or in the exercise of reasonable care should know that the same are
erroneous.
Any certificate, statement or opinion of an officer of the Issuer or of
counsel may be based, insofar as it relates to accounting matters, upon a
certificate
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or opinion of or representations by an accountant or firm of accountants in the
employ of the Issuer, unless such officer or counsel, as the case may be, knows
that the certificate or opinion or representations with respect to the
accounting matters upon which his certificate, statement or opinion may be based
as aforesaid are erroneous, or in the exercise of reasonable care should know
that the same are erroneous.
Any certificate or opinion of any independent firm of public
accountants filed with and directed to the Trustee shall contain a statement
that such firm is independent.
SECTION 11.06. Payments Due on Saturdays, Sundays and Holidays. If the
date of maturity of interest on or principal of the Securities of any series or
any Coupons appertaining thereto or the date fixed for redemption or repayment
of any such Security or Coupon shall not be a Business Day, then payment of
interest or principal need not be made on such date, but may be made on the next
succeeding Business Day with the same force and effect as if made on the date of
maturity or the date fixed for redemption, and no interest shall accrue for the
period after such date.
SECTION 11.07. Conflict of Any Provision of Indenture with Trust
Indenture Act of 1939. If and to the extent that any provision of this Indenture
limits, qualifies or conflicts with the duties imposed by, or with another
provision (an "incorporated provision") included in this Indenture by operation
of, Sections 310 to 318, inclusive, of the Trust Indenture Act of 1939, such
imposed duties or incorporated provision shall control.
SECTION 11.08. New York Law to Govern. This Indenture and each Security
and Coupon shall be deemed to be a contract under the laws of the State of New
York, and for all purposes shall be construed in accordance with the laws of
such State, except as may otherwise be required by mandatory provisions of law.
SECTION 11.09. Counterparts. This Indenture may be executed in any
number of counterparts, each of which shall be an original; but such
counterparts shall together constitute but one and the same instrument.
SECTION 11.10. Effect of Headings. The Article and Section headings
herein and the Table of Contents are for convenience only and shall not affect
the construction hereof.
SECTION 11.11. Securities in a Foreign Currency. Unless otherwise
specified in an Officer's Certificate delivered pursuant to Section 2.03 of this
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Indenture with respect to a particular series of Securities, whenever for
purposes of this Indenture any action may be taken by the Holders of a specified
percentage in aggregate principal amount of Securities of all series or all
series affected by a particular action at the time Outstanding and, at such
time, there are Outstanding Securities of any series which are denominated in a
coin or currency other than Dollars, then the principal amount of Securities of
such series which shall be deemed to be Outstanding for the purpose of taking
such action shall be that amount of Dollars that could be obtained for such
amount at the Market Exchange Rate. For purposes of this Section 11.11, Market
Exchange Rate shall mean the noon Dollar buying rate in New York City for cable
transfers of that currency published by the Federal Reserve Bank of New York. If
such Market Exchange Rate is not available for any reason with respect to such
currency, the Trustee shall use, in its sole discretion and without liability on
its part, such quotation of the Federal Reserve Bank of New York as of the most
recent available date, or quotations from one or more major banks in The City of
New York or in the country of issue of the currency in question, or such other
quotations as the Trustee shall deem appropriate. The provisions of this
paragraph shall apply in determining the equivalent principal amount in respect
of Securities of a series denominated in a currency other than Dollars in
connection with any action taken by Holders of Securities pursuant to the terms
of this Indenture.
All decisions and determinations of the Trustee regarding the Market
Exchange Rate or any alternative determination provided for in the preceding
paragraph shall be in its sole discretion and shall, in the absence of manifest
error, be conclusive to the extent permitted by law for all purposes and
irrevocably binding upon the Issuer and all Holders.
SECTION 11.12. Judgment Currency. The Issuer agrees, to the fullest
extent that it may effectively do so under applicable law, that (a) if for the
purpose of obtaining judgment in any court it is necessary to convert the sum
due in respect of the principal of or interest on the Securities of any series
(the "Required Currency") into a currency in which a judgment will be rendered
(the "Judgment Currency"), the rate of exchange used shall be the rate at which
in accordance with normal banking procedures the Trustee could purchase in The
City of New York the Required Currency with the Judgment Currency on the day on
which final unappealable judgment is entered, unless such day is not a New York
Banking Day, then, to the extent permitted by applicable law, the rate of
exchange used shall be the rate at which in accordance with normal banking
procedures the Trustee could purchase in The City of New York the Required
Currency with the Judgment Currency on the New York Banking Day preceding the
day on which a final unappealable judgment is entered, and (b) its obligations
under this Indenture to make payments in the Required Currency (i) shall not be
discharged or satisfied by any tender, or any recovery pursuant to any judgment
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(whether or not entered in accordance with subsection (a)), in any currency
other than the Required Currency, except to the extent that such tender or
recovery shall result in the actual receipt, by the payee, of the full amount of
the Required Currency expressed to be payable in respect of such payments, (ii)
shall be enforceable as an alternative or additional cause of action for the
purpose of recovering in the Required Currency the amount, if any, by which such
actual receipt shall fall short of the full amount of the Required Currency so
expressed to be payable and (iii) shall not be affected by judgment being
obtained for any other sum due under this Indenture. For purposes of the
foregoing, "New York Banking Day" means any day except a Saturday, Sunday or a
legal holiday in The City of New York or a day on which banking institutions in
The City of New York are authorized or required by law or executive order to
close.
ARTICLE 12
REDEMPTION OF SECURITIES AND SINKING FUNDS
SECTION 12.01. Applicability of Article. The provisions of this Article
shall be applicable to the Securities of any series which are redeemable before
their maturity or to any sinking fund for the retirement of Securities of a
series except as otherwise specified as contemplated by Section 2.03 for
Securities of such series.
SECTION 12.02. Notice of Redemption; Partial Redemptions. Notice of
redemption to the Holders of Registered Securities of any series to be redeemed
as a whole or in part at the option of the Issuer shall be given by mailing
notice of such redemption by first class mail, postage prepaid, to such Holders
of Securities of such series at their last addresses as they shall appear upon
the registry books at least 30 days and not more than 60 days prior to the date
fixed for redemption, or within such other redemption notice period as has been
designated for any Securities of such series pursuant to Section 2.03 or 2.04
(the "Redemption Notice Period"). Notice of redemption to the Holders of
Unregistered Securities to be redeemed as a whole or in part, who have filed
their names and addresses with the Trustee within two years preceding such
notice of redemption, shall be given by mailing notice of such redemption, by
first class mail, postage prepaid, at least 30 and not more than 60 days prior
to the date fixed for redemption or within any applicable Redemption Notice
Period to such Holders at such addresses as were so furnished to the Trustee
(and, in the case of any such notice given by the Issuer, the Trustee shall make
such information available to the Issuer for such purpose). Notice of redemption
to all other Holders of Unregistered Securities shall be published in an
Authorized Newspaper in the Borough of Manhattan, The City of New York and in an
Authorized Newspaper in London (and, if required by
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Section 3.06, in an Authorized Newspaper in Luxembourg), in each case, once in
each of three successive calendar weeks, the first publication to be not less
than 30 nor more than 60 days prior to the date fixed for redemption or within
any applicable Redemption Notice Period; provided that notice to Holders of
Unregistered Securities held only in global form may be made, at the option of
the Issuer, through the customary notice provisions of the clearing system or
systems through which beneficial interests in such Unregistered Securities are
owned. Any notice which is mailed in the manner herein provided shall be
conclusively presumed to have been duly given, whether or not the Holder
receives the notice. Failure to give notice by mail, or any defect in the notice
to the Holder of any Security of a series designated for redemption as a whole
or in part shall not affect the validity of the proceedings for the redemption
of any other Security of such series.
The notice of redemption to each such Holder shall specify the
principal amount of each Security of such series held by such Holder to be
redeemed, the date fixed for redemption, the redemption price (or if not then
ascertainable, the manner of calculation thereof), the place or places of
payment, that payment will be made upon presentation and surrender of such
Securities and, in the case of Securities with Coupons attached thereto, of all
Coupons appertaining thereto maturing after the date fixed for redemption, that
such redemption is pursuant to the mandatory or optional sinking fund, or both,
if such be the case, that interest accrued to the date fixed for redemption will
be paid as specified in such notice and that on and after said date interest
thereon or on the portions thereof to be redeemed will cease to accrue. In case
any Security of a series is to be redeemed in part only the notice of redemption
shall state the portion of the principal amount thereof to be redeemed and shall
state that on and after the date fixed for redemption, upon surrender of such
Security, a new Security or Securities of such series in principal amount equal
to the unredeemed portion thereof will be issued.
The notice of redemption of Securities of any series to be redeemed at
the option of the Issuer shall be given by the Issuer or, at the Issuer's
request, by the Trustee in the name and at the expense of the Issuer.
On or before the redemption date specified in the notice of redemption
given as provided in this Section, the Issuer will deposit with the Trustee or
with one or more paying agents (or, if the Issuer is acting as its own paying
agent, set aside, segregate and hold in trust as provided in Section 3.04) an
amount of money or other property sufficient to redeem on the redemption date
all the Securities of such series so called for redemption at the appropriate
redemption price, together with accrued interest to the date fixed for
redemption. The Issuer will deliver to the Trustee at least 70 days prior to the
date fixed for redemption or at least 10 days prior to the first day of any
applicable Redemption Notice Period
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an Officer's Certificate stating the aggregate principal amount of Securities to
be redeemed. In case of a redemption at the election of the Issuer prior to the
expiration of any restriction on such redemption, the Issuer shall deliver to
the Trustee, prior to the giving of any notice of redemption to Holders pursuant
to this Section, an Officer's Certificate stating that such restriction has been
complied with.
If less than all the Securities of a series are to be redeemed, the
Trustee shall select, in such manner as it shall deem appropriate and fair,
Securities of such Series to be redeemed in whole or in part. Securities may be
redeemed in part in multiples equal to the minimum authorized denomination for
Securities of such series or any multiple thereof. The Trustee shall promptly
notify the Issuer in writing of the Securities of such series selected for
redemption and, in the case of any Securities of such series selected for
partial redemption, the principal amount thereof to be redeemed. For all
purposes of this Indenture, unless the context otherwise requires, all
provisions relating to the redemption of Securities of any series shall relate,
in the case of any Security redeemed or to be redeemed only in part, to the
portion of the principal amount of such Security which has been or is to be
redeemed.
SECTION 12.03. Payment of Securities Called for Redemption. If notice
of redemption has been given as above provided, the Securities or portions of
Securities specified in such notice shall become due and payable on the date and
at the place stated in such notice at the applicable redemption price, together
with interest accrued to the date fixed for redemption, and on and after said
date (unless the Issuer shall default in the payment of such Securities at the
redemption price, together with interest accrued to said date) interest on the
Securities or portions of Securities so called for redemption shall cease to
accrue, and the unmatured Coupons, if any, appertaining thereto shall be void,
and, except as provided in Sections 6.05 and 10.04, such Securities shall cease
from and after the date fixed for redemption to be entitled to any benefit or
security under this Indenture, and the Holders thereof shall have no right in
respect of such Securities except the right to receive the redemption price
thereof and unpaid interest to the date fixed for redemption. On presentation
and surrender of such Securities at a place of payment specified in said notice,
together with all Coupons, if any, appertaining thereto maturing after the date
fixed for redemption, said Securities or the specified portions thereof shall be
paid and redeemed by the Issuer at the applicable redemption price, together
with interest accrued thereon to the date fixed for redemption; provided that
payment of interest becoming due on or prior to the date fixed for redemption
shall be payable in the case of Securities with Coupons attached thereto, to the
Holders of the Coupons for such interest upon surrender thereof, and in the case
of Registered Securities, to the Holders of such
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Registered Securities registered as such on the relevant record date subject to
the terms and provisions of Sections 2.03 and 2.07 hereof.
If any Security called for redemption shall not be so paid upon
surrender thereof for redemption, the principal shall, until paid or duly
provided for, bear interest from the date fixed for redemption at the rate of
interest or Yield to Maturity (in the case of an Original Issue Discount
Security) borne by such Security.
If any Security with Coupons attached thereto is surrendered for
redemption and is not accompanied by all appurtenant Coupons maturing after the
date fixed for redemption, the surrender of such missing Coupon or Coupons may
be waived by the Issuer and the Trustee, if there be furnished to each of them
such security or indemnity as they may require to save each of them harmless.
Upon presentation of any Security redeemed in part only, the Issuer
shall execute and the Trustee shall authenticate and deliver to or on the order
of the Holder thereof, at the expense of the Issuer, a new Security or
Securities of such series, of authorized denominations, in principal amount
equal to the unredeemed portion of the Security so presented.
SECTION 12.04. Exclusion of Certain Securities from Eligibility for
Selection for Redemption. Securities shall be excluded from eligibility for
selection for redemption if they are identified by registration and certificate
number in an Officer's Certificate delivered to the Trustee at least 40 days
prior to the last date on which notice of redemption may be given as being owned
of record and beneficially by, and not pledged or hypothecated by either (a) the
Issuer or (b) an entity specifically identified in such written statement as
directly or indirectly controlling or controlled by or under direct or indirect
common control with the Issuer.
SECTION 12.05. Mandatory and Optional Sinking Funds. The minimum amount
of any sinking fund payment provided for by the terms of the Securities of any
series is herein referred to as a "mandatory sinking fund payment", and any
payment in excess of such minimum amount provided for by the terms of the
Securities of any series is herein referred to as an "optional sinking fund
payment". The date on which a sinking fund payment is to be made is herein
referred to as the "sinking fund payment date".
In lieu of making all or any part of any mandatory sinking fund payment
with respect to any series of Securities in cash, the Issuer may at its option
(a) deliver to the Trustee Securities of such series theretofore purchased or
otherwise acquired (except upon redemption pursuant to the mandatory sinking
fund) by the
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Issuer or receive credit for Securities of such series (not previously so
credited) theretofore purchased or otherwise acquired (except as aforesaid) by
the Issuer and delivered to the Trustee for cancellation pursuant to Section
2.10, (b) receive credit for optional sinking fund payments (not previously so
credited) made pursuant to this Section, or (c) receive credit for Securities of
such series (not previously so credited) redeemed by the Issuer through any
optional redemption provision contained in the terms of such series. Securities
so delivered or credited shall be received or credited by the Trustee at the
sinking fund redemption price specified in such Securities.
On or before the 60th day next preceding each sinking fund payment date
or the 30th day next preceding the last day of any applicable Redemption Notice
Period relating to a sinking fund payment date for any series, the Issuer will
deliver to the Trustee an Officer's Certificate (which need not contain the
statements required by Section 11.05) (a) specifying the portion of the
mandatory sinking fund payment to be satisfied by payment of cash and the
portion to be satisfied by credit of Securities of such series and the basis for
such credit, (b) stating that none of the Securities of such series has
theretofore been so credited, (c) stating that no defaults in the payment of
interest or Events of Default with respect to such series have occurred (which
have not been waived or cured) and are continuing and (d) stating whether or not
the Issuer intends to exercise its right to make an optional sinking fund
payment with respect to such series and, if so, specifying the amount of such
optional sinking fund payment which the Issuer intends to pay on or before the
next succeeding sinking fund payment date. Any Securities of such series to be
credited and required to be delivered to the Trustee in order for the Issuer to
be entitled to credit therefor as aforesaid which have not theretofore been
delivered to the Trustee shall be delivered for cancellation pursuant to Section
2.10 to the Trustee with such Officer's Certificate (or reasonably promptly
thereafter if acceptable to the Trustee). Such Officer's Certificate shall be
irrevocable and upon its receipt by the Trustee the Issuer shall become
unconditionally obligated to make all the cash payments or payments therein
referred to, if any, on or before the next succeeding sinking fund payment date.
Failure of the Issuer, on or before any such 60th day or 30th day, if
applicable, to deliver such Officer's Certificate and Securities specified in
this paragraph, if any, shall not constitute a default but shall constitute, on
and as of such date, the irrevocable election of the Issuer (i) that the
mandatory sinking fund payment for such series due on the next succeeding
sinking fund payment date shall be paid entirely in cash without the option to
deliver or credit Securities of such series in respect thereof and (ii) that the
Issuer will make no optional sinking fund payment with respect to such series as
provided in this Section.
If the sinking fund payment or payments (mandatory or optional or both)
to be made in cash on the next succeeding sinking fund payment date plus any
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unused balance of any preceding sinking fund payments made in cash shall exceed
$50,000 (or the equivalent thereof in any Foreign Currency) or a lesser sum in
Dollars (or the equivalent thereof in any Foreign Currency) if the Issuer shall
so request with respect to the Securities of any particular series, such cash
shall be applied on the next succeeding sinking fund payment date to the
redemption of Securities of such series at the sinking fund redemption price
together with accrued interest to the date fixed for redemption. If such amount
shall be $50,000 (or the equivalent thereof in any Foreign Currency) or less and
the Issuer makes no such request then it shall be carried over until a sum in
excess of $50,000 (or the equivalent thereof in any Foreign Currency) is
available. The Trustee shall select, in the manner provided in Section 12.02,
for redemption on such sinking fund payment date a sufficient principal amount
of Securities of such series to absorb said cash, as nearly as may be, and shall
(if requested in writing by the Issuer) inform the Issuer of the serial numbers
of the Securities of such series (or portions thereof) so selected. Securities
shall be excluded from eligibility for redemption under this Section if they are
identified by registration and certificate number in an Officer's Certificate
delivered to the Trustee at least 60 days prior to the sinking fund payment date
or at least 30 days prior to the last day of any applicable Redemption Notice
Period relating to a sinking fund payment date as being owned of record and
beneficially by, and not pledged or hypothecated by either (a) the Issuer or (b)
an entity specifically identified in such Officer's Certificate as directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Issuer. The Trustee, in the name and at the expense of the
Issuer (or the Issuer, if it shall so request the Trustee in writing) shall
cause notice of redemption of the Securities of such series to be given in
substantially the manner provided in Section 12.02 (and with the effect provided
in Section 12.03) for the redemption of Securities of such series in part at the
option of the Issuer. The amount of any sinking fund payments not so applied or
allocated to the redemption of Securities of such series shall be added to the
next cash sinking fund payment for such series and, together with such payment,
shall be applied in accordance with the provisions of this Section. Any and all
sinking fund moneys held on the stated maturity date of the Securities of any
particular series (or earlier, if such maturity is accelerated), which are not
held for the payment or redemption of particular Securities of such series shall
be applied, together with other moneys, if necessary, sufficient for the
purpose, to the payment of the principal of, and interest on, the Securities of
such series at maturity.
On or before each sinking fund payment date, the Issuer shall pay to
the Trustee in cash or shall otherwise provide for the payment of all interest
accrued to the date fixed for redemption on Securities to be redeemed on the
next following sinking fund payment date.
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The Trustee shall not redeem or cause to be redeemed any Securities of
a series with sinking fund moneys or give any notice of redemption of Securities
for such series by operation of the sinking fund during the continuance of a
default in payment of interest on such Securities or of any Event of Default
except that, where the giving of notice of redemption of any Securities shall
theretofore have been made, the Trustee shall redeem or cause to be redeemed
such Securities, provided that it shall have received from the Issuer a sum
sufficient for such redemption. Except as aforesaid, any moneys in the sinking
fund for such series at the time when any such default or Event of Default shall
occur, and any moneys thereafter paid into the sinking fund, shall, during the
continuance of such default or Event of Default, be deemed to have been
collected under Article 5 and held for the payment of all such Securities. In
case such Event of Default shall have been waived as provided in Section 5.10 or
the default cured on or before the sixtieth day preceding the sinking fund
payment date in any year, such moneys shall thereafter be applied on the next
succeeding sinking fund payment date in accordance with this Section to the
redemption of such Securities.
ARTICLE 13
SUBORDINATION
SECTION 13.01. Agreement of Subordination. The Issuer covenants and
agrees, and each holder of a Security or Coupon issued hereunder by its
acceptance thereof likewise covenants and agrees, that all indebtedness
represented by the Securities and any Coupons shall be issued subject to the
provisions of this Article 13, and each Person holding any Security or Coupon,
whether upon original issue or upon registration of transfer, assignment or
exchange thereof, accepts and agrees to be bound by such provisions.
The payment of the principal of, premium, if any, and interest on
issued hereunder shall, to the extent and in the manner hereinafter set forth,
be subordinated and subject in right of payment to the prior payment in full of
all Senior Indebtedness, whether outstanding at the date of this Indenture or
thereafter incurred.
No provision of this Article 13 shall prevent the occurrence of any
default or Event of Default hereunder.
SECTION 13.02. Payments to Securityholders. No payment shall be made
with respect to the principal of premium, if any, or interest on the Securities
or any Coupons, except payments and distributions made by the Trustee as
permitted by the first or second paragraph of Section 13.05, if:
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(a) a default in the payment of principal, premium, if any, interest,
rent or other obligations in respect of Designated Senior Indebtedness occurs
and is continuing (or, in the case of Designated Senior Indebtedness for which
there is a period of grace, in the event of such a default that continues beyond
the period of grace, if any, specified in the instrument or lease evidencing
such Designated Senior Indebtedness) (a "Payment Default"), unless and until
such Payment Default shall have been cured or waived or shall have ceased to
exist; or
(b) a default, other than a Payment Default, on any Designated Senior
Indebtedness occurs and is continuing that then permits holders of such
Designated Senior Indebtedness to accelerate its maturity (or in the case of any
lease, a default occurs and is continuing that permits the lessor to either
terminate the lease or require the Issuer to make an irrevocable offer to
terminate the lease following an event of default thereunder) and the Trustee
receives a notice of the default (a "Payment Blockage Notice") from a holder of
Designated Senior Indebtedness, a Representative of Designated Senior
Indebtedness or the Issuer (a "Non-Payment Default").
If the Trustee receives any Payment Blockage Notice pursuant to clause
(ii) above, no subsequent Payment Blockage Notice shall be effective for
purposes of this Section 13.02 unless and until at least 365 days shall have
elapsed since the initial effectiveness of the immediately prior Payment
Blockage Notice. No Non- Payment Default that existed or was continuing on the
date of delivery of any Payment Blockage Notice to the Trustee shall be, or be
made, the basis for a subsequent Payment Blockage Notice.
The Issuer may and shall resume payments on and distributions in
respect of the Securities and Coupons upon the earlier of:
(i) the date upon which any such Payment Default is cured or waived or
ceases to exist, or
(ii) in the case of a Non-Payment Default, the earlier of (a) the date
upon which such default is cured or waived or ceases to exist or (b)
179 days after the applicable Payment Blockage Notice is received by
the Trustee if the maturity of such Designated Senior Indebtedness has
not been accelerated (or in the case of any lease, 179 days after
notice is received if the Issuer has not received notice that the
lessor under such lease has exercised its right to terminate the lease
or require the Issuer to make an irrevocable offer to terminate the
lease following an event of default thereunder),
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unless this Article 13 otherwise prohibits the payment or distribution at the
time of such payment or distribution.
Upon any payment by the Issuer, or distribution of assets of the Issuer
of any kind or character, whether in cash, property or securities, to creditors
upon any dissolution or winding up or liquidation or reorganization of the
Issuer, whether voluntary or involuntary or in bankruptcy, insolvency,
receivership or other proceedings, all amounts due or to become due upon all
Senior Indebtedness shall first be paid in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness (and satisfactory to the
holders of Senior Indebtedness in the case such Senior Indebtedness includes
Designated Senior Indebtedness), or payment thereof in accordance with its terms
provided for in cash or other payment satisfactory to the holders of such Senior
Indebtedness (and satisfactory to the holders of Senior Indebtedness in the case
such Senior Indebtedness includes Designated Senior Indebtedness) before any
payment is made on account of the principal of, premium, if any, or interest on
the Securities and any Coupons (except payments made pursuant to Article 10 from
monies deposited with the Trustee pursuant thereto prior to commencement of
proceedings for such dissolution, winding up, liquidation or reorganization),
and upon any such dissolution or winding up or liquidation or reorganization of
the Issuer or bankruptcy, insolvency, receivership or other similar proceeding,
any payment by the Issuer, or distribution of assets of the Issuer of any kind
or character, whether in cash, property or securities, to which the holders of
the Securities and any Coupons or the Trustee would be entitled, except for the
provisions of this Article 13, shall (except as aforesaid) be paid by the Issuer
or by any receiver, trustee in bankruptcy, liquidating trustee, agent or other
Person making such payment or distribution, or by the holders of the Securities
or any Coupons or by the Trustee under this Indenture if received by them or it,
directly to the holders of Senior Indebtedness (pro rata to such holders on the
basis of the respective amounts of Senior Indebtedness held by such holders, or
as otherwise required by law or a court order) or their Representative or
Representatives, as their respective interests may appear, to the extent
necessary to pay all Senior Indebtedness in full, in cash or other payment
satisfactory to the holders of such Senior Indebtedness (and satisfactory to the
holders of Senior Indebtedness in the case such Senior Indebtedness includes
Designated Senior Indebtedness), after giving effect to any concurrent payment
or distribution to or for the holders of Senior Indebtedness, before any payment
or distribution is made to the holders of the Securities and any Coupons or to
the Trustee.
For purposes of this Article 13, the words, "cash, property or
securities" shall not be deemed to include shares of stock of the Issuer as
reorganized or readjusted, or securities of the Issuer or any other corporation
provided for by a plan of reorganization or readjustment, the payment of which
is subordinated at
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least to the extent provided in this Article 13 with respect to the Securities
and any Coupons to the payment of all Senior Indebtedness which may at the time
be outstanding provided that (i) the Senior Indebtedness is assumed by the new
corporation, if any, resulting from any reorganization or readjustment, and (ii)
the rights of the holders of Senior Indebtedness (other than leases which are
not assumed by the Issuer or the new corporation, as the case may be) are not,
without the consent of such holders, altered by such reorganization or
readjustment. The consolidation of the Issuer with, or the merger of the Issuer
into, another corporation or the liquidation or dissolution of the Issuer
following the conveyance or transfer of its property as an entirety, or
substantially as an entirety, to another Person upon the terms and conditions
provided for in Article 9 shall not be deemed a dissolution, winding-up,
liquidation or reorganization for the purposes of this Section 13.02 if such
other Person shall, as a part of such consolidation, merger, conveyance or
transfer, comply with the conditions stated in Article 9.
In the event of the acceleration of the Securities because of an Event
of Default, no payment or distribution shall be made to the Trustee or any
holder of Securities or any Coupons in respect of the principal of, premium, if
any, or interest on the Securities and any Coupons, except payments and
distributions made by the Trustee as permitted by the first or second paragraph
of Section 13.05, until all Senior Indebtedness has been paid in full in cash or
other payment satisfactory to the holders of Senior Indebtedness (and
satisfactory to the holders of Designated Senior Indebtedness in the case such
Senior Indebtedness includes Designated Senior Indebtedness) or such
acceleration is rescinded in accordance with the terms of this Indenture. If
payment of the Securities is accelerated because of an Event of Default, the
Issuer or the Trustee shall promptly notify holders of Senior Indebtedness
(including Imperial Bank under the Loan Agreement) of the acceleration.
In the event that, notwithstanding the foregoing provisions, any
payment or distribution of assets of the Issuer of any kind or character,
whether in cash, property or securities (including, without limitation, by way
of setoff or otherwise), prohibited by the foregoing provisions in this Section
13.02, shall be received by the Trustee or the holders of the Securities or any
Coupons before all Senior Indebtedness is paid in full in cash or other payment
satisfactory to the holders of such Senior Indebtedness (and satisfactory to the
holders of Senior Indebtedness in the case such Senior Indebtedness includes
Designated Senior Indebtedness), or provision is made for such payment thereof
in accordance with its terms in cash or other payment satisfactory to the
holders of such Senior Indebtedness (and satisfactory to the holders of Senior
Indebtedness in the case such Senior Indebtedness includes Designated Senior
Indebtedness), such payment or distribution shall be held in trust for the
benefit of and shall be paid
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over or delivered to the holders of Senior Indebtedness or their Representative
or Representatives, as their respective interests may appear, as calculated by
the Issuer, for application to the payment of any Senior Indebtedness remaining
unpaid to the extent necessary to pay all Senior Indebtedness in full in cash or
other payment satisfactory to the holders of such Senior Indebtedness (and
satisfactory to the holders of Senior Indebtedness in the case such Senior
Indebtedness includes Designated Senior Indebtedness), after giving effect to
any concurrent payment or distribution to or for the holders of such Senior
Indebtedness.
Nothing in this Section 13.02 shall apply to claims of, or payments to,
the Trustee under or pursuant to Section 6.06. This Section 13.02 shall be
subject to the further provisions of Section 13.05.
SECTION 13.03. Subrogation. Subject to the payment in full of all
Senior Indebtedness, the rights of the holders of the Securities and any Coupons
shall be subrogated to the extent of the payments or distributions made to the
holders of such Senior Indebtedness pursuant to the provisions of this Article
13 (equally and ratably with the holders of all indebtedness of the Issuer which
by its express terms is subordinated to other indebtedness of the Issuer to
substantially the same extent as the Securities and any Coupons are subordinated
and is entitled to like rights of subrogation) to the rights of the holders of
Senior Indebtedness to receive payments or distributions of cash, property or
securities of the Issuer applicable to the Senior Indebtedness until the
principal, premium, if any, and interest on the Securities and any Coupons shall
be paid in full, and, for the purposes of such subrogation, no payments or
distributions to the holders of the Senior Indebtedness of any cash, property or
securities to which the holders of the Securities and any Coupons or the Trustee
would be entitled except for the provisions of this Article 13, and no payment
pursuant to the provisions of this Article 13, to or for the benefit of the
holders of Senior Indebtedness by holders of the Securities and any Coupons or
the Trustee, shall, as among the Issuer, its creditors other than holders of
Senior Indebtedness, and the holders of the Securities and any Coupons, be
deemed to be a payment by the Issuer to or on account of the Senior
Indebtedness, and no payments or distributions of cash, property or securities
to or for the benefit of the holders of the Securities and any Coupons pursuant
to the subrogation provisions of this Article 13, which would otherwise have
been paid to the holders of Senior Indebtedness, shall be deemed to be a payment
by the Issuer to or for the account of the Securities and any Coupons. It is
understood that the provisions of this Article 13 are intended solely for the
purposes of defining the relative rights of the holders of the Securities and
any Coupons, on the one hand, and the holders of the Senior Indebtedness, on the
other hand.
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Nothing contained in this Article 13 or elsewhere in this Indenture or
in the Securities or any Coupons is intended to or shall impair, as among the
Issuer, its creditors other than the holders of Senior Indebtedness, and the
holders of the Securities or any Coupons, the obligation of the Issuer, which is
absolute and unconditional, to pay to the holders of the Securities and any
Coupons the principal of, premium, if any, and interest on the Securities and
any Coupons as and when the same shall become due and payable in accordance with
their terms, or is intended to or shall affect the relative rights of the
holders of the Securities or any Coupons and creditors of the Issuer other than
the holders of the Senior Indebtedness, nor shall anything herein or therein
prevent the Trustee or the holder of any Security or Coupon from exercising all
remedies otherwise permitted by applicable law upon default under this
Indenture, subject to the rights, if any, under this Article 13 of the holders
of Senior Indebtedness in respect of cash, property or securities of the Issuer
received upon the exercise of any such remedy.
Upon any payment or distribution of assets of the Issuer referred to in
this Article 13, the Trustee, subject to the provisions of Section 6.01, and the
holders of the Securities or any Coupons shall be entitled to rely upon any
order or decree made by any court of competent jurisdiction in which such
bankruptcy, dissolution, winding up, liquidation or reorganization proceedings
are pending, or a certificate of the receiver, trustee in bankruptcy,
liquidating trustee, agent or other Person making such payment or distribution,
delivered to the Trustee or to the holders of the Securities or any Coupons, for
the purpose of ascertaining the Persons entitled to participate in such
distribution, the holders of the Senior Indebtedness and other indebtedness of
the Issuer, the amount thereof or payable thereon and all other facts pertinent
thereto or to this Article 13.
SECTION 13.04. Authorization to Effect Subordination. Each holder of a
Security or any Coupon by the holder's acceptance thereof authorizes and directs
the Trustee on the holder's behalf to take such action as may be necessary or
appropriate to effectuate the subordination as provided in this Article 13 and
appoints the Trustee to act as the holder's attorney-in-fact for any and all
such purposes. If the Trustee does not file a proper proof of claim or proof of
debt in the form required in any proceeding referred to in the third paragraph
of Section 5.02 hereof at least thirty (30) days before the expiration of the
time to file such claim, the holders of any Senior Indebtedness or their
Representatives are hereby authorized to file an appropriate claim for and on
behalf of the holders of the Securities and any Coupon.
SECTION 13.05. Notice to Trustee. The Issuer shall give prompt
written notice in the form of an Officers' Certificate to a Responsible
Officer of the Trustee and to any paying agent of any fact known to the Issuer
that would
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prohibit the making of any payment of monies to or by the Trustee or any paying
agent in respect of the Securities or any Coupon pursuant to the provisions of
this Article 13. Notwithstanding the provisions of this Article 13 or any other
provision of this Indenture, the Trustee shall not be charged with knowledge of
the existence of any facts that would prohibit the making of any payment of
monies to or by the Trustee in respect of the Securities or any Coupon pursuant
to the provisions of this Article 13, unless and until a Responsible Officer of
the Trustee shall have received written notice thereof at the Corporate Trust
Office from the Issuer (in the form of an Officer's Certificate) or a
Representative or a holder or holders of Senior Indebtedness, and before the
receipt of any such written notice, the Trustee, subject to the provisions of
Section 6.01, shall be entitled in all respects to assume that no such facts
exist; provided, however, that if on a date not less than one Business Day prior
to the date upon which by the terms hereof any such monies may become payable
for any purpose (including, without limitation, the payment of the principal of,
or premium, if any, or interest on any Security or Coupon) the Trustee shall not
have received, with respect to such monies, the notice provided for in this
Section 13.05, then, anything herein contained to the contrary notwithstanding,
the Trustee shall have full power and authority to apply monies received to the
purpose for which they were received, and shall not be affected by any notice to
the contrary that may be received by it on or after such prior date.
Notwithstanding anything in this Article 13 to the contrary, nothing
shall prevent any payment by the Trustee to the Securityholders of monies
deposited with it pursuant to Section 10.01, if a Responsible Officer of the
Trustee shall not have received written notice at the Corporate Trust Office on
or before one Business Day prior to the date such payment is due that such
payment is not permitted under Section 13.01 or 13.02.
The Trustee, subject to the provisions of Section 6.01, shall be
entitled to rely on the delivery to it of a written notice by a Representative
or a person representing himself to be a holder of Senior Indebtedness (or a
trustee on behalf of such holder) to establish that such notice has been given
by a Representative or a holder of Senior Indebtedness or a trustee on behalf of
any such holder or holders. The Trustee shall not be required to make any
payment or distribution to or on behalf of a holder of Senior Indebtedness
pursuant to this Article 13 unless it has received satisfactory evidence as to
the amount of Senior Indebtedness held by such Person, the extent to which such
Person is entitled to participate in such payment or distribution and any other
facts pertinent to the rights of such Person under this Article 13.
SECTION 13.06. Trustee's Relation to Senior Indebtedness. The
Trustee, in its individual capacity, shall be entitled to all the rights set
forth in this Article
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13 in respect of any Senior Indebtedness at any time held by it, to the same
extent as any other holder of Senior Indebtedness, and nothing in Section 6.13
or elsewhere in this Indenture shall deprive the Trustee of any of its rights as
such holder.
With respect to the holders of Senior Indebtedness, the Trustee
undertakes to perform or to observe only such of its covenants and obligations
as are specifically set forth in this Article 13, and no implied covenants or
obligations with respect to the holders of Senior Indebtedness shall be read
into this Indenture against the Trustee. The Trustee shall not be deemed to owe
any fiduciary duty to the holders of Senior Indebtedness and, subject to the
provisions of Section 6.01, the Trustee shall not be liable to any holder of
Senior Indebtedness (i) for any failure to make any payments or distributions to
such holder or (ii) if it shall pay over or deliver to holders of Securities or
any Coupon, the Issuer or any other Person money in compliance with this Article
13.
SECTION 13.07. No Impairment of Subordination. No right of any present
or future holder of any Senior Indebtedness to enforce subordination as herein
provided shall at anytime in any way be prejudiced or impaired by any act or
failure to act on the part of the Issuer or by any act or failure to act, in
good faith, by any such holder, or by any noncompliance by the Issuer with the
terms, provisions and covenants of this Indenture, regardless of any knowledge
thereof which any such holder may have or otherwise be charged with. Senior
Indebtedness may be created, renewed, refinanced, replaced, deferred, refunded,
amended, modified, supplemented or extended and holders of Senior Indebtedness
may exercise any rights under any instrument creating or evidencing such Senior
Indebtedness, including, without limitation, any waiver of default thereunder,
without any notice to or consent from the holders of the Securities or any
Coupon or the Trustee. No compromise, alteration, amendment, modification,
extension, renewal or other change of or waiver, consent or other action in
respect of, any liability or obligation under or in respect of the Senior
Indebtedness or any terms or conditions of any instrument creating or evidencing
such Senior Indebtedness shall in any way alter or affect any of the provisions
of this Article 13 or the subordination of the Securities and Coupons provided
thereby.
SECTION 13.08. Article Applicable to Paying Agents. If at any time any
paying agent other than the Trustee shall have been appointed by the Issuer and
be then acting hereunder, the term "Trustee" as used in this Article 13 shall
(unless the context otherwise requires) be construed as extending to and
including such paying agent within its meaning as fully for all intents and
purposes as if such paying agent were named in this Article 13 in addition to or
in place of the Trustee; provided, however, that the first paragraph of Section
13.05 shall not
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apply to the Issuer or any affiliate of the Issuer if it or such affiliate acts
as paying agent.
The Trustee shall not be responsible for the actions or inactions of
any other paying agents (including the Issuer if acting as its own paying agent)
and shall have no control of any funds held by such other paying agents.
SECTION 13.09. Senior Indebtedness Entitled to Rely. The holders of
Senior Indebtedness (including, without limitation, Designated Senior
Indebtedness) shall have the right to rely upon this Article 13, and no
amendment or modification of the provisions contained herein shall diminish the
rights of such holders unless such holders shall have agreed in writing thereto.
SECTION 13.10. Reliance on Judicial Order or Certificate of Liquidating
Agent. Upon any payment or distribution of assets of the Issuer referred to in
this Article 13, the Trustee and the Securityholders shall be entitled to rely
upon any order or decree entered by any court of competent jurisdiction in which
such insolvency, bankruptcy, receivership, liquidation, reorganization,
dissolution, winding up or similar case or proceeding is pending, or a
certificate of the trustee in bankruptcy, liquidating trustee, custodian,
receiver, assignee for the benefit of creditors, agent or other Person making
such payment or distribution, delivered to the Trustee or to the
Securityholders, for the purpose of ascertaining the Persons entitled to
participate in such payment or distribution, the holders of Senior Indebtedness
and other indebtedness of the Issuer, the amount thereof or payable thereon, the
amount or amounts paid or distributed thereon and all other facts pertinent
thereto or to this Article 13.
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IN WITNESS WHEREOF, the parties hereto have caused this Indenture to be
duly executed, and their respective corporate seals to be hereunto affixed and
attested, all as of March __, 2000.
NVIDIA CORPORATION
[CORPORATE SEAL]
By:
-----------------------------
Name:
Title:
Attest:
By:
-----------------------------
Title:
CHASE MANHATTAN BANK AND
TRUST COMPANY, N.A., TRUSTEE
[CORPORATE SEAL]
By:
-----------------------------
Name:
Title:
Attest:
By:
-----------------------------
Title:
85
<PAGE>
STATE OF CALIFORNIA )
) ss.:
COUNTY OF SAN MATEO )
On this ____ of ________, 2000 before me personally came , to me
personally known, who, being by me duly sworn, did depose and say that he
resides at that he is the of NVIDIA Corporation, one of the corporations
described in and which executed the above instrument; that he knows the
corporate seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
[NOTARIAL SEAL]
- --------------------------------------------
Notary Public
<PAGE>
STATE OF CALIFORNIA )
) ss.:
COUNTY OF SAN MATEO )
On this ____ of _________, 2000 before me personally came , to me
personally known, who, being by me duly sworn, did depose and say that he
resides at that he is a ____________ of ______________, one of the corporations
described in and which executed the above instrument; that he knows the
corporate seal of said corporation; that the seal affixed to said instrument is
such corporate seal; that it was so affixed by authority of the Board of
Directors of said corporation, and that he signed his name thereto by like
authority.
[NOTARIAL SEAL]
- --------------------------------------------
Notary Public
<PAGE>
EXHIBIT 4.5
[FORM OF SENIOR DEBT SECURITY]
CUSIP:
No. $
[To be included on Registered Global Securities only: Unless and until it is
exchanged in whole or in part for [Notes] [Debentures] in definitive registered
form, this [Note] [Debenture] may not be transferred except as a whole by the
Depositary to the nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.]
NVIDIA CORPORATION
__% [Note]
[Sinking Fund Debenture]
Due ___
NVIDIA CORPORATION, a Delaware corporation (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to , or registered assigns, at the
office or agency of the Company in New York, New York, the principal sum of
Dollars on _______________, in the coin or currency of the United States, and to
pay interest, semi-annually on ______ and ______ of each year, commencing
__________, on said principal sum at said office or agency, in like coin or
currency, at the rate per annum specified in the title of this [Note]
[Debenture], from the _____ or the ______, as the case may be, next preceding
the date of this [Note] [Debenture] to which interest has been paid or duly
provided for, unless the date hereof is a date to which interest has been paid
or duly provided for, in which case from the date of this [Note] [Debenture], or
unless no interest has been paid or duly provided for on these [Notes]
[Debentures], in which case from __________, until payment of said principal sum
has been made or duly provided for; provided, that payment of interest may be
made at the option of the Company by check mailed to the address of the person
entitled thereto as such address shall appear on the Security register or by
<PAGE>
wire transfer as provided in the Indenture. Notwithstanding the foregoing, if
the date hereof is after the __th day of _____ or ______ , as the case may be,
and before the following _____ or ______, this [Note] [Debenture] shall bear
interest from such ______ or ______; provided, that if the Company shall default
in the payment of interest due on such _____ or _____, then this [Note]
[Debenture] shall bear interest from the next preceding _____ or _____, to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for on these [Notes] [Debentures], from ________. The interest so
payable on any ____ or ____ will, subject to certain exceptions provided in the
Indenture referred to on the reverse hereof, be paid to the person in whose name
this [Note] [Debenture] is registered at the close of business on the ____ or
______, as the case may be, next preceding such _____ or ______, whether or not
such day is a Business Day.
Reference is made to the further provisions of this [Note] [Debenture]
set forth on the reverse hereof. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This [Note] [Debenture] shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been manually
signed by the Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, NVIDIA CORPORATION has caused this instrument to be
signed manually or by facsimile by its duly authorized officers and has caused a
facsimile of its corporate seal to be affixed hereunto or imprinted hereon.
(SEAL) NVIDIA CORPORATION
By
________________________________
Attest:
- ------------------------
2
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
Dated: CHASE MANHATTAN BANK AND TRUST COMPANY, N.A.,
as Trustee
By:
----------------------------------
Authorized Signatory
3
<PAGE>
REVERSE OF [NOTE] [DEBENTURE]
NVIDIA CORPORATION
__% [Note]
[Sinking Fund Debenture]
Due ____
This [Note] [Sinking Fund Debenture] is one of a duly authorized issue
of debentures, notes, bonds or other evidences of indebtedness of the Company
(hereinafter called the "Securities") of the series hereinafter specified, all
issued or to be issued under and pursuant to an indenture dated as of March _,
2000 (herein called the "Indenture"), duly executed and delivered by the Company
to Chase Manhattan Bank and Trust Company, N.A., as Trustee (herein called the
"Trustee"), to which Indenture and all indentures supplemental thereto reference
is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the Holders of the Securities. The Securities may be issued in one or more
series, which different series may be issued in various aggregate principal
amounts, may mature at different times, may bear interest (if any) at different
rates, may be subject to different redemption provisions (if any), may be
subject to different sinking, purchase or analogous funds (if any) and may
otherwise vary as in the Indenture provided. This [Note] [Debenture] is one of a
series designated as the ___% [Notes] [Sinking Fund Debentures] Due ___ of the
Company, limited in aggregate principal amount to $________.
Interest will be computed on the basis of a 360-day year of twelve
30-day months. The Company shall pay interest on overdue Principal and, to the
extent lawful, on overdue installments of interest at the rate per annum borne
by this [Note] [Debenture]. If a payment date is not a Business Day as defined
in the Indenture at a place of payment, payment may be made at that place on the
next succeeding day that is a Business Day, and no interest shall accrue for the
intervening period.
In case an Event of Default with respect to the ___% [Notes] [Sinking
Fund Debentures] Due ____, as defined in the Indenture, shall have occurred and
be continuing, the Principal hereof and the interest accrued hereon, if any, may
be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions which provide that, with the consent
(evidenced as provided in Article 7 of the Indenture) of the Holders of not less
than a majority in aggregate principal amount of the Securities at the time
4
<PAGE>
Outstanding of all series affected by such supplemental indenture (voting as one
class), the Issuer, when authorized by a resolution of its Board of Directors
(which resolution may provide general terms or parameters for such action and
may provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may, from time
to time and at any time, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders of the
Securities of each such series or of the Coupons appertaining to such
Securities; provided, that no such supplemental indenture shall (a)(i) extend
the final maturity of any Security, (ii) reduce the principal amount thereof,
(iii) reduce the rate or extend the time of payment of interest thereon, (iv)
reduce any amount payable on redemption thereof, (v) make the principal thereof
(including any amount in respect of original issue discount), or interest
thereon payable in any coin or currency other than that provided in the
Securities and Coupons or in accordance with the terms thereof, (vi) modify or
amend any provisions for converting any currency into any other currency as
provided in the Securities or Coupons or in accordance with the terms thereof,
(vii) reduce the amount of the principal of an Original Issue Discount Security
that would be due and payable upon an acceleration of the maturity thereof
pursuant to Section 5.01 of the Indenture or the amount thereof provable in
bankruptcy pursuant to Section 5.02 of the Indenture, (viii) modify or amend any
provisions relating to the conversion or exchange of the Securities or Coupons
for securities of the Issuer or of other entities or other property (or the cash
value thereof), including the determination of the amount of securities or other
property (or cash) into which the Securities shall be converted or exchanged,
other than as provided in the antidilution provisions or other similar
adjustment provisions of the Securities or Coupons or otherwise in accordance
with the terms thereof, (ix) alter the provisions of Section 11.11 of the
Indenture or 11.12 of the Indenture or impair or affect the right of any
Securityholder to institute suit for the payment thereof or, if the Securities
provide therefor, any right of repayment at the option of the Securityholder, in
each case without the consent of the Holder of each Security so affected, or (b)
reduce the aforesaid percentage of Securities of any series, the consent of the
Holders of which is required for any such supplemental indenture, without the
consent of the Holders of each Security so affected.
It is also provided in the Indenture that, subject to certain
conditions, the Holders of at least a majority in principal amount (or, if any
Securities are Original Issue Discount Securities, such portion of the principal
as is then accelerable) of the outstanding Securities of all series affected
(voting as a single class), by notice to the Trustee, may waive an existing
Default or Event of Default with respect to the Securities of such series and
its consequences, except a Default
5
<PAGE>
in the payment of Principal of or interest on any Security or in respect of a
covenant or provision of the Indenture which cannot be modified or amended
without the consent of the Holder of each outstanding Security affected. Upon
any such waiver, such Default shall cease to exist, and any Event of Default
with respect to the Securities of such series arising therefrom shall be deemed
to have been cured, for every purpose of the Indenture; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereto.
The Indenture provides that a series of Securities may include one or
more tranches (each a "tranche") of Securities, including Securities issued in a
Periodic Offering. The Securities of different tranches may have one or more
different terms, including authentication dates and public offering prices, but
all the Securities within each such tranche shall have identical terms,
including authentication date and public offering price. Notwithstanding any
other provision of the Indenture, subject to certain exceptions, with respect to
sections of the Indenture concerning the execution, authentication and terms of
the Securities, redemption of the Securities, Events of Default of the
Securities, defeasance of the Securities and amendment of the Indenture, if any
series of Securities includes more than one tranche, all provisions of such
sections applicable to any series of Securities shall be deemed equally
applicable to each tranche of any series of Securities in the same manner as
though originally designated a series unless otherwise provided with respect to
such series or tranche pursuant to a board resolution or a supplemental
indenture establishing such series or tranche.
No reference herein to the Indenture and no provision of this [Note]
[Debenture] or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the Principal of and any
premium and interest on this [Note] [Debenture] in the manner, at the place, at
the respective times, at the rate and in the coin or currency herein prescribed.
The [Notes] [Debentures] are issuable initially only in registered form
without coupons in denominations of [$1,000] or any integral multiple thereof at
the office or agency of the Company in the Borough of Manhattan, The City of New
York, and in the manner and subject to the limitations provided in the
Indenture.
[This [Note] [Debenture] will not be redeemable at the option of the
Company prior to maturity.] [This [Note] [Debenture] is redeemable prior to
maturity ...] [This Debenture is entitled to the benefits of a mandatory sinking
fund as follows ...]
6
<PAGE>
Upon due presentment for registration of transfer of this [Note]
[Debenture] at the office or agency of the Company in the Borough of Manhattan,
The City of New York, a new [Note or Notes] [Debenture or Debentures] of
authorized denominations for an equal aggregate principal amount will be issued
to the transferee in exchange therefor, subject to the limitations provided in
the Indenture, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Company, the Trustee and any agent of the Company or the Trustee
may deem and treat the registered Holder hereof as the absolute owner of this
[Note] [Debenture] (whether or not this [Note] [Debenture] shall be overdue and
notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the Principal hereof and,
subject to the provisions hereof, interest hereon, and for all other purposes,
and neither the Company nor the Trustee nor any agent of the Company or the
Trustee shall be affected by any notice to the contrary.
No recourse under or upon any obligation, covenant or agreement
contained in the Indenture or any indenture supplemental thereto or in any
[Note] [Debenture], or because of any indebtedness evidenced thereby, shall be
had against any incorporator as such, or against any past, present or future
stockholder, officer, director or employee, as such, of the Company or of any
successor, either directly or through the Company or any successor, under any
rule of law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance hereof and as
part of the consideration for the issue hereof.
Terms used herein which are defined in the Indenture shall have the
respective meanings assigned thereto in the Indenture.
The laws of the State of New York (without regard to conflicts of laws
principles thereof) shall govern this [Note] [Debenture].
7
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
[PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]
- --------------------------------------------------------------------------------
the within [Note] [Debenture] and all rights thereunder, hereby
- --------------------------------------------------------------------------------
irrevocably constituting and appointing such person attorney
- --------------------------------------------------------------------------------
to transfer such [Note] [Debenture] on the books of the Issuer, with full
- --------------------------------------------------------------------------------
power of substitution in the premises.
Dated:
______________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within [Note] [Debenture] in every
particular without alteration or enlargement or any change whatsoever.
Signature guarantee:
___________________________________
8
<PAGE>
EXHIBIT 4.6
[FORM OF SUBORDINATED DEBT SECURITY]
CUSIP:
No. $
[To be included on Registered Global Securities only: Unless and until it is
exchanged in whole or in part for [Notes] [Debentures] in definitive registered
form, this [Note] [Debenture] may not be transferred except as a whole by the
Depositary to the nominee of the Depositary or by a nominee of the Depositary to
the Depositary or another nominee of the Depositary or by the Depositary or any
such nominee to a successor Depositary or a nominee of such successor
Depositary.]
NVIDIA CORPORATION
__% [Note]
[Sinking Fund Debenture]
Due ___
NVIDIA CORPORATION, a Delaware corporation (the "Company", which term
includes any successor corporation under the Indenture hereinafter referred to),
for value received, hereby promises to pay to , or registered assigns, at the
office or agency of the Company in New York, New York, the principal sum of
Dollars on _______________, in the coin or currency of the United States, and to
pay interest, semi-annually on ______ and ______ of each year, commencing
__________, on said principal sum at said office or agency, in like coin or
currency, at the rate per annum specified in the title of this [Note]
[Debenture], from the _____ or the ______, as the case may be, next preceding
the date of this [Note] [Debenture] to which interest has been paid or duly
provided for, unless the date hereof is a date to which interest has been paid
or duly provided for, in which case from the date of this [Note] [Debenture], or
unless no interest has been paid or duly provided for on these [Notes]
[Debentures], in which case from __________, until payment of said principal sum
has been made or duly provided for; provided, that payment of interest may be
made at the option of the Company by check mailed to the address of the
<PAGE>
person entitled thereto as such address shall appear on the Security register or
by wire transfer as provided in the Indenture. Notwithstanding the foregoing, if
the date hereof is after the __th day of _____ or ______ , as the case may be,
and before the following _____ or ______, this [Note] [Debenture] shall bear
interest from such ______ or ______; provided, that if the Company shall default
in the payment of interest due on such _____ or _____, then this [Note]
[Debenture] shall bear interest from the next preceding _____ or _____, to which
interest has been paid or duly provided for or, if no interest has been paid or
duly provided for on these [Notes] [Debentures], from ________. The interest so
payable on any ____ or ____ will, subject to certain exceptions provided in the
Indenture referred to on the reverse hereof, be paid to the person in whose name
this [Note] [Debenture] is registered at the close of business on the ____ or
______, as the case may be, next preceding such _____ or ______, whether or not
such day is a Business Day.
Reference is made to the further provisions of this [Note] [Debenture]
set forth on the reverse hereof. Such further provisions shall for all purposes
have the same effect as though fully set forth at this place.
This [Note] [Debenture] shall not be valid or become obligatory for any
purpose until the certificate of authentication hereon shall have been manually
signed by the Trustee under the Indenture referred to on the reverse hereof.
IN WITNESS WHEREOF, NVIDIA CORPORATION has caused this instrument to be
signed manually or by facsimile by its duly authorized officers and has caused a
facsimile of its corporate seal to be affixed hereunto or imprinted hereon.
(SEAL) NVIDIA CORPORATION
Attest: By:
------------------------
- ---------------------------------------
2
<PAGE>
CERTIFICATE OF AUTHENTICATION
This is one of the Securities of the series designated therein referred
to in the within-mentioned Indenture.
Dated: CHASE MANHATTAN BANK AND TRUST COMPANY, N.A.,
as Trustee
By:
------------------------
Authorized Signatory
3
<PAGE>
REVERSE OF [NOTE] [DEBENTURE]
NVIDIA CORPORATION
__% [Note]
[Sinking Fund Debenture]
Due ____
This [Note] [Sinking Fund Debenture] is one of a duly authorized issue
of debentures, notes, bonds or other evidences of indebtedness of the Company
(hereinafter called the "Securities") of the series hereinafter specified, all
issued or to be issued under and pursuant to an indenture dated as of March _,
2000 (herein called the "Indenture"), duly executed and delivered by the Company
to Chase Manhattan Bank and Trust Company, N.A., as Trustee (herein called the
"Trustee"), to which Indenture and all indentures supplemental thereto reference
is hereby made for a description of the rights, limitations of rights,
obligations, duties and immunities thereunder of the Trustee, the Company and
the Holders of the Securities. The Securities may be issued in one or more
series, which different series may be issued in various aggregate principal
amounts, may mature at different times, may bear interest (if any) at different
rates, may be subject to different redemption provisions (if any), may be
subject to different sinking, purchase or analogous funds (if any) and may
otherwise vary as in the Indenture provided. This [Note] [Debenture] is one of a
series designated as the ___% [Notes] [Sinking Fund Debentures] Due ___ of the
Company, limited in aggregate principal amount to $________.
Interest will be computed on the basis of a 360-day year of twelve
30-day months. The Company shall pay interest on overdue Principal and, to the
extent lawful, on overdue installments of interest at the rate per annum borne
by this [Note] [Debenture]. If a payment date is not a Business Day as defined
in the Indenture at a place of payment, payment may be made at that place on the
next succeeding day that is a Business Day, and no interest shall accrue for the
intervening period.
In case an Event of Default with respect to the ___% [Notes] [Sinking
Fund Debentures] Due ____, as defined in the Indenture, shall have occurred and
be continuing, the Principal hereof and the interest accrued hereon, if any, may
be declared, and upon such declaration shall become, due and payable, in the
manner, with the effect and subject to the conditions provided in the Indenture.
The Indenture contains provisions which provide that, with the consent
(evidenced as provided in Article 7 of the Indenture) of the Holders of not less
than a majority in aggregate principal amount of the Securities at the time
4
<PAGE>
Outstanding of all series affected by such supplemental indenture (voting as one
class), the Issuer, when authorized by a resolution of its Board of Directors
(which resolution may provide general terms or parameters for such action and
may provide that the specific terms of such action may be determined in
accordance with or pursuant to an Issuer Order), and the Trustee may, from time
to time and at any time, enter into an indenture or indentures supplemental
hereto for the purpose of adding any provisions to or changing in any manner or
eliminating any of the provisions of this Indenture or of any supplemental
indenture or of modifying in any manner the rights of the Holders of the
Securities of each such series or of the Coupons appertaining to such
Securities; provided, that no such supplemental indenture shall (a)(i) extend
the final maturity of any Security, (ii) reduce the principal amount thereof,
(iii) reduce the rate or extend the time of payment of interest thereon, (iv)
reduce any amount payable on redemption thereof, (v) make the principal thereof
(including any amount in respect of original issue discount), or interest
thereon payable in any coin or currency other than that provided in the
Securities and Coupons or in accordance with the terms thereof, (vi) modify or
amend any provisions for converting any currency into any other currency as
provided in the Securities or Coupons or in accordance with the terms thereof,
(vii) reduce the amount of the principal of an Original Issue Discount Security
that would be due and payable upon an acceleration of the maturity thereof
pursuant to Section 5.01 of the Indenture or the amount thereof provable in
bankruptcy pursuant to Section 5.02 of the Indenture, (viii) modify or amend any
provisions relating to the conversion or exchange of the Securities or Coupons
for securities of the Issuer or of other entities or other property (or the cash
value thereof), including the determination of the amount of securities or other
property (or cash) into which the Securities shall be converted or exchanged,
other than as provided in the antidilution provisions or other similar
adjustment provisions of the Securities or Coupons or otherwise in accordance
with the terms thereof, (ix) alter the provisions of Section 11.11 of the
Indenture or 11.12 of the Indenture or impair or affect the right of any
Securityholder to institute suit for the payment thereof or, if the Securities
provide therefor, any right of repayment at the option of the Securityholder, in
each case without the consent of the Holder of each Security so affected, or (b)
reduce the aforesaid percentage of Securities of any series, the consent of the
Holders of which is required for any such supplemental indenture, without the
consent of the Holders of each Security so affected.
It is also provided in the Indenture that, subject to certain
conditions, the Holders of at least a majority in principal amount (or, if any
Securities are Original Issue Discount Securities, such portion of the principal
as is then accelerable) of the outstanding Securities of all series affected
(voting as a single class), by notice to the Trustee, may waive an existing
Default or Event of Default with respect to the Securities of such series and
its consequences, except a Default
5
<PAGE>
in the payment of Principal of or interest on any Security or in respect of a
covenant or provision of the Indenture which cannot be modified or amended
without the consent of the Holder of each outstanding Security affected. Upon
any such waiver, such Default shall cease to exist, and any Event of Default
with respect to the Securities of such series arising therefrom shall be deemed
to have been cured, for every purpose of the Indenture; but no such waiver shall
extend to any subsequent or other Default or Event of Default or impair any
right consequent thereto.
The Indenture provides that a series of Securities may include one or
more tranches (each a "tranche") of Securities, including Securities issued in a
Periodic Offering. The Securities of different tranches may have one or more
different terms, including authentication dates and public offering prices, but
all the Securities within each such tranche shall have identical terms,
including authentication date and public offering price. Notwithstanding any
other provision of the Indenture, subject to certain exceptions, with respect to
sections of the Indenture concerning the execution, authentication and terms of
the Securities, redemption of the Securities, Events of Default of the
Securities, defeasance of the Securities and amendment of the Indenture, if any
series of Securities includes more than one tranche, all provisions of such
sections applicable to any series of Securities shall be deemed equally
applicable to each tranche of any series of Securities in the same manner as
though originally designated a series unless otherwise provided with respect to
such series or tranche pursuant to a board resolution or a supplemental
indenture establishing such series or tranche.
The Company, for itself and its successors, and each Holder, by
accepting the [Notes] [Debentures], agrees that the payment of the principal of
and interest on the [Notes] [Debentures] is subordinated, to the extent and in
the manner provided in the Indenture, to the right of payment in full of all
present and future Senior Indebtedness, and that the subordination provisions in
the Indenture are for the benefit of the holders of Senior Indebtedness.
No reference herein to the Indenture and no provision of this [Note]
[Debenture] or of the Indenture shall alter or impair the obligation of the
Company, which is absolute and unconditional, to pay the Principal of and any
premium and interest on this [Note] [Debenture] in the manner, at the place, at
the respective times, at the rate and in the coin or currency herein prescribed.
The [Notes] [Debentures] are issuable initially only in registered form
without coupons in denominations of [$1,000] or any integral multiple thereof at
the office or agency of the Company in the Borough of Manhattan, The City of
6
<PAGE>
New York, and in the manner and subject to the limitations provided in the
Indenture.
[This [Note] [Debenture] will not be redeemable at the option of the
Company prior to maturity.] [This [Note] [Debenture] is redeemable prior to
maturity ...] [This Debenture is entitled to the benefits of a mandatory sinking
fund as follows ...]
Upon due presentment for registration of transfer of this [Note]
[Debenture] at the office or agency of the Company in the Borough of Manhattan,
The City of New York, a new [Note or Notes] [Debenture or Debentures] of
authorized denominations for an equal aggregate principal amount will be issued
to the transferee in exchange therefor, subject to the limitations provided in
the Indenture, without charge except for any tax or other governmental charge
imposed in connection therewith.
The Company, the Trustee and any agent of the Company or the Trustee
may deem and treat the registered Holder hereof as the absolute owner of this
[Note] [Debenture] (whether or not this [Note] [Debenture] shall be overdue and
notwithstanding any notation of ownership or other writing hereon), for the
purpose of receiving payment of, or on account of, the Principal hereof and,
subject to the provisions hereof, interest hereon, and for all other purposes,
and neither the Company nor the Trustee nor any agent of the Company or the
Trustee shall be affected by any notice to the contrary.
No recourse under or upon any obligation, covenant or agreement
contained in the Indenture or any indenture supplemental thereto or in any
[Note] [Debenture], or because of any indebtedness evidenced thereby, shall be
had against any incorporator as such, or against any past, present or future
stockholder, officer, director or employee, as such, of the Company or of any
successor, either directly or through the Company or any successor, under any
rule of law, statute or constitutional provision or by the enforcement of any
assessment or by any legal or equitable proceeding or otherwise, all such
liability being expressly waived and released by the acceptance hereof and as
part of the consideration for the issue hereof.
Terms used herein which are defined in the Indenture shall have the
respective meanings assigned thereto in the Indenture.
The laws of the State of New York (without regard to conflicts of laws
principles thereof) shall govern this [Note] [Debenture].
7
<PAGE>
FOR VALUE RECEIVED, the undersigned hereby sell(s), assign(s) and
transfer(s) unto
[PLEASE INSERT SOCIAL SECURITY OR OTHER IDENTIFYING NUMBER OF ASSIGNEE]
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
[PLEASE PRINT OR TYPE NAME AND ADDRESS, INCLUDING ZIP CODE, OF ASSIGNEE]
- --------------------------------------------------------------------------------
the within [Note] [Debenture] and all rights thereunder, hereby
- --------------------------------------------------------------------------------
irrevocably constituting and appointing such person attorney
- --------------------------------------------------------------------------------
to transfer such [Note] [Debenture] on the books of the Issuer, with full
- --------------------------------------------------------------------------------
power of substitution in the premises.
Dated:
______________________
NOTICE: The signature to this assignment must correspond with the name as
written upon the face of the within [Note] [Debenture] in every
particular without alteration or enlargement or any change whatsoever.
Signature guarantee:
___________________________________
8
<PAGE>
Exhibit 12.1
STATEMENTS REGARDING COMPUTATION OF RATIOS
Our earnings were insufficient to cover fixed charges in each of the years
in the three-year period ended December 31, 1997. Additional earnings of $6.4
million, $3.1 million and $3.6 million were necessary to provide a 1:1
coverage ratio for December 31, 1995, 1996 and 1997, respectively. For the
purpose of these calculations, "earnings" consist of income before taxes, plus
fixed charges, and "fixed charges" consist of interest expense incurred and
the portion of rental expense deemed by us to be representative of the
interest factor of rental payments under leases.
<TABLE>
<CAPTION>
Year Ended Year Ended
December 31, Month Ended -----------------------
---------------------- January 31, January 31, January 30,
1995 1996 1997 1998 1999 2000
------ ------ ------ ----------- ----------- -----------
<S> <C> <C> <C> <C> <C> <C>
Income (loss) before in-
come taxes............. (6,377) (3,077) (3,589) 1,481 4,487 56,166
Add fixed charges....... 65 298 352 41 602 832
------ ------ ------ ----- ----- ------
Earnings (as defined)... (6,312) (2,779) (3,237) 1,522 5,089 56,998
====== ====== ====== ===== ===== ======
Fixed Charges:
Interest expense...... -- 216 267 31 291 332
Estimated interest
component of rent
expense.............. 65 82 85 10 311 500
------ ------ ------ ----- ----- ------
Total fixed charges..... 65 298 352 41 602 832
====== ====== ====== ===== ===== ======
Ratio of earnings to
fixed charges.......... -- -- -- 37x 8x 68x
</TABLE>
<PAGE>
Exhibit 23.1
CONSENT OF INDEPENDENT AUDITORS
We consent to incorporation herein of our report dated March 6, 2000,
relating to the balance sheets of NVIDIA Corporation as of January 31, 1999
and January 30, 2000 and the related statements of operations, stockholders'
equity and cash flows for the year ended December 31, 1997, the one-month
period ended January 31, 1998, and each of the years in the two-year period
ended January 30, 2000, and the related schedule, which report appears in the
January 30, 2000, annual report on Form 10-K of NVIDIA Corporation and herein
and to the reference to our firm under the heading "Experts" in the
prospectus.
/s/ KPMG LLP
Mountain View, California
March 27, 2000
